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DALLAS, TEXAS.Aug 7, 2017. Kronos Worldwide, Inc. (NYSE:KRO) today reported net income of $196.5 million, or $1.70 per share, in the second quarter of 2017 compared to net income of $1.7 million, or $.01 per share, in the second quarter of 2016. For the first six months of 2017, Kronos Worldwide reported net income of $233.3 million, or $2.01 per share, compared to a net loss of $2.1 million, or $.02 per share in the first six months of 2016. We reported higher net income in the 2017 periods as compared to the 2016 periods in part due to higher income from operations in 2017 resulting from the favorable effects of higher average selling prices, higher sales and production volumes and lower raw materials and other production costs. In addition, our results in the 2017 periods include the recognition of a non-cash deferred income tax benefit as a result of a net decrease in our deferred income tax asset valuation allowance related to our German and Belgian operations, as discussed below.

Net sales of $441.4 million in the second quarter of 2017 were $85.3 million, or 24%, higher than in the second quarter of 2016. Net sales of $811.2 million in the first six months of 2017 were $136.7 million, or 20%, higher than in the first six months of 2016. Net sales increased in 2017 due to higher average TiO2 selling prices and higher sales volumes. The Company's average TiO2 selling prices were 20% higher in the second quarter of 2017 as compared to the second quarter of 2016 and were 19% higher in the first six months of the year as compared to the same prior year period. The Company's average selling prices at the end of the second quarter of 2017 were 8% higher than at the end of the first quarter of 2017, and were 12% higher than at the end of 2016, with higher prices in all major markets. TiO2 sales volumes in the second quarter of 2017 were 6% higher as compared to the same period in 2016 due to higher sales in the North American and European markets, partially offset by lower sales in the Latin American market. TiO2 sales volumes in the first six months of 2017 were 5% higher than the same period in 2016 due to higher sales in the North American and export markets, partially offset by lower sales in the Latin American market. Kronos' sales volumes in the second quarter and first six months of 2017 set a new overall record for a second quarter and first-six-month period. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, decreasing net sales by approximately $8 million in the second quarter 2017 and approximately $15 million in the first six months of 2017 as compared to the same periods in 2016. The table at the end of this press release shows how each of these items impacted the overall increase in sales.

The Company's TiO2 segment profit (see description of non-GAAP information below) in the second quarter of 2017 was $73.7 million as compared to $13.4 million in the second quarter of 2016. For the year-to-date period, the Company's segment profit was $130.2 million as compared to $17.2 million in the first six months of 2016. Segment profit increased in the 2017 periods primarily due to higher average TiO2 selling prices, higher sales and production volumes and lower raw materials and other production costs. Kronos' TiO2 production volumes were 8% higher in the second quarter and 9% higher in the first six months of 2017 as compared to the same periods in 2016. We operated our production facilities at an overall average capacity utilization rates of 100% in the first six months of 2017 (approximately 100% of practical capacity in the first and second quarters) compared to approximately 96% in the first six months of 2016 (97% and 95% in the first and second quarters of 2016, respectively). Fluctuations in currency exchange rates also affected segment profit comparisons, which decreased segment profit by approximately $5 million in the second quarter and by approximately $13 million in the year-to-date period.

The Company's net income before interest, taxes, depreciation and amortization ("EBITDA") (see description of non-GAAP information below) in the second quarter of 2017 was $80.3 million compared to EBITDA of $21.3 million in the second quarter of 2016. For the first six months of 2017, the Company's EBITDA was $142.9 million compared to $31.4 million in the first six months of 2016.

Other operating income, net in the first six months of 2016 includes an insurance settlement gain of $3.4 million ($2.6 million, or $.02 per share, net of income tax expense) related to a 2014 business interruption claim, of which $1.4 million ($1.0 million, or $.01 per share, net of income tax expense) was recognized in the second quarter.

The Company's income tax benefit in the first six months of 2017 includes a non-cash deferred income tax benefit of $162.6 million ($1.40 per share) as a result of a net decrease in our deferred income tax asset valuation allowance related to our German and Belgian operations ($157.6 million or $1.36 per share recognized in the second quarter). The Company's income tax expense in the second quarter and first six months of 2016 includes a non-cash deferred income tax expense of $2.9 million ($.02 per share) as a result of a net increase in our deferred income tax asset valuation allowance related to our German and Belgian operations.

The statements in this release relating to matters that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements. While it is not possible to identify all factors, the Company continues to face many risks and uncertainties. The factors that could cause actual future results to differ materially include, but are not limited to, the following:

Future supply and demand for our products
The extent of the dependence of certain of our businesses on certain market sectors
The cyclicality of our business
Customer and producer inventory levels
Unexpected or earlier-than-expected industry capacity expansion
Changes in raw material and other operating costs (such as energy and ore costs)
Changes in the availability of raw materials (such as ore)
General global economic and political conditions (such as changes in the level of gross domestic product in various regions of the world and the impact of such changes on demand for TiO2)
Competitive products and substitute products
Customer and competitor strategies
Potential consolidation of our competitors
Potential consolidation of our customers
The impact of pricing and production decisions
Competitive technology positions
Potential difficulties in upgrading or implementing new accounting and manufacturing software systems (such as our new enterprise resource planning system)
The introduction of trade barriers
Possible disruption of our business, or increases in our cost of doing business, resulting from terrorist activities or global conflicts
Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar), or possible disruptions to our business resulting from potential instability resulting from uncertainties associated with the euro or other currencies
Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions and cyber-attacks)
Our ability to renew or refinance credit facilities
Our ability to maintain sufficient liquidity
The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters
Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria
Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities)
Government laws and regulations and possible changes therein
The ultimate resolution of pending litigation
Possible future litigation.

Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. The Company disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.

In an effort to provide investors with additional information regarding the Company's results of operations as determined by accounting principles generally accepted in the United States of America (GAAP), the Company has disclosed certain non-GAAP information, which the Company believes provides useful information to investors:

The Company discloses segment profit, which is used by the Company's management to assess the performance of the Company's TiO2 operations. The Company believes disclosure of segment profit provides useful information to investors because it allows investors to analyze the performance of the Company's TiO2 operations in the same way that the Company's management assesses performance. The Company defines segment profit as income before income taxes, interest expense and certain general corporate items. Corporate items excluded from the determination of segment profit include corporate expense and interest income not attributable to the Company's TiO2 operations; and
The Company discloses EBITDA, which is also used by the Company's management to assess the performance of the Company's TiO2 operations. The Company believes disclosure of EBITDA provides useful information to investors because it allows investors to analyze the performance of the Company's TiO2 operations in the same way that the Company's management assesses performance. The Company defines EBITDA as net income before income taxes, interest expense and depreciation and amortization expense.

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