# Tronox Holdings plc (TROX) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Tronox Holdings plc's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1530804/000153080425000004/trox-20241231.htm
Accession: 0001530804-25-000004
Filing date: 2025-02-19
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/TROX/
All MD&A years: /company/TROX/mda/
Previous year: /company/TROX/mda/fy2023/ (FY 2023)
Next year: /company/TROX/mda/fy2025/ (FY 2025)

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Tronox Holdings plc's consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion and other sections in this Annual Report on Form 10-K contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, and actual results could differ materially from those discussed in the forward-looking statements as a result of numerous factors. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements also can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties outlined in Item 1A. “Risk Factors.”

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains certain financial measures, in particular the presentation of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA, which are not presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). We are presenting these non-U.S. GAAP financial measures because we believe they provide us and readers of this Form 10-K with additional insight into our operational performance relative to earlier periods and relative to our competitors. We do not intend for these non-U.S. GAAP financial measures to be a substitute for any U.S. GAAP financial information. Readers of these statements should use these non-U.S. GAAP financial measures only in conjunction with the comparable U.S. GAAP financial measures. A reconciliation of net (loss) income to EBITDA and Adjusted EBITDA is also provided herein.

Executive Overview

Tronox Holdings plc (referred to herein as "Tronox", "we", "us", or "our") operates titanium-bearing mineral sand mines and beneficiation operations in Australia and South Africa to produce feedstock materials that can be processed into TiO2 for pigment, high purity titanium chemicals, including titanium tetrachloride, and Ultrafine© titanium dioxide used in certain specialty applications. Our strategy is to be vertically integrated and produce enough feedstock materials to be as self-sufficient as possible in the production of TiO2 at our nine pigment facilities located in the United States, Australia, Brazil, UK, France, the Netherlands, China and the Kingdom of Saudi Arabia (“KSA”). We believe that vertical integration is the best way to achieve our ultimate goal of delivering low cost, high-quality pigment to our coatings and other TiO2 customers throughout the world. The mining, beneficiation and smelting of titanium bearing mineral sands creates meaningful quantities of zircon, pig iron and the rare-earth bearing mineral, monazite, which we also supply to customers around the world.

We are a public limited company listed on the New York Stock Exchange and are registered under the laws of England and Wales.

Business Environment

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

Fourth quarter revenue decreased 1% compared to the prior year, driven by unfavorable average selling prices including mix and lower other product sales volumes, partially offset by higher sales volumes of zircon and TiO2. For the fourth quarter of 2024 as compared to the fourth quarter of 2023, TiO2 revenue increased 3%, driven by a 4% increase in volumes partially offset by a 1% decrease in average selling prices including mix. Zircon sales volumes increased 43% partially offset by an 11% decrease in average selling prices including mix. Revenue from other products decreased 38% due to opportunistic sales of ilmenite and heavy mineral concentrate tailings which occurred in the prior year quarter, but did not reoccur in the current year quarter. Gross profit increased for the fourth quarter of 2024 as compared to the fourth quarter of 2023 due to lower production costs and higher TiO2 and zircon sales volumes. These favorable impacts were partially offset by lower sales volumes of other products, unfavorable impacts of average selling prices and mix and unfavorable impacts of foreign currency.

Sequentially, revenue decreased 16% in the fourth quarter of 2024 compared to the third quarter of 2024 driven by lower TiO2 and other products sales volumes and unfavorable average selling prices including mix partially offset by higher sales volumes of zircon. TiO2 revenue decreased 13% in the fourth quarter of 2024 compared to the third quarter of 2024 driven by an 11% decrease in volumes, a 1% decline in average selling prices including mix and a 1% exchange rate headwind. Zircon sales

53

TABLE OF CONTENTS

volumes increased 9% partially offset by an 8% decrease in average selling prices including mix. Other products revenues decreased 40% sequentially primarily due to opportunistic sales of ilmenite and heavy mineral concentrate tailings that occurred in the third quarter of 2024, but did not reoccur in the fourth quarter of 2024. Gross profit decreased sequentially from the third quarter of 2024 to the fourth quarter of 2024 due to lower sales volumes of other products and TiO2 and headwinds from average selling prices and mix. These unfavorable impacts were partially offset by improved production costs and favorable impacts of foreign currency.

As of December 31, 2024, our total available liquidity was $578 million, including $151 million in cash and cash equivalents and $427 million available under revolving credit agreements. As of December 31, 2024, our total debt was $2.9 billion and net debt to trailing-twelve month Adjusted EBITDA was 4.8x. The Company also has no financial covenants on its term loans or bonds and only one springing financial covenant on its Cash Flow revolver facility. Refer to Note 13 of notes to consolidated financial statements for further details.

Consolidated Results of Operations

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023","","Variance"],["","(Millions of U.S. Dollars)"],["Net sales","$","3,074","","","$","2,850","","","$","224"],["Cost of goods sold","2,559","","","2,388","","","171"],["Gross profit","$","515","","","$","462","","","$","53"],["Gross Margin","16.8","%","","16.2","%","","0.6","pts"],["Selling, general and administrative expenses","296","","","276","","","20"],["Income from operations","219","","","186","","","33"],["Interest expense","(167)","","","(158)","","","(9)"],["Interest income","10","","","18","","","(8)"],["Loss on extinguishment of debt","(3)","","","\u2014","","","(3)"],["Other income, net","14","","","3","","","11"],["Income before income taxes","73","","","49","","","24"],["Income tax provision","(127)","","","(363)","","","236"],["Net loss","$","(54)","","","$","(314)","","","$","260"],["Effective tax rate","174","%","","741","%","","(567) pts"],["EBITDA(1)","$","515","","","$","464","","","$","51"],["Adjusted EBITDA(1)","$","564","","","$","524","","","$","40"],["Net loss as % of Net Sales","(1.8)","%","","(11.0)","%","","9.2 pts"],["Adjusted EBITDA as % of Net Sales(1)","18.3","%","","18.4","%","","0.1","pts"]]
[[/GREPCENT_TABLE]]

_____________________

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

Net sales of $3,074 million for the year ended December 31, 2024 increased by 8% compared to $2,850 million for the same period in 2023. Revenue increased primarily due to higher TiO2 and zircon sales volumes. Net sales by type of product for the years ended December 31, 2024 and 2023 were as follows:

54

TABLE OF CONTENTS

The table below presents reported revenue by product:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["(Millions of dollars, except percentages)","2024","","2023","","Variance","","Percentage"],["TiO2","$","2,407","","","$","2,248","","","$","159","","","7","%"],["Zircon","322","","","257","","","65","","","25","%"],["Other products","345","","","345","","","\u2014","","","\u2014","%"],["Total net sales","$","3,074","","","$","2,850","","","$","224","","","8","%"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2024, TiO2 revenue increased $159 million, or 7%, compared to the prior year due to a $290 million increase in sales volumes partially offset by a decrease of $129 million in average selling prices, including mix. Foreign currency negatively impacted TiO2 revenue by $2 million due primarily to the weakening of the Euro. Zircon revenues increased $65 million primarily due to a 41% increase in sales volumes partially offset by a 16% decrease in average selling prices. Other products revenue remained consistent period over period.

Gross profit of $515 million for the year ended December 31, 2024 was 16.8% of net sales compared to 16.2% of net sales for the same period in 2023. The increase in gross margin is primarily due to:

•the favorable impact of 4 points due to improved absorption from higher production volumes, and

•the favorable impact of 1 point due to improved production costs and lower idle facility charges, partially offset by

•the unfavorable impact of 5 points primarily due to a decrease in TiO2 and Zircon selling prices, including mix.

Selling, general and administrative ("SG&A") expenses increased $20 million when comparing the year ended December 31, 2024 to the prior year. The SG&A expenses increase was primarily driven by a $11 million increase in employee costs and a $9 million increase in professional services. The remaining net increase was driven by individually immaterial amounts.

Income from operations for the year ended December 31, 2024 of $219 million, increased by $33 million or 18% compared to the same period in 2023 which is primarily attributable to higher sales volumes of TiO2 and zircon, improved production costs and lower idle facility charges partially offset by higher selling, general and administrative expenses.

Interest expense for the year ended December 31, 2024 increased $9 million compared to the same period in 2023. The increase is primarily due to the increase in the effective interest rates period over period.

Interest income for the year ended December 31, 2024 decreased $8 million compared to the same period in 2023 primarily due to an overall decrease in our cash investments and lower interest rates on those cash balances period over period.

Loss on extinguishment of debt was $3 million for the year ended December 31, 2024 which was primarily related to the refinancing of our US Term Loan Facility with the new 2024-B Term Loan Facility.

Other income (expense), net for the year ended December 31, 2024 primarily consisted of approximately $28 million (net of associated transaction costs) related to a sale of royalty interest in certain Canadian mineral properties partially offset by $15 million of fees associated with the utilization of the Securitization Facility. The remaining amount was driven by other individually immaterial amounts.

We continue to maintain full valuation allowances related to the total net deferred tax assets in Australia and the United Kingdom. During the year ended December 31, 2024, the Company recorded a full valuation allowances against the deferred tax assets in Brazil and the Netherlands. Future provisions for income taxes associated with these jurisdictions will include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments. Additionally, we have valuation allowances against other specific tax assets.

The effective tax rate was 174% and 741% for the years ended December 31, 2024 and 2023, respectively. The effective tax rates for the year ended December 31, 2024 and 2023 are influenced by a variety of factors, primarily income and losses in jurisdictions with valuation allowances, non-taxable income and expenses, withholding taxes, prior year accruals, and our jurisdictional mix of income at tax rates different than the U.K. statutory rate. Additionally, the effective tax rates for each year is significantly influenced by the application of valuation allowances against deferred tax assets in Brazil and the Netherlands during the year ended December 31, 2024 and Australia during the year ended December 31, 2023. Refer to Note 5 of notes to consolidated financial statements for further information.

Net loss as a percentage of net sales was (1.8)% for the year ended December 31, 2024 as compared to (11.0)% for the year ended December 31, 2023. The primary driver of the year-over-year decrease in Net loss as a percentage of net sales is the timing of the deferred tax assets' valuation allowance adjustments as well as the higher gross profit due to higher sales volumes, lower

55

TABLE OF CONTENTS

production costs and lower idle facility charges. Adjusted EBITDA as a percentage of net sales was relatively consistent period over period at 18.3% for the year ended December 31, 2024 as compared to 18.4% in the prior year.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

A discussion of our results of operations for the year ended December 31, 2023 versus December 31, 2022 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operation”, included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Other Comprehensive Income (Loss)

There was an other comprehensive loss of $74 million for the year ended December 31, 2024 compared to other comprehensive loss of $42 million for the year ended December 31, 2023. This increase in comprehensive loss was primarily driven by the unfavorable foreign currency translation adjustments of $80 million for the year ended December 31, 2024 as compared to unfavorable foreign currency translation adjustments of $15 million in the prior year. Additionally, we recognized net gains on derivative instruments of $2 million in the year ended December 31, 2024 as compared to net losses on derivative instruments of $13 million in the prior year as well as pension and postretirement gains of $8 million for the year ended December 31, 2024 as compared to pension and postretirement losses of $14 million in the prior year.

A discussion of our comprehensive (loss) income for the year ended December 31, 2023 versus December 31, 2022 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Other Comprehensive (Loss) Income”, included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Liquidity and Capital Resources

During 2024, our liquidity decreased by $183 million to $578 million.

The table below presents our liquidity, including amounts available under our credit facilities, as of the following dates:

[[GREPCENT_TABLE]]
[["","December 31, 2024","","December 31, 2023"],["Cash and cash equivalents","$","151","","","$","273"],["Available under the Cash Flow Revolver","305","","","343"],["Available under the Standard Credit Facility","\u2014","","","55"],["Available under the RMB Credit Facility","42","","","\u2014"],["Available under the Emirates Revolver","63","","","64"],["Available under the SABB Facility","12","","","20"],["Available under the Bank Itau Facility","5","","","6"],["Total","$","578","","","$","761"]]
[[/GREPCENT_TABLE]]

Historically, we have funded our operations and met our commitments through cash generated by operations, issuance of unsecured notes, bank financings and borrowings under lines of credit. In the next twelve months, we expect that our operations will provide sufficient cash for our operating expenses, capital expenditures, interest payments and debt repayments, however, if necessary, we have the ability to borrow under our short-term credit facilities (see Note 13 of notes to consolidated financial statements). This is predicated on our achieving our forecast which could be negatively impacted by items outside of our control, including, among other things, macroeconomic conditions, inflationary pressures, political instability including the ongoing Russia and Ukraine and Middle East conflicts and any expansion of such conflicts, and supply chain disruptions. If negative events occur in the future, we may need to reduce our capital spend, cut back on operating costs, and other items within our control to maintain appropriate liquidity.

Working capital (calculated as current assets less current liabilities) was $1.3 billion at December 31, 2024, compared to $1.4 billion at December 31, 2023.

As of and for the year ended December 31, 2024, the non-guarantor subsidiaries of our Senior Notes due 2029 represented approximately 18% of our total consolidated liabilities, approximately 39% of our total consolidated assets, approximately 44% of our total consolidated net sales and approximately 52% of our Consolidated EBITDA (as such term is defined in the 2029 Indenture). In addition, as of December 31, 2024, our non-guarantor subsidiaries had $748 million of total consolidated liabilities (including trade payables but excluding intercompany liabilities), all of which would have been structurally senior to the 2029 Notes. See Note 13 of notes to consolidated financial statements for additional information.

At December 31, 2024, we had outstanding letters of credit and bank guarantees of $131 million. See Note 18 of notes to consolidated financial statements.

56

TABLE OF CONTENTS

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

As of December 31, 2024, our credit rating with Moody’s remained unchanged from December 31, 2023 at Ba3 stable outlook. In the first quarter of 2025, Moody's changed our outlook to negative. As of December 31, 2024, our credit rating with Standard & Poor's rating and outlook remained unchanged at B positive and stable, respectively. See Note 13 of notes to consolidated financial statements.

Cash and Cash Equivalents

We consider all investments with original maturities of three months or less to be cash equivalents. As of December 31, 2024, our cash and cash equivalents were invested in money market funds and we also receive earnings credits for some balances left in our bank operating accounts. We maintain cash and cash equivalents in bank deposit and money market accounts that may exceed federally insured limits. The financial institutions where our cash and cash equivalents are held are highly rated and geographically dispersed, and we have a policy to limit the amount of credit exposure with any one institution. We have not experienced any losses in such accounts and believe we are not exposed to significant credit risk.

The use of our cash includes payment of our operating expenses, capital expenditures, servicing our interest and debt repayment obligations, cash taxes, making pension contributions and making quarterly dividend payments. Going forward, we expect to continue to invest in our businesses through cost reduction, as well as growth and vertical integration-related capital expenditures including projects such as newTRON and various mine development projects, continued reductions in our debt, continued dividends and share repurchases.

Repatriation of Cash

At December 31, 2024, we held $151 million in cash and cash equivalents in these respective jurisdictions: $17 million in the United States, $38 million in South Africa, $26 million in Australia, $28 million in Brazil, $7 million in Saudi Arabia, $17 million in China, $17 million in Europe and $1 million in India. Our credit facilities limit transfers of funds from subsidiaries in the United States to certain foreign subsidiaries. In addition, at December 31, 2024, we held approximately $1 million of restricted cash which is in South Africa related to a profit-sharing arrangement as well as in Australia related to performance bonds.

At December 31, 2024, Tronox Holdings plc had foreign subsidiaries with undistributed earnings. Although we would not be subject to income tax on these earnings, we have asserted that amounts in specific jurisdictions are indefinitely reinvested outside of the parent's taxing jurisdictions. These amounts could be subject to withholding tax if distributed, but the Company has made no provision for tax related to these undistributed earnings. The Company has removed its assertion that earnings in China are indefinitely reinvested, and the withholding tax accruals for potential repatriations from that jurisdiction are now reflected in the effective tax rate reconciliation in Note 5 to the consolidated financial statements.

Stock Repurchases

On February 21, 2024, in connection with the expiration in February 2024 of the Company's previous share repurchase program, the Company's Board of Directors authorized the repurchase of up to $300 million of the Company's stock through February 21, 2027. During the year ended December 31, 2024, we made no repurchases of the Company's stock.

Cash Dividends on Ordinary Shares

On February 18, 2025, the Board declared a quarterly dividend of $0.125 per share to holders of our ordinary shares at the close of business on March 3, 2025, which will be paid on April 4, 2025.

Debt Obligations

On May 1, 2024, Tronox Finance LLC (the “Borrower”), Tronox Holdings plc (the “Company”), certain of the Company’s subsidiaries, the incremental term lender party thereto and HSBC Bank USA, National Association, as Administrative Agent and Collateral Agent, entered into Amendment No. 4 to the Amended and Restated First Lien Credit Agreement (the "2024 Amendment"). The 2024 Amendment provides the Borrower with a new five-year incremental term loan facility ("the 2024 Term Loan Facility") under its credit agreement in an aggregate initial principal amount of $741 million. The 2024 Term Loan Facility was used to refinance in full the Company's outstanding 2022 Term Loan and 2023 Term Loan.

On August 15, 2024, the Borrower (as defined above), together with the Company and certain of the Company's subsidiaries, entered into Amendment No. 5 to the Credit Agreement (as defined above) with the revolving lenders party thereto and HSBC Bank USA, National Association, as Administrative Agent and Collateral Agent. Amendment No. 5 provides for a $350 million

57

TABLE OF CONTENTS

replacement revolving loan facility (the "New Cash Flow Revolver") which refinances and replaces the Borrower's existing $350 million revolving loan facility (the "Cash Flow Revolver").

On September 30, 2024, the Borrower (as defined above), together with the Company and certain of the Company's subsidiaries, entered into Amendment No. 6 to the Credit Agreement (as defined above) with the term lenders party thereto and HSBC Bank USA, National Association, as Administrative Agent and Collateral Agent. Amendment No. 6 provides the Borrower with a new seven-year incremental term loan facility (the "2024-B Term Loan Facility") in an aggregate principal amount of $902 million. The proceeds of the 2024-B Term Loan Facility was used to refinance in full all of the outstanding amounts of the existing Term Loan Facility.

On August 16, 2024, Tronox Minerals Sands Proprietary Limited and Tronox KZN Sands Proprietary Limited, wholly- owned subsidiaries of the Company, entered into Amendment No. 2 (“the Amendment”) and restatement of a credit facility with RMB, that supersedes and replaces the Standard Bank Limited Term Loan Facility in its entirety. The amended credit facility provides the Company with (a) a new five-year term loan facility in an aggregate principal amount of R1.1 billion (approximately $58 million at December 31, 2024 exchange rate) (the "RMB Term Loan Facility") and (b) a new three-year revolving credit facility (the "RMB Revolving Credit Facility") providing an increase of the revolving commitments of R1.2 billion (approximately $63 million at December 31, 2024 exchange rate).

At December 31, 2024 and 2023, our short-term debt and long-term debt, net of unamortized discount and debt issuance costs was $2.9 billion and $2.8 billion, respectively.

At December 31, 2024 and 2023, our net debt (the excess of our debt over cash and cash equivalents) was $2.7 billion and $2.6 billion, respectively.

As of February 17, 2025, the total outstanding principal balance on our short-term debt facilities was approximately $117 million.

See Note 13 of notes to consolidated financial statements for further details.

Off-Balance Sheet Arrangements

In March 2022, the Company entered into an accounts receivable securitization program ("Securitization Facility") with a financial institution, through our wholly-owned special purpose bankruptcy-remote subsidiary, Tronox Securitization LLC ("SPE"). The Securitization Facility permitted the SPE to sell accounts receivable up to $75 million.

In November 2022, the Company amended the receivable purchase agreement to expand the program to include receivables generated by its wholly-owned Australian operating subsidiaries, Tronox Pigment Pty Ltd., Tronox Pigment Bunbury Ltd. and Tronox Mining Australia Ltd. which increased the facility limit to $200 million and extended the program term to November 2025.

In June 2023, the Company entered into an additional amendment (the "Second Amendment") to further include receivables generated by our wholly-owned European operating subsidiaries, Tronox Pigment Holland BV and Tronox Pigment UK Limited. Neither the facility limit nor the program term were changed as a result of the Second Amendment, and remained at $200 million and November 2025, respectively.

In March 2024, we entered into a Securitization Facility technical amendment (the "Third Amendment"), to increase the percentage of certain receivables eligible for sale to the Purchaser. In April 2024, we again amended the Securitization Facility (the "Fourth Amendment"), to increase the Facility Limit from $200 million to $230 million.

See "Note 7 - Accounts Receivable Securitization Program" in notes to consolidated financial statements for further details regarding this off-balance sheet program.

Cash Flows

Years Ended December 31, 2024 and 2023

58

TABLE OF CONTENTS

The following table presents cash flow for the periods indicated:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Millions of U.S. dollars)"],["Net cash provided by operating activities","$","300","","","$","184"],["Net cash used in investing activities","(343)","","","(255)"],["Net cash (used in) provided by financing activities","(71)","","","176"],["Effect of exchange rate changes on cash","(7)","","","4"],["Net increase (decrease) in cash and cash equivalents","$","(121)","","","$","109"]]
[[/GREPCENT_TABLE]]

Cash Flows provided by Operating Activities — Cash provided by our operating activities is driven by net loss adjusted for non-cash items and changes in working capital items. The following table summarizes our net cash provided by operating activities for 2024 and 2023:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Millions of U.S. dollars)"],["Net loss","$","(54)","","","$","(314)"],["Net adjustments to reconcile net loss to net cash provided by operating activities","457","","","672"],["Income related cash generation","403","","","358"],["Net change in assets and liabilities","(103)","","","(174)"],["Net cash provided by our operating activities","$","300","","","$","184"]]
[[/GREPCENT_TABLE]]

Net cash provided by operating activities was $300 million in 2024 as compared to $184 million in 2023. The increase of $116 million period over period is primarily due to a $45 million increase in income related cash generation and a decrease of $71 million use of cash for net assets and liabilities. The lower use of cash for working capital was primarily driven by decreases in the use of cash for inventories of $36 million and decreases in the use of cash for accounts payable and accrued liabilities of $73 million partially offset by a decrease in cash provided by accounts receivable of $73 million and a change of $34 million in net changes in income tax payables and receivables. Additionally, there was an increase in the use of cash for long-term other assets and liabilities of $2 million from the prior year to the current year.

Cash Flows used in Investing Activities — Net cash used in investing activities for the year ended December 31, 2024 was $343 million as compared to $255 million for the year ended December 31, 2023. The $88 million increase in use of cash year over year is primarily driven by higher capital expenditures of $370 million partially offset by $21 million of proceeds from the sale of a royalty interest in certain Canadian mineral properties during the current year. The remaining $6 million in the current year is related to other proceeds from sale of assets.

Cash Flows (used in) provided by Financing Activities — Net cash used in financing activities during the year ended December 31, 2024 was $71 million as compared to cash provided by financing activities of $176 million for the year ended December 31, 2023. The current year is primarily comprised of dividends paid of $80 million and total net proceeds of $26 million of long-term debt and short-term debt. The prior year was comprised of $347 million of proceeds from long-term debt partially offset by repayments of long-term and short-term debt of $165 million as well as $89 million of cash used to pay dividends.

Years Ended December 31, 2023 and 2022

A discussion of our cash flows for the year ended December 31, 2023 versus 2022 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Cash Flows”, included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Contractual Obligations

59

TABLE OF CONTENTS

The following table sets forth information relating to our contractual obligations as of December 31, 2024:

[[GREPCENT_TABLE]]
[["","","","Contractual Obligation Payments Due by Period(3)"],["","Total","","Less than 1 year","","1-3 years","","3-5 years","","More than 5 years"],["","","","(Millions of U.S. dollars)"],["Long-term debt and lease financing (including interest)(1)","$","3,780","","","$","280","","","$","407","","","$","2,109","","","$","984"],["Purchase obligations(2)","3,431","","","395","","","399","","","472","","","2,165"],["Operating leases","235","","","35","","","42","","","33","","","125"],["Pension and other post-retirement benefit obligations(4)","219","","","27","","","46","","","44","","","102"],["Asset retirement obligations and environmental liabilities(5)","480","","","24","","","54","","","48","","","354"],["Total","$","8,145","","","$","761","","","$","948","","","$","2,706","","","$","3,730"]]
[[/GREPCENT_TABLE]]

__________________

(1)We calculated our various term loan facilities' interest at a SOFR plus an applicable margin. See Note 13 of notes to our consolidated financial statements.

(2)Includes obligations to purchase requirements of process chemicals, supplies, utilities and services. We have various purchase commitments for materials, supplies, and services entered into in the ordinary course of business. Included in the purchase commitments table above are contracts, which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2025. 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.

(4)Pension and other post-retirement benefit ("OPEB") obligations of $219 million include estimates of pension plan contributions and expected future benefit payments for unfunded pension and OPEB plans. Pension plan contributions are forecasted for 2025 only. Expected future unfunded pension and OPEB benefit payments are forecasted only through 2034. Contribution and unfunded benefit payment estimates are based upon current valuation assumptions. Estimates of pension contributions after 2025 and unfunded benefit payments after 2034 are not included in the table because the timing of their resolution cannot be estimated. Refer to Note 21 in notes to consolidated financial statements for further discussion on our pension and OPEB plans.

(5)Amounts are shown at the undiscounted and uninflated values.

Non-U.S. GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted net (loss) income attributable to Tronox and Diluted adjusted net income per share attributable to Tronox, which are used by management to measure performance, are not presented in accordance with U.S. GAAP. We define EBITDA as net (loss) income excluding the impact of income taxes, interest expense, interest income and depreciation, depletion and amortization. We define Adjusted EBITDA as EBITDA excluding the impact of nonrecurring items such as restructuring charges, gain or loss on debt extinguishments, impairment charges, gains or losses on sale of assets, acquisition-related transaction costs and pension settlements and curtailment gains or losses. Adjusted EBITDA also excludes non-cash items such as share-based compensation costs, pension and postretirement costs, and realized and unrealized foreign currency remeasurement gains and losses. We define Adjusted net income attributable to Tronox as net (loss) income attributable to Tronox excluding the impact of nonrecurring items which the Company believes are not indicative of its core operating results such as restructuring charges, gain or loss on debt extinguishments, impairment charges, gains or losses on sale of assets, acquisition-related transaction costs and pension settlements and curtailment gains or losses. We define Diluted adjusted net income per share attributable to Tronox as Diluted net income per share excluding the impact of nonrecurring items which the Company believes are not indicative of its core operating results such as restructuring charges, gain or loss on debt extinguishments, impairment charges, gains or losses on sale of assets, acquisition-related transaction costs and pension settlements and curtailment gains or losses.

Management believes that EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and Diluted adjusted net income per share attributable to Tronox are useful to investors, as it is commonly used in the industry as a means of evaluating operating performance. We do not intend for these non-U.S. GAAP financial measures to be a substitute for any U.S. GAAP financial information. Readers of these statements should use these non-U.S. GAAP financial measures only in conjunction with the comparable U.S. GAAP financial measures. Since other companies may calculate EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and Diluted adjusted net income per share attributable to Tronox differently than we do, EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and Diluted adjusted net income per share attributable to Tronox, as presented herein, may not be comparable to similarly titled measures reported by other companies. Management believes these non-U.S. GAAP financial measures:

•reflect our ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business, as they exclude income and expense that are not reflective of ongoing operating results;

60

TABLE OF CONTENTS

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

•provide a normalized view of our operating performance by excluding items that are either noncash or infrequently occurring.

These non-U.S. GAAP measures are the primary measures management uses for planning and budgeting processes, and to monitor and evaluate financial and operating results. In addition, Adjusted EBITDA is a factor in evaluating management’s performance when determining incentive compensation.

The following table reconciles net (loss) income to EBITDA and Adjusted EBITDA, Adjusted EBITDA as a % of net sales for the periods presented and Net Debt to Trailing Twelve Month Adjusted EBITDA as of December 31, 2024 and December 31,

61

TABLE OF CONTENTS

2023:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023","","2022"],["Net (loss) income (U.S. GAAP)","(54)","","","(314)","","","500"],["Interest expense","167","","","158","","","125"],["Interest income","(10)","","","(18)","","","(9)"],["Income tax provision","127","","","363","","","(192)"],["Depreciation, depletion and amortization expense","285","","","275","","","269"],["EBITDA (non-U.S. GAAP)","515","","","464","","","693"],["Share-based compensation(a)","21","","","21","","","26"],["Venator settlement(b)","\u2014","","","\u2014","","","85"],["Loss on extinguishment of debt(c)","3","","","\u2014","","","21"],["Foreign currency remeasurement(d)","(1)","","","(6)","","","3"],["Pension settlement loss(e)","\u2014","","","\u2014","","","20"],["Accretion expense and other adjustments to asset retirement and environmental obligations(f)","23","","","22","","","19"],["Accounts receivable securitization program(g)","15","","","12","","","3"],["Sale of royalty interest in certain Canadian mineral properties, net of fees(h)","(28)","","","\u2014","","","\u2014"],["Other items(i)","16","","","11","","","5"],["Adjusted EBITDA (non-U.S. GAAP)","$","564","","","$","524","","","$","875"],["","Year Ended December 31,"],["","2024","","2023","","2022"],["Net sales","$","3,074","","","$","2,850","","","$","3,454"],["Net (loss) income (U.S. GAAP)","$","(54)","","","$","(314)","","","$","500"],["Net (loss) income (U.S. GAAP) as a % of Net sales","(1.8)","%","","(11.0)","%","","14.5","%"],["Adjusted EBITDA (non-U.S. GAAP) (see above) as a % of Net sales","18.3","%","","18.4","%","","25.3","%"],["","December 31,"],["","2024","","2023"],["Long-term debt, net","$","2,759","","","$","2,786"],["Short-term debt","65","","","11"],["Long-term debt due within one year","35","","","27"],["(Less) Cash and cash equivalents","(151)","","","(273)"],["Net debt","$","2,708","","","$","2,551"],["Adjusted EBITDA (non-U.S. GAAP) (see above)","$","564","","","$","524"],["Net debt to trailing-twelve month Adjusted EBITDA (non-U.S. GAAP) (see above)","4.8x","","4.9x"]]
[[/GREPCENT_TABLE]]

________________

(a)Represents non-cash share-based compensation. See Note 20 of notes to consolidated financial statements.

(b)Represents the breakage fee including interest associated with the Venator settlement which were recorded in "Venator settlement" in the Consolidated Statements of Operations.

(c)2024 amount represents the loss in connection with the refinancing of the Term Loan Facility in the U.S. 2022 amount represents the loss in connection with the redemption of the 6.5% Senior Secured Notes and the issuance of a new loan which closed in April 2022. See Note 13 of notes to consolidated financial statements.

62

TABLE OF CONTENTS

(d)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 Consolidated Statements of Operations.

(e)2022 amount represents a non-cash pension settlement loss due to the settling of low-dollar valued amounts in our U.S. Qualified Plan.

(f)Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities.

(g)Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall capital structure.

(h)Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the Consolidated Statements of Operations.

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

The following table reconciles Net (loss) income attributable to Tronox to Adjusted net income attributable to Tronox for the periods presented:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023","","2022"],["Net (loss) income attributable to Tronox Holdings plc (U.S. GAAP)","$","(48)","","","$","(316)","","","$","497"],["Venator settlement(a)","\u2014","","","\u2014","","","85"],["Loss on extinguishment of debt(b)","3","","","\u2014","","","21"],["Sale of royalty interest(c)","(21)","","","\u2014","","","\u2014"],["Pension settlement loss(d)","\u2014","","","\u2014","","","15"],["Other(e)","5","","","(1)","","","(3)"],["Withholding tax accrued(f)","\u2014","","","\u2014","","","4"],["Tax valuation allowance(g)","49","","","293","","","(301)"],["Income tax expense - deferred tax assets(h)","\u2014","","","\u2014","","","(7)"],["Adjusted net (loss) income attributable to Tronox Holdings plc (non-U.S. GAAP) (1)(2)","$","(12)","","","$","(24)","","","311"],["Diluted net (loss) income per share (U.S. GAAP)","$","(0.31)","","","$","(2.02)","","","$","3.16"],["Venator settlement, per share","\u2014","","","\u2014","","","0.54"],["Loss on extinguishment of debt, per share","0.02","","","\u2014","","","0.13"],["Sale of royalty interest, per share","(0.13)","","","\u2014","","","\u2014"],["Pension settlement loss, per share","\u2014","","","\u2014","","","0.09"],["Other, per share","0.03","","","(0.01)","","","(0.02)"],["Withholding tax accrued","\u2014","","","\u2014","","","0.03"],["Tax valuation allowance, per share","0.31","","","1.88","","","(1.92)"],["Income tax expense - deferred tax assets, per share","\u2014","","","\u2014","","","(0.04)"],["Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc (non-U.S. GAAP) (2)","$","(0.08)","","","$","(0.15)","","","$","1.98"],["Weighted average shares outstanding, diluted (in thousands)","157,819","","","156,397","","","157,110"]]
[[/GREPCENT_TABLE]]

________________

63

TABLE OF CONTENTS

[[GREPCENT_TABLE]]
[["(a) Represents the breakage fee including interest associated with the Venator settlement which were recorded in \"Venator settlement\" in the Consolidated Statements of Operations."],["(b) 2024 amount represents the loss in connection with the refinancing of the Term Loan Facility in the U.S. 2022 amount represents the loss in connection with the redemption of the 6.5% Senior Secured Notes and the issuance of a new term loan which closed in April 2022."],["(c) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in \"Other income (expense), net\" in the Consolidated Statements of Operations."],["(d) 2022 amount represents a non-cash pension settlement loss due to the settling of low-dollar valued amounts in our U.S. Qualified Plan."],["(e) Represents other activity not representative of the ongoing operations of the Company."],["(f) Represents potential withholding tax due to the Chinese government for historic distributable income generated."],["(g) 2024 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Brazilian and Netherlands jurisdictions. 2023 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Australian jurisdiction. 2022 amount represents changes primarily within the Company's Australian deferred tax assets' valuation allowance."],["(h) Represents a charge to tax expense for the impact on deferred tax assets from a change in tax rates in a foreign tax jurisdiction."],["(1) Only the sale of royalty interest, pension settlement loss amount and certain other items have been tax impacted. No income tax impacts have been given to other items as they were recorded in jurisdictions with full valuation allowances."],["(2) Diluted adjusted net income per share attributable to Tronox Holdings plc was calculated from exact, not rounded Adjusted net income attributable to Tronox Holdings plc and share information."]]
[[/GREPCENT_TABLE]]

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions regarding matters that are inherently uncertain and that ultimately affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The estimates and assumptions are based on management’s experience and understanding of current facts and circumstances. These estimates may differ from actual results. Certain of our accounting policies are considered critical, as they are both important to reflect our financial position and results of operations and require significant or complex judgment on the part of management. The following is a summary of certain accounting policies considered critical by management.

Asset Retirement Obligations

To the extent a legal obligation exists, an asset retirement obligation (“ARO”) is recorded at its estimated fair value and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. Because AROs represent financial obligations to be settled in the future, uncertainties exist in estimating the timing and amount of the associated costs to be incurred. Fair value is measured using expected future cash outflows, adjusted for expected inflation and discounted at our credit-adjusted risk-free interest rate. No market-risk premium has been included in our calculation of ARO balances since we can make no reliable estimate. Management believes these estimates and assumptions are reasonable; however, they are inherently uncertain. Refer to Notes 17 to the consolidated financial statements for a summary of the estimates and assumptions utilized. At December 31, 2024, AROs were $186 million of which the long-term portion of $172 million is recorded in "Asset retirement obligations" and the short-term portion of $14 million is recorded in "Accrued liabilities" in the Consolidated Balance Sheet.

Environmental Matters

Liabilities for environmental matters are recognized when it is probable that a liability has been incurred and the related costs can be reasonably estimated. Such liabilities are based on our best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory or legal information becomes available. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range or reasonably possible environmental loss in excess of our recorded liabilities. At December 31, 2024, environmental liabilities (both short term and long term) were $48 million.

For further discussion, see Environmental Matters included elsewhere in this section entitled, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and Notes 2 and 18 to the consolidated financial statements.

Income Taxes

64

TABLE OF CONTENTS

We have operations in several countries around the world and are subject to income and similar taxes in these countries. The estimation of the amounts of income tax involves the interpretation of complex tax laws and regulations and how foreign taxes affect domestic taxes, as well as the analysis of the realizability of deferred tax assets, tax audit findings and uncertain tax positions. Although we believe our tax accruals are adequate, differences may occur in the future, depending on the resolution of pending and new tax matters.

Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided against a deferred tax asset when it is more likely than not that all or some portion of the deferred tax asset will not be realized. We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes in our estimates in the valuation allowance with a corresponding adjustment to earnings or other comprehensive income (loss) as appropriate. ASC 740, Income Taxes, requires that all available positive and negative evidence be weighed to determine whether a valuation allowance should be recorded.

The amount of income taxes we pay are subject to ongoing audits by federal, state and foreign tax authorities, which may result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We assess our income tax positions, and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, we record the amount that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties are accrued as part of tax expense, where applicable. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit is recognized.

See Notes 2 and 5 to the consolidated financial statements for additional information.

Contingencies

From time to time, we may be subject to lawsuits, investigations and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, prior acquisitions and divestitures including our acquisition of Cristal, employee benefit plans, intellectual property, and environmental, health and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. Such contingencies are significant and the accounting requires considerable management judgments in analyzing each matter to assess the likely outcome and the need for establishing appropriate liabilities and providing adequate disclosures.

Refer to Notes 2 and 18 to the consolidated financial statements for additional information.

Long-Lived Assets

Key estimates related to long-lived assets (property, plant and equipment, mineral leaseholds, and intangible assets) include useful lives, recoverability of carrying values, and the existence of any asset retirement obligations. As a result of future decisions, such estimates could be significantly modified. The estimated useful lives of property, plant and equipment range from three to forty years, and depreciation is recognized on a straight-line basis. Useful lives are estimated based upon our historical experience, engineering estimates, and industry information. These estimates include an assumption regarding periodic maintenance. Mineral leaseholds are depleted over their useful lives as determined under the units of production method. Intangible assets with finite useful lives are amortized on the straight-line basis over their estimated useful lives. The amortization methods and remaining useful lives are reviewed quarterly.

We evaluate the recoverability of the carrying value of long-lived assets that are held and used whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Under such circumstances, we assess whether the projected undiscounted cash flows of our long-lived assets are sufficient to recover the carrying amount of the asset group being assessed. If the undiscounted projected cash flows are not sufficient, we calculate the impairment amount by discounting the projected cash flows using our weighted-average cost of capital. For assets that satisfy the criteria to be classified as held for sale, an impairment loss, if any, is recognized to the extent the carrying amount exceeds fair value, less cost to sell. The amount of the impairment of long-lived assets is written off against earnings in the period in which the impairment is determined.

Pension and Postretirement Benefits

We provide pension benefits for qualifying employees in the United States and internationally, with the largest in the United Kingdom. Because pension benefits represent financial obligations that will ultimately be settled in the future with employees

65

TABLE OF CONTENTS

who meet eligibility requirements, uncertainties exist in estimating the timing and amount of future payments, and significant estimates are required to calculate pension expense and liabilities relating to these plans. The company utilizes the services of independent actuaries, whose models are used to help facilitate these calculations. Several key assumptions are used in actuarial models to calculate pension expense and liability amounts recorded in the financial statements; the most significant variables in the models are the expected rate of return on plan assets, the discount rate, and the expected rate of compensation increase. Management believes the assumptions used in the actuarial calculations are reasonable, reflect the company’s experience and expectations for the future and are within accepted practices in each of the respective geographic locations in which it operates. However, actual results in any given year often differ from actuarial assumptions due to economic events and different rates of retirement, mortality, and turnover. Refer to Notes 2 and 21 to the consolidated financial statements for a summary of the plan assumptions and additional information on our pension arrangements.

Expected Return on Plan Assets — In forming the assumption of the long-term rate of return on plan assets, we consider the expected earnings on funds already invested, earnings on contributions expected to be made in the current year, and earnings on reinvested returns. The long-term rate of return estimation methodology for the plans is based on a capital asset pricing model using historical data and a forecasted earnings model. An expected return on plan assets analysis is performed which incorporates the current portfolio allocation, historical asset-class returns, and an assessment of expected future performance using asset-class risk factors. A 100 basis point change in these expected long-term rates of return, with all other variables held constant, would change our pension expense by approximately $2 million.

Discount Rate — The discount rates selected for estimation of the actuarial present value of the benefit obligations are determined based on the prevailing market rate for high-quality, fixed-income debt instruments with maturities corresponding to the expected timing of benefit payments as of the annual measurement date for each of the various plans. These rates change from year to year based on market conditions that affect corporate bond yields. A 100 basis points change in discount rates, with all other variables held constant, would have a less than $1 million impact to our pension expense. A 100 basis points reduction in discount rates would increase the PBO by approximately $29 million whereas a 100 basis point increase in discount rates would decrease the PBO by approximately $25 million.

Rates of Compensation Increase - We determine these rates based on review of the underlying long-term salary increase trend characteristic of the local labor markets and historical experience, as well as comparison to peer companies. A 100 basis points change in the expected rate of compensation increase, with all other variables held constant, would change our pension expense by approximately $1 million. A 100 basis points reduction or increase in rate of compensation would decrease the PBO by approximately $4 million or increase the PBO by approximately $5 million, respectively.

Recent Accounting Pronouncements

See Note 2 of notes to Consolidated Financial Statements for recently issued accounting pronouncements.

Environmental Matters

We are subject to a broad array of international, federal, state, and local laws and regulations relating to safety, pollution, protection of the environment, and the generation, storage, handling, transportation, treatment, disposal, and remediation of hazardous substances and waste materials. In the ordinary course of business, we are subject to frequent environmental inspections and monitoring, and occasional investigations by governmental enforcement authorities. Under these laws, we are or may be required to obtain or maintain permits or licenses in connection with our operations. In addition, under these laws, we are or may be required to remove or mitigate the effects on the environment of the disposal or release of chemical, petroleum, low-level radioactive and other substances at our facilities. We may incur future costs for capital improvements and general compliance under environmental, health, and safety laws, including costs to acquire, maintain, and repair pollution control equipment. Environmental laws and regulations are becoming increasingly stringent, and compliance costs are significant and will continue to be significant in the foreseeable future. There can be no assurance that such laws and regulations or any environmental law or regulation enacted in the future is not likely to have a material effect on our business. We believe we are in compliance with applicable environmental rules and regulations in all material respects.

Refer to Item 3. Legal Proceedings for further information.