News Release

Houston, Texas – January 25, 2001 -- NL Industries, Inc. (NYSE: NL) today reported income before extraordinary item for the fourth quarter of 2000 of $.75 per diluted share, up from $.33 per diluted share reported in the fourth quarter of 1999. Excluding unusual items discussed below, income before extraordinary item in the fourth quarter of 2000 was $.46 per diluted share, or 39% higher than 1999. Income before extraordinary item for 2000 was $3.06 per diluted share compared to $3.08 per diluted share reported in 1999, including certain unusual items discussed below.

Operating income of Kronos' titanium dioxide pigments ("TiO₂") business in the fourth quarter of 2000 increased 28% to $46.0 million compared to $35.8 million in the fourth quarter of 1999. The improved operating income is primarily due to 10% higher average selling prices in billing currencies, partially offset by 16% lower sales volume. Fourth-quarter operating income declined from the $57.5 million reported in the third quarter of 2000 primarily due to 18% lower sales volume and 1% lower production volume, partially offset by 1% higher average selling prices in billing currencies.

Operating income in full-year 2000 increased 46% to $212.5 million compared to $145.7 million in 1999 primarily due to 6% higher average selling prices in billing currencies, 7% higher production volume and 2% higher sales volume.

Kronos' average selling prices in billing currencies (which excludes the effects of foreign currency translation) during the fourth quarter of 2000 were higher in all major regions compared to the fourth quarter of 1999 with the greatest improvement being realized in the European and export markets. Compared to the third quarter of 2000, prices were 2% higher in Europe and slightly higher in export markets, while remaining flat in North America. Average prices in December were slightly lower than average selling prices during the fourth quarter.

Kronos' fourth-quarter 2000 average selling prices expressed in U.S. dollars computed using actual foreign currency exchange rates prevailing during the respective periods were even with the fourth quarter of 1999 and 3% lower than the third quarter of 2000. Comparisons of Kronos' average selling prices using actual foreign currency exchange rates are significantly affected by the value of the U.S. dollar relative to the euro and other European currencies. The majority of Kronos' net sales and production and other costs are incurred in currencies other than the U.S. dollar. The net effect of foreign currency volatility on Kronos' operating income in the fourth quarter of 2000 as compared to the fourth quarter of 1999 was slightly negative.

Kronos' fourth-quarter 2000 sales volume decreased 16% from the record fourth quarter of 1999 and 18% from the third quarter of 2000. Sales volume for full-year 2000 was a record and was 2% higher than 1999. The Company's fourth-quarter 2000 production volume was 1% lower than the comparable 1999 period with operating rates near full capacity in both periods. Production volume in 2000 was 7% higher than 1999. Finished goods inventory levels at the end of December increased from September 2000 levels and represent about two months of sales.

J. Landis Martin, President and Chief Executive Officer, stated, "Higher average selling prices combined with record production and sales volumes resulted in an outstanding year for NL. We expect our operating income in the first quarter of 2001 will be in line with the first quarter of 2000. The balance of 2001 will depend on worldwide economic conditions. If the economy continues to soften, full year 2001 operating income will likely be below 2000 levels factoring in higher anticipated costs, particularly energy. However, if demand strengthens later in the year we should be able to realize price increases, some of which have already been announced. We believe this would put our operating income closer to or above the 2000 level."

Unusual items in the fourth quarter of 2000 included a $26.5 million pretax net gain included in corporate income ($.34 per share after tax) pursuant to a settlement agreement with certain members of one of NL's two principal former insurance carrier groups to settle certain insurance coverage claims. A settlement with remaining members of this carrier group was reached in January 2001, and the Company expects to recognize a $10 million pretax gain in the first quarter of 2001. Also included in the fourth quarter of 2000 is a $3.1 million noncash pretax securities loss ($.04 per share after tax) related to an other-than-temporary decline in value of certain marketable securities held by the Company.

Unusual items in the first nine months of 2000 included a second-quarter $43.0 million pretax net gain ($.54 per share after tax) from a settlement with NL's other former principal insurance carrier, and a second-quarter $5.6 million pretax securities gain ($.07 per share after tax) related to common stock received from the demutualization of an insurance company. Unusual items in 1999 included a second-quarter $90 million income tax benefit ($1.73 per share).

Corporate expense in the fourth quarter of 2000 was $6.6 million, or $0.8 million higher than the fourth quarter of 1999, primarily as a result of higher environmental expenses. Corporate expense in full-year 2000 was $29.6 million, or $8.1 million higher than 1999, primarily as a result of higher legal and environmental expenses.

Interest expense for fourth-quarter and full-year 2000 was down $0.9 million and $5.7 million, respectively, from the comparable periods in 1999 primarily due to reduced levels of outstanding euro-denominated debt. In December 2000, NL borrowed $43 million of short-term non-U.S. dollar-denominated bank debt and used the proceeds along with cash on hand to redeem $50 million (par value) of its 11.75% Senior Secured Notes.

Susan E. Alderton, Chief Financial Officer, stated, "In 2000, NL reduced its total debt by approximately $34 million and refinanced $50 million of high fixed-rate public debt with lower variable-rate bank debt. As a result, we expect NL's interest expense in 2001 will be lower than in 2000."

The Company's net debt at December 31, 2000 was $59 million, down $91 million from December 31, 1999. Net debt at December 31, 2000 is comprised of total debt of $266 million less cash and restricted cash of $207 million.

Minority interest primarily relates to the Company's majority-owned environmental management subsidiary. The fourth-quarter 2000 extraordinary item relates to after-tax costs associated with the December debt prepayment.

A conference call regarding NL's earnings announcement is scheduled for January 25, 2001 at 11:30 a.m. (EST). Mr. Martin will host the call. Participants can access the call by dialing 800-553-0318 (domestic) and 612-332-1020 (international). The passcode is NL Earnings. A taped replay of the call will be available after 3:00 p.m. (EST) the day of the call through 11:59 p.m. (EST) on February 1, 2001 by calling 800-475-6701 (domestic) and 320-365-3844 (international), and using access code 565434. The call will also be broadcast live on the Internet at StreetEvents.com and an online replay will be available approximately one hour after the call.

NL Industries, Inc. is a major international producer of titanium dioxide pigments.

The statements in this release (and statements made in the conference call referred to above) relating to matters that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Forward-looking statements can be identified by the use of words such as "believes," "intends," "may," "will," "should," "anticipates," "expects," or comparable terminology or by discussions of strategy or trends. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties, including, but not limited to, the cyclicality of the titanium dioxide industry, global economic conditions, global productive capacity, customer inventory levels, changes in product pricing, changes in product costing, changes in foreign currency exchange rates, competitive technology positions, operating interruptions (including, but not limited to, labor disputes, leaks, fires, explosions, unscheduled downtime and transportation interruptions), the ultimate resolution of pending or possible future lead pigment litigation and legislative developments related to the lead paint litigation, the outcome of other litigation, and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings. Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. The Company assumes no duty to update any forward-looking statements. The Company's 2000 results are subject to completion of an audit and filing of Form 10-K.