Fourth Quarter 2012:
Revenue of $482 million, up 26 percent versus $383 million in prior-year quarter and 1 percent lower than $487 million in third quarter 2012
Adjusted EBITDA of $71 million compared to $139 million in the year-ago quarter and $134 million in third quarter 2012
Mineral Sands segment revenue of $316 million, including acquired businesses, versus $52 million in prior-year quarter and $272 million in third quarter 2012; adjusted EBITDA of $154 million includes $9.6 million lower of cost or market (LCM) inventory write-down
Pigment segment revenue of $256 million versus $325 million in prior-year quarter and $280 million in third quarter 2012; adjusted EBITDA of ($58) million includes $35.2 million lower of cost or market (LCM) inventory write-down

Full Year 2012:
Revenue of $1,832 million, up 11 percent versus $1,651 million in prior year
Adjusted EBITDA of $503 million, up 2 percent versus $492 million in prior year
Returned approximately $600 million to shareholders in 2012

Strong Financial Position:
Net debt of $929 million, including cash of $716 million; evaluating the refinancing of our term loan given strong cash position
Board declared regular quarterly dividend of $0.25 per share payable on March 20, 2013 to shareholders of record of company＇s Class A and Class B ordinary shares at close of business on March 6, 2013

Tronox Limited (NYSE: TROX) today reported fourth quarter 2012 revenue of $482 million, an increase of 26 percent versus $383 million in the year-ago quarter. Adjusted EBITDA was $71 million in the fourth quarter, as compared to $139 million in the year-ago quarter. Adjusted net loss in the fourth quarter was $45 million, or $0.40 per diluted share, versus adjusted net income of $71 million or $0.89 per diluted share in the year-ago quarter.
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Tom Casey, chairman and CEO of Tronox, said: "The fourth quarter remained challenging but we may have seen the first glimpse of a recovery in the pigment market. Mineral Sands revenue increased 16 percent sequentially versus the third quarter despite the impact of three scheduled ore shipments that were either delayed or cancelled by pigment customers in the fourth quarter. And for the first time since 2005, fourth quarter sales volumes in Pigment were higher, up 2 percent, than those of the third quarter. Though the sequential difference was modest, we view this increase in what is normally a seasonally lower quarter as a positive indication. We believe the fourth quarter represented the material conclusion of the destocking period by our pigment customers."

Casey continued: "The integration of our pigment and mineral sands businesses continues to make great progress and is on plan, but its advantages are not yet fully reflected in our financial performance. We still have the cost effects of some legacy contracts in both businesses that are working through our reported results. Given the time it takes for feedstock to be transported, inventoried at the pigment plant, processed and held in finished goods inventory prior to sale, the margin on any pigment sales is determined in part by feedstock purchases made as much as six months prior to sale. To illustrate the effect of this time lag, at the end of the fourth quarter, we had approximately $57 million in margin on sales of feedstock by our mineral sands business to our pigment business that had not been recognized at the parent company level because the titanium dioxide pigment manufactured from the feedstock remained in inventory. As this pigment is sold, this margin can be recognized. In 2013, we expect to purchase 15,000 metric tons of feedstock from third-party suppliers and the balance sourced internally. And in Mineral Sands, legacy feedstock sales contracts representing approximately 40,000 metric tons of CP titanium slag priced significantly below market expired at the end of the fourth quarter. Both present opportunities for margin enhancement as well as the ability to mitigate the modest decline in pigment average selling prices that we expect in the first quarter relative to the fourth quarter. As the market strengthens in the second half of 2013 －－ and we believe it will －－ the advantages of our integration will contribute to a more rapid recovery and higher margins, cash flows and net income for us than other firms not similarly structured. We remain confident in the long term value creation potential of our business."
Fourth Quarter 2012 Results
Mineral Sands

Mineral Sands segment revenue of $316 million in the fourth quarter was $264 million higher than revenue of $52 million in the year-ago quarter. The mineral sands businesses acquired in the second quarter of 2012 contributed revenue of $251 million in the fourth quarter. Excluding acquired businesses, segment revenue of $65 million increased 25 percent versus the prior-year quarter, driven by higher selling prices, partially offset by lower zircon and rutile volumes. Adjusted EBITDA was $154 million in the quarter, which includes a $9.6 million lower of cost or market (LCM) inventory write-down. As stated above, Mineral Sands segment adjusted EBITDA is calculated before the elimination of gross profit on sales to the affiliated Pigment segment that occurs in consolidation. Segment income from operations of $26 million increased 44 percent versus $18 million in the year-ago quarter, as the acquired businesses and higher grade rutile feedstocks were partially offset by significantly lower volumes of high margin zircon.

Pigment

Pigment segment revenue of $256 million was 21 percent lower than $325 million in the year-ago quarter, as selling prices declined by 15 percent on a constant currency basis and sales volumes declined by 6 percent. Compared sequentially to the third quarter 2012, volumes improved 2 percent while selling prices declined 10.7 percent. Sales volume gains were realized in Asia Pacific compared to both the year ago quarter and sequentially versus the third quarter 2012. Adjusted EBITDA was a negative $58 million in the current quarter, which includes a $35.2 million lower of cost or market (LCM) inventory write-down. Feedstock purchases by the Pigment segment, whether purchased from third-party vendors or our Mineral Sands segment, averaged $1,623 per metric ton, which we believe was significantly higher than the average feedstock cost of other pigment producers who continued to purchase portions of their 2012 feedstock pursuant to legacy under-market contracts, while we purchased 100 percent of our feedstock requirements at market prices. Finished goods inventory increased during the quarter. Segment income from operations moved from $104 million in the year-ago quarter to a loss of $85 million in the current quarter. The year-on-year decline in adjusted EBITDA and income from operations was the result of lower sales volumes and prices, increased feedstock costs and lower production rates.

Corporate and Other

Revenue in Corporate and Other was $31 million in the fourth quarter compared to $40 million in the prior-year quarter. Corporate and Other includes our electrolytic manufacturing business. Electrolytic and other chemical products net sales were higher than the year-ago quarter, as higher sales volumes of manganese dioxide and sodium chlorate were partially offset by reduced revenues from our former relationship with Exxaro in the Tiwest joint venture. Electrolytic Corporate and Other expenses were $9 million as compared to $13 million in the year ago quarter.

Consolidated

Selling, general and administrative expenses for the company in the fourth quarter were $32 million, or 7 percent of revenue, down from $40 million, or 10 percent of revenue, in the year ago quarter and $60 million, or 12 percent of revenue, in the third quarter of 2012. Interest and debt expense was $25 million versus $9 million in the year-ago quarter, primarily due to interest on the senior notes issued in the third quarter 2012 and the term loan that was refinanced in the first quarter 2012. On December 31, 2012, gross consolidated debt was $1,645 million, and debt, net of cash, was $929 million. For the quarter, capital expenditures were $75 million and depreciation and amortization was $88 million.

Full Year 2012 Results

For the full year 2012, revenue of $1,832 million increased 11 percent versus $1,651 million in the prior year as a result of the impact of acquired businesses and higher selling prices in both Mineral Sands and Pigment, partially offset by significantly lower sales volumes due to simultaneous market weakness in Europe, Asia and North America and unfavorable foreign currency exchange rates. Acquired businesses contributed $344 million of consolidated revenue in 2012. Adjusted EBITDA was $503 million in 2012, up 2 percent compared to adjusted EBITDA of $492 million a year ago. Adjusted net income was $202 million, or $1.90 per diluted share, versus $299 million, or $4.04 per diluted share in 2011.

Mineral Sands

Mineral Sands segment revenue of $760 million was $592 million higher than revenue of $168 million in the prior year. The mineral sands businesses acquired in the second quarter 2012 contributed revenue of $489 million on a segment basis in 2012. Excluding acquired businesses, segment revenue of $271 million increased 61 percent versus the prior year, driven by higher selling prices partially offset by lower zircon and rutile volumes. Segment earnings were $156 million in 2012 as compared to $44 million a year ago. Cost of goods sold in the segment for 2012 includes $136 million for amortization of fair value step-up of inventory related to the acquisition.

Pigment

Pigment segment revenue of $1,246 million was 12 percent lower than $1,416 million in the prior year, as an 11 percent increase in average selling prices was more than offset by a 21 percent volume decline and unfavorable currency exchange. Segment income from operations of $57 million in the current year compares to $343 million a year ago. The decline was driven primarily by higher raw material costs, particularly for feedstock ores and process chemicals, and lower sales volumes and production rates, partially offset by higher selling prices. Cost of goods sold in the segment for 2012 includes $16 million for amortization of fair value step-up of inventory related to the acquisition.

Corporate and Other

Revenue in Corporate and Other was $128 million for 2012 versus $147 million in the prior year. Corporate and Other includes our electrolytic manufacturing business. Electrolytic and other chemical products net sales in 2012 were essentially level to those of a year ago, as higher sodium chlorate selling prices were offset by lower volumes of the same product. The revenue decline versus prior year is related to the transfer of a sulfuric acid business to an environmental trust upon emergence from bankruptcy coupled with reduced revenues from our former relationship with Exxaro in the Tiwest joint venture.

Consolidated

Selling, general and administrative expenses for the company for the full year 2012 were $239 million, an increase of $82 million as compared to a year ago primarily due to costs associated with the mineral sands acquisition. Interest and debt expense was $65 million, an increase of $32 million, attributable to higher debt levels and issuance costs. On December 31, 2012, gross consolidated debt was $1,645 million, and debt, net of cash, was $929 million. For the year, capital expenditures were $166 million and depreciation and amortization was $211 million.

Fourth Quarter 2012 Conference Call and Webcast

Tronox will conduct its fourth quarter 2012 conference call and webcast on Thursday, February 21, 2013 at 8:30am ET (New York).