10q10k10q10k.net

What changed in VALHI INC /DE/'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of VALHI INC /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+525 added−477 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-07)

Top changes in VALHI INC /DE/'s 2024 10-K

525 paragraphs added · 477 removed · 388 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

111 edited+15 added−13 removed111 unchanged
Biggest changeThe factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Annual Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following: ● Future supply and demand for our products; ● The extent of the dependence of certain of our businesses on certain market sectors; ● The cyclicality of certain of our businesses (such as Kronos’ TiO 2 operations); ● Customer and producer inventory levels; ● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO 2 industry); ● Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs); ● Changes in the availability of raw materials (such as ore); ● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO 2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises); ● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises); ● Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders; ● Competitive products and substitute products; ● Customer and competitor strategies; ● Potential difficulties in integrating future acquisitions; ● Potential difficulties in upgrading or implementing accounting and manufacturing software systems; ● Potential consolidation of our competitors; ● Potential consolidation of our customers; ● The impact of pricing and production decisions; - 2 - ‌ ​ ● Competitive technology positions; ● Our ability to protect or defend intellectual property rights; ● The introduction of trade barriers or trade disputes; ● The ability of our subsidiaries to pay us dividends; ● Uncertainties associated with new product development and the development of new product features; ● Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone) or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies; ● Decisions to sell operating assets other than in the ordinary course of business; ● The timing and amounts of insurance recoveries; ● Our ability to renew, amend, refinance or establish credit facilities; ● Increases in interest rates; ● Our ability to maintain sufficient liquidity; ● The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform; ● Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria; ● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations); ● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental, health, safety, sustainability or other regulations (such as those seeking to limit or classify TiO 2 or its use); ● The ultimate resolution of pending litigation (such as NL’s lead pigment and environmental matters); ● Our ability to comply with covenants contained in our revolving bank credit facilities; ● Our ability to complete and comply with the conditions of our licenses and permits; ● Changes in real estate values and construction costs in Henderson, Nevada; and ● Pending or possible future litigation or other actions.
Biggest changeThe factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Annual Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following: ● Future supply and demand for our products; ● Our ability to realize expected cost savings from strategic and operational initiatives; ● Our ability to integrate acquisitions, including Louisiana Pigment Company, L.P., into Kronos’ operations and realize expected synergies and innovations; ● The extent of the dependence of certain of our businesses on certain market sectors; ● The cyclicality of certain of our businesses (such as Kronos’ titanium dioxide (“TiO 2 ”) operations); ● Customer and producer inventory levels; ● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO 2 industry); ● Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs) or the implementation of tariffs on imported raw materials; ● Changes in the availability of raw materials (such as ore); ● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO 2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, tariffs, natural disasters, terrorist acts, global conflicts and public health crises); ● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises); ● Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders; ● Competitive products and substitute products; - 2 - ‌ ​ ● Competition from Chinese suppliers with less stringent regulatory and environmental compliance requirements; ● Customer and competitor strategies; ● Potential difficulties in upgrading or implementing accounting and manufacturing software systems; ● Potential consolidation of our competitors; ● Potential consolidation of our customers; ● The impact of pricing and production decisions; ● Competitive technology positions; ● Our ability to protect or defend intellectual property rights; ● The introduction of new, or changes in existing, tariffs, trade barriers or trade disputes (including tariffs imposed by the U.S. federal government on imports from Canada, where Kronos has a manufacturing facility); ● The ability of our subsidiaries to pay us dividends; ● Uncertainties associated with new product development and the development of new product features; ● Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone) or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies; ● Decisions to sell operating assets other than in the ordinary course of business; ● The timing and amounts of insurance recoveries; ● Our ability to renew or refinance credit facilities or other debt instruments in the future ; ● Changes in interest rates; ● Our ability to maintain sufficient liquidity; ● The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform; ● Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria; ● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation or decommissioning obligations at sites related to our former operations); ● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental, sustainability, health and safety or other regulations (such as those seeking to limit or classify TiO 2 or its use); ● The ultimate resolution of pending litigation (such as NL’s lead pigment and environmental matters); ● Our ability to comply with covenants contained in our revolving bank credit facilities; ● Our ability to complete and comply with the conditions of our licenses and permits; ● Changes in real estate values and construction costs in Henderson, Nevada; and - 3 - ‌ ​ ● Pending or possible future litigation (such as litigation related to CompX’s use of certain permitted chemicals in its productions process) or other actions.
These specialty chemicals are used in applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices and natural gas pipe and other specialty applications. Manufacturing, operations and properties Kronos produces TiO 2 in two crystalline forms: rutile and anatase.
These specialty chemicals are used in applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices and natural gas pipe and other specialty applications. Manufacturing, operations and properties Manufacturing – Kronos produces TiO 2 in two crystalline forms: rutile and anatase.
In the event CompX is unable to offset raw material cost increases with other cost reductions, it may be difficult to recover those cost increases through increased product selling prices or raw material surcharges due to the competitive nature of the markets in which it competes. Consequently, overall operating margins can be negatively affected by commodity-related raw material cost pressures.
In the event CompX is unable to offset raw material cost increases with other cost reductions, it may be difficult to recover those cost increases through increased product selling prices or raw material surcharges due to the competitive nature of the markets in which CompX competes. Consequently, overall operating margins can be negatively affected by commodity-related raw material cost pressures.
We expect our manufacturing facilities to produce our products safely and in compliance with local regulations, policies, standards and practices intended to protect the environment and our people and have established global policies designed to promote compliance. We require our employees to comply with such requirements.
We expect our manufacturing facilities to produce our products safely and in compliance with local regulations, policies, standards and practices intended to protect the environment and people and have established global policies designed to promote such compliance. We require our employees to comply with such requirements.
These products include: ● wake enhancement devices, trim tabs, steering wheels, and billet aluminum accessories; ● original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers and other exhaust components; ● high performance gauges such as GPS speedometers and tachometers; ● mechanical and electronic controls and throttles; ● dash panels, LED indicators, and wire harnesses; and ● grab handles, pin cleats and other accessories. - 14 - ‌ ​ CompX operated three principal operating facilities at December 31, 2023 as shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ Reporting ​ ​ ​ Size Facility Name Unit Location (square feet) Owned Facilities : National (1) SP Mauldin, SC 198,000 Grayslake (1) SP/MC Grayslake, IL 133,000 Custom (1) MC Neenah, WI 95,000 (1) ISO-9001 registered facilities SP- Security Products MC- Marine Components Raw materials CompX’s primary raw materials are: ● Security Products - zinc and brass (for the manufacture of locking mechanisms). ● Marine Components - stainless steel (for the manufacture of exhaust headers and pipes and wake enhancement systems), aluminum (for the manufacture of throttles and trim tabs) and other components.
These products include: ● wake enhancement devices, trim tabs, steering wheels, and billet aluminum accessories; ● original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers and other exhaust components; ● high performance gauges such as GPS speedometers and tachometers; ● mechanical and electronic controls and throttles; ● dash panels, LED indicators, and wire harnesses; and ● grab handles, pin cleats and other accessories. ​ - 14 - ‌ ​ CompX operated three principal operating facilities at December 31, 2024 as shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ Reporting ​ ​ ​ Size Facility Name Unit Location (square feet) Owned Facilities : National (1) SP Mauldin, SC 198,000 Grayslake (1) SP/MC Grayslake, IL 133,000 Custom (1) MC Neenah, WI 95,000 SP – Security Products MC – Marine Components (1) ISO-9001 registered facilities Raw materials CompX’s primary raw materials are: ● Security Products - zinc and brass (for the manufacture of locking mechanisms). ● Marine Components - stainless steel (for the manufacture of exhaust headers and pipes and wake enhancement systems), aluminum (for the manufacture of throttles and trim tabs) and other components.
In addition, Kronos operates a rutile slurry manufacturing plant near Lake Charles, Louisiana, which converts dry pigment primarily manufactured for it at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers. Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium and France.
In addition, Kronos operates a rutile slurry manufacturing plant near its Lake Charles, Louisiana facility, which converts dry pigment primarily manufactured for it at the Lake Charles TiO 2 facility into a slurry form that is then shipped to customers. Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium and France.
TiO 2 is considered a “quality-of-life” product. Demand for TiO 2 has generally been driven by worldwide gross domestic product and has generally increased with rising standards of living in various regions of the world. According to industry estimates, TiO 2 consumption has grown at a compound annual growth rate of approximately 2% since 2000.
TiO 2 is considered a “quality-of-life” product. Demand for TiO 2 has generally been driven by worldwide gross domestic product and has generally increased with rising standards of living in various regions of the world. According to industry estimates, TiO 2 consumption has grown at a compound annual growth rate of approximately 3% since 2000.
These co-product chemicals are marketed through its Ecochem division and are primarily used as treatment and conditioning agents for industrial effluents and municipal wastewater as well as in the manufacture of iron pigments, cement and agricultural products. - 6 - ‌ ​ ● Kronos manufactures and sells other specialty chemicals, which are side-stream products from the production of TiO 2 .
These co-product chemicals are marketed through its Ecochem division and are primarily used as treatment and conditioning agents for industrial effluents and municipal wastewater as well as in the manufacture of iron pigments, cement and agricultural products. ● Kronos manufactures and sells other specialty chemicals, which are side-stream products from the production of TiO 2 .
For internal global tracking, benchmarking and identification of opportunities for improvement, Kronos collects the location specific information and applies a U.S.-based injury rate calculation to arrive at a global total frequency rate, which is expressed as the number of incidents at its operating locations per 200,000 hours.
For internal global tracking, benchmarking and identification of opportunities for improvement, Kronos collects the location specific information and applies a U.S.-based injury rate calculation method to arrive at a global total frequency rate, which is expressed as the number of incidents at its operating locations per 200,000 hours.
In some instances we actively manage the - 20 - ‌ ​ businesses we acquire with a focus on maximizing return-on-investment through cost reductions, capital expenditures, improved operating efficiencies, selective marketing to address market niches, disposition of marginal operations, use of leverage and redeployment of capital to more productive assets.
In some instances we actively manage the businesses we acquire with a focus on maximizing return-on-investment through cost reductions, capital expenditures, improved operating efficiencies, selective marketing to address market niches, disposition of marginal operations, use of leverage and redeployment of capital to more productive assets.
From time to time, new environmental, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 . Kronos believes it is in substantial compliance with laws applicable to the regulation of TiO 2 .
From time to time, new environmental, sustainability, health and safety regulations are passed or proposed in the countries in which Kronos operates or sells its products, seeking to regulate its operations or to restrict, limit or classify TiO 2 . Kronos believes it is in substantial compliance with laws applicable to the regulation of TiO 2 .
TiO 2 is widely considered to be superior to alternative white pigments in large part due to its hiding power (or opacity), which is the ability to cover or - 4 - ‌ ​ mask other materials effectively and efficiently. TiO 2 is designed, marketed and sold based on specific end-use applications.
TiO 2 is widely considered to be superior to alternative white pigments in large part due to its hiding power (or opacity), which is the ability to cover or mask other materials effectively and efficiently. TiO 2 is designed, marketed and sold based on specific end-use applications.
Commodity market prices are cyclical, reflecting overall economic trends, specific developments in consuming industries and speculative investor activities. Patents and trademarks CompX holds a number of patents relating to its component products, certain of which it believes to be important to it and its continuing business activity.
Commodity market prices are cyclical, reflecting overall economic trends, specific developments in consuming industries and speculative investor activities. ​ - 15 - ‌ ​ Patents and trademarks CompX holds a number of patents relating to its component products, certain of which it believes to be important to it and its continuing business activity.
We provide our workers with the tools and - 19 - ‌ ​ training necessary to make the appropriate decisions to prevent accidents and injuries. Each of our operating facilities develops, maintains and implements safety programs encompassing key aspects of their operations. In addition, management reviews and evaluates safety performance throughout the year.
We provide our workers with the tools and training necessary to make the appropriate decisions to prevent accidents and injuries. Each of our operating facilities develops, maintains and implements safety programs encompassing key aspects of their operations. In addition, management reviews and evaluates safety performance throughout the year.
Simmons and the Family Trust routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies, that provide strategic opportunities and synergies or that we perceive to be undervalued in the marketplace. These companies may or may not be engaged in businesses related to our current businesses.
Simmons and the Family Trust routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies, that provide strategic opportunities and synergies or that we perceive to be undervalued in the marketplace. These companies - 20 - ‌ ​ may or may not be engaged in businesses related to our current businesses.
CompX continuously seeks to diversify into new markets and identify new applications and features for its products, which it believes provides a greater potential for higher rates of earnings growth as well as diversification of risk. Manufacturing, operations and products Security Products .
CompX continuously seeks to diversify into new - 13 - ‌ ​ markets and identify new applications and features for its products, which it believes provides a greater potential for higher rates of earnings growth as well as diversification of risk. Manufacturing, operations and products Security Products .
Contracts for land sales are negotiated on an individual basis, and sales terms and prices will vary based on such factors as location (including location within a planned community), expected development work and individual buyer needs.
Contracts for land sales are negotiated on an individual basis, and sales terms and prices will vary based on such factors - 17 - ‌ ​ as location (including location within a planned community), expected development work and individual buyer needs.
A substantial portion of security products’ sales consist of products with specialized adaptations to an individual customer’s specifications, some of which are listed above. CompX also has a standardized product line suitable for many customers, which is offered through a North American distribution network to locksmith and smaller original equipment manufacturer (OEM) distributors via its STOCK LOCKS ® distribution program.
A substantial portion of security products’ sales consist of products with specialized adaptations to an individual customer’s specifications, some of which are listed above. CompX also has a standardized product line suitable for many customers, which is offered through a North American distribution network to locksmith and smaller original equipment manufacturer (“OEM”) distributors via its STOCK LOCKS ® distribution program.
We are the successor company of the 1987 merger of LLC Corporation and another entity controlled by Contran Corporation. One of Contran’s wholly-owned subsidiaries held approximately 91% of Valhi’s outstanding common stock at December 31, 2023. As discussed in Note 1 to our Consolidated Financial Statements, Lisa K. Simmons and a trust established for the benefit of Ms.
We are the successor company of the 1987 merger of LLC Corporation and another entity controlled by Contran Corporation. One of Contran’s wholly-owned subsidiaries held approximately 91% of Valhi’s outstanding common stock at December 31, 2024. As discussed in Note 1 to our Consolidated Financial Statements, Lisa K. Simmons and a trust established for the benefit of Ms.
CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries.
CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and various other industries.
Substantially all the land in the residential/planned community has been sold; however, we expect the development work to take three to four years to complete. Our Real Estate Management and Development Segment’s sales consist principally of land sales and to a lesser extent water (through September 2022) and electric delivery fees (prior to December 2023).
Substantially all the land in the residential/planned community has been sold; however, we expect the development work to take two to three years to complete. Our Real Estate Management and Development Segment’s sales consist principally of land sales and to a lesser extent water (through September 2022) and electric delivery fees (prior to December 2023).
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) We seek to operate our businesses in line with sound ESG principles that include corporate governance, social responsibility, sustainability and cybersecurity.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) We seek to operate our businesses in line with sound ESG principles that include corporate governance, social responsibility, sustainability and cybersecurity.
Kronos maintains the secrecy of its trade secret rights and protects them by means of security protocols and confidentiality agreements. In some instances, Kronos has entered into license agreements with third parties concerning various intellectual property matters. Kronos has also from time to time been involved in disputes over intellectual property.
Kronos also registers, maintains and protects its trademark rights. Kronos maintains the secrecy of its trade secret rights and protects them by means of security protocols and confidentiality agreements. In some instances, Kronos has entered into license agreements with third parties concerning various intellectual property matters. Kronos has also from time to time been involved in disputes over intellectual property.
Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels. On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety. That decision is currently under appeal.
Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels. On November 23, 2022 the Court of Justice of the European Union annulled the classification of TiO 2 as a suspected carcinogen in its entirety, which decision is currently under appeal.
Products and end-use markets Including its predecessors, Kronos has produced and marketed TiO 2 in North America and Europe, its primary markets, for over 100 years. We believe Kronos is the largest chloride process TiO 2 producer in Europe with 44% of its 2023 sales volumes attributable to markets in Europe.
Products and end-use markets Including its predecessors, Kronos has produced and marketed TiO 2 in North America and Europe, its primary markets, for over 100 years. We believe Kronos is the largest chloride process TiO 2 producer in Europe with 44% of its 2024 sales volumes attributable to markets in Europe.
As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates a rock ilmenite mine in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2023. Kronos expects ilmenite production from its mine to meet its European sulfate process feedstock requirements for the foreseeable future.
As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates a rock ilmenite mine in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2024. Kronos expects ilmenite production from its mine to meet its sulfate process feedstock requirements for the foreseeable future.
BMI also was responsible for the delivery of water to the City of Henderson and various other users through a water distribution system owned and operated by Basic Water Company (BWC), a wholly-owned subsidiary of BMI, prior to BWC’s bankruptcy filing and deconsolidation on September 10, 2022.
BMI also was responsible for the delivery of water to the City of Henderson and various other users through a water distribution system owned and operated by Basic Water Company (“BWC”), a wholly-owned subsidiary of BMI, prior to BWC’s bankruptcy filing and deconsolidation on September 10, 2022.
Tremont also owns 100% of Tall Pines Insurance Company, an insurance company that also holds certain marketable securities and other investments. Tremont also owns certain real property in Henderson, Nevada. See Note 17 to our Consolidated Financial Statements. In addition, we also own real property related to certain of our former business units.
Tremont also owns 100% of Tall Pines Insurance Company, an insurance company that also holds certain marketable securities and other investments. See Note 17 to our Consolidated Financial Statements. In addition, we also own real property related to certain of our former business units.
If actual developments differ from Kronos’ expectations, the TiO 2 industry’s and Kronos’ performance could be unfavorably affected. Research and development Kronos employs scientists, chemists, process engineers and technicians who are engaged in research and development, process technology and quality assurance activities in Leverkusen, Germany.
If actual developments differ from Kronos’ expectations, the TiO 2 industry and Kronos’ performance could be unfavorably affected. Research and development Kronos employs scientists, chemists, process engineers and technicians who are engaged in research and development, process technology and quality assurance activities in Leverkusen, Germany.
Sales LandWell began marketing land for sale in the residential/planned community in December 2013 and at December 31, 2023 approximately 20 saleable acres remain. In addition, LandWell has been actively marketing and selling land zoned for commercial and light industrial use and at December 31, 2023 approximately 15 saleable acres remain.
Sales LandWell began marketing land for sale in the residential/planned community in December 2013 and at December 31, 2024 approximately 20 saleable acres remain. In addition, LandWell has been actively marketing and selling land zoned for commercial and light industrial use and at December 31, 2024 approximately 15 saleable acres remain.
Kronos did not experience any work stoppages during 2023, although it is possible that there could be future work stoppages or other labor disruptions that could materially and adversely affect Kronos’ business, results of operations, financial position, or liquidity.
Kronos did not experience any work stoppages during 2024, although it is possible that there could be future work stoppages or other labor disruptions that could materially and adversely affect Kronos’ business, results of operations, financial position or liquidity.
Kronos’ U.S. patent portfolio includes patents having remaining terms ranging from one year to 18 years. Trademarks – Kronos’ trademarks, including KRONOS ® , are covered by issued and/or pending registrations, including in Canada and the United States.
Kronos’ U.S. patent portfolio includes patents having remaining terms ranging from one year to 19 years. Trademarks – Kronos’ trademarks, including KRONOS ® , are covered by issued and/or pending registrations, including in Canada and the United States.
BMI also provided certain utility services to an industrial park located in Henderson, Nevada prior to the sale of Basic Power Company (BPC), a wholly-owned subsidiary of BMI, on December 1, 2023.
BMI also provided certain utility services to an industrial park located in Henderson, Nevada prior to the sale of Basic Power Company (“BPC”), a wholly-owned subsidiary of BMI, on December 1, 2023.
Kronos purchases feedstock for its chloride process TiO 2 from the following primary suppliers for certain contractually specified volumes for delivery extending in some cases, through 2026: ​ ​ ​ ​ ​ ​ ​ ​ Supplier ​ Product ​ ​ Renewal Terms Rio Tinto Iron and Titanium Ltd ​ Chloride process grade slag ​ ​ Auto-renews bi-annually Rio Tinto Iron and Titanium Ltd ​ Upgraded slag ​ ​ Auto-renews annually Eramet SA ​ Chloride process grade slag ​ Renewal terms upon negotiation Sierra Rutile Limited ​ Rutile ore ​ Renewal terms upon negotiation Iluka Resources Limited ​ Rutile ore ​ Renewal terms upon negotiation Saraf Agencies Private Limited ​ Chloride process grade slag ​ ​ Renewal terms upon negotiation In the past Kronos has been, and it expects that it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts.
Kronos purchases feedstock for its chloride process TiO 2 from the following primary suppliers for certain contractually specified volumes for delivery extending in some cases, through 2026: ​ ​ ​ ​ ​ ​ ​ ​ Supplier ​ Product ​ ​ Renewal Terms Rio Tinto Iron and Titanium Ltd ​ Chloride process grade slag ​ ​ Auto-renews bi-annually Rio Tinto Iron and Titanium Ltd ​ Upgraded slag ​ ​ Auto-renews annually Sierra Rutile Limited ​ Rutile ore ​ Renewal terms upon negotiation Iluka Resources Limited ​ Rutile ore ​ Renewal terms upon negotiation In the past Kronos has been, and it expects that it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts.
Kronos’ major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. Kronos ships TiO 2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier. Sales of Kronos’ core TiO 2 pigments represented approximately 90% of our Chemicals Segment’s net sales in 2023.
Kronos’ major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. Kronos ships TiO 2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier. Sales of Kronos’ core - 5 - ‌ ​ TiO 2 pigments represented approximately 90% of our Chemicals Segment’s net sales in 2024.
Marine Components . CompX’s marine components reporting unit manufactures and distributes wake enhancement systems, stainless steel exhaust components, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats (tow boats) and performance boats.
Marine Components . CompX’s marine components reporting unit manufactures and distributes wake enhancement systems, stainless steel exhaust components, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats (towboats) and performance boats.
In some instances, LandWell will receive cash proceeds at the time the contract closes - 17 - ‌ ​ and record deferred revenue for some or all of the cash amount received, with deferred revenue being recognized in subsequent periods.
In some instances, LandWell will receive cash proceeds at the time the contract closes and record deferred revenue for some or all of the cash amount received, with such deferred revenue being recognized in subsequent periods.
The table below shows Kronos’ estimated market share for its significant markets, Europe and North America, for the last three years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 2022 2023 Europe 15% ​ 14% ​ 12% ​ North America 17% ​ 17% ​ 16% ​ ​ We believe Kronos is the leading seller of TiO 2 in several countries, including Germany.
The table below shows Kronos’ estimated market share for its significant markets, Europe and North America, for the last three years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2023 2024 Europe 14% ​ 12% ​ 14% ​ North America 17% ​ 16% ​ 17% ​ ​ We believe Kronos is the leading seller of TiO 2 in several countries, including Germany.
Kronos strives to maintain good relationships with all its employees, including the unions and workers’ councils representing those employees. In Europe, Kronos’ union employees are covered by master collective bargaining agreements for the chemical industry that are generally renewed annually. At December 31, 2023, approximately 78% of Kronos’ worldwide workforce is organized under collective bargaining agreements.
Kronos strives to maintain good relationships with all its employees, including the unions and workers’ councils representing those employees. In Europe, Kronos’ union employees are covered by master collective bargaining agreements for the chemical industry that are generally renewed annually. At December 31, 2024, approximately 75% of Kronos’ worldwide workforce is organized under collective bargaining agreements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 2, 7 and 12 to our Consolidated Financial Statements. CHEMICALS SEGMENT – KRONOS WORLDWIDE, INC.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 2, 3 and 12 to our Consolidated Financial Statements. CHEMICALS SEGMENT – KRONOS WORLDWIDE, INC.
The chloride process is the preferred form for use in coatings and plastics, the two largest end-use markets. Due to environmental factors and customer considerations, the proportion of TiO 2 industry sales represented by chloride process pigments has remained stable relative to sulfate process pigments, and in 2023, chloride process production facilities represented approximately 43% of industry capacity.
The chloride process is the preferred form for use in coatings and plastics, the two largest end-use markets. Due to environmental factors and customer considerations, the proportion of TiO 2 industry sales represented by chloride process pigments has remained stable relative to sulfate process pigments, and in 2024, chloride process production facilities represented approximately 41% of industry capacity.
In addition, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulphate process capacity.
However, several of Kronos’ competitors have recently closed or announced plans to close facilities or otherwise reduce capacity, including Chemours which closed its Taiwan facility with an estimated 160,000 tons of chloride process capacity in 2023 and Venator which announced plans in 2024 to close its Duisburg, Germany facility with an estimated 50,000 tons of sulfate process capacity.
Ltd. previously announced it plans to add an additional 200,000 tons of chloride process capacity which we expect will be added incrementally over the next several years.
LB Group previously announced it plans to add an additional 200,000 tons of chloride process capacity which we expect will be added incrementally over the next several years.
These raw materials are purchased from several suppliers, are readily available from numerous sources and accounted for approximately 13% of our Component Products Segment’s total cost of sales for 2023. Total material costs, including purchased components, represented approximately 48% of our Component Products Segment’s cost of sales in 2023.
These raw materials are purchased from several suppliers, are readily available from numerous sources and accounted for approximately 13% of our Component Products Segment’s total cost of sales for 2024. Total material costs, including purchased components, represented approximately 46% of our Component Products Segment’s cost of sales in 2024.
During 2023, Kronos had an estimated 6% share of worldwide TiO 2 sales volume, and based on sales volume, we believe Kronos is the leading seller of TiO 2 in several countries, including Germany. Kronos’ principal competitors are The Chemours Company, Tronox Incorporated, LB Group Co. Ltd. and Venator Materials PLC. The top five TiO 2 producers (i.e.
During 2024, Kronos had an estimated 7% share of worldwide TiO 2 sales volume, and based on sales volume, we believe Kronos is the leading seller of TiO 2 in several countries, including Germany. Kronos’ principal competitors are LB Group Co. Ltd., The Chemours Company, Tronox Holdings PLC and Venator Materials PLC. The top five TiO 2 producers (i.e.
Kronos owns its Leverkusen facility, which represents about one-third of its current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050. Lease payments are periodically negotiated for periods of at least two years at a time.
Kronos owns its Leverkusen facility, which represents approximately 29% of its current TiO 2 production capacity, but Kronos leases the land under the facility under a long-term agreement which expires in 2050. Lease payments are periodically negotiated for periods of at least two years at a time.
Kronos sells to a diverse customer base with only one customer representing 10% or more of our Chemicals Segment’s net sales in 2023 (Behr Process Corporation – 12%). Kronos’ largest ten customers accounted for approximately 35% of our Chemicals Segment’s net sales in 2023.
Kronos sells to a diverse customer base with only one customer representing 10% or more of our Chemicals Segment’s net sales in 2024 (Behr Process Corporation – 10%). Kronos’ largest ten customers accounted for approximately 39% of our Chemicals Segment’s net sales in 2024.
The following tables show Kronos’ approximate TiO 2 sales volume by geographic region and end-use for the year ended December 31, 2023: ​ ​ ​ ​ Sales volume percentages by geographic region ​ Sales volume percentages by end-use Europe ​ 44 % ​ Coatings ​ 57 % North America ​ 41 % ​ Plastics ​ 30 % Asia Pacific ​ 9 % ​ Paper ​ 9 % Rest of World ​ 6 % ​ Other ​ 4 % ​ - 5 - ‌ ​ Some of the principal applications for Kronos’ products include the following: TiO 2 for coatings – Kronos’ TiO 2 is used to provide opacity, durability, tinting strength and brightness in industrial coatings, as well as coatings for commercial and residential interiors and exteriors, automobiles, aircraft, machines, appliances, traffic paint and other special purpose coatings.
The following tables show Kronos’ approximate TiO 2 sales volume by geographic region and end-use for the year ended December 31, 2024: ​ ​ ​ ​ Sales volume percentages by geographic region ​ Sales volume percentages by end-use Europe ​ 44 % ​ Coatings ​ 60 % North America ​ 40 % ​ Plastics ​ 27 % Asia Pacific ​ 9 % ​ Paper ​ 9 % Rest of World ​ 7 % ​ Other ​ 4 % ​ Some of the principal applications for Kronos’ products include the following: TiO 2 for coatings – Kronos’ TiO 2 is used to provide opacity, durability, tinting strength and brightness in industrial coatings, as well as coatings for commercial and residential interiors and exteriors, automobiles, aircraft, machines, appliances, traffic paint and other special purpose coatings.
In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste. - 16 - ‌ ​ CompX’s operations are subject to federal, state and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal, remediation of and exposure to hazardous and non-hazardous substances, materials and wastes.
In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste. CompX’s operations are subject to federal, state and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal, remediation of and exposure to hazardous and non-hazardous substances, materials and wastes, some of which are becoming stricter over time.
We believe Western Europe and North America currently account for approximately 14% and 15% of global TiO 2 consumption, respectively.
We believe Western Europe and North America each account for approximately 15% of global TiO 2 consumption, respectively.
Ltd. expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by it or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.
Other than through debottlenecking projects and the LB Group expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by it or its principal competitors to further increase capacity and Kronos believes it is unlikely any new TiO 2 plants will be constructed in Europe or North America for the foreseeable future.
Germany and Belgium are members of the EU and follow its initiatives. Norway is not a member but generally patterns its environmental regulatory actions after those of the EU. From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under U.S. and non-U.S. statutes. Typically, Kronos establishes compliance programs to resolve these matters.
Germany and Belgium are members of the EU and follow its initiatives. Norway is not a member but generally patterns its environmental regulatory actions after those of the EU. From time to time, Kronos’ facilities may be subject to environmental regulatory enforcement under local or national laws. Typically, Kronos updates its compliance programs to resolve these matters.
Kronos’ global total frequency rate aggregating information about employees and contractors was 1.08 in 2021 (0.90 was the frequency rate for employees only), 1.01 in 2022 (0.86 was the frequency rate for employees only) and 0.95 in 2023 (0.74 was the frequency rate for employees only). CompX uses lost time incidents as a key measure of worker safety.
Kronos’ global total frequency rate aggregating information about employees and contractors was 1.01 in 2022 (0.86 of the aggregate represents employees only), 0.95 in 2023 (0.74 of the aggregate represents employees only) and 0.70 in 2024 (0.80 of the aggregate represents employees only). CompX uses lost time incidents as a key measure of worker safety.
The joint venture operates on a break-even basis and therefore we do not have any equity in earnings of the joint venture. Kronos is required to purchase one half of the TiO 2 produced by the joint venture.
The joint venture operated on a break-even basis and therefore Kronos did not have any equity in earnings of the joint venture. Kronos was required to purchase one-half of the TiO 2 produced by the joint venture.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2024 to be relatively stable. When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.
Based on current economic conditions, CompX expects the prices for zinc, brass, aluminum, stainless steel and other manufacturing materials in 2025 to be relatively stable, although governmental actions such as tariffs may impact markets. When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.
Since the beginning of 2019, Kronos has added seven new grades for pigments and other applications. Patents, trademarks, trade secrets and other intellectual property rights Kronos has a comprehensive intellectual property protection strategy that includes obtaining, maintaining and enforcing its patents, primarily in the United States, Canada and Europe. Kronos also registers, maintains and protects its trademark rights.
Since the beginning of 2020, Kronos has added six new grades for pigments and other applications. - 11 - ‌ ​ Patents, trademarks, trade secrets and other intellectual property rights Kronos has a comprehensive intellectual property protection strategy that includes obtaining, maintaining and enforcing its patents, primarily in the United States, Canada and Europe.
As a global company, we embrace diversity and collaboration in our workforce and our business initiatives. We are an equal opportunity employer and we base employment decisions on merit, competence and qualifications, without regard to race, color, national origin, gender, age, religion, disability, sex, sexual orientation or other characteristics protected by applicable law in the jurisdictions in which we operate.
We are an equal opportunity employer, and we base employment decisions on merit, competence and qualifications, without regard to race, color, national origin, gender, age, religion, disability, sex, sexual orientation or other characteristics protected by applicable law in the jurisdictions in which we operate.
Kronos also actively manages potential water-related risks, including flooding and water shortages. Kronos’ manufacturing facilities are strategically located adjacent to sources of water, which it uses for process operations and for shipping and receiving raw materials and finished products. Water-critical processes are identified and ongoing efforts to minimize water use are incorporated into environmental planning.
Kronos’ manufacturing facilities are strategically located adjacent to sources of water, which it uses for process operations and for shipping and receiving raw materials and finished products. Water-critical processes are identified and ongoing efforts to minimize water use are incorporated into environmental planning.
Because TiO 2 represents a significant input cost for its customers, the purchasing decisions are often made by Kronos’ customers’ senior management. Kronos works to maintain close relationships with the key decision makers through in-depth and frequent contact.
Sales and marketing Kronos’ marketing strategy is aimed at developing and maintaining strong relationships with new and existing customers. Because TiO 2 represents a significant input cost for its customers, the purchasing decisions are often made by Kronos’ customers’ senior management. Kronos works to maintain close relationships with the key decision makers through in-depth and frequent contact.
We conduct our businesses in ways intended to provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve these results.
We are conducting our businesses in ways that provide all personnel with a safe and healthy work environment and have established safety and environmental programs and goals to achieve such results.
Tremont LLC – Tremont is primarily a holding company through which we hold our 63% ownership interest in BMI and our 77% ownership interest in LandWell. Our 77% ownership interest in LandWell includes 27% we hold through our ownership of Tremont and 50% held by a subsidiary of BMI.
NL also holds certain marketable securities and other investments. Tremont LLC – Tremont is primarily a holding company through which we hold our 63% ownership interest in BMI and our 77% ownership interest in LandWell. Our 77% ownership interest in LandWell includes 27% we hold through our ownership of Tremont and 50% held by a subsidiary of BMI.
All costs and capital expenditures are shared equally with Venator with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced. Kronos’ share of net costs is reported as cost of sales as the TiO 2 is sold. See Notes 7 and 17 to our Consolidated Financial Statements.
All costs and capital expenditures - 7 - ‌ ​ were shared equally with Venator, with the exception of feedstock (purchased natural rutile ore or chlorine slag) and packaging costs for the pigment grades produced. Kronos’ share of net costs was reported as cost of sales as the TiO 2 was sold.
Kronos’ capital expenditures related to ongoing environmental compliance, protection and improvement programs, including capital expenditures which are primarily focused on increasing operating efficiency but also result in improved environmental protection such as lower emissions from its manufacturing facilities, were $11.2 million in 2023 and are currently expected to be approximately $28 million in 2024. - 13 - ‌ ​ COMPONENT PRODUCTS SEGMENT – COMPX INTERNATIONAL INC.
Kronos’ capital expenditures related to ongoing environmental compliance, protection and improvement programs, including capital expenditures which are primarily focused on increasing operating efficiency but also result in improved environmental protection such as lower emissions from its manufacturing facilities, were $17 million in 2024 and are currently expected to be approximately $24 million in 2025.
These individuals have the responsibility for improving Kronos’ chloride and sulfate production processes, improving product quality and strengthening its competitive position by developing new products and applications. Kronos’ expenditures for these activities were approximately $17 million in 2021, $15 million in 2022 and $18 million in 2023.
These individuals have the responsibility for improving Kronos’ chloride and sulfate production processes, improving product quality and strengthening its competitive position by developing new products and applications. Kronos’ expenditures for these activities were approximately $15 million in 2022, $18 million in 2023 and $14 million in 2024. Kronos expects to spend approximately $15 million on research and development in 2025.
CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare and a variety of other industries.
We operate in the component products industry through our majority control of CompX. CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare applications and a variety of other industries.
The TiO 2 industry is characterized by high barriers to entry consisting of high capital costs, proprietary technology and significant lead times required to construct new facilities or to expand existing capacity.
In addition, in 2024 Kronos closed its sulfate production line in Varennes, Canada. The TiO 2 industry is characterized by high barriers to entry consisting of high capital costs, proprietary technology and significant lead times required to construct new facilities or to expand existing capacity.
CompX’s operations are also subject to federal, state, and local laws and regulations relating to worker health and safety. CompX believes it is in substantial compliance with all such laws and regulations. To date, the costs of maintaining compliance with such laws and regulations have not significantly impacted CompX’s results.
CompX’s operations are also subject to federal, state, and local laws and regulations relating to worker health and safety. CompX believes it is in substantial compliance with all such laws and regulations.
Therefore, over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects; however, this increase only partly compensated for the shut-down of various TiO 2 plants throughout the world. Although overall industry demand is expected to increase in 2024, other than through debottlenecking projects and the LB Group Co.
Therefore, over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects; however, this increase only partly compensated for the shut-down of various TiO 2 plants throughout the world.
Kronos expects to spend approximately $14 million on research and development in 2024. - 11 - ‌ ​ Kronos continually seeks to improve the quality of its grades and has been successful at developing new grades for existing and new applications to meet the needs of its customers and increase product life cycles.
Kronos continually seeks to improve the quality of its grades and has been successful at developing new grades for existing and new applications to meet the needs of its customers and increase product life cycles.
The sulfate process produces a warmer undertone and is preferred for use in selected paper products, ceramics, rubber tires, man-made fibers, food products, pharmaceuticals and cosmetics, some of which generate higher profit margins. Kronos produced 545,000, 492,000 and 401,000 metric tons of TiO 2 in 2021, 2022 and 2023, respectively.
The sulfate process produces a warmer undertone and is preferred for use in selected paper products, ceramics, rubber tires, man-made fibers, food products, pharmaceuticals and cosmetics, some of which generate higher profit margins.
Competition There are multiple new construction residential communities in the greater Las Vegas, Nevada area. LandWell competes with these communities on the basis of location, planned community amenities and features, proximity to major retail and recreational activities, and the perception of quality of life within the new community.
LandWell competes with these communities on the basis of location, planned community amenities and features, proximity to major retail and recreational activities, and the perception of quality of life within the new community.
Kronos has taken steps to integrate ESG considerations into operating decisions with other critical business factors. Kronos biennially publishes an ESG Report, which is available on its public website. The primary purpose of its ESG Report is to describe Kronos’ policies and programs in the area of ESG, including certain internal metrics and benchmarks related to various aspects of ESG.
Kronos periodically publishes an ESG Report, which is available on its public website. The primary purpose of its ESG Report is to describe Kronos’ policies and programs in the area of ESG, including certain internal metrics and benchmarks related to various aspects of ESG.
Patents generally have a term of 20 years, and CompX’s patents have remaining - 15 - ‌ ​ terms ranging from less than 1 year to 17 years at December 31, 2023.
Patents generally have a term of 20 years, and CompX’s patents have remaining terms ranging from one year to 16 years at December 31, 2024.
Key events in our history include: ● 1979 – Contran acquires control of LLC; ● 1981 – Contran acquires control of our other predecessor company; ● 1982 – Contran acquires control of Keystone Consolidated Industries, Inc., a predecessor to CompX; ● 1984 – Keystone spins-off an entity that includes what is to become CompX; this entity subsequently merges with LLC; ● 1986 – Contran acquires control of NL, which at the time owns 100% of Kronos; ● 1987 – LLC and another Contran controlled company merge to form Valhi, our current corporate structure; ● 2003 – NL completes the spin-off of Kronos through the pro-rata distribution of Kronos shares to its shareholders including us; ● 2004 through 2005 – NL distributes Kronos shares to its shareholders, including us, through quarterly dividends; ● 2010 – Kronos completes a secondary offering of its common stock lowering our ownership of Kronos to 80%; ● 2012 – In December CompX completes the sale of its furniture components business; ● 2013 – In December we purchased an additional ownership interest in and became the majority owner of Basic Management, Inc. and The LandWell Company; ● 2015 – The first homes in our Cadence planned community were completed by third-party builders and sold to the public; ● 2020 – In December LandWell completed the first bulk sale of land within the Cadence planned community; ● 2022 – In July Basic Water Company (BWC) ceased water delivery due to a decline in water levels at Lake Mead in Nevada and in September BWC filed for bankruptcy protection; and ● 2023 – In November, upon the Bankruptcy Court’s approval of BWC’s plan of reorganization, BWC sold substantially all of its assets.
Key events in our history include: ● 1979 – Contran acquires control of LLC; ● 1981 – Contran acquires control of our other predecessor company; ● 1982 – Contran acquires control of Keystone Consolidated Industries, Inc., a predecessor to CompX; ● 1984 – Keystone spins-off an entity that includes what is to become CompX; this entity subsequently merges with LLC; ● 1986 – Contran acquires control of NL, which at the time owns 100% of Kronos; ● 1987 – LLC and another Contran controlled company merge to form Valhi, our current corporate structure; ● 2003 – NL completes the spin-off of Kronos through the pro-rata distribution of Kronos shares to its shareholders including us; ● 2004 through 2005 – NL distributes Kronos shares to its shareholders, including us, through quarterly dividends; ● 2010 – Kronos completes a secondary offering of its common stock lowering our ownership of Kronos to 80%; ● 2012 – In December CompX completes the sale of its furniture components business; ● 2013 – In December we purchased an additional ownership interest in and became the majority owner of Basic Management, Inc.
Beginning in the fourth quarter of 2022 and continuing throughout 2023, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties.
Beginning in the fourth quarter of 2022 and continuing throughout the first quarter of 2024, Kronos adjusted production levels to correspond with reduced customer demand resulting from challenging economic conditions and geopolitical uncertainties. Kronos increased production levels to align with higher overall customer demand in 2024. Properties – Kronos operates facilities throughout North America and Europe.
Kronos, along with its distributors and agents, sells and provides technical services for its products to approximately 3,000 customers in 100 countries with the majority of sales in Europe, North America and the Asia Pacific region. We believe Kronos has developed considerable expertise and efficiency in the manufacture, sale, shipment and service of its products in domestic and international markets.
Kronos, along with its distributors - 4 - ‌ ​ and agents, sells and provides technical services for its products to approximately 3,000 customers in 100 countries with the majority of sales in Europe, North America and the Asia Pacific region.
See Note 7 to our Consolidated Financial Statements and “TiO 2 manufacturing joint venture.” The joint venture owns the land and facility. Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above. Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.
Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above. Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.
Business overview Through our majority-controlled subsidiary, CompX, we are a leading manufacturer of security products including mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications.
CompX manufactures security products including mechanical and electrical cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare applications and a variety of other industries.
Our Component Products Segment sells to a diverse customer base with only one customer representing 10% or more of our Component Products Segment’s sales in 2023 (United States Postal Service representing 24% of which 11% related to a pilot project). Our Component Products Segment’s largest ten customers accounted for approximately 52% of its sales in 2023.
Our Component Products Segment sells to a diverse customer base with only one customer representing 10% or more of our Component Products Segment’s sales in 2024 (United States Postal Service – 21%). Our Component Products Segment’s largest ten customers accounted for approximately 47% of its sales in 2024. Competition The markets in which CompX participates are highly competitive.
This facility has received a ReWa Compliance Excellence Award multiple years for its exemplary performance from Renewable Water Resources, an organization which sets regulatory and water policies for the Mauldin facility’s geographic region.
CompX operates three manufacturing facilities and CompX’s production processes requiring waste-water discharge are consolidated at its Mauldin, South Carolina facility. This facility has received a ReWa Compliance Excellence Award multiple years for its exemplary performance from Renewable Water Resources, an organization which - 16 - ‌ ​ sets regulatory and water policies for the Mauldin facility’s geographic region.

… 59 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

25 edited+17 added−1 removed77 unchanged
Biggest changeWe have significant international operations which, along with our customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, terrorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas), natural disasters, pandemics or other health crises and political conditions.
Biggest changeOur Chemicals Segment has significant international operations which, along with its customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including: ● global or regional economic downturns; ● changes in tariffs, trade barriers, and regulatory requirements, such as the enactment of tariffs on goods imported into the U.S. including, but not limited to, the recently enacted tariff on goods imported from Canada where it manufactures a significant portion of the TiO 2 it sells in North America.
The occurrence of any of these factors could result in reduced earnings or operating losses. ● Competitors may be able to drive down prices for our Component Products Segment’s products beyond its ability to adjust costs because their costs are lower than our Component Products Segment’s, especially products sourced from Asia. ● Competitors’ financial, technological and other resources may be greater than our Component Products Segment’s resources, which may enable them to more effectively withstand changes in market conditions. ● Competitors may be able to respond more quickly than our Component Products Segment can to new or emerging technologies and changes in customer requirements. ● A reduction of our Component Products Segment’s market share with one or more of its key customers, or a reduction in one or more of its key customers’ market share for their end-use products, may reduce demand for its products. ● New competitors could emerge by modifying their existing production facilities to manufacture products that compete with our Component Products Segment’s products. ● Our Component Products Segment may not be able to sustain a cost structure that enables it to be competitive. ● Customers may no longer value our Component Products Segment’s product design, quality or durability over the lower cost products of its competitors. - 22 - ‌ ​ Our development of innovative features for current products is critical to sustaining and growing our Component Product Segment’s sales.
The occurrence of any of these factors could result in reduced earnings or operating losses. ● Competitors may be able to drive down prices for our Component Products Segment’s products beyond its ability to adjust costs because their costs are lower than our Component Products Segment’s, especially products sourced from Asia. ● Competitors’ financial, technological and other resources may be greater than our Component Products Segment’s resources, which may enable them to more effectively withstand changes in market conditions. ● Competitors may be able to respond more quickly than our Component Products Segment can to new or emerging technologies and changes in customer requirements. ● Consolidation of our Component Products Segment’s competitors or its customers in any of the markets in which it competes may result in reduced demand for its products. ● A reduction of our Component Products Segment’s market share with one or more of its key customers, or a reduction in one or more of its key customers’ market share for their end-use products, may reduce demand for its products. ● New competitors could emerge by modifying their existing production facilities to manufacture products that compete with our Component Products Segment’s products. ● Our Component Products Segment may not be able to sustain a cost structure that enables it to be competitive. ● Customers may no longer value our Component Products Segment’s product design, quality or durability over the lower cost products of its competitors. - 22 - ‌ ​ Our development of innovative features for current products is critical to sustaining and growing our Component Product Segment’s sales.
If our subsidiaries were to become unable to make sufficient cash dividends or other distributions to us, our ability to service our liabilities and to pay dividends on our common stock could be adversely affected. In addition, a significant portion of our assets consist of ownership interests in our subsidiaries.
If our subsidiaries were to become unable to make sufficient - 24 - ‌ ​ cash dividends or other distributions to us, our ability to service our liabilities and to pay dividends on our common stock could be adversely affected. In addition, a significant portion of our assets consist of ownership interests in our subsidiaries.
If such increased costs of production were to materialize, we may be unable to pass price increases on to our customers to compensate for increased production costs, which may decrease our liquidity, operating income and results of operations.
If such increased costs of production were to materialize, we may - 27 - ‌ ​ be unable to pass price increases on to our customers to compensate for increased production costs, which may decrease our liquidity, operating income and results of operations.
The majority (but not all) of our sales from our Chemicals Segment’s operations outside the United States are denominated in currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.
The majority (but not all) of our sales from our Chemicals Segment’s operations outside the United States are denominated in - 25 - ‌ ​ currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.
In 2023, approximately 90% of our Chemicals Segment’s sales were attributable to sales of TiO 2 . TiO 2 is used in many “quality of life” products for which demand historically has been linked to global, regional, and local gross domestic product and discretionary spending, which can be negatively impacted by regional and world events or economic conditions.
In 2024, approximately 90% of our Chemicals Segment’s sales were attributable to sales of TiO 2 . TiO 2 is used in many “quality of life” products for which demand historically has been linked to global, regional, and local gross domestic product and discretionary spending, which can be negatively impacted by regional and world events or economic conditions.
The global market in which our Chemicals Segment operates is concentrated, with the top five TiO 2 producers accounting for approximately 52% of the world’s production capacity and is highly competitive. Competition is based on a number of factors, such as price, product quality and service.
The global market in which our Chemicals Segment operates is concentrated, with the top five TiO 2 producers accounting for approximately 51% of the world’s production capacity and is highly competitive. Competition is based on a number of factors, such as price, product quality and service.
Since expenditures for these types of activities are not considered research and development expense under accounting principles generally accepted in the United States of America (GAAP), the amount of our Component Products Segment’s research and development expenditures, which is not significant, is not indicative of the overall effort involved in the development of new product features.
Since expenditures for these types of activities are not considered research and development expense under accounting principles generally accepted in the United States of America (“GAAP”), the amount of our Component Products Segment’s research and development expenditures, which is not significant, is not indicative of the overall effort involved in the development of new product features.
A substantial portion of the revenues and assets associated with our Real Estate Management and Development Segment relates to certain land under development in Henderson, Nevada, including approximately 2,100 acres zoned for residential/planned community purposes. A substantial majority of the land in the residential/planned community was sold prior to 2023.
A substantial portion of the revenues and assets associated with our Real Estate Management and Development Segment relates to certain land under development in Henderson, Nevada, including approximately 2,100 acres zoned for residential/planned community purposes. A substantial majority of the land in the residential/planned community was sold prior to 2024.
Indebtedness outstanding under our loan from Contran and Kronos’ global revolving credit facility (Global Revolver) accrues interest at variable rates. To the extent market interest rates rise, the cost of our debt could increase, even if the amount borrowed remains the same, adversely affecting financial condition, results of operations and cash flows.
Indebtedness outstanding under our loan from Contran and Kronos’ Global Revolver accrues interest at variable rates. To the extent market interest rates rise, the cost of our debt could increase, even if the amount borrowed remains the same, adversely affecting financial condition, results of operations and cash flows.
Our Chemicals Segment experienced increases in feedstock costs in 2022 and 2023, for example, which affected its margins. Our Chemicals Segment has also experienced higher operating costs such as energy costs.
Our Chemicals Segment experienced increases in feedstock costs in 2023 and 2024, for example, which affected its margins. Our Chemicals Segment has also experienced higher operating costs such as energy costs.
We generally recognize revenue from these land sales over time using cost-based inputs because we receive substantially all cash payment at the time of sale but significant development obligations still exist. We currently estimate development obligations are approximately $107 million and will take approximately three to four years to complete.
We generally recognize revenue from these land sales over time using cost-based inputs because we receive substantially all cash payment at the time of sale but significant development obligations still exist. We currently estimate development obligations are approximately $78 million and will take approximately two to three years to complete.
Our Chemicals Segment’s current agreements require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $583 million beginning in 2024 and extending through 2026. In addition, our Chemicals Segment has other long-term supply and service contracts that provide for various raw materials and services.
Our Chemicals Segment’s current agreements require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $542 million beginning in 2025 and extending through 2026. In addition, our Chemicals Segment has other long-term supply and service contracts that provide for various raw materials and services.
These agreements require it to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $72 million at December 31, 2023. Our Chemicals Segment’s commitments under these contracts could adversely affect our financial results if it significantly reduces its production and is unable to modify the contractual commitments.
These agreements require it to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $67 million at December 31, 2024. Our Chemicals Segment’s commitments under these contracts could adversely affect our financial results if it significantly reduces its production and is unable to modify the contractual commitments.
Changes in currency exchange rates and interest rates can adversely affect our net sales, profits, and cash flows. We operate our businesses in several different countries and sell our products worldwide. For example, during 2022 and 2023 approximately 45% and 44%, respectively, of our Chemicals Segment’s sales volumes were sold into European markets.
Changes in currency exchange rates and interest rates can adversely affect our net sales, profits, and cash flows. We operate our businesses in several different countries and sell our products worldwide. For example, during 2023 and 2024 approximately 44% of our Chemicals Segment’s sales volumes were sold into European markets.
In addition to our indebtedness, we are party to various lease and other agreements (including feedstock purchase contracts and other long-term supply and service contracts as discussed above) pursuant to which, along with our indebtedness, we are committed to pay approximately $632 million in 2024.
In addition to our indebtedness, we are party to various lease and other agreements (including feedstock purchase contracts and other long-term supply and service contracts as discussed above) pursuant to which, along with our indebtedness, we are committed to pay approximately $794 million in 2025.
Therefore, we are exposed to risks related to the need to convert currencies we receive from the sale of our products into the currencies required to pay for certain of our operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of our results of operations between periods. ​ - 25 - ‌ ​ Legal, Compliance and Regulatory Risk Factors We could incur significant costs related to legal and environmental remediation matters.
Therefore, we are exposed to risks related to the need to convert currencies we receive from the sale of our products into the currencies required to pay for certain of our operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of our results of operations between periods.
In the event that any such third-party prevails against us on such claims, there could be an adverse effect on our financial condition and results of operations. - 26 - ‌ ​ Although it is the practice of our Chemicals Segment to enter into confidentiality agreements with its employees and third parties to protect its proprietary expertise and other trade secrets, these agreements may not provide sufficient protection for its trade secrets or proprietary know-how, or adequate remedies for breaches of such agreements may not be available in the event of an unauthorized use or disclosure of such trade secrets and know-how.
Although it is the practice of our Chemicals Segment to enter into confidentiality agreements with its employees and third parties to protect its proprietary expertise and other trade secrets, these agreements may not provide sufficient protection for its trade secrets or proprietary know-how, or adequate remedies for breaches of such agreements may not be available in the event of an unauthorized use or disclosure of such trade secrets and know-how.
NL formerly manufactured lead pigments for use in paint. NL and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
Legal, Compliance and Regulatory Risk Factors We could incur significant costs related to legal and environmental remediation matters. NL formerly manufactured lead pigments for use in paint. NL and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
In addition, any adopted future laws and regulations focused on climate change and/or GHG emissions could negatively impact our ability (or that of our customers and suppliers) to compete with companies situated in areas not subject to such laws and regulations. ​ - 27 - ‌ ​ General Risk Factors Operating as a global business presents risks associated with global and regional economic, political and regulatory environments.
In addition, any adopted future laws and regulations focused on climate change and/or GHG emissions could negatively impact our ability (or that of our customers and suppliers) to compete with companies situated in areas not subject to such laws and regulations.
However, we may be unable to obtain protection for our intellectual property in key jurisdictions. Although we own and have applied for numerous patents and trademarks throughout the world, we may have to engage in judicial enforcement in order to protect our patent rights and other proprietary rights.
Although we own and have applied for numerous patents and trademarks throughout the world, we may have to engage in judicial enforcement in order to protect our patent rights and other proprietary rights. - 26 - ‌ ​ Our patents and other intellectual property rights may be challenged, invalidated, circumvented, rendered unenforceable or otherwise compromised.
Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third-party intellectual property rights.
A failure to protect, defend or enforce our intellectual property could have an adverse effect on our financial condition and results of operations. Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third-party intellectual property rights.
We may encounter difficulties enforcing agreements or other legal rights and the effective tax rate may fluctuate based on the variability of geographic earnings and statutory tax rates. TiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions.
TiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions. These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition. Our Chemicals Segment is experiencing increasing competition from China.
These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition. Technology failures or cybersecurity breaches could have a material adverse effect on our operations.
The ultimate impact of any tariffs will depend on various factors, including the length of time tariffs are ultimately implemented and the amount, scope and nature of the tariffs. Technology failures or cybersecurity breaches could have a material adverse effect on our operations.
We have a significant amount of debt, primarily related to Kronos’ Senior Secured Notes issued in September 2017 and February 2024, Kronos’ and our loans from Contran Corporation and the LandWell bank note. As of December - 24 - ‌ ​ 31, 2023, our total consolidated debt was approximately $547 million.
We have a significant amount of debt, primarily related to Kronos’ 9.50% Senior Secured Notes due 2029, Kronos’ 3.75% Senior Secured Notes due 2025, Kronos’ term loan from Contran, Kronos’ borrowings on its global revolving credit facility (the “Global Revolver”), our loan from Contran Corporation and the LandWell bank note.
Removed
Our patents and other intellectual property rights may be challenged, invalidated, circumvented, rendered unenforceable or otherwise compromised. A failure to protect, defend or enforce our intellectual property could have an adverse effect on our financial condition and results of operations.
Added
Kronos’ recent acquisition of the remaining 50% interest in LPC may not generate benefits we anticipate and may otherwise affect our business and prospects. Kronos recently completed the LPC acquisition in which it purchased the 50% ownership interest in LPC it did not previously own.
Added
If Kronos experiences unforeseen technological, operational or other difficulties in managing the integration of LPC as its wholly-owned subsidiary, Kronos may not be able to implement the process innovations at the facility that it expects. In addition, Kronos may not be able to achieve the synergies or improve efficiency and product quality that it expects.
Added
With or without such difficulties, the integration of the LPC facility into Kronos’ operations may divert significant management time and attention from its other operations.
Added
If Kronos fails to successfully integrate LPC into its operations, or if the LPC acquisition does not provide expected synergies or sales increases, or if LPC has unexpected legal, regulatory, or financial liabilities, our business, financial condition, results of operations and prospects could be adversely affected.
Added
As of December 31, 2024, our total consolidated debt was approximately $563 million.
Added
However, we may be unable to obtain protection for our intellectual property in key jurisdictions.
Added
In the event that any such third-party prevails against us on such claims, there could be an adverse effect on our financial condition and results of operations.
Added
General Risk Factors Operating as a global business presents risks associated with global and regional economic, political and regulatory environments. Our Chemicals Segment manufactures and distributes its products globally. Our Chemicals Segment’s revenue from non-U.S. markets accounted for approximately 68%, 66%, and 66% of its revenue for the years ended December 31, 2022, 2023 and 2024, respectively.
Added
Tariffs could make its products more expensive which would reduce demand or require our Chemicals Segment to absorb the increased costs reducing its operating margins; ● protectionist laws, policies, and business practices and nationalistic campaigns such as economic sanctions and exchange controls; ● U.S. relations with the governments of the other countries in which our Chemicals Segment operates; ● t errorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas); ● natural disasters, pandemics or other health crises, climate change, and other events beyond our control; ● difficulties enforcing agreements or other legal rights; and ● our Chemicals Segment’s effective tax rate may fluctuate based on the variability of geographic earnings and statutory rates.
Added
Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices. China has dumped lower cost sulfate process TiO 2 into the markets our Chemicals Segment serves.
Added
In some cases, the TiO 2 industry has been successful in getting anti-competitive duties enacted on Chinese imports such as the European duties enacted in 2024. ​ The U.S. federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.
Added
For example, on March 4, 2025, the U.S. government implemented a 25% tariff on all imports from Mexico and Canada into the U.S.
Added
As our Chemicals Segment currently manufactures a significant portion of its North American TiO 2 in Canada, if sustained for an extended period of time, the 25% tariff on our Chemicals Segment’s imports into the U.S. from Canada, without exclusion, will make its products manufactured in Canada and sold into the U.S. more expensive.
Added
As a result, demand for these products could be reduced, or our Chemicals Segment could be required to absorb the increased costs or increase prices of such products.
Added
Such tariffs and, if enacted, any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs, trade barriers and other protectionist or retaliatory measures taken in response, could adversely impact our Chemicals Segment’s ability to sell its products in the U.S. or reduce its revenues and gross margins.
Added
These measures may also increase our Chemicals Segment’s costs of Canadian - 28 - ‌ ​ feedstock imported into the U.S. and could adversely impact its gross margins or require our Chemicals Segment to raise prices thereby making its products less competitive.
Added
Additional tariffs imposed by the U.S or any retaliatory or reciprocal tariffs imposed by other countries could also increase the cost of feedstock and other raw materials that go into making TiO 2 , the extent of which is unknown.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

16 edited+1 added−1 removed1 unchanged
Biggest changeThe board has delegated some of its primary risk oversight to board committees, including that our audit committee facilitates the board’s process of oversight of our overall risk management approach. Our full board retains oversight of cybersecurity because of its importance to us and visibility with our customers.
Biggest changeOur board of directors is apprised of cybersecurity incidents deemed to have significant business impact, even if they are not material to us. The board has delegated some of its primary risk oversight to board committees, including that our audit committee facilitates the board’s process of oversight of our overall risk management approach.
Our CIO, who also serves as the Kronos CIO, reports to our and Kronos’ chief executive officers, respectively. CompX’s cybersecurity program is led by the director of information technology (IT). The director of IT reports to CompX’s vice president in charge of coordinating operational activities within CompX’s two operating reporting units.
Our CIO, who also serves as the Kronos CIO, reports to our and Kronos’ chief executive officers, respectively. CompX’s cybersecurity program is led by the director of information technology (“IT”). The director of IT reports to CompX’s vice president in charge of coordinating operational activities within CompX’s two operating reporting units.
ITEM 1C. CYBERSECURITY We operate through our subsidiaries and receive services through our intercorporate services agreement (ISA) with Contran (see Note 17 to our Consolidated Financial Statements). We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats.
ITEM 1C. CYBERSECURITY We operate through our subsidiaries and receive services through our intercorporate services agreement (“ISA”) with Contran (see Note 17 to our Consolidated Financial Statements). We recognize the importance of proactively assessing, identifying, and managing material risks associated with cybersecurity threats.
Our corporate cybersecurity program is led by our chief information officer (CIO) who is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. Our corporate information systems are owned and operated by Contran and provided to us through the ISA.
Our corporate cybersecurity program is led by our chief information officer (“CIO”), who is responsible for developing and executing our overall information security - 29 - ‌ ​ strategy, policy, security engineering, operations and cyber threat detection and response. Our corporate information systems are owned and operated by Contran and provided to us through the ISA.
These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy - 28 - ‌ ​ or security laws. Our cybersecurity programs are built on operations and compliance foundations. Operations focus on continuous detection, prevention, measurement, analysis, and response to cybersecurity alerts and incidents and on emerging threats.
These risks include, among other things: operational disruptions, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. Our cybersecurity programs are built on both operational and compliance foundations. The operational component focuses on continuous detection, prevention, measurement, analysis, and response to cybersecurity alerts and incidents and on emerging threats.
Compliance establishes oversight of our cybersecurity programs by creating risk-based controls to protect the integrity, confidentiality, accessibility and availability of company data stored, processed or transferred. Our cybersecurity program is integrated within our overall risk management processes. Kronos and CompX each have their own cybersecurity programs.
The compliance component establishes oversight of our cybersecurity programs by creating risk-based controls to protect the integrity, confidentiality, accessibility and availability of company data stored, processed or transferred. Our cybersecurity program is fully integrated into our enterprise-wide risk management framework. Kronos and CompX each have their own cybersecurity programs.
Our, Kronos’ and CompX’s information technology teams review enterprise risk management level cybersecurity risks annually. We, Kronos and CompX continually enhance our security structure with the ultimate goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing our system resilience in an effort to minimize the business impact should an incident occur.
Our, Kronos’ and CompX’s information technology teams review cybersecurity risks at least annually, integrating findings into strategic risk assessments. We, Kronos and CompX continually enhance our cyber defense strategy with the ultimate goal of preventing cybersecurity incidents to the extent feasible, while simultaneously bolstering our system resilience in an effort to minimize the business impact should an incident occur.
For more information - 29 - ‌ ​ about the cybersecurity risks we face, see the risk factor entitled “Technology failures or cybersecurity breaches could have a material adverse effect on our operations.” in Item 1A- “Risk Factors”. ​
Thus far all such incidents have been minor, isolated and promptly contained. For more information about the cybersecurity risks we face, see the risk factor entitled “Technology failures or cybersecurity breaches could have a material adverse effect on our operations.” in Item 1A- “Risk Factors.”
Our CIDAC, as well as the Kronos and CompX CIDAC, performs simulations and tabletop exercises at a management level to evaluate our readiness and response to cybersecurity incidents. External resources and advisors are incorporated as needed.
Our CIDAC, as well as the Kronos and CompX CIDAC, performs simulations and tabletop exercises at a management level to evaluate our readiness and response to cybersecurity incidents. As needed, we collaborate with external cybersecurity experts and legal advisors to help ensure a robust response strategy.
Third parties also play a role in our cybersecurity. We, Kronos and CompX engage third-party services to conduct evaluations of our security controls through penetration testing, red team testing, consulting on best practices and to address new challenges. These evaluations include testing both the design and operational effectiveness of security controls.
Third parties also play a role in our cybersecurity. We, Kronos and CompX engage reputable third-party security firms for consultation on industry best practices and regulatory standards and to conduct routine evaluations of our cybersecurity, such as through penetration testing and security audits; these evaluations include testing both the design and operational effectiveness of security controls.
In the event of an incident, we intend to follow our detailed incident response playbook, which outlines the steps to be followed from incident detection to mitigation, recovery and notification. This includes notifying functional areas (such as legal and human resources), senior leadership and the board as appropriate. We, Kronos and CompX face a number of cybersecurity risks.
In the event of an incident, we follow a structured incident response playbook, which outlines clear and defined steps to be followed from incident detection to mitigation, recovery and notification, including notifying functional areas (such as legal and human resources), senior leadership and the board, as appropriate. We also conduct post-incident reviews to identify lessons learned and implement continuous improvements.
Our board of directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives.
Our board of directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Senior leadership, including our chief financial officer and CIO, provides regular updates to the board of directors on our cybersecurity posture, emerging threats and our risk mitigation efforts.
All employees are required to complete cybersecurity training at least once a year and have access to more frequent cybersecurity training through online training. We also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings.
All employees are required to complete cybersecurity training at least once a year and have access to more frequent cybersecurity training through periodic updates. Employees in certain roles also receive additional role-based, specialized cybersecurity training. We, Kronos and CompX each have a Cybersecurity Incident Disclosure and Controls Committee (“CIDAC”) which is central to the response and evaluation of cybersecurity incidents.
Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. The IT teams are responsible for categorizing cybersecurity incidents, with incidents evaluated to be high or critical security risks brought to the CIDAC for review and evaluation. Incidents are evaluated to determine materiality as well as operational and business impact.
The IT teams are responsible for categorizing cybersecurity incidents, and those deemed high-risk or critical are escalated to the CIDAC for review and response coordination. Incidents are evaluated to determine materiality and for operational, financial and reputational impact.
To date, such risks have not materially affected us, including our business strategy, results of operations or financial condition. While we have not experienced any breaches, we have encountered occasional attempts, albeit of minor significance, targeting our data and systems, including instances of malware and computer virus infiltration. Thus far all such incidents have been minor.
We, Kronos and CompX face a number of cybersecurity risks. To date, such risks have not materially affected us, including our business strategy, results of operations or financial condition. While we have not experienced any major breaches, we actively monitor and mitigate cyber threats, including phishing attempts, malware and targeted attacks.
We, Kronos and CompX each have a Cybersecurity Incident Disclosure and Controls Committee (CIDAC) which is central to the response and evaluation of cybersecurity incidents. Our CIDAC is comprised of our CIO and other senior executives including our chief executive officer, chief financial officer and general counsel.
Our CIDAC is comprised of our CIO and other senior executives including our chief executive officer, chief financial officer and general counsel. Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation.
Removed
Senior leadership, including our chief financial officer and CIO, regularly brief the board of directors on our cybersecurity and information security posture, and our board of directors is apprised of cybersecurity incidents deemed to have a high or critical business impact, even if immaterial to us.
Added
Our full board retains oversight of cybersecurity because of its importance to us and visibility with our customers.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES We along with our subsidiaries, Kronos, CompX and NL lease office space through Contran for our principal executive offices in Dallas, Texas. Our BMI and LandWell subsidiaries’ principal offices are in an owned building in Henderson, Nevada.
Biggest changeITEM 2. PROPERTIES We along with our subsidiaries, Kronos, CompX and NL lease office space through Contran for our principal executive offices in Dallas, Texas. Our BMI and LandWell subsidiaries’ principal offices are in an owned building in - 30 - ‌ ​ Henderson, Nevada.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

34 edited+16 added−13 removed45 unchanged
Biggest changePursuant to the settlement agreement, NL placed an additional $9.0 million into an escrow account which is included in noncurrent restricted cash on our Consolidated Balance Sheets. For financial reporting purposes, using a discount rate of 1.9% per annum, we discounted the aggregate $101.7 million settlement to the estimated net present value of $96.3 million.
Biggest changeFor financial reporting purposes, using a discount rate of 1.9% per annum, we discounted the aggregate $101.7 million settlement to the estimated net present value of $96.3 million. NL made the initial $25.0 million payment in September 2019 and five annual installment payments of $12.0 million beginning in September 2020 and each September thereafter through 2024.
In June 2008, NL received a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection (NJDEP) regarding the Margaret’s Creek site in Old Bridge Township, New Jersey. NJDEP alleged that a waste hauler transported waste from one of its former facilities for disposal at the site in the early 1970s.
In June 2008, NL received a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection (“NJDEP”) regarding the Margaret’s Creek site in Old Bridge Township, New Jersey. NJDEP alleged that a waste hauler transported waste from one of its former facilities for disposal at the site in the early 1970s.
Environmental Matters and Litigation Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative - 31 - ‌ ​ proceedings or investigations arising under federal and state environmental laws and common law.
Environmental Matters and Litigation Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative proceedings or investigations arising under federal and state environmental laws and common law.
In addition, from time to time, NL has received notices regarding asbestos or silica claims purporting to be brought against former subsidiaries, including notices provided to insurers with which it has entered into settlements extinguishing certain insurance policies. These insurers may seek indemnification from NL.
In addition, from time to time, NL has received notices regarding asbestos or silica claims purporting to be brought against former subsidiaries, including notices provided - 35 - ‌ ​ to insurers with which it has entered into settlements extinguishing certain insurance policies. These insurers may seek indemnification from NL.
Actual costs could exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and costs may be incurred for sites where no estimates presently can be made. Further, additional environmental and related matters may arise in the future.
Actual costs could exceed accrued amounts or the upper end of the range for sites for which estimates have been - 32 - ‌ ​ made, and costs may be incurred for sites where no estimates presently can be made. Further, additional environmental and related matters may arise in the future.
(Supreme Court of the State of New York, County of New York, Index No. 14/650103). The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued - 35 - ‌ ​ to NL by the plaintiff with respect to certain lead pigment lawsuits.
(Supreme Court of the State of New York, County of New York, Index No. 14/650103). The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued to NL by the plaintiff with respect to certain lead pigment lawsuits.
The complaint seeks compensatory and punitive damages and alleges, among other things, trespass, private nuisance, negligence, strict liability, and claims under CERCLA and the New Jersey Spill Act. NL has denied liability and will defend vigorously against all of the claims.
The complaint seeks compensatory and punitive damages and alleges, among other things, trespass, private nuisance, negligence, strict liability, and claims under CERCLA and the New Jersey Spill Act. NL has denied liability and will defend vigorously against all claims.
At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next - 32 - ‌ ​ twelve months, and we classify this estimate as a current liability. We classify the remaining accrued environmental costs as a noncurrent liability.
At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next twelve months, and we classify this estimate as a current liability. We classify the remaining accrued environmental costs as a noncurrent liability.
Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity. We have also accrued approximately $6 million at December 31, 2023 for other environmental cleanup matters which represents our best estimate of the liability.
Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity. We have also accrued approximately $6 million at December 31, 2024 for other environmental cleanup matters which represents our best estimate of the liability.
On a quarterly basis, we evaluate the potential range of our liability for environmental remediation and related costs at sites where we have been named as a PRP or defendant, including sites for which NL’s wholly-owned environmental management subsidiary, NL Environmental Management Services, Inc., (EMS), has contractually assumed NL’s obligations.
On a quarterly basis, we evaluate the potential range of our liability for environmental remediation and related costs at sites where we have been named as a PRP or defendant, including sites for which NL’s wholly-owned environmental management subsidiary, NL Environmental Management Services, Inc., (“EMS”), has contractually assumed NL’s obligations.
NL, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (LIA), which discontinued business operations in 2002, have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
NL, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (“LIA”), which discontinued business operations in 2002, have previously been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.
Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (PRP) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (CERCLA), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors and NL or its predecessors, subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (EPA) Superfund National Priorities List or similar state lists.
Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (“PRP”) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (“CERCLA”), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors and NL or its predecessors, subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (“EPA”) Superfund National Priorities List or similar state lists.
In addition, some plaintiffs allege exposure to asbestos from working in various facilities previously owned and/or operated by NL. There are 108 of these types of cases pending, involving a total of approximately 582 plaintiffs. In addition, the claims of approximately 8,715 plaintiffs have been administratively dismissed or placed on the inactive docket in Ohio state courts.
In addition, some plaintiffs allege exposure to asbestos from working in various facilities previously owned and/or operated by NL. There are 115 of these types of cases pending, involving a total of approximately 589 plaintiffs. In addition, the claims of approximately 8,715 plaintiffs have been administratively dismissed or placed on the inactive docket in Ohio state courts.
NL intends to deny liability and will defend vigorously against all claims. - 34 - ‌ ​ Other Litigation NL – NL has been named as a defendant in various lawsuits in several jurisdictions, alleging personal injuries as a result of occupational exposure primarily to products manufactured by our former operations containing asbestos, silica and/or mixed dust.
NL has denied liability and will defend vigorously against all claims. Other Litigation NL – NL has been named as a defendant in various lawsuits in several jurisdictions, alleging personal injuries as a result of occupational exposure primarily to products manufactured by our former operations containing asbestos, silica and/or mixed dust.
NL’s sixth installment will be made with funds already on deposit at the court, which is included in noncurrent restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by NL (and any amounts on deposit in excess of the final payment would be returned to NL).
NL’s sixth installment due in September 2025 will be made with funds already on deposit at the court, which is included in current restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by NL (and any amounts on deposit in excess of the final payment would be returned to NL).
Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking contribution for any damages they may ultimately have to pay to the plaintiff. NL believes it has substantial defenses to these claims under Wisconsin law and intends to defend itself vigorously. New cases may continue to be filed against NL.
Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking - 31 - ‌ ​ contribution for any damages they may ultimately have to pay to the plaintiff. NL believes it has substantial defenses to these claims under Wisconsin law and intends to defend itself vigorously.
Government during its Chapter 11 bankruptcy. The court in each case entered indefinite stays of the litigation in 2013 and 2015, which remain in place. In July 2012, NL was served in EPEC Polymers, Inc., v. NL Industries, Inc. , (United States District Court for the District of New Jersey, Case 3:12-cv-03842-PGS-TJB).
The court in each case entered indefinite stays of the litigation in 2013 and 2015, which remain in place. In July 2012, NL was served in EPEC Polymers, Inc., v. NL Industries, Inc. , (United States District Court for the District of New Jersey, Case 3:12-cv-03842-PGS-TJB).
At December 31, 2023, NL had accrued approximately $91 million related to approximately 33 sites associated with remediation and related matters that NL believes are at the present time and/or in their current phase reasonably estimable.
At December 31, 2024, NL had accrued approximately $69 million related to approximately 30 sites associated with remediation and related matters that NL believes are at the present time and/or in their current phase reasonably estimable.
In March 2014, EPA issued a UAO to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.
In March 2014, EPA issued a unilateral administrative order (“UAO”) to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.
In June 2022, NL received a letter from the NJDEP informing NL that remediation of contaminated sites upriver of the former Sayreville site had progressed to the point that it was now appropriate for NL to resume investigating the sediments adjacent to the Sayreville site.
In June 2022, NL received a letter from the NJDEP informing NL that remediation of contaminated sites upriver of the former Sayreville site had progressed to the point that it was now appropriate for NL to resume investigating the sediments adjacent to the Sayreville site. NL has been diligently conducting that investigation in compliance with NJDEP regulations.
We do not know if NL will incur liability in the future in respect of any of the pending or possible litigation in view of the inherent uncertainties involved in court and jury rulings.
New cases may continue to be filed against NL. We do not know if NL will incur liability in the future in respect of any of the pending or possible litigation in view of the inherent uncertainties involved in court and jury rulings.
At December 31, 2023, there were approximately five sites for which NL is not currently able to reasonably estimate a range of costs.
NL believes that it is not reasonably possible to estimate the range of costs for certain sites. At December 31, 2024, there were approximately five sites for which NL is not currently able to reasonably estimate a range of costs.
NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name “Raritan Bay Slag Site.” In 2012, EPA notified NL of its potential liability at this site. In May 2013, EPA issued its Record of Decision for the site.
NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name Raritan Bay Slag Site (“RBS Site”). In 2012, EPA notified NL of its potential liability at this site.
(United States District Court, Western District of Missouri, Case No. 4:11-cv-00138-DGK) and ASARCO LLC v. NL Industries, Inc., et al. (United States District Court, Eastern District of Missouri, Case No. 4:11-cv-00864). Both cases are CERCLA contribution actions brought against several defendants to recover a portion of the amount the plaintiff paid in settlement with the U.S.
(United States District Court, Eastern District of Missouri, Case No. 4:11-cv-00864). Both cases are CERCLA contribution actions brought against several defendants to recover a portion of the amount the plaintiff paid in settlement with the U.S. Government during its Chapter 11 bankruptcy.
NL Industries, Inc. , (United States District Court for the Central District of California, Case 2:20-cv-11293). This complaint by a California state agency asserts claims under CERCLA, a state environmental statute, and the common law relating to lead contamination allegedly connected to a secondary lead smelter located in Vernon, California.
This complaint by a California state agency asserts claims under CERCLA, a state environmental statute, and the common law relating to lead contamination allegedly connected to a secondary lead smelter located in Vernon, California.
NL has denied liability and will defend vigorously against all claims while continuing to seek contribution from other PRPs. In August 2009, NL was served with a complaint in Raritan Baykeeper, Inc. d/b/a NY/NJ Baykeeper et al. v. NL Industries, Inc. et al. (United States District Court, District of New Jersey, Case No. 3:09-cv-04117).
In August 2009, NL was served with a complaint in Raritan Baykeeper, Inc. d/b/a NY/NJ Baykeeper et al. v. NL Industries, Inc. et al. (United States District Court, District of New Jersey, Case No. 3:09-cv-04117).
Certain of these actions have been filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others have been asserted as class actions.
Certain of these actions were filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others were asserted as class actions. NL currently has no pending lead paint class action cases or pending lead paint cases brought by housing authorities, school districts or other government entities.
The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control.
We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs. The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control.
In April 2019, EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site. NL believes that it has no liability at the site.
In April 2019, the EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site. In October 2024, NL was served in Brooklyn Union Gas Co. v. Consolidated Edison Co . of New York, et al.
In 2023, the trial court granted partial summary judgment for NL and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit. NL continues to deny liability and will defend vigorously against all claims. In December 2020, NL and several other defendants were sued in California Department of Toxic Substances v.
NL continues to deny liability and will defend vigorously against all claims. In December 2020, NL and several other defendants were sued in California Department of Toxic Substances v. NL Industries, Inc. , (United States District Court for the Central District of California, Case 2:20-cv-11293).
The upper end of the range of reasonably possible costs to NL for remediation and related matters for which NL believes it is possible to estimate costs is approximately $118 million, including the amount currently accrued. NL believes that it is not reasonably possible to estimate the range of costs for certain sites.
Excluding the $56.1 million environmental remediation settlement payment made in the first quarter of 2025 (as discussed below), the upper end of the range of reasonably possible costs to NL for remediation and related matters for which NL believes it is possible to estimate costs is approximately $38 million, including amounts currently accrued.
NL has been diligently conducting that investigation in compliance with - 33 - ‌ ​ NJDEP regulations. The lawsuit remains pending. NL continues to deny liability and will defend vigorously against all claims. In 2011, NL was served in ASARCO LLC v. NL Industries, Inc., et al.
The lawsuit remains pending. NL continues to deny liability and will defend vigorously against all claims. In 2011, NL was served in ASARCO LLC v. NL Industries, Inc., et al. (United States District Court, Western District of Missouri, Case No. 4:11-cv-00138-DGK) and ASARCO LLC v. NL Industries, Inc., et al.
In January 2024, NL was served with a third-party complaint in a matter titled Arrioena Beal v. Hattie Mitchell, et al. (Circuit Court of Milwaukee County, Wisconsin, Case No. 21-cv-3276). The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL.
We recognized an aggregate accretion expense of $.9 million, $.7 million and $.5 million in 2022, 2023 and 2024, respectively. In January 2024, NL was served with a third-party complaint in a matter titled Arrioena Beal v. Hattie Mitchell, et al. (Circuit Court of Milwaukee County, Wisconsin, Case No. 21-cv-3276).
(United States District Court for the District of New Jersey, Civil Action No. 3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, and several federal and state entities NL alleges designed and operated the site and who have significant potential liability as compared to NL which is alleged to have been a potential source of material placed at the site by others.
(United States District Court for the District of New Jersey, Civil Action No. 3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, several federal and state entities and a number of private companies. - 33 - ‌ ​ On February 10, 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the RBS Site in Middlesex County, New Jersey.
Removed
These lawsuits seek recovery under a variety of theories, including public and private nuisance, negligent product design, negligent failure to warn, strict liability, breach of warranty, conspiracy/concert of action, aiding and abetting, enterprise liability, market share or risk contribution liability, intentional tort, fraud and misrepresentation, violations of state consumer protection statutes, supplier negligence and similar claims.
Added
Pursuant to the settlement agreement, NL had placed an additional $9.0 million into an escrow account which was previously included in noncurrent restricted cash on our Consolidated Balance Sheets. Following NL’s fifth $12.0 million installment made in September 2024, these funds became available for use and were reclassified as cash equivalents on our Consolidated Balance Sheet.
Removed
The plaintiffs in these actions generally seek to impose on the defendants responsibility for lead paint abatement and health concerns associated with the use of lead-based paints, including damages for personal injury, contribution and/or indemnification for medical expenses, medical monitoring expenses and costs for educational programs.
Added
The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL.
Removed
To the extent the plaintiffs seek compensatory or punitive damages in these actions, such damages are generally unspecified. In some cases, the damages are unspecified pursuant to the requirements of applicable state law. A number of cases are inactive or have been dismissed or withdrawn. Most of the remaining cases are in various pre-trial stages.
Added
The consent decree requires the United States Army Corps of Engineers (and other federal agencies), the State of New Jersey, the Township of Old Bridge, NL, and twenty-two other private companies to pay a total of $151.1 million, plus interest, to resolve all federal and state law claims for past and future response costs under CERCLA and the New Jersey Spill Act, including natural resource damages, contribution, and indemnification, relating to the RBS Site.
Removed
Some are on appeal following dismissal or summary judgment rulings or a trial verdict in favor of either the defendants or the plaintiffs. NL believes it has substantial defenses to these actions and NL intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.
Added
The consent decree is a global settlement of all such claims relating to the RBS Site and resolves a lawsuit captioned United States of America, et al. v. NL Industries, Inc., et al.
Removed
We do not believe it is probable we have incurred any liability with respect to pending lead pigment litigation cases to which NL is a party, and with respect to all such lead pigment litigation cases to which NL is a party, we believe liability to NL that may result, if any, in this regard cannot be reasonably estimated, because: ● NL has never settled any of the market share, intentional tort, fraud, nuisance, supplier negligence, breach of warranty, conspiracy, misrepresentation, aiding and abetting, enterprise liability, or statutory cases (other than the Santa Clara case discussed below), ● no final, non-appealable adverse judgments have ever been entered against NL, and ● NL has never ultimately been found liable with respect to any such litigation matters, including over 100 cases over a thirty-year period for which NL was previously a party and for which NL has been dismissed without any finding of liability. - 30 - ‌ ​ Accordingly, we have not accrued any amounts for any of the pending lead pigment and lead-based paint litigation cases filed by or on behalf of states, counties, cities or their public housing authorities and school districts, or those asserted as class actions.
Added
(United States District Court for the District of New Jersey, Civil Action No. 3:24-cv-08946) as well as all claims asserted by NL and the other settling parties in NL’s previously filed contribution lawsuit, NL Industries, Inc. v. Old Bridge Township, et al., discussed above.
Removed
In addition, we have determined that liability to NL which may result, if any, cannot be reasonably estimated at this time because there is no prior history of a loss of this nature on which an estimate could be made and there is no substantive information available upon which an estimate could be based.
Added
Under the terms of the consent decree, in the first quarter of 2025 NL paid $56.1 million, plus $.5 million interest, toward the global settlement and received approximately $9.6 million from the other private companies participating in the settlement.
Removed
NL made the initial $25.0 million payment in September 2019 and the first, second, third and fourth annual installment payments of $12.0 million each in September 2020, 2021, 2022 and 2023. We recognized an aggregate accretion expense of $1.1 million, $.9 million and $.7 million in 2021, 2022 and 2023, respectively.
Added
We recognized aggregate income of approximately $31.4 million in 2024 related to the adjustment of NL’s environmental accrual related to this matter and the recording of a $9.6 million receivable for the funds received in the first quarter of 2025 from the other private companies participating in the settlement.
Removed
At December 31, 2022 and December 31, 2023 we had not recognized any material receivables for recoveries. We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs.
Added
(United States District Court for the Eastern District of New York, Case No. 1:24-cv-06993). This complaint asserts claims under CERCLA and New York law against NL and a number of other private parties, federal and state agencies, and agencies of - 34 - ‌ ​ the City of New York.
Removed
NL’s suit also names certain former NL customers of the former NL facility alleged to be the source of some of the materials. In January 2014, EPA issued a Unilateral Administrative Order (UAO) to NL for clean-up of the site based on the EPA’s preferred remedy set forth in the Record of Decision.
Added
The plaintiff, a former gas manufacturer, seeks to recover a portion of investigation and remediation costs it allegedly incurred to address contamination at the Gowanus Canal Superfund Site. NL has denied liability and will defend vigorously against all claims. In January 2020, NL was sued in Atlantic Richfield, Co. v.
Removed
NL has been in discussions with EPA regarding a de minimis settlement and is otherwise taking actions necessary to respond to the UAO. If these discussions are ultimately unsuccessful, NL will continue to deny liability and will defend vigorously against all of the claims. In January 2020, NL was sued in Atlantic Richfield, Co. v.
Added
In 2023, the trial court granted partial summary judgment for NL based on the statute of limitations and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit. In January 2025, the Court of Appeals reversed the trial court’s grant of partial summary judgment and returned the matter to the trial court.
Removed
NL has denied liability and will continue to defend vigorously against all claims. In December 2023, NL and several other defendants were sued in Sunset Commercial, LLC v. Stauffer Management Co., et al. (United States District Court for the District of Nevada, Case 2:23-cv-02081).
Added
NL has denied liability and will continue to defend vigorously against all claims. In May 2024, NL was served in Philip Palmeri v. NL Industries, Inc. (Supreme Court of Niagara County, New York, Case No. E183238).
Removed
The complaint asserts claims under CERCLA as well as claims for private nuisance, negligence, trespass, and strict liability. The plaintiff asserts that hazardous substances located on its property are attributable to a large industrial facility in the area.
Added
In this lawsuit, the plaintiff asserts that radioactive material allegedly originating at a former NL facility in Niagara Falls, New York, caused the wrongful death of plaintiff’s spouse and diminished the value of plaintiff’s residential property located in Lewiston, New York. The complaint alleges that NL is liable under theories of strict liability, negligence, private nuisance and trespass.
Removed
The plaintiff alleges NL is liable for once holding a lease on the industrial property and for its past partial ownership of another company.
Added
Litigation – CompX In 2024, CompX was served with four lawsuits by public water companies in South Carolina that seek recovery of future costs to remove perfluoroalkyl and polyfluoroalkyl substances (known as “PFAS”) from their water supplies.
Added
The lawsuits have been consolidated with other PFAS cases before a single judge in Spartanburg, South Carolina and were subsequently removed to federal court. The defendants in the lawsuits include the manufacturers of PFAS products, as well as companies that allegedly used PFAS-containing products in their manufacturing operations.
Added
The four lawsuits naming CompX allege that CompX was one of many companies that used products containing PFAS in its manufacturing operations, and that such operations have collectively impacted drinking water supplies used by the water companies. The plaintiffs do not allege that CompX has failed to comply with, or has violated, any environmental regulation, permit or statute.
Added
The plaintiffs instead assert claims under common law theories of negligence, nuisance, trespass, failure to warn, and unfair trade practices. CompX intends to deny liability and will defend vigorously against all claims. - 36 - ‌ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed2 unchanged
Biggest changeThe graph shows the value at December 31 of each year assuming an original investment of $100 at December 31, 2018, and assumes the reinvestment of our regular quarterly dividends in shares of our stock. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2018 2019 2020 2021 2022 2023 Valhi common stock ​ $ 100 ​ $ 100 ​ $ 71 ​ $ 136 ​ $ 105 ​ $ 74 S&P 500 Index ​ 100 ​ 131 ​ 156 ​ 200 ​ 164 ​ 207 S&P 500 Industrial Conglomerates ​ 100 ​ 125 ​ 138 ​ 145 ​ 133 ​ 165 ​ The information contained in the performance graph shall not be deemed “soliciting material” or “filed” with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act, as amended, except to the extent we specifically request that the material be treated as soliciting material or specifically incorporate this performance graph by reference into a document filed under the Securities Act or the Securities Exchange Act. - 37 - ‌ ​ Equity Compensation Plan Information – We have an equity compensation plan, which was approved by our stockholders, pursuant to which an aggregate of 100,000 shares of our common stock can be awarded to non-employee members of our board of directors.
Biggest changeThe graph shows the value at December 31 of each year assuming an original investment of $100 at December 31, 2019, and assumes the reinvestment of our regular quarterly dividends in shares of our stock. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2019 2020 2021 2022 2023 2024 Valhi common stock ​ $ 100 ​ $ 70 ​ $ 135 ​ $ 104 ​ $ 74 ​ $ 115 S&P 500 Index ​ 100 ​ 118 ​ 152 ​ 125 ​ 158 ​ 197 S&P 500 Industrial Conglomerates ​ 100 ​ 110 ​ 116 ​ 106 ​ 132 ​ 182 ​ The information contained in the performance graph shall not be deemed “soliciting material” or “filed” with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act, as amended, except to the extent we specifically request that the material be treated as soliciting material or specifically incorporate this performance graph by reference into a document filed under the Securities Act or the Securities Exchange Act. - 38 - ‌ ​ Equity Compensation Plan Information – We have an equity compensation plan, which was approved by our stockholders, pursuant to which an aggregate of 100,000 shares of our common stock can be awarded to non-employee members of our board of directors.
The aggregate number of shares authorized for repurchase is 833,333, and we have approximately 334,000 shares available for repurchase at December 31, 2023. We may purchase the stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time.
The aggregate number of shares authorized for repurchase is 833,333, and we have approximately 334,000 shares available for repurchase at December 31, 2024. We may purchase the stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time.
Performance Graph – Set forth below is a line graph comparing the yearly change in our cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Composite Stock Price Index and the S&P 500 Industrial Conglomerates Index for the period from December 31, 2018 through December 31, 2023.
Performance Graph – Set forth below is a line graph comparing the yearly change in our cumulative total stockholder return on our common stock against the cumulative total return of the S&P 500 Composite Stock Price Index and the S&P 500 Industrial Conglomerates Index for the period from December 31, 2019 through December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Dividends – Our common stock is listed and traded on the New York Stock Exchange (symbol: VHI). As of March 1, 2024, there were approximately 740 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Dividends – Our common stock is listed and traded on the New York Stock Exchange (symbol: VHI). As of March 3, 2025, there were approximately 715 holders of record of our common stock.
At December 31, 2023, an aggregate of 84,600 shares were available for future award under this plan. See Note 16 to our Consolidated Financial Statements.
At December 31, 2024, an aggregate of 78,300 shares were available for future award under this plan. See Note 16 to our Consolidated Financial Statements.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

188 edited+83 added−59 removed107 unchanged
Biggest changeChanges in working capital were affected by accounts receivable and inventory changes, as shown below: ● Kronos’ average days sales outstanding (DSO) increased from December 31, 2022 to December 31, 2023, primarily due to the relative changes in the timing of collections. ● Kronos’ average days sales in inventory (DSI) decreased from December 31, 2022 to December 31, 2023 primarily due to lower inventory volumes attributable to sales volumes exceeding production volumes in 2023 compared to 2022 where production volumes exceeded sales volumes. ● CompX’s average DSO decreased from December 31, 2022 to December 31, 2023 and is primarily impacted by the timing of sales and collections in the last month of the year. ● CompX’s average DSI decreased from December 31, 2022 to December 31, 2023, primarily due to a decrease at its security products reporting unit due to the fulfillment and shipping of a significant order during the fourth quarter of 2023, partially offset by an increase at its marine components reporting unit due to lower sales and increased inventory balances as a result of prior orders of certain raw materials with longer lead times. ​ - 59 - ‌ ​ For comparative purposes, we have also provided comparable prior year numbers below. ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, December 31, ​ ​ 2021 ​ 2022 ​ 2023 Kronos: ​ ​ ​ ​ ​ ​ Days sales outstanding 65 days 64 days 66 days Days sales in inventory 59 days 103 days 65 days CompX: Days sales outstanding 42 days 41 days 36 days Days sales in inventory 96 days 99 days 95 days We do not have complete access to the cash flows of our majority-owned subsidiaries, due in part to limitations contained in certain credit agreements of our subsidiaries and because we do not own 100% of these subsidiaries.
Biggest changeBecause we have largely received cash proceeds from land sales, we expect LandWell to generate negative operating cash flows as it completes its required land development work. ​ - 61 - ‌ ​ Changes in working capital were affected by accounts receivable and inventory changes, as shown below: ● Kronos’ average days sales outstanding (“DSO”) decreased from December 31, 2023 to December 31, 2024, primarily due to the relative changes in the timing of collections. ● Kronos’ average days sales in inventory (“DSI”) increased from December 31, 2023 to December 31, 2024 primarily due to production volumes exceeding sales volumes in 2024 compared to 2023 when Kronos’ sales volumes exceeded its production volumes. ● CompX’s average DSO decreased from December 31, 2023 to December 31, 2024 and is primarily impacted by the timing of sales and collections in the last month of the year. ● CompX’s average DSI at December 31, 2024 was comparable to December 31, 2023 as the increase at the security products reporting unit due to the fulfillment and shipping of a significant order during the fourth quarter of 2023 was offset by the decline at the marine components reporting unit due to elevated inventory balances at December 31, 2023.
Net Sales – Our Chemicals Segment’s net sales in 2023 decreased 14%, or $263.7 million, compared to 2022 primarily due to a 13% decrease in sales volumes (which decreased net sales by approximately $251 million) and a 4% decrease in average TiO 2 selling prices (which decreased net sales by approximately $77 million).
Our Chemicals Segment’s net sales in 2023 decreased 14%, or $263.7 million, compared to 2022 primarily due to a 13% decrease in sales volumes (which decreased net sales by approximately $251 million) and a 4% decrease in average TiO 2 selling prices (which decreased net sales by approximately $77 million).
Operating Income (Loss) – Our Chemicals Segment had an operating loss of $41.1 million in 2023 compared to operating income of $174.6 million in 2022 as a result of the factors impacting gross margin discussed above .
Our Chemicals Segment had an operating loss of $41.1 million in 2023 compared to operating income of $174.6 million in 2022 as a result of the factors impacting gross margin discussed above .
General – Our Component Products Segment’s profitability primarily depends on its ability to utilize its production capacity effectively, which is affected by, among other things, the demand for its products and its ability to control manufacturing costs, primarily comprised of labor costs and materials.
General – Our Component Products Segment’s profitability primarily depends on its ability to utilize its production capacity effectively, which is affected by, among other things, the demand for its products and its ability to control its manufacturing costs, primarily comprised of labor costs and materials.
Kronos’ Senior Secured Notes, its Global Revolver and the Contran term loan contain a number of covenants and restrictions which, among other things, restrict its ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types.
Kronos’ Senior Secured Notes, the Contran Term Loan and Kronos’ Global Revolver contain a number of covenants and restrictions which, among other things, restrict its ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of our assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types.
Commitments and Contingencies We are subject to certain commitments and contingencies, as more fully described in the Notes to our Consolidated Financial Statements and in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, including: ● certain income contingencies in various U.S. and non-U.S. jurisdictions; - 65 - ‌ ​ ● certain environmental remediation matters involving NL and BMI; ● certain litigation related to NL’s former involvement in the manufacture of lead pigment and lead-based paint; and ● certain other litigation to which we are a party.
Commitments and Contingencies We are subject to certain commitments and contingencies, as more fully described in the Notes to our Consolidated Financial Statements and in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, including: ● certain income contingencies in various U.S. and non-U.S. jurisdictions; ● certain environmental remediation matters involving NL and BMI; ● certain litigation related to NL’s former involvement in the manufacture of lead pigment and lead-based paint; and ● certain other litigation to which we are a party.
However, future events and circumstances could change (i.e. a significant decline in quoted market prices) and result in a materially different finding which could result in the recognition of a material impairment with respect to such goodwill. Substantially all of the goodwill for our Component Products Segment relates to its security products reporting unit.
However, future events and circumstances could change (i.e. a significant decline in quoted market prices) and result in a materially different finding which could result in the recognition of a material impairment with respect to such goodwill. - 56 - ‌ ​ Substantially all of the goodwill for our Component Products Segment relates to its security products reporting unit.
The credit facility contains a number of covenants and restrictions which, among other things, restrict NL’s subsidiary’s ability to incur additional debt, incur liens, and merge or consolidate with, or sell or transfer substantially all of NL’s subsidiary’s assets to, another entity, and require NL’s subsidiary to maintain a minimum specified level of consolidated net worth.
The credit facility - 67 - ‌ ​ contains a number of covenants and restrictions which, among other things, restrict NL’s subsidiary’s ability to incur additional debt, incur liens, and merge or consolidate with, or sell or transfer substantially all of NL’s subsidiary’s assets to, another entity, and require NL’s subsidiary to maintain a minimum specified level of consolidated net worth.
The discount rates we use for determining defined benefit pension expense and the related pension obligations are based on current interest rates earned on long-term bonds that receive one of the two highest ratings given by recognized - 55 - ‌ ​ rating agencies in the applicable country where the defined benefit pension benefits are being paid.
The discount rates we use for determining defined benefit pension expense and the related pension obligations are based on current interest rates earned on long-term bonds that receive one of the two highest ratings given by recognized rating agencies in the applicable country where the defined benefit pension benefits are being paid.
We base our purchase decision on a variety of factors, including an analysis of the optimal use of our capital, taking into account the market value of the securities and the relative value of expected returns on alternative investments. In connection with these activities, we may consider issuing additional equity securities - 64 - ‌ ​ or increasing our indebtedness.
We base our purchase decision on a variety of factors, including an analysis of the optimal use of our capital, taking into account the market value of the securities and the relative value of expected returns on alternative investments. In connection with these activities, we may consider issuing additional equity securities or increasing our indebtedness.
In addition to the impact of the operating, investing and financing cash flows discussed below, changes in the amount of cash, cash equivalents and restricted cash we report from year to year can be impacted by changes in currency exchange rates, since a portion of our - 58 - ‌ ​ cash, cash equivalents and restricted cash is held by our Chemicals Segment’s non-U.S. subsidiaries.
In addition to the impact of the operating, investing and financing cash flows discussed below, changes in the amount of cash, cash equivalents and restricted cash we report from year to year can be impacted by changes in currency exchange rates, since a portion of our cash, cash equivalents and restricted cash is held by our Chemicals Segment’s non-U.S. subsidiaries.
BMI also provided certain utility services to an industrial park located in Henderson, Nevada prior to the sale of BPC on December 1, 2023. With the approval of BWC’s plan of reorganization by the bankruptcy court, substantially all of BWC’s - 49 - ‌ ​ assets were sold in November 2023.
BMI also provided certain utility services to an industrial park located in Henderson, Nevada prior to the sale of BPC on December 1, 2023. With the approval of BWC’s plan of reorganization by the bankruptcy court, substantially all of BWC’s assets were sold in November 2023.
For example, certain credit agreements allow the lender to accelerate the maturity of the indebtedness upon a change of control (as defined in the agreement) of the borrower. In addition, certain credit agreements could result in the acceleration of all or a portion of the indebtedness following a sale of assets outside the ordinary course of business.
For example, the credit agreements allow the lender to accelerate the maturity of the indebtedness upon a change of control (as defined in the agreement) of the borrower. In addition, the credit agreements could result in the acceleration of all or a portion of the indebtedness following a sale of assets outside the ordinary course of business.
Certain of our credit agreements contain provisions which could result in the acceleration of indebtedness prior to their stated maturity for reasons other than defaults for failure to comply with typical financial or payment covenants.
Our credit agreements contain provisions which could result in the acceleration of indebtedness prior to their stated maturity for reasons other than defaults for failure to comply with typical financial or payment covenants.
Certain raw materials used in all our Chemicals Segment’s production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies.
Certain raw materials used in all our Chemicals Segment’s production facilities, primarily - 45 - ‌ ​ titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies.
Operating costs and expenses consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to business unit and corporate management activities, as well as gains and losses on sales of property and equipment.
Operating costs and expenses - 49 - ‌ ​ consist primarily of sales and administrative-related personnel costs, sales commissions and advertising expenses directly related to product sales and administrative costs relating to business unit and corporate management activities, as well as gains and losses on sales of property and equipment.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at - 55 - ‌ ​ the date of the financial statements and the reported amount of revenues and expenses during the reported period.
Cost of Sales and Gross Margin – Cost of sales decreased $37.5 million, or 2%, in 2023 compared to 2022 due to the net effects of a 13% decrease in sales volumes, a 19% decrease in production volumes at certain of our Chemicals Segment’s manufacturing facilities to align inventory levels to anticipated near-term customer demand (which resulted in $96 million of unabsorbed fixed production costs) and higher production costs of approximately $65 million (primarily raw materials).
Cost of sales decreased $37.5 million, or 2%, in 2023 compared to 2022 due to the net effects of a 13% decrease in sales volumes, a 19% decrease in production volumes at certain of our Chemicals Segment’s manufacturing facilities to align inventory levels to anticipated near-term customer demand (which resulted in $96 million of unabsorbed fixed production costs) and higher production costs of approximately $65 million (primarily raw materials).
The remaining portion of these shares of our common stock, which are attributable to the noncontrolling interest of Kronos and NL, are reflected in our Consolidated Balance Sheets at fair value.
The - 53 - ‌ ​ remaining portion of these shares of our common stock, which are attributable to the noncontrolling interest of Kronos and NL, are reflected in our Consolidated Balance Sheets at fair value.
CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare and a variety of other industries.
CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare applications and a variety of other industries.
This is because we maintain defined benefit pension plans in several different countries in Europe and North America and the interest rate environment differs from country to country.
This is because we maintain defined - 57 - ‌ ​ benefit pension plans in several different countries in Europe and North America and the interest rate environment differs from country to country.
If actual developments differ from our expectations, our results of operations could be unfavorably affected. ​ Segment Operating Results – 2023 Compared to 2022 and 2022 Compared to 2021 Chemicals – We consider TiO 2 to be a “quality of life” product, with demand affected by gross domestic product, or GDP, and overall economic conditions in our markets located in various regions of the world.
If actual developments differ from our expectations, our results of operations could be unfavorably affected. ​ Segment Operating Results – 2024 Compared to 2023 and 2023 Compared to 2022 Chemicals – We consider TiO 2 to be a “quality of life” product, with demand affected by gross domestic product, or GDP, and overall economic conditions in our markets located in various regions of the world.
See Note 11 to our Consolidated Financial Statements for additional discussion of actuarial assumptions used in determining defined benefit pension assets, liabilities and expenses. Based on the actuarial assumptions described above and our current expectation for what actual average currency exchange rates will be during 2024, we expect our defined benefit pension expense will approximate $9 million in 2024.
See Note 11 to our Consolidated Financial Statements for additional discussion of actuarial assumptions used in determining defined benefit pension assets, liabilities and expenses. Based on the actuarial assumptions described above and our current expectation for what actual average currency exchange rates will be during 2025, we expect our defined benefit pension expense will approximate $9 million in 2025.
Our diluted net income per share in 2022 includes: ● aggregate charges of $.35 per share related to the bankruptcy filing of BWC, including $.29 per share related to the impairment of the water delivery system fixed assets, primarily recognized in the second quarter, and $.04 per share loss on the deconsolidation of BWC and $.02 per share of bad debt expense related to an intercompany receivable with BWC, both recognized in the third quarter; ● income of $.28 per share related to tax increment infrastructure reimbursements recognized in the third and fourth quarters; ● a gain of $.05 per share related to a business interruption insurance claim arising from Hurricane Laura in 2020 at our Chemicals Segment recognized in the third quarter; and ● income of $.02 per share related to an energy utility infrastructure reimbursement recognized in the second quarter.
Our diluted net income per share in 2022 includes: ● aggregate charges of $.35 per share related to the bankruptcy filing of BWC, including $.29 per share related to the impairment of the water delivery system fixed assets, primarily recognized in the second quarter, and $.04 per share loss on the deconsolidation of BWC and $.02 per share of bad debt expense related to an intercompany receivable with BWC, both recognized in the third quarter; ● income of $.28 per share related to tax increment infrastructure reimbursements recognized in the third and fourth quarters; and ● a gain of $.05 per share related to a business interruption insurance claim arising from Hurricane Laura in 2020 at our Chemicals Segment recognized in the third quarter.
Following the sale of the BWC assets and BPC, BMI no longer provides services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community. LandWell began marketing land for sale in the residential/planned community in December 2013 and at December 31, 2023 approximately 20 saleable acres remain.
Following the sale of the BWC assets and BPC, BMI no longer provides services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community. LandWell began marketing land for sale in the residential/planned community in December 2013 and at December 31, 2024 approximately 20 saleable acres remain.
We used the following discount rates for our defined benefit pension plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rates used for: ​ Obligations Obligations Obligations ​ ​ at December 31, 2021 ​ at December 31, 2022 ​ at December 31, 2023 ​ ​ and expense in 2022 ​ and expense in 2023 ​ and expense in 2024 Kronos and NL Plans: ​ ​ ​ ​ ​ ​ ​ Germany 1.2% ​ 3.7% ​ 3.2% ​ Canada 2.9% ​ 5.1% ​ 4.6% ​ Norway 1.9% ​ 3.6% ​ 3.6% ​ U.S. 2.6% ​ 5.3% ​ 5.0% ​ The assumed long-term rate of return on plan assets represents the estimated average rate of earnings expected to be earned on the funds invested or to be invested in the plans’ assets provided to fund the benefit payments inherent in the projected benefit obligations.
We used the following discount rates for our defined benefit pension plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rates used for: ​ Obligations Obligations Obligations ​ ​ at December 31, 2022 ​ at December 31, 2023 ​ at December 31, 2024 ​ ​ and expense in 2023 ​ and expense in 2024 ​ and expense in 2025 Kronos and NL Plans: ​ ​ ​ ​ ​ ​ ​ Germany 3.7% ​ 3.2% ​ 3.4% ​ Canada 5.1% ​ 4.6% ​ 4.6% ​ Norway 3.6% ​ 3.6% ​ 4.3% ​ U.S. 5.3% ​ 5.0% ​ 5.5% ​ The assumed long-term rate of return on plan assets represents the estimated average rate of earnings expected to be earned on the funds invested or to be invested in the plans’ assets provided to fund the benefit payments inherent in the projected benefit obligations.
If these events occur in 2024, our corporate expense could be higher than we currently estimate. In addition, we adjust our accruals for environmental remediation and related costs as further information becomes available to us or as circumstances change. Such further information or changed circumstances could result in an increase or reduction in our accrued environmental remediation and related costs.
If these events occur in 2025, our corporate expense could be higher than we currently estimate. In addition, we adjust our accruals for environmental remediation and related costs as further information becomes available to us or as circumstances change. Such further information or changed circumstances could result in an increase or reduction in our accrued environmental remediation and related costs.
In 2023, we used the qualitative assessment for our annual impairment test and determined it was not necessary to perform the quantitative goodwill impairment test, as we concluded it is more-likely-than-not that the fair value of the security products reporting unit exceeded its carrying amount.
In 2024, we used the qualitative assessment for our annual impairment test and determined it was not necessary to perform the quantitative goodwill impairment test, as we concluded it is more-likely-than-not that the fair value of the security products reporting unit exceeded its carrying amount.
This $31.0 million decrease in cash provided by operations in 2023 includes: ● consolidated operating income of $34.2 million in 2023, a decrease of $205.2 million compared to operating income of $239.4 million in 2022; ● lower amount of net cash used of $84.6 million associated with relative changes in our receivables, inventories, land held for development, payables and accruals in 2023; ● lower net cash paid for income taxes in 2023 of $16.3 million primarily due to decreased earnings; and ● lower net contributions to our TiO 2 manufacturing joint venture in 2023 of $13.6 million.
This $31.0 million decrease in cash provided by operations in 2023 includes: ● consolidated operating income of $34.2 million in 2023, a decrease of $205.2 million compared to operating income of $239.4 million in 2022; ● lower amount of net cash used of $84.6 million associated with relative changes in our receivables, inventories, land held for development, payables and accrued liabilities in 2023; ● lower net cash paid for income taxes in 2023 of $16.3 million primarily due to decreased earnings; and ● lower net contributions to our TiO 2 manufacturing joint venture in 2023 of $13.6 million.
As noted in our discussion of our Real Estate Management and Development segment above, we have sold the majority of the land in our residential/planned community, and in accordance with our development agreement with the City of Henderson and our contractual obligations with builders, we expect to complete our land development obligations over the next three to four years.
As noted in our discussion of our Real Estate Management and Development segment above, we have sold the majority of the land in our residential/planned community, and in accordance with our development agreement with the City of Henderson and our contractual obligations with builders, we expect to complete our land development obligations over the next two to three years.
However, in 2022 our consolidated effective income tax rate is lower than the U.S. federal statutory rate of 21% due to the effect of a tax benefit relating to the partial release of our valuation allowance associated with the 2022 utilization of a portion of our business interest expense carryforwards.
However, in 2022 our consolidated effective income tax rate was lower than the U.S. federal statutory rate of 21% due to the effect of a tax benefit relating to the partial release of our valuation allowance associated with the 2022 utilization of a portion of our business interest expense carryforwards.
During 2022: ● we had net purchases of $70.7 million of marketable securities; and ● $8.6 million of BWC’s cash, cash equivalents and restricted cash was removed as part of its deconsolidation in the third quarter (see Note 2 to our Consolidated Financial Statements).
During 2022: ● we had net purchases of $70.7 million of marketable securities; and ● $8.6 million of BWC’s cash, cash equivalents and restricted cash was removed as part of its deconsolidation in the third quarter (see Note 3 to our Consolidated Financial Statements).
Similarly, if we lowered the assumed long-term rate of return on plan assets by 25 basis points for all of our plans, our defined benefit pension expense would be expected to increase by approximately $1 million during 2024.
Similarly, if we lowered the assumed long-term rate of return on plan assets by 25 basis points for all of our plans, our defined benefit pension expense would be expected to increase by approximately $1 million during 2025.
Cost of Sales and Gross Margin – Our Component Products Segment’s cost of sales decreased in 2023 compared to 2022 primarily due to the effects of lower production costs at both security products and marine components reporting units as well as lower marine components sales.
Our Component Products Segment’s cost of sales decreased in 2023 compared to 2022 primarily due to the effects of lower production costs at both security products and marine components reporting units as well as lower marine components sales.
At December 31, 2023, CompX had approximately .5 million shares of its Class A common stock available for repurchase under the authorization described in Note 3 to our Consolidated Financial Statements.
At December 31, 2024, CompX had approximately .5 million shares of its Class A common stock available for repurchase under the authorization described in Note 3 to our Consolidated Financial Statements.
As a result, we recognize additional depreciation expense above the amounts Kronos reports separately, substantially all of which is included within cost of sales. We recognized additional depreciation expense of $1.5 million in 2021 and $1.3 million in each of 2022 and 2023, which reduced our reported Chemicals Segment’s operating income as compared to amounts reported by Kronos.
As a result, we recognize additional depreciation expense above the amounts Kronos reports separately, substantially all of which is included within cost of sales. We recognized additional depreciation expense of $1.3 million in each of 2022 and 2023 and $2.5 million in 2024, which reduced our reported Chemicals Segment’s operating income as compared to amounts reported by Kronos.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Business Overview We are primarily a holding company. We operate through our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International, Inc., Tremont LLC, Basic Management, Inc. (BMI) and the LandWell Company (LandWell).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Business Overview We are primarily a holding company. We operate through our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and the LandWell Company (“LandWell”).
With the sale of BPC, we no longer provide services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community. ​ Outlook – LandWell is focused on developing the land it manages, primarily to residential builders, for the residential/planned community in Henderson.
With the sale of BPC and the completion of the bankruptcy, we no longer provide services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community. ​ - 52 - ‌ ​ Outlook – LandWell is focused on developing the land it manages, primarily to residential builders, for the residential/planned community in Henderson.
Planned capital expenditures in 2024 at Kronos and CompX will primarily be to maintain and improve existing facilities and, as it relates to CompX, to meet expected customer demand and maintain technology infrastructure.
Planned capital expenditures in 2025 at Kronos and CompX will primarily be to maintain and improve existing facilities and, as it relates to CompX, to meet expected customer demand and maintain technology infrastructure.
Our obligations related to the long-term supply contracts for the purchase of TiO 2 feedstock are more fully described in Note 18 to our Consolidated Financial Statements and above in “Business – Chemicals Segment – Kronos Worldwide, Inc. – Raw Materials.” CompX has purchase obligations of $18.3 million ($17.5 million payable in 2024 and $.8 million payable in 2025/2026) which consist of open purchase orders and contractual obligations, primarily commitments to purchase raw materials and for capital projects in process at December 31, 2023.
Our - 68 - ‌ ​ obligations related to the long-term supply contracts for the purchase of TiO 2 feedstock are more fully described in Note 18 to our Consolidated Financial Statements and above in “Business – Chemicals Segment – Kronos Worldwide, Inc. – Raw Materials.” CompX has purchase obligations of $19.8 million ($19.3 million payable in 2025 and $.5 million payable in 2026/2027) which consist of open purchase orders and contractual obligations, primarily commitments to purchase raw materials and for capital projects in process at December 31, 2024.
LandWell has been actively marketing and selling the land zoned for commercial and light industrial use and at December 31, 2023 approximately 15 saleable acres remain.
LandWell has been actively marketing and selling the land zoned for commercial and light industrial use and at December 31, 2024 approximately 15 saleable acres remain.
However, if we had lowered the assumed discount rate by 25 basis points for all plans as of December 31, 2023, our aggregate projected benefit obligations would have increased by approximately $21 million at that date and our defined benefit pension expense would be expected to increase by a nominal amount during 2024.
However, if we had lowered the assumed discount rate by 25 basis points for all plans as of December 31, 2024, our aggregate projected benefit obligations would have increased by approximately $19 million at that date and our defined benefit pension expense would be expected to increase by a nominal amount during 2025.
The terms of all of our debt instruments are discussed in Note 9 to our Consolidated Financial Statements. We are in compliance with all of our debt covenants at December 31, 2023.
The terms of all of our debt instruments are discussed in Note 9 to our Consolidated Financial Statements. We are in compliance with all of our debt covenants at December 31, 2024.
At December 31, 2023, we had substantial net assets denominated in the euro, Canadian dollar and Norwegian krone. - 53 - ‌ ​ Critical accounting policies and estimates Our significant accounting policies are more fully described in Note 1 to our Consolidated Financial Statements.
At December 31, 2024, we had substantial net assets denominated in the euro, Canadian dollar and Norwegian krone. Critical Accounting Policies and Estimates Our significant accounting policies are more fully described in Note 1 to our Consolidated Financial Statements.
We also eliminate any such intercompany borrowings in our Consolidated Financial Statements. There is $.5 million outstanding under this facility at December 31, 2023. ​ We had an unsecured revolving demand promissory note with Kronos which, as amended, provided for borrowings from Kronos of up to $25 million. We eliminate any such intercompany borrowings in our Consolidated Financial Statements.
We also eliminate any such intercompany borrowings in our Consolidated Financial Statements. There is $.5 million outstanding under this facility at December 31, 2024. ​ We had an unsecured revolving demand promissory note with Kronos which, as amended, provided for borrowings from Kronos of up to $25 million. We had no borrowings with Kronos in 2022, 2023 and 2024.
At December 31, 2023, we had approximately .3 million shares of our common stock available for repurchase under the authorizations described in Note 16 to our Consolidated Financial Statements. At December 31, 2023, Kronos had approximately 1.0 million shares of its common stock available for repurchase under the authorization described in Note 3 to our Consolidated Financial Statements.
At December 31, 2024, we had approximately .3 million shares of our common stock available for repurchase under the authorizations described in Note 16 to our Consolidated Financial Statements. - 66 - ‌ ​ At December 31, 2024, Kronos had approximately 1.0 million shares of its common stock available for repurchase under the authorization described in Note 3 to our Consolidated Financial Statements.
We believe we will be able to comply with the financial covenants contained in our credit facilities through their maturities; however, if future operating results differ materially from our expectations we may be unable to maintain compliance.
We believe we will be able to continue to comply with the financial covenants contained in our credit facilities through their maturity; however, if future operating results differ materially from our expectations we may be unable to maintain compliance.
In comparison, we expect to be required to contribute approximately $18 million to such plans during 2024. As noted above, defined benefit pension expense and the amounts recognized as accrued pension costs are based upon the actuarial assumptions discussed above. We believe all of the actuarial assumptions used are reasonable and appropriate.
In comparison, we expect to be required to contribute approximately $16 million to such plans during 2025. As noted above, defined benefit pension expense and the amounts recognized as accrued pension costs are based upon the actuarial assumptions discussed above. We believe all of the actuarial assumptions used are reasonable and appropriate.
We paid aggregate cash dividends on our common stock of $9.0 million in each of 2021 and 2022 and $9.1 million in 2023.
We paid aggregate cash dividends on our common stock of $9.0 million in 2022 and $9.1 million in each of 2023 and 2024.
Substantially all the land in the residential/planned community has been sold; however, we expect the development work to take three to four years to complete. Net Sales and Operating Income – Substantially all the net sales from our Real Estate Management and Development segment in 2023 and 2022 consisted of revenues from land sales.
Substantially all the land in the residential/planned community has been sold; however, we expect the development work to take two to three years to complete. Net Sales and Operating Income – Substantially all the net sales from our Real Estate Management and Development segment in 2024 and 2023 consisted of revenues from land sales.
Based upon our expectations of our operating performance, and the anticipated demands on our cash resources, we expect to have sufficient liquidity to meet our short-term (defined as the twelve-month period ending December 31, 2024) and long-term obligations (defined as the five-year period ending December 31, 2028).
Based upon our expectations of our operating performance, and the anticipated demands on our cash resources, we expect to have sufficient liquidity to meet our short-term (defined as the twelve-month period ending December 31, 2025) and long-term obligations (defined as the five-year period ending December 31, 2029).
Our diluted net loss per share in 2023 includes: ● income of $.46 per share related to tax increment infrastructure reimbursements recognized in the third and fourth quarters; ● a loss of $.13 per share due to the termination of our U.K. pension plan recognized in the second quarter; ● a loss of $.10 per share related to workforce reductions by our Chemicals Segment recognized in the fourth quarter; ● a loss of $.06 per share related to the write-off of certain costs resulting from a capital project termination recognized in the fourth quarter; ● a gain of $.05 per share related to a business interruption insurance claim arising from Hurricane Laura in 2020 at our Chemicals Segment recognized in the first, second and third quarters; ● a loss of $.04 per share due to the sale of BPC recognized in the fourth quarter; and ● a gain of $.04 per share related to the sale of land not used in our operations recognized in the second quarter.
Our diluted net loss per share in 2023 includes: ● income of $.46 per share related to tax increment infrastructure reimbursements recognized in the third and fourth quarters; ● a loss of $.13 per share due to the termination of our U.K. pension plan recognized in the second quarter; ● a loss of $.10 per share related to workforce reductions by our Chemicals Segment recognized in the fourth quarter; ● a loss of $.06 per share related to the write-off of certain costs resulting from a capital project termination recognized in the fourth quarter; and ● a gain of $.05 per share related to a business interruption insurance claim arising from Hurricane Laura in 2020 at our Chemicals Segment recognized in the first, second and third quarters.
The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2022 did not have a significant effect on the reported amount of net sales, as a substantial portion of the sales generated by our Chemicals Segment’s Canadian and Norwegian operations are denominated in the U.S. dollar.
The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2024 did not have a significant effect on the reported amount of net sales, as a substantial portion of the sales generated by our Chemicals Segment’s Canadian and Norwegian operations is denominated in the U.S. dollar.
We made contributions to all of our defined benefit pension plans of $20.3 million in 2021, $16.6 million in 2022 and $16.3 million in 2023. Under defined benefit pension plan accounting, defined benefit pension plan expense, pension assets and accrued pension costs are each recognized based on certain actuarial assumptions.
We made contributions to all of our defined benefit pension plans of $16.6 million in 2022, $16.3 million in 2023 and $16.4 million in 2024. Under defined benefit pension plan accounting, defined benefit pension plan expense, pension assets and accrued pension costs are each recognized based on certain actuarial assumptions.
We recognized consolidated defined benefit pension plan expense of $32.1 million in 2021, $25.4 million in 2022 and $18.4 million in 2023. The amount of funding requirements for these defined benefit pension plans is generally based upon applicable regulations (such as ERISA in the U.S.) and will generally differ from pension expense for financial reporting purposes.
We recognized consolidated defined benefit pension plan expense of $25.4 million in 2022, $18.4 million in 2023 and $9.4 million in 2024. The amount of funding requirements for these defined benefit pension plans is generally based upon applicable regulations (such as ERISA in the U.S.) and will generally differ from pension expense for financial reporting purposes.
In addition, LandWell expects to spend approximately $55 million on land development costs during 2024, including approximately $40 million contractually committed at December 31, 2023. Land development costs are included in the determination of cash provided by operating activities. Capital spending for 2024 is expected to be funded through cash generated from operations or borrowing under our existing credit facilities.
In addition, LandWell expects to spend approximately $53 million on land development costs during 2025, including approximately $51 million contractually committed at December 31, 2024. Land development costs are included in the determination of cash provided by operating activities. Capital spending for 2025 is expected to be funded through cash generated from operations or borrowing under our existing credit facilities.
Our net income attributable to Valhi stockholders decreased from 2022 to 2023 primarily due to the net effects of: ● lower operating income from our Chemicals Segment in 2023 compared to 2022 including 2023 charges of $5.8 million related to workforce reductions and $3.8 million related to the write-off of certain costs resulting from a capital project termination; ● aggregate charges of $19.7 million in our Real Estate Management and Development Segment in 2022 related to the impairment of certain fixed assets and the bankruptcy filing of BWC; ● income from tax increment infrastructure reimbursement of $25.2 million in 2023 compared to $15.2 million in 2022; ● a non-cash loss on the termination of our U.K. pension plan of $6.2 million in 2023; ● a loss of $2.6 million related to the sale of BPC in 2023; and ● the recognition of a gain on the sale of land not used in our operations of $1.5 million in 2023.
Our net income attributable to Valhi stockholders decreased from 2022 to 2023 primarily due to the net effects of: ● lower operating income from our Chemicals Segment in 2023 compared to 2022 including 2023 charges of $5.8 million related to workforce reductions and $3.8 million related to the write-off of certain costs resulting from a capital project termination; ● aggregate charges of $19.7 million in our Real Estate Management and Development Segment in 2022 related to the impairment of certain fixed assets and the bankruptcy filing of BWC; ● income from tax increment infrastructure reimbursement of $25.2 million in 2023 compared to $15.2 million in 2022; and ● a non-cash loss on the termination of our U.K. pension plan of $6.2 million in 2023.
The $1.7 million loss in 2023, the $1.6 million loss in 2022 and the $3.3 million gain in 2021 recognized in our Consolidated Financial Statements represent the unrealized gain (loss) in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NL.
The $1.9 million gain in 2024, the $1.7 million loss in 2023 and the $1.6 million loss in 2022 recognized in our Consolidated Financial Statements represent the unrealized gain (loss) in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NL.
We periodically review our deferred tax assets (DTAs) to determine if a valuation allowance is required.
We periodically review our deferred tax assets (“DTA”) to determine if a valuation allowance is required.
If these events occur in 2024, our corporate expense could be higher than we currently estimate.
If these events occur in 2025, our corporate expense could be higher than we currently estimate.
At December 31, 2023, approximately 68%, 14%, 7% and 7% of the projected benefit obligations related to our plans in Germany, Canada, Norway and the U.S., respectively. We use several different discount rate assumptions in determining our consolidated defined benefit pension plan obligation and expense.
At December 31, 2024, approximately 65%, 14%, 7% and 11% of the projected benefit obligations related to our plans in Germany, Canada, Norway and the U.S., respectively. We use several different discount rate assumptions in determining our consolidated defined benefit pension plan obligation and expense.
On November 8, 2023, the Bankruptcy Court for the District of Nevada entered an order approving BWC’s plan of reorganization, which provided for the sale of substantially all BWC’s assets and the transfer of substantially all of its operating and other agreements to one of its industrial customers.
On November 8, 2023, the Bankruptcy Court for the District of Nevada (“Court”) entered an order approving Debtors’ plan of reorganization, which provided for the sale of substantially all Debtors’ assets and the transfer of substantially all of their operating and other agreements to one of their industrial customers.
In February 2024, this note was cancelled by mutual agreement between us and Kronos. We have an unsecured revolving demand promissory note with CompX which, as amended, provides for borrowings from CompX of up to $25 million. We eliminate these intercompany borrowings in our Consolidated Financial Statements.
Kronos’ obligation to loan us money under this note was at Kronos’ discretion. In February 2024, this note was cancelled by mutual agreement between us and Kronos. We have an unsecured revolving demand promissory note with CompX which, as amended, provides for borrowings from CompX of up to $25 million. We eliminate these intercompany borrowings in our Consolidated Financial Statements.
However, new information may become available to us, or circumstances (such as applicable laws and regulations) may change, thereby resulting in an increase or decrease in the amount we are required to accrue for such matters (and therefore a decrease or increase in our reported net income in the period of such change).
However, new information may become available to us, or circumstances (such as applicable laws and regulations) may change, thereby resulting in an increase or decrease in the amount required to be accrued for such matters (and therefore a decrease or increase in reported net income in the period of such change).
Capital Expenditures and Other Investments – We currently expect our aggregate capital expenditures for 2024 will be approximately $58 million (including approximately $4 million contractually committed at December 31, 2023) as follows: ● $55 million by our Chemicals Segment, including approximately $28 million in the area of environmental compliance, protection and improvement; and - 63 - ‌ ​ ● $3 million by our Component Products Segment.
Capital Expenditures and Other Investments – We currently expect our aggregate capital expenditures for 2025 will be approximately $58 million (including approximately $9 million contractually committed at December 31, 2024) as follows: ● $55 million by our Chemicals Segment, including approximately $24 million in the area of environmental compliance, protection and improvement; and ● $3 million by our Component Products Segment.
We estimate that changes in currency exchange rates increased our Chemicals Segment’s operating income by approximately $23 million in 2022 as compared to 2021 as discussed in the Currency Exchange Rates section below. Our Chemicals Segment’s operating income (loss) is net of amortization of purchase accounting adjustments made in conjunction with our acquisitions of interests in NL and Kronos.
We estimate changes in currency exchange rates decreased our Chemicals Segment’s operating loss by approximately $16 million in 2023 as compared to 2022, as discussed in the Currency Exchange Rates section below. Our Chemicals Segment’s operating income (loss) is net of amortization of purchase accounting adjustments made in conjunction with our acquisitions of interests in NL and Kronos.
LIQUIDITY AND CAPITAL RESOURCES Consolidated Cash Flows Operating Activities – Trends in cash flows as a result of our operating income (excluding the impact of significant asset dispositions and relative changes in assets and liabilities) are generally similar to trends in our earnings.
See Note 18 to our Consolidated Financial Statements. ​ - 60 - ‌ ​ LIQUIDITY AND CAPITAL RESOURCES Consolidated Cash Flows Operating Activities – Trends in cash flows as a result of our operating income (excluding the impact of significant asset dispositions and relative changes in assets and liabilities) are generally similar to trends in our earnings.
See Note 14 to our Consolidated Financial Statements for more information about our 2023 income tax items, including a tabular reconciliation of our statutory tax expense to our actual tax expense. Noncontrolling Interest in Net Income of Subsidiaries – Noncontrolling interest in operations of subsidiaries decreased from 2022 to 2023 primarily due to lower operating income at Kronos.
See Note 14 to our Consolidated Financial Statements for more information about our 2024 income tax items, including a tabular reconciliation of our statutory tax expense to our actual tax expense. Noncontrolling Interest in Net Income of Subsidiaries – Noncontrolling interest in operations of subsidiaries increased in 2024 compared to 2023 primarily due to increased operating income at Kronos.
Without the ability to pump and deliver water to its customers, BWC’s operating expenses exceeded its revenues, and on September 10, 2022 BWC and its subsidiaries voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District - 50 - ‌ ​ of Nevada.
Without the ability to pump and deliver water to its customers, BWC’s operating expenses exceeded its revenues, and on September 10, 2022 BWC and its wholly-owned subsidiary (collectively, “Debtors”) voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Nevada.
At December 31, 2023, approximately 58%, 19%, 10% and 9% of the plan assets related to our plans in Germany, Canada, Norway and the U.S, respectively. We use several different long-term rates of return on plan asset assumptions in determining our consolidated defined benefit pension plan expense.
At December 31, 2024, approximately 55%, 17%, 9% and 16% of the plan assets related to our plans in Germany, Canada, Norway and the U.S, respectively. We use several different long-term rates of return on plan asset assumptions in determining our consolidated defined benefit pension plan expense.
Long-lived assets – The net book value of our property and equipment totaled $517.3 million at December 31, 2023. We assess property and equipment for impairment only when circumstances indicate an impairment may exist.
Long-lived assets – The net book value of our property and equipment totaled $723.4 million at December 31, 2024. We assess property and equipment for impairment only when circumstances indicate an impairment may exist.
Noncontrolling interest in operations of subsidiaries decreased from 2021 to 2022 primarily due to lower operating income at BMI and LandWell. Related Party Transactions – We are a party to certain transactions with related parties. See Note 17 to our Consolidated Financial Statements.
Noncontrolling interest in operations of subsidiaries decreased from 2022 to 2023 primarily due to lower operating income at Kronos. See Note 15 to our Consolidated Financial Statements. Related Party Transactions – We are a party to certain transactions with related parties. See Note 17 to our Consolidated Financial Statements.
For example, during 2023, relative changes in currency exchange rates resulted in a $1.0 million increase in the reported amount of our cash, cash equivalents and restricted cash compared to a $5.1 million decrease in 2022 and a $10.6 million decrease in 2021. Cash flows from operating activities decreased to $3.9 million in 2023 from $34.9 million in 2022.
For example, during 2024, relative changes in currency exchange rates resulted in a $.1 million decrease in the reported amount of our cash, cash equivalents and restricted cash compared to a $1.0 million increase in 2023 and a $5.1 million decrease in 2022. Cash flows from operating activities increased to $44.0 million in 2024 from $3.9 million in 2023.
If Kronos were to pay its $.19 per share dividend in each quarter of 2024 based on the 58.0 million shares we held of Kronos common stock at December 31, 2023, during 2024 we would receive aggregate regular dividends from Kronos of $44.1 million.
If Kronos were to pay its $.05 per share dividend in each quarter of 2025 based on the 58.0 million shares we held of Kronos common stock at December 31, 2024, during 2025 we would receive aggregate regular dividends from Kronos of $11.6 million.
We could borrow an additional $14.4 million under our current intercompany facility with CompX at December 31, 2023. CompX’s obligation to loan us money under this note is at CompX’s discretion.
We could borrow an additional $15.7 million under our current intercompany facility with CompX at December 31, 2024. CompX’s obligation to loan us money under this note is at CompX’s discretion.
A substantial portion of its workforce reductions were accomplished through voluntary programs, for which eligible workforce reduction costs are recognized at the time both the employee and employer are irrevocably committed to the terms of the separation. These workforce reductions impacted approximately 100 individuals and are substantially completed.
A substantial portion of our Chemicals Segment’s workforce reductions were accomplished through voluntary programs, for which eligible workforce reduction costs are recognized at the time both the employee and employer are irrevocably committed to the terms of the separation. These workforce reductions impacted approximately 100 employees.
Intercompany dividends have been eliminated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2021 2022 2023 ​ ​ (In millions) Cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Kronos ​ $ 206.5 ​ $ 81.7 ​ $ 5.5 Valhi exclusive of subsidiaries ​ 122.1 ​ 68.8 ​ 40.7 CompX ​ 10.5 ​ 16.9 ​ 25.8 NL exclusive of subsidiaries ​ 15.3 ​ 39.2 ​ 21.6 Tremont exclusive of subsidiaries ​ 58.8 ​ 12.7 ​ 11.2 BMI ​ 59.7 ​ 12.1 ​ 13.2 LandWell ​ 302.1 ​ (22.0) ​ 17.5 Eliminations and other ​ (315.3) ​ (174.5) ​ (131.6) Total ​ $ 459.7 ​ $ 34.9 ​ $ 3.9 ​ Investing Activities – We disclose capital expenditures by our business segments in Note 2 to our Consolidated Financial Statements.
Intercompany dividends have been eliminated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2022 2023 2024 ​ ​ (In millions) Cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Kronos ​ $ 81.7 ​ $ 5.5 ​ $ 72.5 Valhi exclusive of subsidiaries ​ 68.8 ​ 40.7 ​ 60.6 CompX ​ 16.9 ​ 25.8 ​ 22.9 NL exclusive of subsidiaries ​ 39.2 ​ 21.6 ​ 36.7 Tremont exclusive of subsidiaries ​ 12.7 ​ 11.2 ​ (.4) BMI ​ 12.1 ​ 13.2 ​ 2.6 LandWell ​ (22.0) ​ 17.5 ​ (16.1) Eliminations and other ​ (174.5) ​ (131.6) ​ (134.8) Total ​ $ 34.9 ​ $ 3.9 ​ $ 44.0 ​ Investing Activities – We disclose capital expenditures by our business segments in Note 2 to our Consolidated Financial Statements.
However, prior to the complete utilization of such carryforwards, if we were to generate additional losses in our German or Belgian operations for an extended period of time, or if applicable law were to change such that the carryforward period was no longer indefinite, it is possible that we might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point we would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.
At December 31, 2024, we continue to conclude no valuation allowance is required to be recognized for our German DTAs although prior to the complete utilization of such carryforwards, if we were to generate additional losses in our German operations for an extended period of time, or if applicable laws were to change such that the carryforward periods were more limited, it is possible that we might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point we would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.
The decrease in 2023 compared to 2022 is primarily due to the net effects of higher discount rates impacting interest cost, previously unrecognized actuarial losses and $6.2 million in settlement costs related to the termination and buy-out of our pension plan in the United Kingdom during the second quarter of 2023.
The decrease in 2023 compared to 2022 is primarily due to the net effects of higher discount rates impacting interest cost, previously unrecognized actuarial losses and $6.2 million in settlement costs related to the termination and buy-out of our U.K. pension plan during the second quarter of 2023. See Note 11 to our Consolidated Financial Statements.
NL received $.5 million in insurance recoveries during 2023. See Note 13 to our Consolidated Financial Statements. - 51 - ‌ ​ The agreements with certain of NL’s insurance carriers also include reimbursement for a portion of its future litigation defense costs.
NL received $1.4 million and $.5 million in insurance recoveries during 2024 and 2023, respectively. Insurance recoveries in 2022 were nominal. See Note 13 to our Consolidated Financial Statements. The agreements with certain of NL’s insurance carriers also include reimbursement for a portion of its future litigation defense costs.

… 250 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+5 added−2 removed12 unchanged
Biggest changeSee Note 9 to our Consolidated Financial Statements. Currency Exchange Rates – We are exposed to market risk arising from changes in currency exchange rates as a result of manufacturing and selling our products worldwide.
Biggest changeSee Note 9 to our Consolidated Financial Statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indebtedness Amount Year end ​ ​ ​ Carrying ​ Fair ​ interest ​ Maturity ​ ​ value ​ value ​ rate ​ date ​ ​ (In millions) ​ ​ ​ ​ Fixed-rate indebtedness: ​ ​ ​ ​ ​ ​ Kronos fixed-rate 9.50% Senior Secured Notes due 2029 ​ $ 365.4 ​ $ 403.4 ​ 9.50% ​ 2029 Kronos fixed-rate 3.75% Senior Secured Notes due 2025 ​ ​ 78.3 ​ ​ 77.9 ​ 3.75% ​ 2025 LandWell bank note payable ​ 11.4 ​ 11.4 4.76% 2036 Total fixed-rate indebtedness ​ $ 455.1 ​ $ 492.7 8.39% ​ ​ ​ Variable-rate indebtedness - Kronos revolving credit facility ​ $ 10.0 ​ $ 10.0 6.25% ​ 2029 Currency Exchange Rates – We are exposed to market risk arising from changes in currency exchange rates as a result of manufacturing and selling our products worldwide.
The above discussion and estimated sensitivity analysis amounts include forward-looking statements of market risk which assume hypothetical changes in market prices. Actual future market conditions will likely differ materially from such assumptions. Accordingly, such forward-looking statements should not be considered to be projections by us of future events, gains or losses.
The above discussion and estimated sensitivity analysis amounts include forward-looking statements of market risk which assume hypothetical changes in market prices. Actual future market conditions will likely differ materially from such assumptions. Accordingly, such forward-looking statements should not be considered to be projections by us of future events, gains or losses. - 70 - ‌ ​
For certain raw material requirements we do not have long-term supply agreements either because we have assessed the risk of the unavailability of those raw materials and/or - 67 - ‌ ​ the risk of a significant change in the cost of those raw materials to be low, or because long-term supply agreements for those raw materials are generally not available.
For certain raw material requirements we do not have long-term supply agreements either because we have assessed the risk of the unavailability of those raw materials and/or the risk of a significant change in the cost of those raw materials to be low, or because long-term supply agreements for those raw materials are generally not available.
See Notes 1 and 19 to our Consolidated Financial Statements for a discussion of the assumptions we used to estimate the fair value of the financial instruments to which we are a party at December 31, 2022 and 2023. Raw Materials – Our Chemicals Segment is exposed to market risk from changes in commodity prices relating to our raw materials.
See Notes 1 and 19 to our Consolidated Financial Statements for a discussion of the assumptions we used to estimate the fair value of the financial instruments to which we are a party at December 31, 2023 and 2024. Raw Materials – Our Chemicals Segment is exposed to market risk from changes in commodity prices relating to our raw materials.
However, we may enter into such contracts in the future to manage our currency exchange rate risk. We are not party to any currency forward contracts at December 31, 2023. Also, we are subject to currency exchange rate risk associated with Kronos’ Senior Secured Notes, as such indebtedness is denominated in euros.
However, we may enter into such contracts in the future to manage our currency exchange rate risk. We are not party to any currency forward contracts at December 31, 2024. Also, we are subject to currency exchange rate risk associated with Kronos’ Senior Secured Notes due 2025 and 2029, as such indebtedness is denominated in euros.
Certain raw materials used worldwide, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are purchased primarily in local currencies. Consequently, the translated U.S. dollar value of our non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings.
Consequently, the translated U.S. dollar value of our non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings.
At December 31, 2023, we had the equivalent of $442.5 million outstanding under Kronos’ euro-denominated 3.75% Senior Secured Notes due 2025 (exclusive of unamortized debt issuance costs). The potential increase in the U.S. dollar equivalent of such indebtedness resulting from a hypothetical 10% adverse change in exchange rates at December 31, 2023 would be approximately $44 million.
The potential increase in the U.S. dollar equivalent of such indebtedness resulting from a hypothetical 10% adverse change in exchange rates at December 31, 2024 would be approximately $45 million.
The fixed-rate debt instruments minimize earnings volatility that would result from changes in interest rates. The Kronos Global Revolver is a variable-rate instrument; however, Kronos had no borrowings under this facility during 2022 or 2023.
At December 31, 2024, our aggregate indebtedness was comprised primarily of Kronos’ fixed-rate, euro-denominated KII 9.50% Senior Secured Notes due 2029 and KII 3.75% Senior Secured Notes due 2025. The fixed-rate debt instruments minimize earnings volatility that would result from changes in interest rates. The Kronos Global Revolver is a variable-rate instrument.
Removed
At December 31, 2023 we have $58.7 million invested in marketable debt securities at an average interest rate of approximately 4.3%. At December 31, 2023 our aggregate indebtedness was split between 83% of fixed-rate instruments (December 31, 2022 – 78%) and 17% of variable-rate borrowings (December 31, 2022 – 22%).
Added
The following table presents principal amounts and weighted average interest rates for our aggregate outstanding indebtedness at December 31, 2024.
Removed
The following table presents principal amounts and weighted average interest rates for our aggregate outstanding indebtedness at December 31, 2023. ​ - 66 - ‌ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indebtedness Amount Year end ​ ​ ​ Carrying ​ Fair ​ interest ​ Maturity ​ ​ value ​ value ​ rate ​ date ​ ​ (In millions) ​ ​ ​ ​ Fixed-rate indebtedness: ​ ​ ​ ​ ​ ​ Kronos fixed-rate 3.75% Senior Secured Notes due 2025 ​ $ 440.9 ​ $ 424.5 ​ 3.75% ​ 2025 LandWell bank note payable ​ 12.2 ​ 12.2 4.76% 2036 Total fixed-rate indebtedness ​ $ 453.1 ​ $ 436.7 3.78% Variable-rate indebtedness: ​ ​ Valhi Contran credit facility ​ $ 93.4 ​ $ 93.4 9.50% ​ 2025 ​ On February 12, 2024 KII exchanged €325 million principal amount of the outstanding 3.75% Senior Secured Notes due 2025 for newly issued €276.174 million aggregate outstanding KII 9.50% Senior Secured Notes due March 2029.
Added
Information shown below for Kronos’ euro-denominated 9.50% and 3.75% Senior Secured Notes due 2029 and 2025, respectively, is presented in its U.S. dollar equivalent at December 31, 2024 (net of unamortized debt issuance costs of $6.3 million, in addition to an unamortized bond premium of $5.3 million) using an exchange rate of U.S. $1.043 per euro.
Added
In addition, at December 31, 2024, Kronos has a $53.7 million subordinated, unsecured term loan payable to a related party, Contran, due September 2029, and Valhi has $44.6 million outstanding on an unsecured revolving credit facility with Contran.
Added
Certain raw materials used worldwide, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are purchased primarily in local - 69 - ‌ ​ currencies.
Added
At December 31, 2024, we had the equivalent of $365.4 million outstanding under Kronos’ euro-denominated KII 9.5% Senior Secured Notes due 2029 (exclusive of unamortized bond premium and debt issuance costs) and $78.3 million outstanding under Kronos’ euro-dominated KII 3.75% Senior Secured Notes due 2025 (exclusive of unamortized debt issuance costs).

Other VHI 10-K year-over-year comparisons