What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-08 compared with 2022-03-09 · 84 added, 86 removed, 461 unchanged (27% of the section changed)

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various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises such as COVID-19);

● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, cyber-attacks and public health crises such as COVID-19);

● Competitive products and substitute products;

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● The introduction of trade barriers or trade disputes;

● The impact of current or future government regulations (including employee healthcare benefit related regulations);

● 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;

● Kronos’ ability to renew or refinance credit facilities;

● Potential increases in interest rates;

● Increases in interest rates;

● Our ability to maintain sufficient liquidity;

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● Our ability to utilize income tax attributes or changes in income tax rates related to such 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 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 us, with respect to asserted health concerns associated with the use of such products), including new environmental health and safety regulations such as those seeking to limit or classify TiO 2 or its use;

● 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 us, with respect to asserted health concerns associated with the use of such products), including new environmental 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 our lead pigment and environmental matters);

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- 87% owned at December 31, 2022

CompX manufactures engineered components that are sold to a variety of industries including recreational transportation (including boats), postal, office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment.

CompX manufactures engineered components that are sold to a variety of industries including postal, recreational transportation (including boats), office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment.

CompX has three production facilities in the United States.

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- 31% owned at December 31, 2022

Kronos is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO 2, a base industrial product used in imparting whiteness, brightness, opacity and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, food, cosmetics and other industrial and consumer “quality-of-life” products.

Kronos is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO 2, a base industrial product used in imparting whiteness, brightness, opacity and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, cosmetics, pharmaceuticals and other industrial and consumer “quality-of-life” products.

Kronos has production facilities in Europe and North America.

Sales of TiO 2 represented about 92% of Kronos’ net sales in 2021, with sales of other products that are complementary to Kronos’ TiO 2 business comprising the remainder.

Sales of its core TiO 2 pigments represented about 92% of Kronos’ net sales in 2022, with sales of other products that are complementary to Kronos’ TiO 2 business comprising the remainder.

COMPONENT PRODUCTS - COMPX INTERNATIONAL INC.

Industry overview - Through our majority-owned subsidiary, CompX, we manufacture engineered components utilized in a variety of applications and industries.

CompX manufactures mechanical and electrical cabinet locks and other locking mechanisms used in recreational transportation, postal, office and institutional furniture, cabinetry, tool storage and healthcare applications.

CompX also manufactures stainless steel exhaust systems, gauges, throttle controls, wake enhancement systems, trim tabs and related hardware and accessories for the recreational marine and other industries.

CompX manufactures 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 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 continuously seeks to diversify into new markets and identify new applications and features for its products, which it believes provide a greater potential for higher rates of earnings growth as well as diversification of risk.

Manufacturing, operations and products - CompX’s Security Products business manufactures mechanical and electrical cabinet locks and other locking mechanisms used in a variety of applications including ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, high security medical cabinetry, integrated inventory and access control secured narcotics boxes, electronic circuit panels, storage compartments, gas station security, vending and cash containment machines.

Manufacturing, operations and products - CompX’s Security Products business manufactures mechanical and electrical cabinet locks and other locking mechanisms used in a variety of applications including mailboxes, ignition systems, file cabinets, desk drawers, tool storage cabinets, high security medical cabinetry, integrated inventory and access control secured narcotics boxes, electronic circuit panels, storage compartments, gas station security, vending and cash containment machines.

CompX’s Security Products business has one manufacturing facility in Mauldin, South Carolina and one in Grayslake, Illinois which is shared with its Marine Components business.

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for many customers, which is offered through a North American distribution network to locksmith and smaller original equipment manufacturer distributors via its STOCK LOCKS ® distribution program.

CompX’s Marine Components business manufactures and distributes stainless steel exhaust components, gauges, throttle controls, wake enhancement systems, trim tabs and related hardware and accessories primarily for performance and ski/wakeboard boats.

CompX’s Marine Components business 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.

CompX’s Marine Components business has a facility in Neenah, Wisconsin and a facility in Grayslake, Illinois which is shared with Security Products.

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At other times CompX may make spot market buys of larger quantities of raw materials to take advantage of favorable pricing or volume-based discounts.

Prices for the primary commodity-related raw materials used in the manufacture of CompX’s locking mechanisms, primarily zinc and brass, remained relatively stable during 2020 but generally increased throughout 2021.

The prices for stainless steel, the primary raw material used for the manufacture of marine exhaust headers and pipes and wake enhancement systems,

remained relatively stable in 2020 but experienced significant volatility during 2021.

Based on current economic conditions, CompX expects the prices for zinc, brass, and stainless steel, and other manufacturing materials to be volatile during 2022.

Prices for the primary commodity-related raw materials used in the manufacture of CompX’s locking mechanisms, primarily zinc and brass, generally increased throughout 2021 and the first half of 2022.

Prices began to stabilize in the latter half of 2022, although at elevated levels.

The prices for stainless steel, the primary raw material used for the manufacture of marine

exhaust headers and pipes and wake enhancement systems, experienced significant volatility during 2021 and 2022.

Based on current economic conditions, CompX expects the prices for zinc, brass, stainless steel and other manufacturing materials in 2023 to be relatively stable, although at the elevated levels it experienced in the second half of 2022.

When purchased on the spot market, each of these raw materials may be subject to sudden and unanticipated price increases.

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These products are packaged and merchandised for easy availability and handling by distributors and end users.

CompX sells to a diverse customer base with only one customer representing 10% or more of its sales in 2021 (United States Postal Service representing 16%).

CompX sells to a diverse customer base with only two customers representing 10% or more of its sales in 2022 (United States Postal Service representing 14% and Malibu Boats, LLC representing 12%).

CompX’s largest ten customers accounted for approximately 52% of its sales in 2022.

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CompX operates three low-emission 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 Gold Award from Renewable Water Resources, an organization which sets regulatory

and water policies for the Mauldin facility’s geographic region, for multiple years for its exemplary performance.

This facility has received a ReWa Gold Award from Renewable Water Resources, an organization which sets regulatory and water policies for the Mauldin facility’s geographic region, for multiple years for its exemplary performance.

In addition, CompX operates extensive scrap metal recycling programs to reduce landfill waste.

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TiO 2 is a white inorganic pigment used in a wide range of products for its exceptional durability and its ability to impart whiteness, brightness and opacity.

TiO 2 is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, food and cosmetics.

TiO 2 is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, cosmetics and pharmaceuticals.

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.

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In addition, TiO 2 has excellent resistance to interaction with other chemicals, good thermal stability and resistance to ultraviolet degradation.

Although there are other white pigments on the market, we believe there are no effective substitutes for TiO 2 because no other white pigment has the physical properties for achieving comparable opacity and brightness or can be incorporated in as cost-effective a manner.

Although there are other white pigments on the market, Kronos believes there are no effective substitutes for TiO 2 because no other white pigment has the physical properties for achieving comparable opacity and brightness or can be incorporated in as cost-effective a manner.

Pigment extenders such as kaolin clays, calcium carbonate and polymeric opacifiers are used together with TiO 2 in a number of end-use markets.

However, these products are not able to duplicate the opacity performance characteristics of TiO 2 and we believe these products are unlikely to have a significant impact on the use of TiO 2 .

However, these products are not able to duplicate the opacity performance characteristics of TiO 2 and Kronos believes these products are unlikely to have a significant impact on the use of TiO 2 .

TiO 2 is considered a “quality-of-life” product.

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Kronos believes that Western Europe and North America currently each account for approximately 16% of global TiO 2 consumption.

Markets for TiO 2 are generally increasing in China, the Asia Pacific region, South America and Eastern Europe and Kronos believes these are significant markets which will continue to grow as economies in these regions continue to develop and quality-of-life products, including TiO 2 , experience greater demand.

Markets for TiO 2 are generally increasing in China, the Asia Pacific region, South America and Eastern Europe and Kronos believes these are significant markets which will continue to grow as economies in these regions develop and quality-of-life products, including TiO 2 , experience greater demand.

Products and end-use markets - Kronos, including its predecessors, has produced and marketed TiO 2 in North America and Europe, its primary markets, for over 100 years.

Kronos believes it is the largest producer of TiO 2 in Europe with 46% of its 2021 sales volumes attributable to markets in Europe.

Kronos believes it is the largest TiO 2 producer in Europe with 45% of its 2022 sales volumes attributable to markets in Europe.

The table below shows Kronos’ estimated market share for its significant markets, Europe and North America, for the last three years.

North America

Kronos believes it is the leading seller of TiO 2 in several countries, including Germany, with an estimated 8% share of worldwide TiO 2 sales volume in 2021.

Overall, Kronos is one of the top five producers of TiO 2 in the world.

Kronos believes it is the leading seller of TiO 2 in several countries, including Germany.

Overall, Kronos is one of the top five producers of TiO 2 in the world, with an estimated 7% share of worldwide TiO 2 sales volume in 2022.

Kronos offers its customers a broad portfolio of products that include over 40 different TiO 2 pigment grades under the KRONOS ® trademark, which provide a variety of performance properties to meet customers’ specific requirements.

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Kronos produces high-purity sulfate process anatase TiO 2 used to provide opacity, whiteness and brightness in a variety of cosmetic and personal care products, such as skin cream, lipstick, eye shadow and toothpaste.

Kronos’ TiO 2 is also found in food products, such as candy and confectionaries, and in pet foods where it is used to obtain uniformity of color and appearance.

In pharmaceuticals, Kronos’ TiO 2 is used commonly as a colorant in tablet and capsule coatings as well as in liquid medicines to provide uniformity of color and appearance.

KRONOS ® purified anatase grades meet the

applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP and BP (United States Pharmacopoeia and British Pharmacopoeia) and the FDA (United States Food and Drug Administration).

KRONOS ® purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP and BP (United States Pharmacopoeia and British Pharmacopoeia) and the FDA (United States Food and Drug Administration).

Kronos’ TiO 2 business is enhanced by the following three complementary businesses, which comprised approximately 8% of its net sales in 2022:

● Kronos owns and operates two ilmenite mines in Norway pursuant to a governmental concession with an unlimited term.

● Kronos owns and operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.

Ilmenite is a raw material used directly as a feedstock by some sulfate-process TiO 2 plants.

Kronos supplies ilmenite to its sulfate plants in Europe.

Kronos also sells ilmenite ore to third parties, some of whom are its competitors, and it sells an ilmenite-based specialty product to the oil and gas industry.

The mines have estimated ilmenite reserves that are expected to last at least 50 years.

Kronos also sells ilmenite ore to third parties, some of whom are its competitors.

Kronos also sells an ilmenite-based specialty product to the oil and gas industry.

The mine has estimated ilmenite reserves that are expected to last at least 50 years.

● Kronos manufactures and sells iron-based chemicals, which are co-products and processed co-products of sulfate and chloride process TiO 2 pigment production.

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 specialty products from the production of TiO 2 .

Such 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.

● Kronos manufactures and sells other specialty chemicals, which are side-stream products from the production of TiO 2 .

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:

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Kronos’ production volumes include its share of the output produced by its TiO 2 manufacturing joint venture discussed below.

Kronos’ average production capacity utilization rates were approximately 98% in 2019, 92% in 2020 and full practical capacity in 2021.

Kronos’ production rates in 2020 were impacted by the COVID-19 pandemic as Kronos decreased production levels early in the third quarter to correspond with a temporary decline in market demand.

Kronos’ average production capacity utilization rates were approximately 92% in 2020, full practical capacity in 2021 and 89% in 2022.

Kronos’ production rates in 2020 were impacted by the COVID-19 pandemic (primarily in the third quarter).

In the fourth quarter of 2022 Kronos adjusted production levels to correspond with reduced customer demand in its European and export markets resulting from challenging economic conditions and geopolitical uncertainties.

Kronos operates facilities throughout North America and Europe, including the only sulfate process plant in North America and four TiO 2 plants in Europe (one in each of Leverkusen, Germany;

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As part of Kronos’ long-term strategy to increase chloride process production, Kronos phased-out sulfate production at its Leverkusen facility during 2020.

Kronos’ chloride process production and remaining sulfate production capacity has increased by approximately 5% over the past ten years due to debottlenecking programs, incurring only moderate capital expenditures.

Kronos expects to operate its TiO 2 plants at near full practical capacity levels in 2022.

Kronos’ chloride process production and remaining sulfate production capacity has increased by approximately 5% over the past ten years due to debottlenecking programs with only moderate

capital expenditures.

Kronos operated its facilities at reduced capacities in the fourth quarter of 2022 and into 2023.

Based on current assumptions about market performance and demand, Kronos expects to operate its TiO 2 plants at 80% to 90% capacity in the first half of 2023 and near full practical capacity levels by the second half of 2023.

The following table presents the division of Kronos’ expected 2023 manufacturing capacity by plant location and type of manufacturing process:

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Kronos owns the land underlying all of its principal production facilities unless otherwise indicated in the table above.

Kronos also operates two ilmenite mines in Norway pursuant to a governmental concession with an unlimited term.

Kronos also operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term.

In addition, Kronos operates a rutile slurry manufacturing plant near Lake Charles, Louisiana, which converts dry pigment primarily manufactured for Kronos 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, France and the United Kingdom and various sales offices located in North America.

Kronos has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium, and France.

TiO 2 manufacturing joint venture - Kronos Louisiana, Inc., one of Kronos’ subsidiaries, and Venator Investments each own a 50% interest in a manufacturing joint venture, Louisiana Pigment Company, L.P.

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A supervisory committee directs the business and affairs of the joint venture, including production and output decisions.

This committee is composed of four members, two of whom Kronos appoints and two of whom Venator

This committee is composed of four members, two of whom Kronos appoints and two of whom Venator appoints.

Two general managers manage the operations of the joint venture acting under the direction of the supervisory committee.

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Auto-renews annually

Tizir Titanium & Iron AS

Chloride process grade slag

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Renewal terms upon negotiations

Base Titanium Limited

Iluka Resources Limited

Renewal terms upon negotiations

Saraf Agencies Private Limited

Chloride process grade slag

Renewal terms upon negotiations

In the past Kronos has been, and expects it will continue to be, successful in obtaining short-term and long-term extensions to these and other existing supply contracts prior to their expiration.

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Titanium-containing feedstock suitable for use in the sulfate process is available from a limited number of suppliers principally in Norway, Canada, Australia, India and South Africa.

As one of the few vertically-integrated producers of sulfate process TiO 2 , Kronos operates two rock ilmenite mines in Norway, which provided all of the feedstock for its European sulfate process TiO 2 plants in 2021.

Kronos expects ilmenite production from its mines 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 2022.

Kronos expects ilmenite production from its mine to meet its European sulfate process feedstock requirements for the foreseeable future.

For Kronos’ Canadian sulfate process plant, it purchases sulfate grade slag primarily from Rio Tinto Fer et Titane Inc.

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Kronos endeavors to extend these commercial and technical relationships to multiple levels within its customers’ organizations using its direct sales force and technical service group to accomplish this objective.

Kronos believes this helps build customer loyalty to Kronos and strengthens its competitive position.

Kronos believes this helps build customer loyalty and strengthens its competitive position.

Close cooperation and strong customer relationships enable Kronos to stay closely attuned to trends in its customers’ businesses.

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In North America, Kronos’ sales are made primarily through its direct sales force and supported by a network of distributors.

In export markets, where Kronos has increased its marketing efforts over the last several years, Kronos’ sales are made through its direct sales force, sales agents and distributors.

Kronos has increased its marketing efforts over the last several years in export markets and Kronos’ sales are now made through its direct sales force, sales agents and distributors.

In addition to Kronos’ direct sales force and sales agents, many of its sales agents also act as distributors to service its customers in all regions.

Kronos offers customer and technical service to customers who purchase its products through distributors as well as to its larger customers serviced by its direct sales force.

Kronos sells to a diverse customer base and no single customer comprised 10% or more of its net sales in 2021.

Kronos sells to a diverse customer base with only one customer representing 10% or more of its net sales in 2022 (Behr Process Corporation – 10%).

Kronos’ largest ten customers accounted for approximately 33% of net sales in 2022.

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However, TiO 2 sales are generally higher in the second and third quarters of the year, due in part to the increase in coatings production in the spring to meet demand during the spring and summer painting seasons.

With certain exceptions, such as during the third quarter of 2020 as a result of the COVID-19 pandemic, Kronos has historically operated its production facilities at near full capacity rates throughout the entire year, which among other things helps to minimize its per-unit production costs.

As a result, Kronos normally will build inventories during the first and fourth quarters of each year in order to maximize its product availability during the higher demand periods normally experienced in the second and third quarters.

With certain exceptions, such as during the third quarter of 2020 as a result of the COVID-19 pandemic, and during the fourth quarter of 2022 as a result of reduced customer demand and unprecedently high energy costs, Kronos has historically operated its production facilities at near full capacity rates throughout the entire year, which among other things helps to minimize its per-unit production costs.

As a result, Kronos normally builds inventories during the first and fourth quarters of each year in order to maximize its product availability during the higher demand periods normally experienced in the second and third quarters.

Competition - The TiO 2 industry is highly competitive.

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Increasingly, Kronos is focused on providing pigments that are differentiated to meet specific customer requests and specialty grades that are differentiated from its competitors’ products.

During 2021, Kronos had an estimated

8% share of worldwide TiO 2 sales volume, and based on sales volume Kronos believes it is the leading seller of TiO 2 in several countries, including Germany.

Kronos’ principal competitors are The Chemours Company, Tronox Incorporated, Lomon Billions and Venator Materials PLC.

During 2022, Kronos had an estimated 7% share of worldwide TiO 2 sales volume, and based on sales volume Kronos believes it is the leading seller of TiO 2 in several countries, including Germany.

Kronos’ principal competitors are The Chemours Company, Tronox Incorporated, LB Group Co.

and Venator Materials PLC.

The top five TiO 2 producers (i.e.

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Worldwide production capacity – 2022

Lomon Billions

LB Group Co.Ltd.

Chemours has approximately one-half of total North American TiO 2 production capacity and is Kronos’ principal North American competitor.

In 2019, Tronox acquired certain of the TiO 2 assets of Cristal Global.

Lomon Billions announced it added approximately 260,000 tons of chloride capacity in 2019 and plans to add an additional 200,000 tons by 2023.

previously announced it plans to add an additional 200,000 tons of chloride capacity which we expect will be added incrementally over the next several years.

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.

Over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects, which in part compensated for the shut-down of various TiO 2 plants throughout the world.

Although overall industry demand is expected to increase in 2022, other than through debottlenecking projects and the Lomon Billions expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by Kronos 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.

Therefore, over the past ten years, Kronos and its competitors increased industry capacity through debottlenecking projects, although 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 2023, other than through debottlenecking projects and the LB Group Co.

expansion mentioned above, Kronos does not expect any significant efforts will be undertaken by Kronos 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.

If actual developments differ from Kronos’ expectations, the TiO 2 industry’s and Kronos’ performance could be unfavorably affected.

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patents are generally in effect for 20 years from the date of filing.

patent portfolio includes patents having remaining terms ranging from two years to 20 years.

patent portfolio includes patents having remaining terms ranging from one year to 20 years.

Trademarks and trade secrets – Kronos trademarks, including KRONOS ® , are covered by issued and/or pending registrations, including in Canada and the United States.

Kronos protects the trademarks that it uses in connection with the

products it manufactures and sells and has developed goodwill in connection with its long-term use of its trademarks.

Kronos protects the trademarks it uses in connection with the products it manufactures and sells and has developed goodwill in connection with its long-term use of its trademarks.

Kronos conducts research activities in secret and it protects the confidentiality of its trade secrets through reasonable measures, including confidentiality agreements and security procedures, including data security.

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During 2021, Kronos was notified by government authorities in Norway that the classification of a dam at its mine facilities was changed to the highest level for Norwegian classification of dam structures.

As a result, its mine operations are subject to a higher degree of oversight and regulation than existed prior to this change in classification, and Kronos expects to incur additional capital expenditures to adapt to the higher classification standards.

Kronos has a history of identifying new ways to reduce consumption and waste by converting byproducts to co-products through its ecochem® products.

As a result, its mine operations are subject to a higher degree of oversight and regulation than existed prior to this change in classification, and Kronos has increased its capital expenditures to adapt to the higher classification standards.

Kronos has a history of identifying new ways to reduce consumption and waste by converting byproducts to co-products through its KRONOS ecochem® products.

Annually Kronos updates and publishes its Safety, Environment, Energy and Quality Policy which is translated into local languages and distributed to all its employees and shared publicly via its website.

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Three of its five production facilities maintain certifications to the ISO 50001:2018 Energy Management standard and all locations have local energy teams in place.

These teams are responsible for maintaining ISO 50001:2018 certifications (where applicable), performing regular reviews of local energy consumption, making recommendations regarding capital projects that reduce energy consumption or enhance efficiency, and partnering with local government authorities through grant opportunities to reduce energy consumption and associated Greenhouse Gas (“GHG”) emissions.

These teams are responsible for maintaining ISO 50001:2018 certifications (where applicable), performing regular reviews of local energy consumption, making recommendations regarding capital projects that reduce energy consumption and associated Greenhouse Gas (GHG) emissions or enhance efficiency.

When possible, Kronos looks for opportunities to partner with local government authorities through grant opportunities to reduce energy consumption and associated GHG emissions.

Kronos also actively manages potential water-related risks, including flooding and water shortages.

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However, increased regulatory scrutiny could affect consumer perception of TiO 2 or limit the marketability and demand for TiO 2 or products containing TiO 2 and increase its regulatory and compliance costs.

On February 18, 2020 the European Union published a regulation classifying dry TiO 2 and mixtures containing dry TiO 2 as a suspected carcinogen via inhalation under its EU Regulation No.

1272/2008 on classification and labeling substances and mixtures.

The regulation went into force on October 1, 2021 when hazard labels were required on certain dry TiO 2 products and certain mixtures containing dry TiO 2 in the EU.

On October 1, 2021, EU Regulation No.

1272/2008 classifying dry TiO 2 and mixtures containing dry TiO 2 as a suspected carcinogen via inhalation went into force.

Kronos’ dry TiO 2 products do not meet the criteria set forth in the regulation and therefore do not require classification labels.

This classification of TiO 2 is based on scientifically questioned animal test data.

Separate studies of TiO 2 workers conducted by the TiO 2 industry have shown no TiO 2 specific links to cancer.

Kronos intends to comply with the new requirements including working with customers and other stakeholders on compliance matters as appropriate.

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.

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 $17.6 million in 2022 and are currently expected to be approximately $20 million in 2023.

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Through our subsidiaries and affiliates, we seek to operate our businesses in line with sound ESG principles that include corporate governance, social responsibility, sustainability, and cybersecurity.

We believe ESG means conducting operations with high standards of environmental and social responsibility, practicing exemplary ethical standards, focusing on safety as a top priority, respecting and supporting our local communities, and continuously developing our employees.

We believe ESG means conducting operations with high standards of environmental and social responsibility, practicing exemplary ethical standards, focusing on safety as a top priority, respecting human rights and supporting our local communities, and continuously developing our employees.

At their facilities, Kronos and CompX undertake various environmental sustainability programs, and promote social responsibility and volunteerism through programs designed to support and give back to the local communities in which each operates.

Each of Kronos’ and CompX’s locations maintain site-specific safety programs and disaster response and business continuity plans.

All manufacturing facilities have detailed, site-specific emergency response procedures that Kronos and CompX believe adequately address regulatory compliance, vulnerability to potential hazards, emergency response and action plans, employee training, alarms and warning systems and crisis communication.

All manufacturing facilities have detailed, site-specific emergency response procedures Kronos and CompX believe adequately address regulatory compliance, vulnerability to potential hazards, emergency response and action plans, employee training, alarms and warning systems and crisis communication.

At a corporate level, Kronos and CompX engage in periodic reviews of their cybersecurity programs, including cybersecurity risk and threats.

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Kronos voluntarily developed these internal metrics and benchmarks, which Kronos uses to identify progress and opportunities for improvement.

These metrics are not intended to be directly comparable to similar metrics utilized by other companies to track ESG performance.

These metrics are not intended to be directly comparable to similar metrics utilized by other companies to track ESG performance, as the standards, methodologies and assumptions used to determine these metrics vary by company and jurisdiction.

HUMAN CAPITAL RESOURCES

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Kronos and CompX provide competitive compensation and benefits to their employees, some of which for Kronos are offered under collective bargaining agreements.

In addition to salaries, these programs, which vary by country/region, can include annual bonuses, a defined benefit pension plan (for Kronos), a defined contribution plan with employer matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, employee assistance programs, and tuition assistance.

In addition to salaries, these programs, which vary by country/region, can include annual bonuses, a defined benefit pension plan (for Kronos), a defined contribution plan

with employer matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, employee assistance programs, and tuition assistance.

As of December 31, 2022, CompX employed 609 people, all in the United States.

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In addition, management reviews and evaluates safety performance throughout the year.

CompX uses a Lost Time Incident Rate as a key measure of worker safety.

The Lost Time Incident Rate is a standard Occupational Safety and Health Administration metric that calculates the number of incidents that result in time away from work.

CompX had a Lost Time Incident Rate of three in 2019, nil in 2020, and one in 2021.

CompX uses lost time incidents as a key measure of worker safety.

CompX defines lost time incidents as work-related accidents where a worker sustains an injury that results in time away from work.

CompX had lost time incidents of nil in 2020, one in 2021, and three in 2022.

Kronos monitors conditions that could lead to a safety incident and keep track of injuries through reporting systems in accordance with laws in the jurisdictions in which it operates.

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Each Kronos operating location is subject to local laws and regulations that dictate what injuries are required to be recorded and reported, which may differ from location to location and result in different methods of injury rate calculation.

For internal global tracking, benchmarking and identification of opportunities for improvement, Kronos collects the location specific information and applies a US-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.

This internal safety metric may not be

directly comparable to a recordable incident rate calculated under US law.

Kronos’ global total frequency rate was 1.59 in 2019, 1.61 in 2020 and 1.08 in 2021.

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.

This internal safety metric may not be directly comparable to a recordable incident rate calculated under U.S.

Kronos’ global total frequency rate was 1.61 in 2020 (1.54 of the aggregate represents employees only), 1.08 in 2021(0.90 of the aggregate represents employees only) and 1.01 in 2022 (0.86 of the aggregate represents employees only).

Diversity and inclusion - We recognize that everyone deserves respect and equal treatment.

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Kronos and CompX promote a respectful, diverse and inclusive workplace in which all individuals are treated with respect and dignity.

In addition to our 87% ownership of CompX and our 30% ownership of Kronos at December 31, 2021, we also own 100% of EWI RE, Inc., an inactive subsidiary that was formerly an insurance brokerage and risk management services company.

In the fourth quarter of 2019, we sold the insurance and risk management business of EWI for proceeds of $3.25 million and recognized a gain of $3.0 million.

We also hold certain marketable securities and other investments.

See Notes 13 and 16 to our Consolidated Financial Statements.

In addition to our 87% ownership of CompX and our 31% ownership of Kronos at December 31, 2022, we also hold certain marketable securities and other investments.

See Note 5 to our Consolidated Financial Statements.

Regulatory and environmental matters - We discuss regulatory and environmental matters in the respective business sections contained elsewhere herein and in Item 3 - “Legal Proceedings.” In addition, the information included in Note 16 to our Consolidated Financial Statements under the captions “Lead pigment litigation” and “Environmental matters and litigation” is incorporated herein by reference.

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From time to time, we also evaluate the restructuring of ownership interests among our respective subsidiaries and related companies.

We and other entities that may be affiliated with Contran routinely evaluate acquisitions of interests in, or combinations with, companies, including related companies, perceived by management to be undervalued in the marketplace.

We and other entities that may be affiliated with Contran 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.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business