UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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 30, 2017~~

March 31, 2020


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

For the transition period from __________to ___________

1-35573

(Commission file number)

TRONOX ~~LIMITED~~HOLDINGS PLC

~~(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~~


England and Wales						98-1467236
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~incorporation or ~~Organization)~~organization)						(I.R.S. Employer Identification ~~Number)~~No.)



263 Tresser Boulevard, Suite 1100 Stamford, Connecticut06901		~~Lot 22, Mason~~ Laporte Road,
~~Stamford, Connecticut 06901~~	~~Kwinana Beach, WA, 6167~~
	~~Australia~~ Stallingborough Grimsby, North East Lincolnshire, DN40 2PR United Kingdom

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

Securities registered pursuant to Section 12(b) of the Act:


Title of each class						Name of each exchange on which registered
Ordinary Shares, par value $0.01 per share						New York Stock Exchange

Trading Symbol: TROX

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐ ~~(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 27, 2017,~~April 30, 2020, the Registrant had ~~91,052,581 Class A ordinary shares and 28,729,280 Class B~~143,368,056 ordinary shares outstanding.

Table of Contents

Item 1. Financial Statements (Unaudited)

~~Item 1.~~

~~Financial Statements (Unaudited)~~

	~~Page~~ ~~No.~~
		Page No.

Unaudited Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019		4
Unaudited Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019		5
Unaudited Condensed Consolidated Balance Sheets at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019		6
Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019		7
Unaudited Condensed Consolidated Statement of Shareholders’ Equity for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and 2019		8 10
Notes to Unaudited Condensed Consolidated Financial Statements		9 12

Table of Contents

TRONOX ~~LIMITED~~HOLDINGS PLC

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,

2017 2016 2017 2016
Net sales $ 435 $ 339 $ 1,234 $ 957
Cost of goods sold 329 291 971 877

Gross profit 106 48 263 80
Selling, general and administrative expenses (55 ) (47 ) (186 ) (135 )
Restructuring income (expense) — (1 ) 1 (2 )

Income (loss) from operations 51 — 78 (57 )
Interest and debt expense, net (47 ) (46 ) (140 ) (138 )
Gain (loss) on extinguishment of debt (28 ) — (28 ) 4
Other income (expense), net 12 (10 ) 5 (22 )

Income (loss) from continuing operations before income taxes (12 ) (56 ) (85 ) (213 )
Income tax provision (13 ) (6 ) (10 ) (25 )

Net income (loss) from continuing operations (25 ) (62 ) (95 ) (238 )
Income (loss) from discontinued operations, net of tax (See Note 2) (216 ) 23 (179 ) 55
Net income (loss) (241 ) (39 ) (274 ) (183 )
Net income (loss) attributable to noncontrolling interest 6 (2 ) 11 (1 )
��
Net income (loss) attributable to Tronox Limited $ (247 ) $ (37 ) $ (285 ) $ (182 )

Net income (loss) per share, basic and diluted:
Continuing operations $ (0.26 ) $ (0.53 ) $ (0.89 ) $ (2.04 )
Discontinued operations (1.81 ) 0.20 (1.51 ) 0.47
Net income (loss) per share, basic and diluted $ (2.07 ) $ (0.33 ) $ (2.40 ) $ (1.57 )

Weighted average shares outstanding, basic and diluted (in thousands) 119,405 116,219 118,908 116,108


	Three Months Ended March 31,
	2020		2019
Net sales	$	722	$	390
Cost of goods sold	547		307

Gross profit	175		83
Selling, general and administrative expenses	94		67
Restructuring	2		—

Income from operations	79		16
Interest expense	(45)		(49)
Interest income	3		9
Loss on extinguishment of debt	—		(2)
Other income (expense), net	10		(2)
Income (loss) before income taxes	47		(28)
Income tax provision	(7)		(2)


Net income (loss)	40		(30)
Net income attributable to noncontrolling interest	8		4
Net income (loss) attributable to Tronox Holdings plc	$	32	$	(34)

Earnings (loss) per share:
Basic	$	0.23	$	(0.27)
Diluted	$	0.22	$	(0.27)









Weighted average shares outstanding, basic (in thousands)	142,736		124,296
Weighted average shares outstanding, diluted (in thousands)	143,596		124,296

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

TRONOX ~~LIMITED~~HOLDINGS PLC

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

(Unaudited)

(Millions of U.S. dollars)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Net income (loss) $ (241 ) $ (39 ) $ (274 ) $ (183 )
Other comprehensive income:
Foreign currency translation adjustments (36 ) 69 22 122
Pension and postretirement plans:
Actuarial losses, (no tax impact; See Note 3) — (21 ) — (21 )
Amortization of unrecognized actuarial losses, net of taxes of less than $1 million in each of the three and nine months ended September 30, 2017 and 2016 1
(1
) 2 —
Impact of transfer of Alkali pension obligation upon sale (no tax impact) 5 — 5 —
Unrealized gains (losses) on derivative financial instruments (no tax impact; see Note 3) — (1 ) (3 ) 1

Other comprehensive income (loss) (30 ) 46 26 102

Total comprehensive income (loss) (271 ) 7 (248 ) (81 )

Comprehensive income (loss) attributable to noncontrolling interest:
Net income (loss) 6 (2 ) 11 (1 )
Foreign currency translation adjustments (10 ) 18 3 31

Comprehensive income (loss) attributable to noncontrolling interest (4 ) 16 14 30

Comprehensive income (loss) attributable to Tronox Limited $ (267 ) $ (9 ) $ (262 ) $ (111 )


	Three Months Ended March 31,
	2020		2019
Net income (loss)	$	40	$	(30)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(188)		—
Pension and postretirement plans:
Amortization of unrecognized actuarial losses, net of taxes of less than $1 million and NaN in the three ended March 31, 2020 and 2019, respectively	1		—

Total pension and postretirement gains (losses)	1		—
Realized (gains) losses on derivatives reclassified from accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations	5		—
Unrealized (losses) gains on derivative financial instruments, (net of taxes of $10 million and NaN for the three months ended March 31, 2020 and 2019, respectively) - See Note 13	(88)		—

Other comprehensive loss	(270)		—

Total comprehensive loss	(230)		(30)

Comprehensive (loss) income attributable to noncontrolling interest:
Net income	8		4
Foreign currency translation adjustments	(47)		11
Comprehensive (loss) income attributable to noncontrolling interest	(39)		15

Comprehensive loss attributable to Tronox Holdings plc	$	(191)	$	(45)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

TRONOX ~~LIMITED~~HOLDINGS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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


	September 30, 2017			December 31, 2016				March 31, 2020		December 31, 2019
ASSETS							ASSETS
Current Assets							Current Assets
Cash and cash equivalents	$	1,058		$	248		Cash and cash equivalents	$	420	$	302
Restricted cash		653			3		Restricted cash	9		9
Accounts receivable, net of allowance for doubtful accounts		309			278
Accounts receivable (net of allowance for credit losses of $4 million and $5 million as of March 31, 2020 and December 31, 2019, respectively)							Accounts receivable (net of allowance for credit losses of $4 million and $5 million as of March 31, 2020 and December 31, 2019, respectively)	554		482
Inventories, net		459			499		Inventories, net	1,054		1,131
Prepaid and other assets		44			28		Prepaid and other assets	115		143
Income taxes receivable		1			11		Income taxes receivable	6		6
Total assets of discontinued operations		—			1,671
Total current assets		2,524			2,738		Total current assets	2,158		2,073
Noncurrent Assets							Noncurrent Assets
Property, plant and equipment, net		1,069			1,092		Property, plant and equipment, net	1,630		1,762
Mineral leaseholds, net		859			877		Mineral leaseholds, net	783		852
Intangible assets, net		203			223		Intangible assets, net	202		208
Inventories, net		14			14
Lease right of use assets, net							Lease right of use assets, net	92		101
Deferred tax assets							Deferred tax assets	107		110
Other long-term assets		22			20		Other long-term assets	158		162
Total assets	$	4,691		$	4,964		Total assets	$	5,130	$	5,268

LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current Liabilities							Current Liabilities
Accounts payable	$	155		$	136		Accounts payable	$	280	$	342
Accrued liabilities		131			150		Accrued liabilities	346		283
Short-term lease liabilities							Short-term lease liabilities	37		38
Short-term debt		—			150		Short-term debt	212		—
Long-term debt due within one year		11			16		Long-term debt due within one year	30		38
Income taxes payable		2			1		Income taxes payable	6		1
Total liabilities of discontinued operations		—			111
Total current liabilities		299			564		Total current liabilities	911		702

Noncurrent Liabilities							Noncurrent Liabilities
Long-term debt, net		3,129			2,888		Long-term debt, net	2,954		2,988
Pension and postretirement healthcare benefits		100			114		Pension and postretirement healthcare benefits	153		160
Asset retirement obligations		78			73		Asset retirement obligations	129		142
Long-term deferred tax liabilities		161			151
Environmental liabilities							Environmental liabilities	70		65
Long-term lease liabilities							Long-term lease liabilities	52		62
Deferred tax liabilities							Deferred tax liabilities	139		184
Other long-term liabilities		18			21		Other long-term liabilities	43		49
Total liabilities		3,785			3,811		Total liabilities	4,451		4,352

Commitments and Contingencies
Commitments and Contingencies - Note 16							Commitments and Contingencies - Note 16	—		—
Shareholders’ Equity							Shareholders’ Equity
Tronox Limited Class A ordinary shares, par value $0.01 — 68,767,566 shares issued and 68,591,094 shares outstanding at September 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 September 30, 2017 and December 31, 2016		—			—
Tronox Holdings plc ordinary shares, par value $0.01 — 143,366,438 shares issued and outstanding at March 31, 2020 and 141,900,459 shares issued and outstanding at December 31, 2019							Tronox Holdings plc ordinary shares, par value $0.01 — 143,366,438 shares issued and outstanding at March 31, 2020 and 141,900,459 shares issued and outstanding at December 31, 2019	1		1
Capital in excess of par value		1,542			1,524		Capital in excess of par value	1,852		1,846
Accumulated deficit		(321	)		(19	)	Accumulated deficit	(471)		(493)
Accumulated other comprehensive loss		(474	)		(497	)	Accumulated other comprehensive loss	(829)		(606)
Total Tronox Limited shareholders’ equity		748			1,009
Total Tronox Holdings plc shareholders’ equity							Total Tronox Holdings plc shareholders’ equity	553		748
Noncontrolling interest		158			144		Noncontrolling interest	126		168

Total equity		906			1,153		Total equity	679		916
Total liabilities and equity	$	4,691		$	4,964		Total liabilities and equity	$	5,130	$	5,268

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

TRONOX ~~LIMITED~~HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Millions of U.S. dollars)

Nine Months Ended
September 30,

2017 2016
Cash Flows from Operating Activities:
Net loss $ (274 ) $ (183 )
Income (loss) from discontinued operations, net of tax (179 ) 55
Net income (loss) from continuing operations $ (95 ) $ (238 )
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities, continuing operations:
Depreciation, depletion and amortization 136 131
Deferred income taxes 8 (5 )
Share-based compensation expense 26 18
Amortization of deferred debt issuance costs and discount on debt 9 8
Pension and postretirement healthcare benefit expense 2 —
(Gain) loss on extinguishment of debt 28 (4 )
Other, net 22 35
Contributions to employee pension and postretirement plans (18 ) (15 )
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net (29 ) (3 )
(Increase) decrease in inventories, net 48 94
(Increase) decrease in prepaid and other assets (16 ) (3 )
Increase (decrease) in accounts payable and accrued liabilities (27 ) (33 )
Increase (decrease) in taxes payable — 28
Cash provided by operating activities, continuing operations 94 13

Cash Flows from Investing Activities:
Capital expenditures (63 ) (59 )
Debt proceeds restricted for Cristal acquisition (650 ) —
Proceeds from the sale of business 1,325 —
Proceeds from the sale of assets — 1
Cash provided by (used in) investing activities, continuing operations 612 (58 )

Cash Flows from Financing Activities:
Repayments of long-term debt (2,342 ) (27 )
Repayments of short-term debt (150 ) —
Proceeds from long-term debt 2,589 —
Debt issuance costs (36 ) —
Call premium paid (14 ) —
Proceeds from options and warrants 1 —
Dividends paid (17 ) (40 )
Restricted stock and performance-based shares settled in cash for taxes (11 ) (1 )
Cash provided by (used in) financing activities, continuing operations 20 (68 )

Discontinued Operations:
Cash provided by operating activities 107 112
Cash used in investing activities (25 ) (29 )
Cash used in financing activities — —
Net cash flows provided by discontinued operations 82 83

Effects of exchange rate changes on cash and cash equivalents 2 3

Net increase (decrease) in cash and cash equivalents 810 (27 )
Cash and cash equivalents at beginning of period 248 229

Cash and cash equivalents at end of period, continuing operations $ 1,058 $ 202

Table of Contents


	Three Months Ended March 31,
	2020		2019
Cash Flows from Operating Activities:
Net income (loss)	$	40	$	(30)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	71		47
Deferred income taxes	—		(3)
Share-based compensation expense	9		8
Amortization of deferred debt issuance costs and discount on debt	2		2
Loss on extinguishment of debt	—		2



Other non-cash items affecting net (loss) income	14		6
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net	(92)		19
Increase in inventories, net	—		(10)
Increase in prepaid and other assets	(3)		(1)
(Decrease) increase in accounts payable and accrued liabilities	(54)		8
Net changes in income tax payables and receivables	2		(3)
Changes in other non-current assets and liabilities	(17)		(6)
Cash (used in) provided by operating activities	(28)		39

Cash Flows from Investing Activities:
Capital expenditures	(38)		(25)




Loans	—		(25)

Cash used in investing activities	(38)		(50)

Cash Flows from Financing Activities:
Repayments of long-term debt	(7)		(101)
Proceeds from long-term debt	—		222

Proceeds from short-term debt	213		94
Acquisition of noncontrolling interest	—		(148)

Debt issuance costs	—		(4)

Dividends paid	(10)		(7)
Restricted stock and performance-based shares settled in cash for withholding taxes	(3)		(6)
Cash provided by financing activities	193		50






Effects of exchange rate changes on cash and cash equivalents and restricted cash	(9)		(1)

Net increase in cash, cash equivalents and restricted cash	118		38
Cash, cash equivalents and restricted cash at beginning of period	311		1,696
Cash, cash equivalents and restricted cash at end of period	$	429	$	1,734

Supplemental cash flow information:
Interest paid, net	$	24	$	29

Income taxes paid	$	4	$	5

Table of Contents

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

TRONOX ~~LIMITED~~HOLDINGS PLC

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(Millions of U.S. ~~dollars)~~dollars, except for shares)

For the three months ended March 31, 2020

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, 2017 $ 1 $ — $ 1,524 $ (19 ) $ (497 ) $ 1,009 $ 144 $ 1,153
Net income (loss) — — — (285 ) — (285 ) 11 (274 )
Other comprehensive income — — — — 23 23 3 26
Share-based compensation — — 28 — — 28 — 28
Shares cancelled — — (11 ) — — (11 ) — (11 )
Shares and warrants exercised — — 1 — 1 1
Class A and Class B share dividends — — — (17 ) — (17 ) — (17 )

Balance at September 30, 2017 $ 1 — 1,542 (321 ) (474 ) 748 158 906


	Tronox Holdings plc Ordinary Shares (in thousands)	Tronox Holdings plc Ordinary Shares (Amount)		Capital in Excess of par Value		(Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total Tronox Holdings plc Shareholders’ Equity		Non- controlling Interest		Total Equity
Balance at December 31, 2019	141,900	$	1	$	1,846	$	(493)	$	(606)	$	748	$	168	$	916
Net income	—	—		—		32		—		32		8		40
Other comprehensive (loss) income	—	—		—				(223)		(223)		(47)		(270)
Share-based compensation	1,779	—		9		—		—		9		—		9
Shares cancelled	(313)	—		(3)		—		—		(3)		—		(3)
Measurement period adjustment related to Cristal acquisition	—	—				—				—		(3)		(3)
Ordinary share dividends ($0.07 per share)	—	—		—		(10)		—		(10)		—		(10)
Balance at March 31, 2020	143,366	$	1	$	1,852	$	(471)	$	(829)	$	553	$	126	$	679

See accompanying notes to unaudited condensed consolidated financial statements.

810

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TRONOX ~~LIMITED~~HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

(Unaudited)

(Millions of U.S. dollars, except for shares)

For the three months ended March 31, 2019


	Tronox Holdings plc Ordinary Shares (in thousands)	Tronox Holdings plc Ordinary Shares		Capital in Excess of par Value		(Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total Tronox Holdings plc Shareholders’ Equity		Non- controlling Interest		Total Equity
Balance at December 31, 2018	122,934	$	1	$	1,579	$	(357)	$	(540)	$	683	$	179	$	862
Net (loss) income	—	—		—		(34)		—		(34)		4		(30)
Other comprehensive income (loss)	—	—		—		—		(11)		(11)		11		—
Share-based compensation	3,306	—		8		—		—		8		—		8
Shares cancelled	(502)	—		(6)		—		—		(6)		—		(6)
Acquisition of noncontrolling interest	—	—		3		—		(61)		(58)		(90)		(148)
Ordinary share dividends ($0.045 per share)	—	—		—		(6)		—		(6)		—		(6)
Balance at March 31, 2019	125,738	$	1	$	1,584	$	(397)	$	(612)	$	576	$	104	$	680

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

TRONOX HOLDINGS PLC

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~~

1. The Company

Tronox ~~Limited and its subsidiaries (collectively referred~~Holdings plc (referred to herein as “Tronox, ~~Limited,~~” “we,” “us,” or “our”) is a public limited company registered under the laws of England and Wales. On April 10, 2019, we completed the ~~State~~acquisition from National Industrialization Company ("Tasnee") of ~~Western Australia. We are a global leader with~~the TiO₂ business of The National Titanium Dioxide Company Ltd. (“Cristal”) (the “Cristal Transaction”). In order to obtain regulatory approval for the Cristal Transaction, we were required to divest Cristal's North American TiO₂ business, which was sold in May 2019. See Note 2 below for further details on the Cristal Transaction.

Including the Cristal operations, we now operate titanium-bearing mineral sand mines and beneficiation and smelting operations in ~~North America, Europe,~~Australia, South Africa and ~~the Asia-Pacific region~~Brazil to produce feedstock materials that can be processed into TiO₂ for pigment, high purity titanium chemicals, including titanium tetrachloride, and Ultrafine© titanium dioxide used in certain specialty applications. It is our long-term strategic goal to be fully vertically integrated and consume all of our feedstock materials in our own TiO₂ pigment facilities in the ~~production~~United States, Australia, Brazil, UK, France, the Netherlands, China and ~~marketing~~the Kingdom of Saudi Arabia (“KSA”). We believe that full vertical integration is the best way to achieve our ultimate goal of delivering low cost, high-quality pigment to our coatings and other TiO₂ customers throughout the world. The mining, beneficiation and smelting of titanium bearing mineral sands ~~and titanium dioxide (“TiO~~₂~~”) pigment. We classify our operations into one reporting segment:~~ ~~TiO~~₂~~: consisting~~creates meaningful quantities of products 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.~~

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~~also supply 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”). Followingcustomers around 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. As a result of the refinancing (See Note 11 - Debt), we expect to finance the Cristal Transaction with our cash on hand inclusive of restricted cash and liquidity from our asset-based syndicated revolving credit facility. The Cristal Transaction is also conditioned upon the receipt of various regulatory approvals, including antitrust clearance in numerous jurisdictions. On April 13, 2017, the United States Federal Trade Commission (“FTC”) issued a request for additional information (“Second Request”) to us and Cristal in connection with its filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and Tronox has substantially complied with the Second Request. 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. On October 2, 2017, at a special meeting of shareholders of the Company held pursuant to the Transaction Agreement, the Company’s shareholders approved a resolution to issue 37,580,000 Class A Shares to the Seller in connection with the acquisition of Cristal’s TiO₂ ~~business, and the resulting acquisition of interests in such Class A Shares by the Seller and certain other persons and entities, at the closing of such acquisition.~~world.

On September 1, 2017, we completed the previously announced sale of our wholly owned subsidiary Tronox Alkali Corporation (“Alkali”) to Genesis Energy, L.P. for proceeds of $1.325 billion in cash, subject to a customary post-closing working capital adjustment (the “Sale”). We have agreed unconditionally to guarantee the indemnification and performance of the obligations of Tronox U.S. Holdings Inc. (“Tronox Holdings”), a subsidiary of Tronox Limited, under the stock purchase agreement (“Purchase Agreement”). Both Tronox Holdings and Genesis ~~Energy, L.P. 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.~~

During the three months ended September 30, 2017, we recognized a pre-tax loss of $233 million on the Alkali disposal. For all periods presented, sales, costs and expenses and income taxes attributable to Alkali together with the loss on disposal have been aggregated in a single caption entitled “Income (loss) from discontinued operations, net of tax” in our Condensed Consolidated Statement of Operations. Included in the calculation of the loss noted above, were approximately $21 million of transaction fees related to the sale of Alkali. For cash flow presentation purposes, these transaction costs are included in “Cash provided by operating activities, continuing operations” on the Condensed Consolidated Statements of Cash Flows. See Note 2 – Discontinued Operations for additional information.

In 2012, 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. 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 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 September 30, 2017 and December 31, 2016, Exxaro held approximately 43% and 44%, respectively, of the voting securities of Tronox Limited. See Note 18 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. On October 10, 2017, Exxaro sold 22,425,000 Class A ordinary shares in an underwritten registered offering (the “Exxaro Share Transaction”). Subsequent to the Exxaro Shares Transaction, Exxaro held approximately 24% of the Company’s voting securities. Presently, Exxaro intends to sell the remainder of its Tronox shares in a staged process over time pursuant to the existing registration statement, subject to market conditions. Exxaro’s sale of Class A ordinary shares does not impact their 26% ownership interest in each of our Tronox KZN Sands (Pty) Ltd. and Tronox Mineral Sands (Pty) Ltd subsidiaries.

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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, ~~2016.~~ 2019.

The ~~Condensed Consolidated Balance Sheet as~~acquisition of ~~December~~Cristal has impacted the comparability of our financial statements. As the Cristal Transaction was completed on April 10, 2019, in accordance with ASC 805, the three month period ended March 31, ~~2016 was derived from audited financial statements, but~~2019 does not include ~~all disclosures required by U.S. GAAP.~~

the results of the Cristal business, while the three month period ended March 31, 2020 does include the results of Cristal. However, the balance sheet at both December 31, 2019 and March 31, 2020 includes the impacts of the acquisition of Cristal.

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.~~statement of its financial position as of March 31, 2020, and its results of operations for the three months ended March 31, 2020 and 2019. Our unaudited condensed consolidated financial statements include the accounts of all majority-owned subsidiary companies. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the manner and presentation in the current period. As a result of the Alkali disposition, the results of Alkali have been reclassified as discontinued operations for all periods presented. ~~See Note 2 – Discontinued Operations for additional information.~~

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.~~statements, including any potential impacts on the economy as a result of the Covid-19 pandemic which could impact revenue growth and collectibility of trade receivables.

Recently Adopted Accounting Pronouncements

~~Revision of Previously Issued Consolidated Financial Statements~~

~~During~~In August 2018, the ~~three months ended March 31, 2017, we identified a misstatement~~FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard modifies the disclosure requirements in ~~our selling, general, and administrative expense for~~Topic 820, Fair Value Measurement, by: removing certain ~~prior periods~~disclosure requirements 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 sheetsthe fair value hierarchy; modifying existing disclosure requirements related to measurement uncertainty; and ~~cash flows~~adding new disclosure requirements, such as ofdisclosing the changes in unrealized gains and losses for the ~~years ended December 31, 2015 and 2016, and the unaudited condensed consolidated financial statements~~period included in other comprehensive income 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.

recurring

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

~~Unaudited Condensed Consolidated Statement~~Level 3 fair value measurements held at the end of ~~Operations~~

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

As
Reported ⁽¹⁾
Adjustment Revised
As
Reported ⁽¹⁾
Adjustment Revised

Net sales $ 339 $ — $ 339 $ 957 $ — $ 957
Cost of goods sold 290 1 291 877 — 877
Gross profit 49 (1 ) 48 80 — 80
Selling, general and administrative expenses (47 ) — (47 ) (131 ) (4 ) (135 )
Income (loss) from operations 1 (1 ) — (53 ) (4 ) (57 )
Other income (expense), net (13 ) 3 (10 ) (22 ) — (22 )
Income (loss) from continuing operations before income taxes (58 ) 2 (56 ) (209 ) (4 ) (213 )
Net income (loss) from continuing operations (64 ) 2 (62 ) (235 ) (3 ) (238 )
Income (loss) from discontinued operations, net of tax 22 1 23 53 2 55
Net loss attributable to Tronox Limited (40 ) 3 (37 ) (181 ) (1 ) (182 )
Net income (loss) per share from continuing operations, basic and diluted (0.54 ) 0.01 (0.53 ) (2.02 ) (0.02 ) (2.04 )
Net income (loss) per share from discontinued operations, basic and diluted 0.19 0.01 0.20 0.46 0.01 0.47

Weighted average shares outstanding, basic and diluted (in thousands) 116,219 116,219 116,219 116,108 116,108 116,108

~~Unaudited Condensed Consolidated Statements~~the reporting period and disclosing the range and weighted average of ~~Comprehensive Income (Loss)~~

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

As
Reported
Adjustment Revised
As
Reported
Adjustment Revised

Net loss $ (42 ) $ 3 $ (39 ) $ (182 ) $ (1 ) $ (183 )
Total comprehensive income ( loss) 4 3 7 (80 ) (1 ) (81 )
Comprehensive loss attributable to Tronox Limited (12 ) 3 (9 ) (110 ) (1 ) (111 )

~~Unaudited Condensed Consolidated Balance Sheet~~

December 31, 2016

As Reported ⁽¹⁾
Adjustment Revised
Current assets of continuing operations $ 1,067 $ — $ 1,067
Total assets of discontinued operations 1,668 3 1,671
Total current assets 2,735 3 2,738
Total assets 4,961 3 4,964
Accrued liabilities 138 11 149
Current liabilities of continuing operations 443 10 453
Total liabilities of discontinued operations 110 1 111
Total current liabilities 553 11 564
Total liabilities 3,800 11 3,811
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 4,961 3 4,964

⁽¹⁾

~~Amounts reflect the results of Alkali as discontinued operations.~~

~~Unaudited Condensed Consolidated Statement of Cash Flows~~

~~There was no net impact~~significant unobservable inputs used to ~~operating, investing~~develop Level 3 fair value measurements. This standard is effective for fiscal years and ~~financing cash flows from the revisions for continuing operations for the nine months ended September 30, 2016.~~

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~~Adopted Accounting Pronouncements~~

~~In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting~~ ~~(“ASU 2016-09”), which amends 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.~~ interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted.We adopted ~~ASU 2016-09 during the first quarter of 2017. Its adoption~~this standard on January 1, 2020 and it did not have a material impact on ~~our unaudited condensed~~the Company's consolidated financial statements.

In ~~March~~June 2016, the FASB issued ASU ~~2016-05,~~ ~~Derivatives~~2016-13, Financial Instruments - Credit Losses (Topic 326), as amended. The standard introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses (CECL). This standard became effective on January 1, 2020, and ~~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~~had 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 animmaterial impact on ~~our unaudited condensed~~the Company's consolidated financial ~~statements.~~

~~In July 2015,~~statements as ~~part 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. We adopted ASU 2015-11 during the first quarter of 2017. The adoption of ASU 2015-11 didour historical bad debt expense has not ~~have an impact on our unaudited condensed consolidated financial statements.~~been material.

Recently Issued Accounting Pronouncements

~~We consider~~During 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 August 2017,~~quarter ended March 31, 2020, the FASB issued ASU ~~2017-12, Derivatives~~2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform Financial Reporting.” This amendment is elective in nature. Amongst other aspects, this standard provides for practical expedients and ~~Hedging (Topic 815):~~ ~~Targeted Improvements~~exceptions to ~~Accounting for Hedging Activities~~ ~~(“ASU 2017-12”),~~current accounting standards that reference a rate which will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is ~~intended~~expected to ~~more closely align~~be dissolved (e.g. London Interbank Offered Rate “LIBOR”) as it relates to hedge accounting, with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 is effective for annual periods beginning on or after December 15, 2018, including interim periods within those periods. Early adoption is permitted which we are considering. We do not expect the adoption of ASU 2017-12 to have a material 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 do not expect the adoption of ASU 2017-07 to have a material impact 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~~contract modifications and other ~~reporting organizations with evaluating whether~~ transactions ~~should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01~~that reference this rate, subject to meeting certain criteria. The standard 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. The adoption of ASU 2016-18 will require us to include and reconcile the amount of “Restricted cash”, together with “Cash and cash equivalents”, for cash flow purposes for all periods presented commencing with the three months ending March 31, 2018.

~~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 March 12, 2020 through December 31, 2022.The company is currently evaluating the ~~beginning~~impact of the standard.

2. Cristal Acquisition and Related Divestitures

On April 10, 2019, we completed the acquisition of the TiO2 business of Cristal for $1.675 billion of cash, plus 37,580,000 ordinary shares. The total acquisition price, including the value of the ordinary shares at $14 per share on the closing date of the Cristal Transaction, was approximately $2.2 billion. With the acquisition of our shares, an affiliate of Cristal became our largest shareholder. At March 31, 2020, Cristal International Holdings B.V. (formerly known as Cristal Inorganic Chemical Netherlands Cooperatief W.A.), a wholly-owned subsidiary of National Titanium Dioxide Company Ltd., continues to own 37,580,000 shares of Tronox, or a 26% ownership interest. National Titanium Dioxide Company Ltd. is 79% owned by Tasnee.

In order to obtain regulatory approval for the Cristal Transaction, the FTC required us to divest Cristal's North American TiO2 business, which we sold to INEOS on May 1, 2019, for cash proceeds, net of transaction costs, of $701 million, inclusive of an ~~annual reporting~~amount for a working capital adjustment.

In conjunction with the Cristal Transaction, we entered into a transition services agreement with Tasnee and certain of its affiliates under which we and the Tasnee entities will provide certain transition services to one another. See Note 20 for further details of the transition services agreement. In conjunction with the divestiture of Cristal's North American TiO2 business to INEOS, we entered into a transition services agreement with INEOS. Under the terms of the transition services agreement, INEOS agreed to provide the following services to Tronox for manufacturing, technology and innovation, information technology, finance, warehousing and human resources. Similarly, Tronox will provide services to INEOS for information technology, finance, product stewardship, warehousing and human resources.

In addition, in order to obtain regulatory approval by the European Commission, we divested the 8120 paper laminate grade, supplied from our Botlek facility in the Netherlands, to Venator Materials PLC (“Venator”). The divestiture was completed on April 26, 2019. Under the terms of the divestiture, we will supply the 8120 grade product to Venator under a supply agreement for an initial term of 2 years, and extendable up to 3 years, to allow for the transfer of the manufacturing of the 8120 grade to Venator. Total cash consideration is 8 million Euros, of which 1 million Euros was paid at the closing and the remaining 7 million Euros (approximately $7.7 million at March 31, 2020 exchange rate) will be paid in equal installments during the second quarters of 2020 and 2021. We recorded a charge of $19 million during the second quarter of 2019, in “Contract loss” in the Consolidated Statements of Operations, reflecting both the proceeds on sale and the estimated losses we expect to incur under the supply agreement with Venator.

We funded the cash portion of the Cristal Transaction through existing cash, borrowings from our Wells Fargo Revolver, and restricted cash which had been borrowed under the Blocked Term Loan and which became available to us for the purpose of consummating the Cristal Transaction.

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Allocation of the Purchase Price

For the Cristal Transaction, we have applied the acquisition method of accounting in accordance with ASC 805, "Business Combinations", with respect to the identifiable assets and liabilities of Cristal, which have been measured at estimated fair value as of the date of the business combination.

The aggregate purchase price noted above was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date, primarily using Level 2 and Level 3 inputs (see Note 14 for an explanation of Level 2 and Level 3 inputs). These fair value estimates represent management’s best estimate of future cash flows (including sales, cost of sales, income taxes, etc.), discount rates, competitive trends, market comparables and other factors. Inputs used were generally determined from historical data supplemented by current and anticipated market conditions and growth rates.

During the three months ended March 31, 2020, we finalized the purchase price allocation which resulted in increasing environmental liabilities by $8 million, increasing property, plant and equipment by $13 million, decreasing noncontrolling interest by $3 million, decreasing deferred taxes by $6 million, increasing liabilities held for sale by $5 million and decreasing inventory by $4 million, as well as other minor adjustments. The adjustments to the unaudited Condensed Consolidated Statement of Operations that would have been recognized in the second quarter of 2019 if the measurement period adjustments had been completed as of the acquisition date would have increased the net loss by approximately $1 million.

The final purchase price consideration and estimated fair value of Cristal's net assets acquired on April 10, 2019 are shown below. The assets and liabilities of Cristal's North American TiO₂ business, that was subsequently divested on May 1, 2019, are shown as held for ~~which financial statements (interim or annual) have not been issued or made available for issuance.~~ sale in the fair value of assets acquired and liabilities assumed.


	Fair Value
Purchase Price Consideration:
Tronox Holdings plc shares issued	37,580,000
Tronox Holdings plc closing price per share on April 10, 2019	$	14.00
Total fair value of Tronox Holdings plc shares issued at acquisition date	$	526
Cash consideration paid	$	1,675
Total purchase price	$	2,201

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	Fair Value
Fair Value of Assets Acquired:
Accounts receivable	$	251
Inventory	689
Deferred tax assets	51
Prepaid and other assets	81
Property, plant and equipment	759
Mineral leaseholds	95
Intangible assets	64
Lease right of use assets	40
Other long-term assets	43
Assets held for sale	850
Total assets acquired	$	2,923
Less: Liabilities Assumed
Accounts payable	$	102
Accrued liabilities	137
Short-term lease liabilities	13
Deferred tax liabilities	2
Pension and postretirement healthcare benefits	76
Environmental liabilities	72
Asset retirement obligations	75
Long-term debt	22
Long-term lease liabilities	24
Other long-term liabilities	20
Liabilities held for sale	131
Total liabilities assumed	$	674
Less noncontrolling interest	48
Purchase price	$	2,201

Summary of Significant Fair Value Methods

The ~~impact, if any, that ASU 2016-16 will have on our~~methods used to determine the fair value of significant identifiable assets and liabilities included in the allocation of purchase price are included in Note 3 to the consolidated financial statements ~~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 2016-15 is 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 as it will depend on the nature of future cash flow transactions impacted by the new guidance.

~~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 not early adopt ASU 2016-02. Refer to Note 14 and 17 included in ourCompany’s Annual Report on Form 10-K for the year ended December 31, ~~2016 regarding current obligations under lease agreements.~~2019.

3. Restructuring Initiatives

In April 2019, we announced the completion of the Cristal Transaction. During the second quarter of 2019, as a result of the acquisition, we outlined a broad based synergy savings program that is expected to reduce costs, simplify processes and focus the organization’s structure and resources on key growth initiatives. During the three months ended March 31, 2020, we recorded costs of $2 million in our unaudited Condensed Consolidated Statement of Operations of which there were 0 comparable amounts in the three months ended March 31, 2019. The costs consisted primarily of charges for employee related costs, including severance.

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~~In May 2014, the FASB issued ASU 2014-09,~~ The liability balance for restructuring as of March 31, 2020, is as follows:


	Employee- Related Costs



Balance, December 31, 2019	$	10
First Quarter 2020 charges	2
Cash payments	(4)
Foreign exchange and other	1
Balance, March 31, 2020	$	9

4. Revenue ~~from Contracts with Customers (Topic 606)~~ ~~which states that an entity should~~

We recognize revenue at a point in time when the customer obtains control of the promised products. For most transactions this occurs when products are shipped from our manufacturing facilities or at a later point when control of the products transfers to ~~depict~~ the ~~transfer of promised goods~~customer at a specified destination or ~~services~~time.

Contract assets represent our rights 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~~products that have transferred to a customer when the right is ~~effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted, and may be applied either retrospectively or~~conditional on ~~a modified retrospective basis. Subsequent~~situations other than the passage of time. For products that we have transferred to our customers, our rights to the ~~issuance~~consideration are typically unconditional and only the passage of time is required before payments become due. These unconditional rights are recorded as accounts receivable. As of March 31, 2020, and December 31, 2019, we did not have material contract asset balances.

Contract liabilities represent our obligations to transfer products to a customer for which we have received consideration from the customer. Infrequently we may receive advance payment from our customers that is accounted for as deferred revenue. Deferred revenue is earned when control of the ~~May 2014 guidance, several clarifications~~product transfers to the customer, which is typically within a short period of time from when we received the advanced payment. Contract liability balances as of March 31, 2020 and ~~updates have been issued on this topic, the most recent of which was issued in May 2017. We are executing our implementation plan for adopting ASU 2014-09~~December 31, 2019 were approximately $3 million and are currently operating in line with that plan. We have completed phase 1 of our contract evaluation process and are continuing to review additional contracts while 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$1 million, respectively. Contract liability balances were reported as “Accounts payable” in the fourth quarter of 2017. We are evaluating the impact that ASU 2014-09 will have on our consolidated financial statements and will adopt the new standard using the modified retrospective approach effective January 1, 2018.

2.	~~Discontinued Operations~~

Concurrent with the announcement of the Cristal Transaction, we expressed intent to begin a process to market our Alkali soda ash business which met the criteria as held for sale in the third quarter and was sold on September 1, 2017. The sale of Alkali is an important step in positioning us as a global leader in the titanium dioxide (TiO₂) industry. The proceeds will be used to fund a portion of the cash consideration for the Cristal acquisition and a portion was also used in the refinancing of our debt. See Notes 1 and 11. The criteria for presentation of Alkali as a discontinued operation in accordance with Accounting Standards Update (“ASU”) 2014-08, ~~Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity~~ was met in the third quarter of 2017. This disposal is considered a strategic shift that has and will have a major effect on the Company’s operations and financial results; therefore, the results of Alkali have been classified as discontinued operations for all periods presented. Alkali assetsunaudited Condensed Consolidated Balance Sheets. All contract liabilities as of December 31, ~~2016 have been segregated from continuing operations and presented~~2019 were recognized as ~~current assets or current liabilities from discontinued operations.~~revenue in “Net sales” in the unaudited Condensed Consolidated Statements of Operations during the first quarter of 2020.

Disaggregation of Revenue

Alkali, which was previously one of our two operating and reportable segments, included certain allocated corporate costs which have been reallocated to Corporate. The amount of allocated corporate costs was $1 million and $3 million, respectively, for each of the three and nine months ended September 30, 2017 and 2016. After the sale, we nowWe operate ~~in a single~~under 1 operating and reportable segment, TiO₂. We disaggregate our revenue from contracts with customers by product type and geographic area. We believe this level of disaggregation appropriately depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors and reflects how our business is managed.

Net sales to external customers by geographic areas where our customers are located were as follows:

The following table presents the major classes of Alkali’s line items constituting the “Income (loss) from discontinued operations, net of tax” in our Condensed Consolidated Statements of Operations:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Net sales $ 129 $ 194 $ 521 $ 590
Cost of goods sold 113 163 448 511
Selling, general and administrative expenses (6 ) (7 ) (18 ) (20 )
Income before income taxes 10 24 55 59
Income tax benefit (provision) 7 (1 ) (1 ) (4 )
Loss on sale of discontinued operations, no tax impact (233 ) — (233 ) —
Income (loss) from discontinued operations $ (216 ) $ 23 $ (179 ) $ 55


	Three Months Ended March 31,
	2020		2019
North America	$	178	$	138
South and Central America	40		13
Europe, Middle-East and Africa	292		130
Asia Pacific	212		109
Total net sales	$	722	$	390

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~~The following table is a summary~~

Net sales from external customers for each similar type of product were as follows:


	Three Months Ended March 31,
	2020		2019
TiO₂	$	580	$	277
Zircon	65		64
Feedstock and other products	77		49
Total net sales	$	722	$	390

Feedstock and other products mainly include rutile prime, ilmenite, chloride (“CP”) slag and other mining products.

During the ~~carrying amounts~~three months ended March 31, 2020 and 2019, our 10 largest third-party TiO₂ represented 29% and 42%, respectively, of ~~Alkali’s assets~~our consolidated net sales. During the three months ended March 31, 2020 and ~~liabilities included as “Total assets~~2019, no single customer accounted for 10% of ~~discontinued operations” and “Total liabilities of discontinued operations” of December 31, 2016:~~our consolidated net sales.

December 31, 2016
Assets
Current Assets
Accounts receivable, net of allowance for doubtful accounts $ 146
Inventories, net 33
All other current assets 21
Total current assets of discontinued operations 200
Noncurrent Assets
Property, plant and equipment 739
Mineral leaseholds, net 730
Other long-term assets 2
Total assets of discontinued operations $ 1,671

Liabilities
Current Liabilities
Accounts payable $ 44
Accrued liabilities 36
All other current liabilities 11
Total current liabilities of discontinued operations 91
All other long-term liabilities 20
Total liabilities of discontinued operations $ 111

3.	5. 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,

2017 2016 2017 2016
Income tax provision $ (13 ) $ (6 ) $ (10 ) $ (25 )
Income (loss) from continuing operations before income taxes $ (12 ) $ (56 ) $ (85 ) $ (213 )
Effective tax rate (108 )% (11 )% (12 )% (12 )%

Income (loss) before income taxes is comprised of the following:

~~During~~


	Three Months Ended March 31,
	2020			2019
Income tax provision	$	(7)		$	(2)
Income (loss) before income taxes	$	47		$	(28)
Effective tax rate	15		%	(7)		%

Tronox Holdings plc, a U.K. public limited company, became 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 (the “Corporate Reorganization”). As a result of this Corporate Reorganization, we reduced our cross jurisdictional financing arrangements during 2016; therefore, the three and nine months period ended September 30, 2017 is not impacted by withholding tax accruals on interest income. In connection with the Corporate Reorganizationpublic parent during the three months ~~period~~ ended March 31, ~~2017,~~2019. During the three months ended March 31, 2019, 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 nine months ended September 30, 2017, Tronox Limited,~~was the public parent, ~~which is~~ registered under the laws of the State of Western Australia ~~became~~but managed and controlled in the U.K. The statutory tax rate in the U.K. at ~~September 30, 2017~~both March 31, 2020 and 2019 was 19%. ~~During 2016, Tronox Limited was managed and controlled in Australia which has a statutory tax rate of 30%.~~

During the three months ended September 30, 2017 we sold the Alkali segment of our operations. The Alkali results are now shown as discontinued operations and are not included in the tabular results above. The effective tax ~~rate~~rates for the three months ended ~~September 30, 2017 differs from both~~March 31, 2020 and 2019 are influenced by a variety of factors, primarily income and losses in jurisdictions with full valuation allowances, disallowable expenditures, restructuring impacts, and our jurisdictional mix of income at tax rates different than the ~~three months ended September 30, 2016,~~U.K. statutory rate.

Upon completion of the Cristal Transaction, we now have additional jurisdictions with operational income. The statutory tax rates on income earned in Australia (30%), the United States (21%), South Africa (28%), France (28.92%), China (25%), Brazil (34%), the Kingdom of Saudi Arabia (KSA) (20%), and the ~~nine months ended September 30, 2017 primarily due to the discrete results of reporting the effects of this sale.~~

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~~Additionally, the effective tax rate for the three and nine months ended September 30, 2017 differs from~~Netherlands (25%) are higher than the U.K. statutory rate of 19% ~~primarily due to valuation allowances, income~~. Tax rates will be reduced in foreign jurisdictions taxed at rates different than 19%. The effective tax rate for the three and nine months ended September 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 nine months ended September 30, 2017 differs from the income tax provision for the three and nine months ended September 30, 2016 due to withholding tax accruals on interest income which we made during 2016.

~~The statutory tax rates in various countries where subsidiaries of Tronox Limited have operations are different than both the U.K.~~France and the ~~Australian tax rates. Tax rates~~Netherlands to 25% and 21.7%, respectively, in the United States (“U.S.”) (35% for corporations), South Africa (28% for limited liability companies), the Netherlands (25% for corporations), Switzerland (8.5% for corporations) and Jersey, U.K. (0% for corporations) all impact our effective tax rate.

future years.

We continue to maintain full valuation allowances related to the total net deferred tax assets in Australia ~~the Netherlands,~~ and the U.S., as we cannot objectively assert that these deferred tax assets are more likely than not to be realized. ~~Future~~It is reasonably possible that a portion of these valuation allowances could be reversed within the next year due to increased profitability levels. For entities acquired in the Cristal Transaction, we have full valuation allowances in Australia, Belgium, Brazil, Switzerland and the U.S. Until these valuation allowances are eliminated, future provisions for income taxes for these jurisdictions will include no tax benefits with respect to losses incurred and tax expense only to the extent of current ~~state~~ tax ~~payments until the valuation allowances are eliminated.~~payments. Additionally, we have valuation allowances against specific tax assets in the Netherlands, South Africa, and ~~during~~ the ~~nine month period ended September 30, 2017 we established a valuation allowance of $7 million against deferred tax assets~~U.K.

The Company’s ability to use certain loss and expense carryforwards in the ~~U.K. which we do not currently expect~~U.S. could be substantially limited if the Company were to ~~utilize.~~experience an ownership change as defined under IRC Section 382. In general, an ownership change would occur if the Company’s “5-percent shareholders,” as defined under IRC Section 382, including certain groups of persons

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~~These conclusions were reached~~treated as “5-percent shareholders,” collectively increased their ownership in the Company by more than 50 percentage points over a rolling three-year period. If an ownership change does occur during 2020, the ~~application~~resulting impact could be a limitation of ~~ASC 740,~~ ~~Income Taxes, which require all available positive and negative evidence be weighted~~up to ~~determine whether a valuation allowance should be recorded. The more significant evidential matter in Australia, the~~$5.3 billion composed of both U.S.~~, The Netherlands, and the U.K. relates to recent book~~ net operating losses and interest limitation carryforwards. We believe there would be minimal impact on the ~~lack of sufficient projected taxable income. The more significant evidential matter for South Africa relates~~$2.3 billion future Grantor Trust deductions from an IRC Section 382 change.

We currently have 0 uncertain tax positions recorded; however, we continue to ~~assets~~evaluate the companies acquired in the Cristal Transaction, and it is reasonably possible that ~~cannot be depleted or depreciated for tax purposes and capital gains tax losses which we do not expect to utilize.~~this could change in the next 12 months.

~~The Company is currently under audit in Australia and the United States.~~ We believe that we have made adequate provision for income taxes that may be payable with respect to years open for examination; however, the ultimate outcome is not presently known and, accordingly, ~~additional~~adjustments to our provisions may be necessary and/or reclassifications of noncurrent tax liabilities to current may occur in the future.

4.	6. Income (Loss) Per Share

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Numerator – Basic and Diluted:
Net income (loss) from continuing operations $ (25 ) $ (62 ) $ (95 ) $ (238 )
Less: Net income (loss) from continuing operations attributable to noncontrolling interest 6 (2 ) 11 (1 )
Undistributed net income (loss) from continuing operations attributable to Tronox Limited (31 ) (60 ) (106 ) (237 )
Percentage allocated to ordinary shares ⁽¹⁾
100 % 100 % 100 % 100 %
Net income (loss) from continuing operations available to ordinary shares (31 ) (60 ) (106 ) (237 )
Net income (loss) from discontinued operations available to ordinary shares (216 ) 23 (179 ) 55
Net income (loss) available to ordinary shares $ (247 ) $ (37 ) $ (285 ) $ (182 )
Denominator – Basic and Diluted:

Weighted-average ordinary shares, basic and diluted (in thousands) 119,405 116,219 118,908 116,108

Net income (loss) per Ordinary Share ⁽²⁾:

Basic and diluted net income (loss) from continuing operations per ordinary share $ (0.26 ) $ (0.53 ) $ (0.89 ) $ (2.04 )
Basic and diluted net income (loss) from discontinued operations per ordinary share (1.81 ) 0.20 (1.51 ) 0.47
Basic and diluted net income (loss) per ordinary share $ (2.07 ) $ (0.33 ) $ (2.40 ) $ (1.57 )


	Three Months Ended March 31,
	2020		2019
Numerator - Basic and Diluted:
Net income (loss)	$	40	$	(30)
Less: Net income attributable to noncontrolling interest	8		4


Net income (loss) available to ordinary shares	$	32	$	(34)

Denominator - Basic and Diluted:
Weighted-average ordinary shares, basic (in thousands)	142,736		124,296
Weighted-average ordinary shares, diluted (in thousands)	143,596		124,296



Basic net income (loss) operations per ordinary share	$	0.23	$	(0.27)



Diluted net income (loss) operations per ordinary share	$	0.22	$	(0.27)

⁽¹⁾

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 three and nine months ended September 30, 2017 and 2016, 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.

⁽²⁾

~~Loss per ordinary share amounts were calculated from exact, not rounded, 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 net income (loss) per share under the two-class method, we considered potentially dilutive shares.~~ Anti-dilutive shares not recognized in the diluted net ~~loss~~income (loss) per share calculation for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:


										Shares
	September 30, 2017				September 30, 2016					Three Months Ended March 31,
	Shares		Average Exercise Price		Shares		Average Exercise Price			2020	2019
Options		1,827,354	$	21.21		1,997,437	$	21.20	Options	1,216,456	1,307,735
Series A Warrants ⁽¹⁾		960,371	$	8.51		1,440,652	$	8.51
Series B Warrants ⁽¹⁾		1,009,283	$	9.37		1,953,250	$	9.37
Restricted share units		5,548,071	$	11.22		5,566,589	$	7.18	Restricted share units	7,322,644	5,176,210

⁽¹⁾	Series A Warrants were converted into Class A ordinary shares at September 30, 2017 and 2016 using a rate of 6.02. Series B Warrants were converted into Class A ordinary shares at September 30, 2017 and 2016 using a rate of 6.03.

5.	~~Accounts Receivable, Net of Allowance for Doubtful Accounts~~

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

September 30,
2017

December 31,
2016

Trade receivables $ 298 $ 271
Other 12 8
Subtotal 310 279
Allowance for doubtful accounts (1 ) (1 )
Accounts receivable, net of allowance for doubtful accounts $ 309 $ 278

6.	7. Inventories, Net

Inventories, net consisted of the following:

September 30,
2017

December 31,
2016

Raw materials $ 161 $ 191
Work-in-process 30 35
Finished goods, net 184 190
Materials and supplies, net ⁽¹⁾
98 97
Total 473 513
Less: Inventories, net – non-current (14 ) (14 )
Inventories, net - current $ 459 $ 499


	March 31, 2020		December 31, 2019
Raw materials	$	186	$	205
Work-in-process	101		129
Finished goods, net	566		573
Materials and supplies, net	201		224
Inventories, net – current	$	1,054	$	1,131

⁽¹⁾	~~Consists~~Materials and supplies, net consists of processing chemicals, maintenance supplies and spare parts, which will be consumed directly and indirectly in the production of our products.

~~Finished goods include inventory on consignment of $29 million and $24 million at September 30, 2017~~At March 31, 2020 and December 31, ~~2016, respectively. At September 30, 2017 and December 31, 2016,~~2019, inventory obsolescence reserves primarily for materials and supplies were ~~$15~~$42 million and ~~$17~~$39 million, respectively. ~~At September 30, 2017 and December 31, 2016, reserves~~Reserves for lower of cost or market and net realizable value were ~~$17~~$13 million and ~~$26~~$25 million at March 31, 2020 and December 31, 2019, respectively.

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7.	8. Property, Plant and Equipment, Net

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

September 30,
2017

December 31,
2016

Land and land improvements $ 94 $ 94
Buildings 244 237
Machinery and equipment 1,316 1,275
Construction-in-progress 103 82
Other 40 38
Subtotal 1,797 1,726
Less accumulated depreciation and amortization (728 ) (634 )
Property, plant and equipment, net ⁽¹⁾
$ 1,069 $ 1,092


	March 31, 2020		December 31, 2019
Land and land improvements	$	175	$	191
Buildings	319		340
Machinery and equipment	1,893		2,028
Construction-in-progress	156		156
Other	54		54
Subtotal	2,597		2,769
Less: accumulated depreciation	(967)		(1,007)
Property, plant and equipment, net	$	1,630	$	1,762

⁽¹⁾	~~Substantially all of these assets are pledged as collateral for our debt. See Note 11.~~

The decline in property, plant and equipment, net from December 31, 2019 to March 31, 2020 is primarily a result of impact of foreign currency translation due to the devaluation of the South African rand and Brazilian real.

Substantially all of the property, plant and equipment, net is pledged as collateral for our debt. See Note 12.

~~Depreciation~~The table below summarizes depreciation expense related to property, plant and equipment ~~during~~for the ~~three months ended September 30, 2017 and 2016 was $31 million and $30 million, respectively, of which $30 million and $29 million, respectively, was~~periods presented, recorded in ~~“Cost of goods sold”~~the specific line items in ~~the~~our unaudited Condensed Consolidated Statements of ~~Operations and $1 million each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements~~Operations:


	Three Months Ended March 31,
	2020		2019
Cost of goods sold	$	59	$	32
Selling, general and administrative expenses	1		1
Total	$	60	$	33

Table of Operations. Depreciation expense related to property, plant and equipment during the nine months ended September 30, 2017 and 2016 was $93 million and $86 million, respectively, of which $91 million and $84 million, respectively, was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and $2 million each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.Contents

8.	9. Mineral Leaseholds, Net

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


	September 30, 2017			December 31, 2016				March 31, 2020		December 31, 2019
Mineral leaseholds	$	1,263		$	1,257		Mineral leaseholds	$	1,293	$	1,352
Less: accumulated depletion		(404	)		(380	)	Less: accumulated depletion	(510)		(500)
Mineral leaseholds, net	$	859		$	877		Mineral leaseholds, net	$	783	$	852

The decline in mineral leaseholds, net from December 31, 2019 to March 31, 2020 is primarily a result of the impact of foreign currency translation due to the devaluation of the South African rand. Depletion expense relating to mineral leaseholds recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations was $2 million and $8 million during ~~each of~~ the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016 and $24 million and $26 million, respectively, during the nine months ended September 30, 2017 and 2016.~~2019, respectively.

9.	10. Intangible Assets, Net

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


	September 30, 2017							December 31, 2016								March 31, 2020										December 31, 2019
	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	$	291	$	(129	)	$	162	$	291	$	(115	)	$	176	Customer relationships	$	291	$	(178)	$	113	$	291	$	(173)	$	118
TiO₂ technology		32		(11	)		21		32		(9	)		23	TiO₂ technology	93		(20)		73		92		(17)		75
Internal-use software		44		(24	)		20		45		(21	)		24	Internal-use software	50		(34)		16		49		(34)		15
Intangible assets, net	$	367	$	(164	)	$	203	$	368	$	(145	)	$	223	Intangible assets, net	$	434	$	(232)	$	202	$	432	$	(224)	$	208

Amortization expense related to intangible assets ~~during each of the three months ended September 30, 2017 and 2016 was $6 million of which less than $1 million each was~~ recorded in ~~“Cost of goods sold”~~"Selling, general and administrative expenses" in the unaudited Condensed Consolidated Statements of Operations was $9 million and $6 million ~~each was recorded in “Selling, general and administrative expenses” in~~during the ~~unaudited Condensed Consolidated Statements of Operations. Amortization expense related to intangible assets during each of the nine~~three months ended ~~September 30, 2017~~March 31, 2020 and 2016 was $19 million of which $1 million each was recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations and $18 million each was recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. 2019, respectively.

Estimated future amortization expense related to intangible assets is $6$23 million for the remainder of ~~2017, $25~~2020, $31 million ~~each~~ for ~~2018 through~~ 2021, $29 million for 2022, $27 million for 2023, $26 million for 2024 and ~~$97~~$66 million thereafter.

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~~10.~~

11. Accrued Liabilities

Accrued liabilities consisted of the following:


	September 30, 2017		December 31, 2016			March 31, 2020		December 31, 2019
Employee-related costs and benefits	$	63	$	61	Employee-related costs and benefits	$	82	$	103
Related party payables					Related party payables	4		7
Interest		5		35	Interest	32		16
Sales rebates		19		20	Sales rebates	42		39
Restructuring					Restructuring	9		10
Taxes other than income taxes		11		9	Taxes other than income taxes	12		6
Asset retirement obligations					Asset retirement obligations	13		16
Interest rate swaps					Interest rate swaps	54		22
Currency contracts					Currency contracts	47		—
Professional fees and other		33		25	Professional fees and other	48		60
Liabilities held for sale					Liabilities held for sale	3		4
Accrued liabilities	$	131	$	150	Accrued liabilities	$	346	$	283

~~11.~~

~~Debt~~

~~Debt Refinancing~~

On September 22, 2017, we completed our offering of our Senior Notes due 2025 for an aggregate principal amount of $450 million, the net proceeds of which, together with borrowings under our $2.150 billion New Term Loan Facility and proceeds from the Alkali sale, funded the redemption of the remaining outstanding balance of our Senior Notes due 2020 and repayment in full of the remaining outstanding balance of our $1.5 billion Prior Term Loan. In addition, we paid off our UBS Revolver and entered into a new asset-based revolving syndicated facility with Wells Fargo (all defined below).

The refinancing of our Senior Notes due 2020 was considered a debt extinguishment in accordance with ASC 470, Debt (“ASC 470”). However, for refinancing of both the UBS Revolver and the New Term Loan Facility, a portion of each of these refinancing arrangements were considered modifications and a portion considered extinguishments in accordance with the requirements of ASC 470 as some of the original lenders in the original syndications were part of the new lender base.

~~Short-term~~12. Debt

During the third quarter of 2017, we repaid the $150 million outstanding balance under the global senior secured asset-based syndicated revolving credit facility with UBS AG (the “UBS Revolver”). Concurrent with entering into the Wells Fargo Revolver, described below, the UBS Revolver was terminated. Unamortized original debt issuance costs of $1 million relating to the UBS Revolver were included in “Gain (loss) on extinguishment of debt” in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017. The remaining unamortized balance of original debt issuance costs of $2 million relating to the UBS Revolver will be amortized over the life of the Wells Fargo Revolver.

~~Wells Fargo Revolver~~

On September 22, 2017, we entered into a new global senior secured asset-based syndicated revolving credit facility with the lenders party thereto and Wells Fargo Bank, N.A. as administrative agent (the “Wells Fargo Revolver”). The Wells Fargo Revolver provides us with up to $550 million of revolving credit loans, with an $85 million sublimit for letters of credit, and has a maturity date of September 22, 2022. Our availability of revolving credit loans and letters of credit is subject to a borrowing base. Borrowings bear interest at our option, at either an adjusted London Interbank Offered Rate (“LIBOR”) plus an applicable margin that ranges from 1.25% to 1.75%, or a base rate, which is defined to mean the greatest of (a) the administrative agent’s prime rate, (b) the Federal funds effective rate plus 0.50% and (c) the adjusted LIBOR for a one-month period plus 1.00%, plus an applicable margin that ranges from 0.25% to 0.75%, in each case, based on the average daily borrowing availability. At September 30, 2017, there was no outstanding revolving credit loans under the Wells Fargo Revolver, except for $19 million of issued and undrawn letters of credit under the Wells Fargo Revolver. Long-Term Debt ~~issuance costs associated with the Wells Fargo Revolver of $6 million ($2 million remaining from the UBS Revolver and $4 million incurred for the Wells Fargo Revolver) were~~ ~~included in “Other long-term assets” in the Condensed Consolidated Balance Sheets at September 30, 2017 and will be amortized over the life of the Wells Fargo Revolver.~~

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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, 2017			December 31, 2016
Prior Term Loan, net of unamortized discount ⁽¹⁾	$	1,500	Variable			3/20/2020	$	—		$	1,441
New Term Loan Facility, net of unamortized discount ⁽²⁾	$	2,150	Variable			9/22/2024	$	2,136		$	—
Senior Notes due 2020		900		6.375	%	8/15/2020		—			896
Senior Notes due 2022		600		7.50	%	3/15/2022		584			584
														Original Principal		Annual Interest Rate		Maturity Date	March 31, 2020		December 31, 2019
Term Loan Facility, net of unamortized discount ⁽¹⁾													Term Loan Facility, net of unamortized discount ⁽¹⁾	$	2,150	Variable		9/22/2024	$	1,805	$	1,805
Senior Notes due 2025		450		5.75	%	9/22/2025		450			—		Senior Notes due 2025	450		5.75	%	10/1/2025	450		450
Lease financing								17			19
Senior Notes due 2026													Senior Notes due 2026	615		6.50	%	4/15/2026	615		615
Standard Bank Term Loan Facility ⁽¹⁾⁽²⁾													Standard Bank Term Loan Facility ⁽¹⁾⁽²⁾	222		Variable		3/25/2024	117		158
Tikon Loan													Tikon Loan	N/A		Variable		5/23/2021	16		16
Australian Government Loan, net of unamortized discount													Australian Government Loan, net of unamortized discount	N/A		N/A		12/31/2036	1		1
Finance leases													Finance leases						12		15
Long-term debt								3,187			2,940		Long-term debt						3,016		3,060
Less: Long-term debt due within one year								(11	)		(16	)	Less: Long-term debt due within one year						(30)		(38)
Debt issuance costs								(47	)		(36	)	Debt issuance costs						(32)		(34)
Long-term debt, net							$	3,129		$	2,888		Long-term debt, net						$	2,954	$	2,988

_______________

(1)Average effective interest rate on the Term Loan Facility of 5.0% and 5.6% during the three months ended March 31, 2020 and 2019, respectively. Average effective interest rate on the Standard Bank Term Loan Facility of 9.5% and 10.6% during the three months ended March 31, 2020 and 2019, respectively.

(2)The Standard Bank Term Loan Facility contains financial covenants relating to certain ratio tests.

Short-Term Debt

Short-term debt consisted of the following:

⁽¹⁾

~~Average effective interest rate of 5.2% and 5.1% during the three and nine months ended September 30, 2017, respectively, and 4.9% each during the three and nine months ended September 30, 2016.~~

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	Annual Interest Rate	Maturity Date	March 31, 2020		December 31, 2019
Wells Fargo Revolver⁽¹⁾	Variable	9/22/2022	$	125	$	—
Standard Bank Revolver⁽²⁾	~~Average effective interest rate of 4.5% during each of the three and nine months ended September 30, 2017.~~Variable	3/25/2022	34		—
Emirates Revolver⁽³⁾	Variable	3/31/2021	40		—
SABB Credit Facility	Variable	11/30/2020	13		—
Short-term debt⁽⁴⁾			$	212	$	—

_______________

~~At September 30, 2017,~~(1) In March 2019, the ~~scheduled maturities~~Wells Fargo Revolver was amended, which amongst other things, modified certain components of ~~our long-term debt were as follows:~~

Total
Borrowings

2017 $ —
2018 17
2019 22
2020 22
2021 22
Thereafter 3,118
Total 3,201
Remaining accretion associated with the New Term Loans (14 )
Total borrowings $ 3,187

~~Prior Term Loan~~

~~On April 23, 2014,~~the borrowing base in order to increase the potential availability of credit. We also voluntarily reduced the revolving credit lines under the Wells Fargo Revolver from $550 million to $350 million. As a result of this modification, we ~~along with our wholly owned subsidiary, Tronox Pigments (Netherlands) B.V., and certain named guarantor subsidiaries, entered into~~accelerated the recognition of a ~~Third Amended and Restated Credit and Guaranty Agreement (the “Third Agreement”) with~~portion of the ~~lenders party thereto and Goldman Sachs Bank USA, as administrative agent. Pursuant~~deferred financing costs related to the ~~Third Agreement, we obtained~~Wells Fargo Revolver and during the three months ended March 31, 2019, recorded a ~~$1.5 billion senior secured term loan (the “Prior Term Loan”) with a maturity date~~charge of March 19, 2020. As mentioned above, on September 22, 2017, we repaid the remaining $1.4 billion outstanding balance of the $1.5 billion Prior Term Loan and entered into the New Term Loan Facility described below. Unamortized original debt discount and issuance costs of $1$2 million ~~relating to the Prior Term Loan were included~~ in ~~“Gain (loss)~~“Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017. The remaining balance of unamortized original debt discount and issuance costs of $16 million relating to the Prior Term Loan will continue to be amortized over the life of the New Term Loan Facility.

~~New Term Loan Facility~~

On September 22, 2017, we entered into a new senior secured first lien term loan facility (the “New Term Loan Facility”) with the lenders party thereto and Bank of America, N.A., as administrative agent, with a maturity date of September 22, 2024. The New Term Loan Facility consists of (i) a U.S. dollar term facility in an aggregate principal amount of $1.5 billion (the “New Term Loans”) with our subsidiary, Tronox Finance LLC (“Tronox Finance”) as the borrower and (ii) a U.S. dollar term facility in an aggregate principal amount of $650 million (the “Blocked Term Loan”) with our unrestricted subsidiary, Tronox Blocked Borrower LLC (the “Blocked Borrower”) as the borrower, which Blocked Term Loan was funded into a blocked account. Upon consummation of the Cristal acquisition, the Blocked Borrower will merge with and into Tronox Finance, and the Blocked Term Loan will become available to Tronox Finance. If the Cristal Acquisition is terminated, the Blocked Term Loan will be repaid to the lenders of such Blocked Term Loan. The proceeds from the Blocked Term Loan were included in “Restricted cash” in the Condensed Consolidated Balance Sheets at September 30, 2017. The term loans under the New Term Loan Facility bear interest at the “Applicable Rate” defined by reference to a grid pricing matrix that relates to our first lien net leverage ratio. Based upon our first lien net leverage ratio, the Applicable Rate under the New Term Loan Facility as of September 30, 2017 was 300 basis points plus LIBOR. The New Term Loan Facility was issued net of an original issue discount of $11 million. Debt issuance costs of $4 million relating to the New Term Loans were included in “Gain (loss) on extinguishment of debt” in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017. Debt issuance costs of $30 million associated with the New Term Loan Facility ($13 million remaining from the Prior Term Loan and $17 million incurred for the New Term Loan Facility) were recorded as a direct reduction of the carrying value of the long-term debt as described below and will be amortized over the life of the New Term Loan Facility.

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~~Senior Notes due 2020~~

On September 25, 2017, we redeemed (the “Redemption”) the $896 million outstanding balance of our $900 million aggregate principal, 6.375% senior notes due 2020 issued by Tronox Finance (the “Senior Notes due 2020”). The total cash payment made in connection with the Redemption was approximately $917 million, and included accrued interest of $7 million and a call premium of $14 million (the “Call Premium”) included in “Gain (loss) on extinguishment of debt” inwithin the unaudited Condensed Consolidated ~~Statements~~Statement of Operations. ~~During the nine months ended September 30, 2016, we repurchased $4~~At March 31, 2020, there were $30 million of ~~face value~~issued and undrawn letters of credit under the ~~Senior Notes due 2020~~Wells Fargo Revolver.

The Wells Fargo Revolver contains a springing financial covenant that requires the Company and its restricted subsidiaries to maintain a consolidated fixed charge coverage ratio of at ~~a price~~least 1.0:1.0 during certain test periods based on borrowing availability under the Wells Fargo Revolver or following the occurrence of ~~77%~~specified events of ~~par, resulting in a net gain of approximately $1 million which~~default.

(2) In connection with the Standard Bank Credit Facility ("Standard Bank Revolver") entered into on March 25, 2019, the ABSA Revolving Credit Facility ("ABSA Revolver") was ~~included in “Gain (loss)~~terminated on extinguishment of debt” in the unaudited Condensed Consolidated Statements of Operations. The Senior Notes due 2020 were fully and unconditionally guaranteed on a senior and unsecured basis by us and certain of our subsidiaries.March 26, 2019. As a result of the ~~Redemption,~~termination, we ~~are no longer required to present guarantor condensed consolidating financial statements starting with this Form 10-Q for~~accelerated the ~~period ended September 30, 2017. In connection with~~recognition of the ~~Redemption, we recorded a loss on extinguishment of debt of $22 million included in “Gain (loss) on extinguishment of debt”, of which $8 million related to unamortized debt issuance~~remaining deferred financing costs ~~and $14 million~~ related to the ~~Call Premium.~~

~~Senior Notes due 2022~~

We have $600 million aggregate principal amount, 7.50% Senior Notes due 2022 (the “Senior Notes due 2022”) which notes were issued pursuant to an indenture dated March 19, 2015 (the “2022 Indenture”). The Senior Notes due 2022 have not been registered under the Securities Act, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. There were no repaymentsABSA Revolver during the three ~~and nine~~ months ended ~~September 30, 2017. During the nine months ended September 30, 2016, we repurchased $16~~March 31, 2019 and recorded less than $1 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 (loss)~~“Loss on extinguishment of debt” inwithin the unaudited Condensed Consolidated ~~Statements~~Statement of Operations.

~~The Indenture and~~(3) In March 2020, the ~~Senior Notes due 2022 provide, among~~Company entered into an amendment to, amongst other things, ~~that~~extend the Senior Notes due 2022 are senior unsecured obligations of Tronox Finance and are guaranteed on a senior and unsecured basis by us and certain of our other subsidiaries. Interest is payable on March 15 and September 15 of each year until their maturity date of the Emirates Revolver from March ~~15, 2022. The terms~~31, 2020 to March 31, 2021.

(4) In March 2020, the Company drew down $200 million of borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers in order to increase liquidity and preserve financial flexibility. Additionally, during the three months ended March 31, 2020, our KSA subsidiary drew down $13 million on its SABB Credit Facility for local working capital purposes. At March 31, 2020, the short-term debt balance was $212 million based on the March 31, 2020 exchange rate. There were no comparable amounts outstanding as of December 31, 2019.

Debt Covenants

At March 31, 2020, we are in compliance with all financial covenants in our debt facilities.

New Debt

On May 1, 2020, Tronox Incorporated, a wholly-owned indirect subsidiary of the 2022 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 us; 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 September 30, 2017 and December 31, 2016, debt issuance costs related to the Senior Notes due 2022 of $8 million and $10 million, respectively, were recorded as a direct reduction of the carrying value of the long-term debt as described below.

~~Senior Notes due 2025~~

~~On September 22, 2017, our wholly-owned subsidiary Tronox Finance plc,~~Company, issued ~~5.75%~~6.5% senior secured notes due 2025 for an aggregate principal amount of ~~$450~~$500 million (the ~~“Senior~~"6.5% Senior Secured Notes due ~~2025”~~2025"), which ~~notes~~ were issued under an indenture dated May 1, 2020. A portion of the proceeds of this debt offering was utilized to repay the $200 million of the Company's outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers.

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13. Derivative Financial Instruments

The following table is a summary of the fair value of derivatives outstanding at March 31, 2020 and December 31, 2019:


	Fair Value
	March 31, 2020						December 31, 2019
	Assets(a)		Accrued Liabilities		Assets(a)		Accrued Liabilities
Derivatives Designated as Cash Flow Hedges
Currency Contracts	$	6	$	37	$	30	$	—
Interest Rate Swaps	$	—	$	54	$	—	$	22
Total Hedges	$	6	$	91	$	30	$	22
Derivatives Not Designated as Cash Flow Hedges
Currency Contracts	$	—	$	10	$	7	$	—
Total Derivatives	$	6	$	101	$	37	$	22

(a) At March 31, 2020, current assets of $1 million are recorded in prepaid and other current assets and long-term assets of $5 million are recorded in other long-term assets. At December 31, 2019, current assets of $34 million were recorded in prepaid and other current assets and long-term assets of $3 million are recorded in other long-term assets.

Interest Rate Risk

During the second quarter of 2019, we entered into interest-rate swap agreements with an aggregate notional value of $750 million, representing a portion of our Term Loan Facility, which effectively converts the variable rate to a fixed rate for that portion of the loan. The agreements expire in September ~~22, 2017 (the “2025 Indenture”).~~2024. The Company’s objectives in using the interest-rate swap agreements are to add stability to interest expense and to manage its exposure to interest rate movements. These interest rate swaps have been designated as cash flow hedges and involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

Fair value gains or losses on these cash flow hedges are recorded in other comprehensive (loss) income and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affect earnings. At March 31, 2020 and December 31, 2019, the net unrealized loss of $54 million and $22 million, respectively, was recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet. For the three months ended March 31, 2020, the amounts recorded in interest expense related to the interest-rate swap agreements were not material.

Foreign Currency Risk

During the third quarter of 2019 and the first quarter of 2020, we entered into foreign currency contracts used to hedge forecasted third party non-functional currency sales for our South African subsidiaries and forecasted non-functional currency cost of goods sold for our Australian subsidiaries. These foreign currency contracts are designated as cash flow hedges. Changes to the fair value of these foreign currency contracts are recorded as a component of other comprehensive (loss) income, if these contracts remain highly effective, and are recognized in net sales or costs of goods sold in the period in which the forecasted transaction affects earnings or are recognized in other income (expense) when the transactions are no longer probable of occurring.

As of March 31, 2020, we had notional amounts of (i) 2.9 billion South African rand (or approximately $163 million at March 31, 2020 exchange rate) that expire between April 29, 2020 and February 25, 2021 to reduce the exposure of our South African subsidiaries’ third party sales to fluctuations in currency rates, and (ii) $691 million Australian dollars (or approximately $422 million at March 31, 2020 exchange rate) that expire between April 29, 2020 and December 30, 2021 to reduce the exposure of our Australian subsidiaries’ cost of sales to fluctuations in currency rates. For the three months ended March 31, 2020, we recorded a loss of $1 million and a loss of $4 million in “Net sales” and "Cost of goods sold", respectively, on the unaudited Condensed Consolidated Statement of Operations, related to our cash flow hedges. There were

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0 amounts recognized for foreign currency cash flow hedges in the comparative period of 2019. At March 31, 2020 and December 31, 2019, there was an unrealized net loss of $30 million and an unrealized net gain of $30 million, respectively, recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet, of which $25 million is expected to be recognized in earnings over the next twelve months.

We enter into foreign currency contracts for the South African rand and Australian dollar to reduce exposure of our subsidiaries’ balance sheet accounts not denominated in our subsidiaries’ functional currency to fluctuations in foreign currency exchange rates. We use a combination of zero-cost collars or forward contracts to reduce the exposure. For accounting purposes, these foreign currency contracts are not considered hedges. The change in fair value associated with these contracts is recorded in “Other expense, net” within the unaudited Condensed Consolidated Statement of Operations and partially offsets the change in value of third party and intercompany-related receivables not denominated in the functional currency of the subsidiary. At March 31, 2020, there was (i) 638 million South African rand (or approximately $36 million at March 31, 2020 exchange rate) and (ii) $82 million Australian dollars (or approximately $50 million at March 31, 2020) of notional amount outstanding foreign currency contracts with a fair value of a loss of $10 million. At December 31, 2019, there was (i) 712 million South African rand (or approximately $40 million at March 31, 2020 exchange rate) and (ii) $89 million Australian dollars (or approximately $54 million at March 31, 2020 exchange rate) of notional amounts outstanding foreign currency contracts with a fair value of a gain of less than $1 million. For the three months ended March 31, 2020 and 2019, we have recorded losses of $16 million and gains of $5 million, respectively, related to foreign currency contracts in our unaudited Condensed Consolidated Statement of Operations.

14. Fair Value

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The accounting standards also have established a fair value hierarchy, which prioritizes the inputs to valuation techniques used in measuring fair value into three broad levels as follows:

Level 1 -Quoted prices in active markets for identical assets or liabilities

Level 2 -Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly

Level 3 -Unobservable inputs based on the Company’s own assumptions

Our debt is recorded at historical amounts. The following table presents the fair value of our debt and derivative contracts at both March 31, 2020 and December 31, 2019:


	March 31, 2020		December 31, 2019
Term Loan Facility	$	1,607	$	1,820
Standard Bank Term Loan Facility	117		158
Senior Notes due 2025	375		459
Senior Notes due 2026	557		636
Tikon Loan	16		16
Australian Government Loan	1		1
Interest rate swaps	54		22
Foreign currency contracts, net	41		37

We determined the fair value of the Term Loan Facility, the Senior Notes due 2025 ~~Indenture~~ and the Senior Notes due ~~2025 provide,~~2026 using quoted market prices, which under the fair value hierarchy is a Level 1 input. We determined the fair value of the Standard Bank Term Loan Facility and Tikon Loan utilizing transactions in the listed markets for identical or similar liabilities, which under the fair value hierarchy is a Level 2 input. The fair value of the Australian Government Loan is based on the contracted amount which is a Level 2 input.

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We determined the fair value of the foreign currency contracts and the interest rate swaps using inputs other than quoted prices in active markets that are observable either directly or indirectly. The fair value hierarchy for the foreign currency contracts and interest rate swaps is a Level 2 input.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate fair value due to the short-term nature of these items.

See Note 2, “Cristal Acquisition and Related Divestitures”, for the assets and liabilities measured on a non-recurring basis at fair value associated with our acquisition.

15. Asset Retirement Obligations

Asset retirement obligations consist primarily of rehabilitation and restoration costs, landfill capping costs, decommissioning costs, and closure and post-closure costs. Activities related to asset retirement obligations were as follows:


	Three Months Ended March 31,
	2020		2019
Beginning balance	$	158	$	74

Accretion expense	3		1
Remeasurement/translation	(21)		—

Settlements/payments	(2)		—

Measurement period adjustment related to Cristal acquisition	4		—

Balance, March 31,	$	142	$	75


	March 31, 2020		December 31, 2019
Current portion included in “Accrued liabilities”	$	13	$	16
Noncurrent portion included in “Asset retirement obligations”	129		142
Asset retirement obligations	$	142	$	158

16. Commitments and Contingencies

Purchase and Capital Commitments — Includes obligations for purchase requirements of process chemicals, supplies, utilities and services entered into in the ordinary course of business. At March 31, 2020, purchase commitments were $166 million for 2020, $77 million for 2021, $55 million for 2022, $41 million for 2023, $36 million for 2024, and $76 million thereafter.

Letters of Credit—At March 31, 2020, we had outstanding letters of credit and bank guarantees of $71 million, of which $34 million were letters of credit and $37 million were bank guarantees. Amounts for performance bonds were not material.

Environmental Matters— It is our policy to record appropriate liabilities for environmental matters when remedial efforts are probable and the costs can be reasonably estimated. Such liabilities are based on our best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory or legal information becomes available. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. We expect to fund expenditures for these matters from operating cash flows. The timing of cash expenditures depends principally on the timing of remedial investigations and feasibility studies, regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. Included in these environmental matters are the following:

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Hawkins Point Plant. Residual waste mud, known as Batch Attack Mud, and a spent sulfuric waste stream were deposited in an onsite repository (the “Batch Attack Lagoon”) at a former TiO₂ manufacturing site, Hawkins Point Plant in Baltimore, Maryland, operated by Cristal USA, Inc. from 1954 until 2011. We assumed responsibility for remediation of the Hawkins Point Plant when we acquired the TiO₂ business of Cristal in April 2019. In 1984, a predecessor of Cristal and the Maryland Department of the Environment (“MDE”) entered into a consent decree (the “Consent Decree”) to address the Batch Attack Lagoon. The Consent Decree required that Cristal close the Batch Attack Lagoon when the Hawkins Point Plant ceased operations. In addition, we are investigating whether hazardous substances are migrating from the Batch Attack Lagoon. A provision of $61 million has been made in our financial statements for the Hawkins Point Plant consistent with the accounting policy described above. We are in discussions with the MDE regarding a new consent decree to address both the Batch Attack Lagoon as well as other environmental contamination issues associated with the Hawkins Point Plant.

Other Matters— We are subject to a number of other lawsuits, investigations and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, prior acquisitions and divestitures, including our acquisition of Cristal, employee benefit plans, intellectual property, and environmental, health and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. Included in these other matters is the following:

Venator Materials plc v. Tronox Limited. In May 2019, Venator Materials plc (“Venator”) filed an action in the Superior Court of the State of Delaware alleging among other things that we owed Venator a $75 million “Break Fee” pursuant to the ~~Senior Notes due 2025 are senior unsecured obligations~~terms of a preliminary agreement dated July 14, 2018 (the “Exclusivity Agreement”). The Exclusivity Agreement required, among other things, Tronox ~~Finance~~and Venator to use their respective best efforts to negotiate a definitive agreement to sell the entirety of the National Titanium Dioxide Company Limited’s (“Cristal’s”) North American operations to Venator if a divestiture of all or a substantial part of these operations were required to secure the approval of the Federal Trade Commission for us to complete our acquisition of Cristal’s TiO₂ business. In June 2019, we denied Ventaor's claims and counterclaimed against Venator seeking to recover $400 million in damages from Venator that we suffered as a result of Venator’s breaches of the Exclusivity Agreement. Specifically, we alleged, among other things, that Venator’s failure to use best efforts constituted a material breach of the Exclusivity Agreement and directly resulted in and caused us to sell Cristal’s North American operations to an alternative buyer for $701 million, $400 million less than the price Venator had agreed to in the Exclusivity Agreement. Though we believe that our interpretation of the Exclusivity Agreement is correct, there can be no assurance that we will prevail in litigation.

17. Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc

The tables below present changes in accumulated other comprehensive loss by component for the three months ended March 31, 2020 and ~~are guaranteed~~2019.


	Cumulative Translation Adjustment		Pension Liability Adjustment		Unrealized Gains (Losses) on Hedges		Total
Balance, January 1, 2020	$	(503)	$	(104)	$	1	$	(606)
Other comprehensive loss	(141)		—		(88)		(229)
Amounts reclassified from accumulated other comprehensive income (loss)	—		1		5		6
Balance, March 31, 2020	$	(644)	$	(103)	$	(82)	$	(829)

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	Cumulative Translation Adjustment		Pension Liability Adjustment		Unrealized Gains (Losses) on Hedges		Total
Balance, January 1, 2019	$	(445)	$	(95)	$	—	$	(540)
Other comprehensive loss	(11)		—		—		(11)
Acquisition of noncontrolling interest	(61)		—		—		(61)
Balance, March 31, 2019	$	(517)	$	(95)	$	—	$	(612)

18. Share-Based Compensation

Restricted Share Units (“RSUs”)

2020 Grant - During the first quarter of 2020, the Company granted both time-based and performance-based awards to certain members of management and to members of the Board of Directors ("BOD"). A total of 1,577,273 of time-based awards were granted to management which will vest ratably over a three-year period ending March 5, 2023. A total of 21,654 of time-based awards were granted to members of the BOD which will vest in June 2020. A total of 1,487,120 of performance-based awards were granted, of which 743,560 of the awards vest based on a ~~senior~~relative Total Shareholder Return ("TSR") calculation and ~~unsecured basis by us and~~743,560 of the awards vest based on certain performance metrics of ~~our other subsidiaries.~~the Company. The ~~Senior Notes due 2025 have not been registered under~~non-TSR performance-based awards vest on March 5, 2023 based on the ~~Securities Act, and may not be offered or sold in~~achievement against the ~~U.S. absent registration or an applicable exemption from registration requirements. Interest is payable~~target average company performance of 3 separate performance periods, commencing on ~~April 1 and October~~January 1 of each ~~year beginning~~2020, 2021, and 2022 and ending on ~~April 1, 2018 until their maturity~~December 31 of each 2020, 2021 and 2022, for which, for each performance period, the performance metric is an average annual operating return on net assets (ORONA). Similar to the Company's historical TSR awards granted in prior years, the TSR awards vest based on the Company's three-year TSR versus the peer group performance levels. Given these terms, the TSR metric is considered a market condition for which we used a Monte Carlo simulation to determine the grant date fair value of ~~October 1, 2025.~~$10.07. The ~~terms~~following weighted average assumptions were utilized to value the TSR grant:


	2020
Dividend yield	2.13	%
Expected historical volatility	58.30	%
Risk free interest rate	1.42	%
Expected life (in years)	3

The unrecognized compensation cost associated with all unvested awards at March 31, 2020 was $58 million, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of approximately 2.1 years.

Options

There were 0 options exercised during the three months ended March 31, 2020.

19. Pension and Other Postretirement Healthcare Benefits

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

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	Pensions
	Three Months Ended March 31,
	2020		2019
Net periodic cost:
Service cost	$	1	$	—
Interest cost	5		3
Expected return on plan assets	(6)		(3)
Net amortization of actuarial loss and prior service credit	1		—
Total net periodic cost	$	1	$	—

The components of net periodic cost associated with our other postretirement healthcare plans were less than $1 million for each of the ~~2025 Indenture, among other things, limit,~~three months ended March 31, 2020 and 2019.

Tronox estimates that 2020 required contributions to its pension plans will be approximately $16 million, of which $4 million have been made through March 31, 2020.

For the three months ended March 31, 2020 and 2019, we contributed $1 million and $1 million, respectively, to the Netherlands Multiemployer Plan, which was primarily recognized in ~~certain circumstances,~~“Cost of goods sold” in the ~~ability~~unaudited Condensed Consolidated Statement of ~~us and~~Operations.

20. Related Parties

Exxaro

On November 26, 2018, we, certain of our subsidiaries ~~to: incur secured indebtedness, engage~~and Exxaro entered into the Completion Agreement. The Completion Agreement provides for the orderly sale of Exxaro’s remaining ownership interest in us, subject to market conditions, helped to facilitate the Re-domicile Transaction, as well as addressed several legacy issues related to our 2012 acquisition of Exxaro’s mineral sands business. Pursuant to the terms of the Completion Agreement, Tronox has covenanted to pay Exxaro an amount equal to any South African capital gains tax assessed on Exxaro in respect of any profit arising to it on a disposal of any of its ordinary shares subsequent to the Re-domicile Transaction where such tax would not have been assessed but for the Re-domicile Transaction. Similarly, Exxaro has covenanted to pay Tronox an amount equal to any South African tax savings Exxaro may realize in certain ~~sale-leaseback transactions~~situations from any tax relief that would not have arisen but for the Re-domicile Transaction.

Pursuant to the terms of the Completion Agreement, on May 9, 2019, Exxaro exercised their right under the agreement to sell 14 million shares to us for an aggregate purchase price of approximately $200 million or $14.319 per share, plus fees of approximately $1 million.The share price was based upon a 5% discount to the 10 day volume weighted average price as of the day that Exxaro exercised their sale notice to us. Upon repurchase of the shares by the Company, the shares were cancelled. As a result of the sale of the $14 million shares on May 9, 2019, we recorded a liability of approximately $4 million which was included in “Accrued liabilities” in our Consolidated Balance Sheets as of December 31, 2019 and ~~merge, consolidate~~was subsequently paid in January 2020.

Futhermore, pursuant to the Completion Agreement, the parties agreed to accelerate our purchase of Exxaro's 26% membership interest in Tronox Sands LLP, a U.K. limited liability partnership ("Tronox Sands"). On February 15, 2019, we completed the redemption of Exxaro's ownership interest in Tronox Sands for consideration of approximately ZAR 2.06 billion (or approximately $148 million in cash), which represented Exxaro's indirect share of the loan accounts in our South African subsidiaries.

At March 31, 2020, Exxaro continues to own approximately 14.7 million shares of Tronox, or a 10.3% ownership interest, as well as their 26% ownership interest in our South African operating subsidiaries.

At the present time, we are unable to reasonably determine when and if Exxaro will sell ~~substantially~~its remaining shares in the foreseeable future, and as a result, we are not able to estimate what the capital gains tax impacts would be should Exxaro sell its remaining shares.

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Tasnee/Cristal

On April 10, 2019, we announced the completion of the acquisition of the TiO₂ business of Cristal for $1.675 billion of cash, subject to a working capital and noncurrent liability adjustment, plus 37,580,000 ordinary shares. At March 31, 2020, Cristal International Holdings B.V. (formerly known as Cristal Inorganic Chemical Netherlands Cooperatief W.A.), a wholly-owned subsidiary of Tasnee, continues to own 37,580,000 shares of Tronox, or a 26% ownership interest. In February 2020, Tronox and Cristal resolved the working capital and noncurrent liability adjustment by agreeing that no payment was required by either party.

On May 9, 2018, we entered into an Option Agreement with AMIC which is owned equally by Tasnee and Cristal. Under the terms of the Option Agreement, AMIC granted us an option (the “Option”) to acquire 90% of a special purpose vehicle (the “SPV”), to which AMIC’s ownership in a titanium slag smelter facility (the “Slagger”) in The Jazan City for Primary and Downstream Industries in KSA will be contributed together with $322 million of AMIC indebtedness (the “AMIC Debt”). As of March 31, 2020, we have loaned $89 million for capital expenditures and operational expenses to facilitate the start-up of the Slagger and we have recorded this loan payment and related interest of $4 million within “Other long-term assets” on the unaudited Condensed Consolidated Balance Sheet at March 31, 2020. The Option did not have a significant impact on the financial statements as of or for the periods ended March 31, 2020.

Prior to the Cristal acquisition, the Company also acquired feedstock from AMIC for consumption in production. There were no purchases of feedstock for the three months ended March 31, 2020. In addition, from time to time, Tronox sells Titanium Tetrachloride (TiCl₄) to AMIC for use at a sponge plant facility. During the three months ended March 31, 2020, Tronox recorded $6 million for TiCl₄ product sales made to AMIC and such amounts were recorded in “Net sales” on the unaudited Condensed Consolidated Statement of Operations. At March 31, 2020, Tronox had a receivable from AMIC of $2 million from the sale of TiCl₄that is recorded within “Prepaid and other assets”on the unaudited Condensed Consolidated Balance Sheet.

In conjunction with the acquisition on April 10, 2019 we entered into a transition services agreement with Tasnee, Cristal and AMIC. Under the terms of the transition services agreement, Tasnee and its affiliates will provide services to Tronox related to information technology support and infrastructure, logistics, safety, health and environmental, treasury and tax. Similarly, Tronox will provide services to Tasnee and its affiliates for information technology support and infrastructure, finance and accounting, tax, treasury, human resources, logistics, research and development and business development.

As part of the transition services agreement, Tronox recorded a net reduction of approximately $1 million in “Selling, general and administrative expenses” for the three months ended March 31, 2020 in the unaudited Condensed Consolidated Statement of Operations. The net reduction of selling, general and administrative expenses associated with the transition services agreement generally represents a recovery of the related costs. At March 31, 2020, Tronox had a receivable due from Tasnee of $15 million and a payable due to Tasnee of $4 million that are recorded within “Prepaid and other assets” and “Accrued liabilities”, respectively, on the unaudited Condensed Consolidated Balance Sheet. The balance in prepaid and other assets and remaining balances in accrued liabilities primarily relate to pre-acquisition activity and those balances are expected to be settled in the near term.

On December 29, 2019, we entered into an agreement, subject to regulatory approval, with Cristal to acquire certain assets co-located at our Yanbu facility that had been not included in the Cristal Transaction and which assets produce metal grade TiCl₄ for a $36 million note payable. Under such agreement, the metal grade TiCl₄ will be purchased by Advanced Metal Industries Cluster and Toho Titanium Metal Co. Ltd (ATTM), a joint venture between AMIC and Toho Titanium Company Ltd. ATTM uses the TiCl₄, which we supply by pipeline, for the production of titanium sponge. We expect this transaction to close in 2020. During the three months ended March 31, 2020, Tronox recorded $1 million for purchase of chlorine gas from ATTM and such amounts are recorded in "Cost of goods sold" on the unaudited Condensed Consolidated Statement of Operations. The amount due to ATTM as of March 31, 2020 for the purchase of chlorine gas was less than $1 million and is recorded within “Accounts payable”on the unaudited Condensed Consolidated Balance Sheet.

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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 Holdings plc’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, 2019. 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, 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 net income (loss) to EBITDA and Adjusted EBITDA is also provided herein.

Overview

Tronox Holdings plc (referred to herein as “Tronox,” “we,” “us,” or “our”) is a public limited company registered under the laws of England and Wales. As a result of the Re-domicile Transaction, Tronox Limited became a wholly-owned subsidiary of Tronox Holdings plc. On April 10, 2019, we completed the acquisition from National Industrialization Company ("Tasnee") of the TiO₂ business of The National Titanium Dioxide Company Ltd. (“Cristal”) (the “Cristal Transaction”). In order to obtain regulatory approval for the Cristal Transaction, we were required to divest Cristal's North American TiO₂ business, which was sold in May 2019. See Note 2 for further details on the Cristal Transaction.

Including the Cristal operations, we now operate titanium-bearing mineral sand mines and beneficiation and smelting operations in Australia, South Africa and Brazil to produce feedstock materials that can be processed into TiO₂ for pigment, high purity titanium chemicals, including titanium tetrachloride, and Ultrafine© titanium dioxide used in certain specialty applications. It is our long-term strategic goal to be fully vertically integrated and consume all of our ~~assets.~~feedstock materials in our own TiO₂ pigment facilities in the United States, Australia, Brazil, UK, France, the Netherlands, China and the Kingdom of Saudi Arabia (“KSA”). We believe that full vertical integration is the best way to achieve our ultimate goal of delivering low cost, high-quality pigment to our coatings and other TiO₂ customers throughout the world. The ~~terms~~mining, beneficiation and smelting of titanium bearing mineral sands creates meaningful quantities of zircon, which we also supply to customers around the ~~2025 Indenture also include certain limitations on~~world.

Tronox Synergy Savings Program

On April 10, 2019, we completed the Cristal Transaction. During the second quarter of 2019 as part of our ~~non-guarantor subsidiaries incurring indebtedness. Debt issuance costs~~strategy for realizing value from the acquisition, we announced our goal of $9achieving approximately $220 million ~~relating~~in operating synergies by 2022. These synergies are expected to be realized from the ~~Senior Notes due 2025~~ ~~were recorded as~~following areas:

•operational enhancements through, among other things, technology exchange, optimization of feedstock cost at pigment plants and performance improvements at the Yanbu plant in Saudi Arabia;

•feedstock initiatives including, among other things, maximizing synthetic rutile and slag output and better utilizing our diverse types of feedstock in our TiO₂ plants and other initiatives that more efficiently integrate our global feesdtock chain;

•supply chain savings from, among other things, volume purchasing discounts for a ~~direct reduction~~range of raw materials and services, including shipping and freight, and rationalizing the ~~carrying value~~production of ~~the long-term debt as described below~~ ~~and will be amortized over the life~~our broad portfolio of ~~the Senior Notes due 2025.~~

TiO₂ grades; and

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•reductions in selling, general and administrative expenses primarily from employee-related costs and indirect spend consolidation.

In connection with realizing the synergies discussed above, during the year ended December 31, 2019 and including the three months ended March 31, 2020, we incurred restructuring costs of $24 million for employee related costs, including severance. See Note 3 of notes to unaudited condensed consolidated financial statements for further information on restructuring.

During the first quarter of 2020, we have delivered total synergies of $45 million, of which $38 million have been reflected in our EBITDA in the first quarter of 2020 and $7 million are cash and other synergies not reflected in EBITDA. Our synergy targets continue to be $190 million for 2020, $275 million for 2021 and $325 million for 2022.

Business Environment

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

During the current coronavirus pandemic, our operations have been designated as essential to support the continued manufacturing of products such as food and medical packaging, medical equipment, pharmaceuticals, and personal protective gear. As of the end of the quarter, all of our sites were running to planned production levels, excluding South Africa where we elected to shutdown the mining of ilmenite for a period of time near the end of the first quarter of 2020 and into a portion of the second quarter of 2020. During that time, we utilized our existing inventories of ilmenite to operate our smelters which operated at near-full rates to produce chloride slag with a reduced workforce through the 21-day countrywide lockdown period. On April 13, 2020, our South African mines and concentrators were back up and running at full capacity.

Our first quarter revenue increased 4% sequentially driven primarily by higher TiO₂ volumes. Average TiO₂ selling prices remained stable, while Zircon average selling prices were 8% lower. The Covid-19 pandemic has impacted, and will continue to impact, our industry and business. Demand for TiO₂ in North America has been the most resilient, as we benefit from our exposure to do-it-yourself coatings and packaging applications. Regions hit hardest by the virus have experienced lower than normal demand, including southern Europe, Brazil and India. Zircon demand remains mixed, with recovering volumes in China offset by weaker demand in southern Europe and India. Zircon volumes for the first quarter were in-line with fourth quarter 2019 volumes. Based upon the status of social restrictions, the announced plans for the re-opening of economies around the world, and our conversations with and public statements by our customers, we anticipate declines in second quarter TiO₂ volumes versus first quarter 2020, while we expect Zircon volumes for the second quarter to remain largely in line with the first quarter.

Gross margin improved sequentially from the fourth quarter 2019 to the first quarter 2020 due to the favorable impacts of volume and mix, reductions in production costs and favorable impacts of foreign currency on costs. These impacts were partially offset by the negative impacts of average selling prices.

As of March 31, 2020, our total available liquidity was $570 million, including $420 million in cash and cash equivalents and $150 million available under revolving credit agreements including $123 million available under our Asset Backed Lending ("ABL") facility. Our total debt was $3.2 billion and net debt to trailing-twelve month Adjusted EBITDA pro forma for the Cristal transaction was 3.9x. There are no upcoming maturities on the Company’s term loan or bonds until 2024. The Company also has no financial covenants on its term loan or bonds and only one springing financial covenant on its ABL facility, which we do not expect to be triggered based on our current scenario planning.

On May 1, 2020, Tronox Incorporated, a wholly-owned indirect subsidiary of the Company, issued 6.5% senior secured notes due 2025 for an aggregate principal amount of $500 million (the "6.5%Senior Secured Notes due 2025"). A portion of the proceeds of this debt offering was utilized to repay the $200 million of the Company's outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers.

Pro Forma Income Statement Information

The acquisition of the TiO₂ business of Cristal on April 10, 2019 impacts the comparability of the reported results for 2020 compared to 2019. Since Tronox and Cristal have combined their respective businesses effective with the merger date of April 10, 2019, the three months ended March 31, 2020 reflect the results of the combined business, while the three months ended March 31, 2019 includes only the results of the legacy Tronox business. To assist with a discussion of the 2020 and

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2019 results on a comparable basis, certain supplemental unaudited pro forma income statement information is provided on a consolidated basis and is referred to as "pro forma information".

The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO₂ business and the 8120 paper laminate grade had been consummated on January 1, 2018. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies in the periods prior to the acquisition that may result from the business combination or any related restructuring costs.

Condensed Consolidated Results of Operations

Three Months Ended March 31, 2020 compared to the Three Months Ended March 31, 2019


	Reported Amounts														Pro Forma Amounts (1)
	Three Months Ended March 31,														Three Months Ended March 31,
	2020			2019			Variance		2020			2019			Variance
Net sales	$	722		$	390		$	332	$	722		$	720		$	2
Cost of goods sold	547			307			240		547			579			(32)
Gross profit	175			83			92		175			141			34
Gross Margin	24		%	21		%	3 pts		24		%	20		%	4 pts

Selling, general and administrative expenses	94			67			27		94			95			(1)
Restructuring	2			—			2		2			—			2

Income from operations	79			16			63		79			46			33
Interest expense	(45)			(49)			4		(45)			(55)			10
Interest income	3			9			(6)		3			3			—
Loss on extinguishment of debt	—			(2)			2		—			(2)			2
Other (expense) income, net	10			(2)			12		10			(3)			13
Income (loss) before income taxes	47			(28)			75		47			(11)			58
Income tax provision	(7)			(2)			(5)		(7)			(7)			—
Net (loss) income	$	40		$	(30)		$	70	$	40		$	(18)		$	58

Effective tax rate	15		%	(7)		%			15		%	64		%

EBITDA ⁽²⁾	$	160		$	59		$	101	$	160		$	128		$	32
Adjusted EBITDA ⁽²⁾	$	174		$	80		$	94	$	174		$	141		$	33
Adjusted EBITDA as% of Net Sales	24		%	21		%	3 pts		24		%	20		%	4 pts

_______________

(1)The pro forma amounts have been prepared on a basis consistent with Article 11 of Regulation S-X. See “Supplemental Pro Forma Information” section of the MD&A for further detail.

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(2)EBITDA and Adjusted EBITDA are Non-U.S. GAAP financial measures. Please refer to the “Non-U.S. GAAP Financial Measures” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of these measures and a reconciliation of these measures to Net income (loss) from operations.

Net sales by type of product for the three months ended March 31, 2020 and 2019 were as follows:

The table below presents reported revenue by product:


	Three Months Ended March 31,
	2020		2019		Variance		Percentage
TiO₂	$	580	$	277	$	303	109	%
Zircon	65		64		1		2	%
Feedstock and other products	77		49		28		57	%
Total net sales	$	722	$	390	$	332	85	%

The table below presents pro forma revenue by product:


	Three Months Ended March 31,
(Millions of dollars)	2020		2019		Variance		Percentage
TiO₂	$	580	$	570	$	10	2	%
Zircon	65		82		(17)		(21)	%
Feedstock and other products	77		68		9		13	%
Total net sales	$	722	$	720	$	2	—	%

On a reported basis, for the three months ended March 31, 2020, TiO₂ revenue was higher by 109% or $303 million compared to the prior year quarter. The acquisition of Cristal benefited growth by $286 million, or 94%. In addition to the Cristal acquisition, the increase in TiO₂ revenue for legacy Tronox operations benefited by a 7% or $21 million increase in sales volumes in legacy Tronox operations offset by a decrease of 1% or $2 million in average selling prices of TiO₂. Foreign currency negatively impacted TiO₂ revenue by $2 million due to the weakening of the Euro. Zircon revenues benefited by $15 million due to the Cristal acquisition. This increase in Zircon revenues was partially offset by a $14 million decline in legacy Tronox operations compared to the prior year quarter driven by a 16% reduction in average selling prices and a 6% reduction in sales volumes. Feedstock and other products revenues was $28 million higher from the year-ago quarter which includes $26 million related to Cristal. The increase in Feedstock and other products revenues for Tronox legacy operations was primarily driven by higher CP slag volumes.

On a pro forma basis, for the three months ended March 31, 2020, TiO₂ revenue increased 2% compared to the prior year driven primarily by a $29 million increase in sales volumes partially offset by a $7 million decrease in average selling prices. Foreign currency negatively impacted TiO₂sales by $7 million or 1% due to the weakening of the Euro. Zircon revenues declined $17 million or 21% primarily due to a 16% decline in average sales prices and a 7% decline in sales volumes. Feedstock and other products revenues increased primarily due to higher sales volumes of CP slag.

On both an as reported and pro forma basis, first quarter revenue of 2020 increased 4% when compared to the fourth quarter of 2019 driven by a 7% increase in TiO₂ volumes partially offset by a 8% decrease in average selling prices of Zircon.

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Feedstock and other products revenue was lower driven by lower CP slag average selling prices offset by higher CP slag sales volumes.

On a reported basis, our gross margin of $175 million was 24% of net sales compared to 21% of net sales in the year-ago quarter. The increase in gross margin is primarily due to:

•the favorable impact of 10 points due to the reduction of production costs, primarily due to lower energy costs and process chemicals costs and improved production synergies;

•the net favorable impact of 3 points related to foreign currency primarily due to a favorable impact on cost of goods sold due to the South African rand and Australian dollar partially offset by an unfavorable impact on sales due to the South African rand and Euro;

•the inclusion of Cristal’s results, which operates at a lower gross margin than legacy Tronox, reduced gross margin by 7 points due to higher operating costs and lower grade at Cristal mining offset by synergies realized; and

•the unfavorable impact of 3 points on gross margin for volume, product mix and sales prices.

On a pro forma basis, our gross margin of $175 million was 24% of net sales compared to 20% of net sales in the year-ago quarter. The increase in gross margin is primarily due to:

•the favorable impact of 4 points from reduction of production costs, primarily due to lower energy and process chemicals costs and improved production and cost structures as a result of synergy initiatives;

•the net favorable impact of 3 points of foreign currency on cost of goods sold due to the South African rand and Australian dollar;

•the unfavorable impact of 2 points caused by a decrease in both TiO₂ and Zircon selling prices;

•the unfavorable impact of 1 point of foreign currency on sales due to the Euro and South African rand.

On a reported basis, selling, general and administrative expenses increased by $27 million or 40% during the three months ended March 31, 2020 compared to the same period of the prior year. The acquisition of Cristal accounted for $20 million of the increase. In addition to the Cristal expenses were $5 million of higher employee-related costs and a $4 million increase in integration costs partially offset by a $3 million decrease in research and development expenses and lower professional services of $1 million. On a pro forma basis, selling, general and administrative expenses remained consistent period over period.

On both a reported and pro forma basis, we recorded restructuring expenses of $2 million for employee-related costs associated with headcount reductions during the three months ended March 31, 2020. See Note 3 of notes to unaudited condensed consolidated financial statements.

On a reported basis, income from operations for the three months ended March 31, 2020 was $79 million compared to income from operations of $16 million in the prior year period. The increase of $63 million was primarily due to the higher gross margin partially offset by higher SG&A expenses discussed above.

On a pro forma basis, income from operations for the three months ended March 31, 2020 increased $33 million to $79 million from $46 million in the prior year period primarily due to higher gross margin as discussed above.

On a reported basis, adjusted EBITDA as a percentage of net sales was 24% for the three months ended March 31, 2020, an increase of 3 points from 21% in the prior year. The higher gross margin partially offset by the higher SG&A expenses as discussed above were the primary drivers of the year-over-year increase in Adjusted EBITDA percentage.

On a pro forma basis, adjusted EBITDA as a percentage of net sales was 24% for the three months ended March 31, 2020, an increase of 4 points from 20% in the prior year. The higher gross margin as discussed above was the primary driver of the year-over-year increase in Adjusted EBITDA percentage.

On a reported basis, interest expense for the three months ended March 31, 2020 decreased by $4 million compared to the same period of 2019 primarily due to lower average debt outstanding balances and lower average interest rates.

On a pro forma basis, interest expense for the three months ended March 31, 2020 was lower by $10 million compared to the same period of 2019 due to lower average debt levels and lower interest rates in the current period versus the prior year period.

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On a reported basis, other income (expense), net for the three months ended March 31, 2020 primarily consisted of $13 million of net realized and unrealized foreign currency gains. The foreign currency gains were primarily driven by the South African rand and the Australian dollars used in the remeasurement of our U.S. dollar denominated working capital balances partially offset by the impact of our foreign currency derivatives. In the prior year period, we recognized a $1 million expense for the potential payment to Exxaro equal to any South African capital gains tax assessed on Exxaro in respect of any profit arising to it on the disposal of any of its ordinary shares in Tronox Holdings plc as a result of the Re-domicile Transaction (see Note 20 of notes to unaudited condensed consolidated financial statements for additional information). The payment to Exxaro was fully paid in January 2020.

On a pro forma basis, other income (expense), net for the three months ended March 31, 2020 was higher than the prior year period primarily due to the pro forma results including foreign currency losses for legacy Cristal operations in the prior year, mostly offset by the reasons previously discussed.

We continue to maintain full valuation allowances related to the total net deferred tax assets in the U.S. and Australia. We have full valuation allowances in Australia, Belgium, Brazil, Switzerland, and the U.S. The provisions for income taxes associated with these jurisdictions include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments. Additionally, we have valuation allowances against other specific tax assets.

On a reported basis, the effective tax rate was 15% and (7)% for the three months ended March 31, 2020 and 2019, respectively. The effective tax rates for the three months ended March 31, 2020 and 2019 are influenced by a variety of factors, primarily income and losses in jurisdictions with valuation allowances, disallowable expenditures, restructuring impacts, and our jurisdictional mix of income at tax rates different than the U.K. statutory rate. On a pro forma basis, the effective tax rate was 15% and 64% for the three months ended March 31, 2020 and 2019, respectively.

Other Comprehensive (Loss) Income

Other comprehensive loss was $270 million for the three months ended March 31, 2020 as compared to none for the prior year period. The increase in loss in 2020 compared to the prior year was primarily driven by unfavorable foreign currency translation adjustments of $188 million in the current year period compared to none in the prior year primarily due to the movement in the South Africa rand coupled with a net loss of $83 million in derivative instruments of which there were no comparable amounts in the prior year.

~~Liquidity~~Business Environment

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

As of ~~September 30, 2017, we had $238~~March 31, 2020, our total available liquidity was $570 million, ~~available under the $550~~including $420 million ~~Wells Fargo Revolver and $1.1 billion~~ in cash and cash ~~equivalents. In addition, restricted cash as of September 30, 2017 included the $650~~equivalents and $150 million ~~proceeds from the Blocked Term Loan discussed above.~~

~~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 September 30, 2017~~available under revolving credit agreements including $123 million available under our Asset Backed Lending ("ABL") facility. Our total debt was $3.2 billion and December 31, 2016, assets recorded under capital lease obligations were $21 million and $7 million, respectively. Related accumulated amortization was $7 million and $6 million at September 30, 2017 and December 31, 2016, respectively. During each of the three and nine months ended September 30, 2017 and 2016, we made principal payments of less than $1 million.

~~Fair Value~~

~~Our~~net debt is recorded at historical amounts. At September 30, 2017 and December 31, 2016, the fair value of the New Term Loan Facility was $2.2 billion. At September 30, 2017 and December 31, 2016, the fair value of the Senior Notes due 2022 was $616 million and $544 million, respectively. At September 30, 2017 the fair value of our Senior Notes due 2025 was $461 million. We determined the fair value of the New Term Loan Facility, the Senior Notes due 2022 and the Senior Notes due 2025 using quoted market prices. The fair value hierarchyto trailing-twelve month Adjusted EBITDA pro forma for the ~~New Term Loan Facility, the Senior Notes due 2022 and the Senior Notes due 2025 is a Level 1 input. Balances outstanding under our Wells Fargo Revolver~~Cristal transaction was 3.9x. There are ~~carried at contracted amounts, which approximate fair value based~~no upcoming maturities on the ~~short~~Company’s term ~~nature of the borrowing and the variable interest rate.~~loan or bonds until 2024. The ~~fair value hierarchy for our Wells Fargo Revolver is a Level 2 input.~~

~~Debt Covenants~~

~~At September 30, 2017, we had~~Company also has no financial covenants inon its term loan or bonds and only one springing financial covenant on its ABL facility, which we do not expect to be triggered based on our current scenario planning.

~~Interest and Debt Expense, Net~~Pro Forma Income Statement Information

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Interest on Prior Term Loan $ 16 $ 17 $ 49 $ 50
Interest on New Term Loan Facility 2 — 2 —
Interest on Senior Notes due 2020 13 14 41 43
Interest on Senior Notes due 2022 11 11 33 33
Interest on Senior Notes due 2025 1 — 1 —
Amortization of deferred debt issuance costs and discounts on debt 3 3 9 8
Other 2 1 7 6
Capitalized interest (1 ) — (2 ) (2 )
Total interest and debt expense, net $ 47 $ 46 $ 140 $ 138

~~In connection with obtaining debt, we incurred debt issuance costs, which are being amortized through~~TiO₂ business of Cristal on April 10, 2019 impacts the respective maturity dates using the effective interest method. At September 30, 2017, we had deferred debt issuance costs of $6 million related to the Wells Fargo Revolver which is recorded in “Other long-term assets” in the unaudited Condensed Consolidated Balance Sheets. At September 30, 2017, we had $30 million and $9 million of debt discount and issuance costs related to the New Term Loan Facility and the Senior Notes due 2025, respectively, which was recorded as a direct reductioncomparability of the carrying value of the long term debt in the unaudited Condensed Consolidated Balance Sheets. At September 30, 2017 and December 31, 2016, we had $8 million and $10 million, respectively, of debt issuance costs related to the Senior Notes 2022, which were recorded as a direct reduction of the carrying value of the 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,

2017 2016 2017 2016
Beginning balance $ 80 $ 78 $ 76 $ 81
Additions 1 — 1 1
Accretion expense 2 1 4 4
Remeasurement/translation — 3 4 5
Changes in estimates, including cost and timing of cash flows — — — (9 )
Settlements/payments (1 ) — (3 ) —
Balance, September 30, $ 82 $ 82 $ 82 $ 82

Asset retirement obligations in our unaudited Condensed Consolidated Balance Sheets at September 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 $78 million and $73 million, respectively, included in “Asset retirement obligations”.

~~During the nine months ended September 30, 2016, we amended our lease agreement for our TiO~~₂ 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.

~~13.~~

~~Commitments and Contingencies~~

~~Purchase and Capital Commitments~~ ~~— At September 30, 2017, purchase commitments were $72 million for the remainder of 2017, $82 million for 2018, $57 million for 2019, $41 million~~reported results for 2020 ~~$29 million for 2021,~~compared to 2019. Since Tronox and ~~$118 million thereafter.~~

~~Letters~~Cristal have combined their respective businesses effective with the merger date of ~~Credit~~ — At September 30, 2017, we had outstanding letters of credit, bank guarantees, and performance bonds of $43 million, of which $19 million were letters of credit issued under the Wells Fargo Revolver, $18 million were bank guarantees issued by ABSA Bank Limited (“ABSA”), $5 million were bank guarantees issued by Standard Bank, $1 million were performance bonds issued by Westpac Banking Corporation and less than $1 million of letters of credit issued by UBS.

~~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 operations.

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~~14.~~

~~Shareholders’ Equity~~

~~The changes in outstanding Class A Shares and Class B Shares for the nine months ended September 30, 2017 were as follows:~~

~~Class A Shares:~~
~~Balance at January 1, 2017~~	~~65,165,672~~
~~Shares issued for share-based compensation~~	~~3,034,771~~
~~Shares issued upon warrants exercised~~	~~964,897~~
~~Shares issued upon options exercised~~	~~45,753~~
~~Shares issued cancelled for share-based compensation~~	~~(619,999~~	)
~~Balance at September 30, 2017~~	~~68,591,094~~
~~Class B Shares:~~
~~Balance, at both September 30, 2017 and 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 30, 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 in cash at an exercise price of $51.21 for each Series A Warrant and $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 30, 2017 and December 31, 2016, there were 159,530 and 239,306 Series A Warrants outstanding, respectively, and 167,377 and 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

Three Months
Ended September 30,
2017

Dividend per share $ 0.045 $ 0.045 $ 0.045
Total dividend $ 6 $ 6 $ 5
Record date (close of business) March 6 May 15 August 21

~~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

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

~~Accumulated Other Comprehensive Loss Attributable to Tronox Limited~~

~~The tables below present changes in accumulated other comprehensive income (loss) by component for~~April 10, 2019, the three months ended ~~September 30, 2017 and 2016.~~

Cumulative
Translation
Adjustment

Pension
Liability
Adjustment

Unrealized
Gains (Losses)
on
Derivatives
Total
Beginning balance $ (363 ) $ (91 ) $ — $ (454 )
Other comprehensive income (loss) (26 ) — — (26 )
Amounts reclassified from accumulated other comprehensive income (loss) — 6 — 6
Balance, September 30, 2017 $ (389 ) (85 ) — (474 )

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Cumulative
Translation
Adjustment

Pension
Liability
Adjustment

Unrealized
Gains (Losses)
on
Derivatives
Total
Beginning balance $ (456 ) $ (101 ) $ 2 $ (555 )
Other comprehensive income (loss) 51 (21 ) (1 ) 29
Amounts reclassified from accumulated other comprehensive income (loss) — (1 ) — (1 )
Balance, September 30, 2016 $ (405 ) $ (123 ) $ 1 $ (527 )

~~The tables below present changes in accumulated other comprehensive income (loss) by component for~~March 31, 2020 reflect the ~~nine months ended September 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) 19 — (3 ) 16
Amounts reclassified from accumulated other comprehensive income (loss) — 7 — 7
Balance, September 30, 2017 $ (389 ) (85 ) — (474 )

Cumulative
Translation
Adjustment

Pension
Liability
Adjustment

Unrealized
Gains (Losses)
on
Derivatives
Total
Beginning balance $ (496 ) $ (102 ) $ — $ (598 )
Other comprehensive income (loss) 91 (21 ) 1 71
Balance, September 30, 2016 $ (405 ) $ (123 ) $ 1 $ (527 )

~~15.~~

~~Noncontrolling Interest~~

At September 30, 2017, 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 requirementsresults 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.

~~Noncontrolling interest activity for the three and nine months ended September 30, 2017 and 2016 was as follows:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Beginning balance $ 162 $ 126 $ 144 $ 112
Net income (loss) attributable to noncontrolling interest 6 (2 ) 11 (1 )
Effect of exchange rate changes (10 ) 18 3 31
Balance, September 30, $ 158 $ 142 $ 158 $ 142

~~16.~~

~~Share-Based Compensation~~

~~Share-based compensation expense consisted of the following:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
Restricted shares and restricted share units $ 5 $ 7 $ 25 $ 15
Options — 1 — 2
T-Bucks Employee Participation Plan — — 1 1
Total share-based compensation expense $ 5 $ 8 $ 26 $ 18

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~~Tronox Limited Management Equity Incentive Plan~~

~~Restricted Shares~~

~~We did not grant any restricted shares during the nine months ended September 30, 2017.~~

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

Number of
Shares

Weighted Average
Grant Date
Fair Value

Outstanding, January 1, 2017 284,400 $ 6.09
Vested (107,928 ) 8.00
Outstanding, September 30, 2017 176,472 $ 4.92
Expected to vest, September 30, 2017 176,472 $ 4.92

At September 30, 2017, there was less than $l million of unrecognized compensation expense related to unvested restricted shares which is expected to be recognized over a weighted-average period of 1.1 years. Since the restricted shares were granted only to certain members of our Board, the unrecognized compensation expense was not adjusted for estimated forfeitures. The total fair value of restricted shares that vested during the nine months ended September 30, 2017 was $1 million.

~~Restricted Share Units (“RSUs”)~~

During the nine months ended September 30, 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. For the time-based awards, 1,075 RSUs vested immediately, 14,053 RSUs vest ratably over a nine-month period 100,160 RSUs vest ratably over a one-year period and 12,869 RSUs vest ratably over a three-year period, and are valued at the weighted average grant date fair value. For the performance-based awards, 1,145,933 cliff vest at the end of the three years and 12,865 cliff vest at the end of forty months. Included in the performance-based awards are 786,639 RSUs for which vesting is determined based 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 1,225,697 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.

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

Number of
Shares

Weighted Average
Grant Date
Fair Value

Outstanding, January 1, 2017 5,587,331 $ 7.19
Granted 2,944,267 17.19
Vested (2,378,609 ) 9.52
Forfeited (604,918 ) 9.81
Outstanding, September 30, 2017 5,548,071 $ 11.22
Expected to vest, September 30, 2017 5,797,277 $ 9.83

At September 30, 2017, there was $35 million of unrecognized compensation expense related to unvested RSUs, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 2.0 years. The weighted-average grant-date fair value of RSUs granted during the nine months ended September 30, 2017 and 2016 was $17.19 per share and $4.04 per share, respectively. The total fair value of RSUs that vested during the nine months ended September 30, 2017 was $23 million.

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~~Options~~

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

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 $ —
Exercised (45,753 ) 19.32
Forfeited (4,273 ) 21.98
Expired (93,101 ) 21.58
Outstanding, September 30, 2017 1,827,354 $ 21.21 4.62 $ 2
Expected to vest, September 30, 2017 789 $ 22.69 7.27 $ —
Exercisable, September 30, 2017 1,826,560 $ 21.21 4.61 $ 2

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. The total intrinsic value of options exercised during the three and nine months ended September 30, 2017 was less than $1 million. No options were exercised during the three and nine months ending September 30, 2016 and consequently, there was no related intrinsic value. We issue new shares upon the exercise of options. During the three and nine months ended September 30, 2017, we received approximately $1 million in cash for the stock options exercised. As there were no stock options exercised during the three and nine months ended September 30, 2016, no cash was received.

~~At September 30, 2017, we had no unrecognized compensation expense related to options, adjusted for estimated forfeitures. We did not issue any options during the nine months ended September 30, 2017.~~

~~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 a T-Bucks Trust (the “Trust”) with R124 million (approximately $15 million), which was used to acquire Class A Shares. On May 31, 2017, the shares held by the Trust became fully vested. The Trust sold 546,403 shares in June 2017 on behalf of the participants who elected to receive cash. The remaining participants elected to receive shares.

~~Long-Term Incentive Plan (“LTIP”)~~

We have a LTIP for the benefit of certain qualifying employees of Tronox subsidiaries in South Africa and Australia. The LTIP is classified as a cash-settled compensation plan and is re-measured to fair value at each reporting date. We did not have an outstanding liability for LTIP at both September 30, 2017 and December 31, 2016.

~~17.~~

~~Pension and Other Postretirement Healthcare Benefits~~

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

We sponsored a noncontributory defined benefit plan that covered eligible employees of Alkali which became effective from the acquisition date of Alkali, on April 1, 2015 (the “Alkali Qualified Plan”). Our obligations under the Alkali Qualified Plan transferred with the Sale and $5 million in actuarial losses and prior service costs previously included in “Accumulated other comprehensive loss” were recognized as a loss within “Income (loss) from discontinued operations, net of tax” on the Statement of Operations in the third quarter of 2017.

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The components of net periodic cost associated with our U.S. Qualified Retirement Plan 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,

2017 2016 2017 2016
Net periodic cost:
Service cost $ — $ — $ — $ —
Interest cost 3 5 11 15
Expected return on plan assets (4 ) (5 ) (11 ) (15 )
Net amortization of actuarial loss and prior service credit 1 — 2 1
Curtailment gain (loss) — (1 ) — (1 )
Total net periodic cost $ — $ (1 ) $ 2 $ —

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

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

~~18.~~

~~Related Parties~~

~~Exxaro~~

We have service level agreements with Exxaro for research and development that expired during the third quarter of 2017. Such service level agreements amounted to less than $1 million of expense during each of the three months and nine months ended September 30, 2017 and 2016, which was included in “Selling, general and administrative expense” in the unaudited Condensed Consolidated Statements of Operations. Additionally, we had a professional service agreement with Exxaro related to the Fairbreeze construction project which ended in January 2017. Payments were nil and $1 million, respectively, to Exxaro relating to Fairbreeze duringcombined business, while the three months ended September 30, 2017 and 2016 and less than $1 million and $2 million, respectively, during the nine months ended September 30, 2017 and 2016. These payments were capitalized and included in “Property, plant and equipment, net” in our unaudited Condensed Consolidated Balance Sheets. At both September 30, 2017 and DecemberMarch 31, ~~2016, we had less than $1 million of related party payables, which were recorded in “Accounts payable” in our unaudited Condensed Consolidated Balance Sheets.~~

~~19.~~

~~Segment Information~~

~~Segment performance is evaluated based on segment operating income (loss), which represents~~2019 includes only the results of ~~segment operations before unallocated costs, such as general corporate expenses not identified to~~the legacy Tronox business. To assist with a ~~specific segment, interest expense, other income (expense), net~~discussion of the 2020 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,
2017 2016 2017 2016
Net sales (TiO₂)
$ 435 $ 339 $ 1,234 $ 957
TiO₂ segment
$ 75 $ 17 $ 168 $ (12 )
Corporate (24 ) (17 ) (90 ) (45 )
Income (loss) from operations 51 — 78 (57 )
Interest and debt expense, net (47 ) (46 ) (140 ) (138 )
Gain on extinguishment of debt (28 ) — (28 ) 4
Other income (expense), net 12 (10 ) 5 (22 )
Income (loss) from continuing operations before income taxes $ (12 ) $ (56 ) $ (85 ) $ (213 )

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~~Item~~ 2.

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

2019 results on a comparable basis, certain supplemental unaudited pro forma income statement information is provided on a consolidated basis and is referred to as "pro forma information".

The ~~following discussion should be read in conjunction~~pro forma information has been prepared on a basis consistent with ~~Tronox Limited’s unaudited condensed consolidated financial statements~~Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO₂ business and the 8120 paper laminate grade had been consummated on January 1, 2018. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies in the periods prior to the acquisition that may result from the business combination or any related ~~notes included elsewhere in~~restructuring costs.

Condensed Consolidated Results of Operations

Three Months Ended March 31, 2020 compared to the Three Months Ended March 31, 2019


	Reported Amounts														Pro Forma Amounts (1)
	Three Months Ended March 31,														Three Months Ended March 31,
	2020			2019			Variance		2020			2019			Variance
Net sales	$	722		$	390		$	332	$	722		$	720		$	2
Cost of goods sold	547			307			240		547			579			(32)
Gross profit	175			83			92		175			141			34
Gross Margin	24		%	21		%	3 pts		24		%	20		%	4 pts

Selling, general and administrative expenses	94			67			27		94			95			(1)
Restructuring	2			—			2		2			—			2

Income from operations	79			16			63		79			46			33
Interest expense	(45)			(49)			4		(45)			(55)			10
Interest income	3			9			(6)		3			3			—
Loss on extinguishment of debt	—			(2)			2		—			(2)			2
Other (expense) income, net	10			(2)			12		10			(3)			13
Income (loss) before income taxes	47			(28)			75		47			(11)			58
Income tax provision	(7)			(2)			(5)		(7)			(7)			—
Net (loss) income	$	40		$	(30)		$	70	$	40		$	(18)		$	58

Effective tax rate	15		%	(7)		%			15		%	64		%

EBITDA ⁽²⁾	$	160		$	59		$	101	$	160		$	128		$	32
Adjusted EBITDA ⁽²⁾	$	174		$	80		$	94	$	174		$	141		$	33
Adjusted EBITDA as% of Net Sales	24		%	21		%	3 pts		24		%	20		%	4 pts

_______________

(1)The pro forma amounts have been prepared on a basis consistent with Article 11 of Regulation S-X. See “Supplemental Pro Forma Information” section of the MD&A for further detail.

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(2)EBITDA and Adjusted EBITDA are Non-U.S. GAAP financial measures. Please refer to the “Non-U.S. GAAP Financial Measures” section of 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 a discussion of these measures and a reconciliation of these measures to Net income (loss) from operations.

Net sales by type of product for the three months ended March 31, 2020 and 2019 were as follows:

The table below presents reported revenue by product:


	Three Months Ended March 31,
	2020		2019		Variance		Percentage
TiO₂	$	580	$	277	$	303	109	%
Zircon	65		64		1		2	%
Feedstock and other products	77		49		28		57	%
Total net sales	$	722	$	390	$	332	85	%

The table below presents pro forma revenue by product:


	Three Months Ended March 31,
(Millions of dollars)	2020		2019		Variance		Percentage
TiO₂	$	580	$	570	$	10	2	%
Zircon	65		82		(17)		(21)	%
Feedstock and other products	77		68		9		13	%
Total net sales	$	722	$	720	$	2	—	%

On a reported basis, for the three months ended March 31, 2020, TiO₂ revenue was higher by 109% or $303 million compared to the prior year ~~ended December 31, 2016.~~quarter. The acquisition of Cristal benefited growth by $286 million, or 94%. In addition to the Cristal acquisition, the increase in TiO₂ revenue for legacy Tronox operations benefited by a 7% or $21 million increase in sales volumes in legacy Tronox operations offset by a decrease of 1% or $2 million in average selling prices of TiO₂. Foreign currency negatively impacted TiO₂ revenue by $2 million due to the weakening of the Euro. Zircon revenues benefited by $15 million due to the Cristal acquisition. This ~~discussion~~increase in Zircon revenues was partially offset by a $14 million decline in legacy Tronox operations compared to the prior year quarter driven by a 16% reduction in average selling prices and a 6% reduction in sales volumes. Feedstock and other ~~sections~~products revenues was $28 million higher from the year-ago quarter which includes $26 million related to Cristal. The increase in ~~this Quarterly Report on Form 10-Q contain forward-looking statements, within~~Feedstock and other products revenues for Tronox legacy operations was primarily driven by higher CP slag volumes.

On a pro forma basis, for the ~~meaning~~three months ended March 31, 2020, TiO₂ revenue increased 2% compared to the prior year driven primarily by a $29 million increase in sales volumes partially offset by a $7 million decrease in average selling prices. Foreign currency negatively impacted TiO₂sales by $7 million or 1% due to the weakening of the ~~Private Securities Litigation Reform Act~~Euro. Zircon revenues declined $17 million or 21% primarily due to a 16% decline in average sales prices and a 7% decline in sales volumes. Feedstock and other products revenues increased primarily due to higher sales volumes of ~~1995, that involve risks~~CP slag.

On both an as reported and ~~uncertainties,~~pro forma basis, first quarter revenue of 2020 increased 4% when compared to the fourth quarter of 2019 driven by a 7% increase in TiO₂ volumes partially offset by a 8% decrease in average selling prices of Zircon.

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Feedstock and ~~actual results could differ materially from those discussed~~other products revenue was lower driven by lower CP slag average selling prices offset by higher CP slag sales volumes.

On a reported basis, our gross margin of $175 million was 24% of net sales compared to 21% of net sales in the ~~forward-looking statements~~year-ago quarter. The increase in gross margin is primarily due to:

•the favorable impact of 10 points due to the reduction of production costs, primarily due to lower energy costs and process chemicals costs and improved production synergies;

•the unfavorable impact of 3 points on gross margin for volume, product mix and sales prices.

On a pro forma basis, our gross margin of $175 million was 24% of net sales compared to 20% of net sales in the year-ago quarter. The increase in gross margin is primarily due to:

•the net favorable impact of ~~future events based~~3 points of foreign currency 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~~cost of Financial Condition and Results of Operations contains certain financial measures, in particular the presentation of earnings before interest, 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 net income (loss) to EBITDA and Adjusted EBITDA is also provided herein.

~~Overview~~

~~We are a global leader in the production and marketing of titanium bearing mineral sands and titanium dioxide (“TiO~~₂~~”) pigment.~~

~~TiO~~₂ ~~Segment~~

~~We operate three TiO~~₂ ~~pigment facilities at the following locations: Hamilton, Mississippi; Botlek, the Netherlands; and Kwinana, Western Australia, representing an aggregate annual TiO~~₂ ~~production capacity of approximately 465,000 metric tons. TiO~~₂ is 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 applicationsgoods sold due to ~~its superior ability~~the South African rand and Australian dollar;

•the unfavorable impact of 2 points caused by a decrease in both TiO₂ and Zircon selling prices;

•the unfavorable impact of 1 point of foreign currency on sales due to ~~cover or mask other materials effectively~~the Euro and ~~efficiently relative to alternative white pigments and extenders. TiO~~₂ is 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 Sands located in South ~~Africa, Namakwa Sands located in South Africa and Cooljarloo located in Western Australia.~~African rand.

~~Our TiO~~₂ ~~business 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 TiO~~₂~~; and~~

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

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~~Recent Developments~~

On ~~February 21, 2017, Tronox Limited, The National Titanium Dioxide Company Ltd.,~~ a ~~limited company organized under~~reported basis, selling, general and administrative expenses increased by $27 million or 40% during the ~~laws~~three months ended March 31, 2020 compared to the same period of the ~~Kingdom~~prior year. The acquisition of ~~Saudi Arabia (“Cristal”), and~~ Cristal ~~Inorganic Chemicals Netherlands Coöperatief W.A., a cooperative organized under the laws~~accounted for $20 million of the ~~Netherlands~~increase. In addition to the Cristal expenses were $5 million of higher employee-related costs and a ~~wholly owned subsidiary~~$4 million increase in integration costs partially offset by a $3 million decrease in research and development expenses and lower professional services of ~~Cristal (“Seller”), entered into~~$1 million. On a ~~Transaction Agreement (the “Transaction Agreement”), pursuant to which~~pro forma basis, selling, general and administrative expenses remained consistent period over period.

On both a reported and pro forma basis, we ~~agreed to acquire Cristal’s titanium dioxide business~~recorded restructuring expenses of $2 million 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”). Followingemployee-related costs associated with headcount reductions during 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. As a result of the refinancing (Seethree months ended March 31, 2020. See Note 113 of notes to unaudited condensed consolidated financial ~~statements), we expect~~statements.

On a reported basis, income from operations for the three months ended March 31, 2020 was $79 million compared to ~~finance~~income from operations of $16 million in the prior year period. The increase of $63 million was primarily due to the higher gross margin partially offset by higher SG&A expenses discussed above.

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On a reported basis, interest income for the three months ended March 31, 2020 decreased by $6 million compared to the same period in 2019 due to lower cash balances from the use of cash and previously restricted cash in the second quarter of 2019 for the acquisition of the Cristal ~~Transaction with our cash on hand inclusive of restricted cash and liquidity from our asset-based syndicated revolving credit facility. The Cristal Transaction is also conditioned upon~~Transaction. On a pro forma basis, interest income for the ~~receipt of various regulatory approvals, including antitrust clearance~~three months ended March 31, 2020 remained flat in ~~numerous jurisdictions. On April 13, 2017, the U.S. Federal Trade Commission (“FTC”) issued a Second Request~~comparison to the ~~Company~~same period in 2019.

On a reported basis, other income (expense), net for the three months ended March 31, 2020 primarily consisted of $13 million of net realized and ~~Cristal in connection with its filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and Tronox has substantially complied with the Second Request.~~unrealized foreign currency gains. The ~~Cristal Transaction, which has been unanimously approved by our board of directors (the “Board”), is expected to close~~foreign currency gains were primarily driven by the ~~first quarter 2018, subject to regulatory approvals~~South African rand and ~~satisfaction of customary closing conditions.~~

~~On September 1, 2017, we completed~~ the ~~previously announced sale~~Australian dollars used in the remeasurement of our ~~wholly owned subsidiary Tronox Alkali Corporation (“Alkali”) to Genesis Energy, L.P. for proceeds of approximately $1.325 billion in cash, subject to a customary post-closing~~U.S. dollar denominated working capital ~~adjustment (the “Sale”).~~balances partially offset by the impact of our foreign currency derivatives. In ~~connection with~~ the ~~Sale,~~prior year period, we recognized a ~~loss of $233~~$1 million ~~net of tax, during~~expense for the ~~three and nine months ended September 30, 2017. See Note 2. As a result of the Sale, Alkali’s results of operations have been reported as discontinued operations (see Note 2).~~ We have agreed unconditionally to guarantee the indemnification and performance of the obligations of Tronox U.S. Holdings Inc. (“Tronox Holdings”), a subsidiary of Tronox Limited, under the stock purchase agreement (“Purchase Agreement”). Both Tronox Holdings and Genesis Energy, L.P. 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. On October 2, 2017, at a special meeting of shareholders of the Company held pursuant to the Transaction Agreement, the Company’s shareholders approved a resolution to issue 37,580,000 Class A Shares to the Seller in connection with the acquisition of Cristal’s TiO₂ ~~business, and the resulting acquisition of interests in such Class A Shares by the Seller and certain other persons and entities, at the closing of such acquisition.~~

~~In 2012, our Class B ordinary shares (“Class B Shares”) were issued~~potential payment to Exxaro ~~Resources Limited (“Exxaro”) and one of its subsidiaries in consideration for 74% of Exxaro’s~~equal to any South African ~~mineral sands business.~~capital gains tax assessed on Exxaro ~~has agreed not~~in respect of any profit arising to ~~acquire~~it on the disposal of 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 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 September 30, 2017 and December 31, 2016, Exxaro held approximately 43% and 44%, respectively, of the voting securities of Tronox Limited. See Note 18 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. On October 10, 2017, Exxaro sold 22,425,000 Class A~~ ordinary shares in an underwritten registered offering (the “Exxaro Share Transaction”). Subsequent to the Exxaro Shares Transaction, Exxaro held approximately 24% of the Company’s voting securities. Presently, Exxaro intends to sell the remainder of its Tronox shares in a staged process over time pursuant to the existing registration statement, subject to market conditions. Exxaro’s sale of Class A ordinary shares does not impact their 26% ownership interest in each of our Tronox KZN Sands (Pty) Ltd. and Tronox Mineral Sands (Pty) Ltd subsidiaries.

During the fourth quarter of 2016, we implemented various steps of an internal corporate reorganization plan to simplify our corporate structure and thereby improve operational, administrative, and commercial synergies within each of our operating segments (the “Corporate Reorganization”). As a result of the Corporate Reorganization, we reduced our cross jurisdictional financing arrangements, eliminated administrative activities and reversed the deferred tax assets related to intercompany interest deductions. The related withholding tax accrual amounts were also reversedHoldings plc as a result of the 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. SeeRe-domicile Transaction (see Note 320 of notes to ~~our~~ unaudited condensed consolidated financial statements for additional ~~information.~~information). The payment to Exxaro was fully paid in January 2020.

30We continue to maintain full valuation allowances related to the total net deferred tax assets in the U.S. and Australia. We have full valuation allowances in Australia, Belgium, Brazil, Switzerland, and the U.S. The provisions for income taxes associated with these jurisdictions include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments. Additionally, we have valuation allowances against other specific tax assets.

~~Table~~Other Comprehensive (Loss) Income

Other comprehensive loss was $270 million for the three months ended March 31, 2020 as compared to none for the prior year period. The increase in loss in 2020 compared to the prior year was primarily driven by unfavorable foreign currency translation adjustments of ~~Contents~~$188 million in the current year period compared to none in the prior year primarily due to the movement in the South Africa rand coupled with a net loss of $83 million in derivative instruments of which there were no comparable amounts in the prior year.

Business Environment

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

~~Our pigment business benefited from~~During the current coronavirus pandemic, our operations have been designated as essential to support the continued manufacturing of products such as food and medical packaging, medical equipment, pharmaceuticals, and personal protective gear. As of the end of the quarter, all of our sites were running to planned production levels, excluding South Africa where we elected to shutdown the mining of ilmenite for a ~~global industry recovery that began in~~period of time near the end of the first quarter of ~~2016. To meet healthy~~2020 and into a portion of the second quarter of 2020. During that time, we utilized our existing inventories of ilmenite to operate our smelters which operated at near-full rates to produce chloride slag with a reduced workforce through the 21-day countrywide lockdown period. On April 13, 2020, our South African mines and concentrators were back up and running at full capacity.

Our first quarter revenue increased 4% sequentially driven primarily by higher TiO₂ volumes. Average TiO₂ selling prices remained stable, while Zircon average selling prices were 8% lower. The Covid-19 pandemic has impacted, and will continue to impact, our industry and business. Demand for TiO₂ in North America has been the most resilient, as we benefit from our exposure to do-it-yourself coatings and packaging applications. Regions hit hardest by the virus have experienced lower than normal demand, ~~we operated our pigment plants at high utilization rates while matching pigment production~~including southern Europe, Brazil and India. Zircon demand remains mixed, with recovering volumes ~~to sales~~in China offset by weaker demand in southern Europe and India. Zircon volumes ~~and keeping inventory at or below normal levels. Global pigment pricing has rebounded with successive gains in each quarter since~~for the first quarter were in-line with fourth quarter 2019 volumes. Based upon the status of ~~2016. We believe pigment inventories,~~social restrictions, the announced plans for the re-opening of economies around the world, and our conversations with and public statements by our customers, we anticipate declines in second quarter TiO₂ volumes versus first quarter 2020, while we expect Zircon volumes for the second quarter to remain largely in line with the first quarter.

Pro Forma Income Statement Information

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2019 results on a comparable basis, certain supplemental unaudited pro forma income statement information is provided on a consolidated basis and is referred to as "pro forma information".

The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO₂ business and the 8120 paper laminate grade had been consummated on January 1, 2018. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies in the ~~aggregate, are at~~periods prior to the acquisition that may result from the business combination or below normal levels at both customer and producer locations globally resulting in a continued tight supply-demand balance. We continue to use a significant majority of our high grade titanium feedstock for our pigment production and continued to reduce our titanium slag inventories. In addition, we expect zircon sales volumes in 2017 to exceed those of 2016 as we continue to ramp up production at our Fairbreeze mine to match market demand.any related restructuring costs.

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.

Condensed Consolidated Results of Operations ~~from Continuing Operations~~

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 compared to the Three ~~and Nine~~ Months Ended ~~September 30, 2016~~March 31, 2019

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Variance 2017 2016 Variance
(Millions of U.S. dollars)
Net sales $ 435 $ 339 $ 96 $ 1,234 $ 957 $ 277
Cost of goods sold 329 291 38 971 877 94
Gross profit 106 48 58 263 80 183
Selling, general and administrative expenses (55 ) (47 ) (8 ) (186 ) (135 ) (51 )
Restructuring income (expense) — (1 ) 1 1 (2 ) 3
Income (loss) from continuing operations 51 — 51 78 (57 ) 135
Interest and debt expense, net (47 ) (46 ) (1 ) (140 ) (138 ) (2 )
Gain (loss) on extinguishment of debt (28 ) — (28 ) (28 ) 4 (32 )
Other income (expense), net 12 (10 ) 22 5 (22 ) 27
Income (loss) from continuing operations before income taxes (12 ) (56 ) 44 (85 ) (213 ) 128
Income tax provision (13 ) (6 ) (7 ) (10 ) (25 ) 15
Net income (loss) from continuing operations $ (25 ) $ (62 ) $ 37 $ (95 ) $ (238 ) $ 143


	Reported Amounts														Pro Forma Amounts (1)
	Three Months Ended March 31,														Three Months Ended March 31,
	2020			2019			Variance		2020			2019			Variance
Net sales	$	722		$	390		$	332	$	722		$	720		$	2
Cost of goods sold	547			307			240		547			579			(32)
Gross profit	175			83			92		175			141			34
Gross Margin	24		%	21		%	3 pts		24		%	20		%	4 pts

Selling, general and administrative expenses	94			67			27		94			95			(1)
Restructuring	2			—			2		2			—			2

Income from operations	79			16			63		79			46			33
Interest expense	(45)			(49)			4		(45)			(55)			10
Interest income	3			9			(6)		3			3			—
Loss on extinguishment of debt	—			(2)			2		—			(2)			2
Other (expense) income, net	10			(2)			12		10			(3)			13
Income (loss) before income taxes	47			(28)			75		47			(11)			58
Income tax provision	(7)			(2)			(5)		(7)			(7)			—
Net (loss) income	$	40		$	(30)		$	70	$	40		$	(18)		$	58

Effective tax rate	15		%	(7)		%			15		%	64		%

EBITDA ⁽²⁾	$	160		$	59		$	101	$	160		$	128		$	32
Adjusted EBITDA ⁽²⁾	$	174		$	80		$	94	$	174		$	141		$	33
Adjusted EBITDA as% of Net Sales	24		%	21		%	3 pts		24		%	20		%	4 pts

_______________

(1)The pro forma amounts have been prepared on a basis consistent with Article 11 of Regulation S-X. See “Supplemental Pro Forma Information” section of the MD&A for further detail.

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On a reported basis, net sales of $722 million for the three months ended March 31, 2020 increased by 85% compared to $390 million for the same period in 2019. The three months ended March 31, 2020 includes $326 million, or 45% revenue growth related to the acquired operations of Cristal. Incremental to the Cristal acquistion, increases in TiO₂ sales volumes and higher CP slag volumes partially offset by lower Zircon sales resulted in increases in revenues related to in Tronox legacy operations. On a pro forma basis, net sales for the three months ended ~~September 30, 2017 increased by 28% compared~~March 31, 2020 remained relatively flat in comparison to the same period in 2016 due to higher selling prices for Pigment of $53 million, Zircon of $8 million and Pig Iron of $4 million. Higher volume and product mix for CP Slag of $12 million, Zircon of $4 million, Pig Iron of $8 million and Ilmenite of $2 million also contributed to the increase in net sales. There was also a favorable change in foreign currency translation of $5 million resulting from Pigment Sales. Volumes and product mix for Pigment were relatively flat.

2019.

Net sales ~~for the nine months ended September 30, 2017 increased~~ by ~~29% compared to the same period in 2016 primarily due to the impact~~type of ~~higher selling prices for Pigment of $142 million, Zircon of $7 million, Pig Iron of $11 million, Natural Rutile of $1 million and Ilmenite of $3 million. Higher volume and~~ product mix for Pigment of $35 million, CP Slag of $34 million, Zircon of $24 million, Pig Iron of $6 million, Natural Rutile of $2 million and Ilmenite of $9 million also contributed to the increase in net sales for the nine months ended September 30, 2017. The impact from foreign currency translation versus the same period in 2016 was insignificant.

~~Our gross profit margin~~ for the three months ended ~~September 30, 2017~~March 31, 2020 and 2019 were as follows:

The table below presents reported revenue by product:


	Three Months Ended March 31,
	2020		2019		Variance		Percentage
TiO₂	$	580	$	277	$	303	109	%
Zircon	65		64		1		2	%
Feedstock and other products	77		49		28		57	%
Total net sales	$	722	$	390	$	332	85	%

The table below presents pro forma revenue by product:


	Three Months Ended March 31,
(Millions of dollars)	2020		2019		Variance		Percentage
TiO₂	$	580	$	570	$	10	2	%
Zircon	65		82		(17)		(21)	%
Feedstock and other products	77		68		9		13	%
Total net sales	$	722	$	720	$	2	—	%

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Feedstock and other products revenue was lower driven by lower CP slag average selling prices offset by higher CP slag sales volumes.

On a reported basis, our gross margin of $175 million was 24% of net sales compared to ~~14% for~~21% of net sales in the ~~same period in 2016.~~year-ago quarter. The increase in gross margin is primarily due to:

•the favorable impact of ~~$58 million was~~10 points due to the reduction of production costs, primarily due to ~~higher selling prices of $68 million, higher volumes~~lower energy costs and ~~product mix of $3 million, offset by~~ process chemicals costs and improved production synergies;

•the net favorable impact of ~~higher production costs of $6 million and unfavorable changes in~~3 points related to foreign currency ~~translation~~primarily due to a favorable impact on cost of ~~$7 million primarily from~~goods sold due to the South African ~~Rand~~rand and Australian ~~Dollar.~~dollar partially offset by an unfavorable impact on sales due to the South African rand and Euro;

~~Table~~•the unfavorable impact of ~~Contents~~

~~Our~~3 points on gross ~~profit~~ margin for ~~the nine months ended September 30, 2017~~volume, product mix and sales prices.

On a pro forma basis, our gross margin of $175 million was ~~21%~~24% of net sales compared to 8%20% of net sales ~~during 2016.~~in the year-ago quarter. The increase in gross margin is primarily due to:

•the favorable impact of ~~$183 million was~~4 points from reduction of production costs, primarily due to ~~higher selling prices~~lower energy and process chemicals costs and improved production and cost structures as a result of ~~$169 million, higher volumes and product mix of $30 million,~~ synergy initiatives;

•the net favorable impact of ~~lower production costs~~3 points of ~~$24 million~~foreign currency on cost of goods sold due ~~primarily~~ to the ~~benefits~~South African rand and Australian dollar;

•the unfavorable impact of ~~vertical integration, offset~~2 points caused by a decrease in both TiO₂ and Zircon selling prices;

•the unfavorable ~~changes in~~impact of 1 point of foreign currency ~~translation of $40 million primarily from~~on sales due to the ~~Rand~~Euro and ~~Australian dollar.~~South African rand.

~~Selling,~~On a reported basis, selling, general and administrative expenses increased by ~~17%~~$27 million or 40% during the three months ended ~~September 30, 2017~~March 31, 2020 compared to the same period of the ~~previous~~prior year. ~~Included in SG&A are $24 million and $17~~The acquisition of Cristal accounted for $20 million of ~~corporate~~the increase. In addition to the Cristal expenses ~~for the three months ended September 30, 2017~~were $5 million of higher employee-related costs and ~~2016, respectively. The $7~~a $4 million increase in corporate expenses compared to the same period in 2016 was mainly due to higher professional fees of $13 million related to the Cristal Transaction offset by $5 million of Alkali transactional expenses that were reclassified to discontinued operations. Also contributing to the charge were higher other general and administrativeintegration costs ~~of $2 million, and a reduction of employee stock-based and other compensation costs of $3 million. SG&A costs associated with our TiO~~₂ ~~activities increased $1 million from the prior year period due primarily to unfavorable changes in foreign currency translation of $1 million.~~

Selling, general and administrative expenses increased by 38% during the nine months ended September 30, 2017 compared to the same period of the previous year. Included in SG&A are $91 million and $45 million of corporate expenses for the nine months ended September 30, 2017 and 2016, respectively. The $45 million increase in corporate expenses was due to higher professional fees of $33 million related to the Cristal Transaction, higher employee stock-based and other compensation costs of $10 million and higher other general and administrative costs of $3 million. Restructuring costs decreased by $1 million during the period. SG&A costs associated with our TiO₂ ~~activities increased $5 million from the prior year period due primarily to higher employee stock-based and other compensation costs and unfavorable changes in foreign currency translation.~~

~~Income from operations for the three months ended September 30, 2017 was $51 million, $75 million from our TiO~~₂ activities offset by $24 million of corporate expenses. Income from operations for the three month period ended September 30, 2016 was $0, $17 million from our TiO2 activities offset by $17 million of corporate expenses. Income from our TiO2 activities increased by $58 million compared to the same period in 2016 primarily due to an increase in gross profit of $58 millionpartially offset by a $3 million decrease in research and development expenses and lower professional services of $1 ~~million increase in~~million. On a pro forma basis, selling, general and administrative expenses remained consistent period over period.

On both a reported and ~~a $1~~pro forma basis, we recorded restructuring expenses of $2 million ~~decrease in restructuring costs. Corporate general and administrative expenses~~ for employee-related costs associated with headcount reductions during the three months ended ~~September 30, 2017 increased for the reasons noted above in the discussion of the SG&A expenses.~~

~~Income from operations for the nine months ended September 30, 2017 was $78 million, $168 million from our TiO~~₂ activities offset by $90 million of corporate expenses, $91 million of SG&A and a $1 million reversal of restructuring expense. Loss from operations for the nine month period ended September 30, 2016 was $57 million, a $12 million loss from our TiO2 activities and $45 million of corporate expenses. Income from our TiO2 activities increased by $180 million compared to the same period in 2016 primarily due to an increase in gross profit of $183 million offset by a $5 million increase in selling, general and administrative expenses and a $2 million decrease in restructuring costs. Corporate general and administrative expenses for the nine months ended September 30, 2017 increased for the reasons noted above in the discussion of the SG&A expenses.

~~Interest and debt expense, net for the three and nine months ended September 30, 2017 was consistent with the same period of 2016.~~March 31, 2020. See Note 113 of notes to unaudited condensed consolidated financial statements.

~~Gain (loss) on~~On a pro forma basis, income from operations for the three months ended March 31, 2020 increased $33 million to $79 million from $46 million in the prior year period primarily due to higher gross margin as discussed above.

On a reported basis, interest expense for the three months ended March 31, 2020 decreased by $4 million compared to the same period of 2019 primarily due to lower average debt ~~extinguishment - See Note 11~~outstanding balances and lower average interest rates.

On a pro forma basis, interest expense for the three months ended March 31, 2020 was lower by $10 million compared to the same period of ~~notes~~2019 due to ~~unaudited condensed consolidated financial statements.~~lower average debt levels and lower interest rates in the current period versus the prior year period.

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~~Other~~On a reported basis, interest income for the three months ended March 31, 2020 decreased by $6 million compared to the same period in 2019 due to lower cash balances from the use of cash and previously restricted cash in the second quarter of 2019 for the acquisition of the Cristal Transaction. On a pro forma basis, interest income for the three months ended March 31, 2020 remained flat in comparison to the same period in 2019.

On a reported basis, other income (expense), net for the three months ended ~~September 30, 2017~~March 31, 2020 primarily consisted of a$13 million of net realized and unrealized foreign currency ~~gain~~gains. The foreign currency gains were primarily driven by the South African rand and the Australian dollars used in the remeasurement of $9our U.S. dollar denominated working capital balances partially offset by the impact of our foreign currency derivatives. In the prior year period, we recognized a $1 million ~~and interest income~~expense for the potential payment to Exxaro equal to any South African capital gains tax assessed on Exxaro in respect of ~~$3 million. Other~~any profit arising to it on the disposal of any of its ordinary shares in Tronox Holdings plc as a result of the Re-domicile Transaction (see Note 20 of notes to unaudited condensed consolidated financial statements for additional information). The payment to Exxaro was fully paid in January 2020.

On a pro forma basis, other income (expense), net for the three months ended ~~September 30, 2016~~March 31, 2020 was higher than the prior year period primarily ~~consisted of a net realized and unrealized~~due to the pro forma results including foreign currency ~~loss of $15 million,~~losses for legacy Cristal operations in the prior year, mostly offset by ~~a gain on sale of inventory produced during~~ the ~~commissioning phase of our Fairbreeze mine of $3 million and interest income of $1 million.~~reasons previously discussed.

~~Other income (expense),~~We continue to maintain full valuation allowances related to the total net for the nine months ended September 30, 2017 primarily consisted of interest income of $5 million. Other income (expense), net during the nine months ended September 30, 2016 primarily consisted of a net realized and unrealized foreign currency loss of $28 million, partially offset by a gain on sale of inventory produced during the commissioning phase of our Fairbreeze mine of $3 million and interest income of $2 million.

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~~During the three months ended September 30, 2017 we sold the Alkali segment of our operations. The Alkali results are now shown as discontinued operations and are not included~~deferred tax assets in the ~~tabular results above.~~U.S. and Australia. We have full valuation allowances in Australia, Belgium, Brazil, Switzerland, and the U.S. The provisions for income taxes associated with these jurisdictions include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments. Additionally, we have valuation allowances against other specific tax assets.

On a reported basis, the effective tax rate was 15% and (7)% for the three months ended ~~September 30, 2017 differs from both~~March 31, 2020 and 2019, respectively. The effective tax rates for the three months ended ~~September 30, 2016,~~March 31, 2020 and 2019 are influenced by a variety of factors, primarily income and losses in jurisdictions with valuation allowances, disallowable expenditures, restructuring impacts, and our jurisdictional mix of income at tax rates different than the ~~nine~~U.K. statutory rate. On a pro forma basis, the effective tax rate was 15% and 64% for the three months ended ~~September 30, 2017~~March 31, 2020 and 2019, respectively.

Other Comprehensive (Loss) Income

Other comprehensive loss was $270 million for the three months ended March 31, 2020 as compared to none for the prior year period. The increase in loss in 2020 compared to the prior year was primarily driven by unfavorable foreign currency translation adjustments of $188 million in the current year period compared to none in the prior year primarily due to the ~~discrete results~~movement in the South Africa rand coupled with a net loss of ~~reporting~~$83 million in derivative instruments of which there were no comparable amounts in the ~~effects of this sale.~~prior year.

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

Liquidity and Capital Resources

The following table presents our liquidity as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016:~~2019:


	March 31, 2020		December 31, 2019
	(Millions of U.S. dollars)
Cash and cash equivalents	$	420	$	302
Available under the Wells Fargo Revolver	123		209
Available under the Standard Credit Facility	22		72
Available under the Emirates Revolver	—		46
Available under the SABB Facility	5		19
Total	$	570	$	648

September 30,
2017

December 31,
2016

Cash and cash equivalents $ 1,058 $ 248
Available under the Wells Fargo Revolver 238 —
Available under the UBS Revolver — 190
Available under the ABSA Revolver — 95
Total $ 1,296 $ 533

As discussed previously, on May 1, 2020, the Company increased liquidity by issuing its 6.5% senior secured notes due 2025 for an aggregate principal amount of $500 million. A portion of the proceeds of this debt offering was utilized to repay the $200 million of its outstanding borrowings under the Company's Wells Fargo, Standard Bank, and Emirates revolvers.

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Historically, we have funded our operations and met our commitments through cash generated by ~~operations. During 2012, 2015~~operations, issuance of unsecured notes, bank financings and ~~2017,~~borrowings under lines of credit. In the next twelve months, we issued a $900 million aggregate principal, 6.375% senior notes due 2020 at par value (the “Senior Notes due 2020”) which was redeemed during the third quarter of 2017, a $600 million aggregate principal amount, 7.50% senior notes due 2022 (the “Senior Notes due 2022”)expect that our operations and ~~a 5.75% senior notes due 2025 for an aggregate principal amount of $450 million (the “Senior Notes due 2025”), respectively. Additionally, during 2013~~available borrowings under our debt financings and 2017 we obtained a $1.5 billion senior secured term loan (the “ Prior Term Loan”) which was repaid during the third quarter of 2017 and a $2.2 billion new senior secured first lien term loan facility (the “New Term Loan Facility”), respectively. Seerevolving credit agreements (see Note 1112 of notes to ~~unaudited condensed~~ consolidated financial ~~statements. In connection with~~statements) will provide sufficient cash for our operating expenses, capital expenditures, interest payments and debt repayments. This is predicated on our achieving our forecast which could be negatively impacted by items outside of our control, in particular, macroeconomic conditions, including the ~~Cristal Transaction,~~economic impacts caused by the coronavirus pandemic. If negatives events occur, we ~~refinanced~~may need to reduce our capital expenditures and ~~increased our credit facilities lowering our cost of debt~~reduce operating costs and ~~extended the portfolio’s weighted average years~~other items to ~~maturity. Additionally, we improved our mix of secured and unsecured debt and achieved more favorable covenants. See Note 11 of notes~~maintain adequate liquidity.

Working capital (calculated as current assets less current liabilities) was $1.2 billion at March 31, 2020 compared to ~~unaudited condensed consolidated financial statements.~~

$1.4 billion at December 31, 2019.

As of and for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, the non-guarantor subsidiaries of our Senior Notes due 2025 represented approximately ~~23%~~18% of our total consolidated liabilities, approximately ~~40%~~32% of our total consolidated assets, approximately ~~19%~~42% of our total consolidated net sales and approximately ~~38%~~46% of our ~~Consolidated~~consolidated EBITDA (as such term is defined in the 2025 Indenture). In addition, as of ~~September 30, 2017,~~March 31, 2020, our non-guarantor subsidiaries had ~~$881~~$781 million of total consolidated liabilities (including trade payables but excluding intercompany liabilities), all of which would have been structurally senior to the 2025 Notes. See Note 1112 of notes to unaudited condensed consolidated financial statements.

At ~~September 30, 2017,~~March 31, 2020, we had outstanding letters of credit and bank guarantees ~~and performance bonds, see~~of $71 million. See Note 1316 of notes to unaudited condensed consolidated financial statements.

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 of continuing operations less current liabilities of continuing operations) was $2.2 billion at September 30, 2017 compared to $614 million at December 31, 2016, an increase of $1.6 billion, which is primarily due to the sale of the Alkali business, the debt refinancing and cash provided by continuing operations of $94 million, partially offset by dividends paid of $17 million and capital expenditures of $63 million.

Principal factors that could affect the availability of our internally-generated funds include (i) the deterioration of our revenues; (ii) an increase in our expenses; or (iii) changes in our working capital requirements. See Note 1 to notes to condensed consolidated financial statements.

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Principal factors that could affect our ability to obtain cash from external sources include (i) debt covenants that limit our total borrowing capacity; (ii) increasing interest rates applicable to our floating rate debt; (iii) increasing demands from third parties for financial assurance or credit enhancement; (iv)) credit rating downgrades, which could limit our access to additional debt; (v) a decrease in the market price of our common stock and debt obligations; orand (vi) volatility in public debt and equity markets.

As of ~~September 30, 2017,~~March 31, 2020, our credit rating with Moody’s and Standard & Poor’s ~~was~~changed from December 31, 2019 from B1 positive to B1 stable outlook and from B stable to B negative outlook, respectively. ~~On August 24, 2017, Standard & Poor’s upgraded our outlook~~See Note 12 of notes to B stable outlook from B negative outlook. On September 7, 2017, Moody’s upgraded our corporate credit rating to B1 stable outlook from B2 negative outlook. At September 30, 2017, we have sufficient borrowings available and have no significant principal payments on debt due until 2022.

unaudited condensed consolidated financial statements.

Cash and Cash Equivalents

We consider all investments with original maturities of three months or less to be cash equivalents. As of ~~September 30, 2017,~~March 31, 2020, 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 payment of our operating expenses, capital expenditures, servicing our interest and debt repayment obligations, making pension contributions and making quarterly dividend payments.

Repatriation of Cash

At ~~September 30, 2017,~~March 31, 2020, we held ~~$1.7 billion~~$420 million in cash and cash equivalents ~~and restricted cash~~ in these respective jurisdictions: ~~$31~~$151 million in the United States, $94 million in Europe, ~~$75~~$52 million in Australia, ~~$145~~$57 million in South Africa, $23 million in Brazil, $19 million in Saudi Arabia and ~~$1.5 billion~~$24 million in ~~the U.S.~~China. Our credit facilities limit transfers of funds from subsidiaries in the ~~U.S.~~United States to certain foreign subsidiaries.

In addition, at March 31, 2020, we held $9 million of restricted cash primarily in Australia related to performance bonds.

Tronox ~~Limited~~Holdings plc has foreign subsidiaries with ~~positive~~ undistributed earnings at ~~September 30, 2017.~~March 31, 2020. 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.

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Cash Dividends on ~~Class A and Class B~~Ordinary Shares

On ~~November 8, 2017,~~May 6, 2020, the Board declared a quarterly dividend of ~~$0.045~~$0.07 per share to holders of our ~~Class A Shares and Class B Shares~~ordinary shares at the close of business on ~~November 20, 2017, totaling $5 million,~~May 18, 2020, which will be paid on ~~December 1, 2017. See Note 14 of notes to unaudited condensed consolidated financial statements for declared and paid quarterly dividends by quarter.~~

May 29, 2020.

Debt Obligations

In March 2020, the Company took precautionary measures and drewdown $200 million of its outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers in order to increase liquidity and preserve financial flexibility. As discussed below, the Company repaid the outstanding balances of these short-term credit facilities with a portion of the proceeds of the 6.5% senior secured notes due 2025. Additionally, during the three months ended March 31, 2020, our KSA subsidiary drew down $13 million on its SABB Credit Facility for local working capital purposes. As of March 31, 2020, the short-term debt balance was $212 million based on the March 31, 2020 exchange rate. There were no short term debt balances at December 31, 2019.

At ~~September 30, 2017~~both March 31, 2020 and December 31, ~~2016,~~2019, our long-term debt, net of unamortized discount and debt issuance costs was $3.0 billion.

At March 31, 2020 and December 31, 2019, our net debt (the excess of our debt over cash and cash ~~equivalents~~equivalents) was ~~$2.1~~$2.6 billion and ~~$2.8 billion, respectively.~~

We did not have an outstanding balance on our short-term debt at September 30, 2017 and had $150 million of such debt at December 31, 2016. At September 30, 2017 and December 31, 2016, our long-term debt, net of an unamortized discount was $3.2 billion and $2.9$2.7 billion, respectively. See Note 1112 of notes to unaudited condensed consolidated financial ~~statements~~statements.

On May 1, 2020, Tronox Incorporated, a wholly-owned indirect subsidiary of the Company, issued its 6.5% senior secured notes due 2025 for ~~specific~~an aggregate principal amount of $500 million. A portion of the proceeds of this debt ~~information.~~offering was utilized to repay the $200 million of the Company's outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers.

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Cash Flows

The following table presents cash flow for the periods indicated:

Nine Months Ended September 30,
2017 2016
(Millions of U.S. dollars)
Net cash provided by operating activities $ 94 $ 13
Net cash provided by (used in) investing activities 612 (58 )
Net cash provided by (used in) financing activities 20 (68 )
Net cash provided by discontinued operations 82 83
Effect of exchange rate changes on cash 2 3
Net increase (decrease) in cash and cash equivalents $ 810 $ (27 )


	Three Months Ended March 31,
	2020		2019
	(Millions of U.S. dollars)
Cash (used in) provided by operating activities	$	(28)	$	39
Cash used in investing activities	(38)		(50)
Cash provided by financing activities	193		50

Effects of exchange rate changes on cash and cash equivalents and restricted cash	(9)		(1)
Net increase in cash, cash equivalents and restricted cash	$	118	$	38

Cash Flows ~~provided by~~used in Operating Activities —~~Net~~ Cash used in operating activities is driven by net income adjusted for non-cash items and changes in working capital items. The following table provides our net cash provided by operating activities for the ~~nine~~three months ended ~~September 30, 2017 increased by $81~~March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
	(Millions of U.S. dollars)
Net income (loss)	$	40	$	(30)
Adjustments for non-cash items	96		62
Income related cash generation	136		32
Net change in assets and liabilities (“working capital changes”)	(164)		7
Cash (used in) provided by operating activities	$	(28)	$	39

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Net cash used in operating activities was $28 million as compared to ~~the same period in 2016 primarily due to higher cash earnings.~~

~~Cash Flows provided by (used in) Investing Activities —~~ ~~Net~~net cash provided by ~~investing~~operating activities of $39 million in the prior year. The change period over period is due to a higher use of cash from working capital in the current year period. Higher use of cash from working capital was caused primarily by a higher use of cash of $92 million for accounts receivable due to the ~~nine months ended September 30, 2017 was $612~~higher sales in the current year due to the Cristal Transaction coupled with a $54 million ~~compared~~higher use of cash for accounts payable and accrued liabilities due to timing of payments.

Cash Flows used in Investing Activities — Net cash used in investing activities ~~of $58~~for the three months ended March 31, 2020 was $38 million as compared to $50 million for the same period in ~~2016.~~2019. The current year represents $38 million of capital expenditures as compared to $25 million in the prior year. The increase ~~was primarily due~~is attributable to the ~~proceeds~~acquisition of ~~$1.325 billion received from~~Cristal. The prior year is also comprised of a loan of $25 million to AMIC related to the ~~Sale, partially offset by~~Jazan Slagger, a titanium slag smelter facility (see Notes 1 and 20 of notes to unaudited condensed consolidated financial statements for a discussion of the ~~$650 million Blocked Term Loan under the New Term Loan Facility~~Jazan Slagger) of which ~~is included in “Restricted cash”~~there were no comparable amounts in the ~~Condensed Consolidated Balance Sheets at September 30, 2017. Capital expenditures were $4 million higher compared to the same period in 2016.~~current year.

Cash Flows provided by ~~(used in)~~ Financing Activities —Net cash provided by financing activities ~~of $20 million~~ during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was $193 million as compared to $50 million for the three months ended March 31, 2019. The current year is primarily ~~attributable to~~comprised of $213 million from the proceeds from a draw down of $200 million on our revolvers in March 2020 as a precautionary measure to increase liquidity and preserve financial stability in response to the coronavirus pandemic (see Note 12 of notes to unaudited condensed consolidated financial statements). Additionally, during the three months ended March 31, 2020, our KSA subsidiary drew down $13 million on its SABB Credit Facility for local working capital purposes. Partially offsetting these proceeds was a use of cash of $10 million for the payment of dividends during the first quarter of 2020 and repayments of long-term debt of ~~$2.6 billion,~~$7 million. For the three months ended March 31, 2019, cash flows provided by financing activities was primarily driven by proceeds of $222 million from the Standard Bank Term and proceeds of $94 million from the Wells Fargo and Standard Bank Revolvers partially offset by a payment of $148 million for the acquisition of Exxaro’s ownership interest in Tronox Sands and repayments of ~~short term and long term debt of $2.5 billion, debt issuance costs of $36~~$101 million and a call premium payment of $14 million. The nine months ended September 30, 2017 also included dividends paid of $17 million and $11 million of restricted stock and performance-based shares settled in cash for taxes. Net cash used in financing activities of $68 million during the nine months ended September 30, 2016 was primarily attributable to dividends paid of $40 million and principal repayments on long-term debt of $27 million.against our Term Loan Facility.

Contractual Obligations

The following table sets forth information relating to our contractual obligations as of ~~September 30, 2017:~~March 31, 2020:

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

Total
Less than
1 year

1-3
years

3-5
years

More than
5 years

(Millions of U.S. dollars)
Long-term debt, net and lease financing (including interest) ⁽¹⁾
$ 4,262 $ 178 $ 373 $ 931 $ 2,780
Purchase obligations ⁽²⁾
399 134 109 55 101
Operating leases 44 19 12 6 7
Asset retirement obligations 82 4 5 5 68
Total $ 4,787 $ 335 $ 499 $ 997 $ 2,956


	Contractual Obligation Payments Due by Year ⁽³⁾⁽⁴⁾
	Total		Less than 1 year	1-3 years	3-5 years	More than 5 years
	(Millions of U.S. dollars)
Long-term debt, net and lease financing (including interest) ⁽¹⁾	$	4,009	399	379	2,097	1,134
Purchase obligations ⁽²⁾	451		186	123	73	69
Operating leases	103		41	43	11	8
Asset retirement obligations⁽⁵⁾	395		23	61	36	275
Total	$	4,958	649	606	2,217	1,486

⁽¹⁾	~~We calculated the New Term Loan Facility interest at a base rate of 1.3% plus a margin of 3.0%. See Note 11 of notes to unaudited condensed consolidated financial statements.~~

__________________

(1)We calculated the Term Loan interest at a base rate of 2.0% plus a margin of 2.75%. See Note 12 of notes to our 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 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.

(2)Includes obligations for 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 2019. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. We believe that all of our purchase obligations will be utilized in our normal operations.

(3)The table excludes contingent obligations, as well as any possible payments for uncertain tax positions given the inability to estimate the possible amounts and timing of any such payments.

⁽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 excludes commitments pertaining to our pension and other postretirement obligations.

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

(5)Asset retirement obligations are shown at the undiscounted and uninflated values.

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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. We define EBITDA as net income (loss) excluding the impact of income taxes, interest expense, interest income and depreciation, depletion and amortization. We define Adjusted EBITDA as EBITDA excluding the impact of nonrecurring items such as restructuring charges, gain or loss on debt extinguishments, impairment charges, gains or losses on sale of assets, acquisition-related transaction costs, integration costs, purchase accounting adjustments and pension settlements and curtailment gains or losses. Adjusted EBITDA also excludes non-cash items such as share-based compensation costs and pension and postretirement costs. Additionally, we exclude from Adjusted EBITDA, realized and unrealized foreign currency remeasurement gains and losses.

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~~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~~•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~~•provide useful information in understanding and evaluating our operating results and comparing financial results across periods;

and

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

~~Assist investors in assessing our compliance under our debt instruments; and~~

occurring.

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
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016

(Millions of U.S. dollars)

Net income (loss), (U.S GAAP), $ (241 ) $ (39 ) $ (274 ) $ (183 )
Income (loss) from discontinued operations, net of tax (see Note 2), (U.S GAAP), (216 ) 23 (179 ) 55
Net income (loss) from continuing operations, (U.S GAAP), (25 ) (62 ) (95 ) (238 )
Interest and debt expense, net 47 46 140 138
Interest income (3 ) — (5 ) (2 )
Income tax provision 13 6 10 25
Depreciation, depletion and amortization expense 45 45 136 131
EBITDA (non-U.S. GAAP) 77 35 186 54
Share based compensation ^(a)
5 8 26 18
Transaction costs ^(b)
13 — 33 —
Restructuring (income) expense ^(c)
— 1 (1 ) 2
(Gain) loss on extinguishment of debt ^(d)
28 — 28 (4 )
Foreign currency remeasurement ^(e)
(5 ) 14 1 32
Other items ^(f)
5 — 12 4
Adjusted EBITDA (non-U.S. GAAP) ^(g)
$ 123 $ 58 $ 285 $ 106


	Three Months Ended March 31,
	2020		2019
	(Millions of U.S. dollars)
Net income (loss) (U.S. GAAP)	$	40	$	(30)


Interest expense	45		49
Interest income	(3)		(9)
Income tax provision	7		2
Depreciation, depletion and amortization expense	71		47
EBITDA (non-U.S. GAAP)	160		59



Share-based compensation (a)	9		8
Transaction costs (b)	—		8
Restructuring (c)	2		—
Integration costs (d)	6		—
Loss on extinguishment of debt (e)	—		2
Foreign currency remeasurement (f)	(10)		(1)


Other items (g)	7		4
Adjusted EBITDA (non-U.S. GAAP)	$	174	$	80




(a) Represents non-cash share-based compensation. See Note 18 of notes to unaudited condensed consolidated financial statements.
(b) 2019 amount represents transaction costs associated with the Cristal Transaction which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(c) Represents amounts for employee-related costs, including severance. See Note 3 of notes to unaudited condensed consolidated financial statements.
(d) Represents integration costs associated with the Cristal acquisition after the acquisition which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(e) 2019 amount represents the loss in connection with the modification of the Wells Fargo Revolver and termination of the ABSA Revolver. See Note 12 of notes to unaudited condensed consolidated financial statements.
(f) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities denominated in a currency other than the functional currency of the entity holding them, which are included in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.


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

^(a)	~~Represents non-cash share-based compensation. See Note 16 of notes to unaudited condensed consolidated financial statements.~~

^(b)	Represents transaction costs associated with the Cristal Transaction which were recorded 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 restructuring efforts which was recorded in “Restructuring income (expense)” in the unaudited Condensed Consolidated Statements of Operations.

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^(d)

Represents a $28 million loss which includes a $22 million loss associated with the redemption of the outstanding balance of the Senior Notes due 2020, $1 million of unamortized original debt issuance costs from the repayment of the UBS Revolver, and $5 million of debt issuance costs from the refinancing activities associated with the term loans. During 2016, the $4 million gain was associated with the repurchase of $20 million face value of our Senior Notes due 2020 and Senior Notes due 2022. These amounts were recorded in “Gain (loss) on extinguishment of 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, severance expense, accretion expense, 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. See Note 3 to unaudited condensed consolidated financial statements.~~

The following table reconciles ~~income (loss) from continuing operations, our comparable measure for segment reporting under U.S. GAAP,~~net loss to EBITDA and Adjusted EBITDA ~~by segment~~on a pro forma basis for the periods presented:


	Pro Forma Three Months Ended March 31,
	2020		2019
	(Millions of U.S. dollars)
Net income (loss) (U.S. GAAP)	$	40	$	(18)
Interest expense	45		55
Interest income	(3)		(3)
Income tax provision	7		7
Depreciation, depletion and amortization expense	71		87
EBITDA (non-U.S. GAAP)	160		128
Share-based compensation	9		8
Restructuring	2		—
Integration costs	6		—
Loss on extinguishment of debt	—		2
Foreign currency remeasurement	(10)		(1)
Other items	7		4
Adjusted EBITDA (non-U.S. GAAP)	$	174	$	141

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
TiO₂ segment
$ 75 $ 17 $ 168 $ (12 )
Corporate (24 ) (17 ) (90 ) (45 )
Income (loss) from continuing operations (U.S. GAAP) 51 — 78 (57 )
TiO₂ segment
44 44 132 127
Corporate 1 1 4 4
Depreciation, depletion and amortization expense 45 45 136 131
TiO₂ segment
17 15 44 41
Corporate 10 (2 ) 27 (9 )
Other 27 13 71 32
TiO₂ segment
136 76 344 156
Corporate (13 ) (18 ) (59 ) (50 )
Adjusted EBITDA (non-U.S. GAAP) $ 123 $ 58 $ 285 $ 106

Recent Accounting Pronouncements

See Note 1 of notes to 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.

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Supplemental Pro Forma Information

To assist in the discussion of the 2020 and 2019 results on a comparable basis, certain supplemental unaudited pro forma income statement and adjusted EBITDA information is provided on a consolidated basis. The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO₂ business and the 8120 paper laminate grade had been consummated on January 1, 2018. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as:

(1)conforming the accounting policies of Cristal to those applied by Tronox;

(2)conversion to U.S. GAAP from IFRS for Cristal;

(3)the elimination of transactions between Tronox and Cristal;

(4)recording certain incremental expenses resulting from purchase accounting adjustments, such as inventory step-up amortization, depreciation, depletion and amortization expense in connection with fair value adjustments to property, plant and equipment, mineral leases and intangible assets;

(5)recording the contract loss on the sale of the 8120 product line as a charge in the first quarter of 2018;

(6)recording the effect on interest expense related to borrowings in connection with the Cristal Transaction; and

(7)recording the related tax effects and impacts to EPS for the shares issued in conjunction with the transaction.

In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies that may result from the business combination or any related restructuring costs.

Events that are not expected to have a continuing impact on the combined results (nonrecurring income/charges) are excluded from the unaudited pro forma information.

The unaudited pro forma statement of operations and adjusted EBITDA have been presented for informational purposes only and is not necessarily indicative of what Tronox’s results actually would have been had the merger been completed on January 1, 2018. In addition, the unaudited pro forma information does not purport to project the future operating results of the company.

The following unaudited pro forma information includes:

•Pro forma statement of operations for the three months ended March 31, 2020 and 2019

•Pro forma Adjusted EBITDA for the three months ended March 31, 2020 and 2019

Pro forma Information for the three months ended March 31, 2020:

For the three months ended March 31, 2020, the pro forma statement of operations and pro forma Adjusted EBITDA information were the same as the as reported statement of operations and as reported Adjusted EBITDA information.

Pro forma Information for the three months ended March 31, 2019:

~~Item 3.~~

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TRONOX HOLDINGS PLC

Pro Forma Statement of Operations Information

For The Three months ended March 31, 2019

(Unaudited)

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


			Pro Forma Adjustments
	Tronox Holdings plc		Cristal (a)		Other			Total		Pro Forma
Net sales	$	390	$	343	$	(13)	(b)	$	330	$	720
Cost of goods sold	307		263		9		(c)	272		579
Gross profit	83		80		(22)			58		141
Selling, general and administrative expenses	67		56		(28)		(d)	28		95

Income from operations	16		24		6			30		46
Interest expense	(49)		(5)		(1)		(e)	(6)		(55)
Interest income	9		—		(6)		(f)	(6)		3
Loss on extinguishment of debt	(2)		—		—			—		(2)
Other income (expense), net	(2)		(1)		—			(1)		(3)
Income before income taxes	(28)		18		(1)			17		(11)
Income tax (provision) benefit	(2)		(4)		(1)			(5)		(7)
Net income (loss)	(30)		14		(2)			12		(18)
Net income attributable to noncontrolling interest	4		1		—			1		5
Net income (loss) attributable to Tronox Holdings plc	$	(34)	$	13	$	(2)		$	11	$	(23)

Net income per share, basic	$	(0.27)								$	(0.14)
Net income per share, diluted	$	(0.27)								$	(0.14)

Weighted average shares outstanding, basic (in thousands)	124,296									161,876
Weighted average shares outstanding, diluted (in thousands)	124,296									161,876

Pro Forma Adjustments
(a) Includes results for Cristal for period of January 1, 2019 through March 31, 2019.
(b) The adjustment to net sales includes $11 million to eliminate sales between Tronox and Cristal and $2 million to eliminate revenue associated with the divestiture of the 8120 paper laminate product grade.
(c) The adjustment to cost of goods sold includes (i) a credit of $11 million for the elimination of sales between Tronox and Cristal, and (ii) a decrease of $1 million for the decrease in DD&A expense as a result of fair value adjustments to property, plant and equipment and mineral leases. Cost of goods sold also includes a reclassification of expenses of $21 million from SG&A to cost of goods sold for distribution costs as part of our accounting policy alignment.
(d) The adjustment to SG&A includes (i) the elimination of $9 million in non-recurring acquisition-related transaction costs incurred, (2) the reclassification of $21 million in expenses from SG&A to cost of goods sold, and (3) a $2 million increase in amortization expense as a result of fair value adjustments to intangible assets.
(e) The adjustment to interest expense of $1 million reflects interest incurred on incremental borrowings under the Wells Fargo Revolver used to close the Cristal acquisition.
(f) The adjustment to interest income of $6 million reflects the elimination of interest earned on cash balances that were used to acquire Cristal.

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TRONOX HOLDINGS PLC

Pro Forma Adjusted EBITDA Information

For The Three months ended March 31, 2019

(Millions of U.S. dollars)


			Pro Forma Adjustments
	Tronox Holdings plc		Cristal (1)		Other		Total		Pro Forma
Net income (loss) (U.S. GAAP)	$	(30)	$	14	$	(2)	$	12	$	(18)
Interest expense	49		5		1		6		55
Interest income	(9)		—		6		6		(3)
Income tax provision	2		4		1		5		7
Depreciation, depletion and amortization expense	47		39		1		40		87
EBITDA (non-U.S. GAAP)	59		62		7		69		128
Share-based compensation	8		—		—		—		8
Transaction costs	8		1		(9)		(8)		—
Loss on extinguishment of debt	2		—		—		—		2
Foreign currency remeasurement	(1)		—		—		—		(1)
Other items	4		—		—		—		4
Adjusted EBITDA (non-U.S. GAAP)	$	80	$	63	$	(2)	$	61	$	141

(1) Includes results for Cristal for the period of January 1, 2019 through March 31, 2019.

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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~~with derivative instruments. We do not invest in derivative instruments for speculative purposes, but historically have entered into, and may enter into, derivative ~~transactions~~instruments for hedging purposes in order to reduce the exposure to fluctuations in interest rates, natural gas prices orand exchange rates.

Market Risk

A substantial portion of our products and raw materials are commodities that reprice as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to vary with changes in the business cycle. Our TiO₂ prices may do so in the near term as ore prices and pigment prices are expected to fluctuate over the next few years. We try to protect against such instability through various business strategies. These include provisions in sales contracts allowing us to pass on higher raw material costs through timely price increases and formula price contracts to transfer or share commodity price risk, as well as using varying contract term lengths and selling to a diverse mix of customers by geography and industry to reap the benefits of a diverse portfolio.

Credit Risk

Credit risk is the risk that a borrower or a counterparty will fail to meet their obligations. A significant portion of our liquidity is concentrated in trade accounts receivable that arise from sales of our products to customers. In the case of TiO₂, the high level of industry concentration has the potential to impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, industry or other conditions (e.g., the coronavirus pandemic may increase our credit risk as a result of the difficult economic environment). We have significant exposure to credit risk in industries that are affected by cyclical economic fluctuations. 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. Our contracts typically enable us to tighten credit terms if we perceive additional credit ~~risk and~~risk; however, historic losses due to write offs of bad debt have been relatively low. In addition, due to our international operations, ~~in our TiO~~₂~~segment,~~ we are subject to potential trade restrictions and sovereign risk in certain countries in which we ~~operate in.~~operate. We maintain allowances for potential credit losses based on specific customer review and current financial conditions.

During the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, our ten largest third-party customers represented approximately ~~35%~~29% and ~~25%~~42%, respectively, of our consolidated net sales. During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, our ten largest third-party customers represented approximately 36% and 23%, respectively,~~2019, no single customer accounted for 10% of our consolidated net sales.

Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will impact our financial results. We are exposed to interest rate risk on our floating rate debt, the ~~New~~ Term Loan Facility, Standard Bank Term Loan Facility, Tikon Loan and Wells Fargo, Standard Bank Revolver, ~~balance.~~Emirates Revolver and SABB Credit Facility balances. Using a sensitivity analysis as of ~~September 30, 2017,~~March 31, 2020, a hypothetical 1% increase in interest rates would result in a net ~~increase~~decrease to pre-tax ~~loss~~income of approximately $4$10 million on an annualized basis. This is due to the fact that earnings on our floating rate financial assets of ~~$1.7 billion~~$428 million at ~~September 30, 2017 and~~March 31, 2020 would increase by the full 1%, offsetting the impact of a 1% increase in interest expense on our floating rate debt of $1.4 billion.

During 2019, we entered into interest-rate swap agreements for a portion of our ~~New~~ Term Loan Facility, which effectively converts the variable rate to a fixed rate for a portion of the loan. The agreements expire in September 2024. The Company’s objectives in using the interest-rate swap agreements are to add stability to interest expense and ~~Wells Fargo Revolver balance, would each increase by the full 1%.~~

to manage its exposure to interest rate movements.

Currency Risk

Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact our balance sheets due to the ~~value~~translation of our assets and liabilities denominated in foreign currencies, as well as our earnings due to the translation of ~~our balance sheets and remeasurement~~certain of our subsidiaries’ statements of operations from local currencies to U.S. ~~dollars.~~dollars, as well as due to remeasurement of assets and liabilities denominated in currencies other than a subsidiary’s functional currency. 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

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rates, particularly in Australia, Brazil, China, South Africa, the Netherlands and the ~~Netherlands.~~United Kingdom. The exposure is more prevalent in South Africa and Australia as the majority of revenues are earned in U.S. dollars while expenses are primarily incurred in local currencies. Since we are exposed to movements in the South African ~~Rand~~rand and the Australian Dollar versus the U.S. dollar, we may enter into forward contracts to buy and sell foreign currencies as “economic hedges” for these foreign currency transactions.

During 2019, we entered into foreign currency contracts used to hedge non-functional currency sales for our South African subsidiaries and forecasted non-functional currency cost of goods sold for our Australian subsidiaries. These foreign currency contracts are designated as cash flow hedges. Changes to the fair value of these foreign currency contracts are recorded as a component of other comprehensive (loss) income to the extent such contracts are effective, and are recognized in net sales or costs of goods sold in the period in which the forecasted transaction affects earnings or the transactions are no longer probable of occurring.

38As of March 31, 2020, we had notional amounts of (i) 2.9 billion South African rands that expire between April 29, 2020 and February 25, 2021 to reduce the exposure of our South African subsidiaries’ third party sales to fluctuations in currency rates, and (ii) 691 million Australian dollars that expire between April 29, 2020 and December 30, 2021 to reduce the exposure of our Australian subsidiaries’ cost of sales to fluctuations in currency rates. At March 31, 2020, the unrealized net loss associated with these open contracts of approximately $30 million is included in "Accumulated other comprehensive loss” on the unaudited Condensed Consolidated Balance Sheet.

We enter into foreign currency contracts for the South African rand and Australian dollar to reduce exposure of our foreign affiliates’ balance sheet to fluctuations in foreign currency rates. At March 31, 2020, the fair value of the foreign currency contracts was a loss of $10 million.

~~Table of Contents~~

~~Item 4.~~

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of September 30, 2017, our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has conducted an evaluation of our disclosure controls and procedures. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2017.

Under the supervision of and with the participation of Tronox’s management, including our CEO and CFO, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) (the “Exchange Act”), as of ~~September 30, 2017,~~March 31, 2020, 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.Based on that evaluation, we have concluded that the Company’s disclosure controls and procedures were effective as of that date.

An evaluation of our internal ~~controls~~control 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~~During the quarter ended March 31, 2020, there were no changes toin our internal control over financial reporting ~~during the quarter ended September 30, 2017~~ that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

~~Item 1.~~

Item 1. Legal Proceedings

Information required by this item is incorporated herein by reference to the section captioned “Notes to Consolidated Financial Statements, Note 16- Commitments and Contingencies” of this Form 10-Q.

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.

~~Item 1A.~~

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 our Annual Report on Form 10-K and ~~in our Form 10-Q for~~any subsequent filings thereto with the ~~three months ended June 30, 2017.~~SEC. The risks described herein or in the Form 10-K ~~or in~~and any subsequent filings thereto with the ~~Form 10-Q for the three months ended June 30, 2017~~SEC 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~~Other than the COVID related risk factor filed on Form 8-K with the SEC on April 23, 2020, 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 June 30, 2017, except as noted below.~~10-K.

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

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 TiO~~₂ industry and industries consuming our products, submitted comments opposing the classification, based on evidence from epidemiological and other scientific studies. On October 12, 2017, ECHA’s Committee for Risk Assessment (“RAC”) released a written opinion dated September 14, 2017 stating that based on the scientific evidence it reviewed, there is sufficient grounds to classify TiO_-2under the EU’s Classification, Labelling and Packaging Regulation (“CLP”) as a Category 2 Carcinogen , but only with a hazard statement describing the risk by inhalation. The European Commission will review the RAC’s formal recommendation to determine what regulatory measures, if any, should be taken. If the European Commission decides to adopt this classification, it could require that products manufactured with TiO₂ ~~be classified as containing carcinogenic materials, which could impact our business by inhibiting the marketing of products containing TiO~~₂ 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 and local jurisdictions 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.

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~~Our ability to use NOLs to offset future income may be limited.~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

~~The Company’s ability to use any net operating losses (“NOLs”) generated by it could be substantially limited if~~

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On May 7, 2020, the Company ~~were to experience an “ownership change” as defined under Section 382~~announced that Mr. Robert Loughran, Vice President and Corporate Controller of the ~~Code. In general, an “ownership change” would occur if~~Company, will be leaving the Company to pursue other opportunities effective as of June 5, 2020. Since joining the Company on April 2, 2018, Mr. Loughran has been a valuable member of the Company’s ~~“5-percent shareholders,” as defined under Section 382~~management team, with responsibility over financial reporting and playing a leading role in all aspects of the Code, including certain groups of persons treated as “5-percent shareholders,” collectively increased their ownership in the Company by more than 50 percentage points over a rolling three-year period. On October 10, 2017, Exxaro sold 22,425,000 Class A ordinary shares in an underwritten registered offering (the “Exxaro Share Transaction”). The Exxaro Share Transaction and the issuanceintegration of the ~~Class A ordinary shares to Cristal Netherlands in connection~~combined finance function, as well as accounting for the business combination with the Cristal ~~Transaction may~~TiO₂ business. Mr. Loughran’s departure is not the result ~~in an “ownership change” for U.S. federal and applicable state income tax purposes. Should Exxaro decide to sell a significant portion~~ of ~~their remaining ownership in~~any disagreement regarding the ~~future, an “ownership change”~~Company's operations, financial reporting or accounting policies, procedures, estimates or judgments. Mr. Carlson, the Company’s Chief Financial Officer, will ~~most likely occur. A corporation that experiences an ownership change will generally be subject to an annual limitation on~~also assume the ~~use~~role of ~~its pre-ownership change NOLs (and certain other losses and/or credits) equal to the equity value~~Principal Accounting Officer, effective as of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate for the month in which the ownership change occurs. Although our NOLs continue to have full valuation allowances, such a limitation could, for any given year, have the effect of increasing the amount of our U.S. federal income tax liability, which would negatively impact the amount of after-tax cash available for distribution to holders of our ordinary shares and our financial condition.June 5, 2020.

Item 6. Exhibits

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~None.~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

~~Item 4.~~

~~Mine Safety Disclosures~~

Information regarding mine safety and other regulatory actions at our mine in Green River, Wyoming, operated in conjunction with the Alkali business (which was sold on September 1, 2017), is included in Exhibit 95 to this Form 10-Q.

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Table of Contents~~

~~Item 6.~~

~~Exhibits~~

~~Exhibit No.~~
Exhibit No.

31.1		~~4.1~~Rule 13a-14(a) Certification of Jeffry N. Quinn. (furnished herewith)
~~Ninth Supplemental~~
31.2		Rule 13a-14(a) Certification of Timothy Carlson. (furnished herewith)

32.1		Section 1350 Certification for Jeffry N. Quinn. (furnished herewith)

32.2		Section 1350 Certification for Timothy Carlson. (furnished herewith)

4.1		Indenture, dated as of ~~September~~May 1, ~~2017, to the Indenture, dated August 20, 2012~~2020 among Tronox ~~Finance LLC, as Issuer, Tronox Limited as Parent,~~Incorporated, the Company and the other guarantors named therein and Wilmington Trust, National Association, as ~~trustee.~~trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Tronox ~~Limited~~Holdings plc on ~~September 6, 2017).~~May 1, 2020.)

~~4.2~~ 101		~~Fifth Supplemental Indenture, dated as of September 1, 2017, to the Indenture, dated March 19, 2015 among~~The following financial statements from Tronox ~~Finance LLC, as Issuer, Tronox Limited as Parent, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Current~~Holdings plc. Quarterly Report on Form ~~8-K filed by Tronox Limited on September 6, 2017).~~10-Q for the quarter ended March 31, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Changes in Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements.

~~4.3~~ 101.INS		Indenture, dated as of September 22, 2017 among Tronox Finance plc, the Company and the other guarantors named therein and Wilmington Trust, National Association, as trustee. (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Tronox Limited on September 25, 2017).

~~10.1~~	Revolving Syndicated Facility Agreement, dated as of September 22, 2017 among the Company, Tronox US Holdings Inc. and certain of the Company’s other subsidiaries along with a syndicate of lenders and Wells Fargo Bank, National Association, as issuing bank, swingline lender, administrative agent, and collateral agent. (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Tronox Limited on September 25, 2017).

~~10.2~~	First Lien Term Loan Credit Agreement, dated as of September 22, 2017 among Tronox Finance LLC and its unrestricted subsidiary Tronox Blocked Borrower LLC, and certain of the Company’s other subsidiaries, along with a syndicate of lenders and Bank of America, N.A. as administrative agent and collateral agent. (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed by Tronox Limited on September 25, 2017).

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

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

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

~~32.2~~	~~Section 1350 Certification for Timothy Carlson.~~

95	~~Mine Safety Disclosures.~~

~~101.INS~~	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema ~~Document~~Document.

101.CAL		InlineXBRL Taxonomy Extension Calculation Linkbase ~~Document~~Document.

~~101.LAB~~101.DEF		InlineXBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		InlineXBRL Taxonomy Extension Label Linkbase ~~Document~~Document.

~~101.DEF~~101.PRE		~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.PRE~~	InlineXBRL Taxonomy Extension Presentation Linkbase ~~Document~~Document.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2020, which has been formatted in Inline XBRL and contained in Exhibit 101.

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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:

May 7, 2020

~~Date: November 9, 2017~~
TRONOX HOLDINGS PLC (Registrant)
	~~TRONOX LIMITED~~ ~~(Registrant)~~
By:		/s/ Robert Loughran
Name:	~~By:~~Robert Loughran
Title:	Vice President, Corporate Controller

By:	/s/ Timothy Carlson
Name:	~~Name:~~	Timothy Carlson
Title:	~~Title:~~	Senior Vice President and Chief Financial Officer

	~~Page~~
			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	29 30
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	38 45
Item 4.		Controls and Procedures	39 46
PART II – OTHER INFORMATION
Item 1.		Legal Proceedings	39 47
Item 1A.		Risk Factors	39 47
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	40 48
Item 3.		Defaults Upon Senior Securities	40 48
Item 4.		Mine Safety Disclosures	40 48
Item 5.		Other Information	48
Item 6.		Exhibits	48

~~Item 5. Other Information~~SIGNATURES			40
~~Item 6. Exhibits~~49		41

~~SIGNATURES~~	42

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net sales	$	435		$	339		$	1,234		$	957
Cost of goods sold		329			291			971			877

Gross profit		106			48			263			80
Selling, general and administrative expenses		(55	)		(47	)		(186	)		(135	)
Restructuring income (expense)		—			(1	)		1			(2	)

Income (loss) from operations		51			—			78			(57	)
Interest and debt expense, net		(47	)		(46	)		(140	)		(138	)
Gain (loss) on extinguishment of debt		(28	)		—			(28	)		4
Other income (expense), net		12			(10	)		5			(22	)

Income (loss) from continuing operations before income taxes		(12	)		(56	)		(85	)		(213	)
Income tax provision		(13	)		(6	)		(10	)		(25	)

Net income (loss) from continuing operations		(25	)		(62	)		(95	)		(238	)
Income (loss) from discontinued operations, net of tax (See Note 2)		(216	)		23			(179	)		55
Net income (loss)		(241	)		(39	)		(274	)		(183	)
Net income (loss) attributable to noncontrolling interest		6			(2	)		11			(1	)
											��
Net income (loss) attributable to Tronox Limited	$	(247	)	$	(37	)	$	(285	)	$	(182	)

Net income (loss) per share, basic and diluted:
Continuing operations	$	(0.26	)	$	(0.53	)	$	(0.89	)	$	(2.04	)
Discontinued operations		(1.81	)		0.20			(1.51	)		0.47
Net income (loss) per share, basic and diluted	$	(2.07	)	$	(0.33	)	$	(2.40	)	$	(1.57	)

Weighted average shares outstanding, basic and diluted (in thousands)		119,405			116,219			118,908			116,108

	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, 2017	$	1	$	—	$	1,524		$	(19	)	$	(497	)	$	1,009		$	144	$	1,153
Net income (loss)		—		—		—			(285	)		—			(285	)		11		(274	)
Other comprehensive income		—		—		—			—			23			23			3		26
Share-based compensation		—		—		28			—			—			28			—		28
Shares cancelled		—		—		(11	)		—			—			(11	)		—		(11	)
Shares and warrants exercised		—		—		1			—						1					1
Class A and Class B share dividends		—		—		—			(17	)		—			(17	)		—		(17	)

Balance at September 30, 2017	$	1		—		1,542			(321	)		(474	)		748			158		906

	Three Months Ended September 30, 2016									Nine Months Ended September 30, 2016
	As Reported ⁽¹⁾			Adjustment			Revised			As Reported ⁽¹⁾			Adjustment			Revised

Net sales	$	339		$	—		$	339		$	957		$	—		$	957
Cost of goods sold		290			1			291			877			—			877
Gross profit		49			(1	)		48			80			—			80
Selling, general and administrative expenses		(47	)		—			(47	)		(131	)		(4	)		(135	)
Income (loss) from operations		1			(1	)		—			(53	)		(4	)		(57	)
Other income (expense), net		(13	)		3			(10	)		(22	)		—			(22	)
Income (loss) from continuing operations before income taxes		(58	)		2			(56	)		(209	)		(4	)		(213	)
Net income (loss) from continuing operations		(64	)		2			(62	)		(235	)		(3	)		(238	)
Income (loss) from discontinued operations, net of tax		22			1			23			53			2			55
Net loss attributable to Tronox Limited		(40	)		3			(37	)		(181	)		(1	)		(182	)
Net income (loss) per share from continuing operations, basic and diluted		(0.54	)		0.01			(0.53	)		(2.02	)		(0.02	)		(2.04	)
Net income (loss) per share from discontinued operations, basic and diluted		0.19			0.01			0.20			0.46			0.01			0.47

Weighted average shares outstanding, basic and diluted (in thousands)		116,219			116,219			116,219			116,108			116,108			116,108

	Three Months Ended September 30, 2016								Nine Months Ended September 30, 2016
	As Reported			Adjustment		Revised			As Reported			Adjustment			Revised

Net loss	$	(42	)	$	3	$	(39	)	$	(182	)	$	(1	)	$	(183	)
Total comprehensive income ( loss)		4			3		7			(80	)		(1	)		(81	)
Comprehensive loss attributable to Tronox Limited		(12	)		3		(9	)		(110	)		(1	)		(111	)

	December 31, 2016
	As Reported ⁽¹⁾			Adjustment			Revised
Current assets of continuing operations	$	1,067		$	—		$	1,067
Total assets of discontinued operations		1,668			3			1,671
Total current assets		2,735			3			2,738
Total assets		4,961			3			4,964
Accrued liabilities		138			11			149
Current liabilities of continuing operations		443			10			453
Total liabilities of discontinued operations		110			1			111
Total current liabilities		553			11			564
Total liabilities		3,800			11			3,811
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		4,961			3			4,964

Liabilities
Current Liabilities
Accounts payable	$	44
Accrued liabilities		36
All other current liabilities		11
Total current liabilities of discontinued operations		91
All other long-term liabilities		20
Total liabilities of discontinued operations	$	111

	September 30, 2017			December 31, 2016
Trade receivables	$	298		$	271
Other		12			8
Subtotal		310			279
Allowance for doubtful accounts		(1	)		(1	)
Accounts receivable, net of allowance for doubtful accounts	$	309		$	278

	Total Borrowings
2017	$	—
2018		17
2019		22
2020		22
2021		22
Thereafter		3,118
Total		3,201
Remaining accretion associated with the New Term Loans		(14	)
Total borrowings	$	3,187

	Three Months Ended March 31, 2017		Three Months Ended June 30, 2017		Three Months Ended September 30, 2017
Dividend per share	$	0.045	$	0.045	$	0.045
Total dividend	$	6	$	6	$	5
Record date (close of business)	March 6		May 15		August 21

	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

	Cumulative Translation Adjustment			Pension Liability Adjustment			Unrealized Gains (Losses) on Derivatives		Total
Beginning balance	$	(363	)	$	(91	)	$	—	$	(454	)
Other comprehensive income (loss)		(26	)		—			—		(26	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			6			—		6
Balance, September 30, 2017	$	(389	)		(85	)		—		(474	)

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

	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	$	—
Exercised		(45,753	)		19.32
Forfeited		(4,273	)		21.98
Expired		(93,101	)		21.58
Outstanding, September 30, 2017		1,827,354		$	21.21		4.62	$	2
Expected to vest, September 30, 2017		789		$	22.69		7.27	$	—
Exercisable, September 30, 2017		1,826,560		$	21.21		4.61	$	2

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net sales (TiO₂)	$	435		$	339		$	1,234		$	957
TiO₂ segment	$	75		$	17		$	168		$	(12	)
Corporate		(24	)		(17	)		(90	)		(45	)
Income (loss) from operations		51			—			78			(57	)
Interest and debt expense, net		(47	)		(46	)		(140	)		(138	)
Gain on extinguishment of debt		(28	)		—			(28	)		4
Other income (expense), net		12			(10	)		5			(22	)
Income (loss) from continuing operations before income taxes	$	(12	)	$	(56	)	$	(85	)	$	(213	)