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Item 9A. Controls and Procedures

2025-03-06 compared with 2024-03-07 · 474 added, 382 removed, 1341 unchanged (39% of the section changed)

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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,

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This annual report does not include an attestation report of our registered public accounting firm regarding the effectiveness of our internal control over financial reporting as of December 31, 2024.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

As permitted by the SEC, our assessment of internal control over financial reporting excludes (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.

Management’s report was not

subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

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

Changes in Internal Control over Financial Reporting –

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Exhibit Index

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 dated January 26, 2018 and filed on January 26, 2018.

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 dated January 26, 2018 and filed on January 26, 2018.

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 for the quarter ended September 30, 2020.

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

Exhibit Index

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

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

Exhibit Index

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

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dated January 25, 2019 – incorporated by reference to Exhibit 10.16 to Kronos’ Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 11, 2019.

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.

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.

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.

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.

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.

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.

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

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

Exhibit Index

Supplemental Indenture No.

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

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

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

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

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

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

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

Unsecured Revolving Demand Promissory Note dated December 31, 2023 in the principal amount of $150.0 million executed by Valhi, Inc.

and payable to the order of Contran Corporation.

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 filed on March 11, 2019.

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 for the quarter ended March 31, 2021.

Additional Notes Priority Joinder Agreement dated July 30, 2024, executed by Deutsche Bank Trust Company Americas, as trustee and collateral agent – incorporated by reference to Exhibit 10.2 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed July 30, 2024 .

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

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

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

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

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

Exhibit Index

First Amendment to Credit Agreement dated May 8, 2023 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association, as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.1 to Kronos Worldwide, Inc.’s Current Report on Form 8-K filed on May 9, 2023.

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

Third Amendment to Credit Agreement dated December 19, 2024 among Kronos Worldwide, Inc., Kronos Louisiana, Inc., Kronos (US), Inc.

Kronos Canada, Inc., Kronos Europe NV, Kronos Titan GmbH, Wells Fargo Bank, National Association as administrative agent, and the lenders a party thereto – incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated December 19, 2024 and filed by Kronos Worldwide, Inc.

on December 19, 2024.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Exhibit Index

Unsecured Revolving Demand Promissory Note dated December 31, 2024 in the principal amount of $150.0 million executed by Valhi, Inc.

and payable to the order of Contran Corporation.

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 filed on March 11, 2019.

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

Insider Trading Policy

Subsidiaries of Valhi, Inc.

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Certification

Policy for the Recovery of Erroneously Awarded Compensation .

Exhibit Index

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

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

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Norris, March 6, 2025

/s/ Mary A.Tidlund

Tidlund, March 6, 2025

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Consolidated Balance Sheets – December 31, 2023 and 2024

Consolidated Statements of Operations – Years ended December 31, 2021, 2022 and 2023

Consolidated Statements of Comprehensive Income (Loss) – Years ended December 31, 2021,

2022 and 2023

Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2021, 2022 and 2023

Consolidated Statements of Cash Flows – Years ended December 31, 2021, 2022 and 2023

Consolidated Statements of Operations –

Years ended December 31, 2022, 2023 and 2024

Consolidated Statements of Comprehensive Income (Loss) –

Years ended December 31, 2022, 2023 and 2024

Consolidated Statements of Stockholders’ Equity –

Years ended December 31, 2022, 2023 and 2024

Consolidated Statements of Cash Flows –

Years ended December 31, 2022, 2023 and 2024

Notes to Consolidated Financial Statements

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Income Taxes - Chemicals Segment

As described in Note 14 to the consolidated financial statements, the Company recorded a benefit for income taxes of $22.4 million and recorded noncurrent deferred tax asset and deferred tax liability amounts of $67.0 million and $31.8 million, respectively, for the year ended December 31, 2023.

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

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

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

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

The 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 (benefit) 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 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.

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

These procedures included testing the effectiveness of controls relating to management’s evaluation of 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 included testing the

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

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

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Accrued liabilities

Accrued environmental remediation and related costs

Accrued litigation settlement

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Long-term debt

Accrued pension costs

Accrued environmental remediation and related costs

Deferred income taxes

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Long-term litigation settlement

Accrued pension costs

Accrued environmental remediation and related costs

Other liabilities

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Total revenues and other income

Cost and expenses:

Cost and other expense (income):

Cost of sales

Selling, general and administrative

Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Other components of net periodic pension and OPEB expense

Loss on sale of Basic Power Company (BPC)

Water system fixed asset impairment

Loss on deconsolidation of Basic Water Company (BWC)

Total costs and expenses

Total costs and other expense

Income (loss) before income taxes

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Balance at December 31, 2022

Net income (loss)

Cash dividends - $ .32 per share

Dividends paid to noncontrolling interest

Other comprehensive income, net

Other comprehensive loss, net

Equity transactions with noncontrolling

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Balance at December 31, 2023

Net income (loss)

Cash dividends - $ .32 per share

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Depreciation and amortization

Gain from sale of land

Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Premium on issuance of senior secured notes

Deferred income taxes

Benefit plan expense greater (less) than cash funding

Loss on pension plan termination

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Fixed asset impairment

Loss on sale of BPC

Loss on deconsolidation of BWC

Noncash interest expense

Benefit plan expense greater (less) than cash funding

Deferred income taxes

Distributions from (contributions to) TiO 2 manufacturing

joint venture, net

Gain from sale of land

Change in assets and liabilities:

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Capital expenditures

Cash and cash equivalents of BPC at time of sale

Acquisition of remaining TiO 2 manufacturing joint venture interest, net of cash acquired

Cash, cash equivalents and restricted cash of BWC

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Net cash used in investing activities

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In millions)

Years ended December 31,

Cash flows from financing activities:

Principal payments on indebtedness

Kronos revolving credit facility:

Payments on long-term debt

Kronos term loan from Contran

Proceeds from issuance of Kronos senior secured notes

Deferred financing fees

Valhi cash dividends paid

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Net cash used in financing activities

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In millions)

Years ended December 31,

Cash, cash equivalents and restricted cash and cash

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

Simmons, Thomas C.

Simmons and by family stockholders (Thomas C.

Connelly (the husband of Ms.

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

Connelly and their children and for which Ms.

Simmons or Mr.

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

With respect to the Other Trusts for which Mr.

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

Such voting rights of Ms.

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

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

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

Such voting rights are personal to Ms.

Simmons and last through April 22, 2030.

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

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

Revision of previously issued financial statements.

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

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

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

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

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

Accordingly, we revised our previously issued financial statements.

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

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

Additionally, retained

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

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

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

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

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

Foreign currency translation.

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We 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.

We recognize the effect of changes in the fair value of derivatives either in net income (loss) or other comprehensive income (loss), depending on the intended use of the derivative.

Cash and cash equivalents.

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

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

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

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

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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

identification, relative sales value, square footage or a combination of these methods.

As land parcels are sold, costs of land sales, including land and development costs, are allocated based on specific 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.

We accounted for our investment in Louisiana Pigment Company, L.P.

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

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

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

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Units-of-production

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

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

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.

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During the fourth quarter of 2023, our Chemicals Segment recorded a fixed asset impairment of $ 3.8 million related to the write-off of certain costs resulting from a capital project termination.

Excluding this project, we did not evaluate any long-lived assets for impairment during 2023 because no such impairment indicators were present.

During the preparation of our second quarter 2023 interim financial statements, we identified a prior period misclassification related to the presentation of the gross value of the classes of property and equipment and accumulated depreciation and amortization.

This misclassification had no impact to net property and equipment;

however, total gross property and equipment increased $ 19.1 million (a decrease of $ 5.3 million and $ 45.8 million in land and equipment, respectively, and an increase of $ 5.1 million and $ 65.1 million in buildings and mining properties, respectively), and accumulated depreciation and amortization increased by the same amount.

Property and equipment presented on the December 31, 2022 Consolidated Balance Sheet has been revised to reflect these changes.

We have evaluated the misclassifications and determined the related changes are not material to any previously issued annual or interim financial statements.

Excluding this project, we did not evaluate any long-lived assets for impairment during 2023 or 2024 because no such impairment indicators were present.

Long-term debt.

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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.

Internal Revenue Service (“IRS”) 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 $ 17.5 million in 2022, $ 14.2 million in 2023 and $ 19.1 million in 2024.

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.

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.

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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.

Federal tax code imposes a tax on global intangible low-tax income (GILTI).

The 2017 Tax Act imposed a tax on global intangible low-taxed income (“GILTI”).

We record GILTI tax as a current period expense when incurred under the period cost method.

1 unchanged sentence

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.

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 expense (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 (loss).

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

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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.

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

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

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We expense any environmental remediation related legal costs as incurred.

At December 31, 2022 and 2023 we had no t recognized any material receivables for recoveries.

Revenue recognition.

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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.

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

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

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

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

See Notes 2 and 3.

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

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

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

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

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.

Real Estate Management and Development Segment – Our revenues are primarily related to efforts to develop certain real estate in Henderson, Nevada, including approximately 2,100 acres zoned for residential/planned community purposes.

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.

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

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.

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

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

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

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

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

See Notes 2 and 3.

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

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

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

Selling, general and administrative expenses;

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We expense advertising and research and development costs as incurred.

Advertising costs were approximately $ 1 million in 2021 and $ 2 million in each of 2022 and 2023.

Advertising costs were approximately $ 2 million in each of 2022, 2023 and 2024.

Research and development costs were approximately $ 16 million in 2022, $ 18 million in 2023 and $ 14 million in 2024.

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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.

Our chief operating decision maker (“CODM”) is our President and CEO.

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

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

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

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

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

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

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

Intersegment sales are not material.

We have the following three consolidated reportable operating segments.

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● 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.

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

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.

Intersegment sales are not material.

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

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.

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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.

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Interest income and other

Gain on remeasurement of investment in TiO 2 manufacturing joint venture

Insurance recoveries

Gain on land sales

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Income (loss) before income taxes

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

Also included in the determination of Chemicals operating income are business interruption insurance settlement gains of $ 2.7 million recognized in the third quarter of 2022 and an aggregate $ 2.5 million recognized in the first, second and third quarters of 2023.

Infrastructure reimbursements and land related income is included in the determination of Real Estate Management and Development operating income.

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

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

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

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

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

See Notes 7 and 13.

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

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

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

On June 30, 2022 BWC was no longer able to pump water without the risk of damaging the system and consequently ceased operations at its water intake facility to best preserve the system.

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

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

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

Without the ability to pump and

deliver water to its customers, BWC’s operating expenses exceeded its revenues, and on September 10, 2022 BWC and its subsidiaries voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Nevada.

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

In addition, BMI had an outstanding intercompany accounts receivable balance with BWC on the date of the bankruptcy filing, and we recognized $ 1.3 million of bad debt expense to fully reserve this balance during the third quarter of 2022.

All of these charges are included in the determination of the Real Estate Management and Development’s operating income in 2022.

Operating income comparisons between 2023, 2022 and 2021 are also affected by BWC’s water delivery sales and related cost of sales.

Years ended December 31,

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United States

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

Note 3 – Business combinations, dispositions and related transactions:

Kronos Worldwide, Inc.

Prior to 2021, 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.

Acquisition of Remaining Joint Venture Interest in LPC –

Effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50 % joint venture interest in LPC previously held by Venator Investments, Ltd.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

See Note 19 to our Consolidated Financial Statements.

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

ownership interest in LPC).

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

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

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

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

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

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

(In millions)

Consideration:

Cash consideration

Working capital adjustment

Earn-out liability

Total fair value of consideration

Fair value of investment in TiO 2 manufacturing joint venture

Allocation of purchase price to identifiable assets acquired and liabilities assumed:

Cash and cash equivalents

Restricted cash

Accounts and other receivables, net

Inventories, net

Prepaid expenses and other

Property and equipment

Accounts payable and accrued liabilities

Other noncurrent liabilities

Deferred tax liability

Total net identifiable assets acquired

Property and equipment will be depreciated over useful lives of 5 years to 20 years .

Goodwill is related to the benefits expected as a result of the acquisition, and of the $ 2.6 million recorded as goodwill, $ .1 million is expected to be deductible for tax purposes.

Prior to the Acquisition Date, Kronos and Venator were both required to purchase one-half of the TiO 2 produced by LPC, unless Kronos and Venator agreed otherwise.

Because Kronos operated LPC on a break-even basis, it reported no equity in earnings of LPC.

Each owner’s acquisition transfer price for its share of the TiO 2 produced was equal to its share of the joint venture’s production costs and interest expense, if any.

Kronos’ share of net cost was reported as cost of sales as the related TiO 2 acquired from LPC was sold.

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

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

are shown in the table below.

Years ended December 31,

(In millions)

Distributions from LPC

Contributions to LPC

Net distributions (contributions)

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

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

December 31, 2023

(In millions)

Current assets

Property and equipment, net

LIABILITIES AND PARTNERS' EQUITY

Other liabilities, primarily current

Partners' equity

Total liabilities and partners' equity

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

Years ended December 31,

(In millions)

Revenues and other income:

Cost and expenses:

Cost of sales

General and administrative

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

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

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

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

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

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

Kronos may repurchase its common stock from time to time as market conditions permit.

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

Kronos made no treasury purchases in 2024.

At December 31, 2024, 1,017,518 shares are available for repurchase under this stock repurchase program.

CompX International Inc.

Prior to 2021, 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’s board of directors has previously 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.

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

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.

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.

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.

CompX did no t make any repurchases under the plan during 2023.

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

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

CompX made no treasury purchases during 2023 and 2024.

At December 31, 2024, 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.

As discussed above, BWC filed for Chapter 11 bankruptcy protection on September 10, 2022.

On November 8, 2023, the Bankruptcy Court for the District of Nevada entered an order approving BWC’s plan of reorganization, which provided for the sale of substantially all BWC’s assets and the transfer of substantially all of its operating and other agreements to one of its industrial customers.

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

As part of the transaction, BWC is providing transition services to the purchaser for a limited time.

The proceeds of the sale will be used to repay creditors of BWC and its wholly-owned subsidiary.

BWC’s assets may not be sufficient to fully repay its creditors, and the timing of the resolution of the bankruptcy proceedings remains uncertain.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

BMI is providing transition services to the purchaser of the businesses for a limited time.

With the sale of BPC, we no longer provide services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community.

BMI provided transition services to the purchaser of the businesses for a limited time.

With the sale of BPC and the completion of the bankruptcy, we no longer provide services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community.

Note 4 – Accounts and other receivables, net:

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December 31, 2023:

Current assets:

Current assets - fixed income securities

Noncurrent assets:

Fixed income securities

Noncurrent assets - fixed income securities

December 31, 2024:

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Fixed income securities

Our marketable securities are primarily invested in U.S.

Our marketable securities consist of investments in marketable equity and debt securities.

At December 31, 2023 and 2024 our current marketable securities were primarily debt securities 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:

The fair values of our marketable debt securities are either determined using Level 1 inputs (because 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 – Other assets:

(In millions)

Other assets:

Restricted cash and cash equivalents

Note receivables - OPA

Operating lease right-of-use assets

Land held for development

IBNR receivables

Investment in TiO 2 manufacturing joint venture.

Our Chemicals Segment owns a 50 % interest in Louisiana Pigment Company, L.P.

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 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,

(In millions)

Distributions from LPC

Contributions to LPC

Net distributions (contributions)

Summary balance sheets of LPC are shown below:

(In millions)

Current assets

Property and equipment, net

LIABILITIES AND PARTNERS' EQUITY

Other liabilities, primarily current

Partners' equity

Total liabilities and partners' equity

Summary income statements of LPC are shown below:

Years ended December 31,

(In millions)

Revenues and other income:

Venator Investments

Cost and expenses:

Cost of sales

General and administrative

Land held for development

Restricted cash and cash equivalents

We enter into various operating leases for manufacturing facilities, land and equipment.

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Our Chemicals Segment’s principal German operating subsidiary leases the land under its Leverkusen TiO 2 production facility pursuant to a lease 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 an extensive manufacturing complex.

The Leverkusen facility itself, which Kronos owns and which represents approximately 29% of its current TiO 2 production capacity, is located within an extensive manufacturing complex.

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

During 2022, 2023 and 2024, variable lease expense and short-term lease expense were not material.

During 2021, 2022 and 2023, we entered into new operating leases which

resulted in the recognition of $ 3.8 million, $ 6.6 million and $ 4.6 million, respectively, in right-of-use operating lease assets and corresponding liabilities on our Consolidated Balance Sheets.

At December 31, 2022 and 2023, the weighted average remaining lease term of our operating leases was approximately 15 years and 14 years , respectively, and the weighted average discount rate associated with such leases was approximately 5.0 % in both 2022 and 2023.

During 2022, 2023 and 2024, we entered into new operating leases which resulted in the recognition of $ 6.6 million, $ 4.6 million and $ 2.8 million, respectively, in right-of-use operating lease assets and corresponding liabilities on our Consolidated Balance Sheets.

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

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

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

Of the $ 22.5 million total lease obligations at December 31, 2023, approximately $ 7.4 million relates to our Leverkusen facility land lease.

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

relates to our Leverkusen facility land lease.

At December 31, 2024, 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.

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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 2021, 2022 and 2023, we received approval for additional tax increment reimbursement of $ 15.3 million ($ 6.2 million in the first quarter and $ 9.1 million in the fourth quarter), $ 15.2 million ($ 10.0 million in the third quarter and $ 5.2 million in the fourth quarter), and $ 25.2 million ($ 4.8 million in the third quarter and $ 20.4 million in the fourth quarter), respectively, which were recognized as other income and are evidenced by a promissory note issued to LandWell by the City of Henderson.

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

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

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

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

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

We have certain related party transactions with LPC, as more fully described in Note 17.

Land held for development.

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

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

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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 2021, as goodwill was determined prior to the adoption of the equity transaction framework provisions of ASC Topic 810.

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

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

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

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Balance at December 31, 2022 and 2023

LPC Acquisition

Balance at December 31, 2024

We test for goodwill impairment at the reporting unit level.

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9.50 % Senior Secured Notes due 2029

Kronos International, Inc.

3.75 % Senior Secured Notes due 2025

Subordinated, Unsecured Term Loan from Contran

Revolving credit facility

Note payable to Western Alliance Business Trust

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During 2024 we had no borrowings and repayments of $ 48.8 million under this facility, and at December 31, 2024 an additional $ 105.4 million was available for borrowings under this facility.

3.75 % Senior Secured Notes due 2025 – 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 “Old Notes”) at par value ($ 477.6 million when issued).

The Old 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 Old Notes at 100 %, plus accrued and unpaid interest.

If Kronos experiences certain specified change of control events as outlined in the indenture governing its Old Notes, it would be required to make an offer to purchase the Old Notes at 101 % of the principal amount, plus accrued and unpaid interest.

Kronos would also be required to make an offer to purchase a specified portion of the Old Notes at par value, plus accrued and unpaid interest, 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 as described in the indenture governing its Old Notes ;

● 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;

● have substantially similar collateral, guarantees and covenants to the New Notes.

The carrying value of the Old Notes at December 31, 2023 is stated net of unamortized debt issuance costs of $ 1.6 million (December 31, 2022 - $ 2.4 million).

9.50 % Senior Secured Notes due 2029 – On February 12, 2024, for certain eligible holders of existing Old Notes, KII executed an exchange of € 325 million principal amount of the outstanding Old Notes for newly issued € 276.174 million aggregate outstanding KII 9.50 % Senior Secured Notes due March 2029 (the “New Notes” and together with the Old Notes, the “Senior Secured Notes”) plus additional cash consideration of € 50 million.

Kronos financed the € 50 million cash consideration with a new unsecured term loan from Contran Corporation (described below).

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

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

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

Following the exchange, Old Notes totaling € 75 million principal amount that were not exchanged continue to remain outstanding.

Following the exchange, Old

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

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

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

The New Notes:

● bear interest at 9.50 % per annum , payable semi-annually on March 15 and September 15 of each year, payments begin on September 15, 2024 ;

Kronos also entered into a $ 53.7 million unsecured term loan from Contran Corporation (described below) in connection with the exchange.

On July 30, 2024, KII issued an additional € 75 million principal amount of 9.50 % Senior Secured Notes due 2029 (the “Additional New Notes” and together with the New Notes the “ 9.50 % Senior Secured Notes due 2029”).

The Additional New Notes are additional notes to the existing € 276.174 million aggregate principal amount of New Notes issued on February 12, 2024.

The Additional New Notes were issued at a premium of 107.50 % of their principal amount, plus accrued interest from February 12, 2024, resulting in net proceeds of approximately $ 90 million after fees and estimated expenses.

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

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

The 9.50 % Senior Secured Notes due 2029:

● bear interest at 9.50 % per annum, payable semi-annually on March 15 and September 15 of each year, payments began on September 15, 2024 ;

● have a maturity date of March 15, 2029 .

Prior to March 15, 2026, Kronos may redeem some or all of the New Notes at a price equal to 100 % of the principal amount thereof, plus an applicable premium as of the date of the redemption as described in the indenture governing its New Notes, plus accrued and unpaid interest.

On or after March 15, 2026, Kronos may redeem the New Notes at redemption prices ranging from 104.750 % of the principal amount, declining to 100 % on or after March 15, 2028, plus accrued and unpaid interest.

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

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

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

Prior to March 15, 2026, Kronos may redeem some or all of the 9.50 % Senior Secured Notes due 2029 at a price equal to 100 % of the principal amount thereof, plus an applicable premium as of the date of the redemption as described in the indenture governing its 9.50 % Senior Secured Notes due 2029, plus accrued and unpaid interest.

On or after March 15, 2026, Kronos may redeem the 9.50 % Senior Secured Notes due 2029 at redemption prices ranging from 104.75 % of the principal amount, declining to 100 % on or after March 15, 2028, plus accrued and unpaid interest.

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

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

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

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

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

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

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

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

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

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

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

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

Kronos’ obligations under the Contran Term Loan, and the obligations of the guarantors under the related guaranties, are unsecured and subordinated in right of payment to Kronos’ Senior Secured Notes and its $ 225 million global revolving credit facility (Global Revolver).

Interest on the Contran Term Loan is payable in cash at an interest rate of 11.5 %.

The Contran Term Loan matures on demand (but no earlier than

September 2029), is not subject to any amortization payments and is prepayable at par beginning in March 2026.

The restrictive covenants in the Contran Term Loan are substantially similar to those contained in the indenture governing Kronos’ New Notes.

In accordance with Kronos’ related party transaction policy, the audit committee of its board of directors, comprised of the independent directors, approved the terms and conditions of the new term loan from Contran.

Revolving credit facility – On April 20, 2021, Kronos entered into the $ 225 million 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 (SOFR, 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 Contran Term Loan is guaranteed by certain of Kronos’ domestic wholly-owned subsidiaries.

Interest on the Contran Term Loan is payable in cash.

Subsequent to the issuance of the Additional New Notes, the Contran Term Loan was amended in August 2024 to change the interest rate from 11.5 % (which had been determined by adding an additional spread of 2 % to the final interest rate on the New Notes issued in February 2024) to 9.54 % (determined by adding a spread of 2 % to the effective interest rate of the Additional New Notes issued in July 2024).

In each case, the spread used to determine the rate was based upon comparable debt transactions at the time of the issuance of the applicable notes.

The Contran Term Loan matures on demand (but no earlier than September 2029), is not subject to any amortization payments and is prepayable at par beginning in March 2026.

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

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

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

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

Borrowings by Kronos’ Canadian, Belgian and German subsidiaries are limited to U.S.

$ 35 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 (SOFR, adjusted CORRA or EURIBOR, depending 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 % .

Dollar or Canadian Dollar non-base rate loans, as well as euro non-base rate and euro base rate loans are subject to a 0.25 % floor, plus the applicable margin.

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 2023, Kronos had no borrowings or repayments under its Global Revolver and at December 31, 2023, the full $ 225 million was available for borrowing under this revolving facility.

During 2024, Kronos borrowed $ 157.8 million and repaid $ 147.8 million under its Global Revolver.

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

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

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

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

The agreement requires semi-annual payments of principal and interest on April 15 and October 15 aggregating $ 1.3 million annually beginning on April 15, 2020 through the maturity date in April 2036 and is payable from the tax increment reimbursement funds received under the OPA.

from the tax increment reimbursement funds received under the OPA.

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

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Total long-term debt

After considering the effect of the exchange of the Old Notes and issuance of the New Notes and Contran Term Loan discussed above, our aggregate maturities of long-term debt would be:

Years ending December 31,

(In millions)

2029 and thereafter

Gross maturities

Less debt issuance costs

We are in compliance with all of our debt covenants at December 31, 2024.

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Accounts payable:

Distributions payable to noncontrolling interest

Current accrued liabilities:

Deferred income

Employee benefits

Accrued sales discounts and rebates

Accrued development costs

Deferred income

Accrued sales discounts and rebates

Operating lease liabilities

Environmental remediation and related costs

Noncurrent accrued liabilities:

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Operating lease liabilities

Deferred income

Insurance claims and expenses

Deferred income

Asset retirement obligations

Other postretirement benefits

Employee benefits

Reserve for uncertain tax positions

Earn-out liability

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.

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

Note 11 – Defined contribution and defined benefit retirement:

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

Note 11 – Defined contribution and defined benefit retirement plans:

Defined contribution plans.

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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).

As a result of the LPC acquisition in July 2024 (see Note 3), Kronos acquired the LPC defined benefit pension plan, which had a net pension asset of $ 10.6 million on the Acquisition Date.

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

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

defined benefit pension plan.

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

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The funded status of our U.S.

defined benefit pension plans is presented in the table below.

defined benefit pension plans, including the acquired LPC plan, is presented in the table below.

Years ended December 31,

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Interest cost

Actuarial losses (gains)

Actuarial (gains) losses

Benefits paid

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Amounts recognized in the Consolidated Balance Sheets:

Noncurrent pension asset

Accrued pension costs:

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Accumulated benefit obligations ("ABO")

The total net underfunded status of our U.S.

defined benefit pension plans decreased from $ 4.3 million at December 31, 2022 to $ 2.4 million at December 31, 2023 due to the change in our plan assets during 2023 exceeding the change in our PBO during 2023.

The increase in our plan assets in 2023 was primarily attributable to improved returns on plan assets.

The decrease in our PBO in 2023 was primarily attributable to lower actuarial gains due to the decrease in discount rates from year end 2022.

The total net overfunded status of our U.S.

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

Absent the LPC plan, the decrease in our PBO exceeded the decrease in our plan assets during 2024.

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

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

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Participants’ contributions

Actuarial losses (gains)

Actuarial (gains) losses

Change in currency exchange rates

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

defined benefit pension plans increased from $ 118.1 million at December 31, 2022 to $ 141.1 million at December 31, 2023 due to the change in our PBO during 2023 exceeding the change in plan assets during 2023.

The increase in our PBO in 2023 was primarily attributable to higher actuarial losses due to the decrease in discount rates from year end 2022 and unfavorable currency fluctuations, primarily from the weakening of the U.S.

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

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

dollar relative to the euro.

The increase in our plan assets in 2023 was primarily attributable to positive plan asset returns in 2023 and favorable currency fluctuations (primarily from the weakening of the U.S.

dollar relative to the euro) and employer contributions.

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

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

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

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

We expect approximately $ 3.9 million and $ .1 million of the unrecognized

actuarial losses and prior service cost, respectively, will be recognized as components of our periodic defined benefit pension cost in 2024.

We expect approximately $ 3.2 million and $ .1 million of the unrecognized actuarial losses and prior service cost, respectively, will be recognized as components of our periodic defined benefit pension cost in 2025.

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

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Prior service cost

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

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.

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● In the U.S.

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

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

The expected long-term rate of return for our equity securities and fixed income securities is approximately 7 % and 5 %, respectively (before plan administrative expenses).

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

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

defined benefit pension plan effective December 31, 2024.

In preparation for merging the U.S.

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

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

● We also have plan assets in Belgium.

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.

We had plan assets in the United Kingdom invested primarily in insurance contracts

that were a Level 3 input as of December 31, 2022.

During 2023, we completed a termination and buy-out of our pension plan in the United Kingdom resulting in a $ 6.2 million settlement loss.

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

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(In millions)

Local currency equities

Non local currency equities

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(In millions)

Non local currency equities

Local currency equities

Local currency fixed income

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Fair value at beginning of year

Gain (loss) on assets held at end of year

Gain on assets held at end of year

Gain (loss) on assets sold during the year

Assets purchased

Transfers out

Currency exchange rate fluctuations

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Infrastructure reimbursement – Infrastructure reimbursements related to the OPA are discussed in Note 7.

LandWell also has agreements with certain utility providers servicing the Cadence master planned community under which certain costs incurred for the development of power infrastructure may be reimbursed to LandWell.

LandWell received $ .8 million in reimbursement during the second quarter of 2022 and $ .3 million during the third quarter of 2023 for past costs incurred.

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

NL received $ .5 million in insurance recoveries in 2023 and recoveries in each of 2021 and 2022 were nominal.

Land sales – 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 gain of $ 16.0 million (including $ 5.6 million in the second quarter and $ 10.4 million in the third quarter).

In the second quarter of 2023, we sold excess property not used in our operations for net proceeds of approximately $ 1.8 million and recognized a gain of $ 1.5 million.

LandWell also has agreements with certain utility providers servicing the Cadence master planned community under which certain costs incurred for the development of utility infrastructure may be reimbursed to LandWell.

LandWell received $ .8 million, $ .3 million and $ 1.4 million in 2022, 2023 and 2024, respectively, for past costs incurred.

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

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

NL insurance recoveries in 2022 were nominal.

Note 14 – Income taxes:

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income tax rate of 21 %

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

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

tax group companies

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Accrued environmental liabilities

Capitalized research and development costs

Other deductible differences

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Investments in subsidiaries and affiliates

Unrecognized currency gain

Tax on unremitted earnings of non-U.S.

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Net noncurrent deferred tax asset (liability)

We periodically review our deferred tax assets (DTAs) to determine if a valuation allowance is required.

We periodically review our deferred tax assets (“DTA”) to determine if a valuation allowance is required.

At December 31, 2024, our Chemicals Segment has German corporate and trade net operating loss (“NOL”) carryforwards of $ 447.3 million (DTA of $ 70.8 million) and $ 40.1 million (DTA of $ 4.4 million), respectively;

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

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 lengthy carryforward periods (the German and Belgian carryforwards may be carried forward indefinitely and the Canadian carryforwards may be carried forward 20 years ), (ii) we have utilized a portion of such carryforwards during the most recent three-year period and (iii) we currently expect to utilize the remainder of such carryforwards over the long term.

However, prior to the complete utilization of such carryforwards, if we were to generate additional losses in our German, Belgian or Canadian operations for an extended period of time, or if applicable laws were to change such that the carryforward periods were more limited, it is possible that 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 December 31, 2024, and using all available evidence, we had concluded that no deferred income tax asset valuation allowance was required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have lengthy carryforward periods (the German and Belgian carryforwards may be carried forward indefinitely and the Canadian carryforwards may be carried forward 20 years ), (ii) we have utilized a portion of such carryforwards during the most recent three-year period and (iii) we currently expect to utilize the remainder of such carryforwards over the long term.

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

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

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

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

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

At December 31, 2022 and December 31, 2023, we have recorded deferred tax assets of $ 12.5 million and $ 14.7 million, respectively, for the carryforwards associated with the nondeductible portion of our interest expense and have concluded we are required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria.

During 2023 we recognized a non-cash deferred income tax expense of $ 2.2 million with respect to the valuation allowance recorded on additional interest expense carryforwards.

At December 31, 2023 and December 31, 2024, we have recorded deferred tax assets of $ 14.7 million and $ 23.1 million, respectively, for the carryforwards associated with the

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

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

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

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

Pursuant to the one-time repatriation tax

(Transition Tax) provisions of the 2017 Tax Act which imposed a one-time repatriation tax on post-1986 undistributed earnings, we recognized current income tax expense of $ 74.1 million and elected to pay such tax in annual installments over an eight-year period beginning in 2018.

At December 31, 2023, the balance of our unpaid Transition Tax is $ 33.3 million with two remaining payments of $ 14.8 million due in 2024 and $ 18.5 million due in 2025.

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

Pursuant to the one-time repatriation tax (Transition Tax) provisions of the 2017 Tax Act which imposed a one-time repatriation tax on post-1986 undistributed earnings, we recognized current income tax expense of $ 74.1 million and elected to pay such tax in annual installments over an eight-year period beginning in 2018.

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

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

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

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

During 2023, we recognized a non-cash deferred income tax benefit with respect to our direct investment in Kronos of $ 6.4 million for the decrease in the deferred income taxes required to be recognized with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock, to the extent such decrease related to our equity in Kronos’ net income during such period.

We recognized a similar non-cash deferred income tax expense of $ 1.2 million in 2022 and $ 5.0 million in 2021.

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

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

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

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

qualified business units.

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

Tax authorities are examining certain of our U.S.

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

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

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

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.

We also file income tax returns in various non-U.S.

jurisdictions, principally in Germany, Canada, Belgium and Norway.

income tax returns prior to 2021 are generally considered closed to examination by applicable tax authorities.

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

2018 for Norway;

2018 for Canada;

2020 for Germany;

and 2020 for Belgium.

2021 for Belgium;

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

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 $ .7 million during 2021, $ .2 million during 2022 and nil during 2023, and at December 31, 2022 and 2023 we had $ .1 million and nil , respectively, accrued for interest and penalties for our uncertain tax positions.

The amount of interest and penalties we accrued during 2022, 2023 and 2024 was not material.

Note 15 – Noncontrolling interest in subsidiaries:

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Valhi share repurchases and cancellations.

Prior to 2021 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.

Our board of directors previously 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, 2024.

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The treasury stock we reported for financial reporting purposes at December 31, 2023 and 2024 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.

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 Sheets 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

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 gain of $ 3.3 million in 2021 , a loss of $ 1.6 million in 2022 and a loss of $ 1.7 million in 2023 in our Consolidated Statements of Operations which represents the unrealized gain (loss) in respect of these shares attributable to the noncontrolling interest of Kronos and NL.

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

Valhi director stock plan.

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

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

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

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.

Under the terms of various intercorporate services agreements (“ISA”) 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.

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

The aggregate amount paid under the group insurance program by us, our subsidiaries and our joint venture in 2021, 2022 and 2023 was $ 27.1 million, $ 25.2 million and $ 29.3 million, respectively, which amounts principally represent insurance premiums.

The aggregate amount paid under the group insurance program by us, our subsidiaries and LPC in 2022, 2023 and 2024 was $ 25.2 million, $ 29.3 million and $ 29.7 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.

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The program apportions its costs among the participating

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

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

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

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

We expect that these relationships with Contran will continue in 2024.

We expect these relationships with Contran will continue in 2025.

Prior to 2022, 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, 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.

Receivables from and payables to affiliates are summarized in the table below.

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Contran - income taxes

Contran - trade items

Noncurrent payable to affiliates:

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Valhi - Contran credit facility

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.

Purchases of TiO 2 from LPC were $ 188.6 million in 2021, $ 225.6 million in 2022 and $ 231.7 million in 2023.

Sales of feedstock to LPC were $ 85.4 million in 2021, $ 106.9 million in 2022 and $ 135.1 million in 2023.

The noncurrent payable to Contran for income taxes is discussed in Note 14.

Kronos - Contran Term Loan

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

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

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

See Note 3 for the details on the LPC acquisition.

Note 18 – Commitments and contingencies:

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

NL, other former manufacturers of lead pigments for use in paint and lead-based paint (together, the “former pigment manufacturers”), and the Lead Industries Association (LIA), which discontinued business operations in 2002, have 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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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

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

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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.

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

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

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

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

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

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

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

In addition, the imposition of more stringent standards or requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of costs among PRPs, solvency of other PRPs, the results of future testing and analysis undertaken with respect to certain sites or a determination that we are potentially responsible for the release of hazardous substances at other sites, could cause our expenditures to exceed our current estimates.

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

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

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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 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.

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Balance at the beginning of the year

Additions charged to expense, net

Additions (deductions), net

Payments, net

Changes in currency exchange rates and other

Balance at the end of the year

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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 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 $ 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.

On February 10, 2025, the United States District Court for the District of New Jersey entered an order approving a consent decree relating to the Raritan Bay Slag Superfund Site (“RBS Site”) in Middlesex County, New Jersey.

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

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

NL Industries, Inc., et al.

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

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.

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

At December 31, 2024, 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.

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

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

Recoveries in 2022 were nominal.

Other litigation

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Other matters

Concentrations of credit risk – Sales of TiO 2 accounted for approximately 92 % of our Chemicals Segment’s sales in each of 2021 and 2022 and 90 % in 2023.

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

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

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Our Chemicals Segment sells TiO 2 to approximately 3,000 customers, with the top ten customers approximating 33 % of our Chemicals Segment’s net sales in 2022, 35 % in 2023 and 39 % in 2024.

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

Our Chemicals Segment did not have sales to a single customer comprising 10% or more of its net sales in 2021.

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

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

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

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

One customer of the security products reporting unit accounted for approximately 16 % of the Component Products Segment’s total sales in 2021, 14 % in 2022 and 24 % in 2023 (of which 11 % relates to a pilot project).

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

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

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

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

During 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.

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

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

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

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

Income taxes – Prior to 2021, NL made certain pro-rata distributions to its stockholders in the form of shares of Kronos common stock.

To date, we have not paid the liability to Contran because Contran has not paid the liability to the applicable tax authority.

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.

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

Note 19 – Financial instruments:

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

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

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

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

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

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

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2023 and 2024:

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Kronos 9.50 % Senior Secured Notes due 2029

Valhi credit facility with Contran

Kronos 3.75 % Senior Secured Notes due 2025

Kronos revolving credit facility

LandWell bank note payable

At December 31, 2023, the estimated market price of Kronos’ 3.75 % Senior Secured Notes due 2025 was € 959 per € 1,000 principal amount.

The fair value of Kronos’ 3.75 % Senior Secured Notes due 2025 was based on quoted market prices;

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

Fair values of variable interest rate debt and other fixed-rate debt are deemed to approximate book value.

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

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

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

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

The fair value of other fixed-rate debt, which represents Level 2 inputs, is deemed to approximate carrying value.

In addition, at December 31, 2024, Kronos has a $ 53.7 million subordinated, unsecured term loan payable to a related party, Contran, due September 2029, and Valhi has $ 44.6 million outstanding on an unsecured revolving credit facility with Contran.

Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value.

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Note 20 – Restructuring costs:

As part of overall cost saving measures to improve Kronos’ long-term cost structure, during the third quarter of 2023 Kronos began implementing certain voluntary and involuntary workforce reductions.

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

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

These workforce reductions impacted approximately 100 individuals and are substantially completed.

Kronos recognized a total of approximately $ 6 million in selling, general and administrative expense related to these workforce reductions in 2023.

Kronos does not expect to accrue any further material amounts associated with the affected individuals who are providing service to Kronos past December 31, 2023.

Accrued severance costs at December 31, 2023 are expected to be paid by the first quarter of 2024 and are included in accrued liabilities – other on our Consolidated Balance Sheet.

A summary of the activity in Kronos’ accrued workforce reduction costs for 2023 is shown in the table below (in millions):

Accrued workforce reduction costs as of January 1, 2023

These workforce reductions impacted approximately 100 employees.

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

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

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

A summary of the activity in Kronos’ accrued restructuring costs for 2023 and 2024 is shown in the table below:

Years ended December 31,

(in millions)

Changes in accrued workforce reduction costs:

Balances at beginning of the year

Workforce reduction costs accrued

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Currency translation adjustments, net

Accrued workforce reduction costs at December 31, 2023

Balance at the end of the year

Amounts recognized in the balance sheet:

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

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

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

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

Public companies are required to disclose the title and position of the CODM and explain how the CODM uses the reported measure of segment profit or loss in assessing segment performance and allocation resources.

Pending Adoption

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

Improvements to Income Tax Disclosures .

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

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

tax jurisdictions.

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

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

In November 2024, the FASB issued ASU No.

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

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

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

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

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

What changed 10-K

Item 9A. Controls and Procedures