Slide 1: Second-Quarter Preliminary Earnings
TRONOX www.tronox.com, Second-Quarter Preliminary Earnings August 2, 2006
Slide 2: Agenda
Agenda Operating Results - Robert Gibney, VP, Investor Relations & External Affairs Financial Highlights - Mary Mikkelson, Sr. VP & Chief Financial Officer Perspective, Acceleration of Strategic Plan and Business Outlook - Tom Adams, Chairman & CEO Q & A
Slide 3: 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 stateme
Slide 4: Use of Non-GAAP Measures
This presentation contains operating profit and Adjusted EBITDA, which are Non-GAAP measures that are presented because they are used by management to monitor our business. In addition, Adjusted EBITDA is a material component of the covenants that are imposed on us by the senior secured credit facil
Slide 5: Tronox Second-Quarter Operating Results
Tronox Second-Quarter Operating Results ($MM) Net Sales Operating Profit Adj. EBITDA Adj. EBITDA Margin Diluted EPS from Cont. Ops. *(pro forma) $355.9 29.2 61.5 17.3% $0.21* 2006 2005 Second Quarter Ended June 30, $372.9 5.5 40.3 10.8% $(0.14)
Slide 6: 2006 Second-Quarter Summary
2006 Second-Quarter Summary Increased Cost of Goods Sold Energy (natural gas) Process chemicals (chlorine, coke & caustic) Maintenance Production Problems at Savannah Increased maintenance costs Lower production volumes Net Earnings in Unconsolidated Affiliates = $4.7MM Primarily land sale in Hender
Slide 7: Second-Quarter Results
Second-Quarter Results $7.7MM Environmental Charge to Discontinued Operations Net of tax Gross addition to reserves Majority of increase subject to future reimbursement from DOE for 55% Subject to future reimbursement from Kerr-McGee for $0.50 on every dollar, after DOE reimbursement
Slide 8: Segment Results
Segment Results Pigment Sales 5.3% Increase Over 2005 Q2 Good volume growth in Asia Pacific and Europe Pigment Prices Essentially Flat Q1 to Q2 Pigment Production: 144,500 tonnes Down 4% versus Q1 Savannah production disruption Electrolytic and Other Business
Slide 9: Financial Highlights
Financial Highlights Cash Flows used in Operating Activities Q2 2006: $1.0MM Capital Expenditures Q2 2006 = $22MM Projected FY 2006 capital expenditures = $90MM $81MM cash $ 9MM non-cash Term loan payment = $500,000 Term loan balance = $199MM
Slide 10: Outlook
Outlook Perspective on Quarter Strategic Plan and Project Cornerstone 2006 Outlook
Slide 11: Q1 to Q2 Bridge
Q1 to Q2 Bridge Coat of Sales per Tonne Sald (hdexed 10 =a 7 « «
Slide 12: Process Chemicals & Energy
Process Chemicals & Energy Energy Natural gas hedging Q1 = $11.46/mmbtu* Q2 = $7.41* Q3 = $7.50** Q4 = $8.79** Chlorine & Caustic Prices peaked in Q1 2006 Prices are expected to decline throughout 2006 Source: CMAI average market data Source: CMAI average market data Source: CMAI average market data
Slide 13: Q2 to Q3 Bridge
Q2 to Q3 Bridge a1 8 a 36 eo ey 88 Cast cf Sales perTorne Scld(hcxed) co 85 12 | a= = : ee | homes, | Morgares’ | saa aeute oma) Sate Boy Prior Guidance pacts eka pacts
Slide 14: Chandala Synthetic Rutile Operation
Chandala Synthetic Rutile Operation Chandala Synthetic Rutile Operation Rotary Kiln
Slide 15: Project Cornerstone
Project Cornerstone Cornerstone Targets Cash Cost: $60MM Working Capital: $100MM Maintenance Capital Spend: $20MM Land Sales: $100MM Initiative Teams Operations/Supply-Chain Excellence SG&A Productivity Quality Improvement Electrolytic Growth Environmental Spend Accelerated Land Sales Capital Spend
Slide 16: Project Cornerstone Implementation: Cash Cost
Project Cornerstone Implementation Cash Cost : $60MM Operating Cost Improvement Program Cornerstone Target
Slide 17: Project Cornerstone Implementation
Project Cornerstone Implementation Working Capital: $100MM Maintenance Capital Spend: $20MM Land Sales: $100MM* Cornerstone Targets Cash Improvement Program In addition to previously announced land sale in Henderson Nevada *
Slide 18: Outlook
Outlook Fundamentals Remain Strong Operating rates >90% Inventories at or below seasonal norms Global demand >4% Price Increases North America Europe Asia/Pacific Japan US$0.04/pound €130/tonne US$100/tonne Yen 30/kilogram July July Aug. April 1, 15, 15, 1, 2006 2006 2006 2006
Slide 19: Second-Quarter Preliminary Earnings
TRONOX www.tronox.com, Second-Quarter Preliminary Earnings August 2, 2006
Slide 20: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Slide 21: Reconciliation of Operating Profit to Income from Continuing Operations
TRONOX INCORPORATED Operating profit is not @ presentation made in accordance with generally accepted accounting principles, or GAAP. The following table reconciles operating profit to income (loss) fram continuing operations for the periods presented. Second Quarter Ended Six Months Ended June 30,