What changed in this filing

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Item 9A. Controls and Procedures

2026-03-10 compared with 2025-03-06 · 313 added, 388 removed, 1427 unchanged (33% of the section changed)

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This annual report does not include an attestation report of our registered public accounting firm regarding the effectiveness of our internal control over financial reporting as of December 31, 2025.

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 on Form 10-K.

As permitted by the SEC, our assessment of internal control over financial reporting excludes (i) internal control over the preparation of any financial statement schedules which would be required by Article 12 of Regulation S-X and (ii) internal control over financial reporting as it relates to our newly-consolidated subsidiary LPC (as discussed in Note 3 to our Consolidated Financial Statements, which represents approximately 13% of our total assets at December 31, 2024.)

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 on Form 10-K.

As permitted by the SEC, our assessment of internal control over financial reporting excludes internal control over the preparation of any financial statement schedules which would be required by Article 12 of Regulation S-X.

Changes in Internal Control over Financial Reporting –

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and Contran Corporation effective as of January 1, 2004 – incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

Exhibit Index

Intercorporate Services Agreement between Contran Corporation and NL Industries, Inc.

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1-640) for the year ended December 31, 1985.

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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for the year ended December 31, 2015.

Indenture, dated as of September 13, 2017, 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 the Current Report on Form 8-K dated September 13, 2017 and filed by Kronos Worldwide, Inc.

on September 13, 2017.

Supplemental Indenture No.

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 February 12, 2024.

Exhibit Index

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 of Kronos Worldwide, Inc.’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 February 12, 2024.

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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 of Kronos Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Third Supplemental Indenture dated as of September 15, 2025, 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 the Kronos Worldwide, Inc’s Current Report on Form 8-K filed by September 15, 2025.

Pledge Agreement, dated as of September 13, 2017, among Kronos International, Inc.

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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 of Kronos Worldwide, Inc.’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 10.3 of Kronos Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Additional Notes Priority Joinder Agreement dated September 15, 2025, 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 September 15, 2025.

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 of Kronos Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

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on December 19, 2024.

Fourth Amendment to Credit Agreement dated July 17, 2025 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, Inc.’s Current Report on Form 8-K filed July 17, 2025.

Fifth Amendment to Credit Agreement dated December 2, 2025 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 10.11.5 of Kronos Worldwide, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025 filed on March 9, 2026.

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.

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and Contran Corporation as of August 7, 2024 – incorporated by reference to Exhibit 10.6 of Kronos Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

Exhibit Index

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

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

Exhibit Index

Unsecured Revolving Demand Promissory Note dated December 31, 2025 in the principal amount of $125.0 million executed by Valhi, Inc.

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and Contran Corporation – incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 11, 2019.

Insider Trading Policy

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 – incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 6, 2025 .

Insider Trading Policy – incorporated by reference to Exhibit 19.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 6, 2025 .

Subsidiaries of Valhi, Inc.

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(Executive Vice President and Chief Financial Officer)

/s/ Edward R.

Herrington, March 10, 2026

Brinda, March 6, 2025

Moore, March 10, 2026

(Vice President and Controller)

Hayden McIlroy

Hayden McIlroy, March 6, 2025

Norris, March 10, 2026

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income Taxes - Chemicals Segment

As described in Note 14 to the consolidated financial statements, the Company recorded a provision for income taxes of $82.9 million and recorded noncurrent deferred tax asset and deferred tax liability amounts of $53.8 million and $57.7 million, respectively, for the year ended December 31, 2024.

As disclosed by management, the Company operates globally through its Chemicals Segment.

The calculation of the Company’s provision for income taxes and its deferred tax assets and liabilities involves the interpretation

and application of complex tax laws and regulations in a multitude of jurisdictions across the Chemicals Segment’s global operations.

The Company’s effective tax rate is highly dependent upon the geographic distribution of its earnings or losses and the effects of tax laws and regulations in each tax-paying jurisdiction in which it operates.

Significant judgments and estimates are required by management in determining the Company’s consolidated provision for income taxes due to the global nature of the Chemicals Segment’s operations.

The Company's provision for income taxes and deferred tax assets and liabilities reflect management's best assessment of estimated current and future taxes to be paid, including the recognition and measurement of deferred tax assets and liabilities.

The principal considerations for our determination that performing procedures relating to income taxes for the Chemicals Segment is a critical audit matter are the significant judgment by management when developing the estimate of current and future taxes to be paid, including the recognition and measurement of deferred tax assets and liabilities.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating evidence related to the recognition and measurement of deferred tax assets and liabilities and management's assessment of the estimated current and future taxes to be paid, including evaluating management’s interpretation of tax laws and regulations in jurisdictions in which the Chemicals Segment operates.

Annual Goodwill Impairment Assessment – Chemicals Reporting Unit

As described in Notes 1 and 8 to the consolidated financial statements, the Company’s goodwill balance was $382.3 million as of December 31, 2025, and the goodwill associated with the Chemicals reporting unit was $355.2 million.

Management evaluates goodwill for impairment, annually or when events or changes in circumstances indicate the carrying value may not be recoverable.

As disclosed by management, in performing a quantitative test for impairment of goodwill, management uses the income approach method of valuation that includes the discounted cash flow method and the market approach that includes the guideline public company method to determine the fair value of the reporting unit.

When performing an income approach method considerable management judgment is necessary to derive the primary assumptions used in estimating fair value under the discounted cash flow model including forecasted revenue, gross margin, operating expenses, capital expenditures, discount rate and the tax rate.

Additionally, management judgment is necessary for the assumptions used to determine fair value under the guideline public company method including the selection of guideline companies and the valuation multiples applied.

The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment of the Chemicals reporting unit is a critical matter are (i) the significant judgment by management when developing the fair value estimate of the Chemicals reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenue, gross margin, operating expenses, and the discount rate used in the discounted cash flow method and the valuation multiples applied in the guideline public company method;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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 accounting for income taxes, including controls over the identification, completeness, and recognition of permanent and temporary differences within jurisdictions in which the Chemicals Segment operates, the recognition and measurement of deferred tax assets and liabilities, the application of tax laws and regulations in the various jurisdictions in which the Chemicals Segment operates, the rate reconciliation and the provision to tax return reconciliation.

These procedures also included, among others, (i) evaluating the provision for income taxes, including the accuracy of the underlying information used in the calculation by jurisdiction, as well as the reasonableness of management's judgments and estimates in the application of tax laws and regulations in certain jurisdictions in which the Chemicals Segment operates;

(ii) testing the current and deferred income tax provision, including evaluating permanent and temporary differences within certain jurisdictions and management's assessment of the technical merits of the differences;

(iii) performing procedures over the Company's rate reconciliation;

and (iv) testing the reconciliation of the provision to the tax returns.

Environmental Remediation and Related Matters - NL Industries, Inc.

As described in Note 18 to the consolidated financial statements, management evaluates the potential range of the Company’s liability for environmental remediation and related costs at sites where NL Industries, Inc.

(“NL”), a majority-owned subsidiary of the Company, has been named as a potentially responsible party (PRP) or defendant.

As of December 31, 2024, management accrued approximately $69 million related to approximately 30 of NL’s sites associated with remediation and related matters.

Liabilities related to environmental remediation and related matters (including costs associated with damages for property damage and/or damages for injury to natural resources) are recorded when management determines that estimated future expenditures are probable and reasonably estimable.

As disclosed by management, environmental remediation and related costs accruals (and the potential range of the liabilities) are adjusted as further information becomes available or as circumstances change which involves management’s judgment regarding current facts and circumstances for each site and is subject to various assumptions and estimates.

The principal considerations for our determination that performing procedures relating to environmental remediation and related matters is a critical audit matter are the significant judgment by management when assessing the accruals and the potential range of the Company’s liabilities and when determining whether estimated future expenditures are probable and reasonably estimable, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating evidence related to management’s assessment of the accruals and the potential range of the liabilities.

These procedures included, among others (i) testing management’s process for developing the fair value estimate of the Chemicals reporting unit;

(ii) evaluating the appropriateness of the discounted cash flow and guideline public company methods used by management;

(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow and guideline public company methods;

and iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenue, gross margin, operating expenses, and the discount rate used in the discounted cash flow method and the valuation multiples applied in the guideline public company method.

Evaluating management’s assumptions related to forecasted revenue, gross margin, and operating expenses involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Chemicals reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow and guideline public company methods and (ii) the reasonableness of the discount rate and valuation multiples assumptions.

Revenue Recognition – Chemicals Segment

As described in Notes 1 and 2 to the consolidated financial statements, the Company’s net sales from the Chemicals segment were $1,859.4 million for the year ended December 31, 2025.

The Company’s sales involve single performance obligations to ship products pursuant to customer purchase orders.

The Company records revenue when performance obligations are satisfied by transferring control of products to its customers, which generally occurs at point of shipment or upon delivery.

Sales arrangements with consignment customers occur when product is shipped to a consignment customer location but the Company maintains control until the product is used in the customer’s manufacturing process.

In these instances, the Company recognizes revenue when the consignment customer uses its product.

Revenue is recorded in an amount that reflects the net consideration the Company expects to receive in exchange for its products.

The principal consideration for our determination that performing procedures relating to revenue recognition for the Chemicals segment is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition for the Chemicals segment.

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 NL’s 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 NL’s 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 NL’s internal and external legal counsel, and (iii) evaluating the sufficiency of the Company’s environmental remediation and related matters disclosures related to NL.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls related to the Chemicals segment.

These procedures also included, among others (i) testing revenue recognized for a sample of Chemicals segment revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment, or where applicable, evidence of consignment usage, and cash receipts and (ii) confirming a sample of outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as invoices, proof of shipment, or where applicable, evidence of consignment usage, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

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Marketable securities

Investment in TiO 2 manufacturing joint venture

Deferred income taxes

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Deferred income taxes

Payable to affiliate - income taxes

Long-term litigation settlement

Other liabilities

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Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Gain on remeasurement of earn-out liability

Other components of net periodic pension and OPEB expense

Water system fixed asset impairment

Total costs and other expense

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Income tax expense (benefit)

Net income (loss)

Noncontrolling interest in net income of subsidiaries

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Years ended December 31,

Net income (loss)

Other comprehensive income (loss), net of tax:

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Balance at December 31, 2022

Net income (loss)

Cash dividends - $ .32 per share

Dividends paid to noncontrolling interest

Other comprehensive income, net

Other comprehensive loss, net

Equity transactions with noncontrolling

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Balance at December 31, 2023

Net income (loss)

Cash dividends - $ .32 per share

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Balance at December 31, 2024

Net income (loss)

Cash dividends - $ .32 per share

Dividends paid to noncontrolling interest

Other comprehensive loss, net

Other comprehensive income, net

Equity transactions with noncontrolling

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Cash flows from operating activities:

Net income (loss)

Depreciation and amortization

Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Gain on remeasurement of earn-out liability

Premium on issuance of senior secured notes

Deferred income taxes

Benefit plan expense greater (less) than cash funding

Loss on pension plan termination

Water system fixed asset impairment

Benefit plan expense less than cash funding

Settlement loss on pension plan termination and buy-out

Fixed asset impairment

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Other noncurrent liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

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Changes in ownership are accounted for as equity transactions with no gain or loss recognized on the transaction unless there is a change in control.

Revision of previously issued financial statements.

Prior to June 30, 2024, we had concluded a valuation allowance for the deferred tax asset for the carryforwards related to the nondeductible portion of our interest expense was required;

however, during the second quarter of 2024 we determined there were additional sources of income that should have been considered with regards to the realization of such deferred tax asset, specifically the reversals of indefinite-lived deferred tax liabilities that require an action by management which are not expected to reverse in the foreseeable future.

As a result, the quarterly and annual periods beginning in 2018 through the period ended December 31, 2023, have been revised.

During the second quarter of 2024, we evaluated the impact of the correction on our previously issued financial statements and determined the impact is not material to any previously issued annual or interim financial statements;

however, if the aggregate amount of the adjustment was recorded in the three-month period ended June 30, 2024, when the issue was identified the impact to the results would have been material.

Accordingly, we revised our previously issued financial statements.

The impact of the adjustment to periods not presented herein has been reflected as an adjustment to opening retained earnings for the respective period.

As a result of the revision, our deferred income tax liabilities decreased by $ 12.5 million and $ 14.7 million with a corresponding increase in retained earnings as of December 31, 2022 and 2023, respectively.

Additionally, retained

earnings increased by $ 15.5 million as of December 31, 2021.

In addition, our income tax expense increased by $ 3.0 million in 2022 and our net income and comprehensive income decreased correspondingly in 2022.

Our income tax benefit increased by $ 2.2 million in 2023, and net income and comprehensive income increased correspondingly in 2023.

Basic and diluted net income per share were decreased by $ .10 in 2022 and basic and diluted loss per share were decreased by $ .07 in 2023 .

There were no change to cash flows used in operating, investing, or financing activities for the years ended December 31, 2022 and 2023.

Foreign currency translation.

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

Such restrictions principally include amounts pledged as collateral with respect to performance obligations or letters of credit required by regulatory agencies for various environmental remediation sites, cash held in escrow under various hold-back agreements with third-party homebuilders associated with our Real Estate Management and Development Segment, cash pledged under debt agreement covenants or legal settlements and certain employee benefit obligations.

cash held in escrow under various hold-back agreements with third-party homebuilders associated with our Real Estate Management and Development Segment, cash pledged under debt agreement covenants or legal settlements and certain employee benefit obligations.

To the extent the restricted amount relates to a recognized liability, we classify the restricted amount as current or noncurrent according to the corresponding liability.

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(“LPC”), which was operated as a 50 %-owned manufacturing joint venture, by the equity method before Kronos’ acquisition of the remaining 50 % joint venture interest in July 2024.

Distributions received from LPC are classified for statement of cash flow purposes using the “nature of distribution” approach under ASC Topic 230.

Distributions received from and contributions to LPC were classified for statement of cash flow purposes using the “nature of distribution” approach under ASC Topic 230.

We enter into various arrangements (or leases) that convey the rights to use and control identified underlying assets for a period of time in exchange for consideration.

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taxation of such investments in the states in which we operate.

Deferred income tax assets and liabilities for each tax-paying jurisdiction in which we operate are netted and presented as either a noncurrent deferred income tax asset or liability, as applicable.

Deferred income tax assets

and liabilities for each tax-paying jurisdiction in which we operate are netted and presented as either a noncurrent deferred income tax asset or liability, as applicable.

We periodically evaluate our deferred tax assets in the various taxing jurisdictions in which we operate and adjust any related valuation allowance based on the estimate of the amount of such deferred tax assets that we believe does not meet the more-likely-than-not recognition criteria.

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subsidiaries.

For defined pension benefit plans and OPEB plans, this would occur whenever one of our subsidiaries which previously sponsored a defined benefit pension or OPEB plan had terminated such a plan and had no future obligation or plan asset associated with such a plan.

We record a reserve for uncertain tax positions for tax positions where we believe it is more-likely-than-not our position will not prevail with the applicable tax authorities.

The amount of the benefit associated with our uncertain tax positions that we recognize is limited to the largest amount for which we believe the likelihood of realization is greater than 50 %.

pension plan was terminated).

We record a reserve for uncertain tax positions (“UTPs”) for tax positions where we believe it is more-likely-than-not our position will not prevail with the applicable tax authorities.

The amount of the benefit associated with our UTPs that we recognize is limited to the largest amount for which we believe the likelihood of realization is greater than 50 %.

We accrue penalties and interest on the difference between tax positions taken on our tax returns and the amount of benefit recognized for financial reporting purposes.

We classify our reserves for uncertain tax positions in a separate current or noncurrent liability, depending on the nature of the tax position.

We classify our reserves for uncertain UTPs in a separate current or noncurrent liability, depending on the nature of the tax position.

Environmental remediation and related costs.

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

Sales arrangements with our Chemicals Segment’s consignment customers occur when its product is shipped to a consignment customer location but our Chemicals Segment maintains control until the product is used in the customer’s manufacturing process.

In these instances, our Chemicals Segment recognizes revenue

when the consignment customer uses its product, as control of its product has not passed to the customer until that time and all other revenue recognition criteria have been satisfied.

Revenue is recorded in an amount that reflects the net consideration we expect to receive in exchange for our products.

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Land sales associated with the residential/planned community have variable consideration components which are based on a percentage of the builder’s ultimate selling price of a residential housing unit to their customer (ranging from 2.5 % to 3.5 % of such sales price).

significant reversal in the amount of the cumulative revenue recognized is not probable of occurring in a future period.

The amount we recognize when a parcel is sold to a home builder is the amount to which we are most-likely to be entitled, using all information (historical, current and forecasted) that is reasonably available to us, and only to the extent that a significant reversal in the amount of the cumulative revenue recognized is not probable of occurring in a future period.

By recognizing revenue over time using cost-based input methods, revenues (including variable consideration) and profits are recognized in the same proportion of our progress towards completion of our contractual obligations, with our progress measured by costs incurred as a percentage of total costs estimated to be incurred relative to the parcels sold.

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We record estimated deferred revenue on the amount to which we are most-likely to be entitled and deferred revenue is recognized into revenue as the housing units are sold.

Prior to the bankruptcy filing and deconsolidation on September 10, 2022 of Basic Water Company (“BWC”), which at that time was a wholly-owned subsidiary of BMI, revenues from our Real Estate Management and Development Segment involved delivery of water to the City of Henderson and various other users through a water distribution system owned and operated by BWC.

Prior to the sale of Basic Power Company (“BPC”), a wholly-owned subsidiary of BMI, on December 1, 2023, the revenues also included providing certain utility services to an industrial park located in Henderson, Nevada.

See Notes 2 and 3.

These sales involved single performance obligations, and we recorded revenue when we satisfied our performance obligations to our customers generally after the service was performed and our customers became obligated to pay us and it was probable we would receive payment.

Revenue was recorded in an amount that reflected the net consideration we expected to receive in exchange for our services.

Prices for our products were based on contracted rates and did not include financing components, noncash consideration or consideration paid to our customers.

As our standard payment terms were less than one year, we elected the practical expedient under ASC 606 and we did not assess whether a contract had a significant financing component.

Selling, general and administrative expenses;

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Shipping and handling costs of our Component Products Segment are not material.

We expense advertising and research and development costs as incurred.

We expense advertising and research and development costs

Advertising costs were approximately $ 2 million in each of 2023, 2024 and 2025.

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

The CODM evaluates segment performance based on each segment’s operating income, which is defined as income before income taxes and interest expense, exclusive of certain non-recurring items (such as gains or losses on disposition of business units and other long-lived assets outside the ordinary course of business and certain legal settlements) and certain general corporate income and expense items (including securities transactions gains and losses and interest and dividend income), which are not attributable to the operations of the reportable operating segments.

The CODM considers current-period operating income compared to plan and prior-period on a monthly and/or quarterly basis

for evaluating performance of each segment and making decisions about allocating capital and other resources.

The CODM evaluates segment performance based on each segment’s operating income (loss), which is defined as income (loss) before income taxes and interest expense, exclusive of certain non-recurring items (such as gains or losses on disposition of business units and other long-lived assets outside the ordinary course of business and certain legal settlements) and certain general corporate income and expense items (including securities transactions gains and losses and interest and dividend income), which are not attributable to the operations of the reportable operating segments.

The CODM considers current-period operating income (loss) compared to plan and prior-period on a monthly and/or quarterly basis for evaluating performance of each segment and making decisions about allocating capital and other resources.

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

Capital expenditures include additions to property and equipment but exclude amounts attributable to business combinations.

Segment results we report may differ from amounts separately reported by our various subsidiaries and affiliates due to purchase accounting adjustments and related amortization or differences in how we define operating income.

Intersegment sales are not material.

Our CODM is not regularly provided financial information related to the assets of the reportable segments, including capital expenditures, and he does not evaluate the reportable segments’ performance or allocate resources to them based on assets.

Therefore, total assets by reportable segment are not included in our segment disclosures.

We have the following three consolidated reportable operating segments.

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CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare applications and a variety of other industries.

CompX is also a leading manufacturer of wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine industry.

CompX is also a leading manufacturer of wake enhancement systems, stainless steel exhaust systems, custom metal fabricated parts, gauges, throttle controls, trim tabs and related hardware and accessories primarily for the recreational marine and other industries.

All CompX production facilities are in the United States.

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LandWell is engaged in efforts to develop certain land holdings for commercial, industrial and residential purposes in Henderson, Nevada.

BMI previously, through wholly-owned subsidiaries, also was responsible for the delivery of water to the City of Henderson and various other users through September 2022, and provided utility services to certain industrial customers prior to December 2023.

Interest income included in the calculation of segment operating income is not significant in 2022, 2023 or 2024.

Prior to 2023, BMI, through wholly-owned subsidiaries, was responsible for the delivery of water to the City of Henderson and various other users and provided utility services to certain industrial customers prior to December 2023.

Interest income included in the calculation of segment operating income (loss) is not significant in 2023, 2024 or 2025.

Depreciation and amortization related to each reportable operating segment includes amortization of any intangible assets attributable to the segment.

Amortization of deferred financing costs and any premium or discount associated with the issuance of indebtedness is included in interest expense.

Segment assets are comprised of all assets attributable to each reportable operating segment, including goodwill and other intangible assets.

Corporate assets are not attributable to any operating segment and consist principally of cash and cash equivalents, restricted cash and restricted cash equivalents and marketable securities.

Years ended December 31,

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Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Gain on remeasurement of earn-out liability

Insurance recoveries

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Income (loss) before income taxes

Included in the determination of Chemicals operating income is restructuring costs related to workforce reductions of $ 5.8 million and $ 2.0 million recognized in 2023 and 2024, respectively, (see Note 20) and a fixed asset impairment related to the write-off of certain costs resulting from a capital project termination of $ 3.8 million recognized in 2023.

Also included in the determination of Chemicals operating income are business interruption insurance settlement aggregate gains of $ 2.7 million recognized in 2022 and $ 2.5 million recognized in 2023.

Included in the determination of the Real Estate Management and Development Segment’s operating income in 2022 and 2024 are charges resulting from the cessation of BWC’s water delivery and subsequent bankruptcy filing.

Operating income comparisons between 2024, 2023 and 2022 are also affected by BWC’s water delivery sales and related cost of sales, see Note 3.

Also included in the determination of Real Estate Management and Development operating income are infrastructure reimbursements and land related income.

Included in the determination of the Chemicals Segment’s operating income (loss) are restructuring costs related to workforce reductions of $ 5.8 million, $ 2.0 million and $ 10.3 million in 2023, 2024 and 2025, respectively, (see Note 20) and a fixed asset impairment related to the write-off of certain costs resulting from a capital project termination of $ 3.8 million recognized in 2023.

Included in the determination of the Real Estate Management and Development Segment’s operating income in 2024 is income related to the resolution of the Basic Water Company (“BWC”) bankruptcy filing.

Also included in the determination of the Real Estate Management and Development Segment’s operating income are infrastructure reimbursements and land related income.

See Notes 7 and 13.

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Real estate management and development

Capital expenditures:

Component products

Real estate management and development

(In millions)

Total assets:

Operating segments:

Component products

Real estate management and development

Corporate and eliminations

Geographic information .

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United States

At December 31, 2024, the United States net property and equipment includes the acquired assets of LPC.

Note 3 – Business combinations, dispositions and related transactions:

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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.

Kronos acquired the 50 % joint venture interest in LPC for consideration of $ 185 million less a working capital adjustment and an additional earn-out payment of up to $ 15 million.

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

For financial reporting purposes, the assets acquired and liabilities assumed of LPC have been included in our Consolidated Balance Sheet as of December 31, 2024, and the results of operations and cash flows of LPC have been included in our Consolidated Statement of Operations and Cash flows beginning as of the Acquisition Date.

Kronos incurred $ 2.2 million of transaction costs in connection with the acquisition.

These costs were primarily associated with legal and professional services and were expensed in accordance with ASC 805 and are included in selling, general and administrative expense in our Consolidated Statement of Operations.

The potential earn-out payment of up to $ 15 million is based on aggregate Kronos 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.

The earn-out liability is included in other noncurrent liabilities on the Consolidated Balance Sheet and is part of the line item captioned earn-out liability in Note 10.

The fair value measurement is based on significant inputs not observable in the market and therefore represents a Level 3 measurement as defined in ASC 820.

The earn-out liability will be re-measured at fair value on a recurring basis and the change to the liability, if any, would be recorded as a component of cost and other expense (income) in our Consolidated Statements of Operations.

See Note 19 to our Consolidated Financial Statements.

Kronos remeasured its existing ownership interest in LPC to its estimated fair value at the Acquisition Date in accordance with ASC 805-10-25, for a business combination achieved in stages (because Kronos previously had an

ownership interest in LPC).

In 2025, Kronos merged LPC into Kronos’ wholly-owned subsidiary Kronos Louisiana, Inc.

(the combined company is referred to as “Kronos Louisiana”).

For financial reporting purposes, the assets acquired and liabilities assumed of LPC are included in our Consolidated Balance Sheets as of December 31, 2024 and December 31, 2025, and the results of operations and cash flows of LPC have been included in our Consolidated Statements of Operations and Cash flows beginning as of the Acquisition Date.

As a result of such remeasurement, we 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 the existing ownership interest in LPC at the Acquisition Date and its aggregate $ 113.7 million carrying value at the Acquisition Date.

Such pre-tax gain is disclosed as gain on remeasurement of investment in TiO 2 manufacturing joint venture and is included in cost and other expense (income) in our Consolidated Statement of Operations.

The estimated fair value of the earn-out as of December 31, 2024 was $ 4.3 million and is included in noncurrent liabilities on the Consolidated Balance Sheet and is the line item captioned earn-out liability in Note 10.

The earn-out liability is remeasured at fair value at each reporting date.

During the third quarter of 2025, management determined that it was no longer probable the thresholds required to trigger payment of the earn-out would be achieved.

As a result, the fair value of the earn-out liability was reduced to zero, resulting in the recognition of a non-cash gain of $ 4.6 million, which is disclosed as gain on remeasurement of earn-out liability in our Consolidated Statement of Operations.

The following table summarizes the aggregate fair value of the consideration transferred to gain control of LPC, the current estimate for the fair value of Kronos’ existing ownership interest in LPC and the amounts assigned to the identifiable assets acquired and liabilities assumed at the Acquisition Date.

The estimated purchase price allocation is based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using independent third-party appraiser valuation techniques including income, cost, and market approaches.

Our final purchase price allocation indicated below was based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using independent third-party appraiser valuation techniques including income, cost, and market approaches.

The total consideration was allocated to the assets acquired and liabilities assumed, with the excess of the consideration over the estimated fair value of the net assets acquired recorded as goodwill.

Subject to final determination, which is expected to occur within 12 months of the Acquisition Date, the provisional fair values of the assets acquired and liabilities assumed in the acquisition are as follows:

Such final purchase price allocation did not change from our previously-reported preliminary purchase price allocation.

Based on our analysis of the transaction at Acquisition Date, we recognized the following:

(In millions)

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Kronos reported distributions it received from LPC, which generally related to excess cash generated by LPC from its non-cash production costs, and contributions Kronos made to LPC, which generally related to cash required by LPC when it built working capital, as part of its cash flows from operating activities in our Consolidated Statements of Cash Flows.

The components of our net cash distributions from (contributions to) LPC

are shown in the table below.

The components of our net cash distributions from (contributions to) LPC are shown in the table below.

Years ended December 31,

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(1) Reflects distributions and contributions from/to LPC prior to the Acquisition Date.

The summary balance sheet for LPC for the annual period prior to the Acquisition Date is shown below:

December 31, 2023

(In millions)

Current assets

Property and equipment, net

LIABILITIES AND PARTNERS' EQUITY

Other liabilities, primarily current

Partners' equity

Total liabilities and partners' equity

Summary income statements for LPC for the annual periods prior to the Acquisition Date are shown below:

Years ended December 31,

(In millions)

Revenues and other income:

Cost and expenses:

Cost of sales

General and administrative

Prior to the acquisition, Kronos had certain related party transactions with LPC, as more fully described in Note 17.

The pro forma impact of combining LPC’s results of operations assuming the LPC transaction had occurred as of January 1, 2023 would result in no net increase to earnings.

The additional interest expense and depreciation expense that would have occurred during the comparable period is not material.

The pro forma impact is not necessarily indicative of either future results of operations or results of operations that might have been achieved had the acquisition occurred as of January 1, 2023.

The incremental finished goods offtake produced resulting from Kronos’ additional 50% interest acquired in LPC has not materially impacted revenue and earnings from Acquisition Date through the end of the year.

Kronos’ board of directors has previously authorized the repurchase of up to 2.0 million shares of its common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time.

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In 2023, Kronos acquired 313,814 shares of its common stock in market transactions for an aggregate purchase price of $ 2.8 million.

Kronos made no treasury purchases in 2024.

Kronos made no treasury purchases in 2024 or 2025.

At December 31, 2025, 1,017,518 shares are available for repurchase under this stock repurchase program.

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Repurchased shares will be added to CompX’s treasury and cancelled.

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

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

CompX made no treasury purchases during 2023 and 2024.

CompX did not repurchase any shares of its common stock during 2023, 2024 and 2025.

At December 31, 2025, 523,647 shares were available for purchase under these authorizations.

During 2022, NL purchased 2,000 shares of its common stock from Kronos for a nominal amount in a private transaction that was approved in advance by NL’s independent directors and subsequently cancelled all such shares.

Prior to BWC’s bankruptcy filing on September 10, 2022, BMI was responsible for the delivery of water to the City of Henderson and various other users under long-term contracts through a water delivery system owned and operated by BWC.

BWC’s water delivery system operated on Lake Mead in Nevada.

Late in the second quarter of 2022, Lake Mead water levels dropped precipitously to historically low levels.

On June 30, 2022, BWC was no longer able to pump water and consequently ceased operations at its water intake facility.

We considered BWC’s inability to pump water from Lake Mead to be a triggering event under ASC 360 Property, Plant, and Equipment , which caused us to evaluate the water system fixed assets for impairment.

Because BWC was unable to deliver water under its current contracts and therefore unable to generate revenue, we determined the water system’s assets were fully impaired except to the extent certain equipment had alternative use outside of BWC’s operations, in which case those assets were written down to estimated salvage value.

The $ 16.4 million impairment charge primarily recognized in the second quarter of 2022 represented the write down of the book value to the estimated salvage value of the assets.

Without the ability to pump and deliver water to its customers, BWC’s operating expenses exceeded its revenues, and on September 10, 2022, BWC and its wholly-owned subsidiary (collectively, “Debtors”) voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Nevada.

Because BWC filed for bankruptcy protection, we and BMI could no longer affirmatively assert we control BWC and, as such, in accordance with ASC 810, Consolidation, we deconsolidated BWC as of the date of the bankruptcy filing and recognized a loss of $ 2.0 million in the third quarter of 2022 on the deconsolidation.

In addition, BMI had an outstanding intercompany accounts receivable balance with BWC on the date of

the bankruptcy filing, and we recognized $ 1.3 million of bad debt expense to fully reserve this balance during the third quarter of 2022.

On November 8, 2023, the Bankruptcy Court for the District of Nevada (“Court”) entered an order approving Debtors’ plan of reorganization, which provided for the sale of substantially all Debtors’ assets and the transfer of substantially all of their operating and other agreements to one of their industrial customers.

The transaction closed on November 17, 2023 at which time Debtors discontinued their water delivery operations.

The proceeds of the sale were used to repay creditors of the Debtors.

On July 10, 2024, the Court approved the closure of the Debtors’ bankruptcy case.

BWC and its wholly-owned subsidiary BWC SPE I, LLC were subsequently dissolved, with the remaining cash at BWC of $ 2.6 million distributed to BMI.

On December 1, 2023, BMI sold its subsidiary BPC, which provided electricity to four customers located in the industrial park, and its sewer system assets to another of its industrial customers.

Prior to 2023, BMI’s wholly-owned subsidiary, BWC, declared bankruptcy and was deconsolidated from our financial statements.

In July 2024, the Court approved the closure of the bankruptcy case.

Following the case closure, BWC and its wholly owned subsidiary, BWC SPE I, LLC, were dissolved.

Remaining cash of approximately $ 2.6 million held by BWC was distributed to BMI.

On December 1, 2023, BMI sold its subsidiary Basic Power Company (“BPC”), which provided electricity to four customers located in the industrial park, and its sewer system assets to another of its industrial customers.

The sale was for minimal cash consideration and the assumption of liabilities, and upon the closing of the sale we recognized a loss of $ 2.6 million.

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The Leverkusen facility itself, which Kronos owns and which represents approximately 28 % of its current TiO 2 production capacity, is located within an extensive manufacturing complex.

During 2022, 2023 and 2024, our operating lease expense approximated $ 5.5 million, $ 5.6 million and $ 5.2 million, respectively, (which approximates the amount of cash paid during the period for our operating leases included in the determination of our cash flows from operating activities).

During 2023, 2024 and 2025, our operating lease expense approximated $ 5.6 million, $ 5.2 million and $ 5.3 million, respectively, (which approximates the amount of cash paid during the period for our operating leases included in

the determination of our cash flows from operating activities).

During 2023, 2024 and 2025, variable lease expense and short-term lease expense were not material.

During 2023, 2024 and 2025, we entered into new operating leases which resulted in the recognition of $ 4.6 million, $ 2.8 million and $ 1.8 million, respectively, in right-of-use operating lease assets and corresponding liabilities on our Consolidated Balance Sheets.

At December 31, 2023 and 2024, the weighted average remaining lease term of our operating leases was approximately 14 years and the weighted average discount rate associated with such leases was approximately 5.0 % in 2023 and approximately 6.0 % in 2024.

At December 31, 2024 and 2025, the weighted average remaining lease term of our operating leases was approximately 14 years and the weighted average discount rate associated with such leases was approximately 6.0 % in each of 2024 and 2025.

Such average remaining lease term is weighted based on each arrangement’s lease obligation, and such average discount rate is weighted based on each arrangement’s total remaining lease payments.

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As such, we will account for any change in the rent associated with such lease as a lease modification.

Of the $ 20.6 million total lease obligations at December 31, 2024, approximately $ 6.8 million

relates to our Leverkusen facility land lease.

Of the $ 19.9 million total lease obligations at December 31, 2025, approximately $ 7.6 million relates to our Leverkusen facility land lease.

At December 31, 2025, we have no significant lease commitments that have not yet commenced.

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Under an Owner Participation Agreement (“OPA”) entered into by LandWell with the Redevelopment Agency of the City of Henderson, Nevada, if LandWell develops certain real property for commercial and residential purposes in a master planned community in Henderson, Nevada, the cost of certain public infrastructure may be reimbursed to us through tax increment.

The maximum reimbursement under the OPA is $ 209 million, and is subject to, among other things, completing construction of approved qualifying public infrastructure, transferring title of such infrastructure to the City of Henderson, receiving approval from the Redevelopment Agency of the funds expended to be eligible for tax increment reimbursement and the existence of a sufficient property tax valuation base and property tax rates in order to generate tax increment reimbursement funds.

The maximum reimbursement under the OPA is $ 209 million ( $ 170 million for infrastructure reimbursement and interest income capped at $ 39 million), and is subject to, among other things, completing construction of approved qualifying public infrastructure, transferring title of such infrastructure to the City of Henderson, receiving approval from the Redevelopment Agency of the funds expended to be eligible for tax increment reimbursement and the existence of a sufficient property tax valuation base and property tax rates in order to generate tax increment reimbursement funds.

We are entitled to receive 75 % of the tax increment generated by the master planned community through the expiration of the Redevelopment Plan, subject to the qualifications and limitations indicated above.

The OPA note receivables represent public infrastructure costs previously incurred for which the Redevelopment Agency has provided its approval for tax increment reimbursement but we have not yet received such reimbursement through tax increment receipts, and are evidenced by a promissory note issued to LandWell by the City of Henderson.

During 2022, 2023 and 2024, we received approval for additional tax increment reimbursement of $ 15.2 million ($ 10.0 million in the third quarter and $ 5.2 million in the fourth quarter), $ 25.2 million ($ 4.8 million in the third quarter and $ 20.4 million in the fourth quarter), and $ 30.3 million ($ 14.2 million in the third quarter and $ 16.1 million in the fourth quarter), respectively, which were recognized as other income and are evidenced by a promissory note issued to LandWell by the City of Henderson.

The note receivables bear interest at 6 % annually and in 2021, the City of Henderson extended the Redevelopment Plan for an additional 15 years which allows us to collect any remaining amounts due under the OPA through 2051.

During 2023, 2024 and 2025, we received approval for additional tax increment reimbursement of $ 25.2 million ($ 4.8 million in the third quarter and $ 20.4 million in the fourth quarter), $ 30.3 million ($ 14.2 million in the third quarter and $ 16.1 million in the fourth quarter), and $ 34.2 million ($ 17.2 million in the second quarter and $ 17.0 million in the third quarter), respectively, which were recognized as other income and are evidenced by a promissory note issued to LandWell by the City of Henderson.

The note receivables bear interest at 6 % annually and in 2021, the City of Henderson

extended the Redevelopment Plan for an additional 15 years which allows us to collect any remaining amounts due under the OPA through 2051.

Any unpaid balances at the end of the agreement are forfeited.

Land held for development.

The land held for development relates to BMI and LandWell and is discussed in Note 1.

The land held for development in 2024 relates to BMI and LandWell and is discussed in Note 1.

IBNR receivables relate to certain insurance liabilities, the risk of which we have reinsured with certain third-party insurance carriers.

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Note 8 – Goodwill:

We have assigned goodwill to each of our reporting units (as that term is defined in ASC Topic 350-20-20, Goodwill ) which corresponds to our operating segments.

Substantially all of our goodwill related to our Chemicals Segment is from our various step acquisitions of NL and Kronos which occurred prior to 2022, as goodwill was determined prior to the adoption of the equity transaction framework provisions of ASC Topic 810.

In the third quarter of 2024, we recognized $ 2.6 million of goodwill related to Kronos’ acquisition of the remaining 50 % joint venture interest in LPC.

Substantially all of the net goodwill related to the Component Products Segment was generated from CompX’s acquisitions of certain business units and the step acquisitions of CompX.

The Component Products Segment goodwill is assigned to the security products reporting unit within that operating segment.

Operating segment

(In millions)

Balance at December 31, 2022 and 2023

LPC Acquisition

Balance at December 31, 2024

We test for goodwill impairment at the reporting unit level.

In determining the estimated fair value of the reporting units, we use appropriate valuation techniques, such as discounted cash flows and, with respect to our Chemicals Segment, we consider quoted market prices, a Level 1 input, while discounted cash flows are a Level 3 input.

We also consider control premiums when assessing fair value using quoted market prices.

If the carrying amount of the reporting unit’s net assets exceeds its fair value, an impairment charge is recorded for the amount by which such carrying amount exceeds the reporting unit’s fair value (not to exceed the amount of goodwill recognized).

As permitted by GAAP, during 2022, 2023 and 2024 we used the qualitative assessment of ASC 350-20-35 for the Component Products security products reporting unit’s annual impairment test and determined it was not necessary to perform a quantitative goodwill impairment test.

We review goodwill for each of our reporting units for impairment during the third quarter of each year.

Goodwill is also evaluated for impairment at other times whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

If the fair value of an evaluated asset is less than its book value, the asset is written down to fair value.

In determining the estimated fair value of our Chemicals Segment, we use the income approach method of valuation that includes the discounted cash flow method and the market approach that includes the guideline public company method to determine the fair value of the reporting unit, which represent Level 3 inputs.

During 2023, 2024 and 2025 we used the qualitative assessment for the Component Products security products reporting unit’s annual impairment test and determined it was not necessary to perform a quantitative goodwill impairment test.

In 2023, 2024 and 2025, no goodwill impairment was indicated as part of our annual impairment review of goodwill.

Operating segment

(In millions)

Balance at December 31, 2023

LPC Acquisition

Balance at December 31, 2024 and 2025

Prior to 2023, we recorded an aggregate $ 16.5 million goodwill impairment, mostly with respect to our Component Products Segment.

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The facility contains no financial covenants or other financial restrictions.

Valhi pays an unused commitment fee quarterly to Contran on the available balance (except during periods during which Contran would be a net borrower from Valhi).

Valhi pays an unused commitment fee quarterly to Contran on the available balance.

The average interest rate on the credit facility for the year ended December 31, 2025 was 7.37 %.

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Kronos – 9.50 % Senior Secured Notes due 2029 – On February 12, 2024, for certain eligible holders of existing 3.75 % Senior Secured Notes due September 2025 (the “Old Notes”), Kronos International, Inc.

(“KII”) executed an exchange of € 325 million principal amount of the outstanding Old Notes for newly issued € 276.174 million aggregate outstanding KII 9.50 % Senior Secured Notes due March 2029 (the “New Notes” and, together with the Old Notes and the Additional New Notes (as defined below), the “Senior Secured Notes”) plus additional cash consideration of € 48.75 million ($ 52.6 million).

Holders of the Old Notes received for each € 1,000 principal amount of Old Notes exchanged, € 850 in principal amount of New Notes, plus a cash payment in an amount equal to € 150 .

Following the exchange, Old

Notes totaling € 75 million principal amount that were not exchanged continue to remain outstanding.

In connection with the exchange, the indenture governing the Old Notes was amended to conform to the restrictive covenants in the indenture governing the New Notes and to make other conforming changes.

(“KII”) executed an exchange of € 325 million principal amount of the outstanding Old Notes for newly issued € 276.174 million aggregate outstanding KII 9.50 % Senior Secured Notes due March 2029 (the “New Notes”) plus additional cash consideration of € 48.75 million ($ 52.6 million).

KII did not receive any cash proceeds from the issuance and delivery of the New Notes in connection with the exchange.

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The proceeds from the Additional New Notes were used to pay down borrowings under the $ 300 million global revolving credit facility (the “Global Revolver”).

On September 15, 2025, KII issued an additional € 75 million principal amount of 9.50 % Senior Secured Notes due 2029 (the “Additional Notes”), the proceeds of which were used to refinance the 3.75 % Senior Secured Notes (€ 75 million aggregate principal amount) that matured in September 2025.

The Additional Notes were issued as additional notes to the existing € 351.174 million aggregate principal amount of 9.50 % Senior Secured Notes due 2029 issued on February 12, 2024 and July 30, 2024 (the “Existing Notes”).

The Additional Notes were issued at a premium of 105.0 % of their principal amount, resulting in net proceeds of approximately $ 90 million after fees and estimated expenses.

In connection with the Additional Notes offering, Kronos incurred approximately $ 1.7 million of debt issuance costs.

The Additional

Notes are fungible with the Existing Notes, are treated as a single series and have the same terms as the Existing Notes, other than their date of issuance and issue price.

The 9.50 % Senior Secured Notes due 2029:

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In addition, on or before March 15, 2026, Kronos may redeem up to 40 % of the 9.50 % Senior Secured Notes due 2029 with the net proceeds of certain public or private equity offerings at 109.50 % of the principal amount, plus accrued and unpaid interest, provided that following the redemption at least 50 % of the 9.50 % Senior Secured Notes due 2029 remain outstanding .

If Kronos or Kronos’ subsidiaries experience certain change of control events, as outlined in the indenture governing its 9.50 % Senior Secured Notes due 2029 , Kronos would be required to make an offer to purchase the 9.50 % Senior Secured Notes due 2029 at 101 % of the principal amount thereof, plus accrued and unpaid interest.

If Kronos or Kronos’ subsidiaries experience certain change of control events, as outlined in the indenture governing our 9.50 % Senior Secured Notes due 2029 , Kronos would be required to make an offer to purchase the 9.50 % Senior Secured Notes due 2029 at 101 % of the principal amount thereof, plus accrued and unpaid interest.

Kronos would also be required to make an offer to purchase a specified portion of the 9.50 % Senior Secured Notes due 2029 at par value, plus accrued and unpaid interest, in the event that Kronos and its subsidiaries generate a certain amount of net proceeds from the sale of assets outside the ordinary course of business, and such net proceeds are not otherwise used for specified purposes within a specified time period as described in the indenture governing Kronos’ 9.50 % Senior Secured Notes due 2029;

● are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Kronos Worldwide, Inc.

and each of its direct and indirect domestic, wholly-owned subsidiaries;

and each of our direct and indirect domestic, wholly-owned subsidiaries;

● are collateralized by a first priority lien on (i) 100 % of the common stock or other ownership interests of each existing and future direct domestic subsidiary of KII and the guarantors, and (ii) 65 % of the voting common stock or other ownership interests and 100 % of the non-voting common stock or other ownership interests of each non-U.S.

subsidiary that is directly owned by KII or any guarantor;

● contain a number of covenants and restrictions which, among other things, restrict Kronos’ ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of this type (however, there are no ongoing financial maintenance covenants);

● contain a number of covenants and restrictions which, among other things, restrict Kronos’ ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of our assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of this type (however, there are no ongoing financial maintenance covenants);

● contain customary default provisions, including a default under any of Kronos’ other indebtedness in excess of $ 50.0 million.

At December 31, 2024, the carrying value of the 9.50 % Senior Secured Notes due 2029 (€ 351.174 million aggregate principal amount outstanding plus € 5.1 million of unamortized premium) is stated net of unamortized debt issuance costs of $ 6.3 million.

As a result of the note exchange, in the first quarter of 2024 Kronos recognized a non-cash pre-tax interest charge of $ 1.5 million included in interest expense related to the write-off of the deferred financing costs associated with the Old Notes.

As of December 31, 2024, Kronos has capitalized $ 7.4 million in debt issuance costs associated with the 9.50 % Senior Secured Notes due 2029.

3.75 % Senior Secured Notes due 2025 – At December 31, 2024, the carrying value of Kronos’ remaining Old Notes (€ 75 million aggregate principal amount outstanding) is $ 78.3 million.

In connection with the issuance of the New Notes in February 2024, the indenture governing the Old Notes was amended to conform to the restrictive covenants in the indenture governing the New Notes and to make other conforming changes.

At December 31, 2025, the carrying value of Kronos’ 9.50 % Senior Secured Notes due 2029 (€ 426.174 million aggregate principal amount outstanding) was $ 503.7 million and is stated net of $ 9.0 million of unamortized premium and $ 6.9 million of unamortized debt issuance costs.

In the first quarter of 2024 Kronos recognized a non-cash pre-tax interest charge of $ 1.5 million included in interest expense related to the write-off of the deferred financing costs.

3.75 % Senior Secured Notes due 2025 – Kronos’ 3.75 % Senior Secured Notes due 2025 (€ 75 million aggregate principal amount) were repaid in September 2025 with proceeds from the Additional Notes offering, as described above.

Subordinated, Unsecured Term Loan from Contran – As part of the refinancing of a majority of Kronos’ Old Notes discussed above, Kronos borrowed $ 53.7 million (€ 50.0 million) from Contran through the issuance of an unsecured, subordinated term promissory note dated February 12, 2024 (the “Contran Term Loan”).

The Contran Term Loan is guaranteed by certain of Kronos’ domestic wholly-owned subsidiaries.

Kronos’ obligations under the Contran Term Loan, and the obligations of the guarantors under the related guaranties, are unsecured and subordinated in right of payment to Kronos’ Senior Secured Notes and its Global Revolver.

Kronos’ obligations under the Contran

Term Loan, and the obligations of the guarantors under the related guaranties, are unsecured and subordinated in right of payment to our Senior Secured Notes and our Global Revolver.

Interest on the Contran Term Loan is payable in cash.

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The restrictive covenants in the Contran Term Loan are substantially similar to those contained in the indenture governing Kronos’ 9.50 % Senior Secured Notes due 2029.

In accordance with Kronos’ related party transaction policy, the audit committee of its board of directors, comprised of the independent directors, approved the terms and conditions of the original Contran Term Loan and its amendment in August 2024.

In accordance with Kronos’ related party transaction policy, the audit committee of Kronos’ board of directors, comprised of the independent directors, approved the terms and conditions of the original Contran Term Loan and its amendment in August 2024.

Revolving credit facility – Effective July 17, 2024, Kronos completed an amendment to its Global Revolver (the “Second Amendment”).

Among other things, the Second Amendment increased the maximum borrowing amount from $ 225 million to $ 300 million, extended the maturity date to July 2029 and expanded the agreement to include LPC and LPC’s receivables and certain of its inventories in the borrowing base.

Effective July 17, 2025, Kronos completed an amendment to its Global Revolver (the “Fourth Amendment”).

Among other things, the Fourth Amendment increased the maximum borrowing amount from $ 300 million to $ 350 million and increased the Belgian and German sub-limits from € 30 million and € 60 million to € 55 million and € 85 million, respectively, allowing greater access to Euro denominated borrowings.

The maturity date of the Global Revolver remains July 2029.

Available borrowings are based on formula-determined amounts of eligible trade receivables and inventories, as defined in the agreement, less any borrowings outstanding and outstanding letters of credit issued under the Global Revolver.

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During 2025, Kronos borrowed $ 648.2 million and repaid $ 658.2 million under its Global Revolver.

The average interest rate on outstanding borrowings for 2024 was 7.21 %, and at December 31, 2024, the interest rate on the outstanding borrowings was 6.25 %.

The borrowing base calculated as of December 31, 2024, was approximately $ 278 million.

During 2023, Kronos had no borrowings or repayments under its Global Revolver.

The average interest rate on outstanding borrowings for 2025 was 5.6 %, The borrowing base calculated as of December 31, 2025 was approximately $ 251 million.

Other – In December 2019, LandWell entered into the $ 15.0 million loan agreement with Western Alliance Business Trust.

The agreement requires semi-annual payments of principal and interest on April 15 and October 15 aggregating $ 1.3 million annually beginning on April 15, 2020 through the maturity date in April 2036 and is payable

from the tax increment reimbursement funds received under the OPA.

The agreement bears interest at a fixed 4.76 % rate and is collateralized by all tax increment reimbursement funds LandWell receives under the OPA.

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2031 and thereafter

Less amounts representing original issue discount and debt issuance costs

Net amounts representing original issue premium and debt issuance costs

Total long-term debt

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Accrued sales discounts and rebates

Accrued severance cost

Operating lease liabilities

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See Note 3 for additional details related to the acquisition earn-out liability.

See Note 20 for additional information related to the accrued severance costs.

Note 11 – Defined contribution and defined benefit retirement plans:

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Defined benefit plans.

Kronos and NL sponsor various defined benefit pension plans worldwide.

Kronos sponsors various defined benefit pension plans worldwide.

NL previously maintained a defined benefit pension plan in the U.S., in which Kronos and NL both participate.

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

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Prior to the LPC acquisition, LPC’s defined benefit pension plan had been frozen for all employees with benefits based on years of service and employee compensation.

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

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

defined benefit pension plan.

pension plan NL administered has been closed to new participants since 1996 with existing participants no longer accruing any additional benefits after that date.

In accordance with applicable U.S.

pension regulations, effective June 30, 2025, NL began the process of terminating the pension plan, which includes the purchase of annuity contracts from third-party insurance companies for the purpose of distributing benefits to plan participants.

The annuity contracts were purchased on December 16, 2025, from “A” rated third-party insurance companies in settlement of all remaining obligations to the pension plan participants.

The annuity purchase was funded with existing plan assets.

In connection with the settlement, we recognized a non-cash settlement loss of approximately $ 28.7 million which is included in other components of net periodic pension and OPEB costs in our Consolidated Statements of Operations.

This charge represents the previously unrecognized actuarial losses and prior service costs that were accumulated in other comprehensive loss.

As a result of the U.S.

plan settlement, we are entitled to surplus U.S.

pension assets totaling approximately $ 9 million.

Following the settlement, the surplus U.S.

pension assets will be used, as permitted by the applicable regulations, to fund obligations associated with our Chemicals Segment’s U.S.

defined contribution profit sharing plan.

Such surplus assets are included in pension assets on our Consolidated Balance Sheet.

We previously maintained a defined benefit pension plan in the United Kingdom (U.K.) related to a former disposed U.K.

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Accumulated benefit obligations ("ABO")

The total net overfunded status of our U.S.

defined benefit pension plans increased from a total net underfunded balance of $ 2.4 million at December 31, 2023 to a total net overfunded balance of $ 10.5 million at December 31, 2024 due to the consolidation of the LPC pension plan which, as noted above, is an overfunded plan.

Absent the LPC plan, the decrease in our PBO exceeded the decrease 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 components of our net periodic defined benefit pension cost for U.S.

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Accumulated benefit obligations

Fair value of plan assets

The discount rate assumptions used in determining the actuarial present value of the benefit obligation for our U.S.

defined benefit pension plans as of December 31, 2023 and 2024 are 5.0 % and 5.5 %, respectively.

defined benefit pension plans as of December 31, 2024 was 5.5 %.

The impact of assumed increases in future compensation levels does not have an effect on the benefit obligation as the plans are frozen with regards to compensation.

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Interest cost

Participants’ contributions

Actuarial (gains) losses

Participant contributions

Actuarial gains

Change in currency exchange rates

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Employer contributions

Participants' contributions

Participant contributions

Change in currency exchange rates

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The total net underfunded status of our non-U.S.

defined benefit pension plans decreased from $ 141.1 million at December 31, 2023 to $ 108.4 million at December 31, 2024 due to the change in our PBO during 2024 exceeding the change in plan assets during 2024.

The decrease in our PBO in 2024 was primarily attributable to higher actuarial gains due primarily to the increase in discount rates in Germany from year end 2023 and favorable currency fluctuations, primarily from the strengthening of the U.S.

defined benefit pension plans decreased from $ 108.4 million at December 31, 2024 to $ 69.5 million at December 31, 2025 due to the change in our plan assets during 2025 exceeding the change in our PBO during 2025.

The increase in our plan assets in 2025 was primarily attributable to favorable currency fluctuations (primarily from the weakening of the U.S.

dollar relative to the euro).

The decrease in our plan assets in 2024 was primarily attributable to unfavorable currency fluctuations (primarily from the strengthening of the U.S.

dollar relative to the euro) offsetting positive plan asset returns and employer contributions in 2024.

The increase in our PBO in 2025 was primarily attributable to favorable currency fluctuations, primarily from the weakening of the U.S.

dollar relative to the euro, somewhat offset by higher actuarial gains due primarily to the increase in discount rates for all of our non-U.S.

plans from the end of 2024.

The components of our net periodic pension benefit cost for our non-U.S.

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Prior service cost

Settlement loss

In determining the expected long-term rate of return on plan asset assumptions, we consider the long-term asset mix (e.g., equity vs.

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● In Germany, the composition of our plan assets is established to satisfy the requirements of the German insurance commissioner.

Our German pension plan assets represent an investment in a large collective investment fund established and maintained by Bayer AG in which several pension plans, including our German pension plans and Bayer’s pension plans, have invested.

Our plan assets represent a very nominal portion of the total collective investment fund maintained by Bayer.

These plan assets are a Level 3 in the fair value hierarchy because there is not an active market that approximates the value of our investment in the Bayer investment fund.

We estimate the fair value of the Bayer plan assets based on periodic reports we receive from the managers of the Bayer fund and using a model we developed with assistance from our third-party actuary that uses estimated asset allocations and correlates such allocation to similar asset mixes in fund indexes quoted on an active market.

We periodically evaluate the results of our valuation model against actual returns in the Bayer fund and adjust the model as needed.

The Bayer fund periodic reports are subject to audit by the German pension regulator.

Our German pension plan assets represent an investment in a large collective investment fund established by Bayer AG and maintained by a mutual insurance association in which several pension plans, including our German pension plans and Bayer’s pension plans, have invested.

Our plan assets represent a very nominal portion of the total collective investment fund.

These plan assets are a Level 3 in the fair value hierarchy because there is not an active market that approximates the value of our investment.

We estimate the fair value of the Bayer plan assets based on periodic reports we receive from the managers of the mutual insurance association and using a model we developed with assistance from our third-party actuary that uses estimated asset allocations and correlates such allocation to similar asset mixes in fund indexes quoted on an active market.

We periodically evaluate the results of our valuation model against actual returns from the investment fund and adjust the model as needed.

The mutual insurance association periodic reports are subject to audit by the German pension regulator.

● In Canada, we currently have a plan asset target allocation of up to 10 % to equity securities and 90 – 100 % to fixed income securities.

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however, approximately 14 % of our Norwegian plan assets are invested in real estate and other investments not actively traded and are therefore a Level 3 input.

● In the U.S.

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 our equity securities and fixed income securities is approximately 7 % and 5 %, respectively (before plan administrative expenses).

Approximately 51 % of our U.S.

plan assets are invested in funds that are valued at net asset value (“NAV”) and not subject to classification in the fair value hierarchy.

As noted above, the LPC defined benefit pension plan was merged into the existing NL U.S.

defined benefit pension plan effective December 31, 2024.

In preparation for merging the U.S.

pension plans, pension assets held by the LPC defined benefit pension plan were converted to cash resulting in an overall higher allocation to cash at December 31, 2024.

In January 2025, our plan assets were rebalanced to align with the asset target allocation noted above.

● In the U.S., during 2025, we converted all of our U.S.

plan assets to cash in anticipation of the U.S.

plan termination, except for approximately 10 % of our U.S.

plan assets that remain, as of December 31, 2025, 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.

● We also have plan assets in Belgium.

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(In millions)

Non local currency equities

Local currency equities

Local currency fixed income

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Utility and other

Water delivery

Note 13 – Other income, net:

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LandWell received $ .3 million, $ 1.4 million and $ .4 million in 2023, 2024 and 2025, respectively, for past costs incurred.

Insurance recoveries – Kronos recognized aggregate gains of $ 2.7 million and $ 2.5 million in 2022 and 2023, respectively, related to its Hurricane Laura business interruption claim.

Insurance recoveries – Kronos recognized an aggregate gain of $ 2.5 million in 2023 related to its Hurricane Laura business interruption claim.

NL received $ .5 million and $ 1.4 million in insurance recoveries in 2023 and 2024, respectively.

NL insurance recoveries in 2022 were nominal.

NL did no t receive any insurance recoveries in 2025.

Note 14 – Income taxes:

The provision for income taxes and the difference between such provision for income taxes and the amount that would be expected using the U.S.

federal statutory income tax rate are presented below.

Years ended December 31,

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Pre-tax income (loss):

United States

Expected tax expense (benefit) at U.S.

federal statutory

income tax rate of 21 %

Incremental net tax expense (benefit) on earnings and losses of U.S.

tax group companies

Valuation allowance

Global intangible low-tax income, net

state income taxes, net

Adjustment to the reserve for uncertain tax positions, net

Nondeductible expenses

Years ended December 31,

(In millions)

federal statutory tax rate

State income taxes, net of federal income tax effect

Foreign tax effects:

Statutory tax rate difference between Germany and U.S.

Subnational income taxes

Effect of changes in tax laws enacted in the current period

Changes in valuation allowance

Statutory tax rate difference between Belgium and U.S.

Changes in valuation allowance

Statutory tax rate difference between Canada and U.S.

Subnational income taxes

Other foreign jurisdictions

Effect of cross-border tax laws:

Incremental tax expense (benefit) on earnings (losses) of subsidiary

Changes in valuation allowances

Changes in unrecognized tax benefits

Other adjustments:

Incremental tax expense (benefit) on investment in Kronos

Incremental tax benefit on investment in BMI/LandWell

Pension termination

Income tax expense (benefit)

Years ended December 31,

(In millions)

Components of income tax expense (benefit):

Currently payable:

federal and state

Deferred income taxes (benefit):

federal and state

Current income tax expense (benefit)

Deferred income tax expense (benefit)

Income tax expense (benefit)

Comprehensive provision (benefit) for income taxes

allocable to:

Comprehensive provision for income taxes (benefit) allocable to:

Net income (loss)

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Currency translation

Pension plans

The amount shown in the preceding table of our income tax rate reconciliation for non-U.S.

tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our non-U.S.

subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S.

jurisdiction and the U.S.

federal statutory tax rate.

The amount shown on such table for incremental net tax benefit on earnings and losses on non-U.S.

and non-tax group companies includes, as applicable, (i) deferred income taxes (or deferred income tax benefits) associated with the current year earnings of all our Chemicals Segment’s non-U.S.

subsidiaries, (ii) current U.S.

income taxes (or current income tax benefit), including U.S.

personal holding company tax, as applicable, attributable to current-year income (losses) of one of our Chemicals Segment’s non-U.S.

Defined benefit pension plans

Comprehensive income tax expense (benefit)

The amount shown in the preceding table of our income tax rate reconciliation for incremental net tax expense (benefit) on earnings (losses) of subsidiary represents current and deferred U.S.

income taxes (or income tax benefit) attributable to one of our Chemicals Segment’s non-U.S.

subsidiaries, which subsidiary is treated as a dual resident for U.S.

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income tax under the U.S.

dual-resident provisions of the Internal Revenue Code, (iii) deferred income taxes associated with our direct

investment in Kronos and (iv) current and deferred income taxes associated with distributions and earnings from our investment in LandWell and BMI.

dual-resident provisions of the Internal Revenue Code.

The amount shown for incremental tax benefit on investment in BMI/LandWell represents current and deferred income taxes associated with distributions and earnings from our investment in BMI and LandWell.

BMI and LandWell are not members of our consolidated tax group for federal and state tax purposes although we do hold a controlling interest.

Income allocable to non-affiliated equity holders is not taxable to us and results in a net incremental tax benefit.

The components of the net deferred income taxes at December 31, 2024 and 2025 are summarized in the following table.

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Lease assets (liabilities)

Accrued OPEB costs

Accrued pension costs

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At December 31, 2025, our Chemicals Segment has German corporate and trade net operating loss (“NOL”) carryforwards of $ 510.8 million (DTA of $ 57.2 million) and $ 46.3 million (DTA of $ 5.0 million), respectively;

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.

Prior to December 31, 2024, and using all available evidence, we had concluded that no deferred income tax asset valuation allowance was 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) we have utilized a portion of such carryforwards during the most recent three-year period and (iii) we currently expect to utilize the remainder of such carryforwards over the long term.

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

Belgian corporate NOL carryforwards of $ 109.0 million (DTA of $ 27.2 million);

and Canadian corporate and provincial NOL carryforwards of $ 30.9 million (DTA of $ 4.6 million) and $ 33.5 million (DTA of $ 3.8 million), respectively.

We also have U.S.

federal NOL carryforwards of $ 58.1 million (DTA of $ 12.2 million).

With regards to our Belgian DTA, we did not have sufficient positive evidence to overcome the significant negative evidence of having twelve quarters of cumulative losses.

Accordingly, at December 31, 2024, we concluded that we were 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 our Belgian DTA.

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

During 2025, we recognized an aggregate $ 8.6 million non-cash tax expense as the result of a net increase in such deferred income tax asset valuation allowance with respect to the additional losses recognized by our Belgian operations during 2025.

At December 31, 2025, we have concluded no valuation allowance is required to be recognized for our German, U.S., and Canadian DTAs principally because such carryforwards have lengthy carryforward periods (the German and U.S.

carryforwards may be carried forward indefinitely) and we currently expect to utilize the remainder of such carryforwards over the long term.

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

The 2017 Tax Act limited our business interest expense to the sum of our business interest income and 30 % of our 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, 2023 and December 31, 2024, we have recorded deferred tax assets of $ 14.7 million and $ 23.1 million, respectively, for the carryforwards associated with the

nondeductible portion of our interest expense and have concluded we are required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2024 we recognized a non-cash deferred income tax expense of $ 2.5 million with respect to the valuation allowance recorded on the portion of our additional interest expense carryforwards not benefitted by future reversals of existing deferred tax liabilities .

See Note 1 for additional information related to the revision impacting income taxes.

Prior to the enactment of the 2017 Tax Act the undistributed earnings of our Chemicals Segment’s European subsidiaries were deemed to be permanently reinvested (we had not made a similar determination with respect to the undistributed earnings of our Chemicals Segment’s 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, we recognized current income tax expense of $ 74.1 million and elected to pay such tax in annual installments over an eight-year period beginning in 2018.

At December 31, 2024, the balance of our unpaid Transition Tax is $ 18.5 million, with the remaining payment due in 2025.

The payment is recorded as a current payable to affiliate (income taxes payable to Contran) on our Consolidated Balance Sheet at December 31, 2024.

At December 31, 2024 and December 31, 2025, we have recorded deferred tax assets of $ 23.1 million and $ 30.6 million, respectively, for the carryforwards associated with the nondeductible portion of our interest expense and have concluded we are required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2025 we recognized a non-cash deferred income tax expense of $ 8.5 million with respect to the valuation allowance recorded on a portion of our additional interest expense carryforwards.

We recognize deferred income taxes with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock because the exemption under GAAP to avoid such recognition of deferred income taxes is not available to us.

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The maximum amount of such deferred income tax liability we would be required to have recognized (the cap) is $ 153.6 million.

During 2024, we recognized a non-cash deferred income tax expense with respect to our direct investment in Kronos of $ 4.6 million for the increase in the deferred income taxes required to be recognized with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock, to the extent such increase related to our equity in Kronos’ net income during such period.

We recognized a similar non-cash deferred income tax benefit of $ 6.4 million in 2023 and a non-cash deferred income tax expense of $ 1.2 million in 2022.

During 2025, we recognized a non-cash deferred income tax benefit with respect to our direct investment in Kronos of $ 7.5 million for the decrease in the deferred income taxes required to be recognized with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock, to the extent such decrease related to our equity in Kronos’ net income during such period.

We recognized a similar non-cash deferred income tax expense of $ 4.6 million in 2024 and a non-cash deferred income tax benefit of $ 6.4 million in 2023.

A portion of the net change with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock during such periods related to our equity in Kronos’ other comprehensive income (loss) items, and the amounts shown in the table above for income tax expense (benefit) allocated to other comprehensive income (loss) items includes amounts related to our equity in Kronos’ other comprehensive income (loss) items.

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

Pursuant to the repatriation tax provisions of the 2017 Tax Act which imposed a one-time repatriation tax on post-1986 undistributed earnings, we recognized current income tax expense of $ 74.1 million and elected to pay such tax in annual installments over an eight-year period.

We made our final installment payment of $ 18.6 million 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”).

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

We have elected to amortize such gain into taxable income over a ten-year period beginning in 2025, and accordingly, in 2025 we recorded a current tax expense of $ 1.6 million as a result of such amortization.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States.

The OBBBA, among other provisions, provides for bonus depreciation of qualified property, permanently modifies the interest expense deduction to use an adjusted taxable income based on a calculation similar to EBITDA and other computational changes, and makes changes to the international tax framework.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA did not have a material impact on our 2025 consolidated financial statements, and we are in the process of evaluating the impact to future years as additional provisions take effect.

On July 18, 2025, Germany enacted legislation which includes, among other provisions, an additional depreciation allowance for certain fixed assets, improvements to the research and development tax allowance and, starting in 2028, a reduction of the 15 % corporate tax rate by one percentage point in each of five years until the tax rate reaches 10 % in 2032.

We recorded a non-cash deferred tax expense of $ 19.3 million in the third quarter to reduce our net German deferred tax asset as a result of the reduction of the German corporate tax rate.

Tax authorities are examining certain of our U.S.

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At December 31, 2025, all of our uncertain tax benefits are classified as a component of our noncurrent deferred tax asset.

If our uncertain tax position at December 31, 2024 was recognized, a benefit of $ 3.2 million would affect our effective income tax rate.

Excluding any potential adjustments resulting from on-going examinations by tax authorities, we currently estimate that our unrecognized tax benefits will not change materially during the next twelve months.

If our uncertain tax positions at December 31, 2025 were recognized, there would be no net impact to our effective income tax rate.

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

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income tax returns prior to 2022 are generally considered closed to examination by applicable tax authorities.

income tax returns are generally considered closed to examination for years prior to:

2020 for Germany;

2021 for Belgium;

and 2019 for Canada and Norway although certain periods may be extended if currently under examination or for the review of cross-border transactions.

income tax returns are generally considered closed to examination for years prior to 2021 for Germany and Belgium and 2020 for Canada and Norway, although certain periods may be extended if currently under examination or for the review of cross-border transactions.

We accrue interest and penalties on our uncertain tax positions as a component of our provision for income taxes.

The amount of interest and penalties we accrued during 2023, 2024 and 2025 was not material.

The following table shows our net tax payments made in 2023, 2024, and 2025 disaggregated by taxing jurisdiction.

Years ended December 31,

(In millions)

Note 15 – Noncontrolling interest in subsidiaries:

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Under the principles of consolidation we eliminate any gains or losses associated with our common stock to the extent of our proportional ownership interest in each subsidiary.

We recognized a loss of $ 1.6 million in 2022 , a loss of $ 1.7 million in 2023 and a gain of $ 1.9 million in 2024 in our Consolidated Statements of Operations which represents the unrealized gain (loss) in respect of these shares attributable to the noncontrolling interest of Kronos and NL.

We recognized a loss of $ 1.7 million in 2023 , a gain of $ 1.9 million in 2024 and a loss of $ 2.7 million in 2025 in our Consolidated Statements of Operations which represents the unrealized gain (loss) in respect of these shares attributable to the noncontrolling interest of Kronos and NL.

Valhi director stock plan.

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Other comprehensive income:

Unrealized gain (loss) arising during the year

Unrealized gain arising during the year

Balance at end of year

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Simmons and the Family Trust.

Corporations that may be deemed to be controlled by or affiliated with such individuals sometimes engage in (a) intercorporate transactions such as guarantees, management and expense sharing arrangements, shared fee arrangements, joint ventures, partnerships, loans, options, advances of funds on open account, and sales, leases and exchanges of assets, including securities issued by both related and unrelated parties and (b) common investment and acquisition strategies, business combinations, reorganizations, recapitalizations, securities repurchases, and purchases and sales (and other acquisitions and dispositions) of subsidiaries, divisions or other business units, which transactions have involved both related and unrelated parties and have included transactions which resulted in the acquisition by one related party of a publicly-held noncontrolling interest in another related party.

While no transactions of the type described above are planned or proposed with respect to us other than as set forth in these financial statements, we continuously consider, review and evaluate, and understand that Contran

and related entities consider, review and evaluate such transactions.

have included transactions which resulted in the acquisition by one related party of a publicly-held noncontrolling interest in another related party.

Depending upon the business, tax and other objectives then relevant, it is possible that we might be a party to one or more such transactions in the future.

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

Interest expense on Kronos’ loan from Contran was $ 5.1 million in 2024.

Interest expense on Kronos’ loan from Contran was $ 5.1 million each of 2024 and 2025.

See Note 9 for more information on the Kronos term loan with Contran and the Valhi credit facility with Contran.

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Contran and certain of its subsidiaries participate in a combined information technology data services program that Contran provides for primary data processing and failover.

The program apportions its costs among the participating

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

The program apportions its costs among the participating companies.

The aggregate amount Kronos paid Contran for such services was $ .4 million in each of 2023 and 2024 and $ .3 million in 2025.

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

Kronos paid Contran $ .5 million in 2022, $ .6 million in 2023 and $ .7 million in 2024 for such rent and related ancillary services.

Kronos paid Contran $ .6 million in 2023 and $ .7 million in each of 2024 and 2025 for such rent and related ancillary services.

We expect these relationships with Contran will continue in 2026.

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Current receivables from affiliates:

Contran - income taxes

Contran - trade items

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Contran - trade items

Noncurrent payable to affiliates:

Contran - income taxes

Payables to affiliate included in long-term debt:

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Kronos - Contran Term Loan

Amounts payable to LPC were generally for the purchase of TiO 2 , while amounts receivable from LPC were generally from the sale of TiO 2 feedstock.

Purchases of TiO 2 from LPC totaled $ 225.6 million in 2022 and $ 231.7 million in 2023.

Sales of feedstock to LPC totaled $ 106.9 million in 2022 and $ 135.1 million in 2023.

See Note 3 for the details on the LPC acquisition.

Note 18 – Commitments and contingencies:

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

NL, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (“LIA”), which discontinued business operations in 2002, have previously been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.

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.

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1-00-CV-788657) on July 24, 2019, an order approving a global settlement agreement entered into among all of the plaintiffs and the three defendants remaining in the case (the Sherwin Williams Company, ConAgra Grocery Products and NL) was entered by the court and the case was dismissed with prejudice.

The global settlement agreement provides that an aggregate $ 305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between NL and its co-defendants in respect to the case.

In the agreement, NL expressly denies any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against NL.

The global settlement agreement provided that an aggregate $ 305 million would be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between NL and its co-defendants in respect to the case.

In the agreement, NL expressly denied any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against NL.

The settlement agreement fully concludes this matter.

Under the terms of the global settlement agreement, each defendant must pay an aggregate $ 101.7 million to the plaintiffs as follows:

Under the terms of the global settlement agreement, each defendant paid an aggregate $ 101.7 million to the plaintiffs as follows:

$ 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).

NL’s sixth installment due in September 2025 will be made with funds already on deposit at the court, which is included in current restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by NL (and any amounts on deposit in excess of the final payment would be returned to NL).

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

Following NL’s fifth $ 12.0 million installment made in September 2024, these funds became available for use and were reclassified as cash equivalents on our Consolidated Balance Sheet.

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.

NL made the initial $ 25.0 million payment in September 2019 and five annual installment payments of $ 12.0 million beginning in September 2020 and each September thereafter through 2024.

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

NL’s sixth installment, which was paid in October 2025, was funded with amounts that were already on deposit at the court and previously included in current restricted cash on our Consolidated Balance Sheets, as those amounts, together with all accrued interest through the date of payment, had been committed to the settlement.

Per the terms of the settlement, any amounts on deposit in excess of the final payment were to be returned to NL, and in October 2025 NL received accrued interest of approximately $ 1.6 million from such restricted cash.

For financial reporting purposes, NL used a discount rate of 1.9 % per annum to discount the aggregate $ 101.7 million settlement to the estimated net present value of $ 96.3 million.

NL recognized an aggregate accretion expense of $ .7 million, $ .5 million and $ .2 million in 2023, 2024 and 2025, respectively.

New cases may continue to be filed against us.

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Our policy is to maintain compliance with applicable environmental laws and regulations at all of our plants and to strive to improve environmental performance and overall sustainability.

Periodically we produce our Kronos Environmental Social Governance Report, which highlights Kronos’ focus on sustainability of its manufacturing operations, as well as its environmental, social and governance strategy.

Periodically we voluntarily publish on our Kronos website an Environmental Social Governance (“ESG”) Report, which describes Kronos’ policies and programs in the area of ESG, including environmental compliance.

From time to time, our businesses may be subject to environmental regulatory enforcement under U.S.

statutes, the resolution of which typically involves the establishment or enhancement of compliance programs.

It is possible that future developments, such as stricter requirements of environmental laws and enforcement policies, could adversely affect our production, handling, use, storage, transportation, sale or disposal of such substances.

It is possible that future developments, such as stricter requirements of environmental laws and enforcement policies, could adversely affect our production, handling, use,

storage, transportation, sale or disposal of such substances.

We believe all of our facilities are in substantial compliance with applicable environmental laws.

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● number of years between former operations and notice of claims and lack of information and documents about the former operations.

In addition, the imposition of more stringent standards or requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of costs among PRPs, solvency of other PRPs, the results of future testing and analysis undertaken with respect to certain sites or a determination that we are potentially

responsible for the release of hazardous substances at other sites, could cause our expenditures to exceed our current estimates.

Actual costs could exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and costs may be incurred for sites where no estimates presently can be made.

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At December 31, 2025, NL had accrued approximately $ 13 million related to approximately 27 sites associated with remediation and related matters it believes are at the present time and/or in their current phase reasonably estimable.

Excluding the $ 56.1 million environmental remediation settlement payment made in the first quarter of 2025 (as discussed below), the upper end of the range of reasonably possible costs to NL for remediation and related matters for which NL believes it is possible to estimate costs is approximately $ 38 million, including amounts currently accrued.

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 upper end of the range of reasonably possible costs to NL for remediation and related matters for which NL believes it is possible to estimate costs is approximately $ 26 million, including amounts currently accrued.

These accruals have not been discounted to present value.

In February 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 required 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.

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(United States District Court for the District of New Jersey, Civil Action No.

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.

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.

The satisfaction of NL’s obligations under the consent decree fully concludes this matter.

Under the terms of the consent decree, in the first quarter of 2025 NL paid $ 56.1 million, plus $ .5 million interest, toward the global settlement and received approximately $ 9.6 million from the other private companies participating in the settlement.

We recognized aggregate income of approximately $ 31.4 million in 2024 related to the adjustment of NL’s environmental accrual related to this matter and the recording of a $ 9.6 million receivable for the funds received in the first quarter of 2025 from the other private companies participating in the settlement.

We recognized aggregate income of approximately $ 31.4 million in 2024 related to the adjustment of NL’s environmental accrual related to this matter and recorded a $ 9.6 million receivable for the funds which NL received in the first quarter of 2025 from the other private companies participating in the settlement.

NL believes that it is not reasonably possible to estimate the range of costs for certain sites.

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For these sites, generally the investigation is in the early stages, and NL is unable to determine whether or not NL actually had any association with the site, the nature of its responsibility, if any, for the contamination at the site, if any, and the extent of contamination at and cost to remediate the site.

The timing and availability of information on these sites is dependent on events outside of NL’s control, such as when the party alleging liability provides information to NL.

The timing and availability of information on these sites is dependent

on events outside of NL’s control, such as when the party alleging liability provides information to NL.

At certain of these previously inactive sites, NL has received general and special notices of liability from the EPA and/or state agencies alleging that NL, sometimes with other PRPs, are liable for past and future costs of remediating environmental contamination allegedly caused by former operations.

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

Recoveries in 2022 were nominal.

NL did no t receive any insurance recoveries in 2025.

Other litigation

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Other matters

Concentrations of credit risk – Sales of TiO 2 accounted for approximately 92 % of our Chemicals Segment’s sales in 2022 and 90 % in both 2023 and 2024.

Concentrations of credit risk – Sales of TiO 2 accounted for approximately 90 % of our Chemicals Segment’s sales in 2023, 2024 and 2025.

The remaining sales result from the sale of ilmenite ore (a raw material used in the sulfate pigment production process), and the manufacture and sale of iron-based water treatment chemicals and certain titanium chemical products (derived from co-products of the TiO 2 production processes).

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Our Chemicals Segment sells TiO 2 to approximately 3,000 customers, with the top ten customers approximating 35 % of our Chemicals Segment’s net sales in 2023, 39 % in 2024 and 35 % in 2025.

One customer accounted for approximately 10 % of our Chemicals Segment’s net sales in 2022, 12 % in 2023 and 10 % in 2024.

One customer accounted for approximately 12 % of our Chemicals Segment’s net sales in 2023 and 10 % of our Chemicals Segment’s net sales in 2024.

Our Chemicals Segment did not have sales to a single customer

comprising 10 % or more of its net sales in 2025.

The table below shows the approximate percentage of our Chemicals Segment’s TiO 2 sales by volume for its significant markets, Europe and North America, for the last three years.

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Our Component Products Segment’s products are sold primarily in North America to original equipment manufacturers.

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

One customer of the security products reporting unit accounted for approximately 14 % of the Component Products Segment’s total sales in 2022, 24 % in 2023 (of which 11 % related to a non-recurring pilot project) and 21 % in 2024.

One customer of the marine components reporting unit accounted for 12 % of the Component Products Segment’s total sales in 2022.

Our Real Estate Management and Development Segment’s revenues are land sales income and water (through September 2022) and electric delivery fees (prior to December 2023).

During 2022, we had sales to two customers that each exceeded 10 % of our Real Estate Management and Development Segment’s net sales, both related to land sales.

During 2023, we had sales to five customers that each exceeded 10 % of our Real Estate Management and Development Segment’s net sales all related to land sales.

During 2024, we had sales to three customers that each exceeded 10 % of our Real Estate Management and Development Segment’s net sales all related to land sales.

Long-term contracts – Our Chemicals Segment has long-term supply contracts that provide for certain of its TiO 2 feedstock requirements through 2026.

The agreements require Kronos to purchase certain minimum quantities of feedstock with minimum purchase commitments aggregating approximately $ 542 million over the life of the contracts in years subsequent to December 31, 2024 (including approximately $ 484 million committed to be purchased in 2025).

In addition, our Chemicals Segment has other long-term supply and service contracts that provide for various raw materials and services.

These agreements require Kronos to purchase certain minimum quantities or services with minimum purchase commitments aggregating approximately $ 67 million at December 31, 2024 (including $ 40 million committed to be purchased in 2025).

Note 19 – Financial instruments:

The ten largest customers related to our Component Product’s Segment accounted for approximately 52 % of our Component Products Segment’s sales in 2023, 47 % in 2024 and 52 % in 2025.

One customer of the security products reporting unit accounted for approximately 24 % in 2023 (of which 11 % related to a non-recurring pilot project), 21 % in 2024 and 26 % in 2025.

Our Real Estate Management and Development Segment’s revenue are land sales income and electric delivery fees (prior to December 2023).

During 2023, we recognized revenue from five customers that each exceeded 10 % of our Real Estate Management and Development Segment’s net sales all related to land sales.

During each of 2024 and 2025, we recognized revenue from three customers that each exceeded 10 % of our Real Estate Management and Development Segment’s net sales all related to land sales.

Long-term contracts – Our Chemicals Segment is a party to various agreements that contractually and unconditionally commit us to pay certain amounts in the future.

Under these agreements, our Chemicals Segment has obligations of approximately $ 133 million at December 31, 2025 (including approximately $ 108 million committed to be purchased in 2026) which consist of open purchase orders and contractual obligations, primarily commitments to purchase raw materials and services.

Note 19 – Fair value measurements and financial instruments:

See Note 6 for information on how we determine the fair value of our marketable securities.

See Note 3 for information on how we determine fair value of our earn-out liability related to the LPC acquisition.

The fair value measurement is based on significant inputs not observable in the market and therefore represents a Level 3 measurement as defined in ASC 820.

Accretion of the earn-out liability was not material in 2024.

There has been no other activity subsequent to Acquisition Date impacting the fair value of the acquisition earn-out liability.

The fair value of the acquisition earn-out liability is included in other noncurrent liabilities on the Consolidated Balance Sheet.

See Note 3 for additional details related to the acquisition earn-out liability.

Currency forward contract - In order to manage currency exchange rate risk associated with our € 75 million 3.75 % Senior Secured Notes that matured in September 2025, during the first quarter of 2025 Kronos entered into a euro currency forward contract to purchase € 25 million at an exchange rate of € 1.05 per U.S.

The contract was settled in August 2025 resulting in cash proceeds of $ 2.8 million and a currency transaction gain of $ 2.8 million in 2025 included in our Consolidated Statements of Operations.

At December 31, 2025, Kronos had no currency forward contracts outstanding.

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2024 and 2025:

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LandWell bank note payable

At December 31, 2024, the estimated market price of Kronos’ 3.75 % Senior Secured Notes due 2025 was € 996 per € 1,000 principal amount, and the estimated market price of Kronos’ 9.50 % Senior Secured Notes due 2029 was € 1,101 per € 1,000 principal amount.

The fair values of Kronos’ 3.75 % Senior Secured Notes due 2025 and Kronos’ 9.50 % Senior Secured Notes due 2029 were based on quoted market prices;

however, these quoted market prices represented Level 2 inputs because the markets in which the 3.75 % Senior Secured Notes due 2025 and the 9.50 % Senior Secured Notes due 2029 trade were not active.

At December 31, 2025, the estimated market price of Kronos’ 9.50 % Senior Secured Notes due 2029 was € 937 per € 1,000 principal amount.

The fair value of Kronos’ 9.50 % Senior Secured Notes due 2029 was based on quoted market prices;

however, the quoted market price represented Level 2 inputs because the market in which the 9.50 % Senior Secured Notes due 2029 trade was not active.

Due to the variable interest rate, the carrying amount of Kronos’ revolving credit facility is deemed to approximate fair value.

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Note 20 – Restructuring costs:

In response to the extended period of reduced demand in 2023, Kronos took measures to reduce its operating costs and improve its long-term cost structure such as the implementation of certain voluntary and involuntary workforce reductions during the third quarter of 2023 that primarily impacted its European operations.

A substantial portion of Kronos’ workforce reductions were accomplished through voluntary programs, for which eligible workforce reduction costs are recognized at the time both the employee and employer are irrevocably committed to the terms of the separation.

These workforce reductions impacted approximately 100 employees.

Kronos recognized a total of approximately $ 6 million in charges primarily in the fourth quarter of 2023 related to workforce reductions it implement e d during the sec ond h a l f o f 2023 .

In the third quarter of 2024, Kronos closed its sulfate process line at its facility in Varennes, Canada.

As a result of the sulfate process line closure, Kronos recognized charges to cost of sales in 2024 of approximately $ 2 million related to workforce reductions for employees impacted and approximately $ 14 million in non-cash charges primarily related to accelerated depreciation.

All accrued severance costs associated with this restructuring were paid in 2025.

In the fourth quarter of 2025, Kronos initiated a restructuring plan designed to improve its long-term cost structure.

A portion of the expected cost savings is planned to be achieved through workforce reductions.

During the fourth quarter of 2025, Kronos implemented company-wide voluntary and involuntary workforce reductions impacting approximately 226 positions.

A substantial portion of these workforce reductions was accomplished through involuntary programs, for which eligible costs are recognized when management approves the separation program, the affected employees are properly notified and the costs are estimable.

A portion of the reductions was also accomplished through voluntary programs, for which eligible workforce reduction costs are recognized at the time both the employee and employer are irrevocably committed to the terms of the separation.

To the extent a statutorily mandated notice period applies and the affected employee is not required to provide services to us during the notice period, severance and all wages earned during the notice period are accrued at the time of the agreed upon separation.

During the fourth quarter of 2025, Kronos recognized an aggregate $ 10.3 million charge related to these workforce reductions, of which $ 6.4 million is classified in selling, general and administrative expense and $ 3.9 million is classified in cost of sales .

Accrued severance costs remaining as of December 31, 2025 are expected to be paid in 2026 and are included in accounts payable and accrued liabilities – other on our Consolidated Balance Sheet.

See Note 10 to our Consolidated Financial Statements.

For workforce reductions implemented through December 31, 2025, Kronos does not expect to accrue any further material amounts associated with the affected individuals who continue providing service to Kronos beyond December 31, 2025.

A summary of the activity in Kronos’ accrued restructuring costs for 2024 and 2025 is shown in the table below:

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Currency translation adjustments, net

Balance at the end of the year

Amounts recognized in the balance sheet:

Current liability

Noncurrent liability

Current balance at the end of the year

Note 21 – Recent accounting pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (“Topic 280”):

Improvements to Reportable Segment Disclosures .

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 are required to disclose the title and position of the 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):

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

Improvements to Income Tax Disclosures .

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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.

The ASU may be applied prospectively;

however, entities have the option to apply it retrospectively.

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

We adopted the ASU during the year ended December 31, 2025 on a retrospective basis.

Pending Adoption

In November 2024, the FASB issued ASU No.

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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