63 unchanged sentences
Kronos may not always be able to increase its selling prices to offset the impact of any higher costs or reduced production levels, which could reduce its earnings and decrease its liquidity.
−Removed: Kronos has supply contracts that provide for its TiO 2 feedstock requirements that currently expire in either 2022 or 2023.
+Added: Kronos has supply contracts that provide for its TiO 2 feedstock requirements that currently expire in 2023 and one contract that extends through 2026.
While Kronos believes it will be able to renew these contracts, Kronos does not know if it will be successful in renewing them or in obtaining long-term extensions to them prior to expiration.
−Removed: Kronos’ current agreements (including those entered into through February 2022) require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $800 million beginning in 2022.
+Added: Kronos’ current agreements (including those entered into through February 2023) require it to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $1.0 billion beginning in 2023 and extending through 2026.
In addition, Kronos has other long-term supply and service contracts that provide for various raw materials and services.
1 unchanged sentence
Kronos’ commitments under these contracts could adversely affect our financial results if Kronos significantly reduces its production and was unable to modify the contractual commitments.
−Removed: COVID-19 has affected Kronos’ and CompX’s operations and may continue to affect operations.
−Removed: Our results of operations have been and may continue to be negatively impacted by COVID-19, specifically from disruptions to Kronos’ and CompX’s supply chain, transportation networks and customers, which may compress margins, including as a result of preventative and precautionary measures that Kronos and CompX, other businesses, and governments are taking.
−Removed: In addition, the ability of our suppliers and customers to operate may be significantly impacted by individuals contracting or being exposed to COVID-19 or as a result of associated control measures.
−Removed: Given the dynamic and uncertain nature and duration of COVID-19 and related variants, and the effectiveness of actions globally to contain or mitigate its effects, we cannot reasonably estimate the long-term impact of COVID-19 on our businesses, results of operations and overall financial performance.
−Removed: CompX has 570 employees and operates three facilities , each of which specializes in certain manufacturing processes and is therefore dependent upon the other facilities to some extent to manufacture finished goods.
−Removed: With the onset of COVID-19, CompX enhanced cleaning and sanitization procedures within each facility and implemented other health and safety protocols.
−Removed: CompX has generally been able to operate successfully through the pandemic;
−Removed: however, with the increase spread of new variants of COVID-19 it is possible CompX may have temporary closures at one or more of its facilities for the health and safety of its workforce if conditions warrant.
−Removed: Kronos has 2,248 employees and operates facilities throughout North America and Europe.
−Removed: With the onset of COVID-19, Kronos enhanced cleaning and sanitization procedures within each facility and implemented other health and safety protocols.
−Removed: Kronos has also been able to fully operate each of its facilities during the pandemic.
−Removed: It is possible Kronos may have temporary closures at one or more of its facilities for the health and safety of its workforce if conditions warrant.
Our assets consist primarily of investments in our operating subsidiaries and affiliate, and we are dependent upon distributions from our subsidiaries and affiliate.
1 unchanged sentence
Our subsidiaries and affiliate are separate and distinct legal entities and they have no obligation, contingent or otherwise, to pay cash dividends or other distributions to us.
−Removed: In addition, the payment of dividends or other distributions from our subsidiaries and affiliate could be subject to restrictions under applicable law, monetary transfer restrictions, currency exchange regulations in jurisdictions in which our subsidiaries and affiliate operate or any other restrictions imposed by current or future agreements to which our subsidiaries and affiliate
−Removed: may be a party, including debt instruments.
+Added: In addition, the payment of dividends or other distributions from our subsidiaries and affiliate could be subject to restrictions under applicable law, monetary transfer restrictions, currency exchange regulations in jurisdictions in which our subsidiaries and affiliate operate or any other restrictions imposed by current or future agreements to which our subsidiaries and affiliate may be a party, including debt instruments.
Events beyond our control, including changes in general business and economic conditions, could adversely impact the ability of our subsidiaries and affiliate to pay dividends or make other distributions to us.
16 unchanged sentences
In addition to Kronos’ indebtedness, Kronos is 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 its indebtedness, Kronos is committed to pay approximately $689 million in 2023.
−Removed: Kronos’ ability to make payments on and refinance its debt and to fund planned capital expenditures depends on its future ability to generate cash flow.
+Added: Kronos’ ability to make payments on and refinance its debt and to fund planned capital expenditures depends on its ability to generate cash flow in the future.
To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control.
−Removed: In addition, Kronos’ ability to borrow funds under its revolving credit facility in the future will, in some instances, depend in part on its ability to maintain specified financial ratios and satisfy certain financial covenants contained in the applicable credit agreement.
+Added: In addition, Kronos’ ability to borrow funds under its revolving credit facility in the future, in some instances, will depend in part on its ability to maintain specified financial ratios and satisfy certain financial covenants contained in the applicable credit agreement.
Kronos’ business may not generate cash flows from operating activities sufficient to enable it to pay its debts when they become due and to fund its other liquidity needs.
5 unchanged sentences
We formerly manufactured lead pigments for use in paint.
−Removed: We and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly
−Removed: caused by the use of lead-based paints.
+Added: We 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.
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.
9 unchanged sentences
See also Item 3 - “Legal Proceedings - Environmental matters and litigation.”
−Removed: If Kronos’ or CompX’s intellectual property were to be declared invalid, or copied by or become known to competitors, or if Kronos’ and CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.
+Added: If Kronos’ or CompX’s intellectual property were to be declared invalid, or copied by or become known to competitors, or if Kronos’ or CompX’s competitors were to develop similar or superior intellectual property or technology, their ability to compete could be adversely impacted.
Protection of intellectual property rights, including patents, trade secrets, confidential information, trademarks and tradenames, is important to Kronos’ and CompX’s businesses and their competitive positions.
5 unchanged sentences
Similarly, third parties may assert claims against Kronos and Compx and their customers and distributors alleging their products infringe upon third-party intellectual property rights.
−Removed: Although it is the practice of Kronos 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.
+Added: Although it is the practice of Kronos 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
+Added: 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.
Kronos also may not be able to readily detect breaches of such agreements.
9 unchanged sentences
Even if CompX believes such claims are without merit, they can be time-consuming and costly to defend and distract management’s and technical staff’s attention and resources.
−Removed: Claims of intellectual property infringement also might require CompX to redesign affected technology, enter into costly settlement or license agreements or pay costly damage awards,
−Removed: or face a temporary or permanent injunction prohibiting CompX from marketing or selling certain technology.
+Added: Claims of intellectual property infringement also might require CompX to redesign affected technology, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting CompX from marketing or selling certain technology.
If CompX cannot or does not license the infringed technology on reasonable pricing terms or at all, or substitute similar technology from another source, our business could be adversely impacted.
1 unchanged sentence
A failure to protect, defend or enforce intellectual property rights could have an adverse effect on our financial condition and results of operations.
−Removed: Environmental, health and safety laws and regulations, particularly as it relates to Kronos, may result in increased regulatory scrutiny which could decrease demand for Kronos’ products, increase Kronos’ manufacturing and compliance costs or obligations and result in unanticipated losses which could negatively impact its financial results or limit its ability to operate its business.
+Added: Environmental, health and safety laws and regulations, particularly as they relate to Kronos, may result in increased regulatory scrutiny which could decrease demand for Kronos’ products, increase Kronos’ manufacturing and compliance costs or obligations and result in unanticipated losses which could negatively impact its financial results or limit its ability to operate its business.
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 , or its use.
1 unchanged sentence
Increased compliance obligations and costs or restrictions on operations, raw materials and certain TiO 2 applications could negatively impact Kronos’ future financial results through increased costs of production, or reduced sales which may decrease its liquidity, operating income and results of operations, which could in turn negatively impact our investment in Kronos.
−Removed: Global climate change legislation could negatively impact our financial results or limit Kronos’ and CompX’s ability to operate their businesses.
+Added: Global climate change laws and regulations could negatively impact our financial results or limit Kronos’ and CompX’s ability to operate their businesses.
CompX operates production facilities in the United States and Kronos operates production facilities in North America and Europe.
1 unchanged sentence
government and various non-U.S.
−Removed: governmental agencies of countries in which Kronos and CompX operate have determined that the consumption of energy derived from fossil fuels is a major contributor to climate change and have introduced or are contemplating regulatory changes in response to the potential impact of climate change, including legislation regarding carbon emission costs, emissions and renewable energy targets.
+Added: governmental agencies of countries in which Kronos and CompX operate have determined the consumption of energy derived from fossil fuels is a major contributor to climate change and have introduced or are contemplating regulatory changes in response to the potential impact of climate change, including laws and regulations requiring enhanced reporting (such as the Corporate Social Responsibility Directive adopted by the European Union on November 28, 2022) as well as legislation regarding carbon emission costs, GHG emissions and renewable energy targets.
International treaties or agreements may also result in increasing regulation of GHG emissions, including emissions permits and/or energy taxes or the introduction of carbon emissions trading mechanisms.
−Removed: To date, the existing GHG permit system in effect in the various countries in which Kronos or CompX operates has not had a material adverse effect on financial results.
−Removed: Until the timing, scope and extent of any future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.
−Removed: However, if further GHG legislation were to be enacted in one or more countries, it could negatively impact Kronos or CompX future results of operations through increased costs of production, particularly as it relates to their energy requirements or their need to obtain emissions permits.
+Added: To date, the existing GHG laws and regulations in effect in the various countries in which
+Added: Kronos or CompX operates have not had a material adverse effect on financial results.
+Added: Until the timing, scope and extent of any new or future regulation becomes known, we cannot predict the effect on Kronos’ or CompX’s business, results of operations or financial condition.
+Added: However, if further GHG laws and regulations were to be enacted in one or more countries, it could negatively impact Kronos or CompX future results of operations through increased costs of production, particularly as it relates to their energy requirements or their need to obtain emissions permits.
If such increased costs of production were to materialize, Kronos or CompX may be unable to pass price increases on to their customers to compensate for increased production costs, which may decrease their liquidity, operating income and results of operations.
−Removed: In addition, any adopted future regulations focused on climate change and/or GHG regulations could negatively impact Kronos’ or CompX’s ability (or that of its customers and suppliers) to compete with companies situated in areas not subject to such regulations.
+Added: In addition, any adopted future laws and regulations focused on climate change and/or GHG emissions could negatively impact Kronos’ or CompX’s ability (or that of its customers and suppliers) to compete with companies situated in areas not subject to such laws and regulations.
General Risk Factors
Kronos’ operating as a global business presents risks associated with global and regional economic, political, and regulatory environments.
−Removed: Kronos 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 trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, natural disasters, terrorism, armed conflict (such as the current conflict between Russia and Ukraine), health crises (such as the coronavirus) and political conditions.
−Removed: Kronos 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, including costs associated with the repatriation of non-U.S.
−Removed: TiO 2 production requires significant energy input, and economic sanctions or supply
−Removed: disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions.
+Added: Kronos 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 trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, natural disasters, terrorism, armed conflict (such as the current conflict between Russia and Ukraine), health crises (such as COVID-19) and political conditions.
+Added: Kronos 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.
+Added: 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 Kronos’ results of operations and financial condition.
3 unchanged sentences
Therefore, any of Kronos’ and CompX’s information technology systems may be susceptible to outages, disruptions or destruction from power outages, telecommunications failures, employee error, cybersecurity breaches or attacks and other similar events.
−Removed: This could result in a disruption of Kronos’ or CompX’s business operations, injury to people, harm to the environment or its assets, and/or the inability to access our information technology systems and could adversely affect its results of operations and financial condition.
+Added: This could result in a disruption of Kronos’ or CompX’s business operations, injury to people, harm to the environment or their assets, and/or the inability to access their information technology systems and could adversely affect our results of operations and financial condition.
Kronos and CompX have in the past experienced, and expect to continue to experience, cyber-attacks, including phishing and other attempts to breach, or gain unauthorized access to, their systems, and vulnerabilities introduced into their systems by trusted third-party vendors who have experienced cyber-attacks.
9 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.