VALHI INC /DE/ 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures – We maintain disclosure controls and procedures which, as defined in Exchange Act Rule 13a-15(e), means controls and other procedures that are designed to ensure that information required to be disclosed in the reports we file or submit to the SEC under the Securities Exchange Act of 1934, as amended (the “Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports we file or submit to the SEC under the Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions to be made regarding required disclosure. Each of Michael S. Simmons, our Vice Chairman of the Board, President and Chief Executive Officer, and Amy Allbach Samford, our Executive Vice President and Chief Financial Officer, have evaluated the design and effectiveness of our disclosure controls and procedures as of December 31, 2022. Based upon their evaluation, these executive officers have concluded that our disclosure controls and procedures were effective as of the date of such evaluation. Management’s Report on Internal Control over Financial Reporting – Our management is responsible for establishing and maintaining adequate internal control over financial reporting which, as defined by Exchange Act Rule 13a-15(f) means a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and ● Provide reasonable assurance regarding prevention or timely detection of an unauthorized acquisition, use or disposition of assets that could have a material effect on our Consolidated Financial Statements. Our evaluation of the effectiveness of internal control over financial reporting is based upon the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (commonly referred to as the “2013 COSO” framework). Based on our evaluation under that framework, we have concluded that our internal control over financial reporting was effective as of December 31, 2022. PricewaterhouseCoopers LLP, the independent registered public accounting firm that has audited our consolidated financial statements included in this Annual Report, has audited the effectiveness of our internal control over - 65 - ​ financial reporting as of December 31, 2022, as stated in their report, which is included in this Annual Report on Form 10-K. Other – As permitted by the SEC, our assessment of internal control over financial reporting excludes (i) internal control over financial reporting of equity method investees and (ii) internal control over the preparation of any financial statement schedules which would be required by Article 12 of Regulation S-X. However, our assessment of internal control over financial reporting with respect to equity method investees did include controls over the recording of amounts related to our investments that are recorded in the consolidated financial statements, including controls over the selection of accounting methods for our investments, the recognition of equity method earnings and losses and the determination, valuation and recording of our investment account balances. Changes in Internal Control over Financial Reporting – There has been no change to our internal control over financial reporting during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Certifications – Our chief executive officer is required to annually file a certification with the New York Stock Exchange, or NYSE, certifying our compliance with the corporate governance listing standards of the NYSE. During 2022, our chief executive officer filed such annual certification with the NYSE. The 2022 certification was unqualified. Our chief executive officer and chief financial officer are also required to, among other things, file quarterly certifications with the SEC regarding the quality of our public disclosures, as required by Section 302 of the Sarbanes-Oxley Act of 2002. The certifications for the quarter ended December 31, 2022 have been filed as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K. ITEM 9B. OTHER INFORMATION Not applicable. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. ​ ​ - 66 - ​ PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item is incorporated by reference to our 2023 definitive proxy statement we will file with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this report (the “Valhi Proxy Statement”). ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference to our 2023 proxy statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference to our 2023 proxy statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTORS INDEPENDENCE The information required by this Item is incorporated by reference to our 2023 proxy statement. See also Note 17 to our Consolidated Financial Statements. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is incorporated by reference to our 2023 proxy statement. PART IV ITEM 15. EXHIBITS (a) and (c) Financial Statements The Registrant Our Consolidated Financial Statements listed on the accompanying Index of Financial Statements (see page F-1) are filed as part of this Annual Report. 50%-or-less owned persons We are not required to provide any consolidated financial statements pursuant to Rule 3-09 of Regulation S-X. (b) Exhibits Included as exhibits are the items listed in the Exhibit Index. We have retained a signed original of any of these exhibits that contain signatures, and we will provide such exhibit to the Commission or its staff upon request. We will furnish a copy of any of the exhibits listed below upon request and payment of $4.00 per exhibit to cover our costs of furnishing the exhibits. Such requests should be directed to the attention of our Corporate Secretary at our corporate offices located at 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240. Pursuant to Item 601(b)(4)(iii) of Regulation S-K, we will furnish to the Commission upon request any instrument defining the rights of holders of long-term debt issues and other agreements related to indebtedness which do not exceed 10% of our consolidated total assets as of December 31, 2022. - 67 - ​ ​ ​ ​ ​ Item No. Exhibit Index ​ ​ ​ ​ 2.1 Purchase Agreement by and between JFL-WCS Partners, LLC, as Purchaser, and Andrews County Holdings, Inc., as Seller, dated as of December 19, 2017 – incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K (File No. 1-5467) dated January 26, 2018 and filed on January 26, 2018. ​ ​ 2.2 Amendment to Purchase Agreement by and between JFL-WCS Partners, LLC, as Purchaser, and Andrews County Holdings, Inc., as Seller, dated as of January 19, 2018 – incorporated by reference to Exhibit 2.2 to our Current Report on Form 8-K (File No. 1-5467) dated January 26, 2018 and filed on January 26, 2018. ​ ​ 3.1 Restated Third Amended and Restated Certificate of Incorporation of Valhi, Inc., as amended by Certificate of Amendment filed on May 29, 2020 (effective June 1, 2020) and by Certificate of Elimination of the 6% Series A Preferred Stock filed on August 10, 2020 – incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q (File No. 1-5467) for the quarter ended September 30, 2020. ​ ​ ​ 3.2 Amended and Restated By-Laws of Valhi, Inc. – incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K (File No. 1-5467) dated March 4, 2021. ​ ​ ​ 4.1 ​ Description of Capital Stock – incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K dated May 6, 2021 (file No. 1-5467) and filed on May 6, 2021. ​ ​ ​ 10.1 Intercorporate Services Agreement between Valhi, Inc. 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. ​ ​ ​ 10.2 Intercorporate Services Agreement between Contran Corporation and NL Industries, Inc. effective as of January 1, 2004 – incorporated by reference to Exhibit 10.1 to NL’s Quarterly Report on Form 10-Q (File No. 1-640) for the quarter ended March 31, 2004. ​ ​ ​ 10.3 Intercorporate Services Agreement between Contran Corporation and CompX International Inc. effective January 1, 2004 – incorporated by reference to Exhibit 10.2 to CompX’s Annual Report on Form 10-K (File No. 1-13905) for the year ended December 31, 2003. ​ ​ ​ 10.4 Intercorporate Services Agreement between Contran Corporation and Kronos Worldwide, Inc. effective January 1, 2004 – incorporated by reference to Exhibit No. 10.1 to Kronos’ Quarterly Report on Form 10-Q (File No. 1-31763) for the quarter ended March 31, 2004. ​ ​ ​ 10.5 Tax Agreement between Valhi, Inc. and Contran Corporation dated January 1, 2020 incorporated by reference to Exhibit 10.5 to our Annual Report on Form 10-K (file No. 1-5467) for the year ended December 31, 2019. ​ ​ ​ 10.6* Valhi, Inc. 2021 Non-employee Director Stock Plan – incorporated by reference to Exhibit 4.4 of the Registration statement on Form S-8 of the Registrant (File No. 333-256546). Filed on May 27, 2021. ​ ​ ​ 10.7* Kronos Worldwide, Inc. 2012 Director Stock Plan – incorporated by reference to Exhibit 4.4 of the Registration statement on Form S-8 of the Registrant (File No. 333-113425). Filed on May 31, 2012. ​ ​ ​ 10.8* CompX International Inc. 2012 Director Stock Plan – incorporated by reference to Exhibit 4.4 of the Registration statement on Form S-8 of the Registrant (File No. 333-47539). Filed on May 31, 2012. ​ ​ ​ 10.9* NL Industries, Inc. 2012 Director Stock Plan – incorporated by reference to Exhibit 4.4 of the Registration statement on Form S-8 of the Registrant (File No. 001-00640). Filed on May 31, 2012. ​ ​ ​ - 68 - ​ ​ ​ ​ Item No. Exhibit Index ​ ​ ​ 10.10 Second Amended and Restated Agreement Regarding Shared Insurance among CompX International Inc., Contran Corporation, Kronos Worldwide, Inc., NL Industries, Inc. and Valhi, Inc. dated January 25, 2019 – incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K for the year ended December 31, 2018 (file No. 1-5467) filed on March 11, 2019. ​ ​ ​ 10.11 Formation Agreement dated as of October 18, 1993 among Tioxide Americas Inc., Kronos Louisiana, Inc. and Louisiana Pigment Company, L.P. – incorporated by reference to Exhibit 10.2 of NL’s Quarterly Report on Form 10-Q (File No. 1-640) for the quarter ended September 30, 1993. (P) ​ ​ ​ ​ 10.12 Joint Venture Agreement dated as of October 18, 1993 between Tioxide Americas Inc. and Kronos Louisiana, Inc. – incorporated by reference to Exhibit 10.3 of NL’s Quarterly Report on Form 10-Q (File No. 1-640) for the quarter ended September 30, 1993. (P) ​ ​ ​ 10.13 Kronos Offtake Agreement dated as of October 18, 1993 by and between Kronos Louisiana, Inc. and Louisiana Pigment Company, L.P. – incorporated by reference to Exhibit 10.4 of NL’s Quarterly Report on Form 10-Q (File No. 1-640) for the quarter ended September 30, 1993. (P) ​ ​ ​ 10.14 Amendment No. 1 to Kronos Offtake Agreement dated as of December 20, 1995 between Kronos Louisiana, Inc. and Louisiana Pigment Company, L.P. – incorporated by reference to Exhibit 10.22 of NL’s Annual Report on Form 10-K (File No. 1-640) for the year ended December 31, 1995. (P) ​ ​ ​ 10.15 Allocation Agreement dated as of October 18, 1993 between Tioxide Americas Inc., ICI American Holdings, Inc., Kronos Worldwide, Inc. (f/k/a Kronos, Inc.) and Kronos Louisiana, Inc. – incorporated by reference to Exhibit 10.10 to NL’s Quarterly Report on Form 10-Q (File No. 1-640) for the quarter ended September 30, 1993. (P) ​ ​ ​ 10.16 Lease Contract dated June 21, 1952, between Farbenfabrieken Bayer Aktiengesellschaft and Titangesellschaft mit beschrankter Haftung (German language version and English translation thereof) - incorporated by reference to Exhibit 10.14 of NL’s Annual Report on Form 10-K (File No. 1-640) for the year ended December 31, 1985. (P) ​ ​ ​ 10.17 ​ 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. effective January 1, 2016 – incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K of Kronos Worldwide, Inc. (File No. 001-31763) for the year ended December 31, 2015. ​ ​ ​ 10.18 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 (File No. 001-31763) dated September 13, 2017 and filed by Kronos Worldwide, Inc. on September 13, 2017. ​ ​ ​ 10.19 ​ Pledge Agreement, dated as of September 13, 2017, among Kronos International, Inc. the guarantors named therein and Deutsche Bank Trust Company Americas, as collateral agent – incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-31763) dated September 13, 2017 and filed by Kronos Worldwide, Inc. on September 13, 2017. ​ ​ ​ 10.20** ​ Unsecured Revolving Demand Promissory Note dated December 31, 2022 in the principal amount of $175.0 million executed by Valhi, Inc. and payable to the order of Contran Corporation. ​ ​ ​ 10.21 ​ Collateral Agreement dated March 12, 2013 between Valhi, Inc. 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 (file No. 1-5467) filed on March 11, 2019. - 69 - ​ ​ ​ ​ Item No. Exhibit Index ​ ​ ​ 10.22 ​ 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’ Quarterly Report on Form 10-Q (File No. 1-31763) for the quarter ended March 31, 2021. ​ ​ ​ 10.23 ​ Guaranty and Security Agreement dated as of April 20, 2021, by and among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos International, Inc. and Wells Fargo Bank, National Association as administrative agent and lender – incorporated by reference to Exhibit 10.2 of Kronos’ Quarterly Report on Form 10-Q (File No. 1-31763) for the quarter ended March 31, 2021. ​ ​ ​ 21.1** Subsidiaries of Valhi, Inc. ​ ​ ​ 23.1** Consent of PricewaterhouseCoopers LLP with respect to Valhi’s Consolidated Financial Statements ​ ​ ​ 31.1** Certification ​ ​ ​ 31.2** Certification ​ ​ ​ 32.1** Certification ​ ​ ​ 101.INS ** Inline XBRL Instance – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document ​ ​ ​ 101.SCH ** Inline XBRL Taxonomy Extension Schema ​ ​ ​ 101.CAL ** Inline XBRL Taxonomy Extension Calculation Linkbase ​ ​ ​ 101.DEF ** Inline XBRL Taxonomy Extension Definition Linkbase ​ ​ ​ 101.LAB ** Inline XBRL Taxonomy Extension Label Linkbase ​ ​ ​ 101.PRE ** ​ Inline XBRL Taxonomy Extension Presentation Linkbase ​ 104 ​ Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) ​ * Management contract, compensatory plan or agreement. ** Filed herewith. (P) Paper exhibits. ​ - 70 - ​ SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ ​ ​ ​ VALHI, INC. ​ ​ ​ (Registrant) ​ ​ ​ ​ ​ ​ By: /s/ Michael S. Simmons ​ ​ Michael S. Simmons, March 9, 2023 ​ ​ ​ (Vice Chairman of the Board, President and Chief Executive Officer) ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: ​ ​ ​ ​ /s/ Loretta J. Feehan /s/ Michael S. Simmons Loretta J. Feehan, March 9, 2023 (Chair of the Board (non-executive)) Michael S. Simmons, March 9, 2023 (Vice Chairman of the Board, President and Chief Executive Officer) ​ ​ ​ /s/ Thomas E. Barry /s/ Amy Allbach Samford Thomas E. Barry, March 9, 2023 (Director) Amy Allbach Samford, March 9, 2023 (Executive Vice President and Chief Financial Officer) ​ ​ ​ /s/ Terri L. Herrington /s/ Patty S. Brinda Terri L. Herrington, March 9, 2023 (Director) Patty S. Brinda, March 9, 2023 (Vice President and Controller) ​ ​ ​ /s/ Kevin B. Kramer ​ ​ Kevin B. Kramer, March 9, 2023 (Director) ​ ​ ​ ​ ​ /s/ W. Hayden McIlroy ​ ​ W. Hayden McIlroy, March 9, 2023 (Director) ​ ​ ​ ​ /s/ Mary A.Tidlund ​ ​ Mary A. Tidlund, March 9, 2023 (Director) ​ ​ ​ ​ ​ ​ - 71 - ​ VALHI, INC. Annual Report on Form 10-K Items 8, 15(a) and 15(c) Index of Financial Statements ​ ​ ​ ​ ​ ​ Page Financial Statements ​ ​ ​ ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) ​ F-2 ​ ​ ​ Consolidated Balance Sheets – December 31, 2021 and 2022 ​ F-5 ​ ​ ​ Consolidated Statements of Income – Years ended December 31, 2020, 2021 and 2022 ​ F-7 ​ ​ ​ Consolidated Statements of Comprehensive Income – Years ended December 31, 2020, 2021 and 2022 ​ F-8 ​ ​ ​ Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2020, 2021 and 2022 ​ F-9 ​ ​ ​ Consolidated Statements of Cash Flows – Years ended December 31, 2020, 2021 and 2022 ​ F-10 ​ ​ ​ Notes to Consolidated Financial Statements ​ F-12 ​ All financial statement schedules have been omitted either because they are not applicable or required, or the information that would be required to be included is disclosed in the Notes to the Consolidated Financial Statements. ​ F- 1 ​ ​ Report of Independent Registered Public Accounting Firm ​ To the Board of Directors and Stockholders of Valhi, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Valhi, Inc. and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the F- 2 ​ transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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 $33.8 million and recorded noncurrent deferred tax asset and deferred tax liability amounts of $40.5 million and $63.5 million, respectively, for the year ended December 31, 2022. 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. 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) F- 3 ​ 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, 2022, management accrued approximately $92 million related to approximately 33 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. 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 costs and estimates associated with damages for property damage and/or damages for injury to natural resources), including controls over determining whether estimated future expenditures are probable and reasonably estimable, as well as the related financial statement disclosures. These procedures 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. /s/ PricewaterhouseCoopers LLP Dallas, Texas March 9, 2023 We have served as the Company’s auditor since 1987. ​ ​ F- 4 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions) ​ ​ ​ ​ ​ ​ ​ ASSETS ​ December 31, ​ 2021 2022 Current assets: ​ ​ Cash and cash equivalents ​ $ 698.4 ​ $ 478.5 Restricted cash equivalents ​ 52.6 ​ 46.3 Marketable securities ​ 2.6 ​ 75.1 Accounts and other receivables, net ​ 380.7 ​ 271.0 Refundable income taxes ​ 4.5 ​ 8.0 Receivables from affiliates ​ 18.5 ​ 2.9 Inventories, net ​ 458.7 ​ 640.8 Prepaid expenses and other ​ 57.2 ​ 66.9 Total current assets ​ 1,673.2 ​ 1,589.5 ​ ​ ​ ​ ​ ​ ​ Other assets: ​ ​ Marketable securities ​ 3.3 ​ 1.2 Investment in TiO 2 manufacturing joint venture ​ 101.9 ​ 112.9 Goodwill ​ 379.7 ​ 379.7 Deferred income taxes ​ 86.8 ​ 40.5 Pension asset ​ 9.0 ​ 9.3 Other assets ​ 187.7 ​ 178.8 Total other assets ​ 768.4 ​ 722.4 ​ ​ ​ ​ ​ ​ ​ Property and equipment: ​ ​ Land ​ 50.3 ​ 47.8 Buildings ​ 252.6 ​ 244.1 Equipment ​ 1,194.6 ​ 1,152.3 Mining properties ​ 26.3 ​ 13.5 Construction in progress ​ 82.9 ​ 77.2 ​ ​ 1,606.7 ​ 1,534.9 Less accumulated depreciation and amortization ​ 1,043.1 ​ 1,011.1 Net property and equipment ​ 563.6 ​ 523.8 Total assets ​ $ 3,005.2 ​ $ 2,835.7 ​ ​ F- 5 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) (In millions, except share data) ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ December 31, ​ 2021 2022 Current liabilities: ​ ​ Current maturities of long-term debt ​ $ 3.1 ​ $ 1.8 Accounts payable ​ 152.7 ​ 199.4 Accrued liabilities ​ 264.8 ​ 243.6 Accrued litigation settlement ​ 11.8 ​ 11.8 Payables to affiliates ​ 18.8 ​ 22.9 Income taxes ​ 12.3 ​ 13.3 Total current liabilities ​ 463.5 ​ 492.8 ​ ​ ​ ​ ​ ​ ​ Noncurrent liabilities: ​ ​ Long-term debt ​ 649.9 ​ 557.7 Deferred income taxes ​ 46.2 ​ 63.5 Payable to affiliate - income taxes ​ 44.5 ​ 33.4 Long-term litigation settlement ​ 38.5 ​ 27.4 Accrued pension costs ​ 291.1 ​ 131.6 Accrued environmental remediation and related costs ​ 94.1 ​ 93.5 Other liabilities ​ 219.0 ​ 129.0 Total noncurrent liabilities ​ 1,383.3 ​ 1,036.1 ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ Preferred stock, $ .01 par value; 500,000 shares authorized and nil shares issued ​ — ​ — Common stock, $ .01 par value; 50.0 million shares authorized; 29.6 million shares issued and outstanding ​ .3 ​ .3 Additional paid-in capital ​ 669.0 ​ 669.5 Retained earnings ​ 401.1 ​ 482.3 Accumulated other comprehensive loss ​ ( 191.3 ) ​ ( 143.9 ) Treasury stock, at cost - 1.1 million shares ​ ( 49.6 ) ​ ( 49.6 ) Total Valhi stockholders' equity ​ 829.5 ​ 958.6 Noncontrolling interest in subsidiaries ​ 328.9 ​ 348.2 Total equity ​ 1,158.4 ​ 1,306.8 Total liabilities and equity ​ $ 3,005.2 ​ $ 2,835.7 ​ Commitments and contingencies (Notes 9, 14, 17 and 18) See accompanying Notes to Consolidated Financial Statements. ​ F- 6 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 Revenues and other income: ​ ​ ​ Net sales ​ $ 1,849.7 ​ $ 2,296.4 ​ $ 2,222.5 Other income, net ​ 28.4 ​ 39.0 ​ 43.7 Total revenues and other income ​ 1,878.1 ​ 2,335.4 ​ 2,266.2 Cost and expenses: ​ ​ ​ Cost of sales ​ 1,437.6 ​ 1,716.2 ​ 1,732.1 Selling, general and administrative ​ 283.6 ​ 311.9 ​ 304.0 Fixed asset impairment ​ — ​ — ​ 16.4 Loss on deconsolidation of Basic Water Company ("BWC") ​ ​ — ​ ​ — ​ ​ 2.0 Other components of net periodic pension and OPEB expense ​ 20.1 ​ 17.0 ​ 13.9 Interest ​ 36.2 ​ 32.5 ​ 27.9 Total costs and expenses ​ 1,777.5 ​ 2,077.6 ​ 2,096.3 Income from continuing operations before income taxes ​ 100.6 ​ 257.8 ​ 169.9 Income tax expense ​ 15.9 ​ 60.1 ​ 33.8 Net income from continuing operations ​ 84.7 ​ 197.7 ​ 136.1 Income from discontinued operations, net of tax ​ 4.3 ​ — ​ — Net income ​ ​ 89.0 ​ ​ 197.7 ​ ​ 136.1 Noncontrolling interest in net income of subsidiaries ​ 33.8 ​ 70.5 ​ 45.9 Net income attributable to Valhi stockholders ​ $ 55.2 ​ $ 127.2 ​ $ 90.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts attributable to Valhi stockholders: ​ ​ ​ Income from continuing operations ​ $ 50.9 ​ $ 127.2 ​ $ 90.2 Income from discontinued operations ​ 4.3 ​ — ​ — Net income attributable to Valhi stockholders ​ $ 55.2 ​ $ 127.2 ​ $ 90.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted net income per share: ​ ​ ​ Income from continuing operations ​ $ 1.79 ​ $ 4.46 ​ $ 3.16 Income from discontinued operations ​ .15 ​ — ​ — Net income per basic and diluted share ​ $ 1.94 ​ $ 4.46 ​ $ 3.16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted weighted average shares outstanding ​ 28.5 ​ 28.5 ​ 28.5 ​ See accompanying Notes to Consolidated Financial Statements. ​ F- 7 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 Net income ​ $ 89.0 ​ $ 197.7 ​ $ 136.1 Other comprehensive income (loss), net of tax: ​ ​ ​ Currency translation ​ 12.5 ​ ( 6.8 ) ​ ( 26.1 ) Defined benefit pension plans ​ ( 10.4 ) ​ 45.3 ​ 89.4 Other ​ ( .7 ) ​ ( .3 ) ​ 1.0 Total other comprehensive income, net ​ 1.4 ​ 38.2 ​ 64.3 Comprehensive income ​ 90.4 ​ 235.9 ​ 200.4 Comprehensive income attributable to noncontrolling interest ​ 33.9 ​ 80.6 ​ 62.8 Comprehensive income attributable to Valhi stockholders ​ $ 56.5 ​ $ 155.3 ​ $ 137.6 ​ See accompanying Notes to Consolidated Financial Statements. ​ F- 8 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years ended December 31, 2020, 2021 and 2022 (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Valhi Stockholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ other ​ ​ ​ ​ Non- ​ ​ ​ ​ ​ Preferred ​ Common ​ paid-in ​ Retained ​ comprehensive ​ Treasury ​ controlling ​ Total ​ ​ stock ​ stock ​ capital ​ earnings ​ loss ​ stock ​ interest ​ equity Balance at December 31, 2019 ​ $ 667.3 ​ $ .3 ​ $ 3.3 ​ $ 239.4 ​ $ ( 220.7 ) ​ $ ( 49.6 ) ​ $ 340.1 ​ $ 980.1 Net income ​ — ​ — ​ — ​ 55.2 ​ — ​ — ​ 33.8 ​ 89.0 Cash dividends - $.48 per share ​ — ​ — ​ ( 2.2 ) ​ ( 11.4 ) ​ — ​ — ​ — ​ ( 13.6 ) Dividends paid to noncontrolling interest ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 49.4 ) ​ ( 49.4 ) Other comprehensive income, net ​ — ​ — ​ — ​ — ​ 1.3 ​ — ​ .1 ​ 1.4 Contribution of preferred stock ​ ( 667.3 ) ​ — ​ 667.3 ​ — ​ — ​ — ​ — ​ — Equity transactions with noncontrolling interest and other, net ​ — ​ — ​ ( .1 ) ​ ( .3 ) ​ — ​ — ​ ( .2 ) ​ ( .6 ) Balance at December 31, 2020 ​ — ​ .3 ​ 668.3 ​ 282.9 ​ ( 219.4 ) ​ ( 49.6 ) ​ 324.4 ​ 1,006.9 Net income ​ — ​ — ​ — ​ 127.2 ​ — ​ — ​ 70.5 ​ 197.7 Cash dividends - $.32 per share ​ — ​ — ​ — ​ ( 9.0 ) ​ — ​ — ​ — ​ ( 9.0 ) Dividends paid to noncontrolling interest ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 74.4 ) ​ ( 74.4 ) Other comprehensive income, net ​ — ​ — ​ — ​ — ​ 28.1 ​ — ​ 10.1 ​ 38.2 Equity transactions with noncontrolling interest and other, net ​ ​ — ​ ​ — ​ ​ .7 ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1.7 ) ​ ​ ( 1.0 ) Balance at December 31, 2021 ​ — ​ .3 ​ 669.0 ​ 401.1 ​ ( 191.3 ) ​ ( 49.6 ) ​ 328.9 ​ 1,158.4 Net income ​ — ​ — ​ — ​ 90.2 ​ — ​ — ​ 45.9 ​ 136.1 Cash dividends - $.32 per share ​ — ​ — ​ — ​ ( 9.0 ) ​ — ​ — ​ — ​ ( 9.0 ) Dividends paid to noncontrolling interest ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 38.9 ) ​ ( 38.9 ) Other comprehensive income, net ​ — ​ — ​ — ​ — ​ 47.4 ​ — ​ 16.9 ​ 64.3 Equity transactions with noncontrolling interest and other, net ​ — ​ — ​ .5 ​ — ​ — ​ — ​ ( 4.6 ) ​ ( 4.1 ) Balance at December 31, 2022 ​ $ — ​ $ .3 ​ $ 669.5 ​ $ 482.3 ​ $ ( 143.9 ) ​ $ ( 49.6 ) ​ $ 348.2 ​ $ 1,306.8 ​ See accompanying Notes to Consolidated Financial Statements. ​ F- 9 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2020 2021 2022 Cash flows from operating activities: ​ ​ ​ ​ Net income ​ $ 89.0 ​ $ 197.7 ​ $ 136.1 Depreciation and amortization ​ 68.5 ​ 59.3 ​ 58.5 Net gain from: ​ ​ ​ Sale of business ​ ( 4.9 ) ​ — ​ — Land sales ​ ( .5 ) ​ ( 16.0 ) ​ — Fixed asset impairment ​ ​ — ​ ​ — ​ ​ 16.4 Loss on deconsolidation of BWC ​ ​ — ​ ​ — ​ ​ 2.0 Noncash interest expense ​ 2.9 ​ 2.9 ​ 2.2 Benefit plan expense greater than cash funding ​ 15.2 ​ 11.4 ​ 8.6 Deferred income taxes ​ ( 7.0 ) ​ 12.1 ​ .6 Distributions from (contributions to) TiO 2 manufacturing joint venture, net ​ ( 12.8 ) ​ 3.8 ​ ( 10.5 ) Other, net ​ 8.3 ​ 2.3 ​ 10.1 Change in assets and liabilities: ​ ​ ​ Accounts and other receivables, net ​ ( 3.1 ) ​ ( 64.6 ) ​ 81.1 Inventories, net ​ 13.1 ​ 58.3 ​ ( 204.2 ) Land held for development, net ​ ​ 16.8 ​ ​ 49.6 ​ ​ 21.4 Accounts payable and accrued liabilities ​ ( 32.8 ) ​ 154.3 ​ 3.9 Income taxes ​ 6.5 ​ ( 1.6 ) ​ ( .5 ) Accounts with affiliates ​ ( 4.3 ) ​ ( 24.3 ) ​ 9.4 Other noncurrent assets ​ ( 49.5 ) ​ ( 15.9 ) ​ ( 3.4 ) Other noncurrent liabilities ​ 53.5 ​ 53.7 ​ ( 83.9 ) Other, net ​ ( 6.7 ) ​ ( 23.3 ) ​ ( 12.9 ) Net cash provided by operating activities ​ 152.2 ​ 459.7 ​ 34.9 Cash flows from investing activities: ​ ​ ​ ​ Capital expenditures ​ ​ ( 65.5 ) ​ ​ ( 64.1 ) ​ ​ ( 67.6 ) Cash, cash equivalents and restricted cash of BWC ​ ​ — ​ ​ — ​ ​ ( 8.6 ) Purchases of marketable securities ​ ( 3.4 ) ​ ( 4.0 ) ​ ( 73.6 ) Proceeds from disposal of marketable securities ​ 4.3 ​ 5.2 ​ 2.9 Proceeds from sale of business ​ ​ 4.9 ​ ​ — ​ ​ — Proceeds from land sales ​ ​ — ​ ​ 23.4 ​ ​ — Other, net ​ 2.7 ​ 2.1 ​ .2 Net cash used in investing activities ​ ( 57.0 ) ​ ( 37.4 ) ​ ( 146.7 ) Cash flows from financing activities: ​ ​ ​ Principal payments on indebtedness ​ ( 58.5 ) ​ ( 102.3 ) ​ ( 62.0 ) Valhi cash dividends paid ​ ( 13.6 ) ​ ( 9.0 ) ​ ( 9.0 ) Distributions to noncontrolling interest in subsidiaries ​ ( 49.4 ) ​ ( 74.4 ) ​ ( 38.9 ) Subsidiary treasury stock acquired ​ ( 1.0 ) ​ ( 1.5 ) ​ ( 4.0 ) Other, net ​ ​ — ​ ​ ( 1.9 ) ​ ​ ( .1 ) Net cash used in financing activities ​ ( 122.5 ) ​ ( 189.1 ) ​ ( 114.0 ) ​ F- 10 ​ VALHI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2020 2021 2022 Cash, cash equivalents and restricted cash and cash equivalents - net change from: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating, investing and financing activities ​ $ ( 27.3 ) ​ $ 233.2 ​ $ ( 225.8 ) Effect of exchange rates on cash ​ 13.8 ​ ( 10.6 ) ​ ( 5.1 ) Balance at beginning of year ​ 583.8 ​ 570.3 ​ 792.9 Balance at end of year ​ $ 570.3 ​ $ 792.9 ​ $ 562.0 Supplemental disclosures: ​ ​ ​ Cash paid for: ​ ​ ​ Interest, net of amounts capitalized ​ $ 33.1 ​ $ 29.2 ​ $ 25.8 Income taxes, net ​ 24.1 ​ 65.9 ​ 43.7 Noncash investing activities: ​ ​ ​ Change in accruals for capital expenditures ​ 5.9 ​ 4.6 ​ 6.6 ​ See accompanying Notes to Consolidated Financial Statements. ​ F- 11 ​ VALHI, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 Note 1 – Summary of significant accounting policies: Nature of our business. Valhi, Inc. (NYSE: VHI) is primarily a holding company. We operate through our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and The LandWell Company (“LandWell”). Kronos (NYSE: KRO), NL (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the Securities and Exchange Commission (“SEC”). In January 2018, we sold Waste Control Specialists LLC (“WCS”), see Note 3. Organization. We are majority owned by a wholly-owned subsidiary of Contran Corporation (“Contran”), which owns approximately 92 % of our outstanding common stock at December 31, 2022. A majority of Contran’s outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) and their children and for which Ms. Simmons or Mr. Connelly, as applicable, serve as trustee (collectively, the “Other Trusts”). With respect to the Other Trusts for which Mr. Connelly serves as trustee, he is required to vote the shares of Contran voting stock held in such trusts in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at December 31, 2022, Ms. Simmons and the Family Trust may be deemed to control Contran and us. Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Valhi, Inc. and its subsidiaries, taken as a whole. Management’s estimates. The preparation of our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and disclosures of contingent assets and liabilities at each balance sheet date and the reported amounts of our revenues and expenses during each reporting period. Actual results may differ significantly from previously-estimated amounts under different assumptions or conditions. Principles of consolidation. Our Consolidated Financial Statements include the financial position, results of operations and cash flows of Valhi and our majority-owned and wholly-owned subsidiaries. We eliminate all material intercompany accounts and balances. 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. Foreign currency translation. The financial statements of our foreign subsidiaries are translated to U.S. dollars. The functional currency of our foreign subsidiaries is generally the local currency of the country. Accordingly, we translate the assets and liabilities at year-end exchange rates, while we translate their revenues and expenses at average exchange rates prevailing during the year. We accumulate the resulting translation adjustments in stockholders’ equity as part of accumulated other comprehensive income (loss), net of related deferred income taxes and noncontrolling interest. We recognize currency transaction gains and losses in income. Derivatives and hedging activities. We recognize derivatives as either assets or liabilities measured at fair value. We recognize the effect of changes in the fair value of derivatives either in net income or other comprehensive income (loss), depending on the intended use of the derivative. Cash and cash equivalents. We classify bank time deposits and highly-liquid investments, including government and commercial notes and bills, with original maturities of three months or less as cash equivalents. F- 12 ​ Restricted cash and cash equivalents. 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 and cash pledged under debt agreement covenants or legal settlements. 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. To the extent the restricted amount does not relate to a recognized liability, we classify restricted cash as a current asset. Restricted cash and cash equivalents classified as a current asset are presented separately on our Consolidated Balance Sheets, and restricted cash and cash equivalents classified as a noncurrent asset are presented as a component of other assets on our Consolidated Balance Sheets, as disclosed in Note 7. Marketable securities and securities transactions. We carry marketable debt and equity securities at fair value. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , establishes a consistent framework for measuring fair value and (with certain exceptions) this framework is generally applied to all financial statement items required to be measured at fair value. The standard requires fair value measurements to be classified and disclosed in one of the following three categories: ● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; ● Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the assets or liability; and ● Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. We classify all of our marketable securities as available-for-sale. Any unrealized gains or losses on our marketable equity securities are recognized in other income, net on our Consolidated Statements of Income. We accumulate unrealized gains and losses on marketable debt securities as part of accumulated other comprehensive income (loss), net of related deferred income taxes. See Notes 6, 11 and 13. We base realized gains and losses upon the specific identification of the securities sold. Accounts receivable. We provide an allowance for doubtful accounts for known and estimated potential losses arising from our sales to customers based on a periodic review of these accounts. Inventories and cost of sales. We state inventories at the lower of cost or net realizable value. We generally base inventory costs for all inventory categories on average cost that approximates the first-in, first-out method. Inventories include the costs for raw materials, the cost to manufacture the raw materials into finished goods and overhead. Depending on the inventory’s stage of completion, our manufacturing costs can include the costs of packing and finishing, utilities, maintenance, depreciation, shipping and handling, and salaries and benefits associated with our manufacturing process. We allocate fixed manufacturing overhead costs based on normal production capacity. Unallocated overhead costs resulting from periods with abnormally low production levels are charged to expense as incurred. As inventory is sold to third parties, we recognize the cost of sales in the same period the sale occurs. We periodically review our inventory for estimated obsolescence or instances when inventory is no longer marketable for its intended use, and we record any write-down equal to the difference between the cost of inventory and its estimated net realizable value based on assumptions about alternative uses, market conditions and other factors. Land held for development. Land held for development relates to BMI and LandWell. The primary asset of LandWell is certain real property in Henderson, Nevada some of which we are developing for residential lots in a master planned community. Land held for development was recorded at the estimated acquisition date fair value based on a value per developable acre at the time of purchase. Development costs, including infrastructure improvements, real estate taxes, capitalized interest and other costs, some of which may be allocated, are capitalized during the period incurred. We allocate costs to each parcel sold on a pro-rata basis associated with the relevant development activity, and the land basis of parcels expected to be sold within one year are presented in prepaid expenses and other on our Consolidated Balance Sheets. As land parcels are sold, costs of land sales, including land and development costs, are allocated based on specific F- 13 ​ identification, relative sales value, square footage or a combination of these methods. All sales and marketing activities and general overhead are charged to selling, general and administrative expense as incurred. Investment in TiO 2 manufacturing joint venture. We account for our investment in a 50 %-owned manufacturing joint venture by the equity method. Distributions received from such investee are classified for statement of cash flow purposes using the “nature of distribution” approach under ASC Topic 230. See Note 7. Leases. 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. We lease various manufacturing facilities, land and equipment. From time to time, we may also enter into an arrangement in which the right to use and control an identified underlying asset is embedded in another type of contract. We determine if an arrangement is a lease (including leases embedded in another type of contract) at inception. All of our leases are classified as operating leases. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and noncurrent operating lease liabilities in our Consolidated Balance Sheets. See Notes 7 and 10. As permitted by ASC Topic 842, Leases , we elected the practical expedients related to nonlease components (in which nonlease components associated with a lease and paid by us to the lessor, such as property taxes, insurance and maintenance, are treated as a lease component and considered part of minimum lease rental payments), and short-term leases (in which leases with an original maturity of 12 months or less are excluded from the recognition requirements of ASC 842). Right-of-use assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. The right-of-use operating lease assets and liabilities are recognized based on the estimated present value of lease payments over the lease term as of the respective lease commencement dates. We use an estimated incremental borrowing rate to determine the present value of lease payments (unless we can determine the rate implicit in the lease, which is generally not the case). Our incremental borrowing rate for each of our leases is derived from available information, including our current debt and credit facilities and U.S. and European yield curves as well as publicly available data for instruments with similar characteristics, adjusted for factors such as collateralization and term. Our leases generally do not include termination or purchase options. Certain of our leases include an option to renew the lease after expiration of the initial lease term, but we have not included such renewal periods in our lease term because it is not reasonably certain that we would exercise the renewal option. Our leases generally have fixed lease payments, with no contingent or incentive payments. Certain of our leases include variable lease payments that depend on a specified index or rate. Our lease agreements do not contain any residual value guarantees. Goodwill and other intangible assets; amortization expense. Goodwill represents the excess of cost over fair value of individual net assets acquired in business combinations. Goodwill is not subject to periodic amortization. We amortize other intangible assets by the straight-line method over their estimated lives and state them net of accumulated amortization. We evaluate goodwill for impairment, annually or when events or changes in circumstances indicate the carrying value may not be recoverable. We evaluate other intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. See Note 8. Property and equipment; depreciation expense. We state property and equipment at acquisition cost, including capitalized interest on borrowings during the actual construction period of major capital projects. In 2020, 2021 and 2022 we capitalized $ .8 million, $ 1.4 million and $ 1.7 million, respectively, of interest costs. We compute depreciation of property and equipment for financial reporting purposes (including mining equipment) principally by the straight-line method over the estimated useful lives of the assets as follows: ​ ​ ​ ​ Asset Useful lives Buildings and improvements 10 to 40 years Machinery and equipment 3 to 20 years Mine development costs Units-of-production ​ F- 14 ​ We use accelerated depreciation methods for income tax purposes, as permitted. Upon the sale or retirement of an asset, we remove the related cost and accumulated depreciation from the accounts and recognize any gain or loss in income currently. We expense expenditures for maintenance, repairs and minor renewals as incurred that do not improve or extend the life of the assets, including planned major maintenance. We have a governmental concession with an unlimited term to operate our ilmenite mine in Norway. Mining properties consist of buildings and equipment used in our Norwegian ilmenite mining operations. While we own the land and ilmenite reserves associated with the mining operations, such land and reserves were acquired for nominal value and we have no material asset recognized for the land and reserves related to our mining operations. We perform impairment tests when events or changes in circumstances indicate the carrying value may not be recoverable. We consider all relevant factors. We perform the impairment test by comparing the estimated future undiscounted cash flows (exclusive of interest expense) associated with the asset or asset group to the asset’s net carrying value to determine if a write-down to fair value is required. Long-term debt. We state long-term debt net of any unamortized original issue premium, discount or deferred financing costs (other than deferred financing costs associated with revolving credit facilities, which are recognized as an asset). We classify amortization of deferred financing costs and any premium or discount associated with the issuance of indebtedness as interest expense, and compute amortization by either the interest method or the straight-line method over the term of the applicable issue. See Note 9. Employee benefit plans. Accounting and funding policies for our defined benefit pension and defined contribution retirement plans are described in Note 11. We also provide certain postretirement benefits other than pensions (OPEB), consisting of health care and life insurance benefits, to certain U.S. and Canadian retired employees, which are not material. See Note 10. Income taxes. We and our qualifying subsidiaries are members of Contran’s consolidated U.S federal income tax group (the “Contran Tax Group”). We and certain of our qualifying subsidiaries also file consolidated income tax returns with Contran in various U.S. state jurisdictions. As a member of the Contran Tax Group, we are jointly and severally liable for the federal income tax liability of Contran and the other companies included in the Contran Tax Group for all periods in which we are included in the Contran Tax Group. See Note 17. As a member of the Contran Tax Group, we are a party to a tax sharing agreement which provides that we compute our tax provision for U.S. income taxes on a separate-company basis using the tax elections made by Contran. Pursuant to the tax sharing agreement, we make payments to or receive payments from Contran in amounts we would have paid to or received from the U.S. Internal Revenue Service or the applicable state tax authority had we not been a member of the Contran Tax Group. We made cash payments for income taxes to Contran of $ 6.3 million in 2020, $ 25.5 million in 2021 and $ 17.5 million in 2022. We recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the income tax and financial reporting carrying amounts of assets and liabilities, including investments in our subsidiaries and affiliates who are not members of the Contran Tax Group and undistributed earnings of our Chemicals Segment’s non-U.S. subsidiaries which are not deemed to be permanently reinvested. At December 31, 2022, we continue to assert indefinite reinvestment as it relates to our outside basis difference attributable to our Chemicals Segment’s investments in non-U.S. subsidiaries, other than post-1986 undistributed earnings of our Chemicals Segment’s European subsidiaries and all undistributed earnings of our Chemicals Segment’s Canadian subsidiary, which are not subject to permanent reinvestment plans. It is not practical for us to determine the amount of the unrecognized deferred income tax liability related to our investments in our Chemicals Segment’s non-U.S. subsidiaries which are permanently reinvested due to the complexities associated with our organizational structure, changes in the Tax Cuts and Jobs Act (2017 Tax Act) and the U.S. 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. 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. F- 15 ​ The U.S. Federal tax code imposes a tax on global intangible low-tax income (GILTI). We record GILTI tax as a current period expense when incurred under the period cost method. While our future global operations depend on a number of different factors, we do expect to have future U.S. inclusions in taxable income related to GILTI. We account for the tax effects of a change in tax law as a component of the income tax provision related to continuing operations in the period of enactment, including the tax effects of any deferred income taxes originally established through a financial statement component other than continuing operations (i.e. other comprehensive income). Changes in applicable income tax rates over time as a result of changes in tax law, or times in which a deferred income tax asset valuation allowance is initially recognized in one year and subsequently reversed in a later year, can give rise to “stranded” tax effects in accumulated other comprehensive income in which the net accumulated income tax (benefit) remaining in accumulated other comprehensive income does not correspond to the then-applicable income tax rate applied to the pre-tax amount which resides in accumulated other comprehensive income. As permitted by GAAP, our accounting policy is to remove any such stranded tax effect remaining in accumulated other comprehensive income, by recognizing an offset to our provision for income taxes related to continuing operations, only at the time when there is no remaining pre-tax amount in accumulated other comprehensive income. For accumulated other comprehensive income related to currency translation, this would occur only upon the sale or complete liquidation of one of our Chemicals Segment’s non-U.S. 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 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 %. 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. See Note 14. Environmental remediation and related costs. We record liabilities related to environmental remediation and related costs when estimated future expenditures are probable and reasonably estimable. We adjust these accruals as further information becomes available to us or as circumstances change. We generally do not discount estimated future expenditures to their present value due to the uncertainty of the timing of the ultimate payout. We recognize any recoveries of remediation costs from other parties when we deem their receipt to be probable. We expense any environmental remediation related legal costs as incurred. At December 31, 2021 and 2022 we had no t recognized any material receivables for recoveries. See Note 18. Revenue recognition. Chemicals and Component Products Segments – Our sales involve single performance obligations to ship our products pursuant to customer purchase orders. In some cases, the purchase order is supported by an underlying master sales agreement, but our purchase order acceptance generally evidences the contract with our customer by specifying the key terms of product and quantity ordered, price and delivery and payment terms. In accordance with ASC 606, Revenue from Contracts with Customers , we record revenue when we satisfy our performance obligations to our customers by transferring control of our products to them, which generally occurs at point of shipment or upon delivery. Such transfer of control is also evidenced by transfer of legal title and other risks and rewards of ownership (giving the customer the ability to direct the use of, and obtain substantially all of the benefits of, the product), and our customers becoming obligated to pay us and it is probable we will receive payment. In certain arrangements we provide shipping and handling activities after the transfer of control to our customer (e.g. when control transfers prior to delivery). In such arrangements shipping and handling are considered fulfillment activities, and accordingly, such costs are accrued when the related revenue is recognized. Revenue is recorded in an amount that reflects the net consideration we expect to receive in exchange for our products. Prices for our products are based on terms specified in published list prices and purchase orders, which generally do not include financing components, noncash consideration or consideration paid to our customers. As our standard payment terms are less than one year , we have elected the practical expedient under ASC 606 and we have not assessed whether a contract has a significant financing component. We state sales net of price, early payment and distributor discounts as well as volume rebates (collectively, variable consideration). Variable consideration, to the extent present, is F- 16 ​ recognized as 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. Differences, if any, between estimates of the amount of variable consideration to which we will be entitled and the actual amount of such variable consideration have not been material in the past. We occasionally receive partial or full consideration from our customers prior to the completion of our performance obligation (shipment of product). 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 our performance obligation has been satisfied. Deferred revenue has not been material in the past. We report any tax assessed by a governmental authority that we collect from our customers that is both imposed on and concurrent with our revenue-producing activities (such as sales, use, value added and excise taxes) on a net basis (meaning we do not recognize these taxes either in our revenues or in our costs and expenses). Frequently, we receive orders for products to be delivered over dates that may extend across reporting periods. We invoice for each delivery upon shipment and recognize revenue for each distinct shipment when all sales recognition criteria for that shipment have been satisfied. As scheduled delivery dates for these orders are within a one year period, under the optional exemption provided by ASC 606, we do not disclose sales allocated to future shipments of partially completed contracts. Real Estate Management and Development Segment – Revenues from our Real Estate Management and Development Segment involve providing certain utility services, among other things, to an industrial park located in Henderson, Nevada and prior to the bankruptcy filing on September 10, 2022 of Basic Water Company (“BWC”), a wholly-owned subsidiary of BMI, we were responsible for the delivery of water to the City of Henderson and various other users through a water distribution system owned and operated by BWC. See Note 2. These sales involve single performance obligations and we record revenue when we satisfy our performance obligations to our customers generally after the service is performed and our customers become obligated to pay us and it is probable we will receive payment. Revenue is recorded in an amount that reflects the net consideration we expect to receive in exchange for our services. Prices for our products are based on contracted rates and do not include financing components, noncash consideration or consideration paid to our customers. As our standard payment terms are less than one year, we have elected the practical expedient under ASC 606 and we have not assessed whether a contract has a significant financing component. Our revenues also are related to efforts to develop certain real estate in Henderson, Nevada, including approximately 2,100 acres zoned for residential/planned community purposes and approximately 400 acres zoned for commercial and light industrial use. Contracts for land sales are negotiated on an individual basis, involve single performance obligations, and generally require us to complete property development and improvements after title passes to the buyer and we have received all or a substantial portion of the selling price. We recognize land sales revenue associated with the residential/planned community over time using cost-based input methods. 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). 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. Estimates of total costs expected to be incurred require significant management judgment, and the amount of revenue and profits that have been recognized to date are subject to revisions throughout the development period. The impact on the amount of revenue recognized resulting from any future change in the estimate of total costs estimated to be incurred would be accounted for prospectively in accordance with GAAP. 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. Selling, general and administrative expenses; shipping and handling costs; advertising costs; research and development costs. Selling, general and administrative expenses include costs related to marketing, sales, distribution, shipping and handling, research and development, legal, environmental remediation and administrative functions such as accounting, treasury and finance, and include costs for salaries and benefits not associated with our manufacturing process, F- 17 ​ travel and entertainment, promotional materials and professional fees. Shipping and handling costs of our Chemicals Segment were approximately $ 112 million in 2020, $ 132 million in 2021 and $ 122 million in 2022. Shipping and handling costs of our Component Products Segment are not material. We expense advertising and research and development costs as incurred. Advertising costs were approximately $ 1 million in each of 2020 and 2021 and $ 2 million in 2022. Research and development costs were approximately $ 16 million in 2020, $ 17 million in 2021 and $ 16 million in 2022. Note 2 – Business and geographic segments: ​ ​ ​ ​ ​ ​ ​ ​ ​ % controlled at Business segment ​ Entity ​ December 31, 2022 Chemicals Kronos 81 % ​ Component products CompX 87 % ​ Real estate management and development BMI and LandWell 63 % - 77 % ​ ​ Our control of Kronos includes 50 % we hold directly and 31 % held directly by NL. We own 83 % of NL. Our control of CompX is through NL. We own 63 % of BMI. Our control of LandWell includes the 27 % we hold directly and 50 % held by BMI. We are organized based upon our operating subsidiaries. Our operating segments are defined as components of our consolidated operations about which separate financial information is available that is regularly evaluated by our chief operating decision maker in determining how to allocate resources and in assessing performance. Each operating segment is separately managed and each operating segment represents a strategic business unit offering different products. We have the following three consolidated reportable operating segments. ● Chemicals – Our Chemicals Segment is operated through our majority control of Kronos. Kronos is a leading global producer and marketer of value-added titanium dioxide pigments (“TiO 2 ”). TiO 2 is used to impart whiteness, brightness, opacity and durability to a wide variety of products, including paints, plastics, paper, fibers and ceramics. Additionally, TiO 2 is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, cosmetics and pharmaceuticals. See Note 7. ● Component Products – We operate in the component products industry through our majority control of CompX. CompX is a leading manufacturer of security products used in the postal, recreational transportation, office and institutional furniture, cabinetry, tool storage, healthcare 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. All CompX production facilities are in the United States. ● Real Estate Management and Development – We operate in real estate management and development through our majority control of BMI and LandWell. BMI owns real property in Henderson, Nevada and through its wholly-owned subsidiaries provides utility services to certain industrial and municipal customers. LandWell is engaged in efforts to develop certain land holdings for commercial, industrial and residential purposes in Henderson, Nevada. We evaluate segment performance based on segment operating income, which we define 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 accounting policies of our reportable operating segments are the same as those described in Note 1. 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. F- 18 ​ Interest income included in the calculation of segment operating income is not material in 2020, 2021 or 2022. Capital expenditures include additions to property and equipment. 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. Our investment in the TiO 2 manufacturing joint venture (see Note 7) is included in the Chemicals Segment’s 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, ​ 2020 2021 2022 ​ ​ (In millions) Net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ Chemicals ​ $ 1,638.8 ​ $ 1,939.4 ​ $ 1,930.2 Component products ​ 114.5 ​ 140.8 ​ 166.6 Real estate management and development ​ 96.4 ​ 216.2 ​ 125.7 Total net sales ​ $ 1,849.7 ​ $ 2,296.4 ​ $ 2,222.5 Cost of sales: ​ ​ ​ Chemicals ​ $ 1,291.0 ​ $ 1,494.5 ​ $ 1,540.2 Component products ​ 81.7 ​ 98.1 ​ 117.8 Real estate management and development ​ 64.9 ​ 123.6 ​ 74.1 Total cost of sales ​ $ 1,437.6 ​ $ 1,716.2 ​ $ 1,732.1 Gross margin: ​ ​ ​ Chemicals ​ $ 347.8 ​ $ 444.9 ​ $ 390.0 Component products ​ 32.8 ​ 42.7 ​ 48.8 Real estate management and development ​ 31.5 ​ 92.6 ​ 51.6 Total gross margin ​ $ 412.1 ​ $ 580.2 ​ $ 490.4 Operating income: ​ ​ ​ Chemicals ​ $ 126.5 ​ $ 200.8 ​ $ 174.6 Component products ​ 11.8 ​ 20.5 ​ 25.4 Real estate management and development ​ 47.8 ​ 97.3 ​ 39.4 Total operating income ​ 186.1 ​ 318.6 ​ 239.4 General corporate items: ​ ​ ​ Interest income and other ​ ​ 4.7 ​ ​ 4.0 ​ ​ 10.4 Insurance recoveries ​ ​ 1.6 ​ ​ .1 ​ ​ .1 Gain on land sales ​ ​ .5 ​ ​ 16.0 ​ ​ — Other components of net periodic pension and OPEB expense ​ ( 20.1 ) ​ ( 17.0 ) ​ ( 13.9 ) Changes in market value of Valhi common stock held by subsidiaries ​ ( 1.7 ) ​ 3.3 ​ ( 1.6 ) General expenses, net ​ ( 34.3 ) ​ ( 34.7 ) ​ ( 36.6 ) Interest expense ​ ( 36.2 ) ​ ( 32.5 ) ​ ( 27.9 ) Income from continuing operations before income taxes ​ $ 100.6 ​ $ 257.8 ​ $ 169.9 ​ Included in the determination of Chemicals operating income is a business interruption insurance settlement gain of $ 2.7 million recognized in the third quarter of 2022. See Note 13. Infrastructure reimbursements and land related income is included in the determination of Real Estate Management and Development operating income. See Notes 7 and 13. ​ BMI provides certain utility services, among other things, to an industrial park located in Henderson, Nevada and prior to BWC’s bankruptcy filing on September 10, 2022 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. Due to the Western drought, water levels in Lake Mead have been declining for much of the last twenty years. As a result of water release curtailments upstream of Lake Mead which F- 19 ​ began late in the second quarter, Lake Mead water levels have dropped precipitously to historically low levels. On June 30, 2022 BWC was no longer able to pump water without the risk of damaging the system and consequently ceased operations at its water intake facility to best preserve the system. Current estimates of Lake Mead water levels do not indicate lake levels will be sufficient to enable BWC to resume pumping water for the foreseeable future. We considered BWC’s inability to pump water from Lake Mead to be a triggering event under the 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 represents 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 subsidiaries voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Nevada. Because BWC has filed for bankruptcy protection, we and BMI can 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. All of these charges are included in the determination of the Real Estate Management and Development’s operating income in 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 ​ 2022 ​ ​ (In millions) Depreciation and amortization: ​ ​ ​ Chemicals ​ $ 61.9 ​ $ 52.8 ​ $ 53.1 Component products ​ 3.8 ​ 3.8 ​ 4.0 Real estate management and development ​ 2.8 ​ 2.7 ​ 1.4 Total ​ $ 68.5 ​ $ 59.3 ​ $ 58.5 Capital expenditures: ​ ​ ​ Chemicals ​ $ 62.8 ​ $ 58.6 ​ $ 63.2 Component products ​ 1.7 ​ 4.1 ​ 3.7 Real estate management and development ​ 1.0 ​ 1.4 ​ .7 Total ​ $ 65.5 ​ $ 64.1 ​ $ 67.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2021 2022 ​ ​ (In millions) Total assets: ​ ​ ​ Operating segments: ​ ​ ​ Chemicals ​ $ 2,400.7 ​ $ 2,373.1 ​ $ 2,293.5 Component products ​ 138.0 ​ 146.4 ​ 131.3 Real estate management and development ​ 171.3 ​ 259.3 ​ 219.2 Corporate and eliminations ​ 179.3 ​ 226.4 ​ 191.7 Total ​ $ 2,889.3 ​ $ 3,005.2 ​ $ 2,835.7 ​ ​ F- 20 ​ Geographic information . We attribute net sales to the place of manufacture (point-of-origin) and the location of the customer (point-of-destination); we attribute property and equipment to their physical location. At December 31, 2022 the net assets of our non-U.S. subsidiaries included in consolidated net assets approximated $ 699 million (in 2021 the total approximated $ 575 million). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Net sales - point of origin: ​ ​ ​ United States ​ $ 1,189.8 ​ $ 1,409.1 ​ $ 1,518.9 Germany ​ 836.0 ​ 971.7 ​ 895.4 Canada ​ 319.5 ​ 371.9 ​ 389.4 Belgium ​ 249.5 ​ 295.7 ​ 306.5 Norway ​ 211.8 ​ 257.2 ​ 273.5 Eliminations ​ ( 956.9 ) ​ ( 1,009.2 ) ​ ( 1,161.2 ) Total ​ $ 1,849.7 ​ $ 2,296.4 ​ $ 2,222.5 Net sales - point of destination: ​ ​ ​ North America ​ $ 778.2 ​ $ 999.7 ​ $ 985.4 Europe ​ 783.8 ​ 945.7 ​ 879.0 Asia and other ​ 287.7 ​ 351.0 ​ 358.1 Total ​ $ 1,849.7 ​ $ 2,296.4 ​ $ 2,222.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2021 2022 ​ (In millions) Net property and equipment: ​ ​ ​ United States ​ $ 67.8 ​ $ 63.6 ​ $ 45.8 Germany ​ 237.5 ​ 214.8 ​ 204.7 Canada ​ 88.6 ​ 91.1 ​ 88.3 Belgium ​ 108.4 ​ 107.7 ​ 101.4 Norway ​ 88.1 ​ 86.4 ​ 83.6 Total ​ $ 590.4 ​ $ 563.6 ​ $ 523.8 ​ ​ Note 3 – Business combinations, dispositions and related transactions: Kronos Worldwide, Inc. Prior to 2020, Kronos’ board of directors 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. Kronos may repurchase its common stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, Kronos may terminate the program prior to its completion. Kronos uses cash on hand or other sources of liquidity to acquire the shares. Repurchased shares are added to Kronos’ treasury shares and subsequently cancelled upon approval of the Kronos board of directors. In 2020, Kronos acquired 122,489 shares of its common stock in market transactions for an aggregate purchase price of $ 1.0 million and subsequently cancelled all such shares. In 2021, Kronos acquired 14,409 shares of its common stock in market transactions for an aggregate purchase price of $ .2 million and subsequently cancelled all such shares. In 2022, Kronos acquired 217,778 shares of its common stock in market transactions for an aggregate purchase price of $ 2.5 million. Of these shares, 73,881 shares were purchased in the first quarter and subsequently cancelled, and 143,897 shares were purchased in the fourth quarter and are accounted for as Kronos’ treasury stock at December 31, 2022. At December 31, 2022, 1,331,332 shares are available for repurchase under this stock repurchase program. F- 21 ​ CompX International Inc. Prior to 2020, CompX’s board of directors authorized various repurchases of its Class A common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time. CompX may repurchase its common stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, CompX may terminate the program prior to its completion. CompX would generally use cash on hand to acquire the shares. Repurchased shares will be added to CompX’s treasury and cancelled. CompX did no t make any repurchases under the plan during 2020. In 2021 CompX acquired 75,000 shares of its Class A common stock in market transactions for an aggregate purchase price of $ 1.3 million and subsequently cancelled all such shares. During the second quarter of 2022, CompX acquired 78,900 shares of its Class A common stock for an aggregate amount of $ 1.7 million and subsequently cancelled all such shares. Of the shares repurchased in 2022, 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. At December 31, 2022, 523,647 shares were available for purchase under these authorizations. NL Industries, Inc. During the second quarter of 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. Discontinued Operations – Waste Control Specialists LLC Pursuant to an agreement we entered into in December 2017, on January 26, 2018 we completed the sale of our former Waste Management Segment to JFL-WCS Partners, LLC ("JFL Partners"), an entity sponsored by certain investment affiliates of J.F. Lehman & Company, for consideration consisting of the assumption of all of WCS’ third-party indebtedness and other liabilities. We recognized a pre-tax gain of $ 4.9 million ($ 4.3 million, net of tax) in the fourth quarter of 2020 related to proceeds received from JFL Partners in final settlement of an earn-out provision in the sale agreement. ​ Note 4 – Accounts and other receivables, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Trade accounts receivable: ​ ​ Kronos ​ $ 326.3 ​ $ 220.3 CompX ​ 15.6 ​ 17.9 BMI/LandWell ​ 2.8 ​ 2.3 VAT and other receivables ​ 38.0 ​ 35.4 Allowance for doubtful accounts ​ ( 2.0 ) ​ ( 4.9 ) Total ​ $ 380.7 ​ $ 271.0 ​ ​ F- 22 ​ ​ ​ Note 5 – Inventories, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Raw materials: ​ ​ Chemicals ​ $ 76.3 ​ $ 145.3 Component products ​ 5.0 ​ 6.2 Total raw materials ​ 81.3 ​ 151.5 Work in process: ​ ​ Chemicals ​ 30.4 ​ 32.0 Component products ​ 16.8 ​ 20.0 Total in-process products ​ 47.2 ​ 52.0 Finished products: ​ ​ Chemicals ​ 246.4 ​ 350.7 Component products ​ 3.8 ​ 5.1 Total finished products ​ 250.2 ​ 355.8 Supplies (chemicals) ​ 80.0 ​ 81.5 Total ​ $ 458.7 ​ $ 640.8 ​ ​ ​ Note 6 – Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost or ​ ​ ​ ​ ​ ​ ​ ​ amortized ​ Unrealized ​ ​ Market value ​ cost ​ loss, net ​ ​ (In millions) December 31, 2021: ​ ​ ​ Current assets ​ $ 2.6 ​ $ 2.6 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent assets ​ $ 3.3 ​ $ 3.3 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022: ​ ​ ​ Current assets ​ $ 75.1 ​ $ 75.7 ​ $ ( .6 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent assets ​ $ 1.2 ​ $ 1.2 ​ $ — ​ ​ ​ F- 23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements ​ ​ ​ ​ ​ Quoted ​ Significant ​ ​ ​ ​ ​ Prices in ​ Other ​ ​ ​ ​ ​ Active ​ Observable ​ ​ ​ ​ ​ Markets ​ Inputs ​ Total (Level 1) (Level 2) ​ ​ (In millions) December 31, 2021: ​ ​ ​ Current assets - fixed income securities ​ $ 2.6 ​ $ — ​ $ 2.6 Noncurrent assets: ​ ​ ​ Fixed income securities ​ $ 1.3 ​ $ — ​ $ 1.3 Mutual funds ​ 2.0 ​ 2.0 ​ — Total ​ $ 3.3 ​ $ 2.0 ​ $ 1.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022: ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities ​ $ 73.3 ​ $ — ​ $ 73.3 Mutual funds ​ ​ 1.8 ​ ​ 1.8 ​ — Total ​ $ 75.1 ​ $ 1.8 ​ $ 73.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent assets - fixed income securities ​ $ 1.2 ​ $ — ​ $ 1.2 ​ Our marketable securities are primarily invested in U.S. government treasuries. The fair value of our marketable securities are either determined using Level 1 inputs (because the securities are actively traded) or determined using Level 2 inputs (because although these securities are traded, in many cases the market is not active and the year-end valuation is generally based on the last trade of the year, which may be several days prior to December 31). Note 7 – Investment in TiO 2 manufacturing joint venture and other assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Other assets: ​ ​ Restricted cash and cash equivalents ​ $ 41.9 ​ $ 37.2 Note receivables - OPA ​ ​ 38.7 ​ ​ 49.3 Land held for development ​ ​ 36.0 ​ ​ 29.7 IBNR receivables ​ 34.4 ​ 16.8 Operating lease right-of-use assets ​ 19.9 ​ 21.5 Other ​ 16.8 ​ 24.3 Total ​ $ 187.7 ​ $ 178.8 ​ Investment in TiO 2 manufacturing joint venture. Our Chemicals Segment owns a 50 % interest in Louisiana Pigment Company, L.P. (“LPC”). LPC is a manufacturing joint venture whose other 50 % -owner is Venator Investments LLC (“Venator Investments”). Venator Investments is a wholly-owned subsidiary of Venator Group, of which Venator Materials PLC owns 100 % and is the ultimate parent. LPC owns and operates a chloride-process TiO 2 plant near Lake Charles, Louisiana. Kronos and Venator Investments are both required to purchase one-half of the TiO 2 produced by LPC, unless Kronos and Venator Investments agree otherwise. LPC operates on a break-even basis and, accordingly, we report no equity in earnings of LPC. Each owner’s acquisition transfer price for its share of the TiO 2 produced is equal to its share of the joint venture’s production costs and interest expense, if any. Kronos’ share of net cost is reported as cost of sales as the related TiO 2 acquired from LPC is sold. We report distributions Kronos receives from LPC, which generally relate to excess cash generated by LPC from its non-cash production costs, and contributions Kronos makes to LPC, which F- 24 ​ generally relate to cash required by LPC when it builds working capital, as part of our 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Distributions from LPC ​ $ 32.7 ​ $ 28.5 ​ $ 58.3 Contributions to LPC ​ ( 45.5 ) ​ ( 24.7 ) ​ ( 68.8 ) Net distributions (contributions) ​ $ ( 12.8 ) ​ $ 3.8 ​ $ ( 10.5 ) ​ Summary balance sheets of LPC are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) ASSETS ​ ​ Current assets ​ $ 111.7 ​ $ 122.2 Property and equipment, net ​ 142.6 ​ 147.4 Total assets ​ $ 254.3 ​ $ 269.6 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND PARTNERS' EQUITY ​ ​ Other liabilities, primarily current ​ $ 47.8 ​ $ 41.2 Partners' equity ​ 206.5 ​ 228.4 Total liabilities and partners' equity ​ $ 254.3 ​ $ 269.6 ​ Summary income statements of LPC are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Revenues and other income: ​ ​ ​ Kronos ​ $ 167.8 ​ $ 188.6 ​ $ 225.6 Venator Investments ​ 168.3 ​ 189.6 ​ 225.9 Total ​ 336.1 ​ 378.2 ​ 451.5 Cost and expenses: ​ ​ ​ Cost of sales ​ 335.7 ​ 377.8 ​ 451.1 General and administrative ​ .4 ​ .4 ​ .4 Total ​ 336.1 ​ 378.2 ​ 451.5 Net income ​ $ — ​ $ — ​ $ — ​ Leases. We enter into various operating leases for manufacturing facilities, land and equipment. Our operating leases are included in operating lease right-of-use assets, current operating lease liabilities and noncurrent operating lease liabilities on our Consolidated Balance Sheets. Also see Note 10. Our Chemicals Segment’s principal German operating subsidiary leases the land under its Leverkusen TiO 2 production facility pursuant to a lease with Bayer AG that expires in 2050. The Leverkusen facility itself, which Kronos owns and which represents approximately one-third of its current TiO 2 production capacity, is located within Bayer’s extensive manufacturing complex. During 2020, 2021 and 2022, our operating lease expense approximated $ 7.6 million, $ 7.7 million and $ 5.5 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 2020, 2021 and 2022, variable lease expense and short-term lease expense were not material. During 2020, 2021 and 2022, we entered into new operating leases which resulted in the recognition of $ 2.5 million, $ 3.8 million and $ 6.6 million, respectively, in right-of-use operating lease assets F- 25 ​ and corresponding liabilities on our Consolidated Balance Sheets. At December 31, 2021 and 2022, the weighted average remaining lease term of our operating leases was approximately 17 years and 15 years , respectively, and the weighted average discount rate associated with such leases was approximately 5.0 % in both 2021 and 2022. 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. At December 31, 2022, maturities of our operating lease liabilities were as follows: ​ ​ ​ ​ ​ Years ending December 31, Amount ​ ​ (In millions) 2023 ​ $ 4.5 2024 ​ 3.3 2025 ​ 2.7 2026 ​ 2.4 2027 ​ 1.5 2028 and thereafter ​ 17.0 Total remaining lease payments ​ 31.4 Less imputed interest ​ 10.2 Total lease obligations ​ 21.2 Less current obligations ​ 3.8 Long term lease obligations ​ $ 17.4 ​ With respect to our land lease associated with our Chemical Segment’s Leverkusen facility, we periodically establish the amount of rent for such land lease by agreement with Bayer for periods of at least two years at a time. The lease agreement provides for no formula, index or other mechanism to determine changes in the rent of such land lease; rather, any change in the rent is subject solely to periodic negotiation between Bayer and us. As such, we will account for any change in the rent associated with such lease as a lease modification. Of the $ 21.2 million total lease obligations at December 31, 2022, approximately $ 7.2 million relates to our Leverkusen facility land lease. At December 31, 2022, we have no significant lease commitments that have not yet commenced. Land held for development. The land held for development relates to BMI and LandWell and is discussed in Note 1. Note receivables – OPA. 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. 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 2020, 2021 and 2022, we received approval for additional tax increment reimbursement of $ 19.1 million (all in the first quarter), $ 15.3 million ($ 6.2 million in the first quarter and $ 9.1 million in the fourth quarter), and $ 15.2 million ($ 10.0 million in the third quarter and $ 5.2 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 F- 26 ​ 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. See Note 13. Other. We have certain related party transactions with LPC, as more fully described in Note 17. IBNR receivables relate to certain insurance liabilities, the risk of which we have reinsured with certain third party insurance carriers. We report the insurance liabilities related to these IBNR receivables which have been reinsured as part of noncurrent accrued insurance claims and expenses. Certain of our insurance liabilities are classified as current liabilities and the related IBNR receivables are classified with prepaid expenses and other on our Consolidated Balance Sheets. See Notes 10 and 17. 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. All of our goodwill related to our Chemicals Segment is from our various step acquisitions of NL and Kronos which occurred prior to 2020, as goodwill was determined prior to the adoption of the equity transaction framework provisions of ASC Topic 810. 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 ​ ​ ​ ​ ​ ​ ​ ​ Component ​ ​ ​ ​ Chemicals Products Total ​ ​ (In millions) Balance at December 31, 2020, 2021 and 2022 ​ $ 352.6 ​ $ 27.1 ​ $ 379.7 ​ 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 2020, 2021 and 2022 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 2020, 2021 and 2022, no goodwill impairment was indicated as part of our annual impairment review of goodwill. Prior to 2020, we recorded an aggregate $ 16.5 million goodwill impairment, mostly with respect to our Component Products Segment. Our consolidated gross goodwill at December 31, 2022 is $ 396.2 million. ​ F- 27 ​ Note 9 – Long-term debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Valhi: ​ ​ Contran credit facility ​ $ 172.9 ​ $ 121.4 Subsidiary debt: ​ ​ Kronos: ​ ​ Senior Notes ​ 448.8 ​ 424.1 LandWell: ​ ​ Note payable to Western Alliance Business Trust ​ 13.5 ​ 12.9 BMI: ​ ​ BWC Bank loan from Western Alliance Bank ​ 15.4 ​ — Other ​ 2.4 ​ 1.1 Total subsidiary debt ​ 480.1 ​ 438.1 Total debt ​ 653.0 ​ 559.5 Less current maturities ​ 3.1 ​ 1.8 Total long-term debt ​ $ 649.9 ​ $ 557.7 ​ Valhi – Contran credit facility – We have an unsecured revolving credit facility with Contran which, as amended, provides for borrowings from Contran of up to $ 175 million. The facility, as amended, bears interest at prime plus 1 % ( 8.50 % at December 31, 2022), and is due on demand, but in any event no earlier than December 31, 2024 . 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). The average interest rate on the credit facility for the year ended December 31, 2022 was 5.86 %. During 2022 we had borrowings of $ .1 million and repayments of $ 51.6 million under this facility, and at December 31, 2022 an additional $ 53.6 million was available for borrowings under this facility. Kronos – Senior Secured Notes – On September 13, 2017, Kronos International, Inc. (“KII”), Kronos’ wholly-owned subsidiary, issued € 400 million aggregate principal amount of its 3.75 % Senior Secured Notes due September 15, 2025 (the “Senior Notes”), at par value ($ 477.6 million when issued). The Senior Notes: ● bear interest at 3.75 % per annum, payable semi-annually on March 15 and September 15 of each year, payments began on March 15, 2018 ; ● have a maturity date of September 15, 2025 . Kronos may redeem the Senior Notes at 100.938 % of the principal amount, declining to 100 % on or after September 15, 2023. If Kronos experiences certain specified change of control events, it would be required to make an offer to purchase the Senior Notes at 101 % of the principal amount. Kronos would also be required to make an offer to purchase a specified portion of the Senior Notes at par value in the event that it generates 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 ; ● 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; ● 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 foreign 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 F- 28 ​ provisions and restrictive covenants customary in lending transactions of this type (however, there are no ongoing financial maintenance covenants); and ● contain customary default provisions, including a default under any of Kronos’ other indebtedness in excess of $ 50.0 million. The carrying value of the Senior Notes at December 31, 2022 is stated net of unamortized debt issuance costs of $ 2.4 million (December 31, 2021 - $ 3.5 million). Revolving credit facility – On April 20, 2021, Kronos entered into a $ 225 million global revolving credit facility (“Global Revolver”) which matures in April 2026 . Borrowings under the Global Revolver are available for Kronos’ general corporate purposes. Available borrowings are based on formula-determined amounts of eligible trade receivables and inventories, as defined in the agreement, less any outstanding letters of credit issued under the Global Revolver. Borrowings by Kronos’ Canadian, Belgian and German subsidiaries are limited to $ 25 million, € 30 million and € 60 million, respectively. Any amounts outstanding under the Global Revolver bear interest, at Kronos’ option, at the applicable non-base rate (LIBOR, CDOR or EURIBOR, dependent on the currency of the borrowing) plus a margin ranging from 1.5 % to 2.0 %, or at the applicable base rate, as defined in the agreement, plus a margin ranging from .5 % to 2.0 %. The Global Revolver is collateralized by, among other things, a first priority lien on the borrowers’ trade receivables and inventories. The facility contains a number of covenants and restrictions customary in lending transactions of this type which, among other things, restrict the borrowers’ ability to incur additional debt, incur liens, pay additional dividends or merge or consolidate with, or sell or transfer all or substantially all of their assets to another entity and, under certain conditions, requires the maintenance of a fixed charge coverage ratio, as defined in the agreement, of at least 1.0 to 1.0. During 2022, Kronos had no borrowings or repayments under its Global Revolver and at December 31, 2022, approximately $ 211 million was available for borrowing under this revolving facility. Other – In December 2019, LandWell entered into a $ 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. See Note 7. In February 2017, BWC entered into a $ 20.5 million loan agreement with Western Alliance Bank. In 2022, BWC repaid $ 8.4 million on this loan prior to September 10, 2022. As a result of BWC’s bankruptcy filing, BWC is no longer consolidated in our Consolidated Financial Statements, including the loan from Western Alliance Bank (see Note 2). ​ ​ F- 29 ​ Aggregate maturities of long-term debt – Aggregate maturities of debt at December 31, 2022 are presented in the table below. ​ ​ ​ ​ ​ Years ending December 31, Amount ​ ​ (In millions) Gross amounts due each year: ​ 2023 ​ $ 1.8 2024 ​ 122.1 2025 ​ 427.3 2026 ​ .8 2027 ​ .8 2028 and thereafter ​ 9.1 Subtotal ​ ​ 561.9 Less amounts representing original issue discount and debt issuance costs ​ 2.4 Total long-term debt ​ $ 559.5 ​ We are in compliance with all of our debt covenants at December 31, 2022. Note 10 – Accounts payable and accrued liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Accounts payable: ​ ​ Kronos ​ $ 143.6 ​ $ 177.2 CompX ​ 3.4 ​ 3.5 BMI/LandWell ​ 5.3 ​ 18.7 Other ​ .4 ​ — Total ​ $ 152.7 ​ $ 199.4 Current accrued liabilities: ​ ​ ​ ​ ​ ​ Deferred income ​ $ 125.8 ​ $ 110.7 Employee benefits ​ ​ 39.9 ​ ​ 34.4 Accrued sales discounts and rebates ​ 28.7 ​ 25.6 Interest ​ 5.3 ​ 4.9 Operating lease liabilities ​ 3.7 ​ 3.8 Environmental remediation and related costs ​ 3.5 ​ 3.8 Other ​ 57.9 ​ 60.4 Total ​ $ 264.8 ​ $ 243.6 Noncurrent accrued liabilities: ​ ​ Accrued development costs ​ $ 55.4 ​ $ 48.1 Deferred income ​ ​ 81.6 ​ ​ 25.9 Insurance claims and expenses ​ 36.4 ​ 18.7 Operating lease liabilities ​ 15.8 ​ 17.4 Other postretirement benefits ​ ​ 10.2 ​ ​ 7.1 Employee benefits ​ 6.1 ​ 4.8 Reserve for uncertain tax positions ​ 3.5 ​ .3 Other ​ 10.0 ​ 6.7 Total ​ $ 219.0 ​ $ 129.0 ​ The risks associated with certain of our accrued insurance claims and expenses have been reinsured, and the related IBNR receivables are recognized as noncurrent assets to the extent the related liability is classified as a noncurrent liability. See Note 7. Our reserve for uncertain tax positions is discussed in Note 14. F- 30 ​ Note 11 – Defined contribution and defined benefit retirement: Defined contribution plans. Certain of our subsidiaries maintain various defined contribution pension plans for our employees worldwide. Defined contribution plan expense approximated $ 6.6 million in 2020, $ 7.8 million in 2021 and $ 8.0 million in 2022. Defined benefit plans. Kronos and NL sponsor various defined benefit pension plans worldwide. The benefits under our defined benefit plans are based upon years of service and employee compensation. Our funding policy is to contribute annually the minimum amount required under ERISA (or equivalent foreign) regulations plus additional amounts as we deem appropriate. We recognize an asset or liability for the over or under funded status of each of our individual defined benefit pension plans on our Consolidated Balance Sheets. Changes in the funded status of these plans are recognized either in net income, to the extent they are reflected in periodic benefit cost, or through other comprehensive income (loss). In accordance with applicable U.K. pension regulations, we entered into an agreement in March 2021 for the bulk annuity purchase, or “buy-in” with a specialist insurer of defined benefit pension plans. Following the buy-in, individual policies will replace the bulk annuity policy in a “buy-out” which is expected to be completed in 2023. The buy-out is expected to be completed with existing plan funds. At the completion of the buy-out we will remove the assets and liabilities of the U.K. pension plan from our Consolidated Financial Statements and a final plan settlement gain or loss (which we are currently unable to estimate) will be included in net periodic pension cost. At December 31, 2022 the U.K. plan had a benefit obligation of $ 7.8 million, plan assets of $ 9.3 million and a pension plan asset of $ 1.5 million was recognized in our Consolidated Balance Sheet. We expect to contribute the equivalent of approximately $ 18 million to all of our defined benefit pension plans during 2023. Benefit payments to plan participants out of plan assets are expected to be the equivalent of: ​ ​ ​ ​ ​ Years ending December 31, Amount ​ ​ (In millions) 2023 ​ $ 26.5 2024 ​ 28.0 2025 ​ 28.4 2026 ​ ​ 29.6 2027 ​ 31.7 Next 5 years ​ ​ 173.2 ​ F- 31 ​ The funded status of our U.S. defined benefit pension plans is presented in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2021 2022 ​ ​ (In millions) Change in projected benefit obligations (“PBO”): ​ ​ ​ ​ ​ ​ Balance at beginning of the year ​ $ 63.2 ​ $ 58.0 Interest cost ​ 1.3 ​ 1.4 Actuarial gains ​ ( 1.8 ) ​ ( 11.8 ) Settlements ​ ​ ( .5 ) ​ ​ — Benefits paid ​ ( 4.2 ) ​ ( 4.2 ) Balance at end of the year ​ $ 58.0 ​ $ 43.4 ​ ​ ​ ​ ​ ​ ​ Change in plan assets: ​ ​ ​ ​ ​ ​ Fair value at beginning of the year ​ $ 53.3 ​ $ 52.4 Actual return on plan assets ​ 1.7 ​ ( 10.7 ) Employer contributions ​ 1.6 ​ 1.6 Benefits paid ​ ( 4.2 ) ​ ( 4.2 ) Fair value at end of the year ​ $ 52.4 ​ $ 39.1 Funded status ​ $ ( 5.6 ) ​ $ ( 4.3 ) ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the Consolidated Balance Sheets: ​ ​ ​ ​ ​ ​ Accrued pension costs: ​ ​ ​ ​ ​ ​ Current ​ $ ( .1 ) ​ $ ( .1 ) Noncurrent ​ ( 5.5 ) ​ ( 4.2 ) Total ​ ( 5.6 ) ​ ( 4.3 ) Accumulated other comprehensive loss - actuarial losses ​ 33.2 ​ 32.2 Total ​ $ 27.6 ​ $ 27.9 Accumulated benefit obligations (“ABO”) ​ $ 58.0 ​ $ 43.4 ​ The total net underfunded status of our U.S. defined benefit pension plans decreased from $ 5.6 million at December 31, 2021 to $ 4.3 million at December 31, 2022 due to the change in our PBO during 2022 exceeding the change in our plan assets during 2022. The decrease in our PBO in 2022 was primarily attributable to higher actuarial gains due to the increase in discount rates from year end 2021. The decrease in our plan assets in 2022 was primarily attributable to negative plan asset returns in 2022. The components of our net periodic defined benefit pension cost for U.S. plans are presented in the table below. The amounts shown below for the amortization of recognized actuarial losses for 2020, 2021 and 2022 were recognized as components of our accumulated other comprehensive income (loss) at December 31, 2019, 2020 and 2021, respectively, net of deferred income taxes and noncontrolling interest. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Net periodic pension cost for U.S. plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ $ 1.9 ​ $ 1.3 ​ $ 1.4 Expected return on plan assets ​ ( 2.1 ) ​ ( 2.1 ) ​ ( 2.0 ) Recognized net actuarial losses ​ 2.1 ​ 2.1 ​ 1.9 Settlements ​ ​ — ​ ​ ( .5 ) ​ ​ — Total ​ $ 1.9 ​ $ .8 ​ $ 1.3 ​ F- 32 ​ Information concerning our U.S. defined benefit pension plans (for which the ABO of all of the plans exceeds the fair value of plan assets as of the indicated date) is presented in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Plans for which the ABO exceeds plan assets: ​ ​ ​ ​ ​ ​ Projected benefit obligations ​ $ 58.0 ​ $ 43.4 Accumulated benefit obligations ​ 58.0 ​ 43.4 Fair value of plan assets ​ 52.4 ​ 39.1 ​ 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, 2021 and 2022 are 2.6 % and 5.3 %, respectively. 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. The weighted-average rate assumptions used in determining the net periodic pension cost for our U.S. defined benefit pension plans for 2020, 2021 and 2022 are presented in the table below. The impact of assumed increases in future compensation levels does not have an effect on the periodic pension cost as the plans are frozen with regards to compensation. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 Discount rate 3.1 % ​ 2.2 % ​ 2.6 % ​ Long-term return on plan assets 4.5 % ​ 4.0 % ​ 4.0 % ​ ​ Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods. F- 33 ​ The funded status of our non-U.S. defined benefit pension plans is presented in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2021 2022 ​ ​ (In millions) Change in PBO: ​ ​ ​ ​ ​ ​ Balance at beginning of the year ​ $ 855.8 ​ $ 758.1 Service cost ​ 14.7 ​ 11.3 Interest cost ​ 8.3 ​ 10.6 Participants’ contributions ​ 2.0 ​ 1.7 Actuarial gains ​ ( 43.9 ) ​ ( 198.6 ) Settlements ​ ​ — ​ ​ ( 1.4 ) Change in currency exchange rates ​ ( 55.2 ) ​ ( 51.2 ) Benefits paid ​ ( 23.6 ) ​ ( 21.9 ) Balance at end of the year ​ $ 758.1 ​ $ 508.6 ​ ​ ​ ​ ​ ​ ​ Change in plan assets: ​ ​ ​ ​ ​ ​ Fair value at beginning of the year ​ $ 494.8 ​ $ 481.5 Actual return on plan assets ​ 16.7 ​ ( 52.5 ) Employer contributions ​ 18.7 ​ 15.0 Participants' contributions ​ 2.0 ​ 1.7 Settlements ​ ​ — ​ ​ ( 1.2 ) Change in currency exchange rates ​ ( 27.1 ) ​ ( 32.1 ) Benefits paid ​ ( 23.6 ) ​ ( 21.9 ) Fair value at end of the year ​ $ 481.5 ​ $ 390.5 Funded status ​ $ ( 276.6 ) ​ $ ( 118.1 ) ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the Consolidated Balance Sheets: ​ ​ ​ ​ ​ ​ Noncurrent pension asset ​ $ 9.0 ​ $ 9.3 Noncurrent accrued pension costs ​ ( 285.6 ) ​ ( 127.4 ) Total ​ ( 276.6 ) ​ ( 118.1 ) Accumulated other comprehensive loss: ​ ​ ​ ​ ​ ​ Actuarial losses ​ 238.3 ​ 90.0 Prior service cost ​ .4 ​ .4 Total ​ 238.7 ​ 90.4 Total ​ $ ( 37.9 ) ​ $ ( 27.7 ) ABO ​ $ 733.8 ​ $ 493.9 ​ The total net underfunded status of our non-U.S. defined benefit pension plans decreased from $ 276.6 million at December 31, 2021 to $ 118.1 million at December 31, 2022 due to the change in our PBO during 2022 exceeding the change in plan assets during 2022. The decrease in our PBO in 2022 was primarily attributable to higher actuarial gains due to the increase in discount rates from year end 2021 and favorable foreign currency fluctuations, primarily from the strengthening of the U.S. dollar relative to the euro. The decrease in our plan assets in 2022 was primarily attributable to the net effects of negative plan asset returns in 2022, unfavorable currency fluctuations, primarily from the strengthening of the U.S. dollar relative to the euro, and employer contributions. ​ F- 34 ​ The components of our net periodic pension benefit cost for our non-U.S. plans are presented in the table below. The amounts shown below for the amortization of prior service cost and recognized net actuarial losses for 2020, 2021 and 2022 were recognized as components of our accumulated other comprehensive income (loss) at December 31, 2019, 2020 and 2021, respectively, net of deferred income taxes and noncontrolling interest. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Net periodic pension cost for non-U.S. plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 13.3 ​ $ 14.7 ​ $ 11.3 Interest cost ​ 10.1 ​ 8.3 ​ 10.6 Expected return on plan assets ​ ( 9.0 ) ​ ( 11.4 ) ​ ( 11.1 ) Recognized net actuarial losses ​ 17.3 ​ 19.5 ​ 12.8 Amortization of prior service cost ​ .2 ​ .2 ​ .1 Settlements ​ — ​ — ​ .4 Total ​ $ 31.9 ​ $ 31.3 ​ $ 24.1 ​ Information concerning certain of our non-U.S. defined benefit pension plans (for which the ABO exceeds the fair value of plan assets as of the indicated date) is presented in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Plans for which the ABO exceeds plan assets: ​ ​ ​ ​ ​ ​ Projected benefit obligations ​ $ 695.2 ​ $ 403.5 Accumulated benefit obligations ​ 674.4 ​ 392.4 Fair value of plan assets ​ 409.4 ​ 276.0 ​ The key actuarial assumptions used to determine our non-U.S. benefit obligations as of December 31, 2021 and 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2021 2022 Discount rate ​ 1.5 % ​ 3.9 % ​ Increase in future compensation levels ​ 2.6 % ​ 2.7 % ​ ​ A summary of our key actuarial assumptions used to determine non-U.S. net periodic benefit cost for 2020, 2021 and 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2020 2021 ​ 2022 Discount rate ​ 1.4 % ​ 1.0 % ​ 1.5 % ​ Increase in future compensation levels ​ 2.6 % ​ 2.6 % ​ 2.6 % ​ Long-term return on plan assets ​ 2.0 % ​ 2.4 % ​ 2.5 % ​ ​ Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods. The amounts shown for all of our periodic defined benefit plans for actuarial losses and prior service cost at December 31, 2021 and 2022 have not been recognized as components of our periodic defined benefit pension cost as of those dates. These amounts will be recognized as components of our periodic defined benefit cost in future years. These amounts, net of deferred income taxes and noncontrolling interest, are recognized in our accumulated other comprehensive income (loss) at December 31, 2021 and 2022. We expect approximately $ 3.8 million and $ .1 million of the unrecognized F- 35 ​ actuarial losses and prior service cost, respectively, will be recognized as components of our periodic defined benefit pension cost in 2023. The table below details the changes in other comprehensive income (loss) during 2020, 2021 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ (In millions) Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): ​ ​ ​ Net actuarial gains (losses) ​ $ ( 37.7 ) ​ $ 50.7 ​ $ 134.1 Amortization of unrecognized: ​ ​ ​ Net actuarial losses ​ 19.4 ​ 21.6 ​ 14.7 Prior service cost ​ .2 ​ .2 ​ .1 Settlements ​ — ​ — ​ .4 Total ​ $ ( 18.1 ) ​ $ 72.5 ​ $ 149.3 ​ In determining the expected long-term rate of return on plan asset assumptions, we consider the long-term asset mix (e.g. equity vs. fixed income) for the assets for each of our plans and the expected long-term rates of return for such asset components. In addition, we receive third-party advice about appropriate long-term rates of return. Such assumed asset mixes are summarized below: ● 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. ● In Canada, we currently have a plan asset target allocation of 10 - 20 % to equity securities and 80 - 90 % to fixed income securities. We expect the long-term rate of return for such investments to approximate the applicable equity or fixed income index. The Canadian assets are Level 1 inputs because they are traded in active markets. ● In Norway, we currently have a plan asset target allocation of 15 % to equity securities, 62 % to fixed income securities, 14 % to real estate and the remainder primarily to other investments and liquid investments such as money markets. The expected long-term rate of return for such investments is approximately 7 % , 4 % , 6 % and 4 % , respectively. The majority of Norwegian plan assets are Level 1 inputs because they are traded in active markets; however approximately 17 % 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 34 % to equity securities, 59 % to fixed income securities, and the remainder is allocated to multi-asset strategies. The expected long-term rate of return for such investments is approximately 7 % , 5 % and 4 % , respectively (before plan administrative expenses). Approximately 90 % 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. F- 36 ​ ● We also have plan assets in Belgium and the United Kingdom. The Belgian plan assets are invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input. The United Kingdom plan assets are invested primarily in insurance contracts and are a Level 3 input. We regularly review our actual asset allocation for each plan, and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate. The composition of our pension plan assets by asset category and fair value level at December 31, 2021 and 2022 is shown in the tables below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2021 ​ ​ ​ Quoted Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Active ​ Observable ​ Unobservable ​ Assets ​ ​ ​ ​ ​ Markets ​ Inputs ​ Inputs ​ measured ​ ​ Total ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ at NAV ​ ​ (In millions) Germany ​ $ 282.9 ​ $ — ​ $ — ​ $ 282.9 ​ $ — Canada: ​ ​ ​ ​ ​ Local currency equities ​ .2 ​ .2 ​ — ​ — ​ — Non local currency equities ​ 21.9 ​ 21.9 ​ — ​ — ​ — Local currency fixed income ​ 89.3 ​ 89.3 ​ — ​ — ​ — Cash and other ​ .8 ​ .8 ​ — ​ — ​ — Norway: ​ ​ ​ ​ ​ Local currency equities ​ 3.1 ​ 3.1 ​ — ​ — ​ — Non local currency equities ​ 5.9 ​ 5.9 ​ — ​ — ​ — Local currency fixed income ​ 25.1 ​ 15.9 ​ 9.2 ​ — ​ — Non local currency fixed income ​ 6.7 ​ 6.7 ​ — ​ — ​ — Real estate ​ 9.1 ​ — ​ — ​ 9.1 ​ — Cash and other ​ 7.0 ​ 6.4 ​ — ​ .6 ​ — U.S.: ​ ​ ​ ​ ​ Equities ​ 18.5 ​ 1.2 ​ — ​ .1 ​ 17.2 Fixed income ​ 30.6 ​ — ​ — ​ — ​ 30.6 Cash and other ​ 3.2 ​ 1.9 ​ — ​ — ​ 1.3 Other ​ 29.6 ​ 1.8 ​ — ​ 27.8 ​ — Total ​ $ 533.9 ​ $ 155.1 ​ $ 9.2 ​ $ 320.5 ​ $ 49.1 ​ F- 37 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2022 ​ ​ ​ Quoted Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ Prices in ​ Other ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Active ​ Observable ​ Unobservable ​ Assets ​ ​ ​ ​ ​ Markets ​ Inputs ​ Inputs ​ measured ​ ​ Total ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ at NAV ​ ​ (In millions) Germany ​ $ 234.0 ​ $ — ​ $ — ​ $ 234.0 ​ $ — Canada: ​ ​ ​ ​ ​ Local currency equities ​ .1 ​ .1 ​ — ​ — ​ — Non local currency equities ​ 11.0 ​ 11.0 ​ — ​ — ​ — Local currency fixed income ​ 72.9 ​ 72.9 ​ — ​ — ​ — Cash and other ​ .6 ​ .6 ​ — ​ — ​ — Norway: ​ ​ ​ ​ ​ Local currency equities ​ 2.3 ​ 2.3 ​ — ​ — ​ — Non local currency equities ​ 4.7 ​ 4.7 ​ — ​ — ​ — Local currency fixed income ​ 21.8 ​ 7.0 ​ 14.8 ​ — ​ — Non local currency fixed income ​ 8.4 ​ 8.4 ​ — ​ — ​ — Real estate ​ 7.8 ​ — ​ — ​ 7.8 ​ — Cash and other ​ 2.7 ​ 2.4 ​ — ​ .3 ​ — U.S.: ​ ​ ​ ​ ​ ​ Equities ​ 12.4 ​ 1.0 ​ — ​ — ​ 11.4 Fixed income ​ 22.9 ​ .2 ​ — ​ — ​ 22.7 Cash and other ​ 3.8 ​ 2.8 ​ — ​ — ​ 1.0 Other ​ 24.2 ​ 1.5 ​ — ​ 22.7 ​ — Total ​ $ 429.6 ​ $ 114.9 ​ $ 14.8 ​ $ 264.8 ​ $ 35.1 ​ A rollforward of the change in fair value of Level 3 assets follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2021 2022 ​ ​ (In millions) Fair value at beginning of year ​ $ 314.8 ​ $ 320.5 Gain (loss) on assets held at end of year ​ 15.2 ​ ( 31.0 ) Gain (loss) on assets sold during the year ​ .4 ​ ( 3.6 ) Assets purchased ​ 16.2 ​ 13.8 Assets sold ​ ( 14.8 ) ​ ( 15.5 ) Transfers in (out) ​ ​ 13.9 ​ ​ ( .1 ) Currency exchange rate fluctuations ​ ( 25.2 ) ​ ( 19.3 ) Fair value at end of year ​ $ 320.5 ​ $ 264.8 ​ ​ F- 38 ​ Note 12 – Disaggregation of sales: The following table disaggregates the net sales of our Chemicals Segment by place of manufacture (point of origin) and the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Net sales - point of origin: ​ ​ ​ United States ​ $ 978.8 ​ $ 1,052.1 ​ $ 1,226.6 Germany ​ ​ 836.0 ​ ​ 971.7 ​ ​ 895.4 Canada ​ 319.5 ​ 371.9 ​ 389.4 Belgium ​ 249.5 ​ 295.7 ​ 306.5 Norway ​ 211.8 ​ 257.2 ​ 273.5 Eliminations ​ ( 956.8 ) ​ ( 1,009.2 ) ​ ( 1,161.2 ) Total ​ $ 1,638.8 ​ $ 1,939.4 ​ $ 1,930.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales - point of destination: ​ ​ ​ Europe ​ $ 783.2 ​ $ 945.0 ​ $ 878.3 North America ​ 569.3 ​ 645.7 ​ 695.7 Other ​ 286.3 ​ 348.7 ​ 356.2 Total ​ $ 1,638.8 ​ $ 1,939.4 ​ $ 1,930.2 ​ The following table disaggregates the net sales of our Component Products and Real Estate Management and Development Segments by major product line, which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows for these segments are affected by economic factors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Component Products: ​ ​ ​ Net sales: ​ ​ ​ Security products ​ $ 87.9 ​ $ 105.1 ​ $ 114.5 Marine components ​ 26.6 ​ 35.7 ​ 52.1 Total ​ $ 114.5 ​ $ 140.8 ​ $ 166.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Management and Development: ​ ​ ​ Net sales: ​ ​ ​ Land sales ​ $ 87.0 ​ $ 207.8 ​ $ 120.9 Water delivery ​ 7.6 ​ 6.8 ​ 3.6 Utility and other ​ 1.8 ​ 1.6 ​ 1.2 Total ​ $ 96.4 ​ $ 216.2 ​ $ 125.7 ​ ​ F- 39 ​ Note 13 – Other income, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Interest income and other: ​ ​ ​ Interest and dividends $ 4.8 $ 4.0 $ 10.9 Securities transactions, net ​ ​ ( .1 ) ​ ​ — ​ ​ ( .5 ) Total ​ ​ 4.7 ​ ​ 4.0 ​ 10.4 Infrastructure reimbursement ​ 19.7 ​ 15.3 ​ 16.0 Gain on land sales ​ ​ 4.5 ​ ​ 16.0 ​ ​ — Currency transactions, net ​ ​ ( 4.0 ) ​ ​ 1.6 ​ ​ 11.5 Insurance recoveries ​ ​ 1.6 ​ ​ .1 ​ ​ 2.8 Other, net ​ ​ 1.9 ​ ​ 2.0 ​ ​ 3.0 Total ​ $ 28.4 ​ $ 39.0 ​ $ 43.7 ​ In the third quarter of 2020, BMI recognized a pre-tax gain of $ 4.0 million related to proceeds received associated with a prior land sale. In 2021 we sold excess property not used in our operations for net proceeds of approximately $ 23.4 million (including $ 8.4 million in the second quarter and $ 15.0 million in the third quarter) and recognized a pre-tax gain of $ 16.0 million (including $ 5.6 million in the second quarter and $ 10.4 million in the third quarter). Infrastructure reimbursement – Infrastructure reimbursements related to the OPA are discussed in Note 7. LandWell also has an agreement with the energy utility providing electric power to the Cadence master planned community under which certain costs incurred for the development of power infrastructure may be reimbursed to LandWell. During 2022, LandWell received $ .8 million (all in the second quarter) in reimbursement for past costs incurred. ​ Insurance recoveries – In the first quarter of 2020, Kronos recognized a gain of $ 1.5 million related to an insurance settlement for a property damage claim. ​ On August 24, 2020, LPC temporarily halted production due to Hurricane Laura. Although storm damage to core processing facilities was not extensive, a variety of factors, including loss of utilities and limited access and availability of employees and raw materials, prevented the resumption of operations until September 25, 2020. The majority of Kronos’ losses from property damage and its share of LPC’s lost production and other costs resulting from the disruption of operations were covered by insurance. Kronos recognized a gain of $ 2.7 million related to its business interruption claim in the third quarter of 2022. ​ F- 40 ​ ​ Note 14 – Income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Pre-tax income: ​ ​ ​ United States ​ $ 45.2 ​ $ 131.4 ​ $ 81.4 Non-U.S. subsidiaries ​ 55.4 ​ 126.4 ​ 88.5 Total ​ $ 100.6 ​ $ 257.8 ​ $ 169.9 Expected tax expense at U.S. federal statutory income tax rate of 21 % $ 21.1 ​ $ 54.1 ​ $ 35.7 Non-U.S. tax rates ​ .5 ​ 4.5 ​ 2.0 Incremental net tax benefit on earnings and losses of U.S. and non-U.S. tax group companies ​ ( 8.7 ) ​ ( 2.0 ) ​ ( 1.7 ) Valuation allowance ​ 3.8 ​ .9 ​ ( 3.0 ) Global intangible low-tax income, net ​ 2.2 ​ 2.8 ​ 1.8 Tax rate changes ​ ​ ( .2 ) ​ ​ — ​ ​ — U.S. state income taxes, net ​ ​ .9 ​ ​ 1.5 ​ ​ 1.5 Adjustment to the reserve for uncertain tax positions, net ​ ( 3.8 ) ​ ( 2.6 ) ​ ( 2.9 ) Nondeductible expenses ​ 1.0 ​ 1.1 ​ 1.0 Other, net ​ ( .9 ) ​ ( .2 ) ​ ( .6 ) Income tax expense ​ $ 15.9 ​ $ 60.1 ​ $ 33.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Components of income tax expense: ​ ​ ​ Currently payable: ​ ​ ​ U.S. federal and state ​ $ 13.3 ​ $ 29.7 ​ $ 16.3 Non-U.S. ​ 14.9 ​ 21.5 ​ 20.1 Total ​ 28.2 ​ 51.2 ​ 36.4 Deferred income taxes (benefit): ​ ​ ​ U.S. federal and state ​ ( 10.3 ) ​ ( 1.7 ) ​ ( 3.9 ) Non-U.S. ​ ( 2.0 ) ​ 10.6 ​ 1.3 Total ​ ( 12.3 ) ​ 8.9 ​ ( 2.6 ) Income tax expense ​ $ 15.9 ​ $ 60.1 ​ $ 33.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive provision for income taxes allocable to: ​ ​ ​ Income from continuing operations ​ $ 15.9 ​ $ 60.1 ​ $ 33.8 Discontinued operations ​ .6 ​ — ​ — Other comprehensive income (loss): ​ ​ ​ ​ ​ Currency translation ​ 1.6 ​ ( .8 ) ​ ( 3.3 ) Pension plans ​ ( 7.3 ) ​ 29.7 ​ 60.7 Other ​ ( .4 ) ​ — ​ .9 Total ​ $ 10.4 ​ $ 89.0 ​ $ 92.1 ​ 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. subsidiaries, which subsidiary is treated as a dual resident for U.S. F- 41 ​ income tax purposes, to the extent the current-year income (losses) of such subsidiary is subject to U.S. 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. The components of the net deferred income taxes at December 31, 2021 and 2022 are summarized in the following table. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 ​ 2022 ​ ​ Assets ​ Liabilities ​ Assets ​ Liabilities ​ ​ (In millions) Tax effect of temporary differences related to: ​ ​ ​ ​ Inventories ​ $ — ​ $ ( 2.5 ) ​ $ — ​ $ ( 5.3 ) Property and equipment ​ — ​ ( 70.4 ) ​ — ​ ( 62.8 ) Lease assets (liabilities) ​ 5.0 ​ ( 5.1 ) ​ 5.3 ​ ( 5.4 ) Accrued OPEB costs ​ 2.8 ​ — ​ 2.0 ​ — Accrued pension costs ​ 74.1 ​ — ​ 22.0 ​ — Accrued environmental liabilities ​ 28.5 ​ — ​ 25.9 ​ — Other deductible differences ​ 9.3 ​ — ​ 12.0 ​ — Other taxable differences ​ — ​ ( 15.5 ) ​ — ​ ( 15.8 ) Investments in subsidiaries and affiliates ​ 7.3 ​ ( 52.7 ) ​ 6.7 ​ ( 62.3 ) Tax on unremitted earnings of non-U.S. subsidiaries ​ — ​ ( 11.2 ) ​ — ​ ( 11.4 ) Tax loss and tax credit carryforwards ​ 89.4 ​ — ​ 82.6 ​ — Valuation allowance ​ ( 18.4 ) ​ — ​ ( 16.5 ) ​ — Adjusted gross deferred tax assets (liabilities) ​ 198.0 ​ ( 157.4 ) ​ 140.0 ​ ( 163.0 ) Netting of items by tax jurisdiction ​ ( 111.2 ) ​ 111.2 ​ ( 99.5 ) ​ 99.5 Net noncurrent deferred tax asset (liability) ​ $ 86.8 ​ $ ( 46.2 ) ​ $ 40.5 ​ $ ( 63.5 ) ​ Our Chemicals Segment has substantial net operating loss (NOL) carryforwards in Germany (the equivalent of $ 414 million for German corporate purposes at December 31, 2022) and in Belgium (the equivalent of $ 13 million for Belgian corporate tax purposes at December 31, 2022). At December 31, 2022, we have concluded that no deferred income tax asset valuation allowance is required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have an indefinite carryforward period, (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. However, prior to the complete utilization of such carryforwards, if we were to generate additional losses in our German or Belgian operations for an extended period of time, or if applicable law were to change such that the carryforward period was no longer indefinite, it is possible that we might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point we would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards. 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 over an eight year period beginning in 2018. At December 31, 2022, the balance of our unpaid Transition Tax is $ 44.5 million, which will be paid in annual installments over the remainder of the eight-year period, which ends in 2025. Of such $ 44.5 million, $ 33.4 million is recorded as a noncurrent payable to affiliate (income taxes payable to Contran) classified as a noncurrent liability in our Consolidated Balance Sheet, and $ 11.1 million is included with our current payable to affiliate (income taxes payable to Contran) classified as a current liability (a portion of our noncurrent income tax payable to affiliate was reclassified to our current payable to affiliate for the portion of our 2022 Transition Tax installment due within the next twelve months). See Note 17. F- 42 ​ 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. At December 31, 2022, we have recognized a deferred income tax liability with respect to our direct investment in Kronos of $ 55.0 million. There is a maximum amount (or cap) of such deferred income taxes we are required to recognize with respect to our direct investment in Kronos. The maximum amount of such deferred income tax liability we would be required to have recognized (the cap) is $ 155.4 million. During 2022, we recognized a non-cash deferred income tax expense with respect to our direct investment in Kronos of $ 1.2 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 expense of $ 5.0 million in 2021 and a non-cash deferred income tax benefit of $ 2.4 million in 2020. 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. On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, modifications to the limitation of business interest for tax years beginning in 2019 and 2020 and technical corrections to tax depreciation methods for qualified improvement property. 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. We determined our interest expense was limited under these provisions and we recorded deferred tax assets for the carryforwards associated with the nondeductible portion of our interest expense. We also concluded we were required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria. The CARES Act modification to the business interest provisions increased the business interest limitation from 30 % of adjusted taxable income to 50 % of adjusted taxable income which increased our allowable interest expense deduction for 2019 and 2020. Consequently, in the first quarter of 2020 we recognized a cash tax benefit of $ 1.0 million related to the reversal of the valuation allowance recognized in 2019 for the portion of the disallowed interest expense we did not expect to fully utilize at December 31, 2019 and we considered such modifications in our 2020 provision for income taxes. Although these CARES Act provisions expired at the end of 2020, in 2021 we recognized less disallowed interest expense than in recent years and a lower valuation allowance for the portion of the carryforward we believe does not meet the more-likely-than-not measurement criteria primarily due to the increase in our adjusted taxable income. During 2022, we determined we were able to utilize a portion of the business interest expense carryforward and accordingly we recognized an aggregate non-cash income tax benefit of $ 2.9 million as a reduction of the valuation allowance. On August 16, 2022, the Inflation Reduction Act was signed into law. Among other things, this legislation provides for a 15% corporate alternative minimum tax on certain large corporations, imposes a 1% excise tax on qualifying stock buybacks occurring after December 31, 2022, and provides for certain energy-related tax credits. We have evaluated the relevant provisions of the Act and do not expect them to have a material impact on our tax provision. Tax authorities are examining certain of our U.S. and non-U.S. tax returns and have or may propose tax deficiencies, including penalties and interest. Because of the inherent uncertainties involved in settlement initiatives and court and tax proceedings, we cannot guarantee that these tax matters, if any, will be resolved in our favor, and therefore our potential exposure, if any, is also uncertain. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. ​ F- 43 ​ The following table shows the changes in the amount of our uncertain tax positions (exclusive of the effect of interest and penalties) during 2020, 2021 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 ​ 2022 ​ ​ (In millions) Unrecognized tax benefits: ​ ​ ​ Amount at beginning of year ​ $ 13.8 ​ $ 9.6 ​ $ 6.4 Net increase (decrease): ​ ​ ​ Tax positions taken in prior periods ​ ( .3 ) ​ — ​ — Tax positions taken in current period ​ .6 ​ .6 ​ .7 Lapse due to applicable statute of limitations ​ ( 4.8 ) ​ ( 3.6 ) ​ ( 3.4 ) Changes in currency exchange rates ​ .3 ​ ( .2 ) ​ ( .2 ) Amount at end of year ​ $ 9.6 ​ $ 6.4 ​ $ 3.5 ​ If our uncertain tax positions were recognized, a benefit of $ 3.5 million at December 31, 2022, would affect our effective income tax rate. We currently estimate that our unrecognized tax benefits will decrease by approximately $ 1.2 million, excluding interest, during the next twelve months related to the expiration of certain statutes of limitations. We and Contran file income tax returns in U.S. federal and various state and local jurisdictions. We also file income tax returns in various foreign jurisdictions, principally in Germany, Canada, Belgium and Norway. Our U.S. income tax returns prior to 2019 are generally considered closed to examination by applicable tax authorities. Our non-U.S. income tax returns are generally considered closed to examination for years prior to: 2017 for Norway; 2017 for Canada; 2018 for Germany; and 2019 for Belgium. We accrue interest and penalties on our uncertain tax positions as a component of our provision for income taxes. We accrued interest and penalties of $ .8 million during 2020, $ .7 million during 2021 and $ .2 million during 2022, and at December 31, 2021 and 2022 we had $ .9 million and $ .1 million, respectively, accrued for interest and an immaterial amount accrued for penalties for our uncertain tax positions. Note 15 – Noncontrolling interest in subsidiaries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ (In millions) Noncontrolling interest in net assets: ​ ​ Kronos Worldwide ​ $ 226.6 ​ $ 239.3 NL Industries ​ 75.7 ​ 79.0 CompX International ​ 22.5 ​ 20.6 BMI ​ 8.3 ​ 6.9 LandWell ​ ( 4.2 ) ​ 2.4 Total ​ $ 328.9 ​ $ 348.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Noncontrolling interest in net income of subsidiaries: ​ ​ ​ Kronos Worldwide ​ $ 12.1 ​ $ 22.0 ​ $ 20.0 NL Industries ​ 2.5 ​ 8.7 ​ 5.8 CompX International ​ 1.4 ​ 2.2 ​ 2.6 BMI ​ 7.6 ​ 14.7 ​ 2.8 LandWell ​ 10.2 ​ 22.9 ​ 14.7 Total ​ $ 33.8 ​ $ 70.5 ​ $ 45.9 ​ F- 44 ​ Note 16 – Valhi stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares of common stock ​ Issued Treasury Outstanding ​ ​ (In millions) Balance at December 31, 2020, 2021 and 2022 29.6 ( 1.1 ) 28.5 ​ Valhi common stock . We issued a nominal number of shares of Valhi common stock during 2020, 2021 and 2022, associated with annual stock awards to members of our board of directors. Valhi share repurchases and cancellations. Prior to 2020 our board of directors authorized the repurchase of shares of our common stock in open market transactions, including block purchases, or in privately negotiated transactions, which may include transactions with our affiliates or subsidiaries. The aggregate number of shares authorized for repurchase is 833,333 , and we have approximately 334,000 shares available for repurchase at December 31, 2022. We may purchase the stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, we may terminate the program prior to completion. We will use cash on hand to acquire the shares. Repurchased shares could be retired and cancelled or may be added to our treasury stock and used for employee benefit plans, future acquisitions or other corporate purposes. We did not make any such purchases under the plan in 2020, 2021 or 2022. Treasury stock. At December 31, 2021 and 2022, NL and Kronos held approximately 1.2 million and .1 million shares of our common stock, respectively. The treasury stock we reported for financial reporting purposes at December 31, 2021 and 2022 represents our proportional interest in these shares of our common stock held by NL and Kronos, at NL’s and Kronos’ historical cost basis. The remaining portion of these shares of our common stock, which are attributable to the noncontrolling interest of NL and Kronos, are reflected in our consolidated balance sheet at fair value and are classified as part of other noncurrent assets. Under Delaware Corporation Law, 100 % (and not the proportionate interest) of a parent company’s shares held by a majority-owned subsidiary of the parent is considered to be treasury stock for voting purposes. As a result, our common shares outstanding for financial reporting purposes differ from those outstanding for legal purposes. Any unrealized gains or losses on the shares of our common stock attributable to the noncontrolling interest of Kronos and NL are recognized in the determination of each of Kronos and NL’s respective net income or loss. 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 $ 1.7 million in 2020, a gain of $ 3.3 million in 2021 and a loss of $ 1.6 million in 2022 in our Consolidated Statements of Income which represents the unrealized gain (loss) in respect of these shares attributable to the noncontrolling interest of Kronos and NL. See Note 2. Preferred stock. At December 31, 2019, our outstanding preferred stock consisted of 5,000 shares of our Series A Preferred Stock having a liquidation preference of $ 133,466.75 per share, or an aggregate liquidation preference of $ 667.3 million. The outstanding shares of Series A Preferred Stock were held by Contran and represented all of the shares of Series A Preferred Stock we were authorized to issue. The preferred stock had a par value of $ .01 per share and paid a non-cumulative cash dividend at an annual rate of 6 % of the aggregate liquidation preference only when authorized and declared by our board of directors. The shares of Series A Preferred Stock were non-convertible, and the shares did not carry any redemption or call features (either at our option or the option of the holder). A holder of the Series A shares did not have any voting rights, except in limited circumstances, and was not entitled to a preferential dividend right that is senior to our shares of common stock. We had not declared any dividends on the Series A Preferred Stock since its issuance. Effective August 10, 2020, we, Contran and a wholly owned subsidiary of Contran entered into a contribution agreement pursuant to which, on August 10, 2020, the 6 % Series A Preferred Stock was voluntarily contributed to our capital for no consideration and without the issuance of additional securities by us. Our independent directors approved acceptance of such contribution and entering into the contribution agreement. The contribution had no impact on our consolidated financial position, results of operations or liquidity and the contribution did not have any tax consequences to us. On August 10, 2020, following the contribution of the 6 % Series A Preferred Stock to us, we filed a Certificate of Elimination with the Secretary of State of Delaware and, as a result, the 5,000 shares that were designated as 6 % Series A Preferred Stock have been returned to the status of authorized but unissued shares of the preferred stock, $.01 par value per share, without designation as to series. F- 45 ​ Valhi director stock plan. Prior to 2020, our board of directors adopted a plan that provided for the award of stock to our board of directors, and up to a maximum of 200,000 shares could be awarded. Under the plan, we awarded 50,000 shares in 2020. (The share numbers under the then-existing plan have not been adjusted for the 1-for- 12 reverse stock split in 2020.) In March 2021, our board of directors voted to replace the existing director stock plan with a new plan that would provide for the award of stock to non-employee members of our board of directors, and up to a maximum of 100,000 shares could be awarded. The new plan was approved at our May 2021 shareholder meeting, at which time the prior director stock plan terminated. We awarded 4,000 shares and 2,400 shares under this plan in 2021 and 2022, respectively, and at December 31, 2022, 93,600 shares are available for future award under this new plan. Stock plans of subsidiaries. Kronos, NL and CompX each maintain plans which provide for the award of their common stock to their board of directors. At December 31, 2022, Kronos, NL and CompX had 111,800 , 51,150 and 131,050 shares of their respective common stock available for future award under respective plans. Accumulated other comprehensive income (loss). Accumulated other comprehensive income (loss) attributable to Valhi stockholders comprises changes in equity as presented in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Accumulated other comprehensive income (loss) (net of tax and noncontrolling interest): ​ ​ ​ Marketable securities: ​ ​ ​ Balance at beginning of year ​ $ 1.7 ​ $ 1.8 ​ $ 1.7 Other comprehensive income: ​ ​ ​ ​ ​ Unrealized gain (loss) arising during the year ​ .1 ​ ( .1 ) ​ ( .1 ) Balance at end of year ​ $ 1.8 ​ $ 1.7 ​ $ 1.6 Currency translation: ​ ​ ​ Balance at beginning of year ​ $ ( 76.8 ) ​ $ ( 67.4 ) ​ $ ( 72.2 ) Other comprehensive gain (loss) arising during the year ​ 9.4 ​ ( 4.8 ) ​ ( 19.3 ) Balance at end of year ​ $ ( 67.4 ) ​ $ ( 72.2 ) ​ $ ( 91.5 ) Defined benefit pension plans: ​ ​ ​ Balance at beginning of year ​ $ ( 146.6 ) ​ $ ( 154.1 ) ​ $ ( 120.9 ) Other comprehensive income: ​ ​ ​ Amortization of prior service cost and net losses included in net periodic pension cost ​ 9.8 ​ 10.7 ​ 7.3 Net actuarial gain (loss) arising during the year ​ ( 17.3 ) ​ 22.5 ​ 58.4 Plan settlement ​ — ​ — ​ .2 Balance at end of year ​ $ ( 154.1 ) ​ $ ( 120.9 ) ​ $ ( 55.0 ) OPEB plans: ​ ​ ​ Balance at beginning of year ​ $ 1.0 ​ $ .3 ​ $ .1 Other comprehensive income: ​ ​ ​ Amortization of prior service credit and net losses included in net periodic OPEB cost ​ ( .8 ) ​ ( .3 ) ​ ( .5 ) Net actuarial gain arising during the year ​ .1 ​ .1 ​ 1.4 Balance at end of year ​ $ .3 ​ $ .1 ​ $ 1.0 Total accumulated other comprehensive loss: ​ ​ ​ Balance at beginning of year ​ $ ( 220.7 ) ​ $ ( 219.4 ) ​ $ ( 191.3 ) Other comprehensive income ​ 1.3 ​ 28.1 ​ 47.4 Balance at end of year ​ $ ( 219.4 ) ​ $ ( 191.3 ) ​ $ ( 143.9 ) ​ See Note 11 for amounts related to our defined benefit pension plans and Note 10 for amounts related to our OPEB plans. F- 46 ​ Note 17 – Related party transactions: We may be deemed to be controlled by Ms. Simmons and the Family Trust. See Note 1. 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. 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. From time to time, we may have loans and advances outstanding between us and various related parties, including Contran, pursuant to term and demand notes. We generally enter into these loans and advances for cash management purposes. When we loan funds to related parties, we are generally able to earn a higher rate of return on the loan than we would earn if we invested the funds in other instruments. While certain of these loans may be of a lesser credit quality than cash equivalent instruments otherwise available to us, we believe we have evaluated the credit risks involved and appropriately reflect those credit risks in the terms of the applicable loans. When we borrow from related parties, we are generally able to pay a lower rate of interest than we would pay if we borrowed from unrelated parties. See Note 9 for more information on the Valhi credit facility with Contran. We paid Contran $ 14.2 million, $ 10.4 million and $ 9.2 million in interest on borrowings and unused commitment fees under credit facilities in 2020, 2021 and 2022, respectively. Under the terms of various intercorporate services agreements (“ISAs”) we enter into with Contran, employees of Contran provide us certain management, tax planning, financial and administrative services on a fee basis. Such fees are based on the compensation of individual Contran employees providing services for us and/or estimates of the time devoted to our affairs by such persons. Because of the number of companies affiliated with Contran, we believe we benefit from cost savings and economies of scale gained by not having certain management, financial and administrative staffs duplicated at all of our subsidiaries, thus allowing certain Contran employees to provide services to multiple companies but only be compensated by Contran. We negotiate fees annually, and agreements renew quarterly. The net ISA fees charged to us by Contran aggregated $ 41.3 million in 2020, $ 41.0 million in 2021 and $ 41.2 million in 2022. At December 31, 2022, we had an aggregate 16.7 million shares of our Kronos common stock pledged as collateral for certain debt obligations of Contran. We receive a fee from Contran for pledging these Kronos shares, determined by a formula based on the market value of the shares pledged. We received $ 1.4 million in 2020, $ 1.5 million in 2021 and $ 1.2 million in 2022 from Contran for this pledge. Contran and certain of its subsidiaries and affiliates, including us, purchase certain of their insurance policies and risk management services as a group, with the costs of the jointly-owned policies and services being apportioned among the participating companies. Tall Pines Insurance Company, our subsidiary, underwrites certain insurance policies for Contran and certain of its subsidiaries and affiliates, including us. Tall Pines purchases reinsurance from highly rated (as determined by A.M. Best or other internationally recognized ratings agency) third-party insurance carriers for substantially all of the risks it underwrites. Consistent with insurance industry practices, Tall Pines receives commissions from the reinsurance underwriters and/or assesses fees for certain of the policies that it underwrites. The aggregate amount paid under the group insurance program by us, our subsidiaries and our joint venture in 2020, 2021 and 2022 was $ 23.1 million, $ 27.1 million and $ 25.2 million, respectively, which amounts principally represent insurance premiums. The aggregate amounts paid under the group insurance program also include payments to insurers or reinsurers for the reimbursement of claims within our applicable deductible or retention ranges that such insurers and reinsurers paid to third parties on our behalf, as well as amounts for claims and risk management services and various other third-party fees and expenses incurred by the program. We expect these relationships will continue in 2023. F- 47 ​ With respect to certain of such jointly-owned policies, it is possible that unusually large losses incurred by one or more insureds during a given policy period could leave the other participating companies without adequate coverage under that policy for the balance of the policy period. As a result, and in the event that the available coverage under a particular policy would become exhausted by one or more claims, Contran and certain of its subsidiaries and affiliates, including us, have entered into a loss sharing agreement under which any uninsured loss arising because the available coverage had been exhausted by one or more claims will be shared ratably amongst those entities that had submitted claims under the relevant policy. We believe the benefits in the form of reduced premiums and broader coverage associated with the group coverage for such policies justify the risk associated with the potential for any uninsured loss. 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 companies. The aggregate amount we paid Contran for such services was $ .3 million in each of 2020, 2021 and 2022. Under the terms of a sublease agreement between Contran and Kronos, Kronos leases certain office space from Contran. Kronos paid Contran $ .4 million in each of 2020 and 2021 and $ .5 million in 2022 for such rent and related ancillary services. We expect that these relationships with Contran will continue in 2023. Receivables from and payables to affiliates are summarized in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2022 ​ ​ (In millions) Current receivables from affiliates: ​ ​ Contran trade items ​ $ .1 ​ $ .2 LPC ​ 15.8 ​ — Other ​ 2.6 ​ 2.7 Total ​ $ 18.5 ​ $ 2.9 Current payables to affiliates: ​ ​ LPC ​ $ 17.3 ​ $ 17.1 Contran - income taxes ​ 1.5 ​ 5.8 Total ​ $ 18.8 ​ $ 22.9 Noncurrent payable to affiliates: ​ ​ Contran - income taxes ​ $ 44.5 ​ $ 33.4 Payables to affiliate included in long-term debt: ​ ​ Valhi - Contran credit facility ​ $ 172.9 ​ $ 121.4 ​ Amounts payable to LPC are generally for the purchase of TiO 2 , while amounts receivable from LPC are generally from the sale of TiO 2 feedstock. See Note 7. Purchases of TiO 2 from LPC were $ 167.8 million in 2020, $ 188.6 million in 2021 and $ 225.6 million in 2022. Sales of feedstock to LPC were $ 84.2 million in 2020, $ 85.4 million in 2021 and $ 106.9 million in 2022. The noncurrent payable to Contran for income taxes is discussed in Note 14. Note 18 – Commitments and contingencies: Lead pigment litigation 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 been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints. Certain of these actions have been filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others have been asserted as class actions. These lawsuits seek recovery under a variety of theories, including public and private nuisance, negligent product design, negligent failure to warn, strict liability, breach of warranty, conspiracy/concert of action, aiding and abetting, F- 48 ​ enterprise liability, market share or risk contribution liability, intentional tort, fraud and misrepresentation, violations of state consumer protection statutes, supplier negligence and similar claims. The plaintiffs in these actions generally seek to impose on the defendants responsibility for lead paint abatement and health concerns associated with the use of lead-based paints, including damages for personal injury, contribution and/or indemnification for medical expenses, medical monitoring expenses and costs for educational programs. To the extent the plaintiffs seek compensatory or punitive damages in these actions, such damages are generally unspecified. In some cases, the damages are unspecified pursuant to the requirements of applicable state law. A number of cases are inactive or have been dismissed or withdrawn. Most of the remaining cases are in various pre-trial stages. Some are on appeal following dismissal or summary judgment rulings or a trial verdict in favor of either the defendants or the plaintiffs. NL believes these actions are without merit, and intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously. We do not believe it is probable we have incurred any liability with respect to pending lead pigment litigation cases to which NL is a party, and with respect to all such lead pigment litigation cases to which NL is a party, we believe liability to NL that may result, if any, in this regard cannot be reasonably estimated, because: ● NL has never settled any of the market share, intentional tort, fraud, nuisance, supplier negligence, breach of warranty, conspiracy, misrepresentation, aiding and abetting, enterprise liability, or statutory cases (other than the Santa Clara case discussed below), ● no final, non-appealable adverse judgments have ever been entered against NL, and ● NL has never ultimately been found liable with respect to any such litigation matters, including over 100 cases over a thirty-year period for which NL was previously a party and for which NL has been dismissed without any finding of liability. Accordingly, we have not accrued any amounts for any of the pending lead pigment and lead-based paint litigation cases filed by or on behalf of states, counties, cities or their public housing authorities and school districts, or those asserted as class actions. In addition, we have determined that liability to NL which may result, if any, cannot be reasonably estimated at this time because there is no prior history of a loss of this nature on which an estimate could be made and there is no substantive information available upon which an estimate could be based. In the matter titled County of Santa Clara v. Atlantic Richfield Company, et al . (Superior Court of the State of California, County of Santa Clara, Case No. 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 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: $ 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 will be made with funds already on deposit at the court, which is included in noncurrent restricted cash on our Consolidated Balance Sheets, that are committed to the settlement, including all accrued interest at the date of payment, with any remaining balance to be paid by NL (and any amounts on deposit in excess of the final payment would be returned to NL). Pursuant to the settlement agreement, NL placed an additional $ 9.0 million into an escrow account which is included in noncurrent restricted cash on our Consolidated Balance Sheets. F- 49 ​ 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 the first, second and third annual installment payments of $ 12.0 million each in September 2020, 2021 and 2022. We recognized an aggregate accretion expense of $ 1.3 million, $ 1.1 million and $ .9 million in 2020, 2021, and 2022, respectively. New cases may continue to be filed against us. We do not know if we will incur liability in the future in respect of any of the pending or possible litigation in view of the inherent uncertainties involved in court and jury rulings. In the future, if new information regarding such matters becomes available to us (such as a final, non-appealable adverse verdict against us or otherwise ultimately being found liable with respect to such matters), at that time we would consider such information in evaluating any remaining cases then-pending against us as to whether it might then have become probable we have incurred liability with respect to these matters, and whether such liability, if any, could have become reasonably estimable. The resolution of any of these cases could result in the recognition of a loss contingency accrual that could have a material adverse impact on our net income for the interim or annual period during which such liability is recognized and a material adverse impact on our consolidated financial condition and liquidity. Environmental matters and litigation Our operations are governed by various environmental laws and regulations. Certain of our businesses are and have been engaged in the handling, manufacture or use of substances or compounds that may be considered toxic or hazardous within the meaning of applicable environmental laws and regulations. As with other companies engaged in similar businesses, certain of our past and current operations and products have the potential to cause environmental or other damage. Our businesses have implemented and continue to implement various policies and programs in an effort to minimize these risks. Our policy is to maintain compliance with applicable environmental laws and regulations at all of our plants and to strive to improve environmental performance. From time to time, our businesses may be subject to environmental regulatory enforcement under U.S. and non-U.S. statutes, the resolution of which typically involves the establishment 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. We believe all of our facilities are in substantial compliance with applicable environmental laws. Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative proceedings or investigations arising under federal and state environmental laws and common law. Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (“PRP”) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (“CERCLA”), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors and NL or its predecessors, subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (“EPA”) Superfund National Priorities List or similar state lists. These proceedings seek cleanup costs, damages for personal injury or property damage and/or damages for injury to natural resources. Certain of these proceedings involve claims for substantial amounts. Although we may be jointly and severally liable for these costs, in most cases we are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated. In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from our operations. Obligations associated with environmental remediation and related matters are difficult to assess and estimate for numerous reasons including the: ● complexity and differing interpretations of governmental regulations, ● number of PRPs and their ability or willingness to fund such allocation of costs, ● financial capabilities of the PRPs and the allocation of costs among them, F- 50 ​ ● solvency of other PRPs, ● multiplicity of possible solutions, ● number of years of investigatory, remedial and monitoring activity required, ● uncertainty over the extent, if any, to which our former operations might have contributed to the conditions allegedly giving rise to such personal injury, property damage, natural resource and related claims, and ● 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. Further, additional environmental and related matters may arise in the future. If we were to incur any future liability, this could have a material adverse effect on our consolidated financial statements, results of operations and liquidity. We record liabilities related to environmental remediation and related matters (including costs associated with damages for personal injury or property damage and/or damages for injury to natural resources) when estimated future expenditures are probable and reasonably estimable. We adjust such accruals as further information becomes available to us or as circumstances change. Unless the amounts and timing of such estimated future expenditures are fixed and reasonably determinable, we generally do not discount estimated future expenditures to their present value due to the uncertainty of the timing of the payout. We recognize recoveries of costs from other parties, if any, as assets when their receipt is deemed probable. At December 31, 2021 and 2022, we had no t recognized any material receivables for recoveries. We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs. The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control. At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next twelve months, and we classify this estimate as a current liability. We classify the remaining accrued environmental costs as a noncurrent liability. The table below presents a summary of the activity in our accrued environmental costs during 2020, 2021, and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2020 2021 2022 ​ ​ (In millions) Balance at the beginning of the year ​ $ 99.7 ​ $ 98.6 ​ $ 97.6 Additions charged to expense, net ​ .7 ​ 1.6 ​ 1.7 Payments, net ​ ( 1.9 ) ​ ( 2.5 ) ​ ( 2.0 ) Changes in currency exchange rates and other ​ .1 ​ ( .1 ) ​ — Balance at the end of the year ​ $ 98.6 ​ $ 97.6 ​ $ 97.3 Amounts recognized in the Consolidated Balance Sheet at the end of the year: ​ ​ ​ Current liabilities ​ $ 3.4 ​ $ 3.5 ​ $ 3.8 Noncurrent liabilities ​ 95.2 ​ 94.1 ​ 93.5 Total ​ $ 98.6 ​ $ 97.6 ​ $ 97.3 ​ F- 51 ​ NL. On a quarterly basis, NL evaluates the potential range of its liability for environmental remediation and related costs at sites where it has been named as a PRP or defendant. At December 31, 2022, NL had accrued approximately $ 92 million related to approximately 33 sites associated with remediation and related matters it believes are at the present time and/or in their current phase reasonably estimable. 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 $ 119 million, including the amount currently accrued. NL believes that it is not reasonably possible to estimate the range of costs for certain sites. At December 31, 2022, there were approximately five sites for which NL is not currently able to reasonably estimate a range of costs. 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. 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. These notifications may assert that NL, along with any other alleged PRPs, are liable for past and/or future clean-up costs. As further information becomes available to us for any of these sites which would allow us to estimate a range of costs, we would at that time adjust our accruals. Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity. Other. We have also accrued approximately $ 5 million at December 31, 2022 for other environmental cleanup matters which represents our best estimate of the liability. Insurance coverage claims We are involved in certain legal proceedings with a number of our former insurance carriers regarding the nature and extent of the carriers’ obligations to us under insurance policies with respect to certain lead pigment and asbestos lawsuits. The issue of whether insurance coverage for defense costs or indemnity or both will be found to exist for our lead pigment and asbestos litigation depends upon a variety of factors and we cannot assure you that such insurance coverage will be available. We have agreements with certain of our former insurance carriers pursuant to which the carriers reimburse us for a portion of our future lead pigment litigation defense costs, and one such carrier reimburses us for a portion of our future asbestos litigation defense costs. We are not able to determine how much we will ultimately recover from these carriers for defense costs incurred by us because of certain issues that arise regarding which defense costs qualify for reimbursement. While we continue to seek additional insurance recoveries, we do not know if we will be successful in obtaining reimbursement for either defense costs or indemnity. Accordingly, we recognize insurance recoveries in income only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the recovery. Other litigation In addition to the litigation described above, we and our affiliates are involved in various other environmental, contractual, product liability, patent (or intellectual property), employment and other claims and disputes incidental to our present and former businesses. In certain cases, we have insurance coverage for these items, although we do not expect additional material insurance coverage for our environmental matters. We currently believe that the disposition of all of these various other claims and disputes (including asbestos-related claims), individually or in the aggregate, should not have a material adverse effect on our consolidated financial position, results of operations or liquidity beyond the accruals already provided. Other matters Concentrations of credit risk – Sales of TiO 2 accounted for approximately 93 % of our Chemicals Segment’s sales in 2020 and 92 % in each of 2021 and 2022. The remaining sales result from the mining and sale of ilmenite ore (a raw F- 52 ​ 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). TiO 2 is generally sold to the paint, plastics and paper industries. Such markets are generally considered “quality-of-life” markets whose demand for TiO 2 is influenced by the relative economic well-being of the various geographic regions. Our Chemicals Segment sells TiO 2 to approximately 4,000 customers, with the top ten customers approximating 34 % of our Chemicals Segment’s net sales in 2020, 32 % in 2021 and 33 % in 2022. One customer accounted for approximately 10 % of our Chemicals Segment’s net sales in both 2020 and 2022. Our Chemicals Segment did not have sales to a single customer comprising 10% or more of its net sales in 2021. 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2021 2022 Europe 46 % ​ 46 % ​ 45 % ​ North America 36 % ​ 37 % ​ 39 % ​ ​ 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 48 % of our Component Products Segment’s sales in 2020, 51 % in 2021 and 52 % in 2022. One customer of the security products reporting unit accounted for approximately 17 % of the Component Products Segment’s total sales in 2020, 16 % in 2021 and 14 % in 2022. 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 and electric delivery fees. During 2020, we had sales to one customer that exceeded 10 % of our Real Estate Management and Development Segment’s net sales related to land sales. During 2021, 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. 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. 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 $ 1.0 billion over the life of the contracts in years subsequent to December 31, 2022 (including approximately $ 600 million committed to be purchased in 2023). 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 $ 84 million at December 31, 2022 (including $ 42 million committed to be purchased in 2023). Income taxes – Prior to 2020, NL made certain pro-rata distributions to its stockholders in the form of shares of Kronos common stock. All of NL’s distributions of Kronos common stock were taxable to NL and NL recognized a taxable gain equal to the difference between the fair market value of the Kronos shares distributed on the various dates of distribution and NL’s adjusted tax basis in the shares at the dates of distribution. NL transferred shares of Kronos common stock to us in satisfaction of the tax liability related to NL’s gain on the transfer or distribution of these shares of Kronos common stock and the tax liability generated from the use of Kronos shares to settle the tax liability. To date, we have not paid the liability to Contran because Contran has not paid the liability to the applicable tax authority. The income tax liability will become payable to Contran, and by Contran to the applicable tax authority, when the shares of Kronos transferred or distributed by NL to us are sold or otherwise transferred outside the Contran Tax Group or in the event of certain restructuring transactions involving us. We have recognized deferred income taxes for our investment in Kronos common stock. We are a party to a tax sharing agreement with Contran providing for the allocation of tax liabilities and tax payments as described in Note 1. Under applicable law, we, as well as every other member of the Contran Tax Group, are each jointly and severally liable for the aggregate federal income tax liability of Contran and the other companies included in the Contran Tax Group for all periods in which we are included in the Contran Tax Group. Contran has agreed, however, F- 53 ​ to indemnify us for any liability for income taxes of the Contran Tax Group in excess of our tax liability computed in accordance with the tax sharing agreement. Note 19 – Financial instruments: ​ See Note 6 for information on how we determine the fair value of our marketable securities. The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2021 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 December 31, 2022 ​ ​ Carrying ​ Fair ​ Carrying ​ Fair ​ ​ amount ​ value ​ amount ​ value ​ ​ (In millions) Cash, cash equivalents and restricted cash equivalents ​ $ 792.9 ​ $ 792.9 ​ $ 562.0 ​ $ 562.0 Long-term debt: ​ ​ ​ ​ ​ ​ Kronos Senior Notes ​ 448.8 ​ 460.2 ​ 424.1 ​ 374.2 Valhi credit facility with Contran ​ 172.9 ​ 172.9 ​ 121.4 ​ 121.4 LandWell bank note payable ​ 13.5 ​ 13.5 ​ 12.9 ​ 12.9 BWC bank note payable ​ 15.4 ​ 15.9 ​ — ​ — ​ At December 31, 2022, the estimated market price of Kronos’ Senior Notes was € 877 per € 1,000 principal amount. The fair value of Kronos’ Senior Notes was based on quoted market prices; however, these quoted market prices represent Level 2 inputs because the markets in which the Senior Notes trade were not active. Fair values of variable interest rate debt and other fixed-rate debt are deemed to approximate book value. Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value. See Notes 4 and 10. BWC is no longer consolidated in our Consolidated Financial Statements at December 31, 2022 (see Notes 2 and 9). ​ ​ ​ ​ F- 54