What changed in this filing

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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-07 · 51 added, 11 removed, 179 unchanged (26% of the section changed)

33 unchanged sentences

● Competitors may be able to respond more quickly than our Component Products Segment can to new or emerging technologies and changes in customer requirements.

● Consolidation of our Component Products Segment’s competitors or its customers in any of the markets in which it competes may result in reduced demand for its products.

● A reduction of our Component Products Segment’s market share with one or more of its key customers, or a reduction in one or more of its key customers’ market share for their end-use products, may reduce demand for its products.

37 unchanged sentences

Should our Component Products Segment’s vendors not be able to meet their supply obligations or should it be otherwise unable to obtain necessary raw materials or components, it may incur higher supply costs or may be required to reduce production levels, either of which may decrease our liquidity or negatively impact our financial condition or results of operations as our Component Products Segment may be unable to offset the higher costs with increases in its selling prices or reductions in other operating costs.

Kronos’ recent acquisition of the remaining 50% interest in LPC may not generate benefits we anticipate and may otherwise affect our business and prospects.

Kronos recently completed the LPC acquisition in which it purchased the 50% ownership interest in LPC it did not previously own.

If Kronos experiences unforeseen technological, operational or other difficulties in managing the integration of LPC as its wholly-owned subsidiary, Kronos may not be able to implement the process innovations at the facility that it expects.

In addition, Kronos may not be able to achieve the synergies or improve efficiency and product quality that it expects.

With or without such difficulties, the integration of the LPC facility into Kronos’ operations may divert significant management time and attention from its other operations.

If Kronos fails to successfully integrate LPC into its operations, or if the LPC acquisition does not provide expected synergies or sales increases, or if LPC has unexpected legal, regulatory, or financial liabilities, our business, financial condition, results of operations and prospects could be adversely affected.

Our Real Estate Management and Development Segment has significant development obligations related to a residential/planned community in Henderson, Nevada.

3 unchanged sentences

We generally recognize revenue from these land sales over time using cost-based inputs because we receive substantially all cash payment at the time of sale but significant development obligations still exist.

We currently estimate development obligations are approximately $107 million and will take approximately three to four years to complete.

We currently estimate development obligations are approximately $78 million and will take approximately two to three years to complete.

Our estimates of our development obligations include certain assumptions about future labor and construction costs.

6 unchanged sentences

Events beyond our control, including changes in general business and economic conditions, could adversely impact the ability of our subsidiaries to pay dividends or make other distributions to us.

If our subsidiaries were to become unable to make sufficient cash dividends or other distributions to us, our ability to service our liabilities and to pay dividends on our common stock could be adversely affected.

If our subsidiaries were to become unable to make sufficient

cash dividends or other distributions to us, our ability to service our liabilities and to pay dividends on our common stock could be adversely affected.

In addition, a significant portion of our assets consist of ownership interests in our subsidiaries.

1 unchanged sentence

Our leverage may impair our financial condition or limit our ability to operate our businesses.

We have a significant amount of debt, primarily related to Kronos’ Senior Secured Notes issued in September 2017 and February 2024, Kronos’ and our loans from Contran Corporation and the LandWell bank note.

As of December

31, 2023, our total consolidated debt was approximately $547 million.

We have a significant amount of debt, primarily related to Kronos’ 9.50% Senior Secured Notes due 2029, Kronos’ 3.75% Senior Secured Notes due 2025, Kronos’ term loan from Contran, Kronos’ borrowings on its global revolving credit facility (the “Global Revolver”), our loan from Contran Corporation and the LandWell bank note.

As of December 31, 2024, our total consolidated debt was approximately $563 million.

Our level of debt could have important consequences to our stockholders and creditors, including:

6 unchanged sentences

● placing us at a competitive disadvantage relative to other less leveraged competitors.

Indebtedness outstanding under our loan from Contran and Kronos’ global revolving credit facility (Global Revolver) accrues interest at variable rates.

Indebtedness outstanding under our loan from Contran and Kronos’ Global Revolver accrues interest at variable rates.

To the extent market interest rates rise, the cost of our debt could increase, even if the amount borrowed remains the same, adversely affecting financial condition, results of operations and cash flows.

9 unchanged sentences

We operate our businesses in several different countries and sell our products worldwide.

For example, during 2022 and 2023 approximately 45% and 44%, respectively, of our Chemicals Segment’s sales volumes were sold into European markets.

The majority (but not all) of our sales from our Chemicals Segment’s operations outside the United States are denominated in currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.

For example, during 2023 and 2024 approximately 44% of our Chemicals Segment’s sales volumes were sold into European markets.

The majority (but not all) of our sales from our Chemicals Segment’s operations outside the United States are denominated in

currencies other than the United States dollar, primarily the euro, other major European currencies and the Canadian dollar.

Therefore, we are exposed to risks related to the need to convert currencies we receive from the sale of our products into the currencies required to pay for certain of our operating costs and expenses and other liabilities (including indebtedness), all of which could result in future losses depending on fluctuations in currency exchange rates and affect the comparability of our results of operations between periods.

50 unchanged sentences

However, if further GHG laws and regulations were to be enacted in one or more countries, it could negatively impact our future results of operations through increased costs of production, particularly as it relates to our energy requirements or our need to obtain emissions permits.

If such increased costs of production were to materialize, we may be unable to pass price increases on to our customers to compensate for increased production costs, which may decrease our liquidity, operating income and results of operations.

If such increased costs of production were to materialize, we may

be unable to pass price increases on to our customers to compensate for increased production costs, which may decrease our liquidity, operating income and results of operations.

In addition, any adopted future laws and regulations focused on climate change and/or GHG emissions could negatively impact our ability (or that of our customers and suppliers) to compete with companies situated in areas not subject to such laws and regulations.

1 unchanged sentence

Operating as a global business presents risks associated with global and regional economic, political and regulatory environments.

We have significant international operations which, along with our customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including trade barriers, tariffs, economic sanctions, exchange controls, global and regional economic downturns, terrorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas), natural disasters, pandemics or other health crises and political conditions.

We may encounter difficulties enforcing agreements or other legal rights and the effective tax rate may fluctuate based on the variability of geographic earnings and statutory tax rates.

Our Chemicals Segment manufactures and distributes its products globally.

Our Chemicals Segment’s revenue from non-U.S.

markets accounted for approximately 68%, 66%, and 66% of its revenue for the years ended December 31, 2022, 2023 and 2024, respectively.

Our Chemicals Segment has significant international operations which, along with its customers and suppliers, could be substantially affected by a number of risks arising from operating a multi-national business, including:

● global or regional economic downturns;

● changes in tariffs, trade barriers, and regulatory requirements, such as the enactment of tariffs on goods imported into the U.S.

including, but not limited to, the recently enacted tariff on goods imported from Canada where it manufactures a significant portion of the TiO 2 it sells in North America.

Tariffs could make its products more expensive which would reduce demand or require our Chemicals Segment to absorb the increased costs reducing its operating margins;

● protectionist laws, policies, and business practices and nationalistic campaigns such as economic sanctions and exchange controls;

relations with the governments of the other countries in which our Chemicals Segment operates;

● t errorism, armed conflict (such as the current conflicts between Russia and Ukraine and Israel and Hamas);

● natural disasters, pandemics or other health crises, climate change, and other events beyond our control;

● difficulties enforcing agreements or other legal rights;

● our Chemicals Segment’s effective tax rate may fluctuate based on the variability of geographic earnings and statutory rates.

TiO 2 production requires significant energy input, and economic sanctions or supply disruptions resulting from armed conflict could lead to additional volatility in global energy prices and energy supply disruptions.

These risks, individually or in the aggregate, could have an adverse effect on our results of operations and financial condition.

Our Chemicals Segment is experiencing increasing competition from China.

Chinese competition generally has lower operating costs due to less stringent regulatory and environmental compliance requirements and less expensive energy prices.

China has dumped lower cost sulfate process TiO 2 into the markets our Chemicals Segment serves.

In some cases, the TiO 2 industry has been successful in getting anti-competitive duties enacted on Chinese imports such as the European duties enacted in 2024.

federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.

For example, on March 4, 2025, the U.S.

government implemented a 25% tariff on all imports from Mexico and Canada into the U.S.

As our Chemicals Segment currently manufactures a significant portion of its North American TiO 2 in Canada, if sustained for an extended period of time, the 25% tariff on our Chemicals Segment’s imports into the U.S.

from Canada, without exclusion, will make its products manufactured in Canada and sold into the U.S.

more expensive.

As a result, demand for these products could be reduced, or our Chemicals Segment could be required to absorb the increased costs or increase prices of such products.

Such tariffs and, if enacted, any further legislation or actions taken by the U.S.

government that restrict trade, such as additional tariffs, trade barriers and other protectionist or retaliatory measures taken in response, could adversely impact our Chemicals Segment’s ability to sell its products in the U.S.

or reduce its revenues and gross margins.

These measures may also increase our Chemicals Segment’s costs of Canadian

feedstock imported into the U.S.

and could adversely impact its gross margins or require our Chemicals Segment to raise prices thereby making its products less competitive.

Additional tariffs imposed by the U.S or any retaliatory or reciprocal tariffs imposed by other countries could also increase the cost of feedstock and other raw materials that go into making TiO 2 , the extent of which is unknown.

The ultimate impact of any tariffs will depend on various factors, including the length of time tariffs are ultimately implemented and the amount, scope and nature of the tariffs.

Technology failures or cybersecurity breaches could have a material adverse effect on our operations.

13 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors