Good day, ladies and gentlemen, and welcome to the Tronox Limited Q4 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Brennan Arndt, Senior Vice President of Investor Relations. You may begin.

Thank you, Jiji, and welcome everyone to Tronox Limited's fourth quarter 2018 conference call. On our call today are Jeff Quinn, President and Chief Executive Officer; Jean-François Turgeon, Chief Operating Officer; John Romano, Chief Commercial Officer; and Tim Carlson, Chief Financial Officer. We will be using slides as we move through today's call. Those of you listening on -- by Internet broadcast through our website should already have them. For those listening by telephone, if you haven't already done so you can access them on our website at tronox.com. Moving to Slide 2, is a reminder that the comments made on this call as well as the information provided in our presentation and on our Web site include certain statements that are forward-looking and subject to various risks and uncertainties including but not limited to the specific factors summarized in our SEC filings, including those under the heading entitled Risk Factors in our annual report on Form 10-K for the year ended December 31, 2018, which will be filed later today. This information represents our best judgment based on today's information. However, actual results may vary based on these risks and uncertainties. The Company undertakes no obligation to update or revise any forward-looking statements. Also during the conference call, we will refer to certain non-U.S. GAAP financial terms that we use in the management of our business and we believe are useful to investors evaluating the Company's performance. These include EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per diluted share and free cash flow. Reconciliations to their nearest U.S. GAAP terms are provided in our earnings release and the appendix of the slide deck. Moving to Slide 3, it's now my pleasure to turn the call over to Jeff Quinn. Jeff?

Thanks, Brennan. Good morning and thanks for being with us this morning. In addition to delivering strong operating and financial performance in the fourth quarter led by our feedstock and co-products businesses. We advanced a number of our strategic initiatives. I would like to start this morning by talking about a few of those strategic developments, starting with the Cristal acquisition. As you saw in the press release we issued two weeks ago, the FTC Tronox and Cristal filed a joint motion with the FTC commissioners to delay the schedule for the following [indiscernible] brief in the administrative Part 3 matter. That filing was to allow discussions concerning appropriate remedial transaction to progress and obviously reflected the progress that had been made in that regard. That is discussion surrounding the proposed divestiture of Cristal's North American TiO2 business, including its two-plant Ashtabula Ohio TiO2 complex to INEOS Enterprises for $700 million. I’m pleased to report that we have submitted definitive documents to the FTC staff that both Tronox and INEOS have indicated they’re prepared to execute. These documents reflect negotiated resolutions between Tronox and INEOS of all issues raised by the FTC staff during our discussions. The FTC staff is now completing its internal review of the documents to confirm that the proposed definitive documents addresses their concerns regarding the transaction and to ensure that the divested business will be a viable competitor. Should the FTC staff and the Bureau of Competition recommend the remedy transaction, the next step in the process will be negotiation of a proposed consent decree to withdraw the matter from Part 3 adjudication and the submission of the proposed consent decree and the remedial transaction to the FTC commissioners for consideration. If the commissioners approve the remedy transaction by a majority vote, we would then…

Thanks, Jeff. Moving to Slide 5, I will start with a look at our revenue performance in the fourth quarter compared to the year-ago quarter. Revenue of $429 million was 8% lower than last year's fourth quarter, as higher selling prices for zircon, CP slag and pig iron were more than offset by lower pigment sales volumes and the absence of the revenue from the electrolytic business that we divested in September of 2018. Excluding the $14 million of electrolytic revenue booked in the year-ago quarter, revenue declined by 5%. Pigment sales of $263 million compared to $360 million in the year-ago quarter. Selling prices were up 1% on local currency basis, a level on U.S dollar basis. The translation of euro to the U.S dollar was a $2 million headwind on revenue in the fourth quarter. Sales volumes were 16% lower than the record fourth quarter sales volumes we reported last year, as a result of continued destocking by customers in certain sales channels in Europe and Asia. Titanium feedstock and co-products sales of $166 million increased 24%, driven by higher selling prices for zircon, CP slag and pig iron, as well as higher sales volumes for CP slag. Zircon delivered a strong performance in the quarter with sales of $82 million, up 21% from the year-ago quarter driven by 28% higher selling prices that were partially offset by 5% lower sales volume. As we discussed last quarter, a significant portion of our zircon is delivered in large shipments via ocean freight, with each shipment representing significant revenue and profits. The shipments are periodic and their timing could be subject to port congestion and weather. Given this variability in shipment volumes, zircon is not a product that lends itself well to quarter-to-quarter predictability, but its better suited to track…

Thanks, JF. Moving to Slide 8, and beginning with our balance sheet. On December 31, 2018 debt was $3.16 billion and debt net of cash and cash equivalents was $1.47 billion, including $662 million of cash restricted for the Cristal transaction. Liquidity was $1.95 billion comprised of cash and cash equivalents of $1.7 billion, including the $662 million of restricted cash and $249 million available under revolving credit agreements. Our blended cost of debt was 5.78% in the fourth quarter and on December 31, 2018, 34% of our total indebtedness was set at a fixed rate. As Jeff mentioned, we’ve taken the first step in executing the terms of the Mineral Sands completion agreement that facilitate Exxaro's quarterly exit of its ownership in Tronox. In our 2012 merger transaction with Exxaro's Mineral Sands business, Exxaro obtained a 38.5% position in Tronox, a 26% ownership in our two South African subsidiaries, and a 26% ownership of a U.K legal structure that held Exxaro intercompany debt prior to the transaction. On February 15, we took the first step and the series of transaction is contemplated in the agreement by purchasing the U.K structure for $148 million which was equivalent to 26% of the book value of the intercompany loans held by the U.K structure. Completing this step has several benefits. First, it removes the restrictions on our South African cash balances that were previously trapped and now that cash can be used for general corporate purposes. Second, we are able to eliminate $160 million of intercompany hedges and intercompany balances between South Africa and our Hamilton and Baltic [ph] facilities. Third, we will be able to eliminate five U.K statutory entities, which will save administrative time and compliance costs, and forth, it will facilitate a better overall capital structure and free up…

Thanks, Tim. As you can see, we got a lot going on. It's a challenging and dynamic con for us. We have a number of important initiative -- initiatives that are underway that we believe will create significant shareholder value as we go forward. But I hope it's clear and I think our results show -- our business continues to run well and our team is not distracted by all that's going on, actually we're energized by it. Over the last year, we strengthened our team, we’ve improved the effectiveness of the team, our communication [indiscernible] team. We are focused on locked in and we are excited about the future of this company, but we realize the future is ours to deliver and it's up to us and so we’re very focused in that regard. The transaction with Cristal dominates much of the focus of many of our investors and a lot of our time. Now it's been a long road. It's -- like many of you, we suffer from guilt fatigue from time-to-time. We are in a home stretch and we think we’re almost there and we look forward to continue to work constructively with the FTC to get that done. The last few months have been a bit of a detour from where we thought we were when we spoke to you after our third quarter call. But that detour has brought us sort of back to the path of progress and I think the recent developments I discussed earlier reflect we are back on track for getting this done. We should not let the delay and the frustration and occasional guilt fatigue to manage the importance of this transaction. Closing the transaction will still be even with selling Ashtabula, a game changing transformational moment for our company…

[Operator Instructions] And our first question is from John McNulty from BMO Capital Markets. Your line is now open.

Hi. This is Colton on for John. On your commentary about building inventory for stronger demand later in the year, can you give us a little more color on this? Also you reported inventories don't look like they’ve moved so much. So how should we think about all of this?

Yes, this is John Romano. It's not unusual in the fourth quarter and the first quarter of every year for us to build the inventory. I mean, it's typically somewhat of a seasonal business and that first quarter and the fourth quarter we will build inventory, in the second and third we will sell more than we produce. So that's a normal event for us. So I hope that answers the question about the inventory.

Yes, that’s helpful. And then also just kind of looking at pricing throughout 2019, can you kind of walk us through what your expectations are balancing your pricing stabilization initiatives along with the finishing of the destocking by midyear?

Yes, look it's not -- we don’t typically provide forward guidance on pricing. What I can say about the margin stability initiatives as we're making good progress in that area. Obviously, as we close the transaction and bring the combined business together, we’re going to have a lot of opportunities to extend that process. So that will escalate after the close, but I can't provide you a lot of additional information on pricing at this stage.

All right. Thanks for your time.

Thank you. Our next question is from Jim Sheehan from SunTrust. Your line is now open.

Good morning. This is [indiscernible] for Jim. On your TiO2 price stabilization, in order to pursue that, are you securing longer-term contracts and have you had to walk away from any volumes in order to secure more stable prices?

Yes, this is John Romano again. So the answer is yes. We are securing longer-term contracts -- kind of exchange for that margin stability. All of them are not necessarily exactly the same, so we are working with customers that’s come up with what we believe are mutually beneficial agreements that help us and customers manage their business in a more stable manner and allow us to reinvest in the business throughout the cycle.

Okay. Thanks. And if the Cristal deal closes as you expect, do you expect that you will have to pay the full amount of the break fee that was in your memorandum of understanding with Venator?

I think the focus right now is on getting done the things that have to happen before that that’s a relevant issue. In terms of closing the transaction -- of the Cristal transaction and closing the divestiture of 8120. And after we do that, then -- that the issue of the break fee becomes relevant.

Thank you.

Thank you. Our next question is from Jeff Zekauskas from J.P. Morgan. Your line is now open.

Thanks very much. How much EBITDA plus the 26% ownership in the South African subsidiaries by Exxaro represent?

The South African business generates probably about 40% to 50% of our overall company EBITDA. Probably closer to 40%.

Okay. And in terms of the possibility of buying the Exxaro shares in Tronox, how much balance sheet flexibility do you have, that is if you actually do complete the transaction with Exxaro, how much more capital do you have at your disposal, or how willing are you to leverage your balance sheet in order to purchase those shares?

I think, Jeff, one of the things we will do there is, look at that opportunity along with the other priorities we have, and obviously those sources of cash flow in, we have including the divestiture proceeds. But it really is a matter of balancing the deleveraging -- reducing debt, the investment in our business to drive further shareholder value, and then returning capital to the shareholders through a share purchase and most obviously -- direct with Exxaro. So we will look at those and combine those things and make that judgment at the time those opportunities arise, but as you know the combined company will have significant ability to generate free cash flow and we intend to put that to work to create value for our shareholders.

Do you have access to -- I don’t know $400 million in capital to purchase that if you so choose to purchase it?

The answer is yes.

Yes, we believe we do and if we chose to deploy capital in that way, we'd have that availability.

And then, lastly, there was -- have you gained any business recently in titanium dioxide for plastics applications that you didn’t have previously?

Look, if you look at the fourth quarter results, our volumes as we mentioned were down 15%.

Yes.

We are not actively, I would say, going out attracting new volume other than [indiscernible] stability initiatives where we got some opportunities as we move forward. So, I can't speak specifically to anyone particular segment at this stage. Jean-François Turgeon: But that is a segment that going forward with the combined company that we believe there are opportunities in because, we are seeing Cristal's business in that segment, historically has been a bit stronger than ours.

We will have the ability to supply high-quality grades in a much stronger capacity they were previously, because the [indiscernible] capability that will help that.

Okay, great. Thank you so much.

Thank you. Our next question is from Frank Mitsch from Fermium Research. Your line is now open.

Hey, good morning, folks. I appreciate the comment, Jeff, about the pro forma EBITDA coming in as expected between $900 million and $950 million. Is there anymore granularity that you can provide on Cristal's operations and pricing relative to yours in the fourth quarter. And given the delay in closing the transaction, I'm sure you guys have continued to discuss, is there any update in terms of the expected synergies ex Ashtabula that you have with Cristal?

Yes. Frank, obviously one of the things that we will be doing over the next month is, will be working to complete sort of our bring down due diligence from refreshing all that and site visits and whatnot. At this point, our view of synergies is unchanged and we believe that the synergies are significant. And we believe that our integration plans are well-designed to go after those and we look forward to -- we are together in May, which will be about 60 days after the closing we hope. We look really forward to updating everyone on that on where we stand and a refresh of that. But as [indiscernible] view is unchanged. With respect to any granularity on pricing, no, we really don't have that to provide. Frankly as you know, we continue to compete vigorously with each other and we really don't -- we don't have visibility into that. And that's, John and his team and we really have a lot of work to do once we get further along the process and get towards closing, because that will be a lot of new information for us to adjust and act on as we close the deal.

All right. Thank you. That’s helpful. And if I could follow-up on the Jazan slagger. Obviously, you guys are confident [indiscernible] performance you’re going to be able to get that operation up and running by putting in, as you said, take another $25 million during January. And I’m trying to reconcile the statement that they try to start it up in the fourth quarter, it was unsuccessful, but you do believe within two years of closing I think, that you will be able to start it up. Is that -- are we really talking about a 2021 type of event when they had just tried to start it up in 4Q '18? I just wanted to get some further color on the expected timing?

Yes, I will respond and JF can maybe add his perspective. I think we are talking about startup in 2020. But the thing -- that JF was pointing is, in our economics, in our synergies, we always believe that that would be a year two type matter when it came in actually started providing really -- providing synergies for us. So I think it's consistent still with the start up and even though the startup effort late in the year was unsuccessful, you learn by that. And I think we learned a lot and I think collectively we learned a lot and everyone involved in the project, and we believe that those lessons learned will help us focus and center in on the weight to make sure that the next startup attempt is successful.

Yes, and Frank, I think Jeff is absolutely right. I mean, we -- I think it's clear from the statement that came out from AMIC that we should not expect slag production in 2019, but it is what we see with the change that we need to be done if we expect slag production in 2020. And that is consistent with what we had -- the planning that we had in our synergy for -- as a vertically integrated producer.

All right. Thank you so much.

Thank you. Our next question is from Hassan Ahmed from Alembic Global. Your line is now open.

Good morning, Jeff.

Hi, Hassan.

Jeff, a question around ore. Ore volumes obviously have held up quite well in the phase of this TiO2 destocking and typically we all know there's a lag between what TiO2 does, create in terms of pricing or volumes and ore following suite. So now is there -- should there be a concern that as you know like you said the destock on the TiO2 side is behind us and volumes start normalizing by midyear. That we see a tick down on ore volumes, or some sort of a destocking there.

I think actually we believe that will be a continued tight market for high-grade feedstocks and as the -- a vertically integrated producer and especially up until the transaction closes in a bit long, we go very good about our relative position versus our competitors in terms of making sure that we have certainty of supply and the right feedstocks at the right price. So, no, I don't think that that concern is something that we believe is significant.

Understood. And now a more philosophical or a higher level question. The TiO2 industry has consolidated, continues to consolidate, so obviously implies market structure is improving, industry is getting much more rational. Yet the inventory cycles continue to be extremely vicious. I mean, that’s what took us into the downturn back in '11 or '12. Again, what we saw in the back half of 2018, above and beyond other commodity chemicals that I see, I understand the back half of last year it was funny sort of dying period for the durable economy with all of these trade concerns and alike. But what is it about the industry, the TiO2 industry that needs these inventory cycles, particularly vicious, and what is it that you guys as an industry leader, what is it that you can do to sort of mute out, the viciousness in these inventory cycles?

Yes, this is John Romano. At this particular stage leaving the fourth -- as we exited 2018, our inventories were basically at what we’d refer to at/or seasonal -- maybe a bit below seasonal norms. So when we compare what happened in the last cycle compared where we are today, I'm not -- I guess, I wouldn't agree that there is a significant vicious inventory cycle coming, because inventories from our perspective, this is a Tronox view, are actually quite where they should be at this particular stage. And when I made the comment earlier that were building inventory in anticipation for the spring season, that's a normal event. So when we think about where our inventory is right now or compared to where they were in the last cycle, yes, they’re not even comparable. They are much lower and are in line with where we would typically need to run the business.

Understood. Very helpful, guys. Thank you so much.

Thank you. Our next question is from Duffy Fischer from Barclays. Your line is now open.

Yes, good morning. Question on volumes last year. So what's your best estimate for what consumption volumes were last year versus shipments by producers? So the real question is just the delta what's the destock that you think happened at the downstream level from you guys as an industry?

Yes, this is John Romano again. That’s a tough question to answer on the end as far as the industry goes. Again, when we think about the destocking, again, what I referenced earlier is that our inventories now are largely at what we would deem to be seasonal norms. At the end of every year, as JF made some reference in his comments, we do some maintenance. So there was a maintenance done at the end of last year. And so some of our inventories were managed through what we'd call normal maintenance at the end of the year. So, again, that kind as a backflow of the prior question, I don't know, Brennan, if you want to …

I don’t have any more to add on that.

No, I guess, the question is more -- we know the producer volumes particularly in the back half were down double-digit. We know consumption wasn't down double-digit, paint volumes, plastic volumes are growing. So the question is more what do you think the delta is between what the producer industry shipped and what real consumption did last year? So how much of would destock downstream from you guys?

No, I think -- this is Brennan, Duffy. I think you’re right. I mean, you’re going down a path that I think we’d agree with, that is the trends in inventory builds that we're seeing are in very select channels. As we said largely -- almost solely in Europe and Asia. But the degree of or that delta you are referring to, wasn't overly large. And hence our view that -- we do see things normalizing by midyear. It's a hard one to quantify specifically, but obviously John and his team has a pretty good sense of where the channels are fit. And these are the customer demand and hence our view that we are five months away from what we think are normalization of inventories, four, five months.

Fair enough. And then just last one, we're two months into the year, do the first two months feel similar to Q4 or the things feel like they're improving somewhat from a volume standpoint?

I mean, yes, this is John Romano, again. I'd say that as we look first quarter, although I won't provide much guidance, the first quarter is looking to be stronger than fourth.

Great. Thank you, guys.

Thank you. Our next question is from Matthew DeYoe from Vertical Research. Your line is now open.

Good morning.

Good morning.

A piggyback -- yes, piggyback little bit on Hassan's question, I mean, what do you think the state of channel inventories are for Mineral Sands? Because we heard of at least one major pigment producer who is building inventories in the next year, kind of with the goal of liquidating some of that.

Yes, I think, again, generically feedstock, so high-grade feedstock at this particular stage is still tight and we’ve continued to see that moving into the balance of the year. And as the market picks up, I think producers are going to continue to run at higher capacity utilization rates and may end up using high-grade feedstock. So high-grade feedstock in our opinion when we look at what our forecasts are as far as pricing, it's in that [indiscernible]. I think it was mentioned earlier that it typically trails anywhere from 6 to 9 maybe even sometimes 12 months behind payment. That market is continuing to strengthen.

Okay. And then to continue that, first off and how did the zircon market hold up at the end of the year, just given the slowdown we saw in China anecdotally a lot of those markets turn pretty south in 4Q from a demand perspective. And then, I know you don't want to necessarily comment on price in '19, but just if we held zircon kind of pig iron and slag price is flat at today’s or year-end run rate, what would be the year-over-year inflation price increases witness for the Mineral Sands business? Thanks.

Yes, so look at just generically on zircon volumes and where -- that the inventory comments we made. We finished the year quite strong with significant volumes in the fourth quarter. We mentioned it several times, shipment timing has a lot to do with that. The first quarter comes in, our volumes are actually going to be a little lighter. As we enter the Chinese New Year, it's actually a bit -- coming out that’s a bit slower than what we would have expected. But when we think about zircon for the full-year, our expectations for volume are going to be very similar to the volumes we sold in 2018.

Okay. And then, if you just kept price levels flat, what would be the price increases witness for Mineral Sands in 2019 over 2018? If you could comment on that.

I can't comment on forward pricing.

Fair enough.

Thank you. Our next question is from John Roberts from UBS. Your line is now open.

Thank you. Do you expect to report just one segment after closing on Cristal or how do you think you report it?

Yes, John, we just report one segment that’s the way we manage the business and we continue -- we will continue to report one just as we did now.

Could you remind me about the lockup on the shares the test and [indiscernible] part of the transaction?

There [indiscernible]. I think it's two years is the lockup on the shares with some minimal leakage early on, there's -- again, least number of shares …

They can sell down 4% prior to that 2-year.

Okay. Thank you.

Thank you. Our next question is from James Finnerty from Citi. Your line is now open.

Thanks. Congratulations on the progress on the Cristal transaction.

Thanks.

Sure. And just one point on inventory, just to compare last cycle versus this cycle. Last cycle inventory days recorded at North of a 100. Imagine this cycle, its lot less than that. Can you kind of give us any gauge in terms of magnitude?

We exited last year with inventory less than 60 days.

So therefore the destocking is occurring much quicker this time around, it seems?

Yes, last cycle there was -- it was very different than this cycle.

Exactly. Great. And then just wanted to just touch in the cash flows going forward there is a lot of moving pieces and there's a lot of confusion. Just in terms of what cash goes out in terms of the acquisition and then going forward Exxaro's stake, I think it's north of $400 million if you add on the pieces together. Can you just walk us through like what kind of cash outflow is the major ones over the next couple of years, assuming the transaction closes as expected, so we can get an idea of like how much cash is being used and how much is being generated, and how much debt you might [indiscernible] to raise in order to fund the Exxaro purchase?

Yes, so the Cristal transaction they’re cash payment of $1.67 billion. We’ve got cash on the balance sheet for that. The business itself as we talked about, we give a sense of where the pro forma EBITDA was for 2018. Capital needs for the business are anywhere from $250 million to $300 million. Just given some of the tax attributes that both companies have on that material amount of cash used or cash taxes. Interest expense is going to be given correct rates, probably $180 million to $190 million for the year. But then as a reminder, as a result of the Ashtabula sale, it will be $700 million of cash coming into the business, it's been structured in a way that’s a tax efficient for us [indiscernible] very little tax leakage. And as Jeff mentioned, we’ve got options in terms of how to utilize that cash in terms of strengthening our balance sheet by deleveraging and investing in the value enhancing organic opportunities that he mentioned or buying some of Exxaro's ownership.

And [multiple speakers] money coming in offsets a lot of the [indiscernible] shares?

Correct.

More so --more than offsets.

Yes, and we think that the thing is [indiscernible] about that is the Mineral Sands have completion agreement gives us the clear alternatives to being able to buy one, two or three of those tranches. So we will look at that opportunistically at the time that those opportunities come up.

Okay, great. Thanks very much. Look forward to the Investor Day.

Thanks, James.

Thank you. Our next question is from Christopher Evans from Goldman Sachs. Your line is now open.

Yes, good morning, guys. Thanks for taking my questions. First I was hoping you could opine on the longer term outlook for the TiO2 feedstock industry. If demand trends continuing to see there's enough supply in the market to meet demand expectations, maybe specifically is there any incremental supply considerations that could loosen industry conditions? And then lastly, in this context how do you see market prices trending over the long haul relative to where they’re today?

We can't speak to pricing, but I will let JF talk to a little bit more about the supply chain. Jean-François Turgeon: Thank you, Christopher. Look, the reality is the market is tight in the short-term. But obviously there's project in the pipeline that will allow to basically meet the demand of the TiO2 plan. Look we talked about Jazan as being one of those project, but there's also other project that are in the pipeline. So we don’t see a situation where there's not enough feedstock to meet the TiO2 demand, but it's a tight market at the moment.

And that’s why we do consider not only is vertical integration I think a differentiator in terms of financial performance, but strategically we believe controlling our own ilmenite and high-grade feedstocks can -- it can be very much advantage as we go forward. It gives us a lot of optionality with the breadth and scope of our reserve base that we have in a number of different organic projects that we have, we believe that it just puts us in a very advantage position moving forward and allows us to think about a lot of things in terms of managing the portfolio as we go forward and managing sort of what that asset base looks like.

It's great. And let me just playing off on earlier question, just do you believe that presently or maybe in the recent past Tronox has exceeded any pigment share in any key geographies or pigment grades?

I think the short answer to that is, no, but if you think about our objective and I think we stated this before is to try to align ourselves with the customers that are growing faster than the market. And by doing that, we can in effect grow faster than the market if we line ourselves appropriately. So we have a focus and as we merge with Cristal, that focus will continue and the alignment that we have with our customers will help us continue to grow.

Super. Thank you.

Thank you. Our next question is from Sean Durkin from Morgan Stanley. Your line is now open.

Good morning.

Good morning, Sean.

Should the FTC approved the sale of Ashtabula to INEOS as a remedy for the Cristal deal? Does INEOS place any conditions of its own -- on it's wish to acquire Ashtabula? For example, does INEOS's team wish to make the purchase of Ashtabula's TiO2 plant conditional and the FTC's allowing of INEOS to further acquire in the future other TiO2 production assets or raw material, mining/S melting assets?

The -- I’m sorry, go ahead.

For the production of TiO2. Some analysts have opined that whomever owns the Ashtabula assets might like -- might likely be interested in becoming further consolidated in the TiO2 industry, for example maybe even purchasing or attending to acquire the financially weaker U.S player Venator? Thank you.

The definitive documentation that we’ve submitted to the FTC, the Tronox and INEOS have indicated they are prepared to execute [indiscernible] to contain no such contingencies. And I think analysts have written a lot of things about perspectives on the future, but there's not any -- anything like that or any contingency of that nature contained in the documents they’ve been submitted.

Thank you. Our last question is from Brian Lalli from Barclays. Your line is now open.

Hey, guys. How are you? Good morning.

Good morning.

Real quick, thanks for fitting me in here at the end. Just maybe a follow-up to James' questions earlier. But from the credit side, could you help us -- appreciating that there's a lot of different uses of the cash, particularly from the Ashtabula sale if it closes as expected, maybe Tim what's your thoughts on the balance sheet from a gross leverage perspective? Like what would you -- I think the intention was originally to pay down term loan with that or at least the majority of that, is that still the intention at first is [indiscernible] going forward do you think about what to do with the various components of the Exxaro mining piece plus the shares. I think that will be helpful for the fixed-income community that get a sense for kind of where you want to be day one before you generate cash flow?

There's a desire to delever the balance sheet. We’ve talked historically about the 2.5x to 3x net leverage ratio. We like to try to down to 2.5x gross debt over the next couple of years. How we get there, it would be a decision not to make internally as it relates to our capital allocation. But it's something that we’re committing to get to.

Understood. Is that though fit to -- so maybe just a follow-on is that the assumption that some of that or majority of that at least is used at first to pay down the loan or I guess you’re reserving the right to sort of think about that post closing and that $700 million will sit there for a little bit.

Well, I think when we get together in May at our Investor Day, we are going to lay out that sort of capital allocation strategy and priorities. Much more specifically after we actually close the Cristal transaction, assume that happens. And I think, any capital allocation strategy, you obviously have goals and priorities, but you also remain opportunistic in terms of how to best deploy that. And I think it certainly, but deleveraging the balance sheet and really creating the capital structure that will allow us to spend ourselves throughout the cycle is a very, very high priority.

Got it. All right. That’s really helpful. Thanks and congrats. Best of luck as you get towards closing.

Thank you.

Thank you. At this time, I’m showing no further questions. I would like to turn the call back over to Jeff Quinn, President and Chief Executive Officer for closing remarks.

Thank you. I guess, just really quick closing. We are, as I said, energized by all that's going on. We think that that we're on the right path both in terms of the business we currently own and the business that we hope we soon own. And we are working towards that and continue to work constructively to try to get that done. It has been a long period and certainly a longer period than any of us presume going into this. But our excitement for it has not weighing and the opportunities we see for value creation, for our shareholders going forward is [indiscernible]. So thank you very much for your time this morning and we look forward to talking with you soon in -- at our Investor Day. Thank you.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program.