NL INDUSTRIES, INC.

          UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The  Unaudited  Pro  Forma  Condensed  Consolidated  Balance  Sheet  of  NL
Industries,  Inc.  ("NL")  as of  September  30,  2003  gives  effect to (i) the
distribution of a $200 million promissory note payable by Kronos Worldwide, Inc.
("Kronos") to NL and (ii) the distribution by NL to its shareholders of 48.8% of
the  outstanding  shares of common  stock of Kronos,  as if they had occurred on
such date. The Unaudited Pro Forma Condensed  Consolidated  Statements of Income
for the year ended  December  31, 2002 and the nine months ended  September  30,
2003 give  effect to such  transactions  as if they had  occurred  on January 1,
2002. You should read this information in conjunction with the following:

     o    the   accompanying   notes  to  the  Unaudited  Pro  Forma   Condensed
          Consolidated Financial Statements;

     o    the audited  consolidated  financial  statements of NL included in its
          Annual  Report on Form 10-K for the year ended  December 31, 2002,  as
          amended,  and the unaudited  consolidated  financial  statements of NL
          included in its  Quarterly  Report on Form 10-Q for the quarter  ended
          September 30, 2003; and

     o    the audited  consolidated  financial  statements of Kronos included in
          the  Information  Statement  filed  as  Exhibit  No.  99.1 to  Kronos'
          Registration  Statement  on Form 10,  and the  unaudited  consolidated
          financial  statements of Kronos  included in its  Quarterly  Report on
          Form 10-Q for the quarter ended September 30, 2003.

     The  unaudited  pro  forma  condensed   consolidated  financial  statements
presented  below  are for  informational  purposes  only  and to aid you in your
analysis of the financial  aspects of the transactions  described above. The pro
forma condensed consolidated financial statements are not necessarily indicative
of what NL's  financial  position or results of operations  actually  would have
been had the transactions described above been completed at the dates indicated.
In addition, the unaudited pro forma condensed consolidated financial statements
do not purport to project the future financial  position or operating results of
NL following completion of the transactions described above.




<PAGE>


                      NL INDUSTRIES, INC. AND SUBSIDIARIES

            UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                               September 30, 2003
                                  (In millions)

<TABLE>
<CAPTION>
                                                     NL      Pro forma         NL
                                                 historical adjustments     pro forma
                                                 ---------- -----------     ---------

ASSETS

Current assets:
<S>                                             <C>         <C>         <C>
  Cash and cash equivalents ................    $     59.7  $   --      $     59.7
  Restricted cash equivalents ..............          22.1      --            22.1
  Restricted marketable debt securities ....           8.2      --             8.2
  Receivables ..............................         177.6      --           177.6
  Inventories ..............................         203.3      --           203.3
  Prepaid expense ..........................           7.9      --             7.9
  Deferred income taxes ....................          10.5      --            10.5
                                                ----------  ------      ----------
    Total current assets ...................         489.3      --           489.3
                                                ----------  ------      ----------

Other assets:
  Investment in joint venture ..............         127.8      --           127.8
  Marketable equity securities .............          53.1      --            53.1
  Receivable from affiliate ................          16.0      --            16.0
  Other assets .............................          47.6      --            47.6
                                                ----------  ------      ----------

    Total other assets .....................         244.5      --           244.5
                                                ----------  ------      ----------

Property and equipment, net ................         405.1      --           405.1
                                                ----------  ------      ----------

                                                $  1,138.9  $   --      $  1,138.9
                                                ==========  ======      ==========
</TABLE>


<PAGE>

                      NL INDUSTRIES, INC. AND SUBSIDIARIES

      UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
                               September 30, 2003
                                  (In millions)
<TABLE>
<CAPTION>
                                                     NL      Pro forma         NL
                                                 historical adjustments     pro forma
                                                 ---------- -----------     ---------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                            <C>         <C>         <C>
  Current long-term debt ...................   $       .5  $   --      $       .5
  Payable to affiliates ....................          8.6        24.3        32.9
  Other payables and accruals ..............        170.4      --           170.4
  Income taxes .............................          8.5      --             8.5
  Deferred income taxes ....................          1.7      --             1.7
                                               ----------  ----------  ----------
    Total current liabilities ..............        189.7        24.3       214.0
                                               ----------  ----------  ----------

Noncurrent liabilities:
  Long-term debt ...........................        327.3      --           327.3
  Accrued environmental costs ..............         65.0      --            65.0
  Accrued pension costs ....................         43.2      --            43.2
  Accrued OPEB costs .......................         23.9      --            23.9
  Deferred income taxes ....................        152.1      --           152.1
  Other ....................................         14.2      --            14.2
                                               ----------  ----------  ----------

    Total noncurrent liabilities ...........        625.7      --           625.7
                                               ----------  ----------  ----------

Minority interest ..........................          8.7        83.4        92.1
                                               ----------  ----------  ----------

Stockholders' equity:
  Common stock .............................          8.4      --             8.4
  Additional paid-in capital ...............        777.8      --           777.8
  Retained earnings ........................        127.8      (107.7)       20.1
  Accumulated other comprehensive income ...       (163.7)     --          (163.7)
  Treasury stock ...........................       (435.5)     --          (435.5)
                                               ----------  ----------  ----------

    Total stockholders' equity .............        314.8      (107.7)      207.1
                                               ----------  ----------  ----------

                                               $  1,138.9  $   --      $  1,138.9
                                               ==========  ==========  ==========

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>



<PAGE>

                      NL INDUSTRIES, INC. AND SUBSIDIARIES

         UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
                          Year ended December 31, 2002
                      (In millions, except per share data)
<TABLE>
<CAPTION>
                                                     NL      Pro forma         NL
                                                 historical adjustments     pro forma
                                                 ---------- -----------     ---------


<S>                                              <C>         <C>          <C>
Net sales ..................................     $   875.2   $  --        $  875.2
Cost of sales ..............................         671.8      --           671.8
                                                 ---------   ---------    --------
  Gross margin .............................         203.4                   203.4

Selling general and administrative
 expenses ..................................         107.7      --           107.7
Other operating expenses, net ..............          29.5      --            29.5
                                                 ---------   ---------    --------

  Income from operations ...................          66.2      --            66.2

Other expenses, net ........................          16.1      --            16.1
                                                 ---------   ---------    --------

  Income before income taxes ...............          50.1      --            50.1

Provision for income taxes .................          12.0         2.0        14.0

Minority interest ..........................           1.3        26.9        28.2
                                                 ---------   ---------    --------

  Net income ...............................     $    36.8   $   (28.9)   $    7.9
                                                 =========   =========    ========

Basic and diluted net income per share .....     $     .76                $    .16
                                                 =========                ========

Shares used in the calculation of
 per share amounts:
  Basic earnings per share .................          48.5                    48.5
  Dilutive impact of stock options .........            .1                      .1
                                                 ---------                --------

  Diluted earnings per share ...............          48.6                    48.6
                                                 =========                ========


See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>


<PAGE>


                      NL INDUSTRIES, INC. AND SUBSIDIARIES

         UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
                      Nine months ended September 30, 2003
                      (In millions, except per share data)


<TABLE>
<CAPTION>
                                                     NL      Pro forma         NL
                                                 historical adjustments     pro forma
                                                 ---------- -----------     ---------

<S>                                               <C>         <C>        <C>
Net sales ....................................    $   762.5   $ --       $  762.5
Cost of sales ................................        563.5     --          563.5
                                                  ---------   -------    --------

  Gross margin ...............................        199.0     --          199.0

Selling, general and administrative
 expenses ....................................         90.1     --           90.1
Other operating expenses, net ................         42.9     --           42.9
                                                  ---------   -------    --------

  Income from operations .....................         66.0     --           66.0

Other expenses, net ..........................         19.1     --           19.1
                                                  ---------   -------    --------

  Income before income taxes .................         46.9     --           46.9

Provision for income taxes (benefit) .........         (8.2)       2.4       (5.8)

Minority interest ............................           .2       32.2       32.4
                                                  ---------   -------    --------

Net income ...................................    $    54.9   $  (34.6)  $   20.3
                                                  =========   ========   ========

Basic and diluted net income per share .......    $    1.15              $    .42
                                                  =========              ========

Shares used in the calculation of
 per share amounts:
  Basic earnings per share ...................         47.7                  47.7
  Dilutive impact of stock options ...........           .1                    .1
                                                  ---------              --------

  Diluted earnings per share .................         47.8                  47.8
                                                  =========              ========

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>


<PAGE>


                      NL INDUSTRIES, INC. AND SUBSIDIARIES

    NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 -- Basis of presentation:

     The  unaudited pro forma  condensed  consolidated  balance  sheet  reflects
adjustments  necessary  to reflect  (i) the  distribution  of a $200  million 9%
promissory  note payable by Kronos to NL and (ii) the  distribution by NL to its
shareholders of 23.9 million shares (48.8%) of the outstanding  shares of common
stock of Kronos,  as if they had occurred on September  30, 2003.  The unaudited
pro forma condensed  consolidated  statements of operations reflect  adjustments
necessary  to reflect  such  transactions  as if they had occurred on January 1,
2002.

     At  September  30,  2003,  Valhi,  Inc.  and  Tremont  LLC, a  wholly-owned
subsidiary of Valhi,  own an aggregate of  approximately  85% of the outstanding
shares of common  stock of NL.  Valhi,  Tremont  and NL are  members of the same
consolidated tax group for U.S. federal income tax purposes.  NL is a party to a
tax sharing  agreement  with Valhi  pursuant to which NL generally  computes its
provision for income taxes on a separate-company basis, and NL makes payments to
or  receives  payments  from  Valhi in  amounts  that it would  have  paid to or
received from the U.S. Internal Revenue Service had NL not been a member of such
consolidated tax group.

     Prior to completion of the  distribution by NL to its shareholders of 48.8%
of the outstanding  shares of common stock of Kronos,  Kronos and its qualifying
subsidiaries  were  members  of NL's  tax  group.  Following  completion  of the
distribution,  Kronos and its qualifying  subsidiaries will no longer be members
of NL's tax group,  but  Kronos  and its  qualifying  subsidiaries  will  remain
members of the same tax group of which Valhi and Tremont are members.

     The  distribution  by NL to its  shareholders  of 48.8% of the  outstanding
shares of common stock of Kronos will be accounted for as a spin-off recorded at
book value,  net of tax. Such  distribution is taxable to NL, and NL is required
to  recognize  a taxable  gain equal to the  difference  between the fair market
value of the shares of Kronos common stock distributed  ($17.25 per share, equal
to the closing  market price of Kronos'  common  stock on December 8, 2003,  the
date the  distribution  was actually  completed)  and NL's adjusted tax basis in
such  stock at the date of  distribution.  With  respect to the shares of Kronos
distributed  to Valhi  and  Tremont  (20.2  million  shares  in the  aggregate),
effective  December  1, 2003,  Valhi and NL have  amended the terms of their tax
sharing  agreement  to not  require  NL to pay up to  Valhi  the  tax  liability
generated  from the  distribution  of such Kronos  shares to Valhi and  Tremont,
since the tax on that  portion of the gain is deferred at the Valhi level due to
Valhi, Tremont and NL being members of the same tax group. Therefore, NL will be
required to recognize a tax on the distribution  only with respect to the shares
of Kronos  distributed  to NL  shareholders  other than Valhi and  Tremont  (3.7
million shares in the aggregate).

Note 2 -- Unaudited pro forma condensed  consolidated  balance sheet - pro forma
adjustments:

     The  adjustment to minority  interest as of September 30, 2003,  represents
recognition  of the 48.8% of Kronos' pro forma net assets at such date which are
attributable to Kronos  shareholders other than NL. Such amount is calculated as
follows:

                                                                     Amount
                                                                  (In millions)

Kronos' historical net assets at September 30, 2003                 $ 371.0
Less Kronos' promissory note payable to NL                            200.0
                                                                    -------

  Kronos' pro forma net assets at September 30, 2003                $ 171.0
                                                                    =======

48.8% of Kronos' pro forma net assets                               $  83.4
                                                                    =======




<PAGE>


     The adjustment to payable to affiliates as of September 30, 2003 represents
recognition  of the income tax  liability  generated  from the  distribution  of
shares of Kronos  common  stock,  as discussed  above,  and is calculated in the
table below.  Such tax liability has been calculated based on the actual closing
market  price for Kronos'  common  stock on December 8, 2003 (since there was no
quoted  market price for Kronos'  common stock on September  30,  2003),  and an
estimate of the tax basis of the shares of Kronos common stock distributed as of
September 30, 2003.  NL's actual tax liability  generated from the  distribution
will be based upon the tax basis of the shares of Kronos  common stock as of the
date of distribution (December 8, 2003).



                                                                   Amount
                                                           (In millions, except
                                                            per share amounts)

Shares of Kronos common stock distributed to NL                      3.7
shareholders other than Valhi and Tremont

Multiplied by fair market value of the shares
 distributed at the time of the distribution                      $17.25
                                                                  ------

    Aggregated market value                                         63.9

Less aggregate tax basis in the shares distributed to NL
shareholders other than Valhi and Tremont                             .4
                                                                 -------

    Taxable gain                                                 $  63.5
                                                                 =======

Tax on taxable gain at estimated combined U.S. federal and
state effective tax rate of 38.3%                                $  24.3
                                                                 =======

     The adjustment to retained earnings  represents the book value, net of tax,
of the shares of Kronos common stock distributed.

     There is no recognition in NL's unaudited  condensed  consolidated  balance
sheet of Kronos' $200 million promissory note payable to NL as such note payable
is eliminated in NL's consolidated financial statements.



<PAGE>


     Note 3 -- Unaudited pro forma condensed consolidated statements of income -
pro forma adjustments:

     The  adjustment to minority  interest for the year ended  December 31, 2002
and the nine months ended September 30, 2003 represents recognition of the 48.8%
of Kronos'  pro forma net  income for such  periods  which are  attributable  to
Kronos shareholders other than NL. Such amounts are calculated as follows:

<TABLE>
<CAPTION>
                                                                     Year ended         Nine months ended
                                                                 December 31, 2002      September 30, 2003
                                                                               (In millions)

<S>                                                                  <C>                     <C>
Kronos' historical net income                                        $     66.3              $    74.4
                                                                     ----------              ---------

Less net-of-tax interest expense on Kronos'
 $200 million 9% promissory note
 payable to NL:
    Interest expense at 9%                                                 18.0                   13.5
    Tax benefit at estimated combined
     U.S. federal and state
      effective tax rate of 38.3%                                           6.9                    5.2
                                                                     ----------              ---------

                                                                           11.1                    8.3
                                                                     ----------              ---------

Kronos' pro forma net income                                         $     55.2              $    66.1
                                                                     ==========              =========

48.8% of Kronos' pro forma net income                                $     26.9              $    32.2
                                                                     ==========              =========
</TABLE>


     NL  provides  incremental  income  taxes on its equity in the net income of
domestic subsidiaries and affiliates that are not members of NL's tax group. The
adjustment  to the  provision  for  income  taxes  (benefit)  for the year ended
December  31,  2002 and the nine months  ended  September  30,  2003  represents
recognition of such  incremental  income taxes on the 51.2% of Kronos' pro forma
net  income  which  are  attributable  to NL,  using the 7%  dividends  received
deduction effective income tax rate.

     There is no recognition in NL's unaudited pro forma condensed  consolidated
statements of income for interest  expense  associated with Kronos' $200 million
promissory  note payable to NL as such  interest  expense is  eliminated in NL's
consolidated financial statements.

Note 4 -- Pro forma per share amounts:

     The pro forma basic and diluted  earnings per share  amounts are based upon
NL's historical basic and diluted  weighted  average shares  outstanding for the
year ended December 31, 2002 and the nine months ended September 30, 2003.



<PAGE>