VALHI REPORTS FOURTH QUARTER 2015 RESULTS

DALLAS, TEXAS . . March 11, 2016.  Valhi, Inc. (NYSE: VHI) reported a net loss attributable to Valhi stockholders of $29.9 million, or $.10 per diluted share, in the fourth quarter of 2015 compared to net income of $8.8 million, or $.03 per diluted share, in the fourth quarter of 2014.   For the full year of 2015, Valhi reported a net loss attributable to Valhi stockholders of $133.6 million, or $.39 per diluted share, compared to net income of $53.8 million, or $.16 per diluted share in the full year of 2014.  We reported a net loss attributable to Valhi stockholders in the full year of 2015 primarily due to the recognition of
 a non-cash deferred income tax asset valuation allowance related to the Chemicals Segment's German and Belgian operations recognized in the second quarter.

The Chemicals Segment's net sales of $287.0 million in the fourth quarter of 2015 were $86.5 million, or 23%, lower than in the fourth quarter of 2014.  Net sales of $1,348.8 million in the full year of 2015 were $303.1 million, or 18%, lower than in the full year 2014.  Net sales decreased in the fourth quarter and full year of 2015 as compared to the same periods of 2014 primarily due to lower average TiO2 selling prices, partially offset by higher sales volumes.  The Company's average TiO2 selling prices were 16% lower in the fourth quarter of 2015 as compared to the fourth quarter of 2014, and were 14% lower in the full year as compared to 2014.  The Chemicals Segment's average selling prices at the end of the fourth quarter of 2015 were 4% lower than at the end of the third quarter of 2015, and 17% lower than at the end of 2014, with lower prices in all major markets.  The Chemicals Segment's average TiO2 selling prices in 2015 were also impacted by a higher percentage of sales to lower-priced export markets in 2015 compared to 2014.  TiO2 sales volumes in the fourth quarter and the full year of 2015 were approximately 3% and 6% higher, respectively, than in same periods of 2014 due to higher sales in certain European and export markets, partially offset by lower sales in North American markets.  Fluctuations in currency exchange rates also impacted net sales comparisons, decreasing net sales by approximately $25 million in the fourth quarter and by approximately $138 million in the full year 2015 as compared to the comparable periods in 2014.  The table at the end of this press release shows how each of these items impacted the overall change in sales.

The Chemicals Segment reported an operating loss in the fourth quarter of 2015 of $17.7 million compared to operating income of $33.2 million in the fourth quarter of 2014.  For the full year 2015, the Chemicals Segment's operating income was $7.1 million compared to $156.8 million in 2014.  The Chemicals Segment's operating income in the full year of 2015 includes an aggregate workforce reduction charge of $21.7 million ($.03 per share, net of income tax benefit and noncontrolling interest), most of which was recognized in the second quarter, $10.8 million of which is classified in cost of sales and $10.9 million of which is classified in selling, general and administrative expense.  The Chemicals Segment's operating income decreased in 2015 primarily due to the net effects of lower average TiO2 selling prices, the workforce reduction charge, lower manufacturing and other production costs (primarily raw materials) and higher sales and production volumes.  Excluding the impact of the workforce reduction charge, the Chemicals Segment had an operating loss of $17.5 million in the fourth quarter of 2015, and operating income of $28.8 million in the full year of 2015.  The Chemicals Segment's TiO2 production volumes were 7% higher in the fourth quarter of 2015 as compared to the fourth quarter of 2014, and were 3% higher in 2015 over 2014.  The Chemicals Segment operated its production facilities at an overall average capacity utilization rate of 95% in 2015 (approximately 93%, 100%, 95% and 92% of practical capacity in the first, second, third and fourth quarters, respectively)  compared to approximately 92% in 2014 (90%, 97%, 96% and 86% in the first, second, third and fourth quarters of 2014, respectively).  The Chemicals Segment's production capacity utilization rates in the first quarter of 2014 were impacted by a union labor lockout at its Canadian production facility that ended in December 2013, as restart of production at the facility did not begin until February 2014.  The Chemicals Segment's production rates in the fourth quarter of 2014 and the first quarter of 2015 were impacted by the implementation of certain productivity-enhancing improvement projects at certain facilities, as well as necessary improvements to ensure continued compliance with our permit regulations, which resulted in longer-than-normal maintenance shutdowns in some instances.  The Chemicals Segment's operating income comparisons were also impacted by the effects of fluctuations in currency exchange rates, which increased operating income by approximately $10 million in the fourth quarter and by approximately $40 million for the year.

 
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The following information was filed by Valhi Inc (VHI) on Friday, March 11, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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