Business segment information

9 Months Ended

Sep. 30, 2012

Business segment information

Note 2 - Business segment information:

Business segment	Entity	% controlled  at September 30, 2012
Chemicals	Kronos		80	%
Component products	CompX		87	%
Waste management	WCS		100	%

Our control of Kronos includes 50% we hold directly and 30% held directly by NL. We own 83% of NL. Our control of CompX is through NL.

	Three months  ended September 30,						Nine months ended September 30,
	2011			2012			2011			2012
	(In millions)
Net sales:
Chemicals	$	547.9		$	472.9		$	1,505.9		$	1,579.5
Component products		35.8			37.1			105.8			110.2
Waste management		.4			14.5			1.2			16.5
Total net sales	$	584.1		$	524.5		$	1,612.9		$	1,706.2
Cost of sales:
Chemicals	$	337.7		$	387.5		$	953.5		$	1,070.5
Component products		27.2			27.0			78.7			80.6
Waste management		6.5			8.7			18.4			24.4
Total cost of sales	$	371.4		$	423.2		$	1,050.6		$	1,175.5
Gross margin:
Chemicals	$	210.2		$	85.4		$	552.4		$	509.0
Component products		8.6			10.1			27.1			29.6
Waste management		(6.1	)		5.8			(17.2	)		(7.9	)
Total gross margin	$	212.7		$	101.3		$	562.3		$	530.7
Operating income (loss):
Chemicals	$	158.4		$	40.4		$	407.8		$	364.1
Component products		1.5			4.4			13.4			11.2
Waste management		(9.7	)		(1.0	)		(27.9	)		(21.9	)
Total operating income		150.2			43.8			393.3			353.4
Equity in earnings of investee		(.1	)		(.1	)		(.3	)		(.1	)
General corporate items:
Securities earnings		6.6			7.3			21.4			21.5
Insurance recoveries		16.1			1.2			16.6			2.6
Litigation settlement gain		—			—			—			14.7
General expenses, net		(9.2	)		(7.9	)		(32.6	)		(37.4	)
Gain (loss)on prepayment of debt		.1			—			(3.2	)		(7.2	)
Interest expense		(15.2	)		(14.6	)		(48.3	)		(42.5	)
Income before income taxes	$	148.5		$	29.7		$	346.9		$	305.0

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 the way we define operating income. Intersegment sales are not material. The following items are included in the determination of CompX’s operating income: approximately $7.5 million for a patent litigation settlement in the first quarter of 2011; impairment charges for assets held for sale of $1.1 million and $.4 million in the third quarters of 2011 and 2012, respectively; and $.8 million in the third quarter of 2012 related to the reversal of accrued contingent consideration. See Note 11.