Slide 1: Third-Quarter Preliminary Results
Third-Quarter Preliminary Results October 31, 2007
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 stateme
Slide 3: Agenda
Agenda Financial Highlights Mary Mikkelson ? Senior Vice President and Chief Financial Officer Third-Quarter Performance and Land Sales Update Robert Gibney ? Vice President Investor Relations and External Affairs Perspective and Key Strategic Initiatives Tom Adams ? Chairman and Chief Executive Off
Slide 4: Working Capital & Cash Flow
Working Capital & Cash Flow Cash to Cash 127 138 Cash Flows Sept. 30, 2007 (In Days) Mar. 31, 2006 From Operating Activities ($MM) Q3, 07 Q3, 06 Cornerstone On Schedule Inventory, Receivables & Payables $ 82.3 $ 49.5 YTD 9/30/06 $ 96.4 $ 62.9 YTD 9/30/07
Slide 5: Debt Pay Down
Debt Pay Down $32MM Q3 Reduction in Debt Total Outstanding Debt as of Sept. 30, 2007: $505MM Accounts Receivable Securitization Program Effective September 2007 Additional $20MM Debt Reduction Completed in October $485MM Outstanding Debt as of Oct. 30, 2007 2006 2007 6/30/1905 190 147 127 ($MM) Term
Slide 6: Selling, General & Administrative (SG&A)
Selling, General & Administrative (SG&A) Project Cornerstone Reductions Restructuring Retiree Medical Contribution Changes $93MM reduction in post- retirement obligation ~$6MM lower retiree medical costs in 2007 ($MM) Baseline Improvements 2006 2007 East 139 123 $139 $118 - $123 IPO* 2007 Projection
Slide 7: Proactive Management of Environmental Liabilities
Environmental Reserves = $203.6MM Receivables 2007 Net Cash Spend Projected = $35MM to $40MM Mitigating Items Government reimbursements (DOE, DOD) Insurance policies Kerr-McGee 7-year remediation cost reimbursement program Reimburses Tronox for 50% of remediation cost in excess of reserves at IPO up
Slide 8: Third-Quarter Preliminary Results
Third-Quarter Preliminary Results Net Sales Cost of Sales Gross Margin Loss From Continuing Ops. Diluted EPS From Continuing Ops. Third Quarter 2006 Third Quarter 2007 Foreign Exchange & Freight $13MM Restructuring & Tax Valuation Charge ($MM) 378.6 334.6 44.0 (0.7) (0.02) $ 363.1 332.0 31.1 (18.7)
Slide 9: Q3 2007 EPS Bridge (vs. Q3 2006)
Q3 2007 EPS Bridge (vs. Q3 2006) Based on 40.7MM shares Pretax
Slide 10: Process Chemicals & Freight
Process Chemicals & Freight Chlorine & Caustic Soda High Operating Rates & Weak Dollar Pushing Caustic Pricing Up Chlorine is Generally Stable but May Be Under Pressure Due to Housing Starts Source: CMAI average market data Record Input Cost Levels Ocean Freight Ocean Bulk Freight Prices Impacting T
Slide 11: TiO2 Pigment: Lower Sales Volumes & Prices
Lower Sales Volumes & Prices Due to Weak North American Demand 2006 2007 East 351.3 335.6 ($MM) 589 598 Operating Profit 2007 2006 155.2 149.2 ($MM) $351.4 $335.6 Sales Q3 Q3 2007 2006 Q3 Q3 TiO2 Pigment 2006 2007 6/30/1905 15.6 3.7 8.5 2007 Q2 $15.6 $3.7 $8.5 Improved Costs Sequentially
Slide 12: Electrolytic & Other Chemical Products
2006 2007 East 27.2 27.6 ($MM) Sales $27.2 $27.5 2006 2007 Q3 Q3 Q2 Revenues Up From Cornerstone Program EMD Anti-Dumping Action Progressing Commerce Department investigation Commerce estimated dumping rates of 53% for Australia & 134% for China Final determinations due by Fall 2008 Electrolytic & O
Slide 13: Land Sales Progress
Land Sales Progress 53-Acre Parcel Under Contract All commercial issues completed - ready for closing NFA process on track All validation testing completed Report will be submitted to NDEP in November If approved by NDEP, closing will occur in December LandWell 2,200-Acre Development City of Henders
Slide 14: Business Strategy
Business Strategy Portfolio Management Segmentation by application, region & customer with focus on margins Technology R&D, capital management, innovation & utilization, IT Manufacturing Excellence Maintenance, quality, uptime, safety Fixed & variable cost efficiencies Supply chain Procurement, logi
Slide 15: Cornerstone Execution Status Summary
Cornerstone Execution Status Summary Teams on track or ahead of schedule Remain committed to target attainment Cornerstone impacting the bottom line Additional $8MM Uerdingen cost reduction target Cash Cost Reductions Land Sales & Capital Program * Does not include 2,200-acre LandWell sales $MM $MM
Slide 16: Balance Sheet Flexibility
Balance Sheet Flexibility Accounts Receivable Program - September 2007 $50MM in Debt Reduction Environmental Risk Mitigation Strategies Negotiations with regulators Pursuing other PRPs Insurance & Anadarko reimbursements Sell land with environmental obligations Continued Focus on Balance Sheet Flexi
Slide 17: Global TiO2 Operations
Location M Tonnes Hamilton 225 Savannah 110 Western Australia 110 Botlek 90 Uerdingen (Sulfate) 107 Global Capacity 642 Global TiO2 Operations Nameplate Capacity (1) Multiple Global TiO2 Production Facilities Increases Flexibility to Quickly Respond to Changing Demand Sales & Technical Service (1) R
Slide 18: Supply & Demand
Supply & Demand Strong Growth Outside U.S. Keeping Global TiO2 Inventories Below Seasonal Norms Industry Capacity Utilization in Low to Mid 90s > Seasonal Average < Seasonal Average Hurricane Impact Source: Company Estimates Region Year-Over-Year % Change in Demand Americas - 4% Europe + 7% Asia + 1
Slide 19: TiO2 Pricing Environment
TiO2 Pricing Environment Market Fundamentals Support Higher Prices: Global demand up ~3%-4% Capacity utilization ~92%-95% Inventory levels below seasonal norms Increased Prices Required to Offset Rising Input Costs Caustic, chlorine, petroleum coke Freight costs Energy Price Increases Announced: Reg
Slide 20: Business Strategy
Business Strategy Portfolio Management Segmentation by application, region & customer with focus on margins Technology R&D, capital management, innovation & utilization, IT Manufacturing Excellence Maintenance, quality, uptime, safety Fixed & variable cost efficiencies Supply chain Procurement, logi
Slide 21: Q&A
Q&A www.tronox.com
Slide 22: Third-Quarter Preliminary Results
Third-Quarter Preliminary Results October 31, 2007