Rockwood Reports Third Quarter Results

  Rockwood Reports Third Quarter Results

        As reported EPS from continuing operations of $0.77 vs. $0.95

        As adjusted EPS from continuing operations of $0.94 vs. $1.06

Business Wire

PRINCETON, N.J. -- October 25, 2012

Rockwood Holdings, Inc. (NYSE: ROC), a global producer of specialty chemicals
and advanced materials, today reported earnings per share from continuing
operations of $0.77 for the third quarter of 2012 as compared to $0.95 for the
same period in the prior year. Rockwood’s as adjusted earnings per share from
continuing operations were $0.94 in the third quarter of 2012 compared to
$1.06 for the same period in the prior year.

Commenting on the third quarter, Seifi Ghasemi, Chairman and Chief Executive
Officer, said, “As compared to the third quarter of 2011, our results were
negatively impacted by foreign currency translation, which reduced net sales
by $73 million and Adjusted EBITDA by $15 million. As compared to the third
quarter of 2011, our TiO2 business experienced a sharp fall-off in demand
which reduced our Adjusted EBITDA by a further $44 million. On the positive
side, we continued to see improving net sales for our lithium and surface
treatment products as a result of higher selling prices, and our medical
ceramics business continued its growth.In addition, we continued to focus on
controlling costs, which contributed to an Adjusted EBITDA margin of 21% and
helped generate $81 million of free cash.

“During the quarter, Rockwood entered into a definitive agreement to acquire
Talison Lithium Limited (Talison). This accretive acquisition is expected to
close in December of 2012. In addition, we issued $1.25 billion in unsecured
senior notes at an attractive interest rate of 4.625%.We used $250 million of
these funds to repay a portion of our existing term debt in October, and
expect to use the remainder to finance the Talison acquisition and other
corporate activities.”

The highlights from continuing operations for the third quarter and nine
months ended September 30, 2012 are as follows:

  *Net sales were $862.8 million for the third quarter of 2012, down 8.3%
    compared to $940.9 million for the same period in the prior year. Net
    sales were $2,677.9 million for the nine months ended September 30, 2012,
    down 6.2% compared to $2,854.9 million for the same period in the prior
    year.
  *Adjusted EBITDA was $181.9 million for the third quarter of 2012, down
    19.8% compared to $226.9 million for the same period in the prior year.
    Adjusted EBITDA was $637.9 million for the nine months ended September 30,
    2012, down 4.4% compared to $667.1 million for the same period in the
    prior year.
  *On a constant-currency basis, net sales and Adjusted EBITDA decreased 0.5%
    and 13.3% for the third quarter of 2012 compared to the same period in the
    prior year and for the nine months ended September 30, 2012, net sales
    were flat and Adjusted EBITDA increased 1.9% compared to the same period
    in the prior year.
  *Net income attributable to Rockwood for the third quarter of 2012 was
    $61.6 million, including other charges of $13.7 million. Net income
    attributable to Rockwood for the third quarter of 2011 was $75.9 million,
    including other charges of $8.8 million.

    Net income attributable to Rockwood for the nine months ended September
    30, 2012 was $362.3 million, including income of $89.3 million primarily
    related to the reversal of $139.0 million of our valuation allowance on
    net federal deferred tax assets. Net income attributable to Rockwood for
    the nine months ended September 30, 2011 was $228.1 million, including
    other charges of $20.4 million.

  *Diluted earnings per share for the third quarter of 2012 were $0.77,
    including other charges of $0.17. Excluding other charges, diluted
    earnings per share were $0.94 in the third quarter of 2012. Diluted
    earnings per share for the third quarter of 2011 were $0.95, including
    other charges of $0.11. Excluding other charges, diluted earnings per
    share were $1.06 in the third quarter of 2011.

    Diluted earnings per share for the nine months ended September 30, 2012
    were $4.53, including income of $1.11 related to other items. Excluding
    other items, diluted earnings per share were $3.42 for the nine months
    ended September 30, 2012. Diluted earnings per share for the nine months
    ended September 30, 2011 were $2.85, including other charges of $0.26.
    Excluding other charges, diluted earnings per share were $3.11 for the
    nine months ended September 30, 2011.

Looking ahead, Mr. Ghasemi concluded, “Since the outlook for the global
economy is not clear, we will continue to focus on controlling our costs to
maintain our profit margins and generate free cash. We expect demand for TiO2
products to remain weak in the fourth quarter, and as a result, will operate
our TiO2 facilities at 65% of capacity or less. We expect demand for our
lithium products and medical ceramics to continue to be strong.”

Third quarter results, as compared with the same period a year ago, are
summarized below:

  *Lithium:  Net sales and Adjusted EBITDA increased 1.5% and 6.3%,
    respectively.

       *Net sales increased from higher selling prices, but were negatively
         impacted by lower volumes of lithium carbonate (technical grade) and
         the impact of currency changes.
       *Adjusted EBITDA increased from higher net sales, partially offset by
         the negative impact of currency changes, higher research and
         development costs and higher raw material costs.

  *Surface Treatment:  Net sales decreased 5.7%, while Adjusted EBITDA was
    flat.

       *Net sales decreased primarily due to the negative impact of currency
         changes. Higher selling prices in certain markets and higher volumes
         in the U.S. and Asia were partially offset by lower volumes in
         Europe.
       *Adjusted EBITDA was positively impacted from increased selling
         prices, offset by the negative impact of currency changes.

  *Performance Additives:  Net sales and Adjusted EBITDA decreased 11.3% and
    18.1%, respectively.

       *Net sales decreased primarily due to lower volumes in Color Pigments
         and Services and Clay-based Additives resulting from difficult
         economic conditions in Europe and a slowdown in North American
         oilfield drilling. In addition, net sales were negatively impacted by
         currency changes, partially offset by increased selling prices.
       *Adjusted EBITDA decreased from lower volumes.

  *Titanium Dioxide Pigments:  Net sales and Adjusted EBITDA decreased 9.1%
    and 63.2%, respectively.

       *Net sales decreased from the negative impact of currency changes and
         lower volumes, partially offset by higher selling prices.
       *Adjusted EBITDA decreased from lower volumes, significantly higher
         raw material costs, primarily slag and ilmenite, and the negative
         impact of currency changes.

  *Advanced Ceramics:  Net sales and Adjusted EBITDA decreased 10.9% and
    11.4%, respectively.

       *Net sales and Adjusted EBITDA decreased primarily from the negative
         impact of currency changes and lower volumes in electronic and
         cutting tool applications, partially offset by higher volumes of
         medical ceramics.

  *Corporate and other:  Net sales decreased 18.9% and Adjusted loss before
    interest, taxes, depreciation and amortization decreased 92.1%.

       *Net sales decreased primarily from the negative impact of currency
         changes and lower volumes and selling prices primarily in our metal
         sulfides business.
       *Adjusted loss before interest, taxes, depreciation and amortization
         decreased primarily from lower variable compensation costs.

Other Financial Items:

  *Interest expense, net decreased $5.2 million in the third quarter of 2012
    compared to the same period in the prior year, primarily due to debt
    repayments.
  *Income taxes. The effective income tax rate for the third quarter of 2012
    was 27.6% and was favorably impacted by a beneficial earnings mix and
    certain domestic income that was not tax effected.
  *Free cash flow was an inflow of $81.2 million for the third quarter of
    2012, and primarily consisted of net cash provided by operating activities
    of continuing operations, partially offset by capital expenditures of
    $71.3 million.
  *Net debt, which is total debt less cash and cash equivalents, was $1,510.9
    million as of September 30, 2012 compared to $1,366.2 million as of
    December 31, 2011. The increase in net debt was primarily due to cash
    outflows for working capital, capital expenditures and a dividend payment
    to the noncontrolling partner in our titanium dioxide pigments venture.

Conference Call and Webcast

We will host a conference call and webcast to discuss the results of
operations for the third quarter ended September 30, 2012 on Thursday, October
25, 2012 at 11:00 am Eastern Time. The dial-in number to access the conference
call in the U.S. is (888) 423-3280 and the international dial-in number is
(612) 332-0725. No access code is needed for either call. A replay of the
conference call will be available through November 8, 2012 at (800) 475-6701
in the U.S., access code: 266579, and internationally at (320) 365-3844,
access code: 266579.

A listen only, live webcast of the conference call will be available at
www.rocksp.com. Materials for the call, including a PowerPoint file detailing
the results, will be available for download on this site on the morning of the
call. The webcast and PowerPoint file will be archived on Rockwood’s website.

Non-GAAP Financial Measures

This press release includes “non-GAAP financial measures,” such as, a
discussion of Adjusted EBITDA, free cash flow and net income/diluted earnings
per share from continuing operations attributable to Rockwood Holdings, Inc.
shareholders excluding certain items. Adjusted EBITDA is not intended to be an
alternative to net income attributable to Rockwood Holdings, Inc. shareholders
as an indicator of operating performance or to cash flows from operating
activities as a measure of liquidity. Additionally, Adjusted EBITDA is not
intended to be a measure of free cash flow for management’s discretionary use,
as it does not consider certain cash requirements such as interest payments,
tax payments and debt service requirements. All presentations of consolidated
Adjusted EBITDA are calculated using the definition set forth in the Company’s
senior secured credit agreement as a basis and reflects management’s
interpretations thereof. Adjusted EBITDA, which is referred to under the
senior secured credit agreement as “Consolidated EBITDA,” is defined in the
senior secured credit agreement as consolidated earnings (which, as defined in
the senior secured credit agreement, equals income (loss) before the deduction
of income taxes of Rockwood Specialties Group, Inc. and the Restricted
Subsidiaries (as such term is defined in the senior secured credit agreement),
excluding extraordinary items) plus certain items including interest expense,
depreciation expense, amortization expense, extraordinary losses and
non-recurring charges, losses on asset sales, less certain items including
extraordinary gains and non-recurring gains, non-cash gains and gains on asset
sales. We use Adjusted EBITDA on a consolidated basis to assess our operating
performance, to calculate performance-based cash bonuses and determine whether
certain performance-based options and restricted stock units vest (as such
bonuses, options and restricted stock units are tied to Adjusted EBITDA), and
as a liquidity measure. In addition, we use Adjusted EBITDA to determine
compliance with our debt covenants. We also use Adjusted EBITDA on a segment
basis as the primary measure used by our chief operating decision maker to
evaluate the ongoing performance of our business segments and reporting units.
A reconciliation of net income attributable to Rockwood Holdings, Inc.
shareholders to Adjusted EBITDA is contained in this press release. We
strongly urge you to review the reconciliation. In addition, we discuss sales
growth in terms of nominal (actual) and net change (nominal less constant
currency impacts).

Free cash flow is not intended to be an alternative to cash flows from
operating activities as a measure of liquidity. Our presentation of free cash
flow is defined as net cash from operating activities of continuing
operations, less capital expenditures, net of proceeds from government grants
received, and other items (including, among others, the cash impact of
adjustments made to Adjusted EBITDA under our senior secured credit
agreement). Management believes that free cash flow is meaningful to investors
because it provides an additional measure of liquidity. However, a limitation
of free cash flow is that it does not represent the total increase or decrease
in cash during the period. An additional limitation associated with the use of
this measure is that the term “free cash flow” does not have a standardized
meaning. Therefore, other companies may use the same or a similarly named
measure but exclude different items or use different computations, which may
provide investors a comparable view of our performance in relation to other
companies. Management compensates for this limitation by presenting the most
comparable GAAP measure, net cash provided by operating activities of
continuing operations, with free cash flow within its earnings release and by
providing a reconciliation that shows and describes the adjustments made. A
reconciliation of net cash provided by operating activities of continuing
operations to free cash flow is provided in the accompanying tables.

Neither net income from continuing operations attributable to Rockwood
Holdings, Inc. shareholders excluding certain items nor diluted earnings per
share from continuing operations attributable to Rockwood Holdings, Inc.
shareholders excluding certain items is intended to be an alternative for net
income or diluted earnings per share. Management believes that net income and
diluted earnings per share from continuing operations attributable to Rockwood
Holdings, Inc. shareholders excluding certain items is meaningful to investors
because it provides a view of the Company with respect to ongoing operating
results. Reconciliations of these non-GAAP financial measures are included
herein. These non-GAAP measures should not be viewed as an alternative to GAAP
measures of performance. Furthermore, these measures may not be consistent
with similar measures provided by other companies.

Rockwood Holdings, Inc. is a leading global specialty chemicals and advanced
materials company. Rockwood has a worldwide employee base of approximately
10,300 people and annual net sales of approximately $3.7 billion. Rockwood
focuses on global niche segments of the specialty chemicals, pigments and
additives and advanced materials markets. For more information on Rockwood,
please visit www.rocksp.com.

The information set forth in this press release contains certain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 concerning the business, operations and
financial condition of Rockwood Holdings, Inc. and its subsidiaries and
affiliates ("Rockwood"). Words such as "anticipates," "believes," "estimates,"
"expects," "forecasts," "predicts" and variations of such words or expressions
are intended to identify forward-looking statements. Although Rockwood
believes the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, there can be no assurance that its
expectations will be realized. "Forward-looking statements" consist of all
non-historical information, including any statements referring to the
prospects and future performance of Rockwood. Actual results could differ
materially from those projected in Rockwood's forward-looking statements due
to numerous known and unknown risks and uncertainties, including, among other
things, the "Risk Factors" described in Rockwood's periodic reports on file
with the Securities and Exchange Commission. Rockwood does not undertake any
obligation to publicly update any forward-looking statement to reflect events
or circumstances after the date on which any such statement is made or to
reflect the occurrence of unanticipated events.

                                                                   
Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Dollars in millions, except per share amounts; shares in thousands)
(Unaudited)
                                                                          
                                  Three months ended        Nine months ended
                                  September 30,             September 30,
                                  2012         2011         2012          2011
Net sales                         $ 862.8      $ 940.9      $ 2,677.9     $ 2,854.9
Cost of products sold              595.2      609.4      1,747.2     1,856.7 
Gross profit                        267.6        331.5        930.7         998.2
                                                                          
Selling, general and                156.3        176.0        500.9         538.1
administrative expenses
Restructuring and other            6.0        4.5        23.9        9.5     
severance costs
Operating income                   105.3      151.0      405.9       450.6   
                                                                          
Other expenses, net:
Interest expense, net (a)           (21.1  )     (26.3  )     (56.5   )     (74.0   )
Loss on early
extinguishment/modification         (0.1   )     (0.1   )     (12.5   )     (16.6   )
of debt
Foreign exchange gain
(loss) on financing                 0.4          (2.4   )     (7.3    )     1.8
activities, net
Other, net                         (0.2   )    -          (0.1    )    (0.1    )
Other expenses, net                (21.0  )    (28.8  )    (76.4   )    (88.9   )
                                                                          
Income from continuing              84.3         122.2        329.5         361.7
operations before taxes
Income tax provision               23.3       34.4       (54.9   )    101.0   
(benefit)
Income from continuing              61.0         87.8         384.4         260.7
operations
Income from discontinued           -          -          -           120.3   
operations, net of tax (b)
Net income                          61.0         87.8         384.4         381.0
Net loss (income)
attributable to                    0.6        (11.9  )    (22.1   )    (32.6   )
noncontrolling interest
Net income attributable to
Rockwood Holdings, Inc.           $ 61.6      $ 75.9      $ 362.3      $ 348.4   
shareholders
                                                                          
Amounts attributable to
Rockwood Holdings, Inc.
shareholders:
Income from continuing            $ 61.6       $ 75.9       $ 362.3       $ 228.1
operations
Income from discontinued           -          -          -           120.3   
operations
Net income                        $ 61.6      $ 75.9      $ 362.3      $ 348.4   
                                                                          
Basic earnings per share
attributable to Rockwood
Holdings, Inc.
shareholders:
Earnings from continuing          $ 0.79       $ 0.99       $ 4.67        $ 2.98
operations
Earnings from discontinued         -          -          -           1.58    
operations (b)
Basic earnings per share          $ 0.79      $ 0.99      $ 4.67       $ 4.56    
                                                                          
Diluted earnings per share
attributable to Rockwood
Holdings, Inc.
shareholders:
Earnings from continuing          $ 0.77       $ 0.95       $ 4.53        $ 2.85
operations
Earnings from discontinued         -          -          -           1.51    
operations (b)
Diluted earnings per share        $ 0.77      $ 0.95      $ 4.53       $ 4.36    
                                                                          
Dividends declared per            $ 0.35      $ -         $ 0.70       $ -       
share of common stock
                                                                                    
Weighted average number of         77,639     76,703     77,542      76,430  
basic shares outstanding
Weighted average number of         79,963     80,030     79,914      79,907  
diluted shares outstanding
                                                                          
(a) Interest expense, net
includes:
Interest expense on debt,         $ (16.5  )   $ (21.2  )   $ (48.8   )   $ (71.3   )
net
Mark-to-market (losses)
gains on interest rate              (2.3   )     (3.9   )     (2.5    )     1.0
swaps
Deferred financing costs           (2.3   )    (1.2   )    (5.2    )    (3.7    )
Total                             $ (21.1  )   $ (26.3  )   $ (56.5   )   $ (74.0   )
                                                                          
(b) Primarily relates to the gain on sale of the AlphaGary plastic compounding
business.
                                                                          


Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts; shares in thousands)
(Unaudited)
                                                             
                                                                  
                                                  September 30,   December 31,
                                                  2012            2011
ASSETS
Current assets:
Cash and cash equivalents                         $  1,489.9      $  321.5
Accounts receivable, net                             521.2           454.1
Inventories                                          854.2           674.3
Deferred income taxes                                13.7            10.2
Prepaid expenses and other current assets           67.2          75.1    
Total current assets                                 2,946.2         1,535.2
Property, plant and equipment, net                   1,674.3         1,618.5
Goodwill                                             843.2           849.6
Other intangible assets, net                         452.7           509.7
Deferred financing costs, net                        55.1            14.3
Deferred income taxes                                153.2           19.3
Other assets                                        55.0          41.0    
Total assets                                      $  6,179.7     $  4,587.6 
LIABILITIES
Current liabilities:
Accounts payable                                  $  205.3        $  249.1
Income taxes payable                                 65.2            45.8
Accrued compensation                                 114.8           161.4
Accrued expenses and other current                   145.7           129.6
liabilities
Deferred income taxes                                4.7             3.8
Long-term debt, current portion                     327.7         250.5   
Total current liabilities                            863.4           840.2
Long-term debt                                       2,673.1         1,437.2
Pension and related liabilities                      460.7           450.7
Deferred income taxes                                96.8            86.5
Other liabilities                                   116.4         100.6   
Total liabilities                                    4,210.4         2,915.2
Restricted stock units                               22.7            14.0
EQUITY
Rockwood Holdings, Inc. stockholders'
equity:
Common stock ($0.01 par value, 400,000
shares authorized, 77,742
shares issued and 77,648 shares outstanding
at September 30, 2012;
400,000 shares authorized, 77,030 shares
issued and 76,936
shares outstanding at December 31, 2011)             0.8             0.8
Paid-in capital                                      1,231.2         1,222.2
Accumulated other comprehensive income               8.2             10.1
Retained earnings                                    435.0           128.5
Treasury stock, at cost                             (1.4     )     (1.4    )
Total Rockwood Holdings, Inc. stockholders'          1,673.8         1,360.2
equity
Noncontrolling interest                             272.8         298.2   
Total equity                                        1,946.6       1,658.4 
Total liabilities and equity                      $  6,179.7     $  4,587.6 
                                                                  

                                                               
Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)
                                                                    
                                                      Nine months ended
                                                      September 30,
                                                      2012          2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                            $ 384.4       $ 381.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Income from discontinued operations, net of tax         -             (120.3 )
(a)
Depreciation and amortization                           196.4         200.2
Deferred financing costs amortization                   5.2           3.7
Loss on early extinguishment/modification of            12.5          16.6
debt
Foreign exchange loss (gain) on financing               7.3           (1.8   )
activities, net
Fair value adjustment of derivatives                    2.5           (1.0   )
Bad debt provision                                      0.2           -
Stock-based compensation                                8.7           9.8
Deferred income taxes                                   (125.0  )     21.3
Restructuring and other                                 11.9          0.3
Excess tax benefits from stock-based payment            (1.4    )     -
arrangements
Changes in assets and liabilities, net of the
effect of foreign currency translation and
acquisitions:
Accounts receivable                                     (69.3   )     (79.6  )
Inventories                                             (112.5  )     (71.4  )
Prepaid expenses and other assets                       (6.2    )     3.5
Accounts payable                                        (19.8   )     (18.8  )
Income taxes payable                                    20.6          34.6
Accrued expenses and other liabilities                 (23.9   )    (11.4  )
Net cash provided by operating activities of            291.6         366.7
continuing operations
Net cash used in operating activities of               (2.7    )    (1.8   )
discontinued operations
Net cash provided by operating activities              288.9       364.9  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (b)                                (215.3  )     (181.6 )
Acquisitions                                            (69.2   )     (0.8   )
Proceeds on sale of assets                             1.7         0.7    
Net cash used in investing activities of                (282.8  )     (181.7 )
continuing operations
Net cash provided by investing activities of
discontinued operations, representing net
sale proceeds in 2011                                  -           300.7  
Net cash (used in) provided by investing               (282.8  )    119.0  
activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net of fees                   6.0           14.2
Excess tax benefits from stock-based payment            1.4           -
arrangements
Payments of long-term debt                              (689.4  )     (437.5 )
Proceeds from long-term debt                            1,987.4       -
Loan repayments to noncontrolling shareholders          -             (5.0   )
Deferred financing costs                                (47.5   )     (5.3   )
Fees related to early                                   (9.2    )     (13.4  )
extinguishment/modification of debt
Dividend distributions to shareholders                  (54.3   )     -
Dividend distributions to noncontrolling               (45.3   )    (9.8   )
shareholder
Net cash provided by (used in) financing               1,149.1     (456.8 )
activities
Effect of exchange rate changes on cash and            13.2        (9.9   )
cash equivalents
Net increase in cash and cash equivalents               1,168.4       17.2
Less net decrease in cash and cash equivalents         -           (16.6  )
from discontinued operations
Increase in cash and cash equivalents from              1,168.4       33.8
continuing operations
Cash and cash equivalents of continuing                321.5       324.1  
operations, beginning of period
Cash and cash equivalents of continuing               $ 1,489.9    $ 357.9  
operations, end of period
                                                                    
Supplemental disclosures of cash flow
information:
Interest paid                                         $ 54.7        $ 73.1
Income taxes paid, net of refunds                       49.5          45.1
Non-cash investing activities:
Acquisition of capital equipment                        13.2          21.9
                                                                    

(a) Primarily relates to the gain on sale of the plastic compounding business
in January 2011.
(b) Net of government grants of $8.9 million and $9.8 million for the nine
months ended September 30, 2012 and 2011, respectively.

                                                 
Rockwood Holdings, Inc. and Subsidiaries
Net Sales and Adjusted EBITDA
                                                   
                                Net Sales
                                                                 
                                Three Months Ended
                                September 30,
($ in millions)                  2012    2011     % Change 
Lithium                         $ 116.0   $ 114.3     1.5        %
Surface Treatment                 175.3     185.8     (5.7     )
Performance Additives             178.1     200.7     (11.3    )
Titanium Dioxide Pigments         229.6     252.6     (9.1     )
Advanced Ceramics                 130.3     146.2     (10.9    )
Corporate and other              33.5    41.3     (18.9    )
Total                           $ 862.8  $ 940.9    (8.3     ) %
                                                   
                                Adjusted EBITDA
                                                                 
                                Three Months Ended
                                September 30,
($ in millions)                  2012    2011     % Change 
Lithium                         $ 45.4    $ 42.7      6.3        %
Surface Treatment                 37.9      37.9      -
Performance Additives             29.9      36.5      (18.1    )
Titanium Dioxide Pigments         27.6      74.9      (63.2    )
Advanced Ceramics                 42.1      47.5      (11.4    )
Corporate and other              (1.0  )  (12.6 )   92.1
Total Adjusted EBITDA           $ 181.9  $ 226.9    (19.8    ) %
                                                                 

                                                            
Rockwood Holdings, Inc. and Subsidiaries
Net Sales and Adjusted EBITDA
                                      
                                      Net Sales
                                                                             
                                      Nine Months Ended
                                      September 30,
($ in millions)                        2012       2011       % Change 
Lithium                               $ 355.3       $ 351.9       1.0        %
Surface Treatment                       547.7         562.5       (2.6     )
Performance Additives                   580.1         614.7       (5.6     )
Titanium Dioxide Pigments               666.4         735.4       (9.4     )
Advanced Ceramics                       417.7         455.3       (8.3     )
Corporate and other                    110.7      135.1      (18.1    )
Total                                 $ 2,677.9   $ 2,854.9    (6.2     ) %
                                      
                                      Adjusted EBITDA
                                                                             
                                      Nine Months Ended
                                      September 30,
($ in millions)                        2012       2011       % Change 
Lithium                               $ 137.9       $ 129.9       6.2        %
Surface Treatment                       116.6         115.0       1.4
Performance Additives                   107.0         117.4       (8.9     )
Titanium Dioxide Pigments               158.0         193.1       (18.2    )
Advanced Ceramics                       136.1         146.4       (7.0     )
Corporate and other                    (17.7   )   (34.7   )   49.0
Adjusted EBITDA from continuing         637.9         667.1       (4.4     )
operations
Discontinued operations -              -          0.2        (100.0   )
Plastic Compounding
Total Adjusted EBITDA                 $ 637.9     $ 667.3      (4.4     ) %
                                                                             

                                               
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Segment Net Sales and Adjusted EBITDA
                                                                             
                        Three Months Ended
                        September 30,                Total         Total
($ in millions)         2012           2011          Change in $   Change in
                                                                   %
Net Sales:
Lithium                 $  116.0       $  114.3      $  1.7        1.5       %
Surface Treatment          175.3          185.8         (10.5  )   (5.7   )
Performance                178.1          200.7         (22.6  )   (11.3  )
Additives
Titanium Dioxide           229.6          252.6         (23.0  )   (9.1   )
Pigments
Advanced Ceramics          130.3          146.2         (15.9  )   (10.9  )
Corporate and             33.5         41.3        (7.8   )   (18.9  )
other
Total                   $  862.8      $  940.9     $  (78.1  )   (8.3   )  %
                                                                             
                        Constant       Constant Currency Basis
                        Currency       Net           Net
($ in millions)         Effect in $    Change in $   Change in %
                        (a)
Net Sales:
Lithium                 $  (5.8   )    $  7.5           6.6      %
Surface Treatment          (13.7  )       3.2           1.7
Performance                (5.8   )       (16.8  )      (8.4   )
Additives
Titanium Dioxide           (29.0  )       6.0           2.4
Pigments
Advanced Ceramics          (14.8  )       (1.1   )      (0.8   )
Corporate and             (4.3   )      (3.5   )      (8.5   )
other
Total                   $  (73.4  )    $  (4.7   )      (0.5   ) %
                                                                             
                        Three Months Ended
                        September 30,                Total         Total
($ in millions)         2012           2011          Change in $   Change in
                                                                   %
Adjusted EBITDA:
Lithium                 $  45.4        $  42.7       $  2.7        6.3       %
Surface Treatment          37.9           37.9          -          -
Performance                29.9           36.5          (6.6   )   (18.1  )
Additives
Titanium Dioxide           27.6           74.9          (47.3  )   (63.2  )
Pigments
Advanced Ceramics          42.1           47.5          (5.4   )   (11.4  )
Corporate and             (1.0   )      (12.6  )     11.6      92.1
other
Total Adjusted          $  181.9      $  226.9     $  (45.0  )   (19.8  )  %
EBITDA
                                                                             
                        Constant       Constant Currency Basis
                        Currency       Net           Net
($ in millions)         Effect in $    Change in $   Change in %
                        (a)
Adjusted EBITDA:
Lithium                 $  (1.9   )    $  4.6           10.8     %
Surface Treatment          (2.6   )       2.6           6.9
Performance                (1.2   )       (5.4   )      (14.8  )
Additives
Titanium Dioxide           (3.6   )       (43.7  )      (58.3  )
Pigments
Advanced Ceramics          (5.1   )       (0.3   )      (0.6   )
Corporate and             (0.4   )      12.0         95.2
other
Total Adjusted          $  (14.8  )    $  (30.2  )      (13.3  ) %
EBITDA
                                                                             

(a) The constant currency effect is the translation impact of the change in
the average rate of exchange of another currency to the U.S. dollar for the
applicable period as compared to the preceding period. The impact primarily
relates to the conversion of the Euro to the U.S. dollar.

                                              
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Segment Net Sales and Adjusted EBITDA
                                                                             
                     Nine Months Ended
                     September 30,                  Total         Total
($ in                2012             2011          Change in $   Change in
millions)                                                         %
Net Sales:
Lithium              $  355.3         $ 351.9       $  3.4        1.0        %
Surface                 547.7           562.5          (14.8  )   (2.6    )
Treatment
Performance             580.1           614.7          (34.6  )   (5.6    )
Additives
Titanium
Dioxide                 666.4           735.4          (69.0  )   (9.4    )
Pigments
Advanced                417.7           455.3          (37.6  )   (8.3    )
Ceramics
Corporate and          110.7         135.1        (24.4  )   (18.1   )
other
Total                $  2,677.9      $ 2,854.9    $  (177.0 )   (6.2    )  %
                                                                             
                     Constant         Constant Currency Basis
                     Currency         Net           Net
($ in                Effect in $      Change in $   Change in %
millions)            (a)
Net Sales:
Lithium              $  (14.3    )    $ 17.7           5.0      %
Surface                 (36.6    )      21.8           3.9
Treatment
Performance             (14.9    )      (19.7   )      (3.2   )
Additives
Titanium
Dioxide                 (64.4    )      (4.6    )      (0.6   )
Pigments
Advanced                (35.8    )      (1.8    )      (0.4   )
Ceramics
Corporate and          (10.5    )     (13.9   )      (10.3  )
other
Total                $  (176.5   )    $ (0.5    )      (0.0   ) %
                                                                             
                     Nine Months Ended
                     September 30,                  Total         Total
($ in                2012             2011          Change in $   Change in
millions)                                                         %
Adjusted
EBITDA:
Lithium              $  137.9         $ 129.9       $  8.0        6.2        %
Surface                 116.6           115.0          1.6        1.4
Treatment
Performance             107.0           117.4          (10.4  )   (8.9    )
Additives
Titanium
Dioxide                 158.0           193.1          (35.1  )   (18.2   )
Pigments
Advanced                136.1           146.4          (10.3  )   (7.0    )
Ceramics
Corporate and          (17.7    )     (34.7   )     17.0      49.0
other
Adjusted
EBITDA from             637.9           667.1          (29.2  )   (4.4    )
continuing
operations
Discontinued
operations -           -             0.2          (0.2   )   (100.0  )
Plastic
Compounding
Total Adjusted       $  637.9        $ 667.3      $  (29.4  )   (4.4    )  %
EBITDA
                                                                             
                     Constant         Constant Currency Basis
                     Currency         Net           Net
($ in                Effect in $      Change in $   Change in %
millions)            (a)
Adjusted
EBITDA:
Lithium              $  (4.9     )    $ 12.9           9.9      %
Surface                 (6.8     )      8.4            7.3
Treatment
Performance             (3.1     )      (7.3    )      (6.2   )
Additives
Titanium
Dioxide                 (13.4    )      (21.7   )      (11.2  )
Pigments
Advanced                (12.7    )      2.4            1.6
Ceramics
Corporate and          (1.3     )     18.3          52.7
other
Adjusted
EBITDA from             (42.2    )      13.0           1.9
continuing
operations
Discontinued
operations -           -             (0.2    )      (100.0 )
Plastic
Compounding
Total Adjusted       $  (42.2    )    $ 12.8          1.9      %
EBITDA
                                                                             

(a) The constant currency effect is the translation impact of the change in
the average rate of exchange of another currency to the U.S. dollar for the
applicable period as compared to the preceding period. The impact primarily
relates to the conversion of the Euro to the U.S. dollar.

                                                                 
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Income (Loss) from Continuing Operations before Taxes
to Adjusted EBITDA by Segment
                                                                        
                                                                        Titanium
                                             Surface     Performance    Dioxide
($ in millions)                   Lithium    Treatment   Additives      Pigments
Three months ended
September 30, 2012
                                                                        
Income (loss) from
continuing operations             $ 32.2     $ 23.1      $   12.3       $ (0.8 )
before taxes
Interest expense, net               0.7        3.0           1.2          9.9
Depreciation and                    11.1       7.8           14.9         17.1
amortization
Restructuring and other             1.3        2.4           1.3          -
severance costs
Systems/organization                0.1        0.6           -            0.4
establishment expenses
Acquisition and disposal            -          -             -            0.4
costs
Loss on early
extinguishment/modification         -          -             -            0.1
of debt
Foreign exchange loss
(gain) on financing                 -          1.0           -            -
activities, net
Other                              -        -           0.2        0.5  
Total Adjusted EBITDA             $ 45.4    $ 37.9     $   29.9      $ 27.6 
                                                                        
                                  Advanced   Corporate
                                             and
($ in millions)                   Ceramics   other       Consolidated
Three months ended
September 30, 2012
                                                                        
Income (loss) from
continuing operations             $ 26.0     $ (8.5  )   $   84.3
before taxes
Interest expense, net               2.8        3.5           21.1
Depreciation and                    12.4       2.2           65.5
amortization
Restructuring and other             0.9        0.1           6.0
severance costs
Systems/organization                -          -             1.1
establishment expenses
Acquisition and disposal            -          1.6           2.0
costs
Loss on early
extinguishment/modification         -          -             0.1
of debt
Foreign exchange loss
(gain) on financing                 (0.2 )     (1.2  )       (0.4   )
activities, net
Other                              0.2      1.3         2.2    
Total Adjusted EBITDA             $ 42.1    $ (1.0  )   $   181.9  
                                                                        
                                                                        Titanium
                                             Surface     Performance    Dioxide
($ in millions)                   Lithium    Treatment   Additives      Pigments
Three months ended
September 30, 2011
                                                                        
Income (loss) from
continuing operations             $ 33.3     $ 17.8      $   18.3       $ 47.2
before taxes
Interest expense, net               1.9        5.2           2.2          6.1
Depreciation and                    10.6       8.1           14.6         18.2
amortization
Restructuring and other             0.5        2.4           1.1          -
severance costs
Systems/organization                -          0.1           0.2          -
establishment expenses
Acquisition and disposal            -          -             -            -
costs
Loss on early
extinguishment/modification         0.1        -             -            -
of debt
Foreign exchange (gain)
loss on financing                   (3.7 )     4.2           0.2          -
activities, net
Other                              -        0.1         (0.1   )    3.4  
Total Adjusted EBITDA             $ 42.7    $ 37.9     $   36.5      $ 74.9 
                                                                        
                                  Advanced   Corporate
                                             and
($ in millions)                   Ceramics   other       Consolidated
Three months ended
September 30, 2011
                                                                        
Income (loss) from
continuing operations             $ 27.4     $ (21.8 )   $   122.2
before taxes
Interest expense, net               5.2        5.7           26.3
Depreciation and                    13.3       2.2           67.0
amortization
Restructuring and other             0.4        0.1           4.5
severance costs
Systems/organization                -          -             0.3
establishment expenses
Acquisition and disposal            0.1        0.1           0.2
costs
Loss on early
extinguishment/modification         -          -             0.1
of debt
Foreign exchange (gain)
loss on financing                   1.0        0.7           2.4
activities, net
Other                              0.1      0.4         3.9    
Total Adjusted EBITDA             $ 47.5    $ (12.6 )   $   226.9  

                                                                     
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Income (Loss) from Continuing Operations before Taxes
to Adjusted EBITDA by Segment
                                                                            
                                                                            Titanium
                                              Surface        Performance    Dioxide
($ in millions)                   Lithium     Treatment      Additives      Pigments
Nine months ended September
30, 2012
                                                                            
Income (loss) from
continuing operations             $ 84.6      $  69.5        $   50.8       $  82.4
before taxes
Interest expense, net               2.6          11.8            5.2           15.4
Depreciation and                    32.6         23.6            44.7          51.4
amortization
Restructuring and other             13.4         4.4             4.9           -
severance costs
Systems/organization                0.4          0.6             0.2           1.9
establishment expenses
Acquisition and disposal            -            0.1             -             2.1
costs
Loss on early
extinguishment/modification         2.2          3.0             0.9           2.8
of debt
Foreign exchange loss
(gain) on financing                 2.0          3.1             (0.1   )      -
activities, net
Other                              0.1        0.5           0.4         2.0    
Total Adjusted EBITDA             $ 137.9    $  116.6      $   107.0     $  158.0  
                                                                            
                                  Advanced    Corporate
                                              and
($ in millions)                   Ceramics    other          Consolidated
Nine months ended September
30, 2012
                                                                            
Income (loss) from
continuing operations             $ 85.9      $  (43.7  )    $   329.5
before taxes
Interest expense, net               11.0         10.5            56.5
Depreciation and                    37.8         6.3             196.4
amortization
Restructuring and other             1.0          0.2             23.9
severance costs
Systems/organization                -            -               3.1
establishment expenses
Acquisition and disposal            -            1.8             4.0
costs
Loss on early
extinguishment/modification         0.7          2.9             12.5
of debt
Foreign exchange loss
(gain) on financing                 (0.5  )      2.8             7.3
activities, net
Other                              0.2        1.5           4.7    
Total Adjusted EBITDA             $ 136.1    $  (17.7  )    $   637.9  
                                                                            
                                                                            Titanium
                                              Surface        Performance    Dioxide
($ in millions)                   Lithium     Treatment      Additives      Pigments
Nine months ended September
30, 2011
                                                                            
Income (loss) from
continuing operations             $ 90.9      $  60.2        $   61.8       $  126.6
before taxes
Interest expense, net               6.1          16.0            6.9           9.2
Depreciation and                    30.7         25.6            43.3          53.6
amortization
Restructuring and other             2.4          4.6             1.9           -
severance costs
Systems/organization                -            0.4             0.6           0.3
establishment expenses
Acquisition and disposal            -            0.1             -             -
costs
Loss on early
extinguishment/modification         3.0          4.7             1.7           -
of debt
Foreign exchange (gain)
loss on financing                   (3.3  )      2.8             1.2           -
activities, net
Other                              0.1        0.6           -           3.4    
Adjusted EBITDA from                129.9        115.0           117.4         193.1
continuing operations
Discontinued operations -          -          -             -           -      
Plastic Compounding
Total Adjusted EBITDA             $ 129.9    $  115.0      $   117.4     $  193.1  
                                                                            
                                              Discontinued
                                              Operations -
                                  Advanced    Plastic        Corporate
                                                             and
($ in millions)                   Ceramics    Compounding    other          Consolidated
Nine months ended September
30, 2011
                                                                            
Income (loss) from
continuing operations             $ 83.6      $  -           $   (61.4  )   $  361.7
before taxes
Interest expense, net               16.8         -               19.0          74.0
Depreciation and                    40.4         -               6.6           200.2
amortization
Restructuring and other             0.5          -               0.1           9.5
severance costs
Systems/organization                -            -               -             1.3
establishment expenses
Acquisition and disposal            0.1          -               0.2           0.4
costs
Loss on early
extinguishment/modification         4.0          -               3.2           16.6
of debt
Foreign exchange (gain)
loss on financing                   0.8          -               (3.3   )      (1.8   )
activities, net
Other                              0.2        -             0.9         5.2    
Adjusted EBITDA from                146.4        -               (34.7  )      667.1
continuing operations
Discontinued operations -          -          0.2           -           0.2    
Plastic Compounding
Total Adjusted EBITDA             $ 146.4    $  0.2        $   (34.7  )   $  667.3  
                                                                            

                                                             
Rockwood Holdings, Inc. and Subsidiaries
Consolidated Reconciliation of Net Income Attributable to
Rockwood Holdings, Inc. Shareholders to Adjusted EBITDA
($ in millions)
                                                                    
                                  Three Months Ended    Nine Months Ended
                                  September 30,         September 30,
                                   2012      2011     2012      2011   
Net income attributable to
Rockwood Holdings, Inc.           $ 61.6      $ 75.9    $ 362.3     $ 348.4
shareholders
Net (loss) income
attributable to                    (0.6  )    11.9     22.1      32.6   
noncontrolling interest
Net income                          61.0        87.8      384.4       381.0
Income tax provision                23.3        34.4      (54.9 )     101.0
(benefit)
Income from discontinued           -         -        -         (120.3 )
operations, net of tax (a)
Income from continuing              84.3        122.2     329.5       361.7
operations before taxes
Interest expense, net               21.1        26.3      56.5        74.0
Depreciation and                    65.5        67.0      196.4       200.2
amortization
Restructuring and other             6.0         4.5       23.9        9.5
severance costs
Systems/organization                1.1         0.3       3.1         1.3
establishment expenses
Acquisition and disposal            2.0         0.2       4.0         0.4
costs
Loss on early
extinguishment/modification         0.1         0.1       12.5        16.6
of debt
Foreign exchange (gain)
loss on financing                   (0.4  )     2.4       7.3         (1.8   )
activities, net
Other                              2.2       3.9      4.7       5.2    
Adjusted EBITDA from                181.9       226.9     637.9       667.1
continuing operations
Discontinued operations -          -         -        -         0.2    
Plastic Compounding
Total Adjusted EBITDA             $ 181.9    $ 226.9   $ 637.9    $ 667.3  
                                                                    

(a) Primarily relates to the gain on sale of the AlphaGary plastic compounding
business.

                                                                  
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Net Cash Provided By Operating Activities From
Continuing Operations to Adjusted EBITDA
                                                                       
                                                           Nine months ended
                                                           September 30,
($ in millions)                                             2012      2011
Net cash provided by operating activities from
continuing
operations                                                 $ 291.6     $ 366.7
Changes in assets and liabilities, net of the effect
of
foreign currency translation and acquisitions                191.9       133.3
Current portion of income tax provision                      70.1        79.7
Interest expense, net, excluding amortization of
deferred
financing costs and unrealized losses/gains on               48.8        71.3
derivatives
Restructuring and other severance costs                      23.9        9.5
Systems/organization establishment expenses                  3.1         1.3
Acquisition and disposal costs                               4.0         0.4
Bad debt provision                                           (0.2  )     -
Other                                                       4.7       4.9
Adjusted EBITDA from continuing operations                   637.9       667.1
Discontinued operations - Plastic Compounding               -         0.2
Total Adjusted EBITDA                                      $ 637.9    $ 667.3
                                                                       

                                                        
Rockwood Holdings, Inc. and Subsidiaries
Reconciliation of Net Cash Provided by Operating Activities From
Continuing Operations to Free Cash Flow
                                                            
                                                            
                                                            Three months ended
($ in millions)                                             September 30, 2012
Net cash provided by operating activities of                $    143.1
continuing operations
Capital expenditures, net of government grants                   (71.3    )
received
Restructuring charges                                            4.8
Other (a)                                                       4.6      
Free Cash Flow                                              $    81.2     
                                                            

(a) Represents the cash impact of adjustments made to EBITDA under our senior
secured credit agreement, which include fees incurred in connection with the
acquisition of certain business assets, particularly crenox GmbH and Talison.

                                                                      
Rockwood Holdings, Inc. and Subsidiaries
Consolidated Reconciliation of Net Income/Diluted Earnings Per Share from
Continuing Operations Attributable to Rockwood Holdings, Inc. Shareholders
as Reported to Net Income/Diluted Earnings Per Share from Continuing
Operations Attributable to Rockwood Holdings, Inc. Shareholders as Adjusted
(Dollars in millions, except per share amounts; shares in thousands)
                                                                             
                                  Three Months Ended          Three Months Ended
                                  September 30, 2012          September 30, 2011
                                  Net Income                 Net Income     
                                  from                        from
                                  Continuing                  Continuing
                                  Operations                 Operations     
                                  Attributable   Diluted      Attributable   Diluted
                                                 EPS                         EPS
                                  to Rockwood    from         to Rockwood    from
                                  Holdings,      Continuing   Holdings,      Continuing
                                  Inc.                        Inc.
                                  Shareholders   Operations   Shareholders   Operations
As reported                       $    61.6      $ 0.77       $     75.9     $  0.95
                                                                             
                                                                             
Adjustments to expenses
from continuing operations:
Restructuring and other                6.3         0.08             3.8         0.05
severance costs
Impact of tax related items            2.9         0.04             -           -
Acquisition and disposal               1.6         0.02             -           -
costs
Mark-to-market swap loss               1.0         0.01             1.6         0.02
Systems/organization                   0.7         0.01             0.3         0.01
establishment expenses
Foreign exchange loss on               -           -                1.2         0.01
financing activities, net
Loss on early
extinguishment/modification            -           -                0.1         -
of debt
Other                                 1.5       0.02           1.8        0.02
Subtotal                               14.0        0.18             8.8         0.11
                                                                             
Adjustments to income from
continuing operations:
Foreign exchange gain on              (0.3  )    (0.01  )        -          -
financing activities, net
Subtotal                              (0.3  )    (0.01  )        -          -
                                                                             
Total adjustments (a)                  13.7        0.17             8.8         0.11
                                                                          
As adjusted                       $    75.3     $ 0.94      $     84.7     $  1.06
                                                                             
Weighted average number of                        79,963                     80,030
diluted shares outstanding
                                                                                

(a) The tax effects of the adjustments are benefits of $0.7 million and $3.6
million for the three months ended September 30, 2012 and 2011, respectively,
based on the statutory tax rate in the various tax jurisdictions in which the
adjustments occurred, adjusted for the impact of certain valuation allowances.

                                                                      
Rockwood Holdings, Inc. and Subsidiaries
Consolidated Reconciliation of Net Income/Diluted Earnings Per Share from Continuing

Operations Attributable to Rockwood Holdings, Inc. Shareholders
as Reported to Net Income/Diluted Earnings Per Share from Continuing Operations

Attributable to Rockwood Holdings, Inc. Shareholders as Adjusted
(Dollars in millions, except per share amounts; shares in thousands)
                                                                             
                                  Nine Months Ended           Nine Months Ended
                                  September 30, 2012          September 30, 2011
                                  Net Income                 Net Income     
                                  from                        from
                                  Continuing                  Continuing
                                  Operations                 Operations     
                                  Attributable   Diluted      Attributable   Diluted
                                                 EPS                         EPS
                                  to Rockwood    from         to Rockwood    from
                                  Holdings,      Continuing   Holdings,      Continuing
                                  Inc.                        Inc.
                                  Shareholders   Operations   Shareholders   Operations
As reported                       $  362.3       $ 4.53       $   228.1      $ 2.85
                                                                             
                                                                             
Adjustments to expenses
from continuing operations:
Restructuring and other              22.9          0.29           7.5          0.09
severance costs
Loss on early
extinguishment/modification          9.0           0.11           13.5         0.17
of debt
Foreign exchange loss on             6.4           0.08           -            -
financing activities, net
Impact of tax related items          2.9           0.04
Acquisition and disposal             2.8           0.03           -            -
costs
Systems/organization                 1.5           0.02           0.9          0.01
establishment expenses
Mark-to-market swap loss             1.1           0.02
Other                               3.1         0.04         3.1        0.05   
Subtotal                             49.7          0.63           25.0         0.32
                                                                             
Adjustments to income from
continuing operations:
Valuation allowance                  (139.0  )     (1.74  )       -            -
reversal
Mark-to-market swap gain             -             -              (1.6   )     (0.02  )
Foreign exchange gain on            -           -            (3.0   )    (0.04  )
financing activities, net
Subtotal                            (139.0  )    (1.74  )      (4.6   )    (0.06  )
                                                                             
Total adjustments (a)                (89.3   )     (1.11  )       20.4         0.26
                                                                          
As adjusted                       $  273.0      $ 3.42      $   248.5     $ 3.11   
                                                                             
Weighted average number of                        79,914                    79,907 
diluted shares outstanding
                                                                             

(a) The tax effects of the adjustments are benefits of $146.7 million and $7.9
million for the nine months ended September 30, 2012 and 2011, respectively,
based on the statutory tax rate in the various tax jurisdictions in which the
adjustments occurred, adjusted for the impact of certain valuation allowances.

Contact:

Rockwood Holdings, Inc.
Timothy McKenna, 609-734-6430
tmckenna@rocksp.com