VALHI REPORTS FOURTH QUARTER 2016 RESULTS

DALLAS, TEXAS . . March 10, 2017.  Valhi, Inc. (NYSE: VHI) reported net income attributable to Valhi stockholders of $9.1 million, or $.03 per diluted share, in the fourth quarter of 2016 compared to a net loss of $29.9 million, or $.10 per diluted share, in the fourth quarter of 2015.   For the full year of 2016, Valhi reported a net loss attributable to Valhi stockholders of $15.9 million, or $.05 per diluted share, compared to a net loss of $133.6 million, or $.39 per diluted share in the full year of 2015.  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 $333.7 million in the fourth quarter of 2016 were $46.7 million, or 16%, higher than in the fourth quarter of 2015.   The Chemicals Segment's net sales of $1,364.3 million in the full year of 2016 were $15.5 million, or 1%, higher than in the full year 2015.  The Chemicals Segment's net sales increased in the fourth quarter as compared to the same period in 2015 due to higher average TiO2 selling prices and higher sales volumes. Net sales increased in the full year 2016 primarily due to higher sales volumes partially offset by lower average selling prices.  The Chemicals Segment's average TiO2 selling prices were 8% higher in the fourth quarter of 2016 as compared to the fourth quarter of 2015, and were 3% lower in the full year as compared to 2015. The Chemicals Segment's average selling prices at the end of the fourth quarter of 2016 were 2% higher than at the end of the third quarter of 2016, and were 10% higher than at the end of 2015. TiO2 sales volumes in the fourth quarter were 8% higher as compared to the fourth quarter of 2015 due to higher sales in North American and export markets, partially offset by lower sales in the European market.  TiO2 sales volumes in the full year of 2016 were 7% higher than 2015 due to higher sales in European, North American and export markets, partially offset by lower sales in Latin America.  The Chemicals Segment's sales volumes in the fourth quarter and full year 2016 set an overall new record for a fourth quarter and full-year period.  Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, decreasing net sales by approximately $1 million in the fourth quarter 2016 and by approximately $9 million in the full year 2016 as compared to the comparable periods in 2015.  The table at the end of this press release shows how each of these items impacted the overall increase in sales.

The Chemicals Segment's operating income in the fourth quarter of 2016 was $45.2 million compared to an operating loss of $17.7 million in the fourth quarter of 2015.  For the full year 2016, the Chemicals Segment's operating income was $91.0 million compared to $7.1 million in 2015.  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.  The Chemicals Segment's operating income increased in the fourth quarter of 2016 as compared to the fourth quarter of 2015 primarily due to higher average TiO2 selling prices, higher sales and production volumes and lower raw materials and other production costs.  Excluding the impact of the 2015 workforce reduction charge, the Chemicals Segment's operating income increased in the full year of 2016 primarily due to the net effects of lower average TiO2 selling prices, higher sales and production volumes and lower raw materials and other production costs (including cost savings resulting from workforce reductions implemented in 2015 reflected in both cost of sales and other operating expenses).  Excluding the impact of the workforce reduction charge, the Chemicals Segment's operating loss was $17.5 million in the fourth quarter of 2015, and the Chemicals Segment's operating income was $28.8 million in the full year of 2015.  The Chemicals Segment's TiO2 production volumes were 11% higher in the fourth quarter of 2016 as compared to the fourth quarter of 2015, and were 3% higher in 2016 over 2015.  The Chemicals Segment operated its production facilities at an overall average capacity utilization rate of 98% in 2016 (approximately 97%, 95%, 100% and 100% of practical capacity in the first, second, third and fourth quarters of 2016, respectively) compared to approximately 95% in 2015 (93%, 100%, 95% and 92% in the first, second, third and fourth quarters of 2015, respectively).  The Chemicals Segment's production rates in the first and fourth quarters 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.  Fluctuations in currency exchange rates also affected segment profit comparisons, which increased segment profit by approximately $1 million in the fourth quarter and by approximately $14 million in the year-to-date period.
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The following information was filed by Valhi Inc (VHI) on Monday, March 13, 2017 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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