UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

~~Form 10-Q~~

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2016~~2017

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to_________to ___________

1-35573

(Commission file number)

TRONOX LIMITED

(ACN 153 348 111)

(Exact Name of Registrant as Specified in its Charter)

extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Western Australia, Australia		98-1026700
(State or Other Jurisdiction of Incorporation or Organization)	~~98-1026700~~	(I.R.S. Employer Identification Number)

263 Tresser Boulevard, Suite 1100 Stamford, Connecticut 06901		Lot 22, Mason Road, Kwinana Beach, WA, 6167 Australia

Registrant’s telephone number, including area code: (203) 705-3800

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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting ~~company.~~company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer,” and~~filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ o (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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 ~~October~~July 28, ~~2016,~~2017, the Registrant had ~~65,149,970~~67,821,274 Class A ordinary shares and 51,154,280 Class B ordinary shares outstanding.

Table of Contents

	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3847
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4959
Item 4. Controls and Procedures	5060
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	5160
Item 1A. Risk Factors	5161
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5162
Item 3. Defaults Upon Senior Securities	5162
Item 4. Mine Safety Disclosures	5162
Item 5. Other Information	5162
Item 6. Exhibits	5263

SIGNATURES	5364

Item 1.

Financial Statements (Unaudited)

	Page No.

Unaudited Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016	4
Unaudited Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016	5
Unaudited Condensed Consolidated Balance Sheets at ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015~~2016	6
Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016	7
Unaudited Condensed Consolidated Statement of Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017	8
Notes to Unaudited Condensed Consolidated Financial Statements	9

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TRONOX LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Net sales	$	533		$	575		$	1,545		$	1,577		$	622		$	538		$	1,191		$	1,014
Cost of goods sold		453			536			1,388			1,479			498			479			977			934

Gross profit		80			39			157			98			124			59			214			80
Selling, general and administrative expenses		(54	)		(55	)		(151	)		(171	)		(69	)		(51	)		(143	)		(101	)
Restructuring expense		(1	)		(5	)		(2	)		(7	)
Restructuring income (expense)														—			1			—			(1	)

Income (loss) from operations		25			(21	)		4			(80	)		55			9			71			(22	)
Interest and debt expense, net		(46	)		(45	)		(138	)		(131	)		(46	)		(46	)		(92	)		(92	)
Gain on extinguishment of debt		—			—			4			—			—			—			—			4
Other income (expense), net		(14	)		23			(23	)		22
Other expense, net														(1	)		(3	)		(7	)		(12	)

Loss before income taxes		(35	)		(43	)		(153	)		(189	)
Income (loss) before income taxes														8			(40	)		(28	)		(122	)
Income tax provision		(7	)		(11	)		(29	)		(29	)		(3	)		(10	)		(5	)		(22	)

Net loss		(42	)		(54	)		(182	)		(218	)
Net income (loss)														5			(50	)		(33	)		(144	)
Net income (loss) attributable to noncontrolling interest		(2	)		6			(1	)		10			2			2			5			1

Net loss attributable to Tronox Limited	$	(40	)	$	(60	)	$	(181	)	$	(228	)
Net income (loss) attributable to Tronox Limited													$	3		$	(52	)	$	(38	)	$	(145	)

Loss per share, basic and diluted	$	(0.35	)	$	(0.52	)	$	(1.56	)	$	(1.97	)
Net income (loss) per share, basic and diluted													$	0.02		$	(0.44	)	$	(0.32	)	$	(1.24	)

Weighted average shares outstanding, basic and diluted (in thousands)		116,219			115,642			116,108			115,529
Weighted average shares outstanding, basic (in thousands)														119,188			116,184			118,804			116,052

Weighted average shares outstanding, diluted (in thousands)														124,301			116,184			118,804			116,052

See accompanying notes to unaudited condensed consolidated financial statements.

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TRONOX LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(Unaudited)

(Millions of U.S. dollars)

Three Months
Ended September 30,

Nine Months
Ended September 30,

2016 2015 2016 2015
Net loss $ (42 ) $ (54 ) $ (182 ) $ (218 )
Other comprehensive income (loss):
Foreign currency translation adjustments 69 (135 ) 122 (187 )
Pension and postretirement plans:
Actuarial losses, (no tax impact; See Note 3) (21 ) — (21 ) —
Amortization of unrealized losses, net of taxes of less than $1 million in each of the three and nine months ended September 30, 2016 and 2015 (1 ) 1 — 3
Unrealized gains (losses) on derivative financial instruments, (no tax impact; See Note 3) (1 ) — 1 —

Other comprehensive income (loss) 46 (134 ) 102 (184 )

Total comprehensive income (loss) 4 (188 ) (80 ) (402 )

Comprehensive income (loss) attributable to noncontrolling interest:
Net income (loss) (2 ) 6 (1 ) 10
Foreign currency translation adjustments 18 (35 ) 31 (49 )

Comprehensive income (loss) attributable to noncontrolling interest 16 (29 ) 30 (39 )

Comprehensive loss attributable to Tronox Limited $ (12 ) $ (159 ) $ (110 ) $ (363 )

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net income (loss)	$	5		$	(50	)	$	(33	)	$	(144	)
Other comprehensive income:
Foreign currency translation adjustments		34			—			58			53
Pension and postretirement plans: amortization of unrecognized actuarial losses, net of taxes of less than $1 million in each of the three and six months ended June 30, 2017 and 2016		—			—			1			1
Unrealized gains (losses) on derivative financial instruments (no tax impact; see Note 13)		(1	)		2			(3	)		2

Other comprehensive income		33			2			56			56

Total comprehensive income (loss)		38			(48	)		23			(88	)

Comprehensive income (loss) attributable to noncontrolling interest:
Net income (loss)		2			2			5			1
Foreign currency translation adjustments		7			—			13			13

Comprehensive income (loss) attributable to noncontrolling interest		9			2			18			14

Comprehensive income (loss) attributable to Tronox Limited	$	29		$	(50	)	$	5		$	(102	)

See accompanying notes to unaudited condensed consolidated financial statements.

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TRONOX LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	202		$	229		$	303		$	248
Restricted cash		3			5			2			3
Accounts receivable, net of allowance for doubtful accounts		394			391			457			424
Inventories, net		558			630			506			532
Prepaid and other assets		45			46			54			49
Total current assets		1,202			1,301			1,322			1,256

Noncurrent Assets
Property, plant and equipment, net		1,850			1,843			1,816			1,831
Mineral leaseholds, net		1,617			1,604			1,608			1,607
Intangible assets, net		226			244			210			223
Inventories, net		6			12			15			14
Other long-term assets		24			23			23			22

Total assets	$	4,925		$	5,027		$	4,994		$	4,953

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	162		$	159		$	201		$	180
Accrued liabilities		148			180			181			186
Short-term debt		150			150			150			150
Long-term debt due within one year		16			16			16			16
Income taxes payable		57			43			2			1
Total current liabilities		533			548			550			533

Noncurrent Liabilities
Long-term debt		2,889			2,910
Long-term debt, net								2,886			2,888
Pension and postretirement healthcare benefits		151			141			116			122
Asset retirement obligations		78			77			76			73
Long-term deferred tax liabilities		156			143			161			152
Other long-term liabilities		111			98			30			32

Total liabilities		3,918			3,917			3,819			3,800

Contingencies and Commitments
Commitments and Contingencies
Shareholders’ Equity
Tronox Limited Class A ordinary shares, par value $0.01 — 65,982,604 shares issued and 65,149,970 shares outstanding at September 30, 2016 and 65,443,363 shares issued and 64,521,851 shares outstanding at December 31, 2015		1			1
Tronox Limited Class B ordinary shares, par value $0.01 — 51,154,280 shares issued and outstanding at September 30, 2016 and December 31, 2015		—			—
Tronox Limited Class A ordinary shares, par value $0.01 — 67,903,699 shares issued and 67,727,227 share outstanding at June 30, 2017 and 65,998,306 shares issued and 65,165,672 shares outstanding at December 31, 2016								1			1
Tronox Limited Class B ordinary shares, par value $0.01 — 51,154,280 shares issued and outstanding at June 30, 2017 and December 31, 2016								—			—
Capital in excess of par value		1,518			1,500			1,535			1,524
(Accumulated deficit) / Retained earnings		(129	)		93
Accumulated deficit								(69	)		(19	)
Accumulated other comprehensive loss		(525	)		(596	)		(454	)		(497	)

Total Tronox Limited shareholders’ equity		865			998			1,013			1,009
Noncontrolling interest		142			112			162			144

Total equity		1,007			1,110			1,175			1,153

Total liabilities and equity	$	4,925		$	5,027		$	4,994		$	4,953

See accompanying notes to unaudited condensed consolidated financial statements.

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TRONOX LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Millions of U.S. dollars)

	Nine Months Ended September 30,						Six Months Ended June 30,
	2016			2015			2017			2016
Cash Flows from Operating Activities:
Net loss	$	(182	)	$	(218	)	$	(33	)	$	(144	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization		175			222			123			115
Deferred income taxes		(4	)		(4	)		2			(3	)
Share-based compensation expense		19			17			22			10
Amortization of deferred debt issuance costs and discount on debt		8			8			6			5
Pension and postretirement healthcare benefit expense		4			4			4			3
Gain on extinguishment of debt		(4	)		—			—			(4	)
Other noncash items affecting net loss		10			(4	)
Other, net								9			20
Contributions to employee pension and postretirement plans		(20	)		(16	)		(11	)		(9	)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		1			(36	)
(Increase) decrease in inventories		98			90
(Increase) decrease in accounts receivable, net								(28	)		(13	)
(Increase) decrease in inventories, net								36			87
(Increase) decrease in prepaid and other assets		(5	)		4			(6	)		(2	)
Increase (decrease) in accounts payable and accrued liabilities		(28	)		(35	)		12			(16	)
Increase (decrease) in taxes payable		28			12			1			20
Other, net		23			1

Cash provided by operating activities		123			45			137			69

Cash Flows from Investing Activities:
Capital expenditures		(87	)		(141	)		(56	)		(55	)
Proceeds from sale of assets		1			—
Acquisition of business		—			(1,653	)

Proceeds on sale of assets								—			1
Cash used in investing activities		(86	)		(1,794	)		(56	)		(54	)

Cash Flows from Financing Activities:
Repayments of debt		(27	)		(13	)		(8	)		(23	)
Proceeds from debt		—			750
Debt issuance costs		—			(15	)
Dividends paid		(40	)		(88	)		(12	)		(35	)
Proceeds from the exercise of warrants and options		—			3

Cash provided by (used in) financing activities		(67	)		637
Restricted stock and performance-based shares settled in cash for taxes								(11	)		—
Cash used in financing activities								(31	)		(58	)

Effects of exchange rate changes on cash and cash equivalents		3			(19	)		5			2

Net decrease in cash and cash equivalents		(27	)		(1,131	)
Net increase (decrease) in cash and cash equivalents								55			(41	)
Cash and cash equivalents at beginning of period		229			1,276			248			229

Cash and cash equivalents at end of period	$	202		$	145		$	303		$	188

See accompanying notes to unaudited condensed consolidated financial statements.

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TRONOX LIMITED

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

(Millions of U.S. dollars)

	Tronox Limited Class A Ordinary Shares		Tronox Limited Class B Ordinary Shares		Capital in Excess of par Value			Accumulated Deficit/ Retained Earnings			Accumulated Other Comprehensive Loss			Total Tronox Limited Shareholders’ Equity			Non- controlling Interest			Total Equity			Tronox Limited Class A Ordinary Shares		Tronox Limited Class B Ordinary Shares		Capital in Excess of par Value			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Tronox Limited Shareholders’ Equity			Non- controlling Interest		Total Equity
Balance at January 1, 2016	$	1	$	—	$	1,500		$	93		$	(596	)	$	998		$	112		$	1,110
Net loss		—		—		—			(181	)		—			(181	)		(1	)		(182	)
Balance at January 1, 2017																							$	1	$	—	$	1,524		$	(19	)	$	(497	)	$	1,009		$	144	$	1,153
Net income (loss)																								—		—		—			(38	)		—			(38	)		5		(33	)
Other comprehensive income		—		—		—			—			71			71			31			102			—		—		—			—			43			43			13		56
Share-based compensation		—		—		19			—			—			19			—			19			—		—		22			—			—			22			—		22
Shares cancelled																								—		—		(11	)		—			—			(11	)		—		(11	)
Class A and Class B share dividends		—		—		—			(41	)		—			(41	)		—			(41	)		—		—		—			(12	)		—			(12	)		—		(12	)
Shares cancelled		—		—		(1	)		—			—			(1	)		—			(1	)
Balance at September 30, 2016	$	1	$	—	$	1,518		$	(129	)	$	(525	)	$	865		$	142		$	1,007

Balance at June 30, 2017																							$	1	$	—	$	1,535		$	(69	)	$	(454	)	$	1,013		$	162	$	1,175

See accompanying notes to unaudited condensed consolidated financial statements.

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TRONOX LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Millions of U.S. dollars, except share, per share and metric tons data or unless otherwise noted)

1.	The Company

Tronox Limited and its subsidiaries (collectively referred to as “Tronox Limited,” “we,” “us,” or “our”) is a public limited company registered under the laws of the State of Western Australia. We are a global leaderwith operations in North America, Europe, South Africa and the Asia-Pacific region in the production and marketing of titanium bearing mineral sands and titanium dioxide (“TiO₂”) pigment, and the world’s largest producer of natural soda ash. ~~Titanium feedstock is primarily used to manufacture~~ We classify our operations into two reporting segments: TiO₂~~. Zircon, a hard, glossy mineral, is used for the manufacture~~: consisting of ceramics, refractories, TV screen glass, and a range of other industrial and chemical products. Pig iron is a metal material used in the steel and metal casting industries to create wrought iron, cast iron, and steel. Our TiO₂products that are critical components of everyday applications such as paint and other coatings, plastics, paper and other uses and our related mineral sands product streams include titanium feedstock, zircon and pig ~~iron. Our~~iron, Alkali: consisting of soda ash products ~~are~~ used by customers in the glass, detergent, and chemicals manufacturing industries.

~~We have global operations in North America, Europe, South Africa, and the Asia-Pacific region. Within our TiO~~₂segment, we operate three pigment production facilities at the following locations: Hamilton, Mississippi; Botlek, The Netherlands; and Kwinana, Western Australia, and we operate three separate mining operations: KwaZulu-Natal (“KZN”) Sands and Namakwa Sands both located in South Africa, and Cooljarloo located in Western Australia.

On February 21, 2017, Tronox Limited, The National Titanium Dioxide Company Ltd., a limited company organized under the laws of the Kingdom of Saudi Arabia (“Cristal”), and Cristal Inorganic Chemicals Netherlands Coöperatief W.A., a cooperative organized under the laws of the Netherlands and a wholly owned subsidiary of Cristal (“Seller”), entered into a Transaction Agreement (the “Transaction Agreement”), pursuant to which we agreed to acquire Cristal’s titanium dioxide business for $1.673 billion in cash, subject to a working capital adjustment at closing (the “Cash Consideration”), plus 37,580,000 Class A ordinary shares (“Class A Shares”), par value $0.01 per share, of Tronox Limited (the “Cristal Transaction”). Following the closing of the Cristal Transaction, the Seller will own approximately 24% of the outstanding ordinary shares (including both Class A and Class B) of Tronox Limited. The Cristal Transaction is conditioned on us obtaining financing sufficient to fund the Cash Consideration, and the Transaction Agreement provides that we must pay to Cristal a termination fee of $100 million if all conditions to closing, other than the financing condition, have been satisfied and the Transaction Agreement is terminated because closing of the Cristal Transaction has not occurred by May 21, 2018. The Cristal Transaction is also conditioned upon the receipt of various regulatory approvals, including antitrust clearance in numerous jurisdictions. On April ~~1, 2015~~13, 2017, the United States Federal Trade Commission (“FTC”) issued a second request to us and Cristal in connection with its filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the parties are cooperating to provide the information requested by the FTC as promptly as practicable. The Cristal Transaction, which has been unanimously approved by our board of directors (the “Board”), is expected to close by the first quarter of 2018, subject to regulatory approvals and satisfaction of customary closing conditions, including the favorable vote of a majority of our outstanding shares.

Concurrently with the announcement of the Cristal Transaction, we expressed intent to begin a process to market our Alkali business. On August 2, 2017, we announced that Tronox, Tronox US Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Tronox (“Tronox Holdings”), Tronox Alkali Corporation, a Delaware corporation and wholly owned subsidiary of Tronox Holdings (“Alkali”), and Genesis Energy, L.P. (“Purchaser”), entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which the Purchaser agreed to acquire our Alkali Chemical business (the “Alkali ~~Transaction Date”~~Business”)~~, we completed~~ for $1.325 billion in cash, subject to a working capital adjustment (the “Alkali Sale”). We have agreed unconditionally to guarantee the ~~acquisition~~indemnification and performance of ~~100%~~the obligations of Tronox Holdings under the Purchase Agreement. Both Tronox Holdings and the Purchaser have agreed, following the closing, to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and for certain other liabilities, subject to certain limitations. The completion of the Alkali ~~Chemicals business (“Alkali”) from FMC Corporation (“FMC”) for an aggregate purchase price~~Sale is subject to certain customary closing conditions and is expected to close in the second half of ~~$1.65 billion in cash (the “Alkali Transaction”). See Note 19 for additional information regarding~~2017. At June 30, 2017, the Alkali ~~Transaction.~~

Asasset group is classified as held and used as it did not meet the held for sale criteria, mainly board approval of a ~~result~~sale and a commitment to a plan to sell. Beginning in the third quarter of 2017, the assets and liabilities of the Alkali Transaction, we produce natural soda ash from a mineral called trona, which we mine at two facilities we own near Green River, Wyoming. Our Wyoming facilities process the trona ore into chemically pure soda ashBusiness will be classified as held for sale, in our unaudited Condensed Balance Sheets and ~~specialty sodium products such as sodium bicarbonate (baking soda). We sell soda ash directly to customers~~its results of operations will be presented within discontinued operations in the United States (“U.S.”), Canada and Europe and to the American Natural Soda Ash Corporation (“ANSAC”), a non-profit foreign sales association in which we and two other U.S. soda ash producers are members,our unaudited Condensed Consolidated Statements of Operations for resale to customers elsewhere around the world. We use a portion of our soda ash at Green River to produce specialty sodium products such as sodium bicarbonate and sodium sesquicarbonate that have uses in food, animal feed, pharmaceutical, and medical applications.all comparative periods presented.

In ~~June~~ 2012, ~~Tronox Limited issued~~our Class B ordinary shares (“Class B Shares”) were issued to Exxaro Resources Limited (“Exxaro”) and one of its subsidiaries in consideration for 74% of Exxaro’s South African mineral sands business, and the existing business of Tronox Incorporated was combined with the mineral sands business in an integrated series of transactions whereby Tronox Limited became the parent company (the “Exxaro Transaction”).business. Exxaro has agreed not to acquire any voting shares of Tronox Limited if, following such acquisition, Exxaro will have a voting interest in Tronox Limited of 50% or more unless Exxaro brings any proposal to make such an acquisition to the Board ~~of Directors of Tronox Limited~~ on a confidential basis. In the event an agreement regarding the proposal is not reached, Exxaro is permitted to make a takeover offer for all the shares of Tronox Limited not held by affiliates of Exxaro, subject to certain non-waivable conditions. At ~~both September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, Exxaro held approximately 43% and 44%, respectively, of the voting securities of Tronox Limited. See Note 2019 for additional information regarding Exxaro transactions.On March 8, 2017, Exxaro announced its intention to begin pursuing a path to monetize its ownership stake in Tronox over time. According to Exxaro’s announcement, any such monetization is expected to proceed in stages and would likely begin in the second half of 2017.

Table of Contents

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited, and have been prepared pursuant to the rules and regulations of the ~~U.S.~~U. S. Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. The Condensed Consolidated Balance Sheet as of December 31, ~~2015~~2016 was derived from ~~our~~ audited ~~consolidated~~ financial statements, but does not include all disclosures required by U.S. GAAP.

In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, considered necessary for a fair statement. Our unaudited condensed consolidated financial statements include the accounts of all majority-owned subsidiary companies. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the manner and presentation in the current period.

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.

Revision of Previously Issued Consolidated Financial Statements

During the three months ended March 31, 2017, we identified a misstatement in our selling, general, and administrative expense for certain prior periods related to a liability resulting from a non-timely filing with a statutory authority. The aggregate misstatement is $11 million, which impacts our previously issued consolidated statements of operations, comprehensive loss, balance sheets and cash flows as of and for the years ended December 31, 2015 and 2016, and the unaudited condensed consolidated financial statements for the third and fourth quarters and corresponding year-to-date periods of 2015, and each quarter and corresponding year-to-date periods of 2016.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, management evaluated the materiality of the misstatement from qualitative and quantitative perspectives, and concluded that the misstatement was not material to our previously issued annual and interim financial statements. The cumulative amount of the prior period adjustments would have been material to our current statement of operations and comprehensive loss had we made the correction in the three months ended March 31, 2017 and accordingly we will revise our previously issued financial statements to correct this misstatement. We also corrected the timing of other previously recorded immaterial out-of-period adjustments and reflected them in the revised prior period financial statements. The previously recorded immaterial out-of-period adjustments include a $6 million decrease to cost of goods sold due to an overstated depreciation expense and a $7 million increase to cost of goods sold related to royalty tax both originating in 2013 and previously recorded as out-of-period corrections in 2014; a $5 million decrease to cost of goods sold that originated in 2012 and was previously recorded as an out-of-period correction in 2014 due to overstated depletion expense; and other miscellaneous immaterial corrections. Periods not presented herein will be revised, as applicable, in future filings.

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The effects on our unaudited condensed consolidated financial statements are as follows:

Unaudited Condensed Consolidated Statement of Operations

	Three Months Ended June 30, 2016									Six Months Ended June 30, 2016
	As Reported			Adjustment			Revised			As Reported			Adjustment			Revised

Net sales	$	537		$	1		$	538		$	1,012		$	2		$	1,014
Cost of goods sold		480			(1	)		479			935			(1	)		934
Gross profit		57			2			59			77			3			80
Selling, general and administrative expenses		(50	)		(1	)		(51	)		(97	)		(4	)		(101	)
Income (loss) from operations		8			1			9			(21	)		(1	)		(22	)
Other expense, net		—			(3	)		(3	)		(9	)		(3	)		(12	)
Loss before income taxes		(38	)		(2	)		(40	)		(118	)		(4	)		(122	)
Net loss		(48	)		(2	)		(50	)		(140	)		(4	)		(144	)
Net loss attributable to Tronox Limited		(50	)		(2	)		(52	)		(141	)		(4	)		(145	)
Loss per share, basic and diluted		(0.42	)		(0.02	)		(0.44	)		(1.21	)		(0.03	)		(1.24	)
Weighted average shares outstanding, basic and diluted (in thousands)		116,184			116,184			116,184			116,052			116,052			116,052

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

	Three Months Ended June 30, 2016												Six Months Ended June 30, 2016
	As Reported				Adjustment				Revised				As Reported				Adjustment				Revised

Net loss		$	(48	)		$	(2	)		$	(50	)		$	(140	)		$	(4	)		$	(144	)
Total comprehensive loss			(46	)			(2	)			(48	)			(84	)			(4	)			(88	)
Comprehensive loss attributable to Tronox Limited			(48	)			(2	)			(50	)			(98	)			(4	)			(102	)

Unaudited Condensed Consolidated Balance Sheet

	December 31, 2016
	As Reported			Adjustment			Revised
Accounts receivable, net of allowance for doubtful accounts	$	421		$	3		$	424
Total current assets		1,253			3			1,256
Total assets		4,950			3			4,953
Accrued liabilities		174			11			185
Total current liabilities		522			11			533
Total liabilities		3,789			11			3,800
Accumulated deficit		(13	)		(6	)		(19	)
Accumulated other comprehensive loss		(495	)		(2	)		(497	)
Total Tronox Limited shareholders’ equity		1,017			(8	)		1,009
Total equity		1,161			(8	)		1,153
Total liabilities and equity		4,950			3			4,953

Unaudited Condensed Consolidated Statement of Cash Flows

The corresponding amounts have been revised within the statement of cash flows for the six months ended June 30, 2016 with no net impact to operating, investing and financing cash flows.

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Recently Adopted Accounting Pronouncements

In ~~September 2015,~~March 2016, the Financial Accounting Standards Board ~~(the “FASB”~~(“FASB”) issued Accounting Standards Update (“ASU”) ~~2015-16,~~2016-09, ~~Simplifying the~~Improvements to Employee Share-Based Payment Accounting ~~for Measurement-Period Adjustments~~ (“ (“ASU ~~2015-16”~~2016-09”), which amends Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. ASU ~~2015-16~~2016-09 simplifies ~~the accounting~~various aspects related to how share-based payments are accounted for ~~measurement-period adjustments by eliminating~~and presented in the ~~requirement to restate prior period~~ financial statements ~~for measurement period adjustments. The new guidance requires that the cumulative impact~~including income taxes and forfeitures of ~~a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified.~~awards. We adopted ASU ~~2015-16~~2016-09 during the first quarter of ~~2016.~~2017. Its adoption did not have a material impact on our unaudited condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (“ASU 2016-05”), which clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. As long as all other hedge accounting criteria in ASC 815, Derivatives and Hedging (“ASC 815”) are met, a hedging relationship in which the hedging derivative instrument is novated would not be discontinued or require redesignation. This clarification applies to both cash flow and fair value hedging relationships. We adopted ASU 2016-05 during the first quarter of 2017. Its adoption did not have an impact on our unaudited condensed consolidated financial statements.

In ~~August~~July 2015, as part of its simplification initiative, the FASB issued ASU ~~2015-15, Interest –~~2015-11, ~~Imputation~~Simplifying the Measurement of ~~Interest~~ Inventory(“ (“ASU ~~2015-15”) and in April 2015, the FASB issued ASU 2015-03,~~ ~~Interest— Imputation of Interest~~ ~~(“ASU 2015-03”~~2015-11”). ASU ~~2015-15~~2015-11 simplifies the subsequent measurement of inventory by requiring entities to remeasure inventory at the lower of cost and ~~ASU 2015-03 change and simplify~~net realizable value, which is defined as the ~~presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented~~estimated selling price in the ~~balance sheet as a direct deduction from the carrying amount~~ordinary course of ~~that debt liability, consistent with debt discounts. ASU 2015-15 stated that it would also be acceptable to present debt issuance~~business, less reasonably predictable costs ~~related to a line~~ of ~~credit arrangement as a direct deduction from the carrying amount of debt. The recognition~~completion, disposal, and ~~measurement guidance for debt issuance costs are not affected by the amendments in these ASUs.~~transportation. We adopted ~~these standards retroactively~~ASU 2015-11 during the first quarter of ~~2016.~~2017. The adoption of ASU ~~2015-03 resulted in decreases to long-term debt and other long term assets as of December 31, 2015 of $45 million. The adoption of ASU 2015-15~~2015-11 did not have an impact on our unaudited condensed consolidated financial statements. ~~As of September 30, 2016, debt issuance costs of $38 million are presented as a decrease to long-term debt and $4 million are presented as other long-term assets.~~

~~In February 2015, the FASB issued ASU 2015-02,~~ ~~Consolidation: Amendments to the Consolidation Analysis~~ (“ASU 2015-02”). ASU 2015-02 changes the consolidation evaluation for entities that are required to evaluate whether they should consolidate certain legal entities. The standard permits the use of a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption, or a reporting entity may also apply the amendments retrospectively. We adopted ASU 2015-02 during the first quarter of 2016. The adoption of ASU 2015-02 did not an impact on our unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

We consider the applicability and impact of all recently issued ASUs. Those not listed below were assessed and determined to be either not applicable or expected to have a minimal impact on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under ASU 2017-09, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective prospectively for annual periods beginning on or after December 15, 2017, including interim periods within those periods. Early adoption is permitted. The impact, if any, that ASU 2017-09 will have on our consolidated financial statements will depend on any future award modification.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”) which amends the requirements in ASC 715, Compensation — Retirement Benefits, which requires employers that sponsor defined benefit pension and/or other postretirement plans to aggregate the various components of net periodic benefit cost for presentation purposes but does not prescribe where they should be presented in the income statement. ASU 2017-07 requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from service rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. Employers will present the other components separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. Employers will have to disclose the line item(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement. ASU 2017-07 is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted as of the beginning of an annual period for which an entity’s financial statements (interim or annual) have not been issued. ASU 2017-07 requires the presentation of the components of net periodic benefit cost in the income statement retrospectively while the guidance limiting the capitalization of net periodic benefit cost in assets to the service component will be applied prospectively. We have not yet determined the impact that ASU 2017-07 will have on our consolidated financial statements.

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In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early application of the amendments in ASU 2017-01 is allowed under certain circumstances. The amendments in ASU 2017-01 should be applied prospectively on or after the effective date. The impact, if any, that ASU 2017-01 will have on our consolidated financial statements will depend on the nature of future acquisitions of assets or businesses.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that the reconciliation of the beginning-of-period and end-of period amounts shown in the statement of cash flows include restricted cash and restricted cash equivalents. ASU 2016-18 does not define restricted cash or restricted cash equivalents, but an entity will need to disclose the nature of the restrictions. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied retrospectively to all periods presented. We do not expect the adoption of ASU 2016-18 to have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party. This amendment should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. ~~We have not yet determined the~~The impact, if any, that ASU 2016-16 will have on our consolidated financial ~~statements.~~statements will depend upon future intra-entity transfers of assets other than inventory.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments(“ (“ASU 2016-15”) which provides guidance intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. We have not yet determined the impact, if any, that ASU 2016-15 will have on our consolidated financial ~~statements.~~statements as it will depend on the nature of future cash flow transactions impacted by the new guidance.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016-13”), which requires that entities use a current expected credit loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The entity's estimate would consider relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We do not expect the adoption of ASU 2016-13 to have a material impact on our consolidated financial statements.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting~~ ~~(“ASU 2016-09”), which amends Accounting Standards Codification (“ASC”) Topic 718,~~ ~~Compensation – Stock Compensation~~. ASU 2016-09, simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements including income taxes and forfeitures of awards. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. We have not yet determined the impact, if any, that ASU 2016-09 will have on our consolidated financial statements.

~~In March 2016, the FASB issued ASU 2016-05,~~ ~~Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships~~ (“ASU 2016-05”), which clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. As long as all other hedge accounting criteria in ASC 815, ~~Derivatives and Hedging~~ (“ASC 815”) are met, a hedging relationship in which the hedging derivative instrument is novated would not be discontinued or require redesignation. This clarification applies to both cash flow and fair value hedging relationships. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We do not expect the adoption of ASU 2016-05 to have a material impact on our consolidated financial statements.

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In February 2016, the FASB issued ASU 2016-02, Leases(“ (“ASU 2016-02”) which includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or an operating lease. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We have developed an implementation plan for adopting ASU 2016-02, which includes utilizing a software program to manage our lease obligations. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and have concluded that we will ~~update~~not early adopt ASU 2016-02. Refer to Note 14 and 17 included in our ~~accounting policies accordingly.~~Annual Report on Form 10-K for the year ended December 31, 2016 regarding current obligations under lease agreements.

~~In July 2015, as part~~

Table of ~~its simplification initiative, the FASB issued ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~ (“ASU 2015-11”). ASU 2015-11 simplifies the subsequent measurement of inventory by requiring entities to remeasure inventory at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU does not apply to inventory measured using the last-in, first-out or the retail inventory method. We are required to adopt this standard in the first quarter of 2017. This standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. The adoption of ASU 2015-11 is not expected to have a material impact on our consolidated financial statements.Contents

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires several new disclosures. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted, and may be applied either retrospectively or on a modified retrospective basis. Subsequent to the issuance of the May 2014 guidance, several clarifications and updates have been issued on this topic, the most recent of which was issued in ~~May 2016.~~February 2017. We have developed an implementation plan for adopting ASU 2014-09 and are currently operating in line with that plan. We have completed our contract evaluation process and are currently validating the results of applying the new revenue guidance. We have also started documenting our accounting policies and evaluating the new disclosure requirements and we expect to complete the evaluation of the impact of the accounting and disclosure requirements on our business processes, controls and systems by the fourth quarter of 2017. We are evaluating the impact ~~if any,~~ that ASU 2014-09 ~~and any amendments thereto,~~ will have on our consolidated financial statements and ~~will update our accounting policies accordingly.~~expect to adopt the new standard using the modified retrospective approach effective January 1, 2018.

2.	Restructuring ~~Expense~~Expenses

~~In 2015, as part of our commitment to reduce operating costs and working capital, we commenced a global restructuring of our TiO~~₂ ~~segment, (the “Global TiO~~₂ ~~Restructure”), which we expect to complete during the fourth quarter of 2016. A portion of this initiative involves a reduction~~Restructuring income (expense) in our ~~global TiO~~₂ ~~workforce by approximately 500 employees and outside contractor positions. The restructuring seeks~~unaudited Condensed Consolidated Statements of Operations consists of charges related to ~~streamline the operations of our TiO~~₂ ~~segment in order to create a more commercially and operationally efficient business segment. This action resulted in a charge, consisting of~~ employee severance and associated costs ~~of $14 million, which was~~ recorded in ~~“Restructuring expense”~~March 2017 in the Consolidated Statements of Operations for the year ended December 31, 2015 of which $2 million was paid during 2015. During the three months ended September 30, 2016, we recorded an additional charge related toconnection with our ~~TiO~~₂ segment, consisting of employee severance costs of $1 million, which was recorded in “Restructuring expense” in the unaudited Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2016, we recorded an additional charge related to our TiO₂ segment, consisting of employee severance costs of $2 million, which was recorded in “Restructuring expense” in the unaudited Condensed Consolidated Statements of Operations. During the three and nine months ended September 30, 2016, we made cash payments of $2 million and $13 million respectively. We expect to pay the remaining $1 million over the next three months.

~~As part of our~~Alkali business cost improvement initiative ~~in November 2015 we ceased production~~focused on process improvement at our Wyoming facility (“Wyoming Restructure”), the reversal of restructuring expense pursuant to the settlement of claims previously filed relating to a prior restructure (“Restructuring Settlement”) and our sodium chlorate plant and global TiO₂ restructure initiatives that commenced in ~~Hamilton, Mississippi, (the “Sodium Chlorate Plant Restructure”~~2015 (“2015 Restructuring Initiatives”) resulting in a reduction in our workforce of approximately 50 employees. This action resulted in a charge, consisting primarily of employee severance costs, of $4 million, which was recorded in “Restructuring expense” in the Consolidated Statements of Operations.

Restructuring income (expense) for the ~~year ended December 31, 2015 of which $1 million was paid during 2015. During the~~ three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 ~~we made cash payments of $1 million and $3 million, respectively.~~is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017			2016
Wyoming Restructure	$	—	$	—	$	(1	)	$	—
Restructuring Settlement		—		—		1			—
2015 Restructuring Initiatives		—		1		—			(1	)
	$	—	$	1	$	—		$	(1	)

The cumulative amount incurred to date relating to the ~~Global TiO2 Restructure and the Sodium Chlorate Plant~~Wyoming Restructure is ~~$16 million~~$1 million. The cumulative amount incurred relating to our 2015 Restructuring Initiatives completed in 2016 was $20 million.

Restructuring income (expense) by segment for the three and ~~$4 million, respectively.~~six months ended June 30, 2017 and 2016 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017			2016
Alkali segment	$	—	$	—	$	(1	)	$	—
TiO₂ segment		—		1		—			(1	)
Corporate		—		—		1			—
	$	—	$	1	$	—		$	(1	)

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A summary of the changes in the liability established for ~~all~~ restructuring included in accrued liabilities is as follows:

	2016			2015			2017		2016
Balance, January 1	$	15		$	4		$	—	$	15
Additional provision, net		2			7			—		1
Cash payments		(16	)		(4	)
Cash (payments) receipts								1		(13	)

Balance, September 30	$	1		$	7
Balance, June 30							$	1	$	3

~~Restructuring expense by segment for~~15

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We paid the ~~three and nine months ended September~~remaining $3 million liability as of June 30, 2016 ~~and~~relating to the 2015 ~~was as follows:~~Restructuring Initiatives during the third quarter of 2016. We expect to pay the remaining liability of $1 million relating to the Wyoming Restructure during the third quarter of 2017.

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015

TiO₂ segment
$ 1 $ 5 $ 2 $ 7

3.	Income Taxes

Our operations are conducted through our 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.

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Income tax provision	$	(7	)	$	(11	)	$	(29	)	$	(29	)	$	(3	)	$	(10	)	$	(5	)	$	(22	)
Loss before income taxes	$	(35	)	$	(43	)	$	(153	)	$	(189	)
Income (loss) before income taxes													$	8		$	(40	)	$	(28	)	$	(122	)
Effective tax rate		(20	)%		(26	)%		(19	)%		(15	)%		38	%		(25	)%		(18	)%		(18	)%

During the fourth quarter of 2016, we implemented various steps of an internal corporate restructuring plan to simplify our corporate, finance and legal structure and thereby improve operational, administrative, and commercial synergies within each of our operating segments (the “Corporate Reorganization”). As a result of this Corporate Reorganization, we reduced our cross jurisdictional financing arrangements during 2016; therefore, the three and six months period ended June 30, 2017 is not impacted by withholding tax accruals on interest income. In connection with the Corporate Reorganization during the three months period ended March 31, 2017, Tronox Limited became managed and controlled in the United Kingdom (“U.K”), with no additional impacts to the consolidated provision for income taxes due to the valuation allowances in various jurisdictions.

During the three months ended March 31, 2017, Tronox Limited, the public parent which is registered under the laws of the State of Western Australia, became managed and controlled in the U.K. The statutory tax rate in the U.K. at June 30, 2017 was 19%. During 2016, Tronox Limited was managed and controlled in Australia which has a statutory tax rate of 30%.

The effective tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 differs from the U.K. statutory rate of 19% primarily due to valuation allowances, income in foreign jurisdictions taxed at rates different than 19%. The effective tax rate for the three and ~~2015~~six months ended June 30, 2016 differs from the Australian statutory rate of 30% primarily due to valuation allowances and income in foreign jurisdictions taxed at rates lower than 30%, and withholding tax accruals on interest income. The income tax provision for the three and six months ended June 30, 2017 differs from the income tax provision for the three and six months ended June, 2016 primarily due to withholding tax accruals on interest income which we made during 2016.

The statutory tax rates ~~on income earned~~ in various countries where subsidiaries of Tronox Limited have operations are different than both the U.K. and the Australian tax rates. Tax rates in the United States (“U.S.”) (35% for corporations), South Africa (28% for limited liability companies), ~~The~~the Netherlands (25% for corporations), and the United Kingdom (20% for corporations and limited liability companies and not applicable for certain limited liability partners) are lower than the Australian statutory rate of 30%. The statutory tax rate, applied against losses in the United States (35%Switzerland (8.5% for corporations)~~, is higher than the Australian statutory rate of 30%.~~ and Jersey, U.K. (0% for corporations) all impact our effective tax rate.

As a result of the Alkali Transaction, we expect to offset a portion of our previously existing U.S. tax attributes with income generated by the Alkali entities. This expectation, however, does not change our overall judgement regarding the utilization of existing deferred tax assets.

We continue to maintain full valuation allowances related to the total net deferred tax assets in Australia, ~~The~~the Netherlands, and the U.S.,~~excluding the Alkali separate company states,~~ as we cannot objectively assert that these deferred tax assets are more likely than not to be realized. ~~Excluding the Alkali separate company states,~~ ~~future~~Future provisions for income taxes will include no ~~income~~ tax benefits with respect to losses incurred and ~~income~~ tax expense only to the extent of current state tax payments until the valuation allowances are eliminated. Additionally, we have valuation allowances against specific tax assets in South ~~Africa.~~Africa, and during the six month period ended June 30, 2017 we established a valuation allowance of $2 million against deferred tax assets in the U.K. which we do not currently expect to utilize.

These conclusions were reached by the application of ASC 740, Income Taxes, which require all available positive and negative evidence be weighted to determine whether a valuation allowance should be recorded. The more significant evidential matter in Australia, the U.S., The Netherlands, and the ~~U.S.,~~U.K. relates to recent book losses and the lack of sufficient projected taxable income. The more significant evidential matter for South Africa relates to assets that cannot be depleted or depreciated for tax ~~purposes.~~

~~In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (“ASU 2015-17”), “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The standard requires that deferred~~purposes and capital gains tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basislosses which we do not expect to all deferred tax assets and liabilities. We early adopted ASU 2015-17 during the fourth quarter of 2015 on a prospective basis. The adoption did not have a material effect on our consolidated financial statements.utilize.

1216

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~~Anadarko Litigation~~

~~On January 23, 2015, Anadarko Petroleum Corp. (“Anadarko”) paid $5.2 billion, including approximately $65 million of accrued interest, pursuant to~~The company is currently under audit in Australia and the terms of a settlement agreement with Tronox Incorporated. We did not receive any portion of the settlement amount. Instead, 88% of the $5.2 billion went to trusts and other governmental entities for the remediation of polluted sites by Kerr-McGee Corporation (“Kerr-McGee”). The remaining 12% was distributed to a tort trust to compensate individuals injured as a result of Kerr-McGee’s environmental failures.

We received a private letter ruling from the U.S. Internal Revenue Service confirming that the trusts that held the claims against Anadarko are grantor trusts of Tronox Incorporated solely for federal income tax purposes. As a result, we believe we are entitled to tax deductions equal to the amount spent by the trusts to remediate environmental matters and to compensate the injured individuals. These deductions will accrue over the life of the trusts as the $5.2 billion is spent.United States. We believe that ~~these expenditures~~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 ~~accompanying tax deductions may continue for several years. At September 30, 2016, approximately $2.7 billion of the trust expenditures from the litigation proceeds have been incurred.~~future.

4.	~~Loss~~Income (Loss) Per Share

The computation of basic and diluted ~~loss~~income (loss) per share for the periods indicated is as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2016 2015 2016 2015
Numerator – Basic and Diluted:
Net loss $ (42 ) $ (54 ) $ (182 ) $ (218 )
Less: Net income (loss) attributable to noncontrolling interest (2 ) 6 (1 ) 10

Undistributed net loss (40 ) (60 ) (181 ) (228 )
Percentage allocated to ordinary shares ₍₁₎
100 % 100 % 100 % 100 %

Loss available to ordinary shares $ (40 ) $ (60 ) $ (181 ) $ (228 )
Denominator – Basic and Diluted:
Weighted-average ordinary shares (in thousands) 116,219 115,642 116,108 115,529
Loss per Ordinary Share ₍₂₎:

Basic and diluted loss per ordinary share $ (0.35 ) $ (0.52 ) $ (1.56 ) $ (1.97 )

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Numerator – Basic and Diluted:
Net income (loss)	$	5		$	(50	)	$	(33	)	$	(144	)

Less: Net income attributable to noncontrolling interest		2			2			5			1
Undistributed net income (loss) attributable to Tronox Limited		3			(52	)		(38	)		(145	)
Percentage allocated to ordinary shares ⁽¹⁾		100	%		100	%		100	%		100	%
Net income (loss) available to ordinary shares	$	3		$	(52	)	$	(38	)	$	(145	)

Denominator – Basic and Diluted:

Weighted-average ordinary shares, basic (in thousands)		119,188			116,184			118,804			116,052

Weighted-average ordinary shares, diluted (in thousands)		124,301			116,184			118,804			116,052

Net income (loss) per Ordinary Share ⁽²⁾:
Basic and diluted net income (loss) per ordinary share	$	0.02		$	(0.44	)	$	(0.32	)	$	(1.24	)

^₍₁₎

Our earnings per share for the three months ended June 30, 2017 was calculated under the two-class method using the weighted average shares and participating securities since we had net income for this period. Our participating securities do not have a contractual obligation to share in losses; therefore, when we have a net loss, none of the loss is allocated to participating securities. Consequently, for the six months ended June 30, 2017 and the three and ~~nine~~six months ended ~~September~~June 30, 2016, ~~and 2015,~~ the two-class method did not have an effect on our net loss per ordinary share calculation, and as such, dividends paid during the year did not impact this ~~calculation.~~calculation for these periods.

⁽²⁾	~~Loss~~Net income (loss) per ordinary share amounts were calculated from exact, not rounded net income (loss) and share information.

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In computing diluted ~~loss~~net income (loss) per share under the two-class method, we considered potentially dilutive shares. Anti-dilutive shares not recognized in the diluted ~~earnings~~net loss per share calculation for the six months ended June 30, 2017 and 2016 were as follows:

	September 30, 2016				September 30, 2015				June 30, 2017				June 30, 2016
	Shares		Average Exercise Price		Shares		Average Exercise Price		Shares		Average Exercise Price		Shares		Average Exercise Price
Options		1,997,437		21.20		2,245,145	$	21.13		1,930,616	$	21.17		2,015,673	$	21.19
Series A Warrants		1,440,652		8.51		1,306,665	$	10.35		986,558	$	8.51		1,438,283	$	8.54
Series B Warrants		1,953,250		9.37		1,769,035	$	11.42		1,940,062	$	9.37		1,947,228	$	9.42
Restricted share units		5,566,589		7.18		1,505,081	$	23.04		6,021,045	$	11.10		5,692,870	$	7.22

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5.	Accounts Receivable, Net of Allowance for Doubtful Accounts

Accounts receivable, net of allowance for doubtful accounts, consisted of the following:

	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Trade receivables	$	377		$	367		$	436		$	403
Other		19			25			23			23

Subtotal		396			392			459			426
Allowance for doubtful accounts		(2	)		(1	)		(2	)		(2	)

Accounts receivable, net of allowance for doubtful accounts	$	394		$	391		$	457		$	424

Bad debt expense was less than $1 million for each of the three months ended September 30, 2016 and 2015, respectively, and $1 million and less than $1 million for the nine months ended September 30, 2016 and 2015, respectively, and was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.

6.	Inventories, Net

Inventories, net consisted of the following:

	June 30, 2017			December 31, 2016
Raw materials	$	180		$	194
Work-in-process		37			41
Finished goods, net		190			204
Materials and supplies, net ⁽¹⁾		114			107
Total		521			546
Less: Inventories, net – non-current		(15	)		(14	)
Inventories, net - current	$	506		$	532

September 30
2016

December 31,
2015

Raw materials $ 223 $ 248
Work-in-process 43 43
Finished goods, net 194 245
Materials and supplies, net ₍₁₎
104 106

Total 564 642
Less: Inventories, net – non-current (6 ) (12 )

Inventories, net – current $ 558 $ 630

_⁽¹⁾

Consists of processing chemicals, maintenance supplies, and spare parts, which will be consumed directly and indirectly in the production of our products.

Finished goods include inventory on consignment of ~~$28 million and $30~~$24 million at ~~September~~both June 30, ~~2016~~2017 and December 31, ~~2015, respectively.~~2016. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, inventory obsolescence reserves primarily for materials and supplies were ~~$19~~$18 and ~~$18~~$17 million, respectively. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, reserves for lower of cost or market were ~~$35~~$21 million and ~~$63~~$26 million, respectively.

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7.	Property, Plant and Equipment, Net

Property, plant and equipment, net of accumulated depreciation, consisted of the following:

September 30,
2016

December 31,
2015

Land and land improvements $ 157 $ 143
Buildings 304 189
Machinery and equipment 1,885 1,765
Construction-in-progress 153 261
Other 49 44

Subtotal 2,548 2,402
Less accumulated depreciation and amortization (698 ) (559 )

Property, plant and equipment, net ₍₁₎
$ 1,850 $ 1,843

	June 30, 2017			December 31, 2016
Land and land improvements	$	163		$	159
Buildings		322			309
Machinery and equipment		1,945			1,888
Construction-in-progress		149			146
Other		57			50
Subtotal		2,636			2,552
Less accumulated depreciation and amortization		(820	)		(721	)
Property, plant and equipment, net ⁽¹⁾	$	1,816		$	1,831

_⁽¹⁾

Substantially all of these assets are pledged as collateral for our debt. See Note 11.

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Depreciation expense related to property, plant and equipment during the three months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$44~~$46 million and ~~$53~~$43 million, respectively, of which ~~$43~~$45 million and ~~$52~~$42 million, respectively, was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and $1 million in each of the periods was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. Depreciation expense related to property, plant and equipment during the ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$126~~$92 million and ~~$138~~$82 million, respectively, of which ~~$123~~$90 million and ~~$135~~$80 million, respectively, was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and $3$2 million each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. ~~In April 2016, we officially commissioned our Fairbreeze mine in KZN and began depreciating related assets in service.~~

8.	Mineral Leaseholds, Net

Mineral leaseholds, net of accumulated depletion, consisted of the following:

	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Mineral leaseholds	$	1,996		$	1,948		$	2,017		$	1,996
Less accumulated depletion		(379	)		(344	)

Less: accumulated depletion								(409	)		(389	)
Mineral leaseholds, net	$	1,617		$	1,604		$	1,608		$	1,607

Depletion expense related to mineral leaseholds during the three months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$10~~$9 million and ~~$22~~$10 million, respectively, and during the ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$30~~$18 million and ~~$64~~$20 million, respectively which was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations.

9.	Intangible Assets, Net

Intangible assets, net of accumulated amortization, consisted of the following:

	September 30, 2016							December 31, 2015							June 30, 2017							December 31, 2016
	Gross Cost		Accumulated Amortization			Net Carrying Amount		Gross Cost		Accumulated Amortization			Net Carrying Amount		Gross Cost		Accumulated Amortization			Net Carrying Amount		Gross Cost		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	294	$	(113	)	$	181	$	294	$	(98	)	$	196	$	291	$	(125	)	$	166	$	291	$	(115	)	$	176
TiO₂ technology		32		(9	)		23		32		(8	)		24		32		(10	)		22		32		(9	)		23
Internal-use software		38		(16	)		22		37		(13	)		24		45		(23	)		22		45		(21	)		24
Other		9		(9	)		—		9		(9	)		—

Intangible assets, net	$	373	$	(147	)	$	226	$	372	$	(128	)	$	244	$	368	$	(158	)	$	210	$	368	$	(145	)	$	223

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Amortization expense related to intangible assets during the three months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$6 million and~~ $7 million ~~respectively,~~each, of which ~~less than~~ $1 million each was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and $6 million ~~and $7 million~~each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. Amortization expense related to intangible assets during the ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$19~~$13 million ~~and $20 million, respectively,~~each, of which $1 million each was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and ~~$18~~$12 million ~~and $19 million, respectively,~~each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. Estimated future amortization expense related to intangible assets is $6$13 million for the remainder of ~~2016,~~2017, $25 million each for ~~each of the years from 2017~~2018 through ~~2020~~2021, and ~~$120~~$97 million thereafter.

10.	Accrued Liabilities

Accrued liabilities consisted of the following:

	September 30, 2016		December 31, 2015		June 30, 2017		December 31, 2016
Employee-related costs and benefits	$	80	$	69	$	71	$	83
Restructuring costs		1		15		1		—
Interest		10		35		35		35
Sales rebates		24		28		19		21
Taxes other than income taxes		10		11		7		10
Other		23		22

Professional fees and other						48		37
Accrued liabilities	$	148	$	180	$	181	$	186

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11.

Debt

Short-term ~~debt~~Debt

Our short-term debt consisted of a UBS Revolver, defined below, and was $150 million at both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015. The average~~2016. Average effective interest ~~rates of our UBS Revolver were 4.4%~~rate was 4.8% and ~~4.1%~~4.7% during the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, respectively, and ~~4.3%~~4.1% and ~~3.4%~~4.0% during the three and ~~nine~~six months ended ~~September~~June 30, ~~2015,~~2016, respectively.

UBS Revolver

~~We have~~On June 18, 2012, we entered into a global senior secured asset-based syndicated revolving credit facility with UBS AG (“UBS”) ~~with an original maturity date of June 18, 2017~~which has been amended and restated (the “UBS Revolver”). ~~Through March 31, 2015, the~~The UBS Revolver ~~provided~~provides us with a committed source of capital with a principal borrowing amount of up to $300 million, subject to a borrowing base. Balances due under the UBS Revolver are carried at contracted amounts, which approximate fair value based on the short term nature of the borrowing and the variable interest rate.

~~On April 1, 2015, in connection with the Alkali Transaction, we entered into an amended and restated asset-based revolving syndicated facility agreement with UBS, which provides for~~ up to $500 million of revolving credit lines, with aan $85 million sublimit for letters of credit, with a ~~new~~ maturity ~~that is the earlier~~date of ~~the date which is five years after the closing date and the date which is three months prior to the maturity of~~April 1, 2020, provided that the Term Loan, ~~Agreement; provided that~~defined below, has not been repaid, refinanced or extended, in ~~no event shall~~which case the ~~Revolving Maturity~~maturity date would be ~~earlier than June 18, 2017.~~December 19, 2019. Availability of revolving credit loans and letters of credit are subject to a borrowing base. Borrowings bear interest at our option, at either ~~a base rate or~~ an adjusted London Interbank Offered Rate (“LIBOR”) as, plus an applicable margin that ranges from 1.50% to 2.00%, or a base rate which is at 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%~~. The applicable~~, plus a margin that ranges from 0.50% to 1.00% ~~for borrowings at the base rate and from 1.50% to 2.00% for borrowings at the adjusted LIBOR,~~, in each case, based on the average daily borrowing availability.

On April 1, 2015, we borrowed $150 million against the UBS Revolver, which was outstanding at both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015.~~2016. During the three and ~~nine~~six months ended ~~September~~June 30, 2017 and 2016, we had no drawdowns or repayments on the UBS Revolver. ~~During both the three and nine months ended September~~At June 30, 2015, we had $150 million of drawdowns and no repayments on the UBS Revolver. We incurred $2 million of deferred debt issuance costs related to the UBS Revolver, which were capitalized and included in “Other long-term assets” in the unaudited condensed consolidated balance sheet at September 30, 2015. At September 30, 20162017 and December 31, ~~2015,~~2016, our amount available to borrow was ~~$173~~$181 million and ~~$217~~$190 million, respectively.

ABSA Revolving Credit Facility

~~We have a~~Our South African Rand (“R”) R1.3 billion (approximately ~~$95~~$100 million at ~~September~~June 30, ~~2016)~~2017 exchange rate) revolving credit facility with ABSA Bank Limited ~~(“ABSA”~~(the “ABSA Revolver”) acting through its ABSA Capital Division ~~with a maturity date of~~(the “ABSA”) expired on June 14, ~~2017 (the “ABSA Revolver”). The~~2017. We are currently in discussions with ABSA ~~Revolver bears interest at (i)~~regarding renewing the base rate (defined as one month Johannesburg Interbank Agreed Rate, which is the mid-market rate for deposits in South African Rand for a period equal to the relevant period which appears on the Reuters Screen SAFEY Page alongside the caption YLD) asfacility.

Table of ~~11h00 Johannesburg time on the first day of the applicable period, plus (ii) the margin, which is 3.9%.~~Contents

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, we had no drawdowns or repayments on the ABSA Revolver. At both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, there were no outstanding borrowings on the ABSA Revolver.

Long-term debt, net of an unamortized discount and debt issuance costs, consisted of the following:

	Original Principal		Annual Interest Rate			Maturity Date	September 30, 2016			December 31, 2015			Original Principal		Annual Interest Rate			Maturity Date	June 30, 2017			December 31, 2016
Term Loan, net of unamortized discount ₍₁₎	$	1,500	Variable			3/19/2020	$	1,444		$	1,454		$	1,500	Variable			3/19/2020	$	1,434		$	1,441
Senior Notes due 2020	$	900		6.375	%	8/15/2020		896			900			900		6.375	%	8/15/2020		896			896
Senior Notes due 2022	$	600		7.50	%	3/15/2022		584			600			600		7.50	%	3/15/2022		584			584
Co-generation Unit Financing Arrangement	$	16		6.5	%	2/1/2016		—			1
Lease financing								19			16									19			19
Total borrowings								2,943			2,971
Long-term debt																				2,933			2,940
Less: Long-term debt due within one year								(16	)		(16	)								(16	)		(16	)
Debt issuance costs								(38	)		(45	)								(31	)		(36	)
Long-term debt							$	2,889		$	2,910
Long-term debt, net																			$	2,886		$	2,888

_⁽¹⁾

Average effective interest rate of 5.1% and 5.0% during the three and six months ended June 30, 2017, respectively, and 4.9% each during the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively, and 4.7% and 4.6% during the three and nine months ended September 30, 2015, respectively.~~2016.

~~Table of Contents~~

At ~~September~~June 30, ~~2016,~~2017, the scheduled maturities of our long-term debt were as follows:

	Total Borrowings			Total Borrowings
2016	$	4
2017		16		$	8
2018		16			16
2019		16			16
2020		2,298			2,298
2021					1
Thereafter		598			598
Total		2,948			2,937
Remaining accretion associated with the Term Loan		(5	)		(4	)
Total borrowings	$	2,943		$	2,933

Term Loan

On March 19, 2013, we, along with our wholly owned subsidiary, Tronox Pigments (Netherlands) B.V., and certain of our subsidiaries named as guarantors, entered into a Second Amended and Restated Credit and Guaranty Agreement (the “Second Agreement”) with Goldman Sachs Bank USA, as administrative agent and collateral agent, and Goldman Sachs Bank USA, UBS Securities LLC, Credit Suisse Securities (USA) LLC and RBC Capital Markets, as joint lead arrangers, joint bookrunners and co-syndication agents. Pursuant to the Second Agreement, we obtained a $1.5 billion senior secured term loan (the “Term Loan”). The Term Loan was issued net of an original issue discount. At September 30, 2016 and December 31, 2015, the unamortized discount was $5 million and $6 million, respectively. During the three months ended September 30, 2016 and 2015, we made principal repayments of $4 million each, and during the nine months ended September 30, 2016 and 2015, we made principal repayments of $11 million each.

On April 23, 2014, we, along with our wholly owned subsidiary, Tronox Pigments (Netherlands) B.V., and certain ~~of our~~named guarantor subsidiaries, ~~named as guarantors,~~ entered into a Third ~~Amendment to the~~Amended and Restated Credit and Guaranty Agreement (the “Third Agreement”) with the lender parties thereto and Goldman Sachs Bank USA, as administrative ~~agent, which amends~~agent. Pursuant to the ~~Second Agreement.~~Third Agreement, we obtained a $1.5 billion senior secured term loan (the “Term Loan”) with a maturity date of March 19, 2020. The Third Agreement ~~provides for the re-pricing of the Term Loan by replacing the existing definition of~~defines “Applicable Margin” ~~with~~using a grid pricing matrix dependent upon our public corporate family rating as determined by Moody’s and Standard & Poor’s (“Family Rating”) (with the interest rate ~~under the Third Agreement remaining~~ subject to Eurodollar Rate and Base Rate floors, as ~~defined in the Third Agreement)~~defined). Pursuant to the Third Agreement, based upon our ~~current public corporate family rating by Moody’s and Standard & Poor’s,~~Family Rating, the current interest rate per annum is 350 basis points plus LIBOR (subject to a LIBOR floor of 1% per annum) ~~compared to 350 basis points plus LIBOR (subject to a LIBOR floor~~. The Term Loan was issued net of ~~1% per annum) in~~an original issue discount. At June 30, 2017 and December 31, 2016, the ~~Second Agreement. The Third Agreement also amended certain provisions~~unamortized discount was $4 million and $5 million, respectively. During each of the ~~Second Agreement to permit us~~three months ended June 30, 2017 and ~~certain~~2016, we made principal repayments of ~~our subsidiaries to obtain new cash flow revolving credit facilities in place~~$4 million, and during the six months ended June 30, 2017 and 2016, we made principal repayments of ~~our existing asset based revolving credit facility. The maturity date under the Second Agreement~~$8 million and ~~all other material terms of the Second Agreement remain the same under the Third Agreement. Debt~~$7 million, respectively. At June 30, 2017 and December 31, 2016, debt issuance ~~cost~~costs related to the Term Loan of ~~$18~~$14 million ~~was~~and $17 million, respectively, were recorded as a direct reduction to the carrying value of the ~~long-term~~long term debt as described below.

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Senior Notes due 2020

On August 20, 2012, our wholly owned subsidiary, Tronox Finance LLC (“Tronox Finance”), completed a private placement offering of $900 million aggregate principal amount of senior notes at par value (the “Senior Notes due 2020”). The Senior Notes due 2020 bear interest semiannually at a rate equal to 6.375%, and are fully and unconditionally guaranteed on a senior, unsecured basis by us and certain of our subsidiaries. The Senior Notes due 2020 were initially offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the ~~United States~~U.S. to non-U.S. persons pursuant to Regulation S under the Securities Act. ~~Debt~~At June 30, 2017 and December 31, 2016, debt issuance costs related to the Senior Notes Due 2020 of ~~$10~~$8 million and $9 million, respectively, were recorded as a direct reduction to the carrying value of the long-term debt as described below.

On September 17, 2013, Tronox Finance issued $900 million in aggregate principal amount of registered 6.375% Senior Notes due 2020 in exchange for its then existing $900 million in aggregate principal amount of its 6.375% Senior Notes due 2020. The Senior Notes due 2020 are guaranteed by Tronox and certain of its subsidiaries. See Note ~~22.~~21. There were no repayments during the three and six months ended ~~September~~June 30, ~~2016 and 2015.~~2017. During the ~~nine~~six months ended ~~September~~June 30, 2016, we repurchased $4 million of face value of notes at a price of 77% of par, resulting in a net gain of approximately $1 million which was included in “Gain on extinguishment of debt” in the unaudited Condensed Consolidated Statements of Operations.

Senior Notes due 2022

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~~On March 19, 2015, Evolution closed an offering of~~We have $600 million aggregate principal amount, ~~of its~~ 7.50% Senior Notes due 2022 (the “Senior Notes due 2022”)~~. The Senior Notes due 2022 were offered and sold by Evolution in reliance on an exemption pursuant to Rule 144A and Regulation S under the Securities Act. The Senior Notes due 2022 were~~ issued under an ~~Indenture,~~indenture dated ~~as of~~ March 19, 2015 (the “Indenture”)~~, between Evolution and Wilmington Trust, National Association (the “Trustee”)~~.

On April 1, 2015, in connection with the Alkali Transaction, Evolution merged with and into Tronox Finance. Tronox Finance assumed the obligations of Evolution under the Indenture and the Senior Notes due 2022, and the proceeds from the offering were released to us to partially pay the purchase price for the Alkali Transaction. We and certain of our subsidiaries entered into a supplemental indenture (the “First Supplemental Indenture”), by and among us, Tronox Finance, the guarantors party thereto, and the Trustee, pursuant to which we and such subsidiaries became guarantors of the Senior Notes due 2022 under the Indenture. The Senior Notes due 2022 have not been registered under the Securities Act, and may not be offered or sold in the ~~United States~~U.S. absent registration or an applicable exemption from registration requirements. There were no repayments during the three and six months ended ~~September~~June 30, ~~2016 and 2015.~~2017. During the ~~nine~~six months ended ~~September~~June 30, 2016, we repurchased $16 million of face value of notes at a weighted average price of 76% of par, resulting in a net gain of approximately $3 million which was included in “Gain on extinguishment of debt” in the unaudited Condensed Consolidated Statements of Operations. ~~Debt issuance costs related to the Senior Notes due 2022 of $10 million were recorded as a direct reduction of the carrying value of the long term-debt as described below.~~

The Indenture and the Senior Notes due 2022 provide, among other things, that the Senior Notes due 2022 are senior unsecured obligations of Tronox Finance. Interest is payable on March 15 and September 15 of each year beginning on September 15, 2015 until their maturity date of March 15, 2022. The terms of the Indenture, among other things, limit, in certain circumstances, the ability of us to: incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; incur liens; agree to any restrictions on the ability of certain subsidiaries to make payments to the Company; consolidate or merge with or into, or sell substantially all of our assets to, another person; enter into transactions with affiliates; and enter into new lines of business. At June 30, 2017 and December 31, 2016, debt issuance costs related to the Senior Notes due 2022 of $9 million and $10 million, respectively, were recorded as a direct reduction of the carrying value of the long-term debt as described below.

Liquidity and Capital Resources

As of ~~September~~June 30, ~~2016,~~2017, we had ~~$173~~$181 million available under the $500 million UBS Revolver ~~$95 million available under the ABSA Revolver~~ and ~~$202~~$303 million in cash and cash equivalents. In the next twelve months, we expect that our operations and available borrowings under our revolving credit agreements will provide sufficient cash to fund our operating expenses, capital expenditures, interest payments, debt repayments, and dividends.

Lease Financing

We have capital lease obligations in South Africa, which are payable through 2031 at a weighted average interest rate of approximately 14%. At ~~both September~~June 30, ~~2016~~2017 and December 31, ~~2015, such obligations had a net book value of~~2016, assets recorded under capital ~~leases aggregating $14 million.~~lease obligations were $22 million and $21 million, respectively. Related accumulated amortization was $7 million and $6 million at June 30, 2017 and December 31, 2016, respectively. During each of the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, we made principal payments of less than $1 million.

~~Bridge Facility~~

In connection with the Alkali Transaction, we entered into a $600 million senior unsecured bridge facility (the “Bridge Facility”). The Bridge Facility was not utilized and terminated with the completion22

Table of the Alkali Transaction. During the nine months ended September 30, 2015, we incurred $8 million of financing fees related to the Bridge Facility, which were included in “Interest and debt expense, net” in the unaudited Condensed Consolidated Statements of Operations.Contents

Fair Value

Our debt is recorded at historical amounts. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the fair value of the Term Loan was $1.4 billion and ~~$1.3~~$1.5 billion, respectively. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the fair value of the Senior Notes due 2020 was ~~$841~~$898 million and ~~$520~~$841 million, respectively. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the fair value of the Senior Notes due 2022 was ~~$537~~$603 million and ~~$347~~$544 million, respectively. We determined the fair value of the Term Loan, the Senior Notes due 2020 and the Senior Notes due 2022 using quoted market prices. The fair value hierarchy for the Term Loan, the Senior Notes due 2020 and the Senior Notes due 2022 is a Level 1 input. Balances outstanding under our UBS Revolver are carried at contracted amounts, which approximate fair value based on the short term nature of the borrowing and the variable interest rate. The fair value hierarchy for our UBS Revolver is a Level 2 input.

Debt Covenants

At ~~September~~June 30, ~~2016,~~2017, we had financial covenants in the UBS Revolver ~~the ABSA Revolver~~ and the Term ~~Loan; however, only the ABSA Revolver had a financial maintenance covenant that applies to local operations and only when the ABSA Revolver is drawn upon.~~Loan. The Term Loan and the UBS Revolver are subject to an intercreditor agreement pursuant to which the lenders’ respective rights and interests in the security are set forth. We were in compliance with all our financial covenants as of and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017 (including the ABSA Revolver which expired on June 14, 2017).

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Interest and Debt Expense, Net

Interest and debt expense, net in the unaudited Condensed Consolidated Statements of Operations consisted of the following:

	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016		2015			2016			2015			2017			2016			2017			2016
Interest on debt	$	43	$	43		$	130		$	117
Interest on Term loan												$	16		$	17		$	33		$	33
Interest on Senior Notes due 2020													15			14			29			29
Interest on Senior Notes due 2022													11			11			22			22
Amortization of deferred debt issuance costs and discounts on debt		3		3			8			8			3			2			6			5
Bridge Facility		—		—			—			8
Other		—		1			2			3			2			3			4			5
Capitalized interest		—		(2	)		(2	)		(5	)		(1	)		(1	)		(2	)		(2	)
Total interest and debt expense, net	$	46	$	45		$	138		$	131		$	46		$	46		$	92		$	92

In connection with obtaining debt, we incurred debt issuance costs, which are being amortized through the respective maturity dates using the effective interest method. At ~~both September~~June 30, ~~2016~~2017, we had deferred debt issuance costs of $3 million related to the UBS Revolver and at December 31, ~~2015,~~2016, we had deferred debt issuance costs of $4 million related to the UBS Revolver and ABSA Revolver which are recorded in “Other long-term assets” in the unaudited Condensed Consolidated Balance ~~Sheets~~Sheets. At June 30, 2017 and ~~$38~~December 31, 2016, we had $31 million and ~~$45~~$36 million, respectively, of debt issuance costs related to the Term Loan, Senior Notes 2020 and Senior Notes 2022, which were recorded as a direct reduction of the carrying value of the ~~long-term debt.~~long term debt in the unaudited Condensed Consolidated Balance Sheets.

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12.	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:

	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016		2015			2016			2015			2017			2016			2017			2016
Balance, January 1,	$	78	$	88		$	81		$	90
Beginning balance												$	79		$	87		$	76		$	81
Additions		—		1			1			2			—			1			—			1
Accretion expense		1		1			4			4			1			2			2			3
Remeasurement/translation		3		(7	)		5			(12	)		1			(2	)		4			2
Changes in estimates, including cost and timing of cash flows		—		(1	)		(9	)		—			—			(10	)		—			(9	)
Settlements/payments		—		—			—			(2	)		(1	)		—			(2	)		—
Balance, September 30,	$	82	$	82		$	82		$	82
Balance, June 30,												$	80		$	78		$	80		$	78

Asset retirement obligations ~~were classified as follows:~~in our unaudited Condensed Consolidated Balance Sheets at June 30, 2017 and December 31, 2016 consist of a current portion of $4 million and $3 million, respectively, included in “Accrued liabilities” and a noncurrent portion of $76 million and $73 million, respectively, included in “Asset retirement obligations”.

September 30,
2016

September 30,
2015

Current portion included in “Accrued liabilities” $ 4 $ 6
Noncurrent portion included in “Asset retirement obligations” 78 76
Asset retirement obligations $ 82 $ 82

During the ~~nine~~three months ended ~~September~~June 30, 2016, we amended our lease agreement for our TiO₂ pigment facility in Botlek, The Netherlands, which included an option to extend the lease term for an additional 25 years. This amendment increased the estimated useful life used in determining the asset retirement obligation and consequently, we recognized a $10 million reduction to this liability.

~~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 September 30, 2016 and December 31, 2015, the environmental rehabilitation trust assets were $13 million and $12 million, respectively, which were recorded in “Other long-term assets” in the unaudited Condensed Consolidated Balance Sheets.

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13.	Derivative Instruments

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 South Africa, Australia, and ~~The~~the Netherlands. Costs in South Africa and Australia are primarily incurred in local currencies, while the majority of revenues are in U.S. dollars. In Europe, the majority of revenues and costs are in the local currency. This leaves us exposed to movements in the South African Rand and the Australian dollar versus the U.S. dollar.

Our businesses rely on natural gas as one of the main fuel sources in our production process. Natural gas prices have historically been volatile. Natural gas prices could increase as a result of reduced domestic drilling and production activity. Drilling and production operations are subject to extensive federal, state, local and foreign laws and government regulations, which could directly curtail such activity or increase the cost of drilling, resulting in reduced levels of drilling activity and, therefore, increased natural gas prices. This exposes us to commodity price risk.

We mitigate our exposures to currency risks ~~and commodity price risks, through a controlled program of risk management that includes the use of derivative financial instruments. We enter~~by entering into foreign exchange forward contracts to reduce the effects of fluctuating foreign currency exchange rates. We ~~also use~~mitigate our exposures to commodity price risks through a controlled program that uses commodity price swap contracts and forward purchase contracts to manage forecasted energy exposure.

We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking our hedge transactions. This process includes relating derivatives that are designated as cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also formally assess, both at the inception of the hedge and throughout its term, whether each derivative is highly effective in offsetting changes in cash flows of the hedged item. If we determine that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, we discontinue hedge accounting with respect to that derivative prospectively. On the date the derivative instrument is entered into, we assess whether to designate the derivative as a hedge of the variability of cash flows to be received or paid related to a forecasted transaction (cash flow hedge) or not. We recognize all derivatives in the unaudited Condensed Consolidated Balance Sheets at fair value.

Our currency forward contracts are not designated for hedge accounting treatment under ASC 815. As such, changes in the fair value are recorded in “Other income (expense), net” in the unaudited Condensed Consolidated Statements

Table of Operations. We did not record any gains or losses during the three and nine months ended September 30, 2016 and 2015 related to forward contracts. At September 30, 2016 and December 31, 2015, we did not have any currency forward contracts in place.Contents

We have designated our natural gas commodity price swap contracts, which qualify as cash flow hedges, for hedge accounting treatment under ASC 815. ~~Our current natural gas derivative contracts mature on December 31, 2016.~~ We perform an analysis for effectiveness of the derivatives at the end of each quarter based on the terms of the contract and the underlying item being hedged. The effective portion of the change in the fair value of cash flow hedges is deferred in other comprehensive loss and is subsequently recognized in ~~the~~ “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations for commodity hedges, when the hedged item impacts earnings. Changes in fair value of derivative assets and liabilities designated as hedging instruments are shown in “Other noncash items affecting net loss” within operating activities in the unaudited Consolidated Statements of Cash Flows. Any portion of the change in fair value of derivatives designated as hedging instruments that is determined to be ineffective is recorded in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.

At ~~September 30,~~December 31, 2016, we recorded ~~the~~$3 million fair value of the natural gas hedge ~~of $1 million~~ in “Prepaid and other assets” in the unaudited Condensed Consolidated Balance ~~Sheets, with~~Sheets. At June 30, 2017, the ~~offset~~fair value of $1the natural gas hedge was not material and the $3 million ~~gain~~of unrealized losses during the six months ended June 30, 2017 was recognized in accumulated other comprehensive loss, with no tax ~~impact. See Note 3~~impact due to ~~the unaudited condensed consolidated financial statements.~~valuation allowances. There were no outstanding currency hedges at June 30, 2017 and December 30, 2016. The current open commodity contract hedges forecasted transactions until December 31, ~~2016.~~2018. At ~~September~~June 30, 2017 and December 31, 2016, we had an equivalent of ~~1.0~~5.3 MMBTUs (millions of British Thermal Units) and 4.8 MMBTUs, respectively, in aggregate notional volume of outstanding natural gas commodity forward contract to hedge forecasted purchases. The fair value of the natural gas commodity price contract was based on market price quotations and the use of a pricing model. The contract was considered a level 2 input in the fair value hierarchy at ~~September~~June 30, ~~2016. We did not have any natural gas hedge positions at~~2017 and December 31, ~~2015.~~2016.

14.	Commitments and Contingencies

Purchase and Capital Commitments—At ~~September~~June 30, ~~2016,~~2017, purchase commitments were ~~$55~~$97 million for the remainder of ~~2016, $87 million for~~ 2017, ~~$68~~$81 million for 2018, $50 million for 2019, ~~$33~~$45 million for 2020, $28 million for 2021, and ~~$162~~$135 million thereafter.

Letters of Credit—At ~~September~~June 30, ~~2016,~~2017, we had outstanding letters of credit, bank guarantees, and performance bonds of ~~$67~~$59 million, of which ~~$42~~$34 million were letters of credit issued under the UBS Revolver, ~~$18~~$19 million were bank guarantees ~~and letters of credit~~ issued ~~under the~~by ABSA, ~~Revolver,~~ $5 million were bank guarantees issued by Standard Bank and $2$1 million were performance bonds issued by Westpac Banking Corporation.

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Other Matters—From time to time, we may be party to a number of legal and administrative proceedings involving legal, environmental, and/or other matters in various courts or agencies. These proceedings, individually and in the aggregate, may have a material adverse effect on us. These proceedings may be associated with facilities currently or previously owned, operated or used by us and/or our predecessors, some of which may include claims for personal injuries, property damages, cleanup costs, and other environmental matters. Current and former operations may also involve management of regulated materials that are subject to various environmental laws and regulations including the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act or state equivalents. Similar environmental laws and regulations and other requirements exist in foreign countries in which we operate. Currently, we are not party to any pending legal or administrative proceedings that may have a material adverse effect, either individually or in the aggregate, on our business, financial condition or results of ~~operation~~operations.

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15.	Shareholders’ Equity

The changes in outstanding Class A ~~ordinary shares (“Class A Shares”)~~Shares and Class B Shares for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 were as follows:

Class A Shares:
Balance at January 1, ~~2016~~2017	~~64,521,851~~65,165,672
Shares issued for share-based compensation	~~717,041~~2,884,219
~~Shares cancelled for share-based compensation~~	~~(89,062~~	)
Shares issued upon warrants exercised	~~140~~295,453
Shares issued cancelled for share-based compensation	(618,117	)
Balance at ~~September~~June 30, ~~2016~~2017	~~65,149,970~~
	67,727,227
Class B Shares:
Balance, at ~~January 1, 2016~~both June 30, 2017 and ~~September 30,~~December 31, 2016	51,154,280

Warrants

We have outstanding Series A Warrants (the “Series A Warrants”) and Series B Warrants (the “Series B Warrants”), together (the “Warrants”). At ~~September~~June 30, ~~2016,~~2017, holders of the Series A Warrants and the Series B Warrants were entitled to purchase 6.02 and 6.03 of Class A Shares, respectively, and receive ~~$12.50~~ $12.50 in cash at an exercise price of ~~$51.22~~$51.21 for each Series A Warrant and ~~$56.52~~ $56.51 for each Series B Warrant. The Warrants have a seven-year term from the date initially issued and will expire on February 14, 2018. A holder may exercise the Warrants by paying the applicable exercise price in cash or exercising on a cashless basis. The Warrants are freely transferable by the holder. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, there were ~~239,311~~163,880 and ~~239,316~~239,306 Series A Warrants outstanding, respectively, and ~~323,922~~321,735 and ~~323,999~~323,915 Series B Warrants outstanding, respectively.

Dividends

During 2017, we declared and paid quarterly dividends to holders of our Class A Shares and Class B Shares as follows:

	Three Months Ended March 31, 2017		Three Months Ended June 30, 2017
Dividend per share	$	0.045	$	0.045
Total dividend	$	6	$	6
Record date (close of business)	March 6		May 15

During 2016, we declared and paid quarterly dividends to holders of our Class A Shares and Class B Shares as follows:

	Three Months Ended March 31, 2016		Three Months Ended June 30, 2016		Three Months Ended September 30, 2016		Three Months Ended March 31, 2016		Three Months Ended June 30, 2016
Dividend per share	$	0.25	$	0.045	$	0.045	$	0.25	$	0.045
Total dividend	$	30	$	5	$	5	$	30	$	5
Record date (close of business)	March 4		May 16		August 17		March 4		May 16

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Accumulated Other Comprehensive Loss Attributable to Tronox Limited

The tables below present changes in accumulated other comprehensive ~~loss~~income (loss) by component for the ~~nine~~three months ended ~~September~~June 30, ~~2016~~2017 and ~~2015.~~2016.

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains (Losses) on Derivatives			Total
Beginning balance	$	(390	)	$	(91	)	$	1		$	(480	)
Other comprehensive income (loss)		27			—			(1	)		26
Balance, June 30, 2017	$	(363	)		(91	)		—			(454	)

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains (Losses) on Derivatives		Total
Beginning balance	$	(456	)	$	(101	)	$	—	$	(557	)
Other comprehensive income (loss)		—			—			2		2
Balance, June 30, 2016	$	(456	)	$	(101	)	$	2	$	(555	)

Cumulative
Translation
Adjustment

Pension
Liability
Adjustment

Unrealized
Gains on
Derivatives
Total
Balance, January 1, 2016 $ (494 ) $ (102 ) $ — $ (596 )
Other comprehensive income (loss) 91 (21 ) 1 71
Balance, September 30, 2016 $ (403 ) $ (123 ) $ 1 $ (525 )
The tables below present changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2017 and 2016.

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains (Losses) on Derivatives			Total
Beginning balance	$	(408	)	$	(92	)	$	3		$	(497	)
Other comprehensive income (loss)		45			—			(3	)		42
Amounts reclassified from accumulated other comprehensive income (loss)		—			1			—			1
Balance, June 30, 2017	$	(363	)		(91	)		—			(454	)

Cumulative
Translation
Adjustment

Pension
Liability
Adjustment

Unrealized
Gains on
Derivatives
Total
Balance, January 1, 2015 $ (279 ) $ (117 ) $ — $ (396 )
Other comprehensive income (loss) (138 ) 3 — (135 )
Balance, September 30, 2015 $ (417 ) $ (114 ) $ — $ (531 )

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains (Losses) on Derivatives		Total
Beginning balance	$	(496	)	$	(102	)	$	—	$	(598	)
Other comprehensive income (loss)		40			—			2		42
Amounts reclassified from accumulated other comprehensive income (loss)		—			1			—		1
Balance, June 30, 2016	$	(456	)	$	(101	)	$	2	$	(555	)

16.	Noncontrolling Interest

Exxaro has a 26% ownership interest in each of our Tronox KZN Sands (Pty) Ltd. and Tronox Mineral Sands (Pty) Ltd. subsidiaries in order to comply with the ownership requirements of the Black Economic Empowerment legislation in South Africa. Exxaro is entitled to exchange this interest for approximately 3.2% in additional Class B Shares under certain circumstances. Exxaro also has a 26% ownership interest in certain of our other non-operating subsidiaries. We account for such ownership interest as “Noncontrolling interest” in the unaudited condensed consolidated financial statements.

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Noncontrolling interest activity for the three and six months ended June 30, 2017 and 2016 was as follows:

2016 2015
Balance, January 1 $ 112 $ 178
Net income (loss) attributable to noncontrolling interest (1 ) 10
Effect of exchange rate changes 31 (49 )
Balance, September 30 $ 142 $ 139

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Beginning balance	$	153	$	124	$	144	$	112
Net income attributable to noncontrolling interest		2		2		5		1
Effect of exchange rate changes		7		—		13		13
Balance, June 30,	$	162	$	126	$	162	$	126

~~17.~~

17. Share-Based Compensation

Share-based compensation expense consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015		2017		2016		2017		2016
Restricted shares and restricted share units	$	7	$	2	$	15	$	11	$	8	$	4	$	22	$	8
Options		2		1		3		4		—		—		—		1
T-Bucks Employee Participation Plan		—		1		1		2		—		1		—		1

Total share-based compensation expense	$	9	$	4	$	19	$	17	$	8	$	5	$	22	$	10

Tronox Limited Management Equity Incentive Plan

On June 15, 2012, we adopted the Tronox Limited Management Equity Incentive Plan (the “MEIP”), which permits the grant of awards that are comprised of incentive options, nonqualified options, share appreciation rights, restricted shares, restricted share units, performance awards, and other share-based awards, cash payments, and other forms as the compensation committee of the Board of Directors (the “Board”) in its discretion deems appropriate, including any combination of the above. Subject to further adjustment, the maximum number of shares which may be the subject of awards (inclusive of incentive options) is 20,781,225 Class A Shares. These shares were increased by 8,000,000 on the affirmative vote of our shareholders on May 25, 2016.

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Restricted Shares

~~During~~We did not grant any restricted shares during the ~~nine~~six months ended ~~September~~June 30, 2016, we granted 244,362 restricted shares which vest ratably over a three-year period and 47,531 shares which vested immediately. The 47,531 restricted shares that vested immediately were granted to certain members of the Board in lieu of cash fees earned during the first and second quarters of 2016. These awards are classified as equity awards, and are accounted for using the fair value established at the grant date.2017.

The following table presents a summary of activity for the ~~nine~~six months ended ~~September~~June 30, ~~2016:~~2017:

Number of
Shares

Weighted Average
Grant Date
Fair Value

Outstanding, January 1, 2016 373,278 $ 22.02
Granted 291,893 3.89
Vested (169,634 ) 16.91
Forfeited (211,137 ) 22.37

Outstanding, September 30, 2016 284,400 $ 6.09

Expected to vest, September 30, 2016 284,400 $ 6.09

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding, January 1, 2017		284,400		$	6.09
Vested		(107,928	)		8.00
Outstanding, June 30, 2017		176,472		$	4.92
Expected to vest, June 30, 2017		176,472		$	4.92

At ~~September~~June 30, ~~2016,~~2017, there was $1 million of unrecognized compensation expense related to nonvested restricted shares which is expected to be recognized over a weighted-average period of ~~1.8~~1.3 years. Since the restricted shares were granted only to certain members of our Board, ~~as indicated above,~~ the unrecognized compensation expense was not adjusted for estimated forfeitures. ~~The weighted-average grant-date fair value of restricted shares granted during the nine months ended September 30, 2016 and 2015 was $3.89 per share and $22.60 per share, respectively.~~ The total fair value of restricted shares that vested during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 was $3$1 million.

Restricted Share Units (“RSUs”)

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we granted RSUs which have time and/or performance conditions. Both the time-based awards and the performance-based awards are classified as equity awards. ~~The~~For the time-based awards, 1,075 RSUs vested immediately, 14,053 RSUs vest ratably over a six-month period, 100,160 RSUs vest ratably over a one-year period and 773,774 RSUs vest ratably over a three-year period, and are valued at the weighted average grant date fair value. ~~The~~For the performance-based awards, 1,145,933 cliff vest at the end of the three ~~years.~~years and 883,538 cliff vest at the end of forty months. Included in the performance-based awards are 773,774 RSUs for which vesting is determined bybased on a relative Total Stockholder Return (“TSR”) calculation over the applicable measurement period. The TSR metric is considered a market condition for which we use a Monte Carlo simulation to determine the grant date fair value. A total of 1,255,697 RSUs were granted, pursuant to an Integration Incentive Award program (the “Integration Incentive Award”) established in connection with the Cristal Transaction, to certain executive officers and managers with significant integration accountability. If the Cristal Transaction does not close by July 1, 2018, then the Integration Incentive Award granted will be cancelled.

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The following table presents a summary of activity for the six months ended June 30, 2017

	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Outstanding, January 1, 2016		1,494,027		$	23.04
Outstanding, January 1, 2017							5,587,331		$	7.19
Granted		4,880,169			4.04		2,918,533			17.16
Vested		(547,407	)		17.51		(2,228,057	)		9.29
Forfeited		(260,200	)		17.53		(256,762	)		10.71

Outstanding, September 30, 2016		5,566,589		$	7.18

Expected to vest, September 30, 2016		6,169,907		$	6.79
Outstanding, June 30, 2017							6,021,045		$	11.10
Expected to vest, June 30, 2017							7,009,320		$	9.58

At ~~September~~June 30, ~~2016,~~2017, there was ~~$23~~$45 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 ~~1.8~~2.2 years. The weighted-average grant-date fair value of ~~restricted share units~~RSUs granted during the ~~nine~~six months ended ~~September~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$4.04~~$ 17.16 per share and ~~$23.47~~$4.02 per share, respectively. The total fair value of RSUs that vested during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 was ~~$10~~$21 million.

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Options

The following table presents a summary of activity for the ~~nine~~six months ended ~~September~~June 30, ~~2016:~~2017:

Number of
Options

Weighted
Average
Exercise
Price

Weighted
Average
Contractual
Life (years)

Intrinsic
Value

Outstanding, January 1, 2016 2,189,967 $ 21.15 7.4 $ —
Forfeited (46,087 ) 20.98
Expired (146,443 ) 20.54 —

Outstanding, September 30, 2016 1,997,437 21.20 6.7 $ —

Expected to vest, September 30, 2016 232,468 22.04 7.4 $ —

Exercisable, September 30, 2016 1,772,281 21.09 6.7 $ —

	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life (years)		Intrinsic Value
Outstanding, January 1, 2017		1,970,481		$	21.19		6.38	$	—
Forfeited		(2,285	)		21.98
Expired		(37,580	)		22.28
Outstanding, June 30, 2017		1,930,616		$	21.17		4.93	$	—
Expected to vest, June 30, 2017		2,266		$	27.26		7.26	$	—
Exercisable, June 30, 2017		1,928,335		$	21.16		4.93	$	—

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 period. The amount will change based on the fair market value of our stock. No options were exercised during the three and ~~nine~~six months ~~ended September~~ending June 30, 2017 and 2016 and consequently, there was no related intrinsic value. No options were exercised during the three months ended September 30, 2015 and consequently, there was no related intrinsic value. The total intrinsic value of options exercised during the nine months ended September 30, 2015 was less than $1 million. We issue new shares upon the exercise of options. As there were no stock options exercised during the three and ~~nine~~six months ended ~~September~~June 30, 2017 and 2016, no cash was received.

At ~~September~~June 30, ~~2016,~~ 2017, we had less than $1 million of unrecognized compensation expense related to options, adjusted for estimated ~~forfeitures, was $1 million, which is expected to be recognized over a weighted-average period of 0.4 years.~~

forfeitures. We did not issue any options during the ~~three and nine~~six months ended ~~September~~June 30, 2016. We did not issue any options during the three months ended September 30, 2015. During the nine months ended September 30, 2015, we granted 2,380 options with a weighted average grant date fair value $7.04.2017.

~~Fair value is determined on the grant date using the Black-Scholes option-pricing model and is recognized in earnings on a straight-line basis over the employee service period~~

Table of three years, which is the vesting period. The fair value is based on the closing price of our Class A Shares on the grant date. The risk-free interest rate is based on U.S. Treasury Strips available with a maturity period consistent with the expected life assumption. The expected volatility assumption is based on historical price movements of our peer group.Contents

T-Bucks Employee Participation Plan (“T-Bucks EPP”)

During 2012, we established the T-Bucks EPP for the benefit of certain qualifying employees of our South African subsidiaries. We funded ~~the~~a T-Bucks Trust (the “Trust”) with R124 million (approximately $15 million), which was used to acquire Class A Shares. Additional contributions may be made in the future at the discretion of the Board. The T-Bucks EPP is classified as an equity-settled shared-based payment plan, whereby participants were awarded share units in the Trust, which entitles them to receive Class A Shares upon completion of the vesting period onOn May 31, ~~2017. Participants are entitled to receive dividends on~~2017, the shares ~~during the vesting period. Forfeited shares are retained~~held by the Trust ~~and are allocated~~became fully vested. The Trust sold 546,403 shares in June 2017 on behalf of the participants who elected to future participants. Compensation costs are recognized over the vesting period using the straight-line method. During 2012, the Trust purchased 548,234 Class A Shares at $25.79 per share, which was the fair value on the date of purchase.receive cash. The ~~balance at both September 30, 2016 and December 31, 2015 was 548,234~~remaining participants elected to receive shares.

Long-Term Incentive Plan (“LTIP”)

We have a ~~long-term incentive plan (the “LTIP”)~~LTIP for the benefit of certain qualifying employees of Tronox subsidiaries in South Africa and Australia. The LTIP is classified as a ~~cash settled~~cash-settled compensation plan and is re-measured to fair value at each reporting date. AtWe did not have an outstanding liability for LTIP at both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015, the LTIP plan liability was less than $1 million.~~2016.

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18.	Pension and Other Postretirement Healthcare Benefits

We sponsor two noncontributory defined benefit retirement plans in the ~~U.S.~~U. S., the qualified retirement plan and ~~the~~ Alkali qualified retirement plan (the ~~“Tronox Alkali Qualified Plan”~~“U.S. Defined Benefit Plans”). We also have ~~a defined benefit retirement plan and~~ a collective defined contribution plan (a multiemployer plan) in ~~The~~the Netherlands, and a postretirement healthcare plan in South ~~Africa~~.Africa. We had a defined benefit retirement plan in the Netherlands which was settled in the fourth quarter of 2016.

The components of net periodic cost associated with our U.S. defined benefit plans and The Netherlands defined benefit plan recognized in the unaudited Condensed Consolidated Statements of Operations were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
Net periodic cost:
Service cost ₍₁₎
$ 1 $ 2 $ 3 $ 3
Interest cost 5 4 15 15
Expected return on plan assets (5 ) (5 ) (15 ) (17 )
Net amortization of actuarial loss and prior service credit — 1 1 3
Curtailment gain (1 ) — (1 ) —

Total net periodic cost $ — $ 2 $ 3 $ 4

₍₁₎	Includes $2 million and $3 million of pension expenses for the three and nine months ended September 30, 2015, respectively, related to the Tronox Alkali Qualified Plan to cover eligible employees of Tronox Alkali Corporation in connection with the Alkali Transaction.

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net periodic cost:
Service cost	$	2		$	1		$	3		$	2
Interest cost		4			5			8			10
Expected return on plan assets		(4	)		(5	)		(8	)		(10	)
Net amortization of actuarial loss and prior service credit		—			—			1			1
Total net periodic cost	$	2		$	1		$	4		$	3

The components of net periodic cost associated with the postretirement healthcare plans was less than $1 million ~~for~~ each offor the three and six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015. The components of net periodic cost associated with the postretirement healthcare plans was $1 million for each of the nine months ended September 30, 2016 and 2015.~~2016.

For each of the three and ~~nine months~~six month periods ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, we contributed $1 million and $3$2 million, respectively, to The Netherlands multiemployer plan, which was primarily recognized in “Cost of goods sold” in the unaudited Condensed Consolidated Statement of Operations.

In April 2016, the Board of Trustees (the “Trustees”) of our Netherlands defined benefit plan (“TDF-Botlek Plan”) filed their intentions with the Netherlands Chamber of Commerce to merge the TDF-Botlek Plan into the collective defined contribution plan, a multi-employer plan administered by the industrywide Pension Fund for the Graphical Industry (the “PGB”), which we joined on January 1, 2015. This merger is expected to occur in the fourth quarter of 2016.

The TDF-Botlek Plan is comprised of two defined benefit plans: the “Pension Plan” and a small transition arrangement established in 2005 for the benefit of certain of our Botlek employees (the “VPL Plan”). In August 2016 we agreed with the Trustees to settle the VPL Plan. Under the settlement agreement, we transferred $1 million into accounts established with the pension fund PGB for the benefit of the participants as a full settlement of our obligation under the VPL Plan. Accordingly, for the three months ended September 30, 2016, we recognized a curtailment gain of $1 million included in “Other income (expense), net” in the unaudited Condensed Consolidated Statement of Operations. This amount had previously been recognized in “Accumulated other comprehensive loss” in the unaudited Condensed Consolidated Balance Sheet as prior service credits. Consequently, as of August 31, 2016, we remeasured the plan assets and the projected benefit obligation of the TDF-Botlek Plan which resulted in €19 million (approximately $21 million) of actuarial losses which was recognized in other comprehensive loss for the three and nine months ended September 30, 2016. The merger of the remaining Pension Plan within the TDF-Botlek Plan is expected to occur in the fourth quarter of 2016.

19.	~~Acquisition of Alkali Chemicals Group~~

On April 1, 2015, we acquired Alkali because it diversifies our end markets and revenue base, and increases our participation in faster growing emerging market economies. We believe it also provides us greater opportunity to utilize a portion of our U.S. tax attributes in future periods. See Note 3 for a discussion of the tax impact of the Alkali Transaction. We accounted for the Alkali Transaction using the acquisition method under ASC 805, ~~Business Combinations~~, (“ASC 805”), which requires recording assets acquired and liabilities assumed at fair value. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded based on their estimated fair values on the Alkali Transaction Date. The results of the Alkali chemical business are included in the Alkali segment. The valuations were derived from estimated fair value assessments and assumptions used by management.

~~Table of Contents~~

~~We funded the Alkali Transaction through existing cash and new debt. See Note 11 for further details of the Alkali Transaction financing.~~

~~Purchase Price Allocation~~

Valuation
Consideration:
Purchase price $ 1,650

Fair Value of Assets Acquired and Liabilities Assumed:
Current Assets:
Accounts receivable $ 147
Inventories 48
Prepaid and other assets 32
Total Current Assets 227
Property, plant and equipment ₍₁₎
767
Mineral leaseholds ₍₂₎
739
Other long-term assets 3
Total Assets $ 1,736
Current Liabilities:
Accounts payable 46
Accrued liabilities 28
Total Current Liabilities 74
Noncurrent Liabilities:
Other 12
Total Liabilities 86
Net Assets $ 1,650

⁽¹⁾

The fair value of property, plant and equipment was determined using the cost approach, which estimates the replacement cost of each asset using current prices and labor costs, less estimates for physical, functional and technological obsolescence, based on the estimated useful life ranging from 5 to 38 years.

⁽²⁾

The fair value of mineral rights was determined using the discounted cash flow method, which was based upon the present value of the estimated future cash flows for the expected life of the asset taking into account the relative risk of achieving those cash flows and the time value of money. A discount rate of 10.4% was used taking into account the risks associated with such assets.

There are no contingent liabilities recorded in the fair value of net assets acquired as of the Alkali Transaction Date, and the fair value of net assets acquired includes accounts receivables with book value that approximates fair value.

~~Supplemental Pro forma financial information~~

The following unaudited pro forma information gives effect to the Alkali Transaction as if it had occurred on January 1, 2014. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as: (1) conforming the accounting policies of Alkali to those applied by Tronox, (2) recording certain incremental expenses resulting from purchase accounting adjustments, such as incremental depreciation expense in connection with fair value adjustments to property, plant and equipment, and depletion expense in connection with fair value adjustments to mineral leaseholds, (3) recording the effect on interest expense related to borrowings in connection with the Alkali Transaction and (4) recording the related tax effects. The unaudited pro forma financial information was adjusted to exclude the effect of certain non-recurring items as of January 1, 2014 such as the impact of transaction costs related to the Alkali Transaction of approximately $29 million, inventory step-up amortization of $9 million and $8 million of interest expense incurred on the Bridge Facility (see Note 11). Non-recurring transaction costs of $2 million and $29 million for the three and nine months ended September 30, 2015, respectively, were excluded from the unaudited supplemental pro forma financial information. The unaudited pro forma financial information is for illustrative purposes only and should not be relied upon as being indicative of the historical results that would have been obtained if the Alkali Transaction had actually occurred on that date, nor the results of operations in the future.

~~Table of Contents~~

In accordance with ASC 805, the following table presents the supplemental pro forma results of operations for the three and nine months ended September 30, 2015, as if the Alkali Transaction had occurred on January 1, 2014:

Three Months Ended
September 30,
2015

Nine Months Ended
September 30,
2015

Net sales $ 575 $ 1,772
Loss from operations $ (19 ) $ (29 )
Net loss $ (52 ) $ (171 )
Loss per share, basic and diluted $ (0.45 ) $ (1.48 )

~~20.~~

Related Parties

Exxaro

We have service level agreements with Exxaro for research and development that expire in 2017. ~~We also had service level agreements with Exxaro for services such as tax preparation and information technology which expired during 2015.~~ Such service level agreements amounted to less than $1 million of expense ~~for~~during each of the three and six months ended ~~September~~June 30, 2017 and 2016 and ~~2015 and $1 million and $2 million of expense during the nine months ended September 30, 2016 and 2015, respectively, which~~ was included in “Selling, general and administrative expense” in the unaudited Condensed Consolidated Statements of Operations. Additionally, we ~~have~~had a professional service agreement with Exxaro related to the Fairbreeze construction ~~project. During the three months~~project which ended ~~September 30, 2016 and 2015, we paid $1 million~~in January 2017. We did not make any payment, and less than $1 million of payment, respectively, ~~and~~to Exxaro relating to Fairbreeze during ~~each of~~ the ~~nine~~during the three months ended ~~September~~June 30, 2017 and 2016 and ~~2015, we paid $2~~made less than $1 million ~~to Exxaro, which was~~and $1 million of payments, respectively, during the six months ended June 30, 2017 and 2016. These payments were capitalized and included in “Property, plant and equipment, net” in our unaudited Condensed Consolidated Balance Sheets. At ~~September~~both June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we had less than $1 million ~~and $1 million, respectively,~~ of related party payables, which were recorded in “Accounts payable” in our unaudited Condensed Consolidated Balance Sheets.

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ANSAC

We sell soda ash directly to customers in the U.S., Canada and Europe and to the American Natural Soda Ash Corporation (“ANSAC”), a non-profit foreign sales association in which we and two other U.S. soda ash producers are members, for resale to customers elsewhere around the world. We hold a membership in ANSAC, which is responsible for promoting exports of US-produced soda ash. Under the ANSAC membership agreement, Alkali’s exports of soda ash to all markets except Canada, the European community, the European Free Trade Association and the Southern African Customs Union are exclusively through ANSAC. Certain sales and marketing costs incurred by ANSAC are charged directly to us. Selling, general and administrative expenses in the unaudited Condensed Consolidated Statement of Operations include amounts charged to us by ANSAC principally consisting of salaries, benefits, office supplies, professional fees, travel, rent and certain other costs, ~~which~~ amounted to ~~$1 million and $3 million for the three and nine months ended September 30, 2016, respectively, and~~ $1 million and $2 million for each of the three month and ~~nine~~six months ended ~~September~~June 30, ~~2015,~~2017 and 2016, respectively. During the three ~~and nine~~ months ended ~~September~~June 30, 2017 and 2016, we recorded net sales to ANSAC of ~~$71~~$79 million and ~~$201~~$70 million, respectively, and ~~$63~~$154 million and ~~$139~~$130 million for the ~~three and nine~~six months ended ~~September~~June 30, ~~2015,~~2017 and 2016, respectively, which was included in “Net sales” in the unaudited Condensed Consolidated Statements of Operations. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we had ~~$48~~$53 million and ~~$47~~$60 million, respectively, of related party receivables from ANSAC, which were recorded in “Accounts receivable, net of allowance for doubtful accounts” in our unaudited Condensed Consolidated Balance Sheets. At ~~September~~both June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we had related party payables due to ANSAC of $1 million ~~and $2 million, respectively,~~ recorded in “Accounts payable” in our unaudited Condensed Consolidated Balance Sheets. Additionally, during each of the three and ~~nine~~six month ended ~~September~~June 30, ~~2016,~~2017, “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations included $1 million ~~and $4 million, respectively, and $2 million and $3 million for the three and nine months ended September 30, 2015~~ of charges to us by ANSAC, for freight costs incurred on our ~~behalf. At September 30, 2016~~behalf and ~~December 31, 2015, “Accounts payable” in the unaudited Condensed Consolidated Balance Sheets included less than~~ $1 million and $1$3 million, respectively, ~~of payables~~during the three and six months ended June 30, 2016. We did not have a liability payable to ANSAC for freight costs incurred on our ~~behalf.~~behalf at both June 30, 2017 and December 31, 2016.

Natron_X Technologies LLC

On April 1, 2015, we completed the acquisition of 100% of the Alkali Chemicals business from FMC Corporation (“FMC”) for an aggregate purchase price of $1.65 billion in cash (the “Alkali Transaction”). In connection with the Alkali Transaction, we acquired FMC’s one-third ownership interest in a joint venture, Natron_XxTechnologies LLC (“Natron_Xx”). Natron_Xx ~~manufactured~~manufactures and ~~marketed~~markets sodium-based, dry sorbents for air pollution control in electric utility and industrial boiler operations. Pursuant to an agreement with Natron_Xx, we purchase ground trona from a third-party vendor as an agent on its behalf (the “Supply Agreement”). We also provide certain administrative services such as accounting, technology and customer services to Natron_Xx under a service level agreement (the “SLA”). We are reimbursed by Natron_Xx for the related costs incurred under the Supply Agreement and the SLA. At ~~both September~~June 30, ~~2016~~2017, we did not have an outstanding receivable related to these agreements and ~~December 31, 2015, we had~~less than $1 million of such receivables ~~related to these agreements,~~at December 31, 2016, which were recorded in “Accounts receivable, net of allowance for doubtful accounts” in the unaudited Condensed Consolidated Balance Sheets.

~~During April~~On June 30, 2016, Natron_Xx ~~notified~~ceased its ~~customers of its intent to cease~~ operations and ~~end~~ended deliveries of ~~product on June 30, 2016. On~~products to its customers. In September 1,of 2016, the ~~Board~~Natron_x board of ~~Directors of Natron~~_Xdirectors approved the demolition of the plant located at Alkali’s Westvaco facility and other costs associated with dissolving the joint venture. ~~During the three months ended September~~At both June 30, 2017 and December 31, 2016, a reserve of $1 million representing our one-third share of the estimated expenses related to the termination of the Natron_Xx business, including severance and other exit activities, was ~~recognized and~~ included ~~in “Selling, general and administrative expenses” in our unaudited Condensed Consolidated Statements of Operations and~~ in “Accrued liabilities” in our unaudited Condensed Consolidated Balance ~~Sheets as of September 30, 2016.~~Sheets. We do not expect to incur any additional future expenses related to the termination of the Natron_xbusiness.

2731

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~~21.~~20.

Segment Information

The reportable segments presented below represent our operating segments for which separate financial information is available and which is utilized on a regular basis by our Chief Executive Officer, who is our chief operating decision maker ~~(“CODM”)~~ to assess performance and to allocate resources.

Our TiO₂ operating segment includes the following:

~~Exploration,~~exploration, mining, and beneficiation of mineral sands deposits

~~Production~~

production of titanium feedstock (including chloride slag, slag fines, and rutile), pig iron, and zircon

•

~~Production~~production and marketing of TiO_22;; and

~~Electrolytic~~

electrolytic manganese dioxide manufacturing and marketing

Our Alkali operating segment includes the mining of trona ore for the production from trona of natural soda ash and its derivatives: sodium bicarbonate, sodium sesquicarbonate and caustic soda (collectively referred to as “alkali-products”).

Segment performance is evaluated based on segment operating income (loss), which represents the results of segment operations before unallocated costs, such as general corporate expenses not identified to a specific segment, interest expense, other income (expense), net and income tax expense or benefit.

Net sales and income (loss) from operations by segment were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
TiO₂ segment	$	339		$	380		$	957		$	1,174		$	421		$	333		$	799		$	618
Alkali segment		194			195			588			403			201			205			392			396

Net sales ₍₁₎	$	533		$	575		$	1,545		$	1,577

Net sales													$	622		$	538		$	1,191		$	1,014
TiO₂ segment	$	18		$	(26	)	$	(12	)	$	(58	)	$	61		$	7		$	93		$	(29	)
Alkali segment		23			21			54			46			23			12			42			33
Corporate		(16	)		(16	)		(38	)		(68	)		(29	)		(10	)		(64	)		(26	)

Income (loss) from operations		25			(21	)		4			(80	)		55			9			71			(22	)
Interest and debt expense, net		(46	)		(45	)		(138	)		(131	)		(46	)		(46	)		(92	)		(92	)
Gain on extinguishment of debt		—			—			4			—			—			—			—			4
Other income (expense), net		(14	)		23			(23	)		22

Loss before income taxes		(35	)		(43	)		(153	)		(189	)
Other expense, net														(1	)		(3	)		(7	)		(12	)
Income (loss) before income taxes														8			(40	)		(28	)		(122	)
Income tax provision		(7	)		(11	)		(29	)		(29	)		(3	)		(10	)		(5	)		(22	)

Net loss	$	(42	)	$	(54	)	$	(182	)	$	(218	)
Net income (loss)													$	5		$	(50	)	$	(33	)	$	(144	)

₍₁₎	~~Net sales to external customers, by geographic region, based on country of production, were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
U.S. operations $ 348 $ 359 $ 1,018 $ 891
International operations:
Australia 94 104 258 285
South Africa 45 71 131 252
The Netherlands 46 41 138 149

Total $ 533 $ 575 $ 1,545 $ 1,577

~~Table of Contents~~

~~Net sales to external customers for each similar product were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
Pigment $ 260 $ 244 $ 720 $ 756
Alkali 194 195 588 403
Titanium feedstock and co-products 64 103 194 333
Electrolytic 15 33 43 85

Total $ 533 $ 575 $ 1,545 $ 1,577

During the three months ended ~~September~~June 30, 2017, our ten largest third-party TiO₂ customers and our ten largest third-party Alkali customers represented approximately 25% and 22%, respectively, of our consolidated net sales. During the three months ended June 30, 2016, our ten largest third-party TiO₂ customers and our ten largest third-party Alkali customers represented approximately 25% and 24%, respectively, of our consolidated net sales. During each of the three months ended June 30, 2017 and 2016, ANSAC accounted for 13% of our consolidated net sales. During the six months ended June 30, 2017, our ten largest third-party TiO₂ customers and our ten largest third-party Alkali customers represented approximately 25% and 22%, respectively, of our consolidated net sales; ANSAC accounted for 13% of our consolidated net sales. During the six months ended June 30, 2016, our ten largest third-party TiO₂ customers and our ten largest Alkali customers represented approximately ~~25%~~22% and ~~24%, respectively, of our consolidated net sales. During the three months ended September 30, 2015, our ten largest third-party TiO~~₂ customers and our ten largest Alkali customers represented approximately 28% and 21%, respectively, of our consolidated net sales. During the three months ended September 30, 2016 and 2015, ANSAC accounted for 13% and 11%, respectively, of our consolidated net sales. During the nine months ended September 30, 2016, our ten largest third-party TiO₂ ~~customers and our ten largest Alkali customers represented approximately 23% and 24%~~25%, respectively, of our consolidated net sales; ANSAC accounted for 13% of our consolidated net sales. ~~During the nine months ended September 30, 2015, our ten largest third-party TiO~~₂ ~~customers and our ten largest Alkali customers represented approximately 31% and 16%, respectively,~~

Table of ~~our consolidated net sales; no single customer accounted for more than 10% of our consolidated sales.~~Contents

Capital expenditures by segment were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015		2017		2016		2017		2016
TiO₂ segment	$	23	$	39	$	58	$	127	$	19	$	18	$	39	$	35
Alkali segment		8		9		28		13		4		4		16		20
Corporate		1		—		1		1		1		—		1		—

Total	$	32	$	48	$	87	$	141	$	24	$	22	$	56	$	55

Total assets by segment were as follows:

	September 30, 2016		December 31, 2015		June 30, 2017		December 31, 2016
TiO₂ segment	$	3,018	$	3,055	$	3,017	$	2,991
Alkali segment		1,661		1,690		1,641		1,671
Corporate		246		282		336		291
Total	$	4,925	$	5,027	$	4,994	$	4,953

~~22.~~21.

Guarantor Condensed Consolidating Financial Statements

The obligations of Tronox Finance, our wholly-owned subsidiary, under the Senior Notes due 2020 are fully and unconditionally (subject to certain customary circumstances providing for the release of a guarantor subsidiary) guaranteed on a senior unsecured basis, jointly and severally, by Tronox Limited (referred to for purposes of this note only as the “Parent Company”) and each of its current and future restricted subsidiaries, other than excluded subsidiaries, that guarantee any indebtedness of the Parent Company or its restricted subsidiaries (collectively, the “Guarantor Subsidiaries”). The Subsidiary Issuer, Tronox Finance, and each of the Guarantor Subsidiaries are 100% owned, directly or indirectly, by the Parent Company. Our subsidiaries that do not guarantee the Senior Notes due 2020 are referred to as the “Non-Guarantor Subsidiaries.” The guarantor ~~unaudited~~ condensed consolidating financial statements presented below presents the statements of operations, statements of comprehensive income (loss), balance sheets and statements of cash flow data for: (i) the Parent Company, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries, and the subsidiary issuer, on a consolidated basis (which is derived from Tronox historical reported financial information); (ii) the Parent Company, alone (accounting for our Guarantor Subsidiaries, the Non-Guarantor Subsidiaries, and Tronox Finance on an equity basis under which the investments are recorded by each entity owning a portion of another entity at cost, adjusted for the applicable share of the subsidiary’s cumulative results of operations, capital contributions and distributions, and other equity changes); (iii) the Guarantor Subsidiaries alone; (iv) the Non-Guarantor Subsidiaries alone; and (v) the Subsidiary Issuer, Tronox Finance.

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The guarantor unaudited condensed consolidating financial statements are presented on a legal entity basis, not on a business segment basis. The indentures governing the Senior Notes due 2020 provide for a Guarantor Subsidiary to be automatically and unconditionally released and discharged from its guarantee obligations in certain customary circumstances, including:

Sale or other disposition of such Guarantor Subsidiary’s capital stock or all or substantially all of its assets and all of the indenture obligations (other than contingent obligations) of such Subsidiary Guarantor ~~Subsidiary~~ in respect of all other indebtedness of the Subsidiary Guarantors ~~Subsidiary~~ terminate upon the consummation of such transaction;

Designation of such Guarantor Subsidiary as an “unrestricted subsidiary” under the indenture;

In the case of certain Guarantor Subsidiaries that incur or guarantee indebtedness under certain credit facilities, upon the release or discharge of such Guarantor Subsidiary’s guarantee or incurrence of indebtedness that resulted in the creation of such guarantee, except a discharge or release as a result of payment under such guarantee;

Legal defeasance, covenant defeasance, or satisfaction and discharge of the indenture obligations;

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Payment in full of the aggregate principal amount of all outstanding Senior Notes due 2020 and all other obligations under the indenture; or

Release or discharge of the Guarantor Subsidiary’s guarantee of certain other indebtedness.

At December 31, 2016, certain entities which were created as part of the Corporate Reorganization were designated as non-guarantor entities. Pursuant to the Seventh Supplemental Indenture, dated as of February 14, 2017, to the Indenture, dated August 20, 2012 among Tronox Finance LLC, as Issuer, Tronox Limited as Parent, the guarantors named therein and Wilmington Trust, National Association, as trustee, these entities have been designated as guarantor entities. Consequently, the unaudited guarantor condensed consolidating financial information for these entities has been revised, retrospectively, to reflect the change in structure.

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net sales	$	533		$	(59	)	$	—		$	—		$	454		$	138		$	622		$	(56	)	$	—		$	—		$	487		$	191
Cost of goods sold		453			(62	)		—			—			387			128			498			(61	)		—			—			400			159
Gross profit		80			3			—			—			67			10			124			5			—			—			87			32
Selling, general and administrative expenses		(54	)		—			—			(6	)		(39	)		(9	)		(69	)		1			—			(16	)		(42	)		(12	)
Restructuring expense		(1	)		—			—			—			—			(1	)
Restructuring income (expense)																				—			—			—			1			(1	)		—
Income (loss) from operations		25			3			—			(6	)		28			—			55			6			—			(15	)		44			20
Interest and debt expense, net		(46	)		—			(26	)		—			(1	)		(19	)		(46	)		—			(26	)		—			(1	)		(19	)
Intercompany interest income (expense)																				—			—			—			(1	)		1			—
Other income (expense), net		(14	)		—			—			—			(3	)		(11	)		(1	)		—			—			(2	)		4			(3	)
Intercompany interest income (expense)		—			—			—			126			(140	)		14
Equity in earnings of subsidiary		—			147			—			(117	)		(30	)		—			—			6			—			21			(27	)		—
Income (loss) before income taxes		(35	)		150			(26	)		3			(146	)		(16	)		8			12			(26	)		3			21			(2	)
Income tax benefit (provision)		(7	)		—			7			(43	)		28			1			(3	)		—			8			—			(14	)		3
Net income (loss)		(42	)		150			(19	)		(40	)		(118	)		(15	)		5			12			(18	)		3			7			1
Net income (loss) attributable to noncontrolling interest		(2	)		(2	)		—			—			—			—
Net income attributable to noncontrolling interest																				2			2			—			—			—			—
Net income (loss) attributable to Tronox Limited	$	(40	)		152			(19	)		(40	)		(118	)		(15	)	$	3		$	10		$	(18	)	$	3		$	7		$	1

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net sales	$	1,191		$	(121	)	$	—		$	—		$	945		$	367
Cost of goods sold		977			(125	)		—			—			796			306
Gross profit		214			4			—			—			149			61
Selling, general and administrative expenses		(143	)		2			—			(35	)		(88	)		(22	)
Restructuring income (expense)		—			—			—			1			(1	)		—
Income (loss) from operations		71			6			—			(34	)		60			39
Interest and debt expense, net		(92	)		—			(52	)		—			(2	)		(38	)
Intercompany interest income (expense)		—			—			—			4			(4	)		—
Other income (expense), net		(7	)		—			—			(5	)		6			(8	)
Equity in earnings of subsidiary		—			45			—			4			(49	)		—
Income (loss) before income taxes		(28	)		51			(52	)		(31	)		11			(7	)
Income tax benefit (provision)		(5	)		—			16			(7	)		(22	)		8
Net income (loss)		(33	)		51			(36	)		(38	)		(11	)		1
Net income attributable to noncontrolling interest		5			5			—			—			—			—
Net income (loss) attributable to Tronox Limited	$	(38	)	$	46		$	(36	)	$	(38	)	$	(11	)	$	1

Consolidated Eliminations
Tronox
Finance LLC

Parent
Company

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Net sales $ 1,545 $ (164 ) $ — $ — $ 1,311 $ 398
Cost of goods sold 1,388 (171 ) — — 1,186 373
Gross profit 157 7 — — 125 25
Selling, general and administrative expenses (151 ) 2 — (20 ) (102 ) (31 )
Restructuring expense (2 ) — — — — (2 )
Income (loss) from operations 4 9 — (20 ) 23 (8 )
Interest and debt expense, net (138 ) — (79 ) — (4 ) (55 )
Gain on extinguishment of debt 4 — 4 — — —
Other income (expense), net (23 ) — — — (3 ) (20 )
Intercompany interest income (expense) — — — 379 (423 ) 44
Equity in earnings of subsidiary — 473 — (401 ) (72 ) —
Income (loss) before income taxes (153 ) 482 (75 ) (42 ) (479 ) (39 )
Income tax benefit (provision) (29 ) — 22 (139 ) 89 (1 )
Net income (loss) (182 ) 482 (53 ) (181 ) (390 ) (40 )
Net income (loss) attributable to noncontrolling interest (1 ) (1 ) — — — —
Net income (loss) attributable to Tronox Limited $ (181 ) $ 483 $ (53 ) $ (181 ) $ (390 ) $ (40 )

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net income (loss)	$	(42	)	$	150		$	(19	)	$	(40	)	$	(118	)	$	(15	)	$	5		$	12		$	(18	)	$	3		$	7		$	1
Other comprehensive income (loss):
Foreign currency translation adjustments		69			(118	)		—			51			68			68			34			(54	)		—			27			28			33
Pension and postretirement plans		(22	)		31			—			(22	)		(9	)		(22	)
Unrealized gains (losses) on derivative financial instruments		(1	)		1			—			(1	)		(1	)		—			(1	)		1			—			(1	)		(1	)		—
Other comprehensive income (loss)		46			(86	)		—			28			58			46			33			(53	)		—			26			27			33
Total comprehensive income (loss)		4			64			(19	)		(12	)		(60	)		31			38			(41	)		(18	)		29			34			34
Comprehensive income (loss) attributable to noncontrolling interest:
Net income (loss)		(2	)		(2	)		—			—			—			—
Net income																				2			2			—			—			—			—
Foreign currency translation adjustments		18			18			—			—			—			—			7			7			—			—			—			—
Comprehensive income (loss) attributable to noncontrolling interest		16			16			—			—			—			—			9			9			—			—			—			—
Comprehensive income (loss) attributable to Tronox Limited	$	(12	)	$	48		$	(19	)	$	(12	)	$	(60	)	$	31		$	29		$	(50	)	$	(18	)	$	29		$	34		$	34

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net income (loss)	$	(33	)	$	51		$	(36	)	$	(38	)	$	(11	)	$	1
Other comprehensive income (loss):
Foreign currency translation adjustments		58			(97	)		—			45			52			58
Pension and postretirement plans		1			(1	)		—			1			1			—
Unrealized gains (losses) on derivative financial instruments		(3	)		3			—			(3	)		(3	)		—
Other comprehensive income (loss)		56			(95	)		—			43			50			58
Total comprehensive income (loss)		23			(44	)		(36	)		5			39			59
Comprehensive income (loss) attributable to noncontrolling interest:
Net income		5			5			—			—			—			—
Foreign currency translation adjustments		13			13			—			—			—			—
Comprehensive income (loss) attributable to noncontrolling interest		18			18			—			—			—			—
Comprehensive income (loss) attributable to Tronox Limited	$	5		$	(62	)	$	(36	)	$	5		$	39		$	59

Consolidated Eliminations
Tronox
Finance LLC

Parent
Company

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Net income (loss) $ (182 ) $ 482 $ (53 ) $ (181 ) $ (390 ) $ (40 )
Other comprehensive income (loss):
Foreign currency translation adjustments 122 (208 )
—
91 118 121
Pension and postretirement plans (21 ) 30 — (21 ) (8 ) (22 )
Unrealized gains (losses) on derivative financial instruments 1 (1 ) — 1 1 —
Other comprehensive income (loss) 102 (179 ) — 71 111 99
Total comprehensive income (loss) (80 ) 303 (53 ) (110 ) (279 ) 59
Comprehensive income (loss) attributable to noncontrolling interest:
Net income (loss) (1 ) (1 ) — — — —
Foreign currency translation adjustments 31 31
—

—

—

—

Comprehensive income (loss) attributable to noncontrolling interest 30 30
—

—

—

—

Comprehensive income (loss) attributable to Tronox Limited $ (110 ) $ 273 $ (53 ) $ (110 ) $ (279 ) $ 59

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GUARANTOR CONDENSED CONSOLIDATING BALANCE SHEETS

As of ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated		Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidated		Eliminations			Tronox Finance LLC			Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	$	202	$	—		$	1		$	3		$	163		$	35	$	303	$	—		$	—		$	39	$	129	$	135
Restricted cash		3		—			—			—			3			—		2		—			—			—		2		—
Accounts receivable, net		394		—			—			—			314			80		457		—			—			—		340		117
Inventories, net		558		(14	)		—			—			360			212		506		(8	)		—			—		321		193
Other current assets		45		(4,978	)		644			1,831			1,294			1,254		54		(589	)		79			82		274		208
Investment in subsidiaries		—		2,888			—			(3,602	)		714			—		—		(1,496	)		—			1,174		322		—
Property, plant and equipment, net		1,850		—			—			—			1,338			512		1,816		—			—			—		1,288		528
Mineral leaseholds, net		1,617		—			—			—			1,243			374		1,608		—			—			—		1,224		384
Intercompany loans receivable		—		(6,942	)		610			5,936			77			319		—		(2,504	)		1,149			—		160		1,195
Other long-term assets		256		—			—			—			238			18		248		—			—			—		215		33
Total assets	$	4,925	$	(9,046	)	$	1,255		$	4,168		$	5,744		$	2,804	$	4,994	$	(4,597	)	$	1,228		$	1,295	$	4,275	$	2,793

LIABILITIES AND EQUITY
Short-term debt	$	150	$	—		$	—		$	—		$	150		$	—	$	150	$	—		$	—		$	—	$	150	$	—
Other current liabilities		383		(4,978	)		18			2,691			2,451			201		400		(589	)		43			161		557		228
Long-term debt		2,889		—			1,460			—			—			1,429
Long-term debt, net																		2,886		—			1,463			—		—		1,423
Intercompany loans payable		—		(6,942	)		—			611			6,255			76		—		(2,504	)		—			120		2,344		40
Other long-term liabilities		496		—			—			1			277			218		383		—			—			1		193		189
Total liabilities		3,918		(11,920	)		1,478			3,303			9,133			1,924		3,819		(3,093	)		1,506			282		3,244		1,880
Total equity		1,007		2,874			(223	)		865			(3,389	)		880		1,175		(1,504	)		(278	)		1,013		1,031		913
Total liabilities and equity	$	4,925	$	(9,046	)	$	1,255		$	4,168		$	5,744		$	2,804	$	4,994	$	(4,597	)	$	1,228		$	1,295	$	4,275	$	2,793

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Cash Flows from Operating Activities:
Net income (loss)	$	(182	)	$	482		$	(53	)	$	(181	)	$	(390	)	$	(40	)	$	(33	)	$	51		$	(36	)	$	(38	)	$	(11	)	$	1
Depreciation, depletion and amortization		175			—			—			—			138			37			123			—			—			—			91			32
Other		130			(482	)		(52	)		249			456			(41	)		47			(51	)		(15	)		38			57			18
Cash provided by (used in) operating activities		123			—			(105	)		68			204			(44	)		137			—			(51	)		—			137			51
Cash Flows from Investing Activities:
Capital expenditures		(87	)		—			—			—			(57	)		(30	)		(56	)		—			—			—			(37	)		(19	)
Proceeds from sale of assets		1			—			—			—			1			—
Collections of intercompany loans		—			(181	)		126			—			—			55			—			(92	)		50			—			—			42
Issuance of intercompany loans		—			100			(5	)		—			(95	)		—			—			66			—			(3	)		(63	)		—
Cash provided by (used in) investing activities		(86	)		(81	)		121			—			(151	)		25			(56	)		(26	)		50			(3	)		(100	)		23
Cash Flows from Financing Activities:
Repayments of debt		(27	)		—			(15	)		—			—			(12	)		(8	)		—			—			—			—			(8	)
Repayments of intercompany loans		—			181			—			(126	)		(55	)		—			—			92			—			—			(92	)		—
Proceeds from intercompany loans		—			(100	)		—			100			—			—			—			(66	)		—			63			3			—
Dividends paid		(40	)		—			—			(40	)		—			—			(12	)		—			—			(12	)		—			—
Restricted stock and performance-based shares settled in cash for tax																				(11	)		—			—			(11	)		—			—
Cash provided by (used in) financing activities		(67	)		81			(15	)		(66	)		(55	)		(12	)		(31	)		26			—			40			(89	)		(8	)
Effects of exchange rate changes on cash and cash equivalents		3			—			—			—			—			3			5			—			—			—			—			5
Net increase (decrease) in cash and cash equivalents		(27	)		—			1			2			(2	)		(28	)		55			—			(1	)		37			(52	)		71
Cash and cash equivalents at beginning of period	$	229		$	—		$	—		$	1		$	165		$	63		$	248		$	—		$	1		$	2		$	181		$	64
Cash and cash equivalents at end of period	$	202		$	—		$	1		$	3		$	163		$	35		$	303		$	—		$	—		$	39		$	129		$	135

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended ~~September~~June 30, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net sales	$	538		$	(45	)	$	—		$	—		$	455		$	128
Cost of goods sold		479			(52	)		—			—			415			116
Gross profit		59			7			—			—			40			12
Selling, general and administrative expenses		(51	)		1			—			(5	)		(35	)		(12	)
Restructuring income		1			—			—			—			1			—
Income (loss) from operations		9			8			—			(5	)		6			—
Interest and debt expense, net		(46	)		—			(27	)		—			—			(19	)
Intercompany interest income (expense)		—			—			—			126			(143	)		17
Other income (expense), net		(3	)		—			—			—			—			(3	)
Equity in earnings of subsidiary		—			140			—			(125	)		(15	)		—
Income (loss) before income taxes		(40	)		148			(27	)		(4	)		(152	)		(5	)
Income tax benefit (provision)		(10	)		—			8			(48	)		30			—
Net income (loss)		(50	)		148			(19	)		(52	)		(122	)		(5	)
Net income attributable to noncontrolling interest		2			2			—			—			—			—
Net income (loss) attributable to Tronox Limited	$	(52	)	$	146		$	(19	)	$	(52	)	$	(122	)	$	(5	)

Consolidated Eliminations
Tronox
Finance LLC

Parent
Company

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Net sales $ 575 $ (51 ) $ — $ — $ 462 $ 164
Cost of goods sold 536 (53 ) — — 434 155

Gross profit 39 2 — — 28 9
Selling, general and administrative expenses (55 ) — — (3 ) (41 ) (11 )
Restructuring expense (5 ) — — — (5 ) —

Income (loss) from operations (21 ) 2 — (3 ) (18 ) (2 )
Interest and debt expense, net (45 ) — (27 ) — (2 ) (16 )
Intercompany interest income (expense) — — — 86 (100 ) 14
Other income (expense), net 23 — — 3 5 15
Equity in earnings of subsidiary — 113 — (112 ) (1 ) —

Income (loss) before income taxes (43 ) 115 (27 ) (26 ) (116 ) 11
Income tax benefit (provision) (11 ) — 8 (34 ) 17 (2 )

Net income (loss) (54 ) 115 (19 ) (60 ) (99 ) 9
Net income attributable to noncontrolling interest 6 6 — — — —

Net income (loss) attributable to Tronox Limited $ (60 ) $ 109 $ (19 ) $ (60 ) $ (99 ) $ 9

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

~~Nine~~Six Months Ended ~~September~~June 30, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net sales	$	1,577		$	(154	)	$	—		$	—		$	1,200		$	531		$	1,014		$	(105	)	$	—		$	—		$	859		$	260
Cost of goods sold		1,479			(146	)		—			—			1,117			508			934			(109	)		—			—			800			243

Gross profit		98			(8	)		—			—			83			23			80			4			—			—			59			17
Selling, general and administrative expenses		(171	)		2			(1	)		1			(144	)		(29	)		(101	)		2			—			(18	)		(63	)		(22	)
Restructuring expense		(7	)		—			—			—			(7	)		—

Restructuring expenses																				(1	)		—			—			—			—			(1	)
Income (loss) from operations		(80	)		(6	)		(1	)		1			(68	)		(6	)		(22	)		6			—			(18	)		(4	)		(6	)
Interest and debt expense, net		(131	)		—			(77	)		—			(5	)		(49	)		(92	)		—			(53	)		—			(2	)		(37	)
Intercompany interest income (expense)		—			—			—			350			(386	)		36			—			—			—			253			(283	)		30
Gain on extinguishment of debt																				4			—			4			—			—			—
Other income (expense), net		22			—			—			4			2			16			(12	)		—			—			—			—			(12	)
Equity in earnings of subsidiary		—			480			—			(449	)		(31	)		—			—			329			—			(285	)		(44	)		—

Income (loss) before income taxes		(189	)		474			(78	)		(94	)		(488	)		(3	)		(122	)		335			(49	)		(50	)		(333	)		(25	)
Income tax benefit (provision)		(29	)		—			23			(134	)		84			(2	)		(22	)		—			15			(95	)		60			(2	)

Net income (loss)		(218	)		474			(55	)		(228	)		(404	)		(5	)		(144	)		335			(34	)		(145	)		(273	)		(27	)
Net income attributable to noncontrolling interest		10			10			—			—			—			—			1			1			—			—			—			—

Net income (loss) attributable to Tronox Limited	$	(228	)	$	464		$	(55	)	$	(228	)	$	(404	)	$	(5	)	$	(145	)	$	334		$	(34	)	$	(145	)	$	(273	)	$	(27	)

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended ~~September~~June 30, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net income (loss)	$	(50	)	$	148		$	(19	)	$	(52	)	$	(122	)	$	(5	)
Other comprehensive income (loss):
Foreign currency translation adjustments		—			(1	)		—			—			1			—
Pension and postretirement plans		—			(1	)		—			—			1			—
Unrealized gains on derivative financial instruments		2			(2	)		—			2			2			—
Other comprehensive income (loss)		2			(4	)		—			2			4			—
Total comprehensive income (loss)		(48	)		144			(19	)		(50	)		(118	)		(5	)
Comprehensive income (loss) attributable to noncontrolling interest:
Net income		2			2			—			—			—			—
Comprehensive income (loss) attributable to noncontrolling interest		2			2			—			—			—			—
Comprehensive income (loss) attributable to Tronox Limited	$	(50	)	$	142		$	(19	)	$	(50	)	$	(118	)	$	(5	)

Consolidated Eliminations
Tronox
Finance LLC

Parent
Company

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Net income (loss) $ (54 ) $ 115 $ (19 ) $ (60 ) $ (99 ) $ 9
Other comprehensive income (loss):
Foreign currency translation adjustments (135 ) 234 — (100 ) (135 ) (134 )
Pension and postretirement plans 1 (1 ) — 1 1 —

Other comprehensive income (loss) (134 ) 233 — (99 ) (134 ) (134 )

Total comprehensive income (loss) (188 ) 348 (19 ) (159 ) (233 ) (125 )

Comprehensive income (loss) attributable to noncontrolling interest:
Net income 6 6 — — — —
Foreign currency translation adjustments (35 ) (35 ) — — — —

Comprehensive income (loss) attributable to noncontrolling interest (29 ) (29 ) — — — —

Comprehensive income (loss) attributable to Tronox Limited $ (159 ) $ 377 $ (19 ) $ (159 ) $ (233 ) $ (125 )

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Net income (loss)	$	(218	)	$	474		$	(55	)	$	(228	)	$	(404	)	$	(5	)	$	(144	)	$	335		$	(34	)	$	(145	)	$	(273	)	$	(27	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(187	)		327			—			(138	)		(189	)		(187	)		53			(89	)		—			40			49			53
Pension and postretirement plans		3			(3	)		—			3			3			—			1			(1	)		—			1			1			—

Unrealized gains on derivative financial instruments																				2			(2	)		—			2			2			—
Other comprehensive income (loss)		(184	)		324			—			(135	)		(186	)		(187	)		56			(92	)		—			43			52			53

Total comprehensive income (loss)		(402	)		798			(55	)		(363	)		(590	)		(192	)		(88	)		243			(34	)		(102	)		(221	)		26

Comprehensive income (loss) attributable to noncontrolling interest:
Net income		10			10			—			—			—			—			1			1			—			—			—			—
Foreign currency translation adjustments		(49	)		(49	)		—			—			—			—			13			13			—			—			—			—

Comprehensive income (loss) attributable to noncontrolling interest		(39	)		(39	)		—			—			—			—			14			14			—			—			—			—

Comprehensive income (loss) attributable to Tronox Limited	$	(363	)	$	837		$	(55	)	$	(363	)	$	(590	)	$	(192	)	$	(102	)	$	229		$	(34	)	$	(102	)	$	(221	)	$	26

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GUARANTOR CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated		Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidated		Eliminations			Tronox Finance LLC			Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	$	229	$	—		$	—		$	1		$	165		$	63	$	248	$	—		$	1		$	2	$	181	$	64
Restricted cash		5		—			—			—			5			—		3		—			—			—		3		—
Accounts receivable, net		391		—			—			—			303			88		424		—			—			—		325		99
Inventories, net		630		(24	)		—			—			439			215		532		(13	)		—			—		363		182
Other current assets		46		(4,345	)		657			1,473			1,149			1,112		49		(531	)		62			91		277		150
Investment in subsidiaries		—		2,596			—			(3,274	)		678			—		—		(1,327	)		—			1,009		318		—
Property, plant and equipment, net		1,843		—			—			—			1,388			455		1,831		—			—			—		1,322		509
Mineral leaseholds, net		1,604		—			—			—			1,266			338		1,607		—			—			—		1,236		371
Intercompany loans receivable		—		(7,106	)		688			5,936			76			406		—		(2,926	)		1,200			405		37		1,284
Other long-term assets		279		—			4			—			258			17		259		—			—			—		228		31
Total assets	$	5,027	$	(8,879	)	$	1,349		$	4,136		$	5,727		$	2,694	$	4,953	$	(4,797	)	$	1,263		$	1,507	$	4,290	$	2,690

LIABILITIES AND EQUITY
Short-term debt	$	150	$	—		$	—		$	—		$	150		$	—	$	150	$	—		$	—		$	—	$	150	$	—
Other current liabilities		398		(4,345	)	$	45			2,443			2,081			174		383		(531	)		43			495		181		195
Long-term debt		2,910		—			1,470			—			—			1,440
Long-term debt, net																		2,888		—			1,462			—		—		1,426
Intercompany loans payable		—		(7,106	)		5			694			6,338			69		—		(2,926	)		—			—		2,888		38
Other long-term liabilities		459		—			—			1			267			191		379		—			—			3		198		178
Total liabilities		3,917		(11,451	)		1,520			3,138			8,836			1,874		3,800		(3,457	)		1,505			498		3,417		1,837
Total equity		1,110		2,572			(171	)		998			(3,109	)		820		1,153		(1,340	)		(242	)		1,009		873		853
Total liabilities and equity	$	5,027	$	(8,879	)	$	1,349		$	4,136		$	5,727		$	2,694	$	4,953	$	(4,797	)	$	1,263		$	1,507	$	4,290	$	2,690

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GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

~~Nine~~Six Months Ended ~~September~~June 30, ~~2015~~2016

(Unaudited)

(Millions of U.S. dollars)

	Consolidated			Eliminations			Tronox Finance LLC			Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries
Cash Flows from Operating Activities:
Net income (loss)	$	(144	)	$	335		$	(34	)	$	(145	)	$	(273	)	$	(27	)
Depreciation, depletion and amortization		115			—			—			—			92			23
Other		98			(335	)		(18	)		189			297			(35	)
Cash provided by (used in) operating activities		69			—			(52	)		44			116			(39	)
Cash Flows from Investing Activities:
Capital expenditures		(55	)		—			—			—			(36	)		(19	)
Proceeds on sale of assets		1			—			—			—			1			—
Collections of intercompany loans		—			(115	)		79			—			—			36
Issuance of intercompany loans		—			72			(5	)		—			(67	)		—
Cash provided by (used in) investing activities		(54	)		(43	)		74			—			(102	)		17
Cash Flows from Financing Activities:
Repayments of debt		(23	)		—			(15	)		—			—			(8	)
Repayments of intercompany loans		—			115			—			(79	)		(36	)		—
Proceeds from debt		—			—			—			—			—			—
Proceeds from intercompany loans		—			(72	)		—			72			—			—
Dividends paid		(35	)		—			—			(35	)		—			—
Cash provided by (used in) financing activities		(58	)		43			(15	)		(42	)		(36	)		(8	)
Effects of exchange rate changes on cash and cash equivalents		2			—			—			—			—			2
Net increase (decrease) in cash and cash equivalents		(41	)		—			7			2			(22	)		(28	)
Cash and cash equivalents at beginning of period	$	229		$	—		$	—		$	1		$	165		$	63
Cash and cash equivalents at end of period	$	188		$	—		$	7		$	3		$	143		$	35

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22.	Subsequent Event

Consolidated Eliminations
Tronox
Finance LLC

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Cash Flows from Operating Activities:
Net income (loss) $ (218 ) $ 474 $ (55 ) $ (228 ) $ (404 ) $ (5 )
Depreciation, depletion and amortization 222 — — — 170 52
Other 41 (474 ) 578 234 333 (630 )

Cash provided by (used in) operating activities 45 — 523 6 99 (583 )

Cash Flows from Investing Activities:
Capital expenditures (141 ) — — — (44 ) (97 )
Acquisition of business (1,653 ) — — — (1,653 ) —
Investment in subsidiaries — 1,526 — (1,526 ) — —
Return of capital from subsidiaries — (24 ) — 24 — —
Collections of intercompany loans — (724 ) 79 25 43 577
Issuance of Intercompany loans — 1,386 (589 ) (3 ) (237 ) (557 )

Cash provided by (used in) investing activities (1,794 ) 2,164 (510 ) (1,480 ) (1,891 ) (77 )

Cash Flows from Financing Activities:
Repayments of debt (13 ) — — — (2 ) (11 )
Repayments of intercompany loans — 724 — (102 ) (601 ) (21 )
Proceeds from debt 750 — — — 150 600
Proceeds from intercompany loans — (1,386 ) — 1,380 3 3
Contribution from parent — (1,526 ) — — 1,526 —
Return of capital to parent — 24 — — (24 ) —
Debt issuance costs (15 ) — (13 ) — (2 ) —
Dividends paid (88 ) — — (88 ) — —
Proceeds from the exercise of warrants and options 3 — — 3 — —

Cash provided by (used in) financing activities 637 (2,164 ) (13 ) 1,193 1,050 571

Effects of exchange rate changes on cash and cash equivalents (19 ) — — — — (19 )

Net increase (decrease) in cash and cash equivalents (1,131 ) — — (281 ) (742 ) (108 )
Cash and cash equivalents at beginning of period $ 1,276 $ — $ — $ 283 $ 815 $ 178

Cash and cash equivalents at end of period $ 145 $ — $ — $ 2 $ 73 $ 70
As discussed in Note 1 above, on August 2, 2017, we announced that Tronox Holdings, entered into a Purchase Agreement, pursuant to which Genesis Energy L.P. agreed to acquire our Alkali Business for $1.325 billion in cash, subject to a working capital adjustment. We have agreed unconditionally to guarantee the indemnification and performance of the obligations of Tronox Holdings under the Purchase Agreement. Both Tronox Holdings and the Purchaser have agreed, following the closing, to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and for certain other liabilities, subject to certain limitations. The completion of the Alkali Sale is subject to certain customary closing conditions and is expected to close in the second half of 2017. At June 30, 2017, the Alkali asset group is classified as held and used as it did not meet the held for sale criteria, mainly board approval of a sale and a commitment to a plan to sell. In the second half of 2017, the loss from the Alkali Sale is expected to be approximately $200 million (net of tax), plus cost to sell. Beginning in the third quarter of 2017, the assets and liabilities of the Alkali Business will be classified as held for sale, in our unaudited Condensed Balance Sheets and its results of operations will be presented within discontinued operations in our unaudited Condensed Consolidated Statements of Operations for all comparative periods presented.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Tronox Limited’s unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. This discussion and other sections in this Quarterly Report on Form 10-Q 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.

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,~~tax, 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-Q 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 ~~consolidated Net loss~~net income (loss) to EBITDA and Adjusted EBITDA ~~and a reconciliation of Net income (loss) from operations to Adjusted EBITDA by segment are~~is also provided herein.

~~Executive~~ Overview

We are a global leader in the production and marketing of titanium bearing mineral sands and titanium dioxide (“TiO₂”) pigment, and the world’s largest producer of natural soda ash.

On April 1, 2015, we completed the acquisition of 100% of the Alkali business (“Alkali”) from FMC Corporation (“FMC”) for an aggregate purchase price of $1.65 billion in cash (the “Alkali Transaction”). Following the Alkali Transaction, we restructured our organization to reflect two integrated businesses, TiO₂~~and Alkali, as our~~Our two operating and reportable ~~segments.~~segments discussed below are TiO₂ and Alkali.

TiO₂Segment

We operate three TiO₂ pigment facilities at the following locations: Hamilton, Mississippi; Botlek, ~~The~~the Netherlands; and Kwinana, Western Australia, representing an aggregate annual TiO₂ production capacity of approximately 465,000 metric ~~tons (“MT”).~~tons. TiO₂~~is used in a wide range of products due to its ability to impart whiteness, brightness, and opacity. TiO~~₂is used extensively in the manufacture of paint and other coatings, plastics and paper, and in a wide range of other applications, including inks, fibers, rubber, food, cosmetics, and pharmaceuticals. 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. TiO₂is considered to be a quality of life product, and some research indicates that consumption generally increases as disposable income increases. At present, it is our belief that there is no effective mineral substitute for TiO₂ because no other white pigment has the physical properties for achieving comparable opacity and brightness, or can be incorporated as cost effectively. We also operate three separate mining operations: KwaZulu-Natal ~~(“KZN”)~~ Sands located in South Africa, Namakwa Sands located in ~~Brand se Baai in the Western Cape of~~ South Africa and Cooljarloo located in Western Australia.

Our TiO₂ segment includes the following:

Exploration, mining, and beneficiation of mineral sands deposits;

Production of titanium feedstock and its co-products (including chloride slag, slag fines, rutile, synthetic rutile and leucoxene), pig iron, and zircon;

•

Production and marketing of TiO₂; and

Electrolytic manganese dioxide manufacturing and marketing, which is primarily, focused on advanced battery materials and specialty boron products.

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Alkali Segment

Our Alkali business is the world’s largest natural soda ash producer. We supply our soda ash to a variety of industries such as flat glass, container glass, dry detergent and chemical manufacturing. Soda ash, also known by its chemical name sodium carbonate (Na₂CO₃), is a highly valued raw material in the manufacture of glass due to its properties of lowering the melting point of silica in the batch. Soda ash is also valued by detergent manufacturers for its absorptive and water softening properties. We produce our products from trona, which we mine at two sites in the Green River Basin, Wyoming. The vast majority of the world’s accessible trona reserves are located in the Green River Basin. According to historical production statistics, approximately one-quarter of global soda ash is produced from trona, with the remainder being produced synthetically, which requires chemical transformation of limestone and salt using a significantly higher amount of energy. Production of soda ash from trona is significantly less expensive than producing it synthetically. In addition, life-cycle analyses reveal that production from trona consumes less energy and produces less carbon dioxide and fewer undesirable by-products than synthetic production.

~~Table of Contents~~

Our Alkali segment includes the following:

Dry mining of trona ore underground at our Westvaco facility;

Secondary recovery of trona from previously dry mined areas underground at our Westvaco and Granger facilities through solution mining;

Refining of raw trona ore into soda ash and specialty sodium alkali products; and

Marketing, sale and distribution of alkali products.

Our Alkali segment currently produces approximately 4 million tons of soda ash and downstream specialty ~~products annually.~~products. All mining and processing activities related to our products take place in our facilities located in the Green River Basin of Wyoming, United ~~States.~~States (“U.S.”)

Recent Developments

InOn February 21, 2017, Tronox Limited, The National Titanium Dioxide Company Ltd., a limited company organized under the laws of the Kingdom of Saudi Arabia (“Cristal”), and Cristal Inorganic Chemicals Netherlands Coöperatief W.A., a cooperative organized under the laws of the Netherlands and a wholly owned subsidiary of Cristal (“Seller”), entered into a Transaction Agreement (the “Transaction Agreement”), pursuant to which we agreed to acquire Cristal’s titanium dioxide business for $1.673 billion in cash, subject to a working capital adjustment at closing (the “Cash Consideration”), plus 37,580,000 Class A ordinary shares, par value $0.01 per share, of Tronox Limited (the “Cristal Transaction”). Following the closing of the Cristal Transaction, the Seller will own approximately 24% of the outstanding ordinary shares (including both Class A and Class B) of Tronox Limited.

The Transaction Agreement provides that we must pay to Cristal a termination fee of $100 million if all conditions to closing, other than the financing condition, have been satisfied and the Transaction Agreement is terminated because closing of the Cristal Transaction has not occurred by May 21, 2018. The Cristal Transaction is also conditioned upon the receipt of various regulatory approvals, including antitrust clearance in numerous jurisdictions. On April ~~2016, we officially commissioned~~13, 2017, the U.S. Federal Trade Commission (“FTC”) issued a second request to the Company and Cristal in connection with its filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the parties are cooperating to provide the information requested by the FTC as promptly as practicable. The Cristal Transaction, which has been unanimously approved by our ~~Fairbreeze mine in KZN Province, South Africa~~board of directors (the “Board”), is expected to close by the first quarter 2018, subject to regulatory approvals and ~~began depreciating assets in service. The mine serves as~~satisfaction of customary closing conditions, including the favorable vote of a ~~replacement source of feedstock production for our Hillendale mine, which ceased mining operations in December 2013. The Fairbreeze mine is part~~majority of our ~~KZN Sands operations,~~outstanding shares.

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Concurrently with the announcement of the Cristal Transaction, we expressed intent to begin a process to market our Alkali business. On August 2, 2017, we announced that Tronox, Tronox US Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Tronox (“Tronox Holdings”), Tronox Alkali Corporation, a Delaware corporation and wholly owned subsidiary of Tronox Holdings (“Alkali”), and Genesis Energy, L.P. (“Purchaser”), entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which ~~also include~~the Purchaser agreed to acquire our Alkali Chemical business (the “Alkali Business”) for $1.325 billion in cash, subject to a ~~concentration plant,~~working capital adjustment (the “Alkali Sale”). We have agreed unconditionally to guarantee the indemnification and performance of the obligations of Tronox Holdings under the Purchase Agreement. Both Tronox Holdings and the Purchaser have agreed, following the closing, to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and for certain other liabilities, subject to certain limitations. The completion of the Alkali Sale is subject to certain customary closing conditions and is expected to close in the second half of 2017. At June 30, 2017, the Alkali asset group is classified as held and used as it did not meet the held for sale criteria, mainly board approval of a ~~mineral separation plant,~~sale and a ~~smelter complex with two furnaces. The Fairbreeze mine has current proved ore reserves of 139 million MTs. The annualized finished product capacity of the mine is included in the table below:~~

~~Capacity (metric tons per year)~~	~~KZN Sands~~
~~Rutile~~		~~25,000~~
~~Titanium Slag~~		~~220,000~~
~~Zircon~~		~~55,000~~
~~Pig Iron~~		~~121,000~~
~~Reserve life of mine~~	~~12+ Years~~

~~As previously announced, we continue~~commitment to ~~identify opportunities in our TiO~~₂~~segment for cost improvements, greater efficiencies, and ways~~a plan to make our workplace safer. To date, our operational excellence program has focused on sustainable and continuous cost improvement achieved through a broad based engagement of our employees to identify and implement cost improvement initiatives. This program currently has approximately 400 active initiatives. The operational excellence program will also achieve improved capability through better production and maintenance systems and disciplines – this is something we expect will enable our business to grow with the market with reduced capital requirements. The Hamilton, Mississippi facility has seen benefitssell. Beginning in the third quarter of ~~2016~~2017, the assets and liabilities of ~~approximately 3 to 5% capacity increase. The TiO~~₂~~segment has also continued to leverage~~ the integrated business establishing centers of excellence around several key technology areas common to our operating sites. The centers of excellence have enabled rapid identification and transfer of internal best practices through collaboration between sites with common technology platforms.

~~Our operating strategy continues to focus on matching TiO~~₂ ~~pigment production to market demand while keeping finished pigment inventories at or below normal levels. During the third quarter, our average pigment capacity utilization rate was~~Alkali Business will be classified as held for sale, in ~~excess of 100% with all lines at all pigment plants in operation.~~

The Chandala synthetic rutile kiln continued to operate at rates in the third quarter of 2016 similar to those in the second quarter. As previously announced, in 2015, we suspended the operation of two of our four furnaces in South Africa producing slag and pig iron and we continued to run at theses reduced rates during the third quarter of 2016.

~~As a result of all these TiO~~₂ ~~initiatives, we delivered during the first half of 2016 incremental cash cost reduction of $43 million and approximately $104 million of working capital reductions. See Note 2 of Notes to~~ our unaudited ~~condensed consolidated financial statements for additional information regarding restructuring expense.~~

~~During April 2016, Natron~~_X ~~notified~~Condensed Balance Sheets and its ~~customers~~results of ~~its intent to cease~~ operations ~~and end deliveries of product on June 30, 2016. On September 1, 2016, the Board of Directors of Natron~~_X ~~approved the demolition of the Natron~~_x plant located at the Westvaco facility and other costs associated with dissolving the joint venture. During the three months ended September 30, 2016, a reserve of $1 million of our share of expenses related to the termination of the Natron_X ~~business, including severance and other exit activities, was recognized and included in “Selling, general and administrative expenses”~~will be presented within discontinued operations in our unaudited Condensed Consolidated Statements of Operations for all comparative periods presented.

During the fourth quarter of 2016, we implemented various steps of an internal corporate reorganization plan to simplify our corporate structure and ~~in “Accrued liabilities” in~~thereby improve operational, administrative, and commercial synergies within each of our ~~unaudited Condensed Consolidated Balance Sheets as~~operating segments (the “Corporate Reorganization”). As a result of ~~September 30, 2016. We do not expect to incur any future expenses~~the Corporate Reorganization, we reduced our cross jurisdictional financing arrangements, eliminated administrative activities and reversed the deferred tax assets related to ~~the termination~~intercompany interest deductions. The related withholding tax accrual amounts were also reversed as a result of the ~~Natron~~_x~~business.~~Corporate Reorganization. Additionally, we reduced our deferred tax assets related to loss carryforwards which will no longer be available to utilize. In connection with the Corporate Reorganization during the first quarter of 2017, Tronox Limited became managed and controlled in the U.K., with no additional impacts to the consolidated provision for income taxes due to the valuation allowances in various jurisdictions. See Note 203 of notes to our unaudited condensed consolidated financial statements for additional information.

Business Environment

The following discussion includes trends and factors that may affect future operating results:

In the TiO₂segment, ~~we continued to leverage~~ our ~~vertical integration to lower our cost and secure our share with our customers. The prolonged downturn~~pigment business benefited from a global industry recovery that began in the ~~market resulted~~first quarter of 2016. To meet healthy demand, we operated our pigment plants at high utilization rates while matching pigment production volumes to sales volumes and keeping inventory at or below normal levels. Global pigment pricing has rebounded with successive gains in ~~announced plant closures and reduced production levels across~~each quarter since the ~~industry during 2015, which had a positive impact on reducing finished~~first quarter of 2016. We believe pigment ~~inventories. Pigment pricing was up~~inventories, in the ~~third quarter of 2016 compared~~aggregate, are at or below normal levels at both customer and producer locations globally resulting in a continued tight supply-demand balance. We continue to the second quarter of 2016, as it was in the second quarter compared to the first quarter. Global demand for pigment continued to recover and we gained additional traction for the second consecutive quarter on the implementation of the announced global price increases.

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~~During the third quarter, we used 100%~~use a significant majority of our high grade titanium feedstock for our pigment production and continued to reduce our titanium slag inventories. Demand in the third-party market for high grade titanium feedstock remained soft due to excessive inventory across the industry. Though natural rutile sale volumes and selling prices remained below year-ago levels, both sales volumes and selling prices improved compared to the second quarter. As production at two of our South African furnaces remained suspended, pig iron production and sales volumes were significantly lower, though selling prices firmed relative to the second quarter. Zircon sales volumes and selling prices remained below year-ago levels and they declined modestly from the second quarter. We expect zircon sales volumes in ~~2016~~2017 to exceed those of ~~2015 by approximately 5%~~2016 as we continue to ramp up production at our Fairbreeze mine to match market demand. ~~The trend towards increased usage and demand for lower grade products continues as end users look to reduce cost.~~

In our Alkali segment, our business remains in a sold-out mode resulting from the sustaining structural cost advantage of natural soda ash ~~industry fundamentals remain strong with global~~relative to higher cost of synthetic soda ash. Global demand for soda ash is expected to grow at about a 2% compound annual growth rate ~~(“CAGR”)~~ through 2024. Emerging markets continue to drive much of this growth with per capita consumption of soda ash in emerging markets less than 50% of U.S. levels of 16 kg per person per year. The U.S. market for soda ash is supplied by five domestic competitors with balanced supply and demand fundamentals. These market conditions have historically resulted in prices rising ~~on average~~for the majority of customers over the past ten ~~years, a trend projected to continue over the medium-long term. We~~years. In export markets, we anticipate that the pricing environment will ~~remain stable through the rest of the year with evidence that~~continue to be driven by production costs for Chinese soda ash exporters ~~costs are stabilizing after a sharp decrease from~~and the prior year. We believe the soda ash market, excluding China, continues to be balanced to tight from a supply-demand perspective. There may be some price pressure, particularly in Europe, beginning in 2017 as the industry anticipatestiming and magnitude of additional volume from the announced expansion of soda ash capacity in Turkey. ~~Nevertheless,~~At the same time, we expect that the competitive cost position of natural soda ash relative to the higher ~~cost~~ synthetic process cost will persist and demand for natural soda ash will continue to exceed available supply.

We continue to be uniquely tax-advantaged by favorable tax loss carry forwards and other favorable tax positions. We believe these tax-advantaged factors create opportunities for our operations to benefit for years to come. See Note 3 of notes to our unaudited condensed consolidated financial statements for additional information.

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Consolidated Results of Operations

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 compared to the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2015~~2016

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
	2016			2015			Variance			2016			2015			Variance			2017			2016			Variance			2017			2016			Variance
	(Millions of U.S. dollars)																		(Millions of U.S. dollars)
Net sales	$	533		$	575		$	(42	)	$	1,545		$	1,577		$	(32	)	$	622		$	538		$	84		$	1,191		$	1,014		$	177
Cost of goods sold		453			536			(83	)		1,388			1,479			(91	)		498			479			19			977			934			43

Gross profit		80			39			41			157			98			59			124			59			65			214			80			134
Selling, general and administrative expenses		(54	)		(55	)		1			(151	)		(171	)		20			(69	)		(51	)		(18	)		(143	)		(101	)		(42	)
Restructuring expense		(1	)		(5	)		4			(2	)		(7	)		5

Restructuring income (expense)																				—			1			(1	)		—			(1	)		1
Income (loss) from operations		25			(21	)		46			4			(80	)		84			55			9			46			71			(22	)		93
Interest and debt expense, net		(46	)		(45	)		(1	)		(138	)		(131	)		(7	)		(46	)		(46	)		—			(92	)		(92	)		—
Gain on extinguishment of debt		—			—			—			4			—			4			—			—			—			—			4			(4	)
Other income (expense), net		(14	)		23			(37	)		(23	)		22			(45	)

Loss before income taxes		(35	)		(43	)		8			(153	)		(189	)		36
Other expense, net																				(1	)		(3	)		2			(7	)		(12	)		5
Income (loss) before income taxes																				8			(40	)		48			(28	)		(122	)		94
Income tax provision		(7	)		(11	)		4			(29	)		(29	)		—			(3	)		(10	)		7			(5	)		(22	)		17

Net loss	$	(42	)	$	(54	)	$	12		$	(182	)	$	(218	)	$	36
Net income (loss)																			$	5		$	(50	)	$	55		$	(33	)	$	(144	)	$	111

Net sales for the three months ended ~~September~~June 30, ~~2016 decreased by 7 %~~2017 increased 16% compared to the same period in ~~2015~~2016 due to ~~lower~~higher selling prices of $62 million, higher volumes and product mix of $7$24 million, ~~and lower volumes~~partially offset by unfavorable changes in foreign currency translation of ~~$35~~$2 million.

Net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2016 decreased by 2%~~2017 increased 17% compared to the same period in ~~2015~~2016 due to ~~lower~~higher selling prices of $100 million, higher volumes and product mix of ~~$135 million and lower volumes of $87~~$81 million, partially offset by ~~nine~~unfavorable changes in foreign currency translation of $4 million.

Our gross profit margin for the three months ended June 30, 2017 was 20% of ~~Alkali~~net sales ~~in 2016~~ compared to 11% for the same period in 2016. The increase of $65 million was primarily due to higher selling prices of $62 million, higher volumes and product mix of $2 million, the impact of lower production costs of $14 million, offset by unfavorable changes in foreign currency translation of $13 million primarily from the Rand.

Our gross profit margin for the six months ~~in 2015, representing an~~ended June 30, 2017 was 18% of net sales compared to 8% of net sales during 2016. The increase of $134 million was primarily due to higher selling prices of $100 million, the impact of ~~$190~~lower production costs of $46 million, higher volumes and product mix of ~~net sales.~~$20 million, offset by unfavorable changes in foreign currency translation of $32 million primarily from the Rand.

Selling, general and administrative expenses increased by 35% during the three months ended June 30, 2017 compared to the same period of the previous year due to higher professional fees of $11 million mostly related to the Cristal Transaction and the process to market our Alkali business, the impact of higher employee stock-based and other compensation costs of $6 million and unfavorable changes in foreign currency translation of $1 million.

Selling, general and administrative expenses increased by 42% during the six months ended June 30, 2017 compared to the same period of the previous year primarily due to higher professional fees of $27 million primarily related to the Cristal Transaction and the process to market our Alkali business, the impact of higher employee stock-based and other compensation costs of $13 million and unfavorable changes in foreign currency translation of $2 million.

Restructuring income (expense) - see Note 2 of notes to unaudited condensed consolidated financial statements.

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~~During the three months ended September 30, 2016, cost of goods sold decreased by 15% compared to the same period in 2015, primarily due to a~~Interest and debt expense, net ~~decrease in volumes of $40 million, lower production costs of $30 million and a reduction of lower of cost or market reserves.~~

During the nine months ended September 30, 2016, cost of goods sold decreased by 6% compared to the same period in 2015, primarily due to lower volumes of $86 million, favorable foreign currency translation of $57 million, lower production costs of $22 million and decrease in lower of cost or market reserves, partially offset by the inclusion of nine months of Alkali cost of sales in 2016 compared to six months in 2015, representing an impact of $164 million of cost of goods sold.

Our gross profit during the three months ended September 30, 2016 was 15% of net sales compared to 7% in the same period in the prior year. The increase was primarily due to the impact of lower production costs of $30 million, a reduction in lower of cost or market reserves and lower volumes of $5 million, partially offset by lower selling prices and favorable product mix of $7 million.

Our gross profit during the nine months ended September 30, 2016 was 10% of net sales compared to 6% in the same period in the prior year. The increase was primarily due to the impact of favorable foreign currency translation of $56 million and the inclusion of Alkali results for nine months in the current year compared to six months in 2015 of $26 million, lower production costs of $22 million and a decrease in lower of cost or market reserves, partially offset by the impact of lower selling prices and product mix and volume of $133 million.

Selling, general and administrative expenses decreased by 2% and 12% during the three and nine months ended September 30, 2016 compared to the same period in 2015, respectively. Selling, general and administrative expenses for the three months ended September 30, 2016 was relatively flat compared to the same period in the prior year. The decrease during the nine months ended September 30, 2016 compared to 2015 was mainly due to decreased professional fees of $29 million related to the Alkali Transaction in 2015 and decreased other professional fees of $1 million, offset by a reversal of an Australian stamp tax accrual of $11 million related to the 2012 acquisition of the Exxaro Sands business.

~~Restructuring expense~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 decreased by $4 million and $5 million, respectively compared to the same periods in 2015. See Note 2 of Notes to unaudited condensed consolidated financial statements.~~

Interest and debt expense for the three months ended September 30, 2016 primarily consisted of interest expense on our $1.5 billion secured term loan (the “Term Loan”) of $17 million, interest expense on our $900 million aggregate principal amounts of Senior Notes at par value (the “Senior Notes due 2020”) of $14 million and interest expense on our $600 million aggregate principal amount of 7.5% Senior Notes due 2022 (the “Senior Notes due 2022”) of $11 million. Interest and debt expense during the three months ended September 30, 2015 was primarily comprised of interest expense on the Term Loan of $16 million, interest expense the Senior Notes due 2020 of $14 million, interest expense on the Senior Notes due 2022 of $11 million. Interest on the Term Loan, Senior Notes due 2020 and Senior Notes due 20222017 was consistent with ~~that~~the same period of ~~the three months ended September 30, 2015.~~2016. See Note 11 ~~to unaudited condensed consolidated financial statements.~~

~~Interest and debt expense during the nine months ended September 30, 2016 was primarily comprised~~ of interest expense on the Term Loan of $50 million, interest expense on the Senior Notes due 2020 of $43 million and interest expense on the Senior Notes due 2022 of $33 million. Interest and debt expense during the nine months ended September 30, 2015 is primarily comprised of interest expense on the Term Loan of $47 million, interest expense on the Senior Notes due 2020 of $43 million, interest expense on the Senior Notes due 2022 of $24 million and fees on the Bridge Facility of $8 million. Interest on the Senior Notes due 2022 increased by $9 million due to a full nine month’s interest expense in 2016 compared to the partial period interest expense in 2015. See Note 11notes to unaudited condensed consolidated financial statements.

Gain on debt extinguishment ofdecreased by $4 million ~~represents a repurchase~~during the six months ended June 30, 2017 compared to the same period of ~~$16 million~~the prior year. See Note 11 of face value of our Senior Notes Due 2022 at a price of 76% of par, resulting in a gain of approximately $3 million and a repurchase of $4 million of face value of our Senior Notes Due 2020 at a price of 77% of par, resulting in a gain of approximately $1 million.notes to unaudited condensed consolidated financial statements.

Other ~~income,~~expense, net ~~during~~for the three months ended ~~September~~June 30, 2017 primarily consisted of a net realized and unrealized foreign currency loss of $2 million, partially offset by interest income of $1 million. Other expense, net for the three months ended June 30, 2016 primarily consisted of an unrealized foreign currency loss of $3 million.

Other expense, net for the six months ended June 30, 2017 primarily consisted of a net realized and unrealized foreign currency loss of $9 million, partially offset by interest income of $2 million. Other expense, net during the six months ended June 30, 2016 primarily consisted of a net realized and unrealized foreign currency loss of ~~$15~~$13 million, partially offset by interest income of $1 ~~million. Other income, net during the three months ended September 30, 2015 primarily consisted of a net realized and unrealized foreign currency gain of $22 million and interest income of $1 million.~~

Other income, net during the nine months ended September 30, 2016 primarily consisted of a net realized and unrealized foreign currency loss of $28 million, offset by a $3 million gain on the sale of inventory produced during the commissioning phase of our Fairbreeze mine and interest income of $2 million. Other income, net during the nine months ended September 30, 2015 primarily consisted of a net realized and unrealized foreign currency gain of $17 million and interest income of $5 million.

The effective tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 differs from the U.K. statutory rate of 19% primarily due to valuation allowances and ~~2015~~income in foreign jurisdictions taxed at rates different than 19%. The effective tax rate for the three and six months ended June 30, 2016 differs from the Australian statutory rate of 30% primarily due to valuation allowances and income in foreign jurisdictions taxed at rates lower than 30%, and withholding tax accruals on interest income. The income tax provision for the three and six months ended June 30, 2017 differs from the income tax provision for the three and six months ended June, 2016 primarily due to withholding tax accruals on interest income which we made during 2016.

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Operations Review of Segment Revenue and Profit

U.S. GAAP has standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance.

We currently operate our business in two operating and reportable segments, TiO₂and Alkali. We evaluate reportable segment performance based on segment operating profit (loss), which represents the results of segment operations before unallocated costs, such as general corporate expenses not identified to a specific segment, interest expense, other income (expense), net and income tax expense ~~(benefit). Sales between segments~~or benefit. Intercompany sales within our TiO₂ segment are generally priced at market. Any resulting profit remaining in the inventory of the acquiring segment is eliminated in consolidation. See Note 2120 of ~~Notes~~notes to unaudited condensed consolidated financial ~~statements for additional information.~~statements.

Net Sales

Net sales by ~~segments~~segment were as follows:

		Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended June 30,							Six Months Ended June 30,
		2016		2015		Variance			2016		2015		Variance			(Millions of U.S. dollars)
	(Millions of U.S. dollars)															2017		2016		Variance			2017		2016		Variance
TiO₂ segment		$	339	$	380	$	(41	)	$	957	$	1,174	$	(217	)	$	421	$	333	$	88		$	799	$	618	$	181
Alkali segment			194		195		(1	)		588		403		185			201		205		(4	)		392		396		(4	)

Net Sales		$	533	$	575	$	(42	)	$	1,545	$	1,577	$	(32	)	$	622	$	538	$	84		$	1,191	$	1,014	$	177

TiO₂ segment

~~TiO~~₂ ~~segment net~~Net sales ~~during~~for the three months ended ~~September~~June 30, ~~2016 decreased~~2017 increased by ~~11%~~26% compared to the same ~~periods~~period in ~~2015 primarily~~2016 due to ~~lower volumes~~higher selling prices for Pigment of ~~$37~~$52 million and ~~lower selling prices~~Mineral Sands of $11 million, higher volumes and product mix for Pigment of ~~$4 million. TiO~~₂ ~~segment net~~$12 million and Mineral Sands of $15 million, partially offset by unfavorable changes in foreign currency translation of $2 million impacting Pigment Sales.

Net sales ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2016 decreased~~2017 increased by ~~18%~~29% compared to the same ~~periods~~period in ~~2015~~2016 primarily due to the impact of ~~lower~~higher selling prices for Pigment of $89 million and Mineral Sands of $13 million, higher volumes and product mix for Pigment of ~~$129~~$32 million and ~~lower volumes~~Mineral Sands of ~~$88 million.~~

~~Selling prices for the three months ended September 30, 2016 were higher for pigment products~~$51 million, partially offset by unfavorable changes in Asia-Pacific and Europe, Middle East and Africa, flat in Latin America and lower in North America compared to the same periods in 2015. Volumes were lower for zircon, rutile and pigment products in Latin America and Europe. Currency impacts are primarily related to the weakeningforeign currency translation of ~~the Euro versus the U.S. Dollar.~~$4 million impacting Pigment Sales.

Selling prices for the nine months ended September 30, 2016 were lower for pigment products in all regions and across most product lines compared to the same periods in 2015. Volumes were lower for zircon and pigment products in Latin America and Europe. Currency impacts are primarily related to the weakening

Table of ~~the Euro versus the U.S. Dollar.~~Contents

Alkali segment

Net sales in our Alkali segment for the three months ended ~~September~~June 30, ~~2016 were relatively flat~~2017 decreased by 2% compared to the same ~~periods~~period in ~~2015~~2016 primarily due to ~~lower selling prices~~a mix of ~~$3 million realized from ANSAC driven by lower pricing from Chinese exporters resulting from their decreased costs of production, offset by~~ higher international sales compared to domestic as overall sales volumes ~~of $2 million.~~were flat.

Net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2016 increased~~2017 decreased by ~~46%~~1% compared to the same ~~periods~~period in ~~2015 primarily~~2016. Price was 3% lower due to a ~~full nine month’s net~~combination of lower prices for domestic and international sales, down by 1% in ~~2016~~each market, as well as an unfavorable sales mix of higher international sales compared to ~~only six month’s sales during~~domestic. Volume increased by 2% over the ~~same period~~year ago first half despite the severe winter weather conditions at our Wyoming production facility early in ~~2015, representing an impact of $190 million, offset by lower selling prices of $5 million.~~the first quarter.

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Income (loss) from Operations

Income (loss) from operations by ~~segments~~segment was as follows:

	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,									Six Months Ended June 30,
	2016			2015			Variance		2016			2015			Variance		2017			2016			Variance			2017			2016			Variance
	(Millions of U.S. dollars)																(Millions of U.S. dollars)
TiO₂ segment	$	18		$	(26	)	$	44	$	(12	)	$	(58	)	$	46	$	61		$	7		$	54		$	93		$	(29	)	$	122
Alkali segment		23			21			2		54			46			8		23			12			11			42			33			9
Corporate		(16	)		(16	)		—		(38	)		(68	)		30		(29	)		(10	)		(19	)		(64	)		(26	)		(38	)

Income (loss) from operations		25			(21	)	$	46		4			(80	)	$	84		55			9		$	46			71			(22	)	$	93

Interest and debt expense, net		(46	)		(45	)				(138	)		(131	)				(46	)		(46	)					(92	)		(92	)
Gain on extinguishment of debt		—			—					4			—					—			—						—			4
Other income (expense), net		(14	)		23					(23	)		22

Loss before income taxes		(35	)		(43	)				(153	)		(189	)
Other expense, net																		(1	)		(3	)					(7	)		(12	)
Income (loss) before income taxes																		8			(40	)					(28	)		(122	)
Income tax provision		(7	)		(11	)				(29	)		(29	)				(3	)		(10	)					(5	)		(22	)

Net loss	$	(42	)	$	(54	)			$	(182	)	$	(218	)
Net income (loss)																	$	5		$	(50	)				$	(33	)	$	(144	)

TiO₂ segment

~~During~~Income from operations for the three months ended ~~September~~June 30, ~~2016, income from operations~~2017 increased by ~~169%~~$54 million compared to the same period in ~~2015~~2016 primarily due to an increase in gross profit of ~~$44 million.~~

~~During~~$57 million resulting from higher selling prices of $63 million, the ~~nine months ended September 30, 2016, income from operations increased by 79% compared to the same period in 2015 primarily due to an increase in gross profit~~impact of ~~$51 million, a decrease in restructuring expenses~~lower production costs of $5 million, higher volumes and product mix of $2 million, offset by unfavorable changes in foreign currency translation of $14 million. Gross profit was partially offset by an increase in selling, general and administrative expenses of $1 million and ~~other~~the reversal of $1 million of prior year restructuring costs.

Income from operations for the six months ended June 30, 2017, increased by $122 million compared to the same period in 2016 primarily due to higher selling prices of $102 million, the impact of lower production costs of ~~$10~~$32 million, higher volumes and product mix of $23 million, decreased restructuring costs of $1 million, offset by unfavorable changes in foreign currency translation of $34 million and increased Selling, general and administrative expenses of $2 million.

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Alkali segment

Income from operations ~~in our Alkali segment~~ for the three months ended ~~September~~June 30, ~~2016~~2017 increased by ~~10%~~$11 million compared to the same period in ~~2015~~2016 primarily due to ~~lower~~an increase in gross profit of $8 million and a decrease in selling, general and administrative expenses of ~~$5 million, partially offset~~$3 million. The prior year quarter was impacted by ~~lower gross profit~~the costs associated with the move of ~~$3 million.~~the longwall mining machine, the transition from a shared services agreement with the prior owner of the business and costs incurred prior to a labor agreement contract renewal. The next cost impact from a longwall mining machine move is expected in Q3 2017.

Income from operations for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 increased by ~~17%~~$9 million compared to the same period in ~~2015~~2016 primarily due to an increase in gross profit of $9 million, a ~~full nine months~~decrease in selling, general and administrative expenses of ~~operating results~~$1 million, partially offset by an increase in ~~2016 compared~~restructuring expense of $1 million. The prior year to ~~only six months~~date period was impacted by the costs associated with the move of ~~operating results in~~ the ~~same period in 2015.~~longwall mining machine, the transition from a shared services agreement with the prior owner of the business and costs incurred prior to a labor agreement contract renewal.

Corporate

Corporate ~~selling,~~ general and administrative expenses for the three months ended ~~September~~June 30, ~~2016 was flat~~2017 increased by $19 million compared to the same period in 2016, primarily due to higher professional fees of $11 million mostly related to the ~~prior year.~~Cristal Transaction and the process to market our Alkali business, the impact of higher employee stock-based and other compensation costs of $6 million and other general and administrative costs of $2 million.

Corporate ~~selling,~~ general and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2016 decreased~~2017 increased by ~~44%~~$39 million compared to the same period in ~~2015~~2016, primarily due to ~~spending for~~higher professional fees of $26 million primarily related to the Cristal Transaction and the process to market our Alkali ~~Transaction in~~business as well as the ~~prior year~~impact of ~~$29~~higher employee stock-based and other compensation costs of $13 million ~~a $2 million decrease in employee~~and decreased restructuring costs aof $1 million ~~decrease in insurance, and a $6 million decrease in other Corporate selling, general and administrative expenses, partially offset by a~~due to the reversal of restructuring expense pursuant to the settlement of claims previously filed relating to a ~~stamp tax accrual in Australia of $11 million in the same period in the~~ prior ~~year.~~restructure.

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Liquidity and Capital Resources

In our third quarter, our liquidity improved by $10 million to $470 million. For the nine month period ending September 30, 2016, our liquidity was reduced by $60 million, principally driven by availability under our UBS Revolver due to lower inventory levels.

The following table ~~below~~ presents our liquidity as of June 30, 2017 and December 31, 2016:

	June 30, 2017		December 31, 2016
Cash and cash equivalents	$	303	$	248
Available under the UBS Revolver		181		190
Available under the ABSA Revolver		—		95
Total	$	484	$	533

Our South African Rand (“R”) R1.3 billion (approximately $100 million at June 30, 2017 exchange rate) revolving credit facility with ABSA Bank Limited (the “ABSA Revolver”) acting through its ABSA Capital Division (the “ABSA”) expired on June 14, 2017. We are currently in discussions with ABSA regarding potentially renewing the ~~following dates:~~facility. As discussed below, we expect to have sufficient funds to cover our obligations over the next twelve months. See Note 11 of notes to unaudited condensed consolidated financial statements.

September 30,
2016

June 30,
2016

March 31,
2016

December 31,
2015

Cash and cash equivalents $ 202 $ 188 $ 152 $ 229
Available under the UBS Revolver 173 183 204 217
Available under the ABSA Revolver 95 89 88 84
Total $ 470 $ 460 $ 444 $ 530

~~We continue to fund~~Historically, we have funded our operations and ~~meet~~met our commitments through cash generated by operations. During 2012, we issued ~~$900 million~~ Senior Notes due 2020 at par value. Additionally, during 2013 and 2015, we obtained a $1.5 billion ~~Term Loan, which matures on March 19, 2020.~~

~~In addition to these cash resources, we have a $500 million global~~ senior secured ~~asset-based syndicated revolving credit facility with UBS AG~~term loan (the “UBS Revolver”) with an available amount to borrow of $173 million at September 30, 2016, and a R1.3 billion (approximately $95 million at September 30, 2016) revolving credit facility with ABSA Bank Limited (“ABSA”) acting through its ABSA Capital Division (the “ABSA Revolver”).

On April 1, 2015, in connection with the Alkali Transaction, we entered into an amended and restated asset-based revolving syndicated facility agreement with UBS, which provides for up to $500 million of revolving credit lines, with an $85 million sublimit for letters of credit. Availability of revolving credit loans and letters of credit are subject to a borrowing base. Borrowings bear interest at our option, at either a base rate or an adjusted London Interbank Offered Rate (“LIBOR”“Term Loan”) and borrowings in Euros bear interest at an adjusted LIBOR, in each case plus an applicable margin. The base rate is defined as the greatest of (a) the Administrative Agent’s prime rate, (b) the Federal funds effective rate plus 0.50% and (c) the adjusted LIBOR forissued a one-month period plus 1.00%. The applicable margin ranges from 0.50% to 1.00% for borrowings at the base rate and from 1.50% to 2.00% for borrowings at the adjusted LIBOR, in each case, based on the average daily borrowing availability. On April 1, 2015, we borrowed $150 million against the UBS Revolver which was outstanding at both September 30, 2016 and December 31, 2015.

On March 6, 2015, Evolution Escrow Issuer LLC (“Evolution”), a special purpose limited liability company organized under the laws of Delaware, was formed. Evolution was wholly owned by Stichting Evolution Escrow, a Dutch foundation not affiliated with the Company. On March 19, 2015, Evolution closed an offering of $600 million aggregate principal amount of its 7.50% Senior Notes due 2022, ~~(the “Senior Notes due 2022”). Evolution was initially a wholly owned subsidiary~~respectively. See Note 11 of ~~Stichting Evolution Escrow, a Dutch foundation that is not an affiliate of Tronox Limited. The Senior Notes due 2022 were offered and sold by Evolution in reliance on an exemption pursuant~~notes to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Senior Notes due 2022 have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Senior Notes due 2022 were issued under an Indenture, dated as of March 19, 2015 (the “Indenture”), between Evolution and Wilmington Trust, National Association (the “Trustee”). The Indenture and the Senior Notes due 2022 provide, among other things, that the Senior Notes due 2022 are senior unsecured obligations of Tronox Finance. Interest is payable on the Senior Notes due 2022 on March 15 and September 15 of each year beginning on September 15, 2015 until their maturity date of March 15, 2022. On April 1, 2015, inunaudited condensed consolidated financial statements. In connection with the ~~Alkali Transaction, Evolution merged~~Cristal transaction, we are in discussions with several banks regarding refinancing and ~~into Tronox Finance, LLC (“Tronox Finance”)~~increasing our existing credit facilities with the expectation of lowering our cost of debt while extending the portfolio’s weighted average years to maturity. We expect to improve our mix of secured and ~~Tronox Finance assumed the obligations of Evolution under the Indenture and the Senior Notes due 2022, and the proceeds from the offering of the Senior Notes due 2022 were released~~unsecured debt to us. We and certain of our subsidiaries entered into a supplemental indenture by and among us, Tronox Finance, the guarantors party thereto, and the Trustee, pursuant to which we and such subsidiaries became guarantors of the Senior Notes due 2022 under the Indenture.achieve more favorable covenants.

At ~~September~~June 30, ~~2016,~~2017, we had outstanding letters of credit, bank guarantees, and performance bonds, see Note 14 of ~~$67 million,~~notes to unaudited condensed consolidated financial statements.

Table of which $42 million were letters of credit issued under the UBS Revolver, $18 million were bank guarantees and letters of credit issued under the ABSA Revolver, $5 million were bank guarantees issued by Standard Bank and $2 million were performance bonds issued by Westpac Banking Corporation.Contents

In the next twelve months, we expect that our operations and available borrowings under our revolving credit agreements will provide sufficient cash to fund our operating expenses, capital expenditures, interest payments, debt repayments, and dividends. Working capital (calculated as current assets less current liabilities) was ~~$669~~$772 million at ~~September~~June 30, ~~2016~~2017 compared to ~~$753~~$723 million at December 31, ~~2015, a decrease~~2016, an increase of ~~$84~~$49 million, which is primarily due to cash provided by operations of $137 million, partially offset by dividends paid of ~~$40~~$12 million, capital expenditures of ~~$87~~$56 million, ~~and $15~~$8 million of ~~cash paid for the repurchase of $4 million~~principal repayment on our Term Loan and ~~$16~~$11 million of ~~face value~~tax payments related to stock-based compensation. Additionally, as disclosed in Note 1 and above, we expect to receive proceeds of $1.325 billion from the ~~Senior Notes Due 2020~~sale of our Alkali Business to fund the Cristal Transaction in addition to refinancing and ~~the Senior Notes Due 2022, at 77% and 76% of par, respectively.~~increasing our existing credit facilities.

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Principal factors that could affect the availability of our internally-generated funds include (i) the deterioration of our revenues in either of our business segments; (ii) an increase in our expenses; or (iii) changes in our working capital ~~requirements.~~requirements; (iv) our closing of the Alkali Sale, subject to customary regulatory approvals and closing conditions, as a source of funds for the Cristal Transaction; or (v) funding related to the Cristal Transaction. See Note 1 to notes to condensed 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;~~debt obligations; or (vi) volatility in public debt and equity markets.

As of ~~September~~June 30, ~~2016,~~2017, our credit rating with Moody’s and Standard & Poor’s iswas B2 ~~negative outlook~~on review for possible upgrade and B+B negative outlook, respectively. On January 23, 2017, Standard & Poor’s lowered our corporate credit rating to B negative outlook from B+ negative outlook. On February 21, 2017, Moody’s placed the B2 rating on review for possible upgrade from B2 negative outlook. At ~~September~~June 30, ~~2016,~~2017, we are in compliance with all our financial covenants, have sufficient borrowings available and have no significant principal payments on debt due until 2020.

Cash and Cash Equivalents

We consider all investments with original maturities of three months or less to be cash equivalents. As of ~~September~~June 30, ~~2016,~~2017, our cash and cash equivalents were primarily invested in money market funds. 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.

The use of our cash includes servicing our interest and debt repayment obligations, making pension contributions and making quarterly dividend ~~payments and capital expenditures.~~payments.

Repatriation of Cash

At ~~September~~June 30, ~~2016,~~2017, we held ~~$205~~$305 million in cash and cash equivalents and restricted cash in these respective jurisdictions: ~~$25~~$28 million in Europe, ~~$86~~$120 million in Australia, ~~$10~~$106 million in South Africa, and ~~$84~~$51 million in the ~~United States.~~U.S. Our credit facilities limit transfers of funds from subsidiaries in the ~~United States~~U.S. to certain foreign subsidiaries.

Tronox Limited has foreign subsidiaries with positive undistributed earnings at ~~September~~June 30, ~~2016.~~2017. We have made no provision for deferred taxes related to these undistributed earnings because they are considered to be indefinitely reinvested in the foreign jurisdictions.

Cash Dividends on Class A and Class B Shares

~~During 2016, we declared and paid quarterly dividends to holders of our Class A ordinary shares (“Class A Shares”) and Class B ordinary shares (“Class B Shares”) as follows:~~

Three Months
Ended March 31,
2016

Three Months
Ended June 30,
2016

Three Months
Ended September 30,
2016

Dividend per share $ 0.25 $ 0.045 $ 0.045
Total dividend $ 30 $ 5 $ 5
Record date (close of business) March 4 May 16 August 17

On ~~November 3, 2016,~~August 8, 2017, the Board ~~of Directors~~ declared a quarterly dividend of $0.045 per share to holders of our Class A Shares and Class B Shares at the close of business on ~~November 16, 2016,~~August 21, 2017, totaling $5$6 million, which will be paid on ~~or before December 2, 2016.~~August 31, 2017. See Note 15 of notes to unaudited condensed consolidated financial statements for declared and paid quarterly dividends by quarter.

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Debt Obligations

At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, our net debt (the excess of our debt over cash and cash equivalents) was ~~$2.9~~$2.7 billion and $2.8 billion, respectively.

~~Short-term debt~~

~~Our short-term debt consisted of a UBS Revolver, defined below, and was $150 million at~~At both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015. The average effective interest rates of~~2016, our ~~UBS Revolver were 4.4%~~short-term was $150 million. At both June 30, 2017 and ~~4.1% during the three and nine months ended September 30,~~December 31, 2016, ~~respectively, and 4.3% and 3.4% during the three and nine months ended September 30, 2015, respectively.~~

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~~Long-term debt~~

~~Long-term~~our long-term debt, net of an unamortized discount ~~consisted~~was $2.9 billion. See Note 11 of ~~the following:~~notes to unaudited condensed consolidated financial statements for specific debt information.

Original
Principal

Annual
Interest Rate

Maturity
Date

September 30
2016

December 31,
2015

(Millions of U.S. dollars)
Term Loan, net of unamortized discount ₍₁₎
$ 1,500 Variable 3/19/2020 $ 1,444 $ 1,454
Senior Notes due 2020 $ 900 6.375 % 8/15/2020 896 900
Senior Notes due 2022 $ 600 7.50 % 3/15/2022 584 600
Co-generation Unit Financing Arrangement $ 16 6.5 % 2/1/2016 — 1
Lease financing 19 16
Total borrowings 2,943 2,971
Less: Long-term debt due within one year (16 ) (16 )
Debt issuance costs (38 ) (45 )
Long-term debt $ 2,889 $ 2,910

⁽¹⁾

Average effective interest rate of 4.9% each during the three and nine months ended September 30, 2016, respectively, and 4.7% and 4.6% during the three and nine months ended September 30, 2015, respectively.

At ~~September~~June 30, ~~2016,~~2017, we had financial covenants in the UBS Revolver ~~the ABSA Revolver~~ and the Term ~~Loan; however, only the~~Loan. The ABSA Revolver which expired on June 14, 2017 had a financial maintenance covenant that ~~applies~~applied to local operations ~~and~~ only when ~~the ABSA Revolver is~~ drawn upon. We are currently in discussions with ABSA regarding potentially renewing the facility.

The Term Loan and the UBS Revolver are subject to an intercreditor agreement pursuant to which the lenders’ respective rights and interests in the security are set forth. We were in compliance with all our financial covenants as of and for three and ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017.

Cash Flows

The following table presents cash flow for the periods indicated:

		Nine Months Ended September 30,						Six Months Ended June 30,
		2016			2015			2017			2016
	(Millions of U.S. dollars)							(Millions of U.S. dollars)
Net cash provided by operating activities		$	123		$	45		$	137		$	69
Net cash used in investing activities			(86	)		(1,794	)		(56	)		(54	)
Net cash provided by (used in) financing activities			(67	)		637
Net cash used in financing activities									(31	)		(58	)
Effect of exchange rate changes on cash			3			(19	)		5			2
Net decrease in cash and cash equivalents		$	(27	)	$	(1,131	)
Net increase (decrease) in cash and cash equivalents								$	55		$	(41	)

Cash Flows provided by Operating Activities — Net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 increased by ~~$78~~$68 million compared to the same period in ~~2015~~2016 primarily due to ~~net decreases in accounts receivable, inventories and income taxes payable.~~higher cash earnings.

Cash Flows used in Investing Activities — Net cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016 decreased~~2017 increased by ~~$1,708~~$2 million compared to the same period in ~~2015 primarily~~2016 due to ~~cash used in~~higher capital expenditures and the 2015 acquisition of Alkali of $1,653 million and reduction in capital expenditure purchases by $54 million. Capital expenditures during the nine months ended September 30, 2016 and 2015 were $87 million and $141 million, respectively, including Fairbreeze.benefit from asset sales.

Cash Flows used in Financing Activities — Net cash used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 was ~~primarily~~ attributable to dividends paid of ~~$40~~$12 million and principal repayments on long-term debt of ~~$27 million. This compares to net~~$8 million and $11 million of restricted stock and performance-based shares settled in cash ~~provided by~~for taxes. Net cash used in financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2015, which~~2016 was ~~primarily~~ attributable to ~~$600 million of cash received from the issuance of the Senior Notes due 2022, $150 million of cash received on the drawdown of the UBS Revolver, partially offset by~~ dividends paid of ~~$88 million, debt issuance costs of $15~~$35 million and principal repayments on long-term debt of ~~$13~~$23 million.

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Contractual Obligations

The following table sets forth information relating to our contractual obligations as of ~~September~~June 30, ~~2016:~~2017:

	Contractual Obligation Payments Due by Year ⁽³⁾⁽⁴⁾
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(Millions of U.S. dollars)
Long-term debt, net and lease financing (including interest) ⁽¹⁾	$	3,681	$	338	$	1,748	$	985	$	610
Purchase obligations ⁽²⁾		436		138		113		63		122
Operating leases		180		33		44		37		66
Asset retirement obligations		80		4		3		4		69
Total	$	4,377	$	513	$	1,908	$	1,089	$	867

Contractual Obligation
Payments Due by Year ₍₃₎₍₄₎

Total
Less than
1 year

1-3
years

3-5
years

More than
5 years

(Millions of U.S. dollars)
Long-term debt and lease financing (including interest) ₍₁₎
$ 3,806 $ 333 $ 367 $ 2,474 $ 632
Purchase obligations ₍₂₎
455 120 127 66 142
Operating leases 187 33 43 36 75
Asset retirement obligations 82 4 4 6 68
Total $ 4,530 $ 490 $ 541 $ 2,582 $ 917

⁽¹⁾	We calculated the Term Loan interest at a base rate of 1% plus a margin of 3.5%. See Note 11 of ~~Notes~~notes to unaudited condensed 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 ~~2016.~~2017. 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 above 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.

⁽⁴⁾	The table above excludes commitments pertaining to our pension and other postretirement obligations.

Non-U.S. GAAP Financial Measures

EBITDA and Adjusted EBITDA, which are used by management to measure performance, are not presented in accordance with U.S. GAAP. Management believes that EBITDA is 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 and Adjusted EBITDA differently than we do, EBITDA and Adjusted EBITDA, 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;

Provide a normalized view of our operating performance by excluding items that are either noncash, infrequently occurring, or non-recurring in nature;

Assist investors in assessing our compliance with financial covenants under our debt instruments; and

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Adjusted EBITDA is one of 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.

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The following table reconciles net loss to EBITDA and Adjusted EBITDA for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(Millions of U.S. dollars)
Net income (loss) (U.S GAAP)	$	5		$	(50	)	$	(33	)	$	(144	)
Interest and debt expense, net		46			46			92			92
Interest income		(1	)		(1	)		(2	)		(2	)
Income tax provision		3			10			5			22
Depreciation, depletion and amortization expense		62			60			123			115
EBITDA (non-U.S. GAAP)		115			65			185			83
Share based compensation ^(a)		8			5			22			10
Transaction costs ^(b)		9			—			20			—
Restructuring (income) expense ^(c)		—			(1	)		—			1
Gain on extinguishment of debt ^(d)		—			—			—			(4	)
Foreign currency remeasurement ^(e)		3			4			6			18
Other items ^(f)		5			(2	)		8			3
Adjusted EBITDA (non-U.S. GAAP) ^(g)	$	140		$	71		$	241		$	111

Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
(Millions of U.S. dollars)
Net loss (U.S GAAP) $ (42 ) $ (54 ) $ (182 ) $ (218 )
Interest and debt expense, net 46 45 138 131
Interest income — (1 ) (2 ) (5 )
Income tax provision 7 11 29 29
Depreciation, depletion and amortization expense 60 82 175 222
EBITDA (non-U.S. GAAP) 71 83 158 159
Amortization of inventory step-up from purchase accounting _(a)
— — — 9
Alkali Transaction costs _(b)
— 2 — 29
Restructuring expense _(c)
1 5 2 7
Gain on extinguishment of debt _(d)
— — (4 ) —
Foreign currency remeasurement _(e)
14 (20 ) 32 (16 )
Other items _(f)
12 11 21 24
Adjusted EBITDA (non-U.S GAAP) _(g)
$ 98 $ 81 $ 209 $ 212

_^(a)

~~Amortization~~Represents non-cash share-based compensation. See Note 17 of ~~inventory step-up from purchase accounting related~~notes to unaudited condensed consolidated financial statements.

^(b)	Represents transaction costs associated with the ~~acquisition of the Alkali business~~Cristal Transaction which ~~is included~~were recorded in ~~“Cost of goods sold”~~“Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.

_(b)	~~One-time non-operating items and the effect of acquisition which is included in "Selling, general and administrative expenses" in the unaudited Condensed Consolidated Statements of Operations.~~

_^(c)

Represents severance and other costs associated with the shutdown of our sodium chlorate plant, and other global ~~TiO~~₂restructuring efforts ~~and the Alkali Transaction~~ which was recorded in ~~"Restructuring expense"~~“Restructuring income (expense)” in the unaudited Condensed Consolidated Statements of Operations. See Note 2 of ~~Notes~~notes to unaudited condensed consolidated financial statements.

_^(d)

Represents the gain associated with the repurchase of $20 million face value of our Senior Notes due 2020 and Senior Notes 2022, which was recorded in ~~"Gain~~“Gain on extinguishment of ~~debt"~~debt” in the unaudited Condensed Consolidated Statements of Operations.

_^(e)

Represents foreign currency remeasurement which is included in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.

_^(f)

Includes noncash pension and postretirement costs, ~~share-based compensation,~~ severance expense, ~~adjustment of transfer tax related to the Exxaro Transaction,~~ insurance settlement gain and other items included in “Selling general and administrative expenses” and “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations.

_^(g)

No income tax impact given full valuation allowance except for South Africa related restructuring ~~costs of less than $1 million.~~costs. See Notes 32 and 23 to unaudited condensed consolidated financial statements.

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The following table reconciles income (loss) from operations, our comparable measure for segment reporting under U.S. GAAP, to Adjusted EBITDA by ~~segments~~segment for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
TiO₂ segment	$	18		$	(26	)	$	(12	)	$	(58	)	$	61		$	7		$	93		$	(29	)
Alkali segment		23			21			54			46			23			12			42			33
Corporate		(16	)		(16	)		(38	)		(68	)		(29	)		(10	)		(64	)		(26	)
Income (loss) from operations (U.S. GAAP)		25			(21	)		4			(80	)		55			9			71			(22	)
TiO₂ segment		44			64			127			189			44			43			88			83
Alkali segment		15			16			44			28			16			15			32			29
Corporate		1			2			4			5			2			2			3			3
Depreciation, depletion and amortization expense		60			82			175			222			62			60			123			115
TiO₂ segment		13			20			41			48			18			7			27			25
Alkali segment		2			4			5			17			2			2			5			3
Corporate		(2	)		(4	)		(16	)		5			3			(7	)		15			(10	)
Other		13			20			30			70			23			2			47			18
TiO₂ segment		75			58			156			179			123			57			208			79
Alkali segment		40			41			103			91			41			29			79			65
Corporate		(17	)		(18	)		(50	)		(58	)		(24	)		(15	)		(46	)		(33	)
Adjusted EBITDA (non-U.S. GAAP)	$	98		$	81		$	209		$	212		$	140		$	71		$	241		$	111

Recent Accounting Pronouncements

See Note 1 of ~~Notes~~notes to ~~our~~ unaudited condensed 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 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.

Our mining operations in Wyoming are subject to several mine permits issued by the Land Quality Division of the Wyoming Department of Environmental Quality (“WDEQ”). WDEQ imposes detailed reclamation obligations on us as a holder of mine permits. WDEQ has ~~permitted~~required us to ~~“self-bond”~~secure our ~~reclamation~~ obligations ~~as long as our Alkali Wyoming subsidiary maintains a minimum net worth.~~through posting commercial surety bonds. As of ~~September~~June 30, ~~2016,~~2017, the amount ofsecured under the ~~self-bond~~surety bonds was approximately $80 million. The amount of the ~~bond~~bonds is subject to change based upon periodic re-evaluation of our reclamation obligations by WDEQ.

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Item 3.

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, through the use of derivative instruments. We do not invest in derivative instruments for speculative purposes, but historically have entered into, and may enter into derivative ~~instrument~~ transactions 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 ~~with~~over the ~~business cycle.~~next few years. Margins in our Alkali business could be affected if product prices change because our competitors add or reduce capacity or demand changes due to economic reasons. ~~Alkali~~Alkali’s margins could be impacted as well by fluctuations in input costs (such as energy, labor and transportation) that are subject to similar supply and demand dynamics. 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.

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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 TiO_2, 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. While our customer base is more diverse in the case of the Alkali segment, we have significant exposure to credit risk in industries that are affected by cyclical economic fluctuations, such as flat glass manufacturing and mining. We perform ongoing credit evaluations of our customers and use credit risk insurance policies from time to time, as deemed appropriate, to mitigate credit risk but generally do not require collateral. ~~In the Alkali segment, our~~Our contracts typically enable us to tighten credit terms if we perceive additional credit risk and historic losses due to write offs of bad debt have been relatively low. In addition, due to our international operations in our TiO₂segment, we are subject to potential trade restrictions and sovereign risk in certain countries we operate in. Because the Alkali segment sells to ANSAC for resale to foreign buyers, we avoid the risks of credit exposure to individual international buyers and regions. We maintain allowances for potential credit losses based on specific customer review and current financial conditions. ~~During the three months ended September 30, 2016, our ten largest third-party TiO~~₂ ~~customers and our ten largest Alkali customers represented approximately 25% and 24 %, respectively,~~See Note 20 of ~~our~~notes to unaudited condensed consolidated ~~net sales. During the three months ended September 30, 2015, our ten largest third-party TiO~~₂ ~~customers and our ten largest Alkali customers represented approximately 28% and 21%, respectively,~~financial statements for details of our consolidated net sales. During the three months ended September 30, 2016 and 2015, ANSAC accounted for 13% and 11%, respectively, of our consolidated net sales. During the nine months ended September 30, 2016, our ten largest third-party TiO₂ customers and our ten largest Alkali customers represented approximately 23% and 24%, respectively, of our consolidated net sales; ANSAC accounted for 13% of our consolidated net sales. During the nine months ended September 30, 2015, our ten largest third-party TiO₂ ~~customers and our ten largest Alkali customers represented approximately 31% and 16%, respectively, of our consolidated net sales; no single~~ customer ~~accounted for more than 10% of our consolidated net sales.~~concentration by segment.

Interest Rate Risk

Interest rate risk arises from the ~~probability~~possibility that changes in interest rates will impact our financial results. ~~Our exposure~~We are exposed to interest rate risk ~~is minimized by the fact that~~on our ~~$1.5 billion of~~ floating rate debt, the Term Loan and UBS Revolver balance. The Term Loan includes a LIBOR floor ofat 1%. As such, if LIBOR ~~would need to increase from the rate in effect at September 30, 2016 to greater~~increases by more than 1% ~~before~~ our borrowing rate ~~would increase.~~will increase accordingly. Using a sensitivity analysis as of ~~September~~June 30, ~~2016,~~2017, a hypothetical 1% increase in interest rates would result in ana net increase to pre-tax loss of approximately ~~$12~~$13 million on an annualized basis. This is due to the fact that earnings on our floating rate financial assets of ~~$202~~$303 million at ~~September~~June 30, ~~2016 would increase by the full 1% while~~2017 and the interest expense on our floating rate debt, our Term Loan and UBS Revolver balance, would each increase by the full 1% ~~on the $150 million UBS Revolver balance and less than the full 1% on our $1.5 billion Term Loan balance.~~.

Currency Risk

Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the value of our assets and liabilities denominated in foreign currencies, as well as our earnings due to the translation of our balance sheets and remeasurement of our statements of operations from local currencies to U.S. dollars. 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, South Africa, and ~~The~~the Netherlands. 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. ~~The foreign exchange risk in Europe however, is partially mitigated as the majority of revenues and expenses are in the same local currency creating a partially natural hedge.~~ Since we are exposed to movements in the South African Rand and the Australian Dollar versus the U.S. dollar, we ~~have, from time to time, entered~~may enter into forward contracts to buy and sell foreign currencies as “economic hedges” for these foreign currency transactions.

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~~Item~~Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~September~~June 30, ~~2016,~~2017, our management, with the participation of our Chief Executive Officer (“CEO”) and ~~Vice President – Corporate Controller and~~ Chief ~~Accounting~~Financial Officer (“~~CAO”~~CFO”), has conducted an evaluation of our disclosure controls and procedures. Based on that evaluation, our CEO and ~~CAO~~CFO concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2016.~~2017.

Under the supervision of and with the participation of Tronox’s management, including our CEO and ~~CAO,~~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 ~~September~~June 30, ~~2016,~~2017, the end of the period covered by this report. Based on that evaluation, we have concluded that the Company’s disclosure controls and procedures were effective as of that date. Tronox’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Tronox in the reports that it files or submits under the Exchange Act is accumulated and communicated to Tronox’s management, including Tronox’s principal executive and principal financial officers, or other persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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An evaluation of our internal controls over financial reporting was also performed to determine whether any changes have occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2016~~2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

~~Item~~Item 1.

Legal Proceedings

From time to time, we may be party to a number of legal and administrative proceedings involving environmental and/or other matters in various courts or agencies. These proceedings, individually and in the aggregate, may have a material adverse effect on us. These proceedings may be associated with facilities currently or previously owned, operated or used by us and/or our predecessors, some of which may include claims for personal injuries, property damages, cleanup costs and other environmental matters. Our current and former operations may also involve management of regulated materials, which are subject to various environmental laws and regulations including the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act or state equivalents. Similar environmental laws and regulations and other requirements exist in foreign countries in which we operate.

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~~Item~~Item 1A.

Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under “Risk Factors” included in ~~the~~our Annual Report on Form ~~10-K and Form 10-Q for the three months ended March 31, 2016.~~10-K. The risks described herein or in the Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. There have been no ~~material~~ changes from the risk factors disclosed under the heading “Risk Factors” in our Form 10-K and our Form 10-Q for the three months ended March 31, ~~2016.~~2017, except as noted below.

Our South African operations may lose the benefit of the Black Economic Empowerment (“BEE”) status under South African legislation, resulting in the need to implement a remedial solution or introduce a new minority shareholder, which could negatively impact our South African operations.

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 main-stream economy. Under BEE legislation, South African businesses are required to become “empowered”. South African mining companies are required to comply with a “sector charter” in order to be deemed “empowered”. The South African Mining Charter specifies certain requirements that all mining companies must satisfy, including a requirement that at least 26% of the shares in such companies are held by BEE “empowered” entities. Exxaro takes the position that it is a BEE “empowered” company under the so-called “once empowered always empowered” principle that emerges from the joint reading of the original Mining Charter (promulgated in 2004) and the amendment thereto promulgated in 2010.

Exxaro retains a 26% direct ownership interest in each of Tronox KZN Sands (Pty) Ltd and Tronox Mineral Sands (Pty) Ltd in order for these two entities to comply with the requirements of the Mineral and Petroleum Resources Development ACT (“MPRDA”) and the South African Mining Charter ownership requirements.

Pursuant to our Shareholders’ Agreement with Exxaro, Exxaro has agreed to maintain its direct ownership for a period of the shorter of the date on which the requirement to maintain a direct ownership stake in each of Tronox KZN Sands (Pty) Ltd and Tronox Mineral Sands (Pty) Ltd no longer applies or June 2022 (unless it transfers the direct ownership interests to another qualified buyer under the MPRDA and the Mining Charter). If either Tronox KZN Sands (Pty) Ltd or Tronox Mineral Sands (Pty) Ltd ceases to qualify under the Mining Charter, Tronox Limited and Exxaro have agreed to jointly seek a remedial solution. If Tronox Limited and Exxaro cannot successfully implement a solution and the reason for this failure is due to anything other than a change in law, then we may dispose of Exxaro’s shares in the non-qualifying company to another BEE compliant, qualifying purchaser. During any period of any non-qualification, our South African operations may be in violation of their mining or prospecting rights, as well as the requirements of the MPRDA and the South African Mining Charter, which could result in a suspension or revocation of the non-qualifying company’s mining and prospecting rights (after providing the non-compliant company with an opportunity to remedy the defect complained of) and could expose us to operating restrictions, lost business opportunities and delays in receiving further regulatory approvals for our South African operations and expansion activities. In addition, if Exxaro’s direct ownership in Tronox KZN Sands (Pty) Ltd and Tronox Mineral Sands (Pty) Ltd is sold to another purchaser, we could be required to share control of our South African operations with a minority shareholder, which may impact our operational and financial flexibility and could impact profitability, expansion opportunities and our results of operations.

There are two concurrent legal challenges in South Africa that could be material to us. First, the question of whether the “once empowered always empowered” principle applies in the mining industry in South Africa is subject to current litigation between the South Africa Chamber of Mines (an industry body that represents approximately 90% of the South African Mining Industry) and the South African Department of Mineral Resources. The “once empowered always empowered” principle asserts that a South African company that has had the requisite shareholding base consisting of historically disadvantaged South Africans for a minimum period of ten years will always qualify as an “empowered” entity. In the mining sector, the requisite shareholding base is 26%. An adverse outcome in connection with such litigation could adversely affect our business, financial condition and results of operations.

Second, on June 15, 2017, the Department of Mineral Resources issued a substantially revised South African Mining Charter. The revised charter sets forth new requirements with regard to continuing ownership of mining rights by BEE entities, the form and percentage of that ownership by BEE entities, procurement from BEE compliant entities, race and gender ownership and employment quotas, and workers’ housing and living conditions. The new charter was immediately challenged by the Chamber of Mines. As a result of such legal challenge, the application of the new charter has been consensually suspended pending the conclusion of the legal process. We are uncertain as to whether the new charter will be ultimately implemented in its current form, but a new mining charter with stricter requirements similar to those described above could adversely affect our business, financial condition or results of operations.

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The classification of TiO₂ as a Category 2 Carcinogen in the European Union could result in more stringent regulatory control with respect to TiO₂.

In May 2016, France’s competent authority under the EU’s Registration, Evaluation, Authorization and Restrictions of Chemicals (“REACH”) submitted a proposal to the European Chemicals Agency ("ECHA") that would classify TiO₂ as carcinogenic in humans by inhalation. The Company together with other companies and trade associations representing the TiO₂ industry and industries consuming our products, submitted comments opposing the classification, based on evidence from epidemiological and other scientific studies. On June 8, 2017, ECHA’s Committee for Risk Assessment (“RAC”) announced its preliminary conclusion that the evidence meets the criteria under the EU’s Classification, Labelling and Packaging Regulation (“CLP”) to classify TiO_-2 as a Category 2 Carcinogen for humans by inhalation. The European Commission will evaluate the RAC formal recommendation in determining whether any regulatory measures should be taken. If the European Commission decides to adopt such a classification, it could require that many products manufactured with TiO₂ be classified as containing carcinogenic materials, which 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. Any classification, use restriction or authorized requirement for use imposed by the ECHA 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 outside the EU based on health and safety grounds. It is also possible that heightened regulatory scrutiny would lead to claims by consumers or those involved in the production of such products alleging adverse health impacts.

~~Item~~

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

~~Item~~

Item 3.

Defaults Upon Senior Securities

None.

~~Item~~

Item 4.

Mine Safety Disclosures

Information regarding mine safety and other regulatory actions at our mine in Green River, Wyoming is included in Exhibit 95 to this Form 10-Q.

~~Item~~

Item 5.

Other Information

None.

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Item 6.

Exhibits

Exhibit No.

~~10.1~~4.1	Fourth Amendment ~~No. 2~~ to Credit and Guaranty Agreement dated July 28, 2017, by and among, inter alia, Tronox Limited, Tronox Australia Holdings PTY Limited, Tronox Management ~~Equity Incentive Plan~~PTY Limited, Tronox Holdings Cooperatief U.A., Tronox Pigments (Netherlands) B.V. and Goldman Sachs Bank USA. (incorporated by reference to Exhibit 10.1 toof the ~~Company’s~~ Current Report on Form 8-K filed by Tronox Limited on ~~September 9, 2016)~~August 7, 2017).

4.2	Consent to Amended and Restated Revolving Syndicated Facility Agreement dated July 28, 2017, by and among, inter alia, Tronox Limited, Tronox Australia Holdings PTY Limited, Tronox Management PTY Limited, Tronox Holdings Cooperatief U.A., Tronox Pigments (Netherlands) B.V. and UB AG, Stamford Branch (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed by Tronox Limited on August 7, 2017).

10.1	Stock Purchase Agreement, dated as of August 2, 2017, by and among Tronox Limited, Tronox US Holdings Inc., Tronox Alkali Corporation, and Genesis Energy, L.P. (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Tronox Limited on August 2, 2017).

10.2	~~Employment~~Interim CEO Agreement ~~entered into~~dated as of ~~October 17, 2016~~May 15, 2017 by and between Tronox LLC and ~~Timothy Carlson~~Peter Johnston (incorporated by reference to Exhibit 10.1 toof the ~~Company’s~~Amended Current Report on Form ~~8-K~~8-K/A filed by Tronox Limited on ~~October 17, 2016)~~May 10, 2017).

10.3	First Amendment to Amended and Restated Employment Agreement dated as of May 15, 2017 by and between Tronox Limited, Tronox LLC and Thomas Casey (incorporated by reference to Exhibit 10.2 of the Amended Current Report on Form 8-K/A filed by Tronox Limited on May 10, 2017).

10.4	Retirement Agreement dated as of May 15, 2017 by and between Tronox Limited, Tronox LLC and Thomas Casey (incorporated by reference to Exhibit 10.3 of the Amended Current Report on Form 8-K/A filed by Tronox Limited on May 10, 2017).

31.1	Rule 13a-14(a) Certification of ~~Thomas Casey.~~Peter Johnston.

31.2	Rule 13a-14(a) Certification of ~~Kevin V. Mahoney.~~Timothy Carlson.

32.1	Section 1350 Certification for ~~Thomas Casey.~~Peter Johnston.

32.2	Section 1350 Certification for ~~Kevin V. Mahoney.~~Timothy Carlson.

95	Mine Safety Disclosures.

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~Date: November 3, 2016~~

Date: August 9, 2017

	TRONOX LIMITED (Registrant)

	By:	/s/ ~~Kevin V. Mahoney~~Timothy Carlson
	Name:	~~Kevin V. Mahoney~~Timothy Carlson
	Title:	Senior Vice President ~~– Corporate Controller~~ and Chief ~~Accounting~~Financial Officer

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Numerator – Basic and Diluted:
Net loss	$	(42	)	$	(54	)	$	(182	)	$	(218	)
Less: Net income (loss) attributable to noncontrolling interest		(2	)		6			(1	)		10

Undistributed net loss		(40	)		(60	)		(181	)		(228	)
Percentage allocated to ordinary shares ₍₁₎		100	%		100	%		100	%		100	%

Loss available to ordinary shares	$	(40	)	$	(60	)	$	(181	)	$	(228	)
Denominator – Basic and Diluted:
Weighted-average ordinary shares (in thousands)		116,219			115,642			116,108			115,529
Loss per Ordinary Share ₍₂₎:
Basic and diluted loss per ordinary share	$	(0.35	)	$	(0.52	)	$	(1.56	)	$	(1.97	)

	September 30 2016			December 31, 2015
Raw materials	$	223		$	248
Work-in-process		43			43
Finished goods, net		194			245
Materials and supplies, net ₍₁₎		104			106

Total		564			642
Less: Inventories, net – non-current		(6	)		(12	)

Inventories, net – current	$	558		$	630

	September 30, 2016		September 30, 2015
Current portion included in “Accrued liabilities”	$	4	$	6
Noncurrent portion included in “Asset retirement obligations”		78		76
Asset retirement obligations	$	82	$	82

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains on Derivatives		Total
Balance, January 1, 2016	$	(494	)	$	(102	)	$	—	$	(596	)
Other comprehensive income (loss)		91			(21	)		1		71
Balance, September 30, 2016	$	(403	)	$	(123	)	$	1	$	(525	)

	Valuation
Consideration:
Purchase price	$	1,650

Fair Value of Assets Acquired and Liabilities Assumed:
Current Assets:
Accounts receivable	$	147
Inventories		48
Prepaid and other assets		32
Total Current Assets		227
Property, plant and equipment ₍₁₎		767
Mineral leaseholds ₍₂₎		739
Other long-term assets		3
Total Assets	$	1,736
Current Liabilities:
Accounts payable		46
Accrued liabilities		28
Total Current Liabilities		74
Noncurrent Liabilities:
Other		12
Total Liabilities		86
Net Assets	$	1,650

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
Net sales	$	575		$	1,772
Loss from operations	$	(19	)	$	(29	)
Net loss	$	(52	)	$	(171	)
Loss per share, basic and diluted	$	(0.45	)	$	(1.48	)

	September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Cash and cash equivalents	$	202	$	188	$	152	$	229
Available under the UBS Revolver		173		183		204		217
Available under the ABSA Revolver		95		89		88		84
Total	$	470	$	460	$	444	$	530