##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 Commission file number 1-32669
 TRONOX INCORPORATED
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    20-2868245(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)
 One Leadership Square, Suite 300
211 N. Robinson Ave, Oklahoma City, Oklahoma 73102  (Address of principal executive offices)
 Registrants telephone number, including area code: (405) 775-5000
 þ o
  o þ o
 o þ




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##### 



Tronox Incorporated
 Form 10-Q
 Table of Contents
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2007 and 2006
    
    
    1Condensed Consolidated Balance Sheets at March 31, 2007, and December 31, 2006
    
    
    2Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    27Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    32PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    35Signatures
    
    
    36




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TRONOX INCORPORATED
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In millions, except per share data)
 (Unaudited)
 Three Months EndedMarch 31,2007
    
    
    2006Net sales
    
    $
    339.1
    
    
    $
    338.8Cost of goods sold
    
    
    301.3
    
    
    
    276.0Gross margin
    
    
    37.8
    
    
    
    62.8Selling, general and administrative expenses
    
    
    35.6
    
    
    
    38.3Provision for environmental remediation and restoration,
net of reimbursements
    
    
    0.2
    
    
    
    (20.5
    )2.0
    
    
    
    45.0Interest and debt expense
    
    
    (12.3
    )
    
    
    (12.0
    )Other income, net
    
    
    1.7
    
    
    
    4.4Income (loss) from continuing operations before income taxes
    
    
    (8.6
    )
    
    
    37.4Income tax provision
    
    
    (0.4
    )
    
    
    (13.8
    )Income (loss) from continuing operations
    
    
    (9.0
    )
    
    
    23.6Loss from discontinued operations, net of income tax
benefit of $0.2 and $1.8, respectively
    
    
    (0.4
    )
    
    
    (3.0
    )Net income (loss)
    
    $
    (9.4
    )
    
    $
    20.6Income (loss) per common share:Basic Continuing operations
    
    $
    (0.22
    )
    
    $
    0.58Discontinued operations
    
    
    (0.01
    )
    
    
    (0.07
    )Net income (loss)
    
    $
    (0.23
    )
    
    $
    0.51Diluted Continuing operations
    
    $
    (0.22
    )
    
    $
    0.58Discontinued operations
    
    
    (0.01
    )
    
    
    (0.08
    )Net income (loss)
    
    $
    (0.23
    )
    
    $
    0.50Dividends declared per common share
    
    $
    0.05
    
    
    $
    0.05Weighted average shares outstanding:Basic
    
    
    40.6
    
    
    
    40.4Diluted
    
    
    40.6
    
    
    
    40.9
  1




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TRONOX INCORPORATED
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In millions, except share data)
 (Unaudited)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    44.5
    
    
    $
    76.6Accounts receivable, net
    
    
    331.5
    
    
    
    325.6Inventories, net
    
    
    351.3
    
    
    
    319.2Prepaid and other assets
    
    
    20.1
    
    
    
    15.2Income tax receivable
    
    
    8.9
    
    
    
    13.9Deferred income taxes
    
    
    35.0
    
    
    
    43.6Total current assets
    
    
    791.3
    
    
    
    794.1Property, plant and equipment, net
    
    
    856.6
    
    
    
    864.6Goodwill
    
    
    11.6
    
    
    
    11.5Other long-term assets
    
    
    153.5
    
    
    
    153.2Total assets
    
    $
    1,813.0
    
    
    $
    1,823.4LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    182.4
    
    
    $
    183.6Accrued liabilities
    
    
    216.2
    
    
    
    212.0Long-term debt due within one year
    
    
    14.7
    
    
    
    14.7Income taxes payable
    
    
    4.4
    
    
    
    1.6Total current liabilities
    
    
    417.7
    
    
    
    411.9Long-term liabilities:Deferred income taxes
    
    
    16.6
    
    
    
    33.6Environmental remediation and/or restoration
    
    
    120.1
    
    
    
    128.6Long-term debt
    
    
    533.9
    
    
    
    534.1Other long-term liabilities
    
    
    299.7
    
    
    
    277.9Total long-term liabilities
    
    
    970.3
    
    
    
    974.2Commitments and contingencies (Notes 12 and 13)Stockholders equityClass A common stock, par value $0.01  100,000,000 shares authorized,
18,702,399 and 18,388,202 shares, respectively, issued and outstanding
    
    
    0.2
    
    
    
    0.2Class B common stock, par value $0.01  100,000,000 shares authorized,
22,889,431 shares issued and outstanding
    
    
    0.2
    
    
    
    0.2Capital in excess of par value
    
    
    485.6
    
    
    
    481.6Accumulated deficit
    
    
    (33.6
    )
    
    
    (12.8
    )Accumulated other comprehensive loss
    
    
    (25.2
    )
    
    
    (31.4
    )Treasury stock, at cost  142,446 shares and 33,533 shares, respectively
    
    
    (2.2
    )
    
    
    (0.5
    )Total stockholders equity
    
    
    425.0
    
    
    
    437.3Total liabilities and stockholders equity
    
    $
    1,813.0
    
    
    $
    1,823.4
  2




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TRONOX INCORPORATED
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In millions)
 (Unaudited)
 Three Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activitiesNet income (loss)
    
    $
    (9.4
    )
    
    $
    20.6Adjustments to reconcile net cash flows from operating activities Depreciation and amortization
    
    
    27.9
    
    
    
    24.5Deferred income taxes
    
    
    (3.8
    )
    
    
    7.1Provision for environmental remediation and
restoration, net of reimbursements
    
    
    1.7
    
    
    
    (20.2
    )Other noncash items affecting net income (loss)
    
    
    8.6
    
    
    
    15.5Changes in assets and liabilities
    
    
    (39.9
    )
    
    
    (33.1
    )Net cash flows from operating activities
    
    
    (14.9
    )
    
    
    14.4Cash flows from investing activitiesCapital expenditures
    
    
    (14.3
    )
    
    
    (21.8
    )Other investing activities
    
    
    
    
    
    
    0.1Net cash flows from investing activities
    
    
    (14.3
    )
    
    
    (21.7
    )Cash flows from financing activitiesStock option
exercises
    
    
    1.2
    
    
    
    Repayment of debt
    
    
    (0.5
    )
    
    
    (0.5
    )Debt issuance costs
    
    
    (0.3
    )
    
    
    (1.2
    )Dividends paid
    
    
    (2.1
    )
    
    
    Net cash flows from financing activities
    
    
    (1.7
    )
    
    
    (1.7
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    (1.2
    )
    
    
    (2.7
    )Net change in cash and cash equivalents
    
    
    (32.1
    )
    
    
    (11.7
    )Cash and cash equivalents at beginning of period
    
    
    76.6
    
    
    
    69.0Cash and cash equivalents at end of period
    
    $
    44.5
    
    
    $
    57.3
  3




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TRONOX INCORPORATED
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. The Company
 2
  Formation
    2. Basis of Presentation and Accounting Policies
   4




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Fair Value Measurements
  3. Statement of Operations Data
  Three MonthsEnded March 31,2007
    
    
    2006(In millions)Net foreign currency transaction gain (loss)
    
    $
    (0.3
    )
    
    $
    4.3Equity in net earnings of equity method investees
    
    
    0.7
    
    
    
    Interest income
    
    
    0.8
    
    
    
    0.7Other income (expense)
    
    
    0.5
    
    
    
    (0.6
    )Total
    
    $
    1.7
    
    
    $
    4.4
 5




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Three Months Ended March 31, 2007
    
    
    Three Months Ended March 31, 2006Loss
    
    
    
    
    
    
    
    
    
    
    Incomefrom
    
    
    
    
    
    
    Per-
    
    
    from
    
    
    
    
    
    
    Per-Continuing
    
    
    
    
    
    
    share
    
    
    Continuing
    
    
    
    
    
    
    shareOperations
    
    
    Shares
    
    
    Loss
    
    
    Operations
    
    
    Shares
    
    
    Income(In millions, except per share amounts)Basic earnings per share
    
    $
    (9.0
    )
    
    
    40.6
    
    
    $
    (0.22
    )
    
    $
    23.6
    
    
    
    40.4
    
    
    $
    0.58Effect of dilutive securities:Restricted stock and stock
options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    Diluted earnings per share
    
    $
    (9.0
    )
    
    
    40.6
    
    
    $
    (0.22
    )
    
    $
    23.6
    
    
    
    40.9
    
    
    $
    0.58
  4. Balance Sheet Data
  March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Accounts receivable  trade
    
    $
    285.0
    
    
    $
    281.1Receivable from Kerr-McGee
    
    
    17.5
    
    
    
    17.5Receivable from the U.S. Department of Energy
    
    
    11.5
    
    
    
    11.0Receivable from insurers
    
    
    7.5
    
    
    
    7.4Other
    
    
    23.1
    
    
    
    21.3Accounts receivable, gross
    
    
    344.6
    
    
    
    338.3Allowance for doubtful accounts
    
    
    (13.1
    )
    
    
    (12.7
    )Accounts receivable, net
    
    $
    331.5
    
    
    $
    325.6
  March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Raw materials
    
    $
    89.6
    
    
    $
    67.5Work-in-progress
    
    
    14.3
    
    
    
    13.4Finished goods
    
    
    183.8
    
    
    
    174.8Materials and supplies
    
    
    71.1
    
    
    
    71.4Inventories, gross
    
    
    358.8
    
    
    
    327.1Allowance for obsolete inventories and supplies
    
    
    (7.5
    )
    
    
    (7.9
    )Inventories, net
    
    $
    351.3
    
    
    $
    319.2
 6




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March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Land
    
    $
    72.2
    
    
    $
    72.2Buildings
    
    
    160.0
    
    
    
    159.4Machinery and equipment
    
    
    1,775.0
    
    
    
    1,795.6Other
    
    
    111.1
    
    
    
    103.7Property, plant and equipment, gross
    
    
    2,118.3
    
    
    
    2,130.9Less accumulated depreciation
    
    
    (1,261.7
    )
    
    
    (1,266.3
    )Property, plant and equipment, net
    
    $
    856.6
    
    
    $
    864.6
  March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Receivable from the U.S. Department of Energy
    
    $
    16.5
    
    
    $
    15.9Investments in equity method investees
    
    
    21.8
    
    
    
    21.1Receivables from insurers
    
    
    17.6
    
    
    
    19.6Debt issuance costs, net
    
    
    10.7
    
    
    
    11.0Prepaid pension cost
    
    
    26.2
    
    
    
    25.3Intangible
Asset  Proprietary Technology(1)
    
    
    52.9
    
    
    
    52.6Other
    
    
    7.8
    
    
    
    7.7Total other long-term assets
    
    $
    153.5
    
    
    $
    153.2
 
 (1)
    
    Associated with the companys reportable pigment segment.  March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Employee-related costs and benefits
    
    $
    40.7
    
    
    $
    37.2Reserves for environmental remediation and restoration  current portion
    
    
    101.0
    
    
    
    95.3Sales rebates
    
    
    17.1
    
    
    
    24.7Other
    
    
    57.4
    
    
    
    54.8Total accrued liabilities
    
    $
    216.2
    
    
    $
    212.0
  March 31,
    
    
    December 31,2007
    
    
    2006(In millions)Reserve for uncertain tax positions
    
    $
    62.3
    
    
    $
    Reserve for income taxes payable
    
    
    
    
    
    
    45.5Pension and postretirement obligations
    
    
    169.1
    
    
    
    167.5Asset retirement obligations
    
    
    24.6
    
    
    
    23.6Reserve for workers compensation and general liability claims
    
    
    17.5
    
    
    
    18.8Other
    
    
    26.2
    
    
    
    22.5Total other long-term liabilities
    
    $
    299.7
    
    
    $
    277.9
 7




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5. Summarized Combined Financial Information of Affiliates
  Three Months EndedMarch 31,2007
    
    2006(In millions)Gross revenues
    
    $
    7.9
    
    
    $
    1.4Gross profit
    
    
    5.9
    
    
    
    0.6Income
(loss) before taxes
    
    
    4.2
    
    
    
    (1.2
    )Net income (loss)
    
    
    3.7
    
    
    
    (0.8
    )
 6. Long-Term Debt
   7. Comprehensive Income (Loss)
  Three Months EndedMarch 31,2007
    
    
    2006(In millions)Net income (loss)
    
    $
    (9.4
    )
    
    $
    20.6After tax changes in:Foreign currency translation adjustments
    
    
    3.3
    
    
    
    6.0Cash flow hedge activity:Unrealized gain (loss), net of taxes of $(0.6) and $0.3
    
    
    1.0
    
    
    
    (0.5
    )Reclassification adjustments, net of taxes of $(0.4) and $(0.3)
    
    
    0.8
    
    
    
    0.2Benefit plan activity:Amortization of net actuarial loss, net of taxes of $(0.4)
    
    
    0.9
    
    
    
    Amortization of net prior service cost, net of taxes of $(0.2)
    
    
    0.2
    
    
    
    Minimum pension liability adjustment
    
    
    
    
    
    
    (1.1
    )Total comprehensive income (loss)
    
    $
    (3.2
    )
    
    $
    25.2
 8




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8. Income Taxes
  Three Months EndedMarch 31,2007
    
    
    2006U.S. statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %Increases (decreases) resulting from Taxation of foreign operations
    
    
    (37.6
    )
    
    
    2.0State income taxes
    
    
    1.6
    
    
    
    1.0Interest on foreign tax contingency
    
    
    (0.7
    )
    
    
    0.6FIN 48 adjustment
    
    
    (5.7
    )
    
    
    Other  net
    
    
    2.8
    
    
    
    (1.7
    )Effective income tax rate
    
    
    (4.6
    )%
    
    
    36.9
    %
     9




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9. Discontinued Operations
  LitigationEnvironmental
    
    
    Provisions, LegalProvisions (1)
    
    
    and Other Costs (1)
    
    
    Total(In millions)Three months ended March 31, 2007:Total pretax loss
    
    $
    1.5
    
    
    $
    (0.9
    )
    
    $
    0.6Tax benefit
    
    
    
    
    
    
    
    
    
    
    (0.2
    )Total after tax loss
    
    
    
    
    
    
    
    
    
    $
    0.4Three months ended March 31, 2006:Total pretax loss
    
    $
    0.2
    
    
    $
    4.6
    
    
    $
    4.8Tax benefit
    
    
    
    
    
    
    
    
    
    
    (1.8
    )Total after tax loss
    
    
    
    
    
    
    
    
    
    $
    3.0
 
 (1)
    
    Legal and environmental costs are allocated to discontinued
operations on a specific identification basis. Other costs are
primarily comprised of insurance and ad valorem taxes. 10. Retirement Plans
  Retirement Plans
    
    
    Postretirement PlansThree Months Ended March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(In millions)Service cost
    
    $
    2.9
    
    
    $
    0.6
    
    
    $
    0.4
    
    
    $
    Interest cost
    
    
    7.0
    
    
    
    0.8
    
    
    
    2.1
    
    
    
    Expected return on plan assets
    
    
    (9.8
    )
    
    
    (0.8
    )
    
    
    
    
    
    
    Net amortizationPrior service cost (credit)
    
    
    0.7
    
    
    
    
    
    
    
    (0.3
    )
    
    
    Net actuarial loss
    
    
    0.9
    
    
    
    0.2
    
    
    
    0.4
    
    
    
    Sub-total net periodic cost
    
    
    1.7
    
    
    
    0.8
    
    
    
    2.6
    
    
    
    Allocated benefit plan expense from Kerr-McGee
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    2.6Total retirement expense
    
    $
    1.7
    
    
    $
    1.5
    
    
    $
    2.6
    
    
    $
    2.6
 11. Employee Stock-Based Compensation
  10




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January 2007AssumptionsGrant-date share price
    
    $
    15.19Exercise price
    
    $
    15.19Risk-free interest rate
    
    
    4.67
    %Expected dividend yield
    
    
    1.32
    %Expected volatility
    
    
    36
    %Expected life (years)
    
    
    6.4Per-unit fair value of options granted
    
    $
    5.89
   12. Contingencies
  Reserves forReserves for
    
    
    Environmental
    
    
    ReimbursementsLitigation
    
    
    Remediation (1)
    
    
    Receivable (2)(In millions)Balance at December 31, 2006
    
    $
    15.0
    
    
    $
    223.9
    
    
    $
    71.4Provisions/Accruals
    
    
    
    
    
    
    2.8
    
    
    
    1.1Payments/Settlements
    
    
    (3.7
    )
    
    
    (5.6
    )
    
    
    (1.9
    )Balance at March 31, 2007
    
    $
    11.3
    
    
    $
    221.1
    
    
    $
    70.6
 
 (1)
    
    Provisions for environmental remediation and restoration include $2.6
million related to the companys former forest products operations. These
charges are reflected in the Condensed Consolidated Statements of Operations
as a component of loss from discontinued operations (net of taxes).(2)
    
    Provisions for environmental remediation and restoration reimbursements
include $1.1 million related to the companys former thorium compounds
manufacturing operations, which are reflected in the Condensed Consolidated
Statements of Operations as a component of loss from discontinued operations
(net of taxes).  11




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
    
    Some sites are in the early stages of investigation, and other sites may be identified in
the future.
    
    Remediation activities vary significantly in duration, scope and cost from site to site
depending on the mix of unique site characteristics, applicable technologies and regulatory
agencies involved.
    
    Remediation requirements are difficult to predict at sites where remedial investigations
have not been completed or final decisions have not been made regarding remediation
requirements, technologies or other factors that bear on remediation costs.
    
    Environmental laws frequently impose joint and several liability on all potentially
responsible parties (PRPs), and it can be difficult to determine the number and financial
condition and possible defenses of PRPs and their respective shares of responsibility for
clean-up costs.
    
    Environmental laws and regulations, as well as enforcement policies and clean-up levels,
are continually changing, and the outcome of court proceedings, alternative dispute
resolution proceedings (including mediation) and discussions with regulatory agencies are
inherently uncertain.
    
    Unanticipated construction problems and weather conditions can hinder the completion of
environmental remediation.
    
    Some legal matters are in the early stages of investigation or proceeding or their
outcomes otherwise may be difficult to predict, and other legal matters may be identified in
the future.
    
    The inability to implement a planned engineering design or use planned technologies and
excavation or extraction methods may require revisions to the design of remediation
measures, which can delay remediation and increase costs.
    
    The identification of additional areas or volumes of contamination and changes in costs
of labor, equipment and technology generate corresponding changes in environmental
remediation costs.
   Environmental
 Henderson, Nevada
  12




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Financial Reserves 
 Litigation
 Insurance
  West Chicago, Illinois
  13




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Closed Facility
 Vicinity Areas
 Financial Reserves
 Government Reimbursement
  Ambrosia Lake, New Mexico
  14




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Financial Reserves
 Litigation
 Crescent, Oklahoma
  Financial Reserves
 New Jersey Wood-Treatment Site
  15




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Financial Reserves
 Reimbursement
 Sauget, Illinois
  Financial Reserves
 Cleveland, Oklahoma
  Financial Reserves
 Cushing, Oklahoma
     16




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Financial Reserves
 Jacksonville, Florida
  Financial Reserves
 Columbus, Mississippi
  Financial Reserves
 Other Sites
  Master Separation Agreement
   17




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Litigation and Claims
 Western Fertilizer Contract
  Birmingham, Alabama
  Forest Products Litigation
   18




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Financial Reserves
 Savannah Plant
  Other Matters
  13. Commitments
   19




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##### Table of Contents



14. Condensed Consolidating Financial Information
    Condensed Consolidating Statements of Operations for the Three Months Ended March 31, 2007
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)Net sales
    
    $
    
    
    
    $
    
    
    
    $
    174.1
    
    
    $
    201.0
    
    
    $
    (36.0
    )
    
    $
    339.1Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    150.8
    
    
    
    184.0
    
    
    
    (33.5
    )
    
    
    301.3Gross margin
    
    
    
    
    
    
    
    
    
    
    23.3
    
    
    
    17.0
    
    
    
    (2.5
    )
    
    
    37.8Selling, general and
administrative expenses
    
    
    1.1
    
    
    
    0.1
    
    
    
    18.0
    
    
    
    18.1
    
    
    
    (1.7
    )
    
    
    35.6Provision for environmental
remediation and restoration,
net of reimbursements
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2(1.1
    )
    
    
    (0.1
    )
    
    
    5.1
    
    
    
    (1.1
    )
    
    
    (0.8
    )
    
    
    2.0Interest and debt expense
    
    
    
    
    
    
    (12.6
    )
    
    
    0.4
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (12.3
    )Other income, net
    
    
    (9.0
    )
    
    
    2.5
    
    
    
    (0.1
    )
    
    
    (0.9
    )
    
    
    9.2
    
    
    
    1.7Income (loss) from continuing
operations before income
taxes
    
    
    (10.1
    )
    
    
    (10.2
    )
    
    
    5.4
    
    
    
    (2.1
    )
    
    
    8.4
    
    
    
    (8.6
    )Income tax benefit (provision)
    
    
    0.6
    
    
    
    1.8
    
    
    
    (0.2
    )
    
    
    (2.6
    )
    
    
    
    
    
    
    (0.4
    )Income (loss) from continuing
operations
    
    
    (9.5
    )
    
    
    (8.4
    )
    
    
    5.2
    
    
    
    (4.7
    )
    
    
    8.4
    
    
    
    (9.0
    )Loss from discontinued
operations, net of taxes
    
    
    
    
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Net income (loss)
    
    $
    (9.5
    )
    
    $
    (8.9
    )
    
    $
    5.3
    
    
    $
    (4.7
    )
    
    $
    8.4
    
    
    $
    (9.4
    )
 20




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##### Table of Contents



Condensed Consolidating Statements of Operations for the Three Months Ended March 31, 2006
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)Net sales
    
    $
    
    
    
    $
    
    
    
    $
    182.7
    
    
    $
    174.7
    
    
    $
    (18.6
    )
    
    $
    338.8Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    150.1
    
    
    
    143.8
    
    
    
    (17.9
    )
    
    
    276.0Gross margin
    
    
    
    
    
    
    
    
    
    
    32.6
    
    
    
    30.9
    
    
    
    (0.7
    )
    
    
    62.8Selling, general and
administrative expenses
    
    
    0.5
    
    
    
    0.2
    
    
    
    21.6
    
    
    
    17.4
    
    
    
    (1.4
    )
    
    
    38.3Provision for environmental
remediation and restoration,
net of reimbursements
    
    
    
    
    
    
    
    
    
    
    (20.5
    )
    
    
    
    
    
    
    
    
    
    
    (20.5
    )(0.5
    )
    
    
    (0.2
    )
    
    
    31.5
    
    
    
    13.5
    
    
    
    0.7
    
    
    
    45.0Interest and debt expense
    
    
    
    
    
    
    (12.5
    )
    
    
    0.2
    
    
    
    0.3
    
    
    
    
    
    
    
    (12.0
    )Other income, net
    
    
    20.9
    
    
    
    31.3
    
    
    
    3.2
    
    
    
    3.4
    
    
    
    (54.4
    )
    
    
    4.4Income (loss) from continuing
operations before income
taxes
    
    
    20.4
    
    
    
    18.6
    
    
    
    34.9
    
    
    
    17.2
    
    
    
    (53.7
    )
    
    
    37.4Income tax benefit (provision)
    
    
    0.2
    
    
    
    2.4
    
    
    
    (9.7
    )
    
    
    (6.7
    )
    
    
    
    
    
    
    (13.8
    )Income (loss) from continuing
operations
    
    
    20.6
    
    
    
    21.0
    
    
    
    25.2
    
    
    
    10.5
    
    
    
    (53.7
    )
    
    
    23.6Loss from discontinued
operations, net of taxes
    
    
    
    
    
    
    (0.1
    )
    
    
    (2.9
    )
    
    
    
    
    
    
    
    
    
    
    (3.0
    )Net income (loss)
    
    $
    20.6
    
    
    $
    20.9
    
    
    $
    22.3
    
    
    $
    10.5
    
    
    $
    (53.7
    )
    
    $
    20.6
 21




---



##### Table of Contents



Condensed Consolidating Balance Sheets as of March 31, 2007
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    16.9
    
    
    $
    27.6
    
    
    $
    
    
    
    $
    44.5Intercompany receivables
    
    
    
    
    
    
    
    
    
    
    18.9
    
    
    
    9.3
    
    
    
    (28.2
    )
    
    
    Accounts receivable, net
    
    
    0.4
    
    
    
    0.2
    
    
    
    151.2
    
    
    
    179.7
    
    
    
    
    
    
    
    331.5Inventories, net
    
    
    
    
    
    
    
    
    
    
    226.1
    
    
    
    127.4
    
    
    
    (2.2
    )
    
    
    351.3Prepaid and other assets
    
    
    0.8
    
    
    
    
    
    
    
    3.8
    
    
    
    15.5
    
    
    
    
    
    
    
    20.1Income tax receivable
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    8.6
    
    
    
    
    
    
    
    8.9Deferred income taxes
    
    
    
    
    
    
    15.9
    
    
    
    30.3
    
    
    
    1.5
    
    
    
    (12.7
    )
    
    
    35.0Total current assets
    
    
    1.2
    
    
    
    16.1
    
    
    
    447.5
    
    
    
    369.6
    
    
    
    (43.1
    )
    
    
    791.3Property, plant and equipment, net
    
    
    
    
    
    
    9.8
    
    
    
    437.9
    
    
    
    408.9
    
    
    
    
    
    
    
    856.6Investments in subsidiaries
    
    
    2,222.5
    
    
    
    1,002.9
    
    
    
    183.7
    
    
    
    
    
    
    
    (3,409.1
    )
    
    
    Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.6
    
    
    
    
    
    
    
    11.6Other long-term assets
    
    
    82.0
    
    
    
    11.2
    
    
    
    87.0
    
    
    
    24.6
    
    
    
    (51.3
    )
    
    
    153.5Total Assets
    
    $
    2,305.7
    
    
    $
    1,040.0
    
    
    $
    1,156.1
    
    
    $
    814.7
    
    
    $
    (3,503.5
    )
    
    $
    1,813.0LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Intercompany borrowings
    
    $
    535.5
    
    
    $
    
    
    
    $
    46.4
    
    
    $
    240.0
    
    
    $
    (821.9
    )
    
    $
    Accounts payable
    
    
    
    
    
    
    1.8
    
    
    
    65.5
    
    
    
    115.1
    
    
    
    
    
    
    
    182.4Accrued liabilities
    
    
    15.3
    
    
    
    22.4
    
    
    
    135.4
    
    
    
    37.1
    
    
    
    6.0
    
    
    
    216.2Long-term debt due within one year
    
    
    
    
    
    
    13.0
    
    
    
    
    
    
    
    1.7
    
    
    
    
    
    
    
    14.7Income taxes payable
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    4.0
    
    
    
    
    
    
    
    4.4Total current liabilities
    
    
    550.8
    
    
    
    37.2
    
    
    
    247.7
    
    
    
    397.9
    
    
    
    (815.9
    )
    
    
    417.7Long-term liabilitiesDeferred income taxes
    
    
    
    
    
    
    
    
    
    
    55.6
    
    
    
    25.0
    
    
    
    (64.0
    )
    
    
    16.6Environmental remediation and/or
restoration
    
    
    
    
    
    
    2.3
    
    
    
    117.8
    
    
    
    
    
    
    
    
    
    
    
    120.1Long-term debt
    
    
    
    
    
    
    526.5
    
    
    
    
    
    
    
    7.4
    
    
    
    
    
    
    
    533.9Other long-term liabilities
    
    
    147.5
    
    
    
    6.9
    
    
    
    43.0
    
    
    
    102.1
    
    
    
    0.2
    
    
    
    299.7Total long-term liabilities
    
    
    147.5
    
    
    
    535.7
    
    
    
    216.4
    
    
    
    134.5
    
    
    
    (63.8
    )
    
    
    970.3Total stockholders equity
    
    
    1,607.4
    
    
    
    467.1
    
    
    
    692.0
    
    
    
    282.3
    
    
    
    (2,623.8
    )
    
    
    425.0Total liabilities and
stockholders equity
    
    $
    2,305.7
    
    
    $
    1,040.0
    
    
    $
    1,156.1
    
    
    $
    814.7
    
    
    $
    (3,503.5
    )
    
    $
    1,813.0
 22




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##### Table of Contents



Condensed Consolidating Balance Sheets as of December 31, 2006
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    24.4
    
    
    $
    52.2
    
    
    $
    
    
    
    $
    76.6Intercompany receivables
    
    
    
    
    
    
    
    
    
    
    41.3
    
    
    
    11.6
    
    
    
    (52.9
    )
    
    
    Accounts receivable, net
    
    
    0.5
    
    
    
    0.2
    
    
    
    152.0
    
    
    
    174.3
    
    
    
    (1.4
    )
    
    
    325.6Inventories, net
    
    
    
    
    
    
    
    
    
    
    201.8
    
    
    
    118.9
    
    
    
    (1.5
    )
    
    
    319.2Prepaid and other assets
    
    
    1.1
    
    
    
    0.1
    
    
    
    3.3
    
    
    
    10.7
    
    
    
    
    
    
    
    15.2Income tax receivable
    
    
    
    
    
    
    
    
    
    
    5.3
    
    
    
    8.6
    
    
    
    
    
    
    
    13.9Deferred income taxes
    
    
    
    
    
    
    12.3
    
    
    
    38.5
    
    
    
    1.9
    
    
    
    (9.1
    )
    
    
    43.6Total current assets
    
    
    1.6
    
    
    
    12.6
    
    
    
    466.6
    
    
    
    378.2
    
    
    
    (64.9
    )
    
    
    794.1Property, plant and equipment, net
    
    
    
    
    
    
    9.8
    
    
    
    446.7
    
    
    
    408.1
    
    
    
    
    
    
    
    864.6Investments in subsidiaries
    
    
    2,231.9
    
    
    
    1,007.8
    
    
    
    176.2
    
    
    
    
    
    
    
    (3,415.9
    )
    
    
    Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.5
    
    
    
    
    
    
    
    11.5Other long-term assets
    
    
    81.2
    
    
    
    11.5
    
    
    
    87.7
    
    
    
    24.4
    
    
    
    (51.6
    )
    
    
    153.2Total assets
    
    $
    2,314.7
    
    
    $
    1,041.7
    
    
    $
    1,177.2
    
    
    $
    822.2
    
    
    $
    (3,532.4
    )
    
    $
    1,823.4LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Intercompany borrowings
    
    $
    535.5
    
    
    $
    
    
    
    $
    51.4
    
    
    $
    249.7
    
    
    $
    (836.6
    )
    
    $
    Accounts payable
    
    
    
    
    
    
    7.2
    
    
    
    74.0
    
    
    
    103.8
    
    
    
    (1.4
    )
    
    
    183.6Accrued liabilities and other
    
    
    15.4
    
    
    
    14.0
    
    
    
    135.9
    
    
    
    40.7
    
    
    
    6.0
    
    
    
    212.0Long-term debt due within one year
    
    
    
    
    
    
    13.0
    
    
    
    
    
    
    
    1.7
    
    
    
    
    
    
    
    14.7Income taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.6
    
    
    
    
    
    
    
    1.6Total current liabilities
    
    
    550.9
    
    
    
    34.2
    
    
    
    261.3
    
    
    
    397.5
    
    
    
    (832.0
    )
    
    
    411.9Long-term liabilitiesDeferred income taxes
    
    
    
    
    
    
    
    
    
    
    62.0
    
    
    
    32.3
    
    
    
    (60.7
    )
    
    
    33.6Environmental remediation and/or
restoration
    
    
    
    
    
    
    2.4
    
    
    
    126.2
    
    
    
    
    
    
    
    
    
    
    
    128.6Long-term debt
    
    
    
    
    
    
    526.9
    
    
    
    
    
    
    
    7.2
    
    
    
    
    
    
    
    534.1Other long-term liabilities
    
    
    145.7
    
    
    
    8.1
    
    
    
    42.3
    
    
    
    81.6
    
    
    
    0.2
    
    
    
    277.9Total long-term liabilities
    
    
    145.7
    
    
    
    537.4
    
    
    
    230.5
    
    
    
    121.1
    
    
    
    (60.5
    )
    
    
    974.2Total stockholders equity
    
    
    1,618.1
    
    
    
    470.1
    
    
    
    685.4
    
    
    
    303.6
    
    
    
    (2,639.9
    )
    
    
    437.3Total liabilities and
stockholders equity
    
    $
    2,314.7
    
    
    $
    1,041.7
    
    
    $
    1,177.2
    
    
    $
    822.2
    
    
    $
    (3,532.4
    )
    
    $
    1,823.4
 23




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##### Table of Contents



Condensed and Consolidating Statements of Cash Flows for the Three Months Ended March 31, 2007
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)Cash flows from operating activitiesNet income (loss)
    
    $
    (9.5
    )
    
    $
    (8.9
    )
    
    $
    5.3
    
    
    $
    (4.7
    )
    
    $
    8.4
    
    
    $
    (9.4
    )Adjustments to reconcile net cash flows
from operating 
activities Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    14.6
    
    
    
    13.3
    
    
    
    
    
    
    
    27.9Deferred income taxes
    
    
    (0.6
    )
    
    
    (2.0
    )
    
    
    0.3
    
    
    
    (1.5
    )
    
    
    
    
    
    
    (3.8
    )Equity in earnings of subsidiaries
    
    
    9.0
    
    
    
    5.1
    
    
    
    (4.9
    )
    
    
    
    
    
    
    (9.2
    )
    
    
    Provision for environmental remediation
and restoration, net of reimbursements
    
    
    
    
    
    
    
    
    
    
    1.7
    
    
    
    
    
    
    
    
    
    
    
    1.7Other noncash items affecting net
income (loss)
    
    
    0.3
    
    
    
    (0.4
    )
    
    
    6.5
    
    
    
    2.2
    
    
    
    
    
    
    
    8.6Changes in assets and liabilities
    
    
    0.2
    
    
    
    7.8
    
    
    
    (43.4
    )
    
    
    (4.5
    )
    
    
    
    
    
    
    (39.9
    )Net cash flows from operating
activities
    
    
    (0.6
    )
    
    
    1.6
    
    
    
    (19.9
    )
    
    
    4.8
    
    
    
    (0.8
    )
    
    
    (14.9
    )Cash flows from investing activitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (5.1
    )
    
    
    (9.2
    )
    
    
    
    
    
    
    (14.3
    )Net cash flows from investing
activities
    
    
    
    
    
    
    
    
    
    
    (5.1
    )
    
    
    (9.2
    )
    
    
    
    
    
    
    (14.3
    )Cash flows from financing activitiesStock option
exercises
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2Repayment of debt
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Debt issuance costs
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Dividends paid
    
    
    (2.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.1
    )Net transfers with affiliates
    
    
    1.5
    
    
    
    (0.8
    )
    
    
    17.5
    
    
    
    (19.0
    )
    
    
    0.8
    
    
    
    Net cash flows from financing
activities
    
    
    0.6
    
    
    
    (1.6
    )
    
    
    17.5
    
    
    
    (19.0
    )
    
    
    0.8
    
    
    
    (1.7
    )Effects of exchange rate changes on cash
and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.2
    )
    
    
    
    
    
    
    (1.2
    )Net change in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (7.5
    )
    
    
    (24.6
    )
    
    
    
    
    
    
    (32.1
    )Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    
    
    
    
    24.4
    
    
    
    52.2
    
    
    
    
    
    
    
    76.6Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    
    
    
    $
    16.9
    
    
    $
    27.6
    
    
    $
    
    
    
    $
    44.5
 24




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##### Table of Contents



Condensed and Consolidating Statements of Cash Flows for the Three Months Ended March 31, 2006
 Tronox
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorIncorporated
    
    
    Issuers
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In millions)Cash flows from operating
activitiesNet income
    
    $
    20.6
    
    
    $
    20.9
    
    
    $
    22.4
    
    
    $
    10.5
    
    
    $
    (53.8
    )
    
    $
    20.6Adjustments to reconcile net cash
flows from operating 
activities Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    14.4
    
    
    
    10.1
    
    
    
    
    
    
    
    24.5Deferred income taxes
    
    
    
    
    
    
    1.0
    
    
    
    3.5
    
    
    
    2.6
    
    
    
    
    
    
    
    7.1Equity in earnings of subsidiaries
    
    
    (20.9
    )
    
    
    (25.2
    )
    
    
    (8.3
    )
    
    
    
    
    
    
    54.4
    
    
    
    Provision for environmental
remediation and restoration, net
of reimbursements
    
    
    
    
    
    
    
    
    
    
    (20.2
    )
    
    
    
    
    
    
    
    
    
    
    (20.2
    )Other noncash items affecting net
income
    
    
    
    
    
    
    0.7
    
    
    
    14.2
    
    
    
    0.6
    
    
    
    
    
    
    
    15.5Changes in assets and liabilities
    
    
    (0.2
    )
    
    
    15.0
    
    
    
    (14.3
    )
    
    
    (33.6
    )
    
    
    
    
    
    
    (33.1
    )Net cash flows from operating
activities
    
    
    (0.5
    )
    
    
    12.4
    
    
    
    11.7
    
    
    
    (9.8
    )
    
    
    0.6
    
    
    
    14.4Cash flows from investing activitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (9.1
    )
    
    
    (12.7
    )
    
    
    
    
    
    
    (21.8
    )Other investing activities
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Net cash flows from investing
activities
    
    
    
    
    
    
    
    
    
    
    (9.0
    )
    
    
    (12.7
    )
    
    
    
    
    
    
    (21.7
    )Cash flows from financing activitiesRepayment of debt
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Debt issuance costs
    
    
    
    
    
    
    (1.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.2
    )Net transfers with affiliates
    
    
    0.5
    
    
    
    (10.7
    )
    
    
    (10.7
    )
    
    
    21.5
    
    
    
    (0.6
    )
    
    
    Net cash flows from financing
activities
    
    
    0.5
    
    
    
    (12.4
    )
    
    
    (10.7
    )
    
    
    21.5
    
    
    
    (0.6
    )
    
    
    (1.7
    )Effects of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.7
    )
    
    
    
    
    
    
    (2.7
    )Net change in cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    (8.0
    )
    
    
    (3.7
    )
    
    
    
    
    
    
    (11.7
    )Cash and cash equivalents at
beginning of period
    
    
    
    
    
    
    
    
    
    
    23.8
    
    
    
    45.2
    
    
    
    
    
    
    
    69.0Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    
    
    
    $
    15.8
    
    
    $
    41.5
    
    
    $
    
    
    
    $
    57.3
 25




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##### Table of Contents



15. Reporting by Business Segment and Geographic Locations
 2
 Three Months EndedMarch 31,2007
    
    
    2006(In millions)Net salesPigment
    
    $
    315.4
    
    
    $
    311.6Electrolytic and other chemical products
    
    
    23.7
    
    
    
    27.2Total net sales
    
    $
    339.1
    
    
    $
    338.8Operating profit (loss)Pigment
    
    $
    7.3
    
    
    $
    25.7Electrolytic
and other chemical products (1)
    
    
    (0.8
    )
    
    
    21.86.5
    
    
    
    47.5Corporate and nonoperating sites
    
    
    (4.5
    )
    
    
    (2.5
    )Total operating profit
    
    
    2.0
    
    
    
    45.0Interest and debt expense
    
    
    (12.3
    )
    
    
    (12.0
    )Other
income, net(2)
    
    
    1.7
    
    
    
    4.4Income tax provision
    
    
    (0.4
    )
    
    
    (13.8
    )Income (loss) from continuing operations
    
    $
    (9.0
    )
    
    $
    23.6
 
 (1)
    
    The three months ended March 31, 2006, includes $20.5 million of reimbursements related to ammonium perchlorate at
the companys Henderson facility.(2)
    
    The three months ended March 31, 2007, includes equity in net earnings of equity method investees of $0.7 million. 16. Related Party Transactions
 2 2
 26




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
 2
    General Factors Affecting the Results of Operations
  2
 
    
    We, along with our 50% joint venture partner, a subsidiary of Exxaro Resources Limited,
have begun the process to increase annual production capacity at the Tiwest TiO2
plant in Kwinana, Western Australia.
    
    We are exploring opportunities to optimize the value of our sulfate TiO2
process plant located in Uerdingen, Germany, including a possible divestiture of the
facility. An offering memorandum has been sent to interested parties and indicative offers
will be submitted soon.
 Asset Impairment.
 27




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##### Table of Contents



Results of Operations
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
  Three Months EndedMarch 31,2007
    
    
    2006(In millions)Net salesPigment
    
    $
    315.4
    
    
    $
    311.6Electrolytic and other chemical products
    
    
    23.7
    
    
    
    27.2Total
    
    $
    339.1
    
    
    $
    338.8Operating profit (loss)Pigment
    
    $
    7.3
    
    
    $
    25.7Electrolytic and other chemical products
    
    
    (0.8
    )
    
    
    21.8Subtotal
    
    
    6.5
    
    
    
    47.5Corporate and nonoperating sites
    
    
    (4.5
    )
    
    
    (2.5
    )Total operating profit
    
    
    2.0
    
    
    
    45.0Interest and debt expense
    
    
    (12.3
    )
    
    
    (12.0
    )Other
income, net
    
    
    1.7
    
    
    
    4.4Income tax provision
    
    
    (0.4
    )
    
    
    (13.8
    )Income (loss) from continuing operations
    
    
    (9.0
    )
    
    
    23.6Discontinued operations, net of taxes
    
    
    (0.4
    )
    
    
    (3.0
    )Net income (loss)
    
    $
    (9.4
    )
    
    $
    20.6
      28




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##### Table of Contents



29




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##### Table of Contents



Liquidity and Capital Resources
 General
      Cash Flows from Operating Activities.
 Cash Flows from Investing Activities.
   30




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##### Table of Contents



Cash Flows from Financing Activities.
 Credit Agreement.
    Note Payable due July 2014.
 Off-Balance Sheet Arrangements
  Outlook
 2 2
 2
 31




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##### Table of Contents



New Accounting Pronouncements
  Fair Value Measurements
  
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
  U.S. Natural gas purchasesAverageContract Price% hedged
    
    $/MMBtuQ2, 2007
    
    
    53
    %
    
    $
    7.53Q3, 2007
    
    
    32
    %
    
    $
    7.61Q4, 2007
    
    
    31
    %
    
    $
    8.40
 
 Item 4. Controls and Procedures
   32




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##### Table of Contents



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  33




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Savannah Plant
  Forest Products
    
 Item 1A . Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  34




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    Amended and restated Certificate of Incorporation of Tronox
Incorporated (incorporated by reference to Exhibit 3.1 of the
Registrants current report on Form 8-K, filed with the Securities
and Exchange Commission on December 7, 2005).3.2
    
    Amended and Restated Bylaws of Tronox Incorporated (incorporated by
reference to Exhibit 3.2 of the Registrants current report on Form
8-K, filed with the Securities and Exchange Commission on December
7, 2005).10.1*
    
    Tronox Incorporated Defined Contribution Restoration Plan10.2*
    
    Tronox Incorporated Defined Benefit Restoration Plan31.1*
    
    Certification Pursuant to 15 U.S.C. Section 7241, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification Pursuant to 15 U.S.C. Section 7241, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Each document marked with an asterisk is filed herewith. 35




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##### Table of Contents



SIGNATURES
  Tronox IncorporatedBy:
    
    /s/ Thomas W. AdamsName:
    
    Thomas W. AdamsTitle:
    
    Chief Executive OfficerBy:
    
    /s/ Mary MikkelsonName:
    
    Mary MikkelsonTitle:
    
    Senior Vice President and Chief
Financial Officer (Principal Financial
Officer)By:
    
    /s/ David J. KlvacName:
    
    David J. KlvacTitle:
    
    Vice President and Controller
(Principal Accounting Officer)
 36