Tronox(US:TROX)2026-02-20 16:32Customer Concentration - The company reported that its ten largest third-party customers represented 36%, 37%, and 39% of consolidated net sales for the years 2025, 2024, and 2023, respectively [434]. - The company has significant exposure to credit risk in industries affected by cyclical economic fluctuations, with no single customer accounting for 10% of consolidated net sales during 2025, 2024, and 2023 [434]. Interest Rate Risk - A hypothetical 1% increase in interest rates would result in a net decrease to pre-tax income of approximately $7 million on an annualized basis, based on a sensitivity analysis as of December 31, 2025 [435]. - The company maintains a total of $950 million of interest rate swaps, with $450 million maturing in March 2028 and $500 million maturing in September 2031, aimed at stabilizing interest expense [445]. - The company entered into two SOFR-indexed forward starting interest rate swaps effective from June 2023, maturing in March 2028, to align with the maturity date of the Term Loan Facility [438]. - The company has entered into amendments with existing interest rate swap agreements, terminating contracts indexed to LIBOR and replacing them with SOFR-indexed swaps [437]. Market and Economic Risks - The company is subject to various market risks, including fluctuations in titanium dioxide (TiO2) prices, which may impact profitability due to changes in supply and demand fundamentals [433]. - The company’s ability to generate sufficient cash to service its debt and fund capital needs is a significant risk factor, particularly in a competitive and rapidly changing environment [434]. - The company’s operations are affected by geopolitical risks, including ongoing conflicts in regions where it operates, such as Russia and Ukraine [434]. Environmental and Operational Risks - The company is exposed to risks from environmental and industrial accidents, which could lead to production delays and additional expenses [434]. Currency Risk - A significant portion of the company's Adjusted EBITDA is derived from jurisdictions exposed to currency risk, with Australia, Europe, and South Africa being the largest contributors [446]. - The company manufactures and markets products globally, facing foreign currency exchange rate fluctuations, particularly in South Africa, Australia, Brazil, China, the Netherlands, France, and the UK [446]. - As of December 31, 2025, the company had no outstanding amounts to hedge the exposure of its Australian subsidiaries' cost of sales and SG&A expenses to currency fluctuations [448]. - The company entered into foreign currency contracts for the South African Rand, Australian Dollar, Euro, Pound Sterling, and Saudi Riyal to mitigate balance sheet exposure to currency fluctuations [449]. - As of December 31, 2025, the notional amounts of outstanding foreign currency contracts included 572 million South African Rand (approximately $35 million), 161 million Australian dollars (approximately $108 million), 213 million Pound Sterling (approximately $286 million), 50 million Euro (approximately $59 million), and 83 million Saudi Riyal (approximately $22 million) [449].