Slide 1: Morgan Stanley Basic Materials Conference
TRONOX Morgan Stanley Basic Materials Conference Feb. 22, 2006 Tom Adams Chief Executive Officer
Slide 2: Forward-Looking Statement
Forward-Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and uncertainties, ‘These statements are based on the beliefs and assumptions of our management and on information currently available to our management at the time of such statem
Slide 3: Use of Adjusted EBITDA
Use of Adjusted EBITDA This presentation contains Adjusted EBITDA, which is a non-GAAP measure that is presented because it is a material component of the covenants that are imposed on us by the senior secured credit facility. A detailed reconciliation to the comparable GAAP financial measures can b
Slide 4: Investment Highlights
Investment Highlights Experienced Management Team Executing Value Strategy: Capturing Upside Potential Attractive Industry Fundamentals Well-Established Strategic Customer Relationships Across Diversified Markets. Global Producer & Marketer with a Strong Leadership Position Proprietary Process & Exp
Slide 5: TiO2 Pigment
TiO, Pigment @ Quality-of-life product used daily @No effective substitutes @ Differentiated and frequently customized 2005 Global TiO, Demand by End-Use Market Diverse Portfolio of End-Use Opportunities Plastics Differentiated Products + Formulation based + Customized + Selective market base |] - F
Slide 6: Global Producer with Strong Market Leadership Position
TRO Ali BA cat Global Producer with Strong Market Leadership Position © Highly concentrated industry with top five producers accounting for approximately 70% of global production = #3 global producer; #2 using higher-growth chloride-process technology © Leading supplier to global customers in multip
Slide 7: TiO2 Supply / Demand
+ a TRON Aig eat 7 TiO, Supply / Demand © Supply / demand is tight TiO, Supply / © Capacity rationalization of 218 MT oo sit or 11% of sulfate capacity since Bbee 2001 © Brown / Greenfield efforts needed 4500 pre-2009 = 2.500 3 2500 @ From 2005 to 2010, minimum of H 700 MT needed assuming 95% ype: c
Slide 8: Pricing vs. Capacity Utilization
yn am ics Pricing vs. | Capacity Utilization
Slide 9: Announced Price Increases
Announced Price Increases @ Oct. 1, 2005, $.06/Ib. increase will positively impact Q1 2006 @ Jan. 1, 2006, $.05/Ib. increase will positively impact Q2 2006
Slide 10: 2005 Fourth-Quarter Highlights
2005 Fourth-Guarter Highlights @ EPS on income from continuing operations $0.28/share @ Q4 Adjusted EBITDA 15% higher YOY @ 2005 Adjusted EBITDA 44% higher YOY @ Record Q4 production @ Global prices moving higher
Slide 11: Tronox Operating Results
Tronox Operating Results $MM @Net Sales @Operating Profit @Adj. EBITDA @Adj. EBITDA Margin @EPS from Cont. Ops. Unaudited 2004 2005 $1,302 $1,364 (95) 88 162 233 12.4% 17.1% $1.13
Slide 12: Tronox Evolution
Tronox Evolution 1997-2000 Bayer Acquisition @Kemira Acquisition @ Capacity: 200 MT to 624 MT @Critical Market Share: 5% to 13% @ Acquired a Range of Competitive Products Global Operations Foundation to Grow 2001-2003 Integration Challenges @Satety & Environmental ‘Standardize to KMG / Tronox ‘@High
Slide 13: Tronox — Moving Ahead
Tronox — Moving Ahead 2005 2006 Focused on Creating Value For Shareholders, @Dual Track Process @Execute Strategy @IPO S-1 Filing @Alignment of Employees Completed IPO with Focus on Cash Roadshow in November ‘@IPO on November 22 ‘Strong Financial Performance @EPS Growth 2007+ Focus on Growth Opportu
Slide 14: Alignment of Employees
o Be Alignment of Employees @ New Variable Compensation Program — “STAR” @ Program 2006 metrics @Corporate =Net Income = Return on Invested Capital = Cash Flow @Organizational Group (by plant) “Line of Sight” = Fixed cost = Manufacturing efficiency variance = Quality =Uptime @ Balanced Scorecard App
Slide 15: Global TiO2 Manufacturing Operations
oe Global TiO, Manufacturing Operations Strategically positioned plants to effectively serve global markets Experienced operational management and plant-level leadership Nameplate Capacity Location ‘M Tonnes =! = % eeaean_S Teonee as" baad oe z Botlek, i Netherlands Australia 110 = ~ Batik 2 Hamilto
Slide 16: Manufacturing Excellence
Manufacturing Excellence @Extracting More From Existing Assets: =Focused effort to improve uptime at all five TiO, facilities to world class Reduce maintenance spend =Focused on quality Percent Uptime Top Quartile Performance Target get Tenitan etek Seah rar dn | ‘Saer09: "Siting Conmnen Stone; Coen
Slide 17: Raw Material - Ore
Raw Material - Ore Titanium Bearing Ore = 25%-30% of COGS Cooljarloo Mine - Western Australia
Slide 18: Process Chemicals & Energy Costs
Process Chemicals & Energy Costs @Process Chemical Costs and Programs = Successful execution of supply chain and contracting strategies mitigated potential cost increases = Tronox cost increases were up 13%, substantially below general market =3 major process chemicals are chlorine, petroleum coke a
Slide 19: Financial Focus and Objectives
Financial Focus and Objectives: @Disciplined focus on: ]@Free cash flow generation EPS growth =Debt reduction Regular quarterly dividend payments @Efficiently manage working capital requirements @Incentivize management with equity ownership
Slide 20: 2006 Capital Expenditures
2006 Capital Expenditures $94 MM Discretionary Maintenance & Environmental
Slide 21: Legacy Sites
Legacy Sites @ Company actively manages environmental issues related to legacy businesses @In 1994, a centralized unit, Safety and Environmental Affairs (S&EA) was formed to manage environmental issues @ S&EA staffed with 33 experts in environmental remediation
Slide 22: Legacy Sites
= Legacy Sites ancial reserves have been established for probable and estimable environmental costs, which are reviewed and updated quarterly @As of 12/31/2005, gross reserves were $223.7 million @As of 12/31/2005, receivable was $56.7 million U.S. Navy settlement of $20.5 million agreed to in Q1, 2
Slide 23: Kerr-McGee Planned Spin-Off
Kerr-McGee Planned Spin-Off @ Shares outstanding 40.4 MM @ Public: Class A 43% = 17.5 MM shares @ KMG: Class B 57% = 22.9 MM shares ®@ Kerr-McGee will complete the Class B spin to KMG existing shareholders on or after the 120-day lock up expires on March 22, 2006, and prior to the end of the Q1, 200
Slide 24: Profit Growth Drivers
TON Alt 7A Profit Growth Drivers Target: >10% EPS Growth Proprietary Chloride Technology Superior Customer / Technical Service Well Positioned to Benefit from Tight Supply & Demand Global Pigment Operations Organic Growth / Brownfield Grow with Strategic Customers Plastics & Specialty Focus R&D Prod
Slide 25: Searchable text section of graphics
Searchable text section of graphics shown above [ GRAPHIC] [LOGO] Morgan Stanley Basic Materials Conference Feb. 22, 2006 Tom Adams Chief Executive Officer [L OGO] [GRAPHIC] Forward-Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and u