Long-Term Debt

9 Months Ended

Sep. 30, 2011

Long-Term Debt

Long-Term Debt

Note 9 – Long-term debt:

	December 31, 2010		September 30, 2011
	(In millions)
Valhi:
Snake River Sugar Company	$	250.0	$	250.0
Subsidiary debt:
Kronos International:
6.5% Senior Secured Notes		532.8		397.6
CompX promissory note payable to TIMET		42.2		37.5
CompX revolving credit facility		3.0		4.8
NL promissory note		18.0		18.0
WCS financing capital lease		72.0		71.4
WCS 6% promissory notes		15.4		15.7
Other		6.9		7.4
Total subsidiary debt		690.3		552.4
Total debt		940.3		802.4
Less current maturities		17.4		22.6
Total long-term debt	$	922.9	$	779.8

Kronos – In March 2011, Kronos redeemed €80 million principal amount of its €400 million 6.5% Senior Secured Notes at 102.17% of the principal amount for an aggregate of $115.7 million, including a $2.5 million call premium. During the third quarter of 2011, Kronos repurchased in open market transactions an aggregate of €30.4 million principal amount of its Senior Secured Notes (including €3.0 million for which settlement of the purchase did not occur until October 2011) for an aggregate of €30.2 million (including €3.0 million for the October 2011 settlement). The aggregate €27.4 million principal amount for which settlement occurred in the third quarter of 2011 was the equivalent of $39.3 million when repurchased. Following such partial redemption and repurchases, €292.6 million principal amount of the Senior Notes remain outstanding at September 30, 2011 (including the €3.0 million principal amount of notes repurchased in late September 2011 for which settlement did not occur until October 2011). In the first quarter of 2011, we recognized a $3.3 million pre-tax interest charge related to the redemption of €80 million of the 6.5% Senior Secured Notes consisting of the call premium, the write-off of unamortized deferred financing costs and original issue discount associated with the redeemed Senior Notes. In the third quarter of 2011, we recognized a $.1 million net gain on €30.4 million principal amount of Senior Notes repurchased in open market transactions. Kronos borrowed under its European revolving credit facility, as discussed below, in order to fund the redemption in the first quarter 2011, while we used cash on hand to fund the third quarter open market repurchases. In October 2011, Kronos repurchased an additional €10.5 million principal amount of Senior Notes for an aggregate of €10.4 million.

During the first nine months of 2011, Kronos borrowed €80 million ($113.3 million when borrowed) under its European credit facility, and subsequently repaid €80 million ($115.0 million when repaid). As of September 30, 2011, there were no outstanding borrowings under Kronos' European credit facility and the equivalent of $109 million was available for borrowing under this facility.

CompX – In February 2011, CompX repaid all of the $3.0 million which was outstanding at December 31, 2010 on its revolving credit facility. In July 2011, CompX borrowed the equivalent of approximately $5.3 million under its revolving credit facility in connection with the acquisition discussed in Note 2 (such borrowing was denominated in Canadian dollars, as permitted by the terms of the credit facility).

CompX's promissory note payable to affiliate was amended in September 2009 resulting in the deferral of interest payments and postponement of quarterly principal payments on the promissory note until March 2011. As such, in March 2011 CompX paid our required quarterly principal payment of $250,000 and all accrued interest totaling approximately $1.0 million. In addition, CompX prepaid $4.0 million in principal on the promissory note. In the second and third quarters of 2011, CompX continued its regularly scheduled quarterly principal payment of $250,000 and related accrued interest for each quarter. The interest rate on the promissory note at September 30, 2011 was 1.2%.

In October 2011, CompX collected the $15.0 million principal amount due under its real-estate related promissory note receivable (See Note 4), and subsequently made an additional $15.0 million prepayment on its promissory note payable to affiliate.

Restrictions and Other – Certain of the credit facilities with unrelated, third-party lenders described above require the respective borrowers to maintain minimum levels of equity, require the maintenance of certain financial ratios, limit dividends and additional indebtedness and contain other provisions and restrictive covenants customary in lending transactions of this type. We are in compliance with all of our debt covenants at September 30, 2011. We believe we will be able to comply with the financial covenants contained in all of our credit facilities through the maturity of the respective facility; however, if future operating results differ materially from our expectations, we may be unable to maintain compliance.