What changed in this filing

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Item 3. Legal Proceedings

2025-03-06 compared with 2024-03-07 · 58 added, 52 removed, 147 unchanged (43% of the section changed)

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

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

Certain of these actions have been filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others have been asserted as class actions.

These lawsuits seek recovery under a variety of theories, including public and private nuisance, negligent product design, negligent failure to warn, strict liability, breach of warranty, conspiracy/concert of action, aiding and abetting, enterprise liability, market share or risk contribution liability, intentional tort, fraud and misrepresentation, violations of state consumer protection statutes, supplier negligence and similar claims.

The plaintiffs in these actions generally seek to impose on the defendants responsibility for lead paint abatement and health concerns associated with the use of lead-based paints, including damages for personal injury, contribution and/or indemnification for medical expenses, medical monitoring expenses and costs for educational programs.

To the extent the plaintiffs seek compensatory or punitive damages in these actions, such damages are generally unspecified.

In some cases, the damages are unspecified pursuant to the requirements of applicable state law.

A number of cases are inactive or have been dismissed or withdrawn.

Most of the remaining cases are in various pre-trial stages.

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

NL believes it has substantial defenses to these actions and NL 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.

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

Certain of these actions were filed by or on behalf of states, counties, cities or their public housing authorities and school districts, and certain others were asserted as class actions.

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

In the matter titled County of Santa Clara v.

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

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.

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

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

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

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

NL made the initial $25.0 million payment in September 2019 and the first, second, third and fourth annual installment payments of $12.0 million each in September 2020, 2021, 2022 and 2023.

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

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

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The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL.

Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking contribution for any damages they may ultimately have to pay to the plaintiff.

Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking

contribution for any damages they may ultimately have to pay to the plaintiff.

NL believes it has substantial defenses to these claims under Wisconsin law and intends to defend itself vigorously.

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Environmental Matters and Litigation

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.

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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.

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.

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

At December 31, 2022 and December 31, 2023 we had not 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.

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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.

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.

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At December 31, 2024, NL had accrued approximately $69 million related to approximately 30 sites associated with remediation and related matters that NL 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 $118 million, including the amount currently accrued.

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

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

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NJDEP alleged that a waste hauler transported waste from one of its former facilities for disposal at the site in the early 1970s.

NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name “Raritan Bay Slag Site.” In 2012, EPA notified NL of its potential liability at this site.

In May 2013, EPA issued its Record of Decision for the site.

NJDEP referred the site to the EPA, and in November 2009, the EPA added the site to the National Priorities List under the name Raritan Bay Slag Site (“RBS Site”).

In 2012, EPA notified NL of its potential liability at this site.

In June 2013, NL filed a contribution suit under CERCLA and the New Jersey Spill Act titled NL Industries, Inc.

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

3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, and several federal and state entities NL alleges designed and operated the site and who have significant potential liability as compared to NL which is alleged to have been a potential source of material placed at the site by others.

NL’s suit also names certain former NL customers of the former NL facility alleged to be the source of some of the materials.

In January 2014, EPA issued a Unilateral Administrative Order (UAO) to NL for clean-up of the site based on the EPA’s preferred remedy set forth in the Record of Decision.

NL has denied liability and will defend vigorously against all claims while continuing to seek contribution from other PRPs.

3:13-cv-03493-MAS-TJB) against the current owner, Old Bridge Township, several federal and state entities and a number of private companies.

On February 10, 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the RBS Site in Middlesex County, New Jersey.

The consent decree requires the United States Army Corps of Engineers (and other federal agencies), the State of New Jersey, the Township of Old Bridge, NL, and twenty-two other private companies to pay a total of $151.1 million, plus interest, to resolve all federal and state law claims for past and future response costs under CERCLA and the New Jersey Spill Act, including natural resource damages, contribution, and indemnification, relating to the RBS Site.

The consent decree is a global settlement of all such claims relating to the RBS Site and resolves a lawsuit captioned United States of America, et al.

NL Industries, Inc., et al.

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

3:24-cv-08946) as well as all claims asserted by NL and the other settling parties in NL’s previously filed contribution lawsuit, NL Industries, Inc.

Old Bridge Township, et al., discussed above.

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

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

In August 2009, NL was served with a complaint in Raritan Baykeeper, Inc.

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In June 2022, NL received a letter from the NJDEP informing NL that remediation of contaminated sites upriver of the former Sayreville site had progressed to the point that it was now appropriate for NL to resume investigating the sediments adjacent to the Sayreville site.

NL has been diligently conducting that investigation in compliance with

NJDEP regulations.

NL has been diligently conducting that investigation in compliance with NJDEP regulations.

The lawsuit remains pending.

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The complaint seeks compensatory and punitive damages and alleges, among other things, trespass, private nuisance, negligence, strict liability, and claims under CERCLA and the New Jersey Spill Act.

NL has denied liability and will defend vigorously against all of the claims.

NL has denied liability and will defend vigorously against all claims.

In September 2013, EPA issued to NL and 34 other PRPs general notice of potential liability and a demand for payment of past costs and performance of a Remedial Design for the Gowanus Canal Superfund Site in Brooklyn, New York.

In March 2014, EPA issued a UAO to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.

In March 2014, EPA issued a unilateral administrative order (“UAO”) to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.

EPA contends that NL is liable as the alleged successor to the Doehler Die Casting Company, and therefore responsible for any potential contamination at the site resulting from Doehler’s ownership/operation of a warehouse and a die casting plant it owned 90 years ago.

In April 2019, EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site.

NL believes that it has no liability at the site.

NL has been in discussions with EPA regarding a de minimis settlement and is otherwise taking actions necessary to respond to the UAO.

If these discussions are ultimately unsuccessful, NL will continue to deny liability and will defend vigorously against all of the claims.

In April 2019, the EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site.

In October 2024, NL was served in Brooklyn Union Gas Co.

Consolidated Edison Co .

of New York, et al.

(United States District Court for the Eastern District of New York, Case No.

1:24-cv-06993).

This complaint asserts claims under CERCLA and New York law against NL and a number of other private parties, federal and state agencies, and agencies of

the City of New York.

The plaintiff, a former gas manufacturer, seeks to recover a portion of investigation and remediation costs it allegedly incurred to address contamination at the Gowanus Canal Superfund Site.

NL has denied liability and will defend vigorously against all claims.

In January 2020, NL was sued in Atlantic Richfield, Co.

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This is a CERCLA cost recovery action brought by a past owner and operator of certain mining properties located in Rico, Colorado.

In 2023, the trial court granted partial summary judgment for NL and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit.

In 2023, the trial court granted partial summary judgment for NL based on the statute of limitations and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit.

In January 2025, the Court of Appeals reversed the trial court’s grant of partial summary judgment and returned the matter to the trial court.

NL continues to deny liability and will defend vigorously against all claims.

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NL has denied liability and will continue to defend vigorously against all claims.

In December 2023, NL and several other defendants were sued in Sunset Commercial, LLC v.

Stauffer Management Co., et al.

(United States District Court for the District of Nevada, Case 2:23-cv-02081).

The complaint asserts claims under CERCLA as well as claims for private nuisance, negligence, trespass, and strict liability.

The plaintiff asserts that hazardous substances located on its property are attributable to a large industrial facility in the area.

The plaintiff alleges NL is liable for once holding a lease on the industrial property and for its past partial ownership of another company.

NL intends to deny liability and will defend vigorously against all claims.

In May 2024, NL was served in Philip Palmeri v.

NL Industries, Inc.

(Supreme Court of Niagara County, New York, Case No.

In this lawsuit, the plaintiff asserts that radioactive material allegedly originating at a former NL facility in Niagara Falls, New York, caused the wrongful death of plaintiff’s spouse and diminished the value of plaintiff’s residential property located in Lewiston, New York.

The complaint alleges that NL is liable under theories of strict liability, negligence, private nuisance and trespass.

NL has denied liability and will defend vigorously against all claims.

Other Litigation

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NL has sought and will continue to vigorously seek, dismissal and/or a finding of no liability from each claim.

In addition, from time to time, NL has received notices regarding asbestos or silica claims purporting to be brought against former subsidiaries, including notices provided to insurers with which it has entered into settlements extinguishing certain insurance policies.

In addition, from time to time, NL has received notices regarding asbestos or silica claims purporting to be brought against former subsidiaries, including notices provided

to insurers with which it has entered into settlements extinguishing certain insurance policies.

These insurers may seek indemnification from NL.

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(Supreme Court of the State of New York, County of New York, Index No.

The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued

to NL by the plaintiff with respect to certain lead pigment lawsuits.

The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued to NL by the plaintiff with respect to certain lead pigment lawsuits.

Other insurers have been added as parties to the case and have also sought a declaratory judgment regarding their obligations under certain insurance policies.

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We do not expect further material settlements relating to environmental remediation coverage.

Litigation – CompX

In 2024, CompX was served with four lawsuits by public water companies in South Carolina that seek recovery of future costs to remove perfluoroalkyl and polyfluoroalkyl substances (known as “PFAS”) from their water supplies.

The lawsuits have been consolidated with other PFAS cases before a single judge in Spartanburg, South Carolina and were subsequently removed to federal court.

The defendants in the lawsuits include the manufacturers of PFAS products, as well as companies that allegedly used PFAS-containing products in their manufacturing operations.

The four lawsuits naming CompX allege that CompX was one of many companies that used products containing PFAS in its manufacturing operations, and that such operations have collectively impacted drinking water supplies used by the water companies.

The plaintiffs do not allege that CompX has failed to comply with, or has violated, any environmental regulation, permit or statute.

The plaintiffs instead assert claims under common law theories of negligence, nuisance, trespass, failure to warn, and unfair trade practices.

CompX intends to deny liability and will defend vigorously against all claims.

MINE SAFETY DISCLOSURES

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

What changed 10-K

Item 3. Legal Proceedings