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Related Parties | 3 Months Ended
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Mar. 31, 2023
Related Party Transactions [Abstract] |
Related Parties | Related Parties Tasnee / Cristal At March 31, 2023, Cristal International Holdings B.V. (formerly known as Cristal Inorganic Chemical Netherlands Cooperatief W.A.), a wholly-owned subsidiary of Tasnee, continues to own 37,580,000 shares of Tronox, or a 24% ownership interest. On May 9, 2018, we entered into an Option Agreement with AMIC which is owned equally by Tasnee and Cristal. Under the terms of the Option Agreement, AMIC granted us an option (the “Option”) to acquire 90% of a special purpose vehicle (the “SPV”), to which AMIC’s ownership in a titanium slag smelter facility (the “Slagger”) in The Jazan City for Primary and Downstream Industries in KSA will be contributed together with $322 million of AMIC indebtedness (the “AMIC Debt”). The AMIC Debt would remain outstanding debt of the SPV upon exercise of the Option. The Option may be exercised if the Slagger achieves certain production criteria related to sustained quality and tonnage of slag produced (the “Option Criteria”). Likewise, AMIC may require us to acquire the Slagger on the same terms if the Option Criteria are satisfied. Furthermore, pursuant to the Option Agreement and during its term, we agreed to lend AMIC and, upon the creation of the SPV, the SPV, up to $125 million for capital expenditures and operational expenses intended to facilitate the start-up of the Slagger (the “Tronox Loans”). At both March 31, 2023 and December 31, 2022, we have lent AMIC the Tronox Loans maximum amount of $125 million, which, together with related interest of $14 million and $13 million, respectively, is recorded within “Other long-term assets” on the unaudited Condensed Consolidated Balance Sheet. The Option did not have a significant impact on the financial statements as of or for the period ended March 31, 2023. For the three months ended March 31, 2023 and March 31, 2022, Tronox recorded $43 million and $9 million, respectively, for purchases of feedstock material produced by the Slagger. Such purchases are subsequently recorded in "Cost of goods sold" on the unaudited Condensed Consolidated Statement of Income. At March 31, 2023 and December 31, 2022, amounts due related to Slagger feedstock purchases were $29 million and $14 million, respectively, which are recorded within “Accrued liabilities” on the unaudited Condensed Consolidated Balance Sheet. On May 13, 2020, we amended the Option Agreement (the "First Amendment") with AMIC to address circumstances in which the Option Criteria cannot be satisfied. Pursuant to the First Amendment, Tronox has the right to acquire the SPV in exchange for (i) our forgiveness of the Tronox Loans principal and accrued interest thereon, and (ii) the SPV's assumption of $36 million of indebtedness plus accrued interest thereon lent by AMIC to the SPV. Under the First Amendment, the SPV would not assume any of the AMIC Debt. The Option Agreement expires on May 10, 2023. While the Company initially decided to allow the Option Agreement to expire in accordance with its terms, it is in discussions with AMIC about under what circumstances it may extend the Option Agreement. In the meanwhile, the Company has agreed to extend the term of the TSA and continue to work with AMIC to support the Jazan smelter complex. The terms of the Tronox Loans, which can be repaid as late as June 2025, remain unchanged and can be paid in the form of cash or in kind. Additionally, on May 13, 2020, we amended a Technical Services Agreement that we had entered with AMIC on March 15, 2018, to add project management support services. Under this amended arrangement, AMIC and its consultants are still responsible for engineering and construction of the Slagger while we provide technical advice and project management services including supervision and management of third party consultants intended to satisfy the Option Criteria. As compensation for these services, Tronox receives a management fee, which is subject to certain success incentives if and when the Slagger achieves the Option Criteria. Tronox recorded management fees of $2 million in "Other income (expense), net" within the unaudited Condensed Consolidated Statement of Income for the three months ended both March 31, 2023 and March 31, 2022. At March 31, 2023 and December 31, 2022, Tronox had a receivable due from AMIC related to the management fee and other technical support fees of $3 million and $2 million, respectively, that is recorded within “Prepaid and other assets” on the unaudited Condensed Consolidated Balance Sheet. At both March 31, 2023 and December 31, 2022, Tronox had a receivable due from Tasnee of $2 million, recorded within “Prepaid and other assets” on the unaudited Condensed Consolidated Balance Sheet, related primarily to pre-acquisition period tax matters in process with certain tax authorities which are reimbursable from Tasnee. On December 29, 2019, we entered into an agreement with Cristal to acquire certain assets co-located at our Yanbu facility which produces metal grade TiCl 4 ("MGT"). Consideration for the acquisition is the assumption by Tronox of a $36 million note payable to Cristal (the "MGT Loan"). MGT is used at a titanium "sponge" plant facility, 65% of the ownership interests of which are held by Advanced Metal Industries Cluster and Toho Titanium Metal Co. Ltd ("ATTM"), a joint venture between AMIC and Toho Titanium Company Ltd. ATTM uses the TiCl 4, which we supply by pipeline, for the production of titanium sponge, a precursor material used in the production of titanium metal. On December 17, 2020 we completed the MGT transaction. Repayment of the $36 million note payable is based on a fixed U.S. dollar amount per metric ton quantity of MGT delivered by us to ATTM over time and therefore the ultimate maturity date is variable in nature. If ATTM fails to purchase MGT from us under certain contractually agreed upon conditions, then at our election we may terminate the MGT supply agreement with ATTM and we will no longer owe any amount under the loan agreement with Cristal. We currently estimate the ultimate maturity to be between approximately five and six years, subject to actual future MGT production levels. The interest rate on the note payable is based on the SAIBOR plus a premium. At March 31, 2023 and December 31, 2022, the outstanding balance of the note payable was $29 million and $30 million, respectively, of which $7 million and $7 million, respectively, was expected to be paid within the next twelve months. The note payable is recorded within "Long-term debt, net" and "Long-term debt due within one year" on the Consolidated Balance Sheet. During the three months ended both March 31, 2023 and March 31, 2022, Tronox recorded $1 million for MGT Loan repayments to Cristal which are recorded within "Net sales" on the unaudited Condensed Consolidated Statement of Income. As a result of these transactions that we entered into related to the MGT assets, Tronox recorded $1 million and $1 million for purchase of chlorine gas from ATTM for the three months ended March 31, 2023 and March 31, 2022, respectively, and such amounts are recorded in "Cost of goods sold" on the unaudited Condensed Consolidated Statement of Income. The amount due to ATTM at March 31, 2023 and December 31, 2022, for the purchase of chlorine gas was less than $1 million and $1 million, respectively, which is recorded within “Accrued liabilities” on the unaudited Condensed Consolidated Balance Sheet. During the three months ended March 31, 2023 and March 31, 2022, Tronox recorded $11 million and $6 million, respectively, for MGT sales made to ATTM. The MGT sales are recorded in “Net sales” on the unaudited Condensed Consolidated Statement of Income. At March 31, 2023 and December 31, 2022, Tronox had a receivable from ATTM of $7 million and $6 million, respectively, from MGT sales that is recorded within “Prepaid and other assets” on the unaudited Condensed Consolidated Balance Sheet.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI https://asc.fasb.org/topic&trid=2122745 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
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