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Item 9A. Controls and Procedures

2025-03-06 compared with 2024-03-06 · 214 added, 182 removed, 964 unchanged (29% of the section changed)

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Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.

As permitted by the SEC, our assessment of internal control over financial reporting excludes (i) internal control over financial reporting of equity method investees and (ii) internal control over the preparation of any financial statement

schedules which would be required by Article 12 of Regulation S-X.

However, our assessment of internal control over financial reporting with respect to equity method investees did include controls over the recording of amounts related to our investment that are recorded in the Consolidated Financial Statements, including controls over the selection of accounting methods for our investments, the recognition of equity method earnings and losses and the determination, valuation and recording of our investment account balances.

39 unchanged sentences

Securities and Exchange Commission on October 26, 2023.

Description of the Registrant’s Capital Stock.

- incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019.

Description of the Registrant’s Capital Stock –.incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019.

Lease Contract dated June 21, 1952, between Farbenfabriken Bayer Aktiengesellschaft and Titangesellschaft mit beschrankter Haftung (German language version and English translation thereof) – incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K (File No.

001-00640) for the year ended December 31, 1985.

Formation Agreement dated as of October 18, 1993 among Tioxide Americas Inc., Kronos Louisiana, Inc.

and Louisiana Pigment Company, L.P.

- incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Joint Venture Agreement dated as of October 18, 1993 between Tioxide Americas Inc.

and Kronos Louisiana, Inc.

- incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Kronos Offtake Agreement dated as of October 18, 1993 between Kronos Louisiana, Inc.

and Louisiana Pigment Company, L.P.

- incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Exhibit Index

Amendment No.

1 to Kronos Offtake Agreement dated as of December 20, 1995 between Kronos Louisiana, Inc.

and Louisiana Pigment Company, L.P.

- incorporated by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K (File No.

001-00640) for the year ended December 31, 1995.

Tioxide Americas Offtake Agreement dated as of October 18, 1993 between Tioxide Americas Inc.

and Louisiana Pigment Company, L.P.

- incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Amendment No.

1 to Tioxide Americas Offtake Agreement dated as of December 20, 1995 between Tioxide Americas Inc.

and Louisiana Pigment Company, L.P.

- incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K (File No.

001-00640) for the year ended December 31, 1995.

Parents’ Undertaking dated as of October 18, 1993 between ICI American Holdings Inc.

and Kronos Worldwide, Inc.

(f/k/a Kronos, Inc.) - incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Allocation Agreement dated as of October 18, 1993 between Tioxide Americas Inc., ICI American Holdings, Inc., Kronos Worldwide, Inc.

(f/k/a Kronos, Inc.).

and Kronos Louisiana, Inc.

- incorporated by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-00640) for the quarter ended September 30, 1993.

Form of Assignment and Assumption Agreement, dated as of January 1, 1999, between Kronos Inc.

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– incorporated by reference to Exhibit 10.10 to Kronos International, Inc.’s Registration Statement on Form S-4 (File No.

Unsecured Revolving Demand Promissory Note dated December 31, 2022 in the principal amount of $25.0 million executed by Valhi, Inc.

and payable to the order of Kronos Worldwide, Inc.

– incorporate by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10K for the year ended December 31, 2022.

Cancellation of Unsecured Revolving Demand Promissory Note between Valhi, Inc.

and Kronos Worldwide, Inc.

dated February 21, 2024.

Exhibit Index

Restated and Amended Agreement by and between Richards Bay Titanium (Proprietary) Limited (acting through its sales agent Rio Tinto Iron & Titanium Limited) and Kronos (US), Inc.

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2023 Non-Employee Director Stock Plan – incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10Q for the quarter ended June 30, 2023.

Exhibit Index

Second Amended and Restated Agreement Regarding Shared Insurance among CompX International Inc., Contran Corporation, Kronos Worldwide, Inc., NL Industries, Inc.

23 unchanged sentences

as Lender, dated as of November 9, 2022 –incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registration dated November 9, 2022 .

Exhibit Index

Pledge and Security Agreement made by and between NLKW Holding, LLC in favor of Valhi, Inc., dated as of November 14, 2016 – incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Registrant dated November 14, 2016 and filed on November 15, 2016.

1 unchanged sentence

First Amendment to Back-to-Back Loan Agreement between NL Industries, Inc., as Borrower, and NLKW Holding, LLC, as Lender, dated as of November 9, 2022 – incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Registrant dated November 9, 2022 .

Exhibit Index

Back-to-Back Pledge and Security Agreement made by and between the registrant in favor of Valhi, Inc., dated as of November 14, 2016 – incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K of the Registrant dated November 14, 2016 and filed on November 15, 2016.

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1, dated as of February 12, 2024, among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 4.1 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

Supplemental Indenture No.

2, dated as of August 8, 2024, among Louisiana Pigment Company, L.P.

and Kronos LPC, LLC (as new guarantors under the Indenture dated as of September 13, 2017, as amended), Kronos International, Inc., and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Indenture, dated as of February 12, 2024, among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 4.2 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

First Supplemental Indenture dated as of July 30, 2024, by and among Kronos International, Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.1 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed on July 30, 2024.

Second Supplemental Indenture dated as of August 8, 2024, among Louisiana Pigment Company, L.P.

and Kronos LPC, LLC (as new guarantors under the Indenture dated as of February 12, 2024, as amended), Kronos International, Inc., and Deutsche Bank Trust Company Americas, as trustee, collateral agent, paying agent, transfer agent and registrar – incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Pledge Agreement, dated as of September 13, 2017, among Kronos International, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as collateral agent – incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kronos Worldwide, Inc.

dated September 13, 2017 and filed on September 13, 2017.

Exhibit Index

Additional Notes Priority Joinder Agreement dated February 12, 2024, executed by Deutsche Bank Trust Company Americas, as trustee and collateral agent for the holders of Kronos International, Inc.’s 9.50% Senior Secured Notes due 2029 and as existing agent under the Pledge Agreement dated September 13, 2017 entered into in connection with Kronos International Inc.’s 3.75% Senior Secured Notes due 2025 – incorporated by reference to Exhibit 4.4 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

Additional Notes Priority Joinder Agreement dated July 30, 2024, executed by Deutsche Bank Trust Company Americas, as trustee and collateral agent.

– incorporated by reference to Exhibit 10.2 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed July 30, 2024 .

1 dated as of August 8, 2024, to the Pledge Agreement dated as of September 13, 2017, joining Louisiana Pigment Company, L.P.

and Kronos LPC, LLC to the Pledge Agreement – incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Pledge Amendment dated as of August 8, 2024, to the Pledge Agreement dated as of September 13, 2017, executed by Kronos Louisiana, Inc.

and Kronos LPC, LLC regarding additional pledged securities – incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Credit Agreement dated as of April 20, 2021 by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH and Wells Fargo Bank, National Association as administrative agent and lender – incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

1 unchanged sentence

Securities and Exchange Commission on May 9, 2023.

Second Amendment to Credit Agreement dated July 17, 2024 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association as administrative agent and the lenders a party thereto – incorporated by reference to Exhibit 10.2 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed July 17, 2024 .

Third Amendment to Credit Agreement dated December 19, 2024 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association, as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.1 to Kronos Worldwide’s Current Report on Form 8-K filed on December 19, 2024.

Guaranty and Security Agreement dated as of April 20, 2021, by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos International, Inc.

and Wells Fargo Bank, National Association as administrative agent and lender – incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

Exhibit Index

First Amendment to Guaranty and Security Agreement, entered into as of July 17, 2024, by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos International, Inc.

and Wells Fargo Bank, National Association as administrative agent and lender, amending Guaranty and Security Agreement dated as of April 20, 2021 – incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

1 dated as of August 7, 2024, joining Louisiana Pigment Company, L.P.

and Kronos LPC, LLC to the Guaranty and Security Agreement dated as of April 20, 2021, as amended – incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Unsecured Subordinated Term Promissory Note dated February 12, 2024 in the principal amount of $53,705,000 executed by Kronos Worldwide, Inc.

and the guarantors named therein and payable to the order of Contran Corporation – incorporated by reference to Exhibit 4.5 to Kronos Worldwide Inc.’s Current Report on Form 8-K filed on February 12, 2024.

First Amendment to Unsecured Subordinated Term Promissory Note dated February 12, 2024, executed by Kronos Worldwide, Inc.

and Contran Corporation as of August 7, 2024 – incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

Purchase and Sale Agreement dated July 16, 2024 by and between Kronos Louisiana, Inc., Kronos Worldwide, Inc., Venator Investments, Ltd.

and Venator Materials PLC – incorporated by reference to Exhibit 10.1 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed July 17, 2024 .

Amendment to Purchase and Sale Agreement dated August 13, 2024, by and between Kronos Louisiana, Inc., Kronos Worldwide, Inc., Venator Investments, Ltd., Venator Materials PLC.

and Louisiana Pigment Company, L.P, amending Purchase Agreement dated as of July 16, 2024 – incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on form 10-Q for the quarter ended September 30, 2024.

Consent Decree effective February 10, 2025, among NL Industries, Inc., the United States of America (on behalf of several agencies) and certain other plaintiff parties and defendant parties, relating to the Raritan Bay Slag Superfund Site.

NL Industries, Inc.

Insider Trading Policy.

Subsidiaries of the Registrant

Consent of PricewaterhouseCoopers LLP with respect to NL’s consolidated financial statements .

Exhibit Index

Consent of PricewaterhouseCoopers LLP with respect to Kronos’ consolidated financial statements.

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Certification

Policy for the Recovery of Erroneously Awarded Compensation.

Policy for the Recovery of Erroneously Awarded Compensation – incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023.

Consolidated Financial Statements of Kronos Worldwide, Inc.

– incorporated by reference to Kronos’ Annual Report on Form 10-K for the year ended December 31, 2024.

Exhibit Index

Inline XBRL Instance – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s evaluation of environmental remediation and related matters (including costs and estimates associated with damages for property damage and/or damages for injury to natural resources), including controls over determining whether estimated future expenditures are probable and reasonably estimable, as well as the related financial statement disclosures.

These procedures included testing the effectiveness of controls relating to management’s evaluation of environmental remediation and related matters, including controls over determining whether estimated future expenditures are probable and reasonably estimable, as well as the related financial statement disclosures.

These procedures also included, among others, (i) obtaining the rollforward of environmental accrual activity for each matter and, for a sample of sites, reviewing and discussing site activity with management, (ii) obtaining and evaluating responses to letters of audit inquiry from internal and external legal counsel, and (iii) evaluating the sufficiency of the Company’s environmental remediation and related matters disclosures.

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Selling, general and administrative expense

Corporate expense

Other operating income (expense):

Insurance recoveries

Corporate income (expense), net

Income from operations

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Other postretirement benefit plans

Total other comprehensive income, net

Total other comprehensive income (loss), net

Comprehensive income

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Balance at December 31, 2022

Net income (loss)

Other comprehensive income,

3 unchanged sentences

Balance at December 31, 2023

Net income (loss)

Other comprehensive income,

Other comprehensive loss,

Issuance of NL common stock

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Dividends received from Kronos Worldwide, Inc.

Marketable equity securities

Marketable equity securities (gain) loss

Loss on pension plan termination

Benefit plan expense greater (less) than cash funding

Benefit plan expense greater than cash funding

Noncash interest income

14 unchanged sentences

Note receivable from affiliate:

Proceeds from land sale

Net cash provided by (used in) investing activities

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Balance at end of year

Supplemental disclosures - cash paid (received) for:

Supplemental disclosures:

Cash paid (received) for:

Income taxes, net

Noncash investing activities -

Change in accruals for capital expenditures

See accompanying Notes to Consolidated Financial Statements.

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A majority of Contran’s outstanding voting stock is held directly by Lisa K.

Simmons, Thomas C.

Simmons and by family stockholders (Thomas C.

Connelly (the husband of Ms.

Simmons’ late sister) and various family trusts established for the benefit of Ms.

Connelly and their children and for which Ms.

Simmons or Mr.

Connelly, as applicable, serve as trustee (collectively, the “Other Trusts”).

With respect to the Other Trusts for which Mr.

Connelly serves as trustee, he is required to vote the shares of Contran voting stock held by such trusts in the same manner as Ms.

Such voting rights of Ms.

Simmons last through April 22, 2030 and are personal to Ms.

Simmons’ late sister), a family-owned entity and various family trusts established for the benefit of Ms.

Connelly and their children) who are required to vote their shares of Contran voting stock in the same manner as Ms.

Such voting rights are personal to Ms.

Simmons and last through April 22, 2030.

The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms.

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Restricted cash and cash equivalents – We classify cash equivalents that have been segregated or are otherwise limited in use as restricted.

Such restrictions include cash pledged as collateral with respect to performance obligations or letters of credit required by regulatory agencies for certain environmental remediation sites and cash pledged as collateral

with respect to certain workers compensation liabilities or legal settlements.

To the extent the restricted amount relates to a recognized liability, we classify such restricted amount as either a current or noncurrent asset to correspond with the classification of the liability.

To the extent the restricted amount relates to

a recognized liability, we classify such restricted amount as either a current or noncurrent asset to correspond with the classification of the liability.

To the extent the restricted amount does not relate to a recognized liability, we classify restricted cash as a current asset.

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We lease various facilities and equipment.

to time, we may also enter into an arrangement in which the right to use and control an identified underlying asset is embedded in another type of contract.

From time to time, we may also enter into an arrangement in which the right to use and control an identified underlying asset is

embedded in another type of contract.

We determine if an arrangement is a lease (including leases embedded in another type of contract) at inception.

4 unchanged sentences

We compute depreciation of property and equipment for financial reporting purposes principally by the straight-line method over the estimated useful lives of 15 to 40 years for buildings and 3 to 20 years for equipment and software.

We use accelerated depreciation methods for income tax purposes, as permitted.

We use the Alternative Depreciation System (“ADS”) for income tax purposes.

Upon sale or retirement of an asset, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is recognized in income currently.

6 unchanged sentences

We also provide certain postretirement benefits other than pensions (OPEB), consisting of health care and life insurance benefits, to certain U.S.

and Canadian retired employees, which are not material.

retired employees, which are not material.

Income taxes – We, Valhi and our qualifying subsidiaries are members of Contran’s consolidated U.S.

5 unchanged sentences

Internal Revenue Service or the applicable state tax authority had we not been a member of the Contran Tax Group.

We made net payments to Valhi for income taxes of nil in 2021, $ 1.1 million in 2022 and received net refunds from Valhi of $ .3 million in 2023.

We made net payments to Valhi for income taxes of $ 1.1 in 2022, received net refunds from Valhi of $ .3 million in 2023 and made net payments to Valhi of $ .1 million in 2024.

We recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the income tax and financial reporting carrying amounts of assets and liabilities, including investments in our subsidiaries and affiliates who are not members of the Contran Tax Group and undistributed earnings of non-U.S.

4 unchanged sentences

We account for the tax effects of a change in tax law as a component of the income tax provision related to continuing operations in the period of enactment, including the tax effects of any deferred income taxes originally established through a financial statement component other than continuing operations (i.e.

other comprehensive income).

Changes in applicable income tax rates over time as a result of changes in tax law, or times in which a deferred income tax asset valuation allowance is initially recognized in one year and subsequently reversed in a later year, can give rise to “stranded” tax effects in accumulated other comprehensive income in which the net accumulated income tax (benefit)

remaining in accumulated other comprehensive income does not correspond to the then-applicable income tax rate applied to the pre-tax amount which resides in accumulated other comprehensive income.

other comprehensive income(loss)).

income tax rate applied to the pre-tax amount which resides in accumulated other comprehensive income (loss).

As permitted by GAAP, our accounting policy is to remove any such stranded tax effect remaining in accumulated other comprehensive income, by recognizing an offset to our provision for income taxes related to continuing operations, only at the time when there is no remaining pre-tax amount in accumulated other comprehensive income.

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We recognize any recoveries of remediation costs from other parties when we deem their receipt probable.

At December 31, 2022 and 2023, we had not recognized any such receivables for recoveries.

We expense any environmental remediation related legal costs as incurred.

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Such transfer of control is also evidenced by transfer of legal title and other risks and rewards of ownership (giving the customer the ability to direct the use of, and obtain substantially all of the benefits of, the product), and our customers becoming obligated to pay us and it is probable we will receive payment.

In certain arrangements we provide shipping and handling activities after the transfer of control to our customer (e.g.

when control transfers prior to delivery).

In certain arrangements we provide shipping and handling activities after the transfer of control to our customer (e.g., when control transfers prior to delivery).

In such arrangements shipping and handling are considered fulfillment activities, and accordingly, such costs are accrued when the related revenue is recognized.

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Deferred revenue has not been material in the past.

We report any tax assessed by a governmental authority that we collect from our customers that is both imposed on and concurrent with our revenue-producing activities (such as

sales, use, value added and excise taxes) on a net basis (meaning we do not recognize these taxes either in our revenues or in our costs and expenses).

We report any tax assessed by a governmental authority that we collect from our customers that is both imposed on and concurrent with our revenue-producing activities (such as sales, use, value added and excise taxes) on a net basis (meaning we do not recognize these taxes either in our revenues or in our costs and expenses).

Frequently, we receive orders for products to be delivered over dates that may extend across reporting periods.

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We expense advertising costs and research and development costs as incurred.

Advertising and research and development costs were not significant in any year presented.

Advertising costs were approximately $ .4 million in 2022 and $ .5 million in each of 2023 and 2024.

Research and development costs were no t significant in any year presented.

Corporate expenses – Corporate expenses include environmental, legal and other costs attributable to formerly-owned business units.

Note 2 - Business and geographic information:

We operate in the security products industry and marine components industry through our majority ownership of CompX.

Note 2 – Business, segment and geographic information:

We have one operating segment .

At December 31, 2024 we owned 87 % of CompX.

CompX manufactures and sells security products including locking mechanisms and other security products for sale to the postal, transportation, office and institutional furniture, cabinetry, tool storage, healthcare and other industries.

CompX also manufactures and distributes wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories primarily for ski/wakeboard boats and performance boats.

The following table disaggregates our net sales by reporting unit, which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (as required by ASC 606).

Our chief operating decision maker (“CODM”) is our Vice Chairman of the Board.

Our CODM is responsible for determining how to allocate resources and assessing performance.

The CODM evaluates segment performance based on net income and segment profit (a non-GAAP measure), which we define as gross margin less selling, general and administrative expenses directly attributable to CompX.

The CODM considers current-period segment profit compared to plan and prior-period on a monthly and/or quarterly basis for evaluating segment performance and making decisions about allocating capital and other resources.

The accounting policies of the reportable operating segment are the same as those described in Note 1.

Differences between segment profit and the amounts included in net income are included in the table below.

Asset information is not regularly provided to the CODM and therefore is not considered to be used by the CODM in making key operating decisions, allocating resources or assessing segment performance.

Depreciation and amortization amounts included in the calculation of segment profit all relate to CompX and were $ 4.0 million in each of 2022 and 2023 and $ 3.7 million in 2024.

Years ended December 31,

(In thousands)

Security Products

Marine Components

Segment profit

Insurance recoveries

Corporate income (expenses), net

Equity in earnings (losses) of Kronos Worldwide, Inc.

Interest and dividend income

Marketable equity securities gain (loss)

Loss on pension plan termination

Other components of net periodic pension and OPEB cost

Interest expense

Income tax (expense) benefit

See the Consolidated Financial Statements for other financial information regarding the Company’s operating segment.

For geographic information, the point of origin (place of manufacture) for all net sales is the U.S., the point of destination for net sales is based on the location of the customer.

8 unchanged sentences

Allowance for doubtful accounts

Accrued insurance recoveries are discussed in Note 16.

Other receivables are discussed in Note 17.

Note 4 – Inventories, net:

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Note 5 – Marketable securities:

Our current marketable securities are invested in U.S.

government treasuries with original maturities ranging in length from 4 months to 12 months .

The fair value of our current marketable securities are determined using Level 2 inputs (because although these securities are traded, in many cases the market is not active and the year-end valuation is generally based on the last trade of the year, which may be several days prior to December 31).

The current marketable securities we held at December 31, 2023 consisted of investments in debt securities.

The fair value of these current marketable securities was generally determined using Level 2 inputs because although these securities are generally traded, in many cases the market is not active and the year-end valuation is generally based on the last trade of the year, which may be several days prior to December 31.

Our noncurrent marketable securities consist of investments in the publicly-traded shares of our immediate parent company Valhi, Inc.

6 unchanged sentences

December 31, 2024

Current assets - fixed income securities

Noncurrent assets

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Net income (loss)

Effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50 % joint venture interest in Louisiana Pigment Company, L.P.

(“LPC”) previously held by Venator Investments, Ltd.

Prior to the acquisition, Kronos held a 50 % joint venture interest in LPC and LPC was operated as a manufacturing joint venture between Kronos and Venator.

Kronos acquired the 50 % joint venture interest in LPC for consideration of $ 185 million less a working

capital adjustment.

An additional earn-out payment of up to $ 15 million may be required if Kronos’ aggregate consolidated net income before interest expense, income taxes and depreciation and amortization expense, or EBITDA, during a two-year period comprising calendar years 2025 and 2026 exceed certain thresholds as described below.

Kronos accounted for the acquisition of the interest in LPC as a business combination and, as a result of obtaining full control, LPC became a wholly-owned subsidiary of Kronos.

Obtaining control of LPC and its estimated additional 78,000 metric tons annually of TiO 2 production volume allows Kronos to better serve the North American TiO 2 marketplace.

The acquisition was financed through a borrowing of $ 132.1 million under Kronos’ Global Revolver and the remainder paid with Kronos’ cash on hand.

The potential earn-out payment of up to $ 15 million is based on Kronos’ aggregate consolidated EBITDA tiers for 2025 and 2026 of $ 650 million and $ 730 million, with $ 5 million of the earn-out payable if Kronos achieves $ 650 million in aggregate consolidated EBITDA, and a maximum of $ 15 million payable if aggregate EBITDA is $ 730 million or greater for the period.

If Kronos achieves aggregated consolidated EBITDA between $ 650 million and $ 730 million, the payment of the additional $ 10 million is prorated between the two targets.

The earn-out is payable at the earliest in April 2027.

The estimated fair value of the earn-out at the Acquisition Date was $ 4.2 million and was determined using a weighted probability of potential outcomes based on estimated future EBITDA and volatility factors, among other variables and estimates.

Kronos recognized a pre-tax gain of approximately $ 64.5 million in the third quarter of 2024, representing the difference between the $ 178.2 million estimated fair value of its existing ownership interest in LPC at the Acquisition Date and its aggregate $ 113.7 million carrying value at the Acquisition Date.

Note 7 – Goodwill:

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In November 2016, we entered into a financing transaction with Valhi.

Previously, and in contemplation of the financing transaction described herein, we formed NLKW Holding, LLC and capitalized it with 35.2 million shares of the common stock of Kronos held by us.

Previously, and in contemplation of the financing transaction described herein, we formed NLKW Holding, LLC (“NLKW”) and capitalized it with 35.2 million shares of the common stock of Kronos held by us.

The financing transaction consisted of two steps.

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In November 2022, NLKW and Valhi entered into a first amendment to the Valhi Credit Facility to extend the latest maturity date (and consequently the latest borrowing date) under the Valhi Credit Facility from December 31, 2023 to December 31, 2030;

and NLKW and NL entered into a first amendment to the Back-to-Back Credit Facility to extend the latest maturity date (and consequently the latest borrowing date) under the Back-to-Back Credit Facility from December 31, 2023 to December 31, 2030.

and NLKW and NL entered into a first amendment to the Back-to-Back Credit Facility to extend the latest

maturity date (and consequently the latest borrowing date) under the Back-to-Back Credit Facility from December 31, 2023 to December 31, 2030.

The related collateral arrangements remained unchanged by these amendments.

5 unchanged sentences

Company contributions are based on matching or other formulas.

Defined contribution plan expense approximated $ 3.7 million in 2021 and $ 3.9 million in each of 2022 and 2023.

Defined contribution plan expense approximated $ 3.9 million in each of 2022 and 2023 and $ 3.5 million in 2024.

Defined benefit pension plans – We maintain a defined benefit pension plan in the U.S.

The benefits under our defined benefit plan is based upon years of service and employee compensation.

As a result of the spin-off of Kronos in 2003, Kronos participates in our pension plan.

Using participant data, we account for our portion of the combined pension plan as if it were a separate pension plan from the portion in which Kronos participates.

As a result of the LPC acquisition in July 2024 (see Note 6), Kronos acquired the LPC defined benefit pension plan, which was overfunded on the Acquisition Date.

Effective December 31, 2024, the LPC defined benefit pension plan was merged into our combined U.S.

pension plan.

Because we account for our portion of the combined pension plan separately, the plan merger did not impact our Consolidated Financial Statements.

The benefits under our defined benefit pension plan are based upon years of service and employee compensation.

The plan is closed to new participants, and no additional benefits accrue to existing plan participants.

Our funding policy is to contribute annually the minimum amount required under ERISA (or equivalent non-U.S.) regulations plus additional amounts as we deem appropriate.

Our funding policy is to contribute annually the minimum amount required under ERISA regulations plus additional amounts as we deem appropriate.

We previously maintained a defined benefit pension plan in the U.K.

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pension plan were removed from our Consolidated Financial Statements and a non-cash pension plan termination loss of $ 4.9 million was recognized in the second quarter of 2023.

We expect to contribute approximately $ 1.0 million to our defined benefit pension plan during 2024.

We do not expect to make any contributions to our defined benefit pension plan during 2025.

Benefit payments to all plan participants out of plan assets are expected to be the equivalent of:

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These amounts will be recognized as components of our periodic defined benefit cost in future years.

These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive income (loss) at December 31, 2022 and 2023.

The total net underfunded status of our defined benefit pension plans decreased from $ 2.0 million at December 31, 2022 to $ 1.6 million at December 31, 2023 due to the change in our plan assets exceeding the change in our PBO during 2023.

Plan assets increased relative to our PBO primarily due to improved returns on plan assets during 2023.

These amounts, net of deferred income taxes, are recognized in our accumulated other comprehensive loss at December 31, 2023 and 2024.

Our defined benefit pension plans increased from a total net underfunded status of $ 1.6 million at December 31, 2023 to a total net overfunded status of $ .2 million at December 31, 2024 due to the change in our PBO exceeding the change in our plan assets during 2024.

The decrease in our PBO in 2024 was primarily attributable to higher actuarial gains due primarily to the increase in the discount rate.

The table below details the changes in other comprehensive income (loss) during 2022, 2023 and 2024.

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Plan settlement

Amortization of unrecognized net actuarial gain (loss)

Amortization of unrecognized net actuarial gain

The components of our net periodic defined benefit pension cost are presented in the table below.

The amounts shown below for recognized actuarial losses in 2021, 2022 and 2023, net of deferred income taxes, was recognized as a component of our accumulated other comprehensive income at December 31, 2020, 2021 and 2022, respectively.

The amounts shown below for recognized actuarial losses in 2022, 2023 and 2024, net of deferred income taxes, were recognized as a component of our accumulated other comprehensive loss at December 31, 2021, 2022 and 2023, respectively.

Years ended December 31,

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(In thousands)

PBO at end of the year:

Fair value of plan assets at end of the year:

Plans for which the ABO exceeds plan assets (only our U.S.

Plans for which the ABO exceeds plan assets:

Fair value of plan assets

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Such weighted-average rates were determined using the projected benefit obligations at each date.

Since our plans are closed to new participants and no new additional benefits accrue to existing plan participants, assumptions regarding future compensation levels are not

Since our plans are closed to new participants and no new additional benefits accrue to existing plan participants, assumptions regarding future compensation levels are not applicable.

Consequently, the accumulated benefit obligations for all of our defined benefit pension plans were equal to the projected benefit obligations at December 31, 2023 and 2024.

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and our previously maintained non-U.S.

plan asset assumptions, we consider the long-term asset mix (e.g.

plan asset assumptions, we consider the long-term asset mix (e.g., equity vs.

fixed income) for the assets for each of our plans and the expected long-term rates of return for such asset components.

In addition, we receive third-party advice about appropriate long-term rates of return.

we currently have a plan asset target allocation of 33 % to equity securities, 59 % to fixed income securities, and the remainder is allocated to multi-asset and other strategies.

we currently have a plan asset target allocation of 17 % to equity securities, 80 % to fixed income securities, and the remainder is allocated to other strategies.

The expected long-term rate of return for such investments is approximately 7 % and 5 %, respectively (before plan administrative expenses).

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plan assets are invested in funds that are valued at net asset value (“NAV”) and, in accordance with ASC 820-10, not subject to classification in the fair value hierarchy.

During 2022 and through plan termination in 2023, the non-U.S.

plan assets were invested primarily in insurance contracts and were a Level 3 input.

We regularly review our actual asset allocation for each plan and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate.

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Cash and other

As noted above, in March 2021 we purchased a bulk annuity for our U.K.

pension plan and such annuity is considered a Level 3 asset included with “U.K.

– Other” in the table above.

Fair Value Measurements

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Our reserve for uncertain tax positions is discussed in Note 14.

Note 13 – Revenue recognition:

Years ended December 31,

(In thousands)

Security Products

Marine Components

Note 14 – Income taxes:

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Comprehensive provision (benefit) for income taxes allocable to:

Other comprehensive income:

Net income (loss)

Other comprehensive income (loss):

Currency translation

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Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos.

We received aggregate dividends from Kronos of $ 25.4 million in 2021, and $ 26.8 million in each of 2022 and 2023.

We received aggregate dividends from Kronos of $ 26.8 million in each of 2022 and 2023, and $ 16.9 million 2024.

The components of the net deferred tax liability at December 31, 2023 and 2024 are summarized in the following table.

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Marketable securities

Property and equipment

Accrued OPEB costs

Accrued pension costs

Accrued employee benefits

Accrued environmental liabilities

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At December 31, 2024, we have a deferred tax asset relating to our NOL carryforwards for federal income tax purposes of $ 2.5 million all of which have an indefinite carryforward period subject to an 80% annual usage limitation.

Our deferred tax asset for such NOL carryforward is net of a portion of our uncertain tax positions as discussed below.

We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations.

We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Our deferred tax asset for such NOL carryforward is shown net of a portion of our uncertain tax positions as discussed below.

At December 31, 2022, 2023, and 2024, the gross amount of our uncertain tax positions (exclusive of the effect of interest and penalties) was $ 7.3 million, and this amount has not changed during the past three years.

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As discussed in Note 1, we are part of the Contran Tax Group and we have not paid this liability because Contran has not paid the liability to the applicable tax authority.

This liability would be payable by Contran to the applicable tax authority only if the shares of Kronos common stock were to be sold or otherwise disposed outside of the Contran Tax Group.

This liability would be payable by Contran to the applicable tax authority only if the previously distributed shares of Kronos common stock were to be sold or otherwise disposed outside of the Contran Tax Group.

At December 31, 2024, $ 2.5 million of our uncertain tax position is classified as a component of our noncurrent deferred tax liability.

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We currently estimate that our unrecognized tax benefits will not change materially during the next twelve months.

We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations.

We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

We and Contran file income tax returns in U.S.

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Belgian corporate NOL carryforwards of $ 72.0 million (DTA of $ 18.0 million) and Canadian corporate and provincial NOL carryforwards of $ 28.9 million (DTA of $ 4.3 million) and $ 31.1 million (DTA of $ 3.6 million), respectively.

Kronos has concluded that no deferred income tax asset valuation allowance is required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have lengthy carryforward periods (the German and Belgian carryforwards may be carried forward indefinitely and the Canadian carryforwards may be carried forward 20 years ), (ii) Kronos has utilized a portion of such carryforwards during the most recent three-year period and (iii) Kronos currently expects to utilize the remainder of such carryforwards over the long term.

However, prior to the complete utilization of such carryforwards, if Kronos were to generate additional losses in its German, Belgian or Canadian 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 it might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point Kronos would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.

Prior to December 31, 2024, and using all available evidence, Kronos had concluded that no deferred income tax asset valuation allowance is required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have lengthy carryforward periods (the German and Belgian carryforwards may be carried forward indefinitely and the Canadian carryforwards may be carried forward 20 years ), (ii) Kronos has utilized a portion of such carryforwards during the most recent three-year period and (iii) Kronos currently expects to utilize the remainder of such carryforwards over the long term.

With regards to Kronos’ Belgian DTA, given its operating results during the fourth quarter of 2024 and its current expectations for 2025 in that jurisdiction, Kronos does not have sufficient positive evidence to overcome the significant negative evidence of having twelve quarters of cumulative losses.

Accordingly, at December 31, 2024, Kronos concluded that it was required to recognize a non-cash deferred income tax asset valuation allowance of $ 8.2 million under the more-likely-than-not recognition criteria with respect to its Belgian DTA.

At December 31, 2024, Kronos continues to conclude no valuation allowance is required to be recognized for its German and Canadian DTAs although prior to the complete utilization of such carryforwards, if Kronos were to generate additional losses in its German or Canadian 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 it might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point Kronos would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.

The 2017 Tax Act limited Kronos’ business interest expense to the sum of its business interest income and 30% of its adjusted taxable income as defined in the Tax Act.

Any business interest expense disallowed as a deduction as a result of the limitation may be carried forward indefinitely.

At December 31, 2022 and December 31, 2023, Kronos has recorded deferred tax assets of $ .9 million and $ 3.5 million, respectively, for the carryforwards associated with the nondeductible portion of its interest expense and has concluded it is required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2023, Kronos recognized a non-cash deferred income tax expense of $ 2.6 million with respect to the valuation allowance recorded on additional interest expense carryforwards .

At December 31, 2023 and December 31, 2024, Kronos has

recorded deferred tax assets of $ 3.5 million and $ 13.3 million, respectively, for the carryforwards associated with the nondeductible portion of its interest expense and has concluded it is required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2024, Kronos recognized a non-cash deferred income tax expense of $ 5.7 million with respect to the valuation allowance recorded on a portion of its additional interest expense carryforwards not benefitted by future reversals of existing deferred tax liabilities .

Prior to the enactment of the 2017 Tax Act, the undistributed earnings of Kronos’ European subsidiaries were deemed to be permanently reinvested (Kronos had not made a similar determination with respect to the undistributed earnings of its Canadian subsidiary).

Pursuant to the one-time repatriation tax (Transition Tax) provisions of the 2017 Tax Act which imposed a one-time repatriation tax on post-1986 undistributed earnings, Kronos recognized current income tax expense of $ 74.5 million and elected to pay such tax in annual installments over an eight-year period beginning in 2018.

At December 31, 2023 the balance of its unpaid Transition Tax is $ 33.5 million, with two remaining payments of $ 14.9 million due in 2024 and $ 18.6 million due in 2025.

The payments are recorded as a current and noncurrent payable to affiliate (income taxes payable to Valhi) on Kronos’ Consolidated Balance Sheet at December 31, 2023.

At December 31, 2024 the balance of its unpaid Transition Tax is $ 18.6 million, with the remaining payment due in 2025.

On December 10, 2024, the Department of the Treasury and the Internal Revenue Service released final currency regulations under §987 and related rules (the “2024 Final Regulations”).

The 2024 Final Regulations generally apply to tax years beginning after December 31, 2024, and include transition rules that require Kronos to compute a pretransition gain or loss for currency translation related to the operations, assets and liabilities of its non-U.S.

qualified business units.

Pursuant to the 2024 Final Regulations, Kronos has calculated a pretransition gain of $ 77.1 million and, accordingly, its income tax expense in 2024 includes a non-cash deferred income tax expense of $ 16.5 million recognized in the fourth quarter.

Tax authorities are examining certain of Kronos’ U.S.

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Long-term incentive compensation plan – Prior to 2022, our board of directors adopted a plan that provided for the award of stock to our board of directors, and up to a maximum of 200,000 shares could be awarded.

We awarded 13,750 shares in 2021, 15,000 shares in 2022 and 17,750 shares in 2023 under this plan.

We awarded 15,000 shares in 2022 and 17,750 shares in 2023 under this plan.

In February 2023, our board of directors voted to replace the existing director stock plan with a new plan that would provide for the award of stock to non-employee members of our board of directors, and up to a maximum of 200,000 shares could be awarded.

plan was approved at our May 2023 shareholder meeting, and the prior director stock plan terminated effective June 30, 2023.

The new plan was approved at our May 2023 shareholder meeting, and the prior director stock plan terminated effective June 30, 2023.

We awarded 14,250 shares in 2024 under the new plan.

At December 31, 2024, 185,750 shares were available for future award under this new plan.

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At December 31, 2024, Kronos had 87,800 shares available for award and CompX had 119,650 shares available for award.

Dividends - Our board of directors approved and we paid quarterly dividends per share to stockholders of $ .06 in 2021 aggregating $ 11.7 million and $ .07 in each of 2022 and 2023 aggregating $ 13.7 million in each year.

In addition, our board of directors declared a special dividend on our common stock which totaled $ 17.1 million ($ .35 per share) that we paid on August 31, 2022.

Dividends – Our board of directors approved and we paid quarterly dividends per share to stockholders of $ .07 in each of 2022 and 2023 aggregating $ 13.7 million in each year and $ .08 in 2024 aggregating $ 15.6 million.

In addition, our board of directors declared special dividends on our common stock which totaled $ 17.1 million ($ .35 per share) that was paid on August 31, 2022 and $ 21.0 million ($ .43 per share) that was paid on August 29, 2024.

The declaration and payment of future dividends, and the amount thereof, is discretionary and is dependent upon our financial condition, cash requirements, contractual obligations and restrictions and other factors deemed relevant by our board of directors.

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Other comprehensive income (loss) - unrealized gain (loss)

arising the period.

arising during the period

Balance at end of period

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Balance at beginning of period

Other comprehensive income

Other comprehensive income (loss)

Balance at end of period

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During 2022, CompX acquired 78,900 shares of its Class A common stock for an aggregate amount of approximately $ 1.7 million under prior repurchase authorizations.

Of these shares, 70,000 shares were purchased in a market transaction, and 8,900 shares were purchased from two of its affiliates in two separate private transactions that were also approved in advance by CompX’s independent directors.

During 2021, CompX purchased 75,000 shares of its

Class A common stock in a market transaction for approximately $ 1.3 million.

Of these shares, 70,000 shares were purchased in a market transaction, and 8,900 shares were purchased from two of its affiliates in two separate private transactions that

were also approved in advance by CompX’s independent directors.

At December 31, 2024, 523,647 shares were available for purchase under CompX’s prior repurchase authorizations.

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Current payables to affiliates:

Other - trade items

Other payables to affiliates

Income taxes payable to Valhi

From time to time, we may have loans and advances outstanding between us and various related parties, pursuant to term and demand notes.

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In February 2024, Kronos entered into a $ 53.7 million subordinated, unsecured term loan with Contran.

Under the terms of various intercorporate services agreements (ISAs) we enter into with Contran, employees of Contran will provide certain management, tax planning, financial and administrative services to the Company on a fee basis.

Such fees are based on the compensation of individual Contran employees providing services for us and/or estimates of time devoted to our affairs by such persons.

Because of the number of companies affiliated with Contran, we believe

we benefit from cost savings and economies of scale gained by not having certain management, financial and administrative staffs duplicated at each entity, thus allowing certain Contran employees to provide services to multiple companies but only be compensated by Contran.

Because of the number of companies affiliated with Contran, we believe we benefit from cost savings and economies of scale gained by not having certain management, financial and administrative staffs duplicated at each entity, thus allowing certain Contran employees to provide services to multiple companies but only be compensated by Contran.

We, CompX and Kronos negotiate fees annually and agreements renew quarterly.

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Consistent with insurance industry practices, Tall Pines receives commissions from the reinsurance underwriters and/or assesses fees for certain of the policies that it underwrites.

During 2021, 2022 and 2023 we paid $ 26.3 million, $ 24.3 million and $ 28.4 million, respectively, under the group insurance program (including amounts attributable to Kronos for all periods, including its Louisiana Pigment Company joint venture) which amounts principally represent insurance premiums, including $ 19.5 million, $ 18.2 million and $ 20.7 million in 2021, 2022 and 2023, respectively, for policies written by Tall Pines.

During 2022, 2023 and 2024 we paid $ 24.3 million, $ 28.4 million and $ 29.1 million, respectively, under the group insurance program (including amounts attributable to Kronos and LPC for all periods) which amounts principally represent insurance premiums, including $ 18.2 million, $ 20.7 million and $ 21.4 million in 2022, 2023 and 2024, respectively, for policies written by Tall Pines.

Amounts paid under the group insurance program also include payments to insurers or reinsurers for the reimbursement of claims within our applicable deductible or retention ranges that such insurers and reinsurers paid to third parties on our behalf, as well as amounts for claims and risk management services and various other third-party fees and expenses incurred by the program.

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The program apportions its costs among the participating companies.

The aggregate amount Kronos paid to Contran for such services was $ .3 million in each of 2021 and 2022 and $ .4 million in 2023.

The aggregate amount Kronos paid to Contran for such services was $ .3 million in 2022 and $ .4 million in each of 2023 and 2024.

Under the terms of a sublease agreement between Contran and Kronos, Kronos leases certain office space from Contran.

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We expect that these relationships with Contran will continue in 2025.

We are a party to a tax sharing agreement with Contran and Valhi providing for the allocation of tax liabilities and tax payments as described in Note 1.

Under applicable law, we, as well as every other member of the Contran Tax Group, are each jointly and severally liable for the aggregate federal income tax liability of Contran and the other companies included in the Contran Tax Group for all periods in which we are included in the Contran Tax Group.

Valhi has agreed, however, to indemnify us for any liability for income taxes of the Contran Tax Group in excess of our tax liability computed in accordance with the tax sharing agreement.

Effective December 31, 2024, the LPC defined benefit pension plan was merged into our U.S.

combined defined benefit pension plan.

Under the terms of the merger, each of us and Kronos are contractually obligated to bear our respective share of the merged plan costs, including any funding obligations, and we and Kronos each continue to account for our respective portions of the merged plan as if it were a separate employee benefit plan.

If the merged plan were to be terminated in the future, Kronos would be entitled to all funding surplus attributable to its participants in the plan.

In February 2025, our board of directors approved the termination of the merged plan, with an effective date of June 30,

We anticipate that the completion of the merged plan termination will occur in the second half of 2026, following the receipt of all necessary regulatory approvals.

Termination of the merged plan would permanently remove all plan assets, liabilities and accumulated other comprehensive income (loss) from our financial statements.

Note 17 – Commitments and contingencies:

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Our former operations included the manufacture of lead pigments for use in paint and lead-based paint.

We, 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.

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.

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.

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.

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.

Some are on appeal following dismissal or summary judgment rulings or a trial verdict in favor of either the defendants or the plaintiffs.

We believe we have substantial defenses to these actions, and we intend to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.

We do not believe it is probable we have incurred any liability with respect to pending lead pigment litigation cases to which we are a party, and with respect to all such lead pigment litigation cases to which we are a party, we believe liability to us that may result, if any, in this regard cannot be reasonably estimated, because:

● we have 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 us, and

● we have never ultimately been found liable with respect to any such litigation matters, including over 100 cases over a thirty-year period for which we were previously a party and for which we have been dismissed without any finding of liability.

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.

In addition, we have determined that liability to us 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.

We, 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.

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.

We currently have no pending lead paint class action cases or pending lead paint cases brought by housing authorities, school districts or other government entities.

In the matter titled County of Santa Clara v.

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$ 25.0 million within sixty days of the court’s approval of the settlement and dismissal of the case, and the remaining $ 76.7 million in six annual installments beginning on the first anniversary of the initial payment ($ 12.0 million for the first five installments and $ 16.7 million for the sixth installment).

Our 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 us (and any amounts on deposit in excess of the final payment would be returned to us).

Pursuant to the settlement agreement, we placed an additional $ 9.0 million into an escrow account which is included in noncurrent restricted cash on our Consolidated Balance Sheets.

Our 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 us (and any amounts on deposit in excess of the final payment would be returned to us).

Pursuant to the settlement agreement, we 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 our 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.

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.

We 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 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.

We recognized an aggregate accretion expense of $ .9 million, $ .7 million, and $ .5 million in 2022, 2023, and 2024 respectively.

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We do not know if we 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.

In the future, if new information regarding such matters becomes available to us (such as a final, non-appealable adverse verdict against us or otherwise ultimately being found liable with respect to such matters), at that time we would consider such information in evaluating any remaining cases then-pending against us as to whether it might then have become probable we have incurred liability with respect to these matters, and whether such liability, if any, could have become reasonably estimable.

The resolution of any of these cases could result in the recognition of a loss contingency accrual that could have a material adverse impact on our net income for the interim or annual period during which such liability is recognized and a material adverse impact on our consolidated financial condition and liquidity.

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We recognize recoveries of costs from other parties, if any, as assets when their receipt is deemed probable.

At December 31, 2022 and 2023, we had no t recognized any 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.

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Balance at the beginning of the period

Additions charged to expense, net

Additions (deductions), net

Payments, net

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At December 31, 2024, we had accrued approximately $ 69 million related to approximately 30 sites associated with remediation and related matters we believe are at the present time and/or in their current phase reasonably estimable.

The upper end of the range of reasonably possible costs to us for remediation and related matters for which we believe it is possible to estimate costs is approximately $ 118 million, including the amount currently accrued.

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 us for remediation and related matters for which we believe it is possible to estimate costs is approximately $ 38 million, including amounts currently accrued.

These accruals have not been discounted to present value.

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 Raritan Bay Slag Superfund Site (“RBS Site”) in Middlesex County, New Jersey.

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.

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.

NL Industries, Inc., et al.

(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.

Old Bridge Township, et al., discussed above.

Under the terms of the consent decree, in the first quarter of 2025 we 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.

We recognized aggregate income of approximately $ 31.4 million in 2024 related to the adjustment of our 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.

We believe it is not reasonably possible to estimate the range of costs for certain sites.

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Accordingly, we recognize insurance recoveries in income only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the recovery.

In this regard we received $ .5 million in insurance recoveries in 2023 and recoveries in each of 2021 and 2022 were nominal.

In this regard we received $ .5 million and $ 1.4 million in insurance recoveries in 2023 and 2024, respectively.

Recoveries in 2022 were nominal.

Other litigation

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Component products are sold primarily in North America to original equipment manufacturers.

The ten largest customers related to our Component Products operations accounted for approximately 51 % of total sales in 2021 and 52 % in each of 2022 and 2023.

One customer of CompX’s Security Products business accounted for 16 % of total sales in 2021, 14 % in 2022 and 24 % in 2023 (of which 11 % relates to a pilot project).

The ten largest customers related to our Component Products operations accounted for approximately 52 % of total sales in each of 2022 and 2023 and 47 % in 2024.

One customer of CompX’s Security Products business accounted for 14 % of total sales in 2022, 24 % in 2023 (of which 11 % related to a pilot project) and 21 % in 2024.

One customer of CompX’s Marine Components business accounted for 12 % of consolidated sales in 2022.

We are a party to a tax sharing agreement with Contran and Valhi providing for the allocation of tax liabilities and tax payments as described in Note 1.

Valhi has agreed, however, to indemnify us for any liability for income taxes of the Contran Tax Group in excess of our tax liability computed in accordance with the tax sharing agreement.

Note 18 – Financial instruments:

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The ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis.

The ASU also mandates public companies to provide all annual segment disclosures currently required annually in interim periods.

Public companies will also be required to disclose the title and position of the chief operating decision maker (CODM) and explain how the CODM uses the reported measure of segment profit or loss in assessing segment performance and allocation resources.

The ASU is effective for us beginning with our 2024 Annual Report, and for interim reporting, in the first quarter of 2025, with retrospective application required.

We are in the process of evaluating the additional disclosure requirements.

The ASU also mandates public companies to provide all segment disclosures currently required annually in interim periods.

Public companies are also required to disclose the title and position of the chief operating decision maker (“CODM”) and explain how the CODM uses the reported measure of segment profit or loss in assessing segment performance and allocation resources.

Pending Adoption

In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”):

Improvements to Income Tax Disclosures .

The ASU requires additional annual disclosure and disaggregation for the rate reconciliation, income taxes paid and income tax expense by federal, state and foreign tax jurisdictions.

The ASU requires additional annual disclosure and disaggregation for the rate reconciliation, income taxes paid and income tax expense by federal, state and non-U.S.

tax jurisdictions.

In addition, the standard increases the disclosure requirements for items included in the rate reconciliation that meet a quantitative threshold.

The ASU is effective for us beginning with our 2025 Annual Report.

effective for us beginning with our 2025 Annual Report.

The ASU may be applied prospectively;

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We are in the process of evaluating the additional disclosure requirements.

In November 2024, the FASB issued ASU No.

2024-03, Reporting Comprehensive Income – Expense Disaggregation Disclosures .

The ASU requires additional information about specific expense categories in the notes to financial statements for both interim and annual reporting periods.

The ASU is effective for us beginning with our 2027 Annual Report, and for interim reporting, in the first quarter of 2028, with early adoption permitted.

We are in the process of evaluating the additional disclosure requirements.

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 9A. Controls and Procedures