10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-5467

VALHI, INC.

(Exact name of Registrant as specified in its charter)

Delaware	87-0110150
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

5430 LBJ Freeway, Suite 1700

Dallas, Texas 75240-2620

(Address of principal executive office)

Registrant’s telephone number, including area code: (972) 233-1700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	VHI	NYSE

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒    No  ☐

Whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐   No  ☒.

Number of shares of the registrant’s common stock, $.01 par value per share, outstanding on April 29, 2022:  28,277,093

VALHI, INC. AND SUBSIDIARIES

INDEX

				Page number
Part I.	FINANCIAL INFORMATION
	Item 1.		Financial Statements
			Condensed Consolidated Balance Sheets – December 31, 2021 and March 31, 2022 (unaudited)	3
			Condensed Consolidated Statements of Income (unaudited) – Three months ended March 31, 2021 and 2022	5
			Condensed Consolidated Statements of Comprehensive Income (unaudited) – Three months ended March 31, 2021 and 2022	6
			Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three months ended March 31, 2021 and 2022	7
			Condensed Consolidated Statements of Cash Flows (unaudited) – Three months ended March 31, 2021 and 2022	8
			Notes to Condensed Consolidated Financial Statements (unaudited)	9
	Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.		Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.		Controls and Procedures	39
Part II.		OTHER INFORMATION
		Item 1.	Legal Proceedings	40
		Item 1A.	Risk Factors	40
		Item 6.	Exhibits	41

Items 2, 3, 4 and 5 of Part II are omitted because there is no information to report.

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

	December 31,		March 31,
	2021		2022
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	698.4	$	640.0
Restricted cash equivalents		52.6		55.9
Marketable securities		2.6		2.2
Accounts and other receivables, net		403.7		443.3
Inventories, net		458.7		493.1
Prepaid expenses and other		57.2		69.7
Total current assets		1,673.2		1,704.2
Other assets:
Investment in TiO2 manufacturing joint venture		101.9		105.7
Goodwill		379.7		379.7
Deferred income taxes		86.8		79.1
Other assets		200.0		190.7
Total other assets		768.4		755.2
Property and equipment:
Land		50.3		50.6
Buildings		252.6		250.0
Equipment		1,194.6		1,192.6
Mining properties		26.3		23.2
Construction in progress		82.9		90.3
		1,606.7		1,606.7
Less accumulated depreciation and amortization		1,043.1		1,042.8
Net property and equipment		563.6		563.9
Total assets	$	3,005.2	$	3,023.3

3

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(In millions)

	December 31,		March 31,
	2021		2022
			(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	3.1	$	3.1
Accounts payable and accrued liabilities		448.1		428.9
Income taxes		12.3		19.0
Total current liabilities		463.5		451.0
Noncurrent liabilities:
Long-term debt		649.9		638.2
Deferred income taxes		46.2		44.9
Payable to affiliate - income taxes		44.5		44.5
Accrued pension costs		291.1		285.9
Accrued environmental remediation and related costs		94.1		94.1
Other liabilities		257.5		243.7
Total noncurrent liabilities		1,383.3		1,351.3
Equity:
Preferred stock		—		—
Common stock		.3		.3
Additional paid-in capital		669.0		670.4
Retained earnings		401.1		444.3
Accumulated other comprehensive loss		(191.3)		(185.4)
Treasury stock, at cost		(49.6)		(49.6)
Total Valhi stockholders' equity		829.5		880.0
Noncontrolling interest in subsidiaries		328.9		341.0
Total equity		1,158.4		1,221.0
Total liabilities and equity	$	3,005.2	$	3,023.3

Commitments and contingencies (Notes 6, 12 and 15)

See accompanying Notes to Condensed Consolidated Financial Statements.

4

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

	Three months ended
	March 31,
	2021		2022
	(unaudited)
Revenues and other income:
Net sales	$	509.0	$	629.0
Other income, net		7.0		—
Total revenues and other income		516.0		629.0
Cost and expenses:
Cost of sales		399.7		458.3
Selling, general and administrative		70.9		77.2
Other components of net periodic pension and OPEB expense		4.3		3.3
Interest		8.6		6.9
Total costs and expenses		483.5		545.7
Income before income taxes		32.5		83.3
Income tax expense		8.0		19.9
Net income		24.5		63.4
Noncontrolling interest in net income of subsidiaries		9.7		18.0
Net income attributable to Valhi stockholders	$	14.8	$	45.4
Amounts attributable to Valhi stockholders:
Basic and diluted net income per share	$	.52	$	1.59
Basic and diluted weighted average shares outstanding		28.5		28.5

See accompanying Notes to Condensed Consolidated Financial Statements.

5

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Three months ended
	March 31,
	2021		2022
	(unaudited)
Net income	$	24.5	$	63.4
Other comprehensive income (loss), net of tax:
Currency translation		1.7		5.8
Defined benefit pension plans		3.4		2.4
Other		(.2)		(.2)
Total other comprehensive income, net		4.9		8.0
Comprehensive income		29.4		71.4
Comprehensive income attributable to noncontrolling interest		11.0		20.1
Comprehensive income attributable to Valhi stockholders	$	18.4	$	51.3

See accompanying Notes to Condensed Consolidated Financial Statements.

6

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

	Three months ended March 31, 2021 and 2022 (unaudited)
									Accumulated
					Additional				other				Non-
	Preferred		Common		paid-in		Retained		comprehensive		Treasury		controlling
	stock		stock		capital		earnings		loss		stock		interest		Total
Balance at December 31, 2020	$	—	$	.3	$	668.3	$	282.9	$	(219.4)	$	(49.6)	$	324.4	$	1,006.9
Net income		—		—		—		14.8		—		—		9.7		24.5
Other comprehensive income, net		—		—		—		—		3.6		—		1.3		4.9
Dividends paid to noncontrolling interest		—		—		—		—		—		—		(4.8)		(4.8)
Cash dividends - $.08 per share		—		—		—		(2.2)		—		—		—		(2.2)
Equity transactions with noncontrolling   interest, net and other		—		—		.9		—		—		—		(1.6)		(.7)
Balance at March 31, 2021	$	—	$	.3	$	669.2	$	295.5	$	(215.8)	$	(49.6)	$	329.0	$	1,028.6
Balance at December 31, 2021	$	—	$	.3	$	669.0	$	401.1	$	(191.3)	$	(49.6)	$	328.9	$	1,158.4
Net income		—		—		—		45.4		—		—		18.0		63.4
Other comprehensive income, net		—		—		—		—		5.9		—		2.1		8.0
Dividends paid to noncontrolling interest		—		—		—		—		—		—		(5.2)		(5.2)
Cash dividends - $.08 per share		—		—		—		(2.2)		—		—		—		(2.2)
Equity transactions with noncontrolling   interest, net and other		—		—		1.4		—		—		—		(2.8)		(1.4)
Balance at March 31, 2022	$	—	$	.3	$	670.4	$	444.3	$	(185.4)	$	(49.6)	$	341.0	$	1,221.0

See accompanying Notes to Condensed Consolidated Financial Statements.

7

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three months ended
	March 31,
	2021		2022
	(unaudited)
Cash flows from operating activities:
Net income	$	24.5	$	63.4
Depreciation and amortization		14.7		14.8
Benefit plan expense greater than cash funding		3.5		1.8
Deferred income taxes		1.3		3.1
Contributions to TiO2 manufacturing joint venture, net		(3.4)		(3.8)
Other, net		.9		2.7
Change in assets and liabilities:
Accounts and other receivables, net		(29.7)		(43.9)
Land held for development, net		(4.9)		7.1
Inventories, net		35.7		(35.3)
Accounts payable and accrued liabilities		(2.0)		(37.7)
Income taxes		1.9		7.1
Accounts with affiliates		4.5		8.1
Other, net		9.6		(10.2)
Net cash provided by (used in) operating activities		56.6		(22.8)
Cash flows from investing activities:
Capital expenditures		(11.5)		(16.2)
Purchases of marketable securities		(.9)		(.1)
Proceeds from disposal of marketable securities		3.0		.8
Other, net		2.1		—
Net cash used in investing activities		(7.3)		(15.5)
Cash flows from financing activities:
Principal payments on indebtedness		(3.9)		(5.9)
Valhi cash dividends paid		(2.2)		(2.2)
Distributions to noncontrolling interest in subsidiaries		(4.8)		(5.2)
Subsidiary treasury stock acquired		(.8)		(1.1)
Net cash used in financing activities		(11.7)		(14.4)
Cash, cash equivalents and restricted cash and cash equivalents - net change from:
Operating, investing and financing activities		37.6		(52.7)
Effect of exchange rates on cash		(7.0)		(.4)
Balance at beginning of period		570.3		792.9
Balance at end of period	$	600.9	$	739.8
Supplemental disclosures:
Cash paid for:
Interest, net of amounts capitalized	$	12.0	$	10.2
Income taxes, net		3.9		6.2
Noncash investing activities:
Change in accruals for capital expenditures		2.4		3.8

See accompanying Notes to Condensed Consolidated Financial Statements.

8

VALHI, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(unaudited)

Note 1 – Organization and basis of presentation:

Organization – We are majority owned by a wholly-owned subsidiary of Contran Corporation (“Contran”), which owns approximately 92% of our outstanding common stock at March 31, 2022. A majority of Contran’s outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) 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. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at March 31, 2022, Ms. Simmons and the Family Trust may be deemed to control Contran and us.

Basis of Presentation – Consolidated in this Quarterly Report are the results of our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and The LandWell Company (“LandWell”). Kronos (NYSE: KRO), NL (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the Securities and Exchange Commission (“SEC”).

The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 that we filed with the SEC on March 10, 2022 (the “2021 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments), in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, 2021 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, 2021) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim period ended March 31, 2022 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our 2021 Consolidated Financial Statements contained in our 2021 Annual Report.

Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Valhi, Inc. and its subsidiaries (NYSE: VHI), taken as a whole.

Note 2 – Business segment information:

		% controlled at
Business segment	Entity	March 31, 2022
Chemicals	Kronos	81%
Component products	CompX	87%
Real estate management and development	BMI and LandWell	63% - 77%

9

Our control of Kronos includes approximately 50% we hold directly and approximately 31% held directly by NL. We own approximately 83% of NL. Our control of CompX is through NL. We own approximately 63% of BMI. Our control of LandWell includes the approximately 27% we hold directly and 50% held by BMI.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales:
Chemicals	$	465.0	$	562.9
Component products		35.9		42.1
Real estate management and development		8.1		24.0
Total net sales	$	509.0	$	629.0
Cost of sales:
Chemicals	$	369.7	$	413.9
Component products		24.9		30.0
Real estate management and development		5.1		14.4
Total cost of sales	$	399.7	$	458.3
Gross margin:
Chemicals	$	95.3	$	149.0
Component products		11.0		12.1
Real estate management and development		3.0		9.6
Total gross margin	$	109.3	$	170.7
Operating income:
Chemicals	$	37.7	$	86.4
Component products		5.8		6.3
Real estate management and development		7.8		8.0
Total operating income		51.3		100.7
General corporate items:
Interest income and other		.9		.9
Other components of net periodic pension and OPEB expense		(4.3)		(3.3)
Changes in market value of Valhi common stock held by subsidiaries		1.3		.1
General expenses, net		(8.1)		(8.2)
Interest expense		(8.6)		(6.9)
Income before income taxes	$	32.5	$	83.3

Segment results we report may differ from amounts separately reported by our various subsidiaries due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material. Infrastructure reimbursement is included in the determination of Real Estate Management and Development operating income. See Note 11.

10

Note 3 – Accounts and other receivables, net:

	December 31,		March 31,
	2021		2022
	(In millions)
Trade accounts receivable:
Kronos	$	326.3	$	374.1
CompX		15.6		17.8
BMI/LandWell		2.8		2.0
VAT and other receivables		38.0		30.3
Refundable income taxes		4.5		4.0
Receivables from affiliates:
Louisiana Pigment Company, L.P. ("LPC")		15.8		15.2
Contran - trade items		.1		.3
Other - trade items		2.6		2.8
Allowance for doubtful accounts		(2.0)		(3.2)
Total	$	403.7	$	443.3

Note 4 – Inventories, net:

	December 31,		March 31,
	2021		2022
	(In millions)
Raw materials:
Chemicals	$	76.3	$	97.1
Component products		5.0		6.1
Total raw materials		81.3		103.2
Work in process:
Chemicals		30.4		35.6
Component products		16.8		17.7
Total in-process products		47.2		53.3
Finished products:
Chemicals		246.4		249.8
Component products		3.8		4.3
Total finished products		250.2		254.1
Supplies (chemicals)		80.0		82.5
Total	$	458.7	$	493.1

Note 5 – Other assets:

	December 31,		March 31,
	2021		2022
	(In millions)
Other noncurrent assets:
Restricted cash and cash equivalents	$	41.9	$	43.9
Note receivables - OPA		38.7		36.0
Land held for development		36.0		31.0
IBNR receivables		34.4		29.9
Operating lease right-of-use assets		19.9		21.5
Pension asset		9.0		9.5
Marketable securities		3.3		2.9
Other		16.8		16.0
Total	$	200.0	$	190.7

11

Note 6 – Long-term debt:

	December 31,		March 31,
	2021		2022
	(In millions)
Valhi:
Contran credit facility	$	172.9	$	167.2
Subsidiary debt:
Kronos:
Senior Secured Notes		448.8		442.9
BMI:
Bank loan Western Alliance Bank		15.4		15.4
LandWell:
Note payable to Western Alliance Business Trust		13.5		13.5
Other		2.4		2.3
Total subsidiary debt		480.1		474.1
Total debt		653.0		641.3
Less current maturities		(3.1)		(3.1)
Total long-term debt	$	649.9	$	638.2

Valhi – Contran credit facility – During the first three months of 2022, we had no borrowings and repaid $5.7 million under this facility. The average interest rate on the existing balance for the three months ended March 31, 2022 was 4.29%. At March 31, 2022, the interest rate was 4.5% and $57.8 million was available for borrowing under this facility.

Kronos – Senior Notes – At March 31, 2022, the carrying value of Kronos’ 3.75% Senior Secured Notes due September 15, 2025 (€400 million aggregate principal amount outstanding) is stated net of unamortized debt issuance costs of $3.2 million.

Revolving credit facility – During the first three months of 2022, Kronos had no borrowings or repayments under its $225 million global revolving credit facility (“Global Revolver”) and at March 31, 2022, the full $225 million was available for borrowing under the Global Revolver.

Other – We are in compliance with all of our debt covenants at March 31, 2022.

12

Note 7 – Accounts payable and accrued liabilities:

	December 31,		March 31,
	2021		2022
	(In millions)
Accounts payable:
Kronos	$	143.6	$	132.5
CompX		3.4		5.1
BMI and LandWell		5.3		10.3
Other		.4		.4
Total		152.7		148.3
Payables to affiliates:
Contran - income taxes		1.5		4.4
LPC		17.3		20.8
Accrued litigation settlement		11.8		11.9
Deferred income		125.8		120.5
Employee benefits		39.9		37.0
Accrued sales discounts and rebates		28.7		11.1
Interest		5.3		1.4
Operating lease liabilities		3.7		3.9
Environmental remediation and related costs		3.5		3.5
Other		57.9		66.1
Total	$	448.1	$	428.9

The accrued litigation settlement is discussed in Note 15.

Note 8 – Other noncurrent liabilities:

	December 31,		March 31,
	2021		2022
	(In millions)
Deferred income	$	81.6	$	73.8
Accrued development costs		55.4		54.1
Accrued litigation settlement		38.5		38.7
Insurance claims and expenses		36.4		32.0
Operating lease liabilities		15.8		17.2
Other postretirement benefits		10.2		10.2
Employee benefits		6.1		5.9
Reserve for uncertain tax positions		3.5		4.8
Other		10.0		7.0
Total	$	257.5	$	243.7

The accrued litigation settlement is discussed in Note 15.

13

Note 9 – Revenue – disaggregation of sales:

The following table disaggregates the net sales of our Chemicals Segment by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales - point of origin:
United States	$	253.9	$	326.4
Germany		231.2		276.5
Canada		97.2		96.4
Belgium		66.5		92.8
Norway		71.0		78.4
Eliminations		(254.8)		(307.6)
Total	$	465.0	$	562.9
Net sales - point of destination:
Europe	$	227.3	$	269.5
North America		145.3		179.9
Other		92.4		113.5
Total	$	465.0	$	562.9

The following table disaggregates the net sales of our Component Products and Real Estate Management and Development Segments by major product line.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Component Products:
Net sales:
Security products	$	25.9	$	29.6
Marine components		10.0		12.5
Total	$	35.9	$	42.1
Real Estate Management and Development:
Net sales:
Land sales	$	6.6	$	22.2
Water delivery		1.0		1.5
Utility and other		.5		.3
Total	$	8.1	$	24.0

14

Note 10 – Defined benefit pension plans:

The components of our net periodic defined benefit pension cost are presented in the table below.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Service cost	$	3.8	$	3.0
Interest cost		2.4		3.2
Expected return on plan assets		(3.4)		(3.5)
Recognized actuarial losses		5.4		3.8
Total	$	8.2	$	6.5

We expect to contribute the equivalent of approximately $20 million to all of our defined benefit pension plans during 2022.

Note 11 – Other income, net:

	Three months ended
	March 31,
	2021		2022
	(In millions)
Interest income and other:
Interest and dividends	$	.9	$	1.1
Securities transactions, net		—		(.2)
Total		.9		.9
Infrastructure reimbursements		6.2		—
Currency transactions, net		(.5)		(1.5)
Other, net		.4		.6
Total	$	7.0	$	—

Infrastructure reimbursement – As disclosed in Note 7 to our 2021 Annual Report, under an Owner Participation Agreement (“OPA”) entered into by LandWell with the Redevelopment Agency of the City of Henderson, Nevada, as LandWell develops certain real property for commercial and residential purposes in its master planned community in Henderson, Nevada, the cost of certain public infrastructure may be reimbursed to LandWell through tax increment. During the first three months of 2021, LandWell received approval for additional tax increment reimbursement of $6.2 million which was recognized as other income and is evidenced by a promissory note issued to LandWell by the City of Henderson.

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Note 12 – Income taxes:

	Three months ended
	March 31,
	2021		2022
	(In millions)
Expected tax expense at U.S. federal statutory income tax   rate of 21%	$	6.8	$	17.5
Non-U.S. tax rates		.8		2.1
Incremental net tax benefit on earnings and losses of U.S.   and non-U.S. tax group companies		(1.1)		(.9)
Valuation allowance		1.2		.6
Global intangible low-tax income, net		.5		.7
Adjustment to the reserve for uncertain tax positions, net		(.4)		(.7)
U.S. state income taxes and other, net		.2		.6
Income tax expense	$	8.0	$	19.9
Comprehensive provision for income taxes allocable to:
Net income	$	8.0	$	19.9
Other comprehensive income (loss):
Currency translation		.2		.7
Pension plans		2.1		1.4
Other		(.1)		.2
Total	$	10.2	$	22.2

The amount shown in the preceding table of our income tax rate reconciliation for non-U.S. tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our non-U.S. subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S. jurisdiction and the U.S. federal statutory tax rate. The amount shown on such table for incremental net tax benefit on earnings and losses on non-U.S. and non-tax group companies includes, as applicable, (i) deferred income taxes (or deferred income tax benefits) associated with the current year earnings of all our Chemicals Segment’s non-U.S. subsidiaries, (ii) current U.S. income taxes (or current income tax benefit) including U.S. personal holding company tax, as applicable, attributable to current-year income (losses) of one of our Chemicals Segment’s non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, to the extent the current year income (losses) of such subsidiary is subject to U.S. income tax under the U.S. dual-resident provisions of the Internal Revenue Code, (iii) deferred income taxes associated with our direct investment in Kronos and (iv) current and deferred income taxes associated with distributions and earnings from our investments in LandWell and BMI.

Tax authorities are examining certain of our U.S. and non-U.S. income tax returns and may propose tax deficiencies, including penalties and interest. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. We currently estimate that our unrecognized tax benefits will decrease by approximately $3.7 million during the next twelve months primarily due to the expiration of certain statutes of limitations.

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Note 13 – Noncontrolling interest in subsidiaries:

	December 31,		March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	226.6	$	232.3
NL Industries		75.7		78.7
CompX International		22.5		22.8
BMI		8.3		9.5
LandWell		(4.2)		(2.3)
Total	$	328.9	$	341.0

	Three months ended March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	3.8	$	11.1
NL Industries		2.3		3.2
CompX International		.6		.6
BMI		1.1		1.2
LandWell		1.9		1.9
Total	$	9.7	$	18.0

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Note 14 – Stockholders’ equity:

Accumulated other comprehensive loss – Changes in accumulated other comprehensive income (loss) attributable to Valhi stockholders are presented in the table below.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Accumulated other comprehensive income (loss) (net of tax and   noncontrolling interest):
Marketable securities:
Balance at beginning of period	$	1.8	$	1.7
Other comprehensive income:
Unrealized gain arising during the period		—		—
Balance at end of period	$	1.8	$	1.7
Currency translation:
Balance at beginning of period	$	(67.4)	$	(72.2)
Other comprehensive gain arising during the period		1.3		4.2
Balance at end of period	$	(66.1)	$	(68.0)
Defined benefit pension plans:
Balance at beginning of period	$	(154.1)	$	(120.9)
Other comprehensive loss:
Amortization of prior service cost and net losses included  in net periodic pension cost		2.5		1.8
Balance at end of period	$	(151.6)	$	(119.1)
OPEB plans:
Balance at beginning of period	$	.3	$	.1
Amortization of prior service credit and net losses  included in net periodic OPEB cost		(.2)		(.1)
Balance at end of period	$	.1	$	—
Total accumulated other comprehensive loss:
Balance at beginning of period	$	(219.4)	$	(191.3)
Other comprehensive income		3.6		5.9
Balance at end of period	$	(215.8)	$	(185.4)

Other – During the first three months of 2022, Kronos acquired an additional 73,881 shares of its common stock in market transactions for an aggregate purchase price of $1.1 million which are accounted for as Kronos’ treasury stock at March 31, 2022.  At March 31, 2022, approximately 1.5 million shares were available for repurchase under Kronos’ prior repurchase authorizations.  

During the first three months of 2021, CompX acquired 50,000 shares of its Class A common stock in a market transaction for approximately $.8 million. At March 31, 2022, approximately .6 million shares were available for repurchase under CompX’s prior repurchase authorizations.

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Note 15 – Commitments and contingencies:

Lead pigment litigation – NL

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 these actions are without merit, and 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 do not have any amounts accrued 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.

In the terms of the County of Santa Clara v. Atlantic Richfield Company, et al. (Superior Court of the State of California, County of Santa Clara, Case No. 1-00-CV-788657) global settlement agreement, NL has four annual installment payments remaining ($12.0 million for the next three installments and $16.7 million for the final installment). NL’s final installment will be made with funds already on deposit at the court, which are included in noncurrent restricted cash on our Condensed 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). See Note 18 to our 2021 Annual Report.

New cases may continue to be filed against NL. We cannot assure you that we will not incur liability in the future with respect to 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 NL or otherwise

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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 NL 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 estimable. 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.

Environmental matters and litigation

Our operations are governed by various environmental laws and regulations. Certain of our businesses are and have been engaged in the handling, manufacture or use of substances or compounds that may be considered toxic or hazardous within the meaning of applicable environmental laws and regulations. As with other companies engaged in similar businesses, certain of our past and current operations and products have the potential to cause environmental or other damage. 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. From time to time, our businesses may be subject to environmental regulatory enforcement under U.S. and non-U.S. statutes, the resolution of which typically involves the establishment 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. We believe all of our facilities are in substantial compliance with applicable environmental laws.

Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative proceedings or investigations arising under federal and state environmental laws and common law. Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (“PRP”) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (“CERCLA”), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors, and NL or its predecessors, our subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (“EPA”) Superfund National Priorities List or similar state lists. These proceedings seek cleanup costs, damages for personal injury or property damage and/or damages for injury to natural resources. Certain of these proceedings involve claims for substantial amounts. Although we may be jointly and severally liable for these costs, in most cases we are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated. In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from our operations.

Obligations associated with environmental remediation and related matters are difficult to assess and estimate for numerous reasons including the:

● complexity and differing interpretations of governmental regulations,

● number of PRPs and their ability or willingness to fund such allocation of costs,

● financial capabilities of the PRPs and the allocation of costs among them,

● solvency of other PRPs,

● multiplicity of possible solutions,

● number of years of investigatory, remedial and monitoring activity required,

● uncertainty over the extent, if any, to which our former operations might have contributed to the conditions allegedly giving rise to such personal injury, property damage, natural resource and related claims, and

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

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In addition, the imposition of more stringent standards or requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of costs among PRPs, solvency of other PRPs, the results of future testing and analysis undertaken with respect to certain sites or a determination that we are potentially responsible for the release of hazardous substances at other sites, could cause our expenditures to exceed our current estimates. Actual costs could exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and costs may be incurred for sites where no estimates presently can be made. Further, additional environmental and related matters may arise in the future. If we were to incur any future liability, this could have a material adverse effect on our consolidated financial statements, results of operations and liquidity.

We record liabilities related to environmental remediation and related matters (including costs associated with damages for personal injury or property damage and/or damages for injury to natural resources) when estimated future expenditures are probable and reasonably estimable. We adjust such accruals as further information becomes available to us or as circumstances change. Unless the amounts and timing of such estimated future expenditures are fixed and reasonably determinable, we generally do not discount estimated future expenditures to their present value due to the uncertainty of the timing of the payout. We recognize recoveries of costs from other parties, if any, as assets when their receipt is deemed probable.

We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs. The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control. At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next twelve months, and we classify this estimate as a current liability. We classify the remaining accrued environmental costs as a noncurrent liability.

The table below presents a summary of the activity in our accrued environmental costs during the first three months of 2022.

	Amount
	(In millions)
Balance at the beginning of the period	$	97.6
Additions charged to expense, net		.3
Payments, net		(.3)
Balance at the end of the period	$	97.6
Amounts recognized in the Consolidated Balance Sheet at the end of the period:
Current liabilities	$	3.5
Noncurrent liabilities		94.1
Total	$	97.6

NL – On a quarterly basis, NL evaluates the potential range of its liability for environmental remediation and related costs at sites where it has been named as a PRP or defendant. At March 31, 2022, NL had accrued approximately $93 million related to approximately 32 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.

NL believes that it is not reasonably possible to estimate the range of costs for certain sites. At March 31, 2022, 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. At certain of these previously inactive sites, NL has received general and special notices of liability from the EPA and/or state agencies alleging that NL, sometimes with other PRPs, is liable for past and future costs of remediating environmental contamination allegedly caused by former operations. These notifications may assert that NL, along with any other alleged PRPs, is liable for past and/or future clean-up costs. As further information becomes available to us for any of these sites which would allow us to estimate a range of costs, we would at that time adjust our accruals. Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity.

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Other – We have also accrued approximately $5 million at March 31, 2022 for other environmental cleanup matters which represents our best estimate of the liability.

Insurance coverage claims – NL

NL is involved in certain legal proceedings with a number of its former insurance carriers regarding the nature and extent of the carriers’ obligations to NL under insurance policies with respect to certain lead pigment and asbestos lawsuits. The issue of whether insurance coverage for defense costs or indemnity or both will be found to exist for NL’s lead pigment and asbestos litigation depends upon a variety of factors, and we cannot assure you that such insurance coverage will be available.

NL has agreements with certain of its former insurance carriers pursuant to which the carriers reimburse it for a portion of its future lead pigment litigation defense costs, and one such carrier reimburses NL for a portion of its future asbestos litigation defense costs. We are not able to determine how much NL will ultimately recover from these carriers for defense costs incurred by NL because of certain issues that arise regarding which defense costs qualify for reimbursement. While NL continues to seek additional insurance recoveries, we do not know if we will be successful in obtaining reimbursement for either defense costs or indemnity. 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.

For a complete discussion of certain litigation involving NL and certain of its former insurance carriers, please refer to our 2021 Annual Report.

Other litigation

In addition to the litigation described above, we and our affiliates are also involved in various other environmental, contractual, product liability, patent (or intellectual property), employment and other claims and disputes incidental to our present and former businesses. In certain cases, we have insurance coverage for these items, although we do not expect additional material insurance coverage for our environmental matters. We currently believe the disposition of all of these various other claims and disputes (including asbestos-related claims), individually and in the aggregate, should not have a material adverse effect on our consolidated financial position, results of operations or liquidity beyond the accruals already provided.

Note 16 – Fair value measurements and financial instruments:

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure:

	December 31, 2021				March 31, 2022
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	792.9	$	792.9	$	739.8	$	739.8
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		448.8		460.2		442.9		435.7
Valhi credit facility with Contran		172.9		172.9		167.2		167.2
BMI bank note payable		15.4		15.9		15.4		15.9
LandWell bank note payable		13.5		13.5		13.5		13.5

At March 31, 2022, the estimated market price of Kronos’ Senior Notes was €977 per €1,000 principal amount. The fair value of Kronos’ Senior Notes was based on quoted market prices; however, these quoted market prices represent Level 2 inputs because the markets in which the term loan trades were not active. The fair value of variable interest rate debt and other fixed-rate debt, which represents Level 2 inputs, is deemed to approximate carrying values. See Note 6. Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value. See Notes 3 and 7.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Business Overview

We are primarily a holding company. We operate through our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and the LandWell Company (“LandWell”). Kronos (NYSE: KRO), NL (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the SEC.

We have three consolidated reportable operating segments:

● Chemicals – Our Chemicals Segment is operated through our majority control of Kronos. Kronos is a leading global producer and marketer of value-added titanium dioxide pigments (“TiO₂”). TiO₂ is used to impart whiteness, brightness, opacity and durability to a wide variety of products, including paints, plastics, paper, fibers and ceramics. Additionally, TiO₂ is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, foods and cosmetics.

● 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 recreational transportation, postal, office and institutional furniture, cabinetry, tool storage, healthcare and a variety of other industries. CompX also manufactures stainless steel exhaust systems, gauges, throttle controls, wake enhancement systems, trim tabs and related hardware and accessories for the recreational marine and other industries.

● Real Estate Management and Development – We operate in real estate management and development through our majority control of BMI and LandWell. BMI provides utility services to certain industrial and municipal customers and owns real property in Henderson, Nevada. LandWell is engaged in efforts to develop certain land holdings for commercial, industrial and residential purposes in Henderson, Nevada.

General

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Statements in this Quarterly Report that are not historical facts are forward-looking in nature and represent management’s beliefs and assumptions based on currently available information. In some cases, you can identify forward-looking statements by the use of words such as “believes,” “intends,” “may,” “should,” “could,” “anticipates,” “expects” or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we do not know if these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results. Actual future results could differ materially from those predicted. The factors that could cause actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Quarterly Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following:

● Future supply and demand for our products;

● The extent of the dependence of certain of our businesses on certain market sectors;

● The cyclicality of certain of our businesses (such as Kronos’ TiO₂ operations);

● Customer and producer inventory levels;

● Unexpected or earlier-than-expected industry capacity expansion (such as the TiO₂ industry);

● Changes in raw material and other operating costs (such as ore, zinc, brass, aluminum, steel and energy costs);

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● Changes in the availability of raw materials (such as ore);

● General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs, reduce demand or perceived demand for TiO_2, component products and land held for development or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises such as COVID-19);

● Competitive products and substitute products;

● Customer and competitor strategies;

● Potential difficulties in integrating future acquisitions;

● Potential difficulties in upgrading or implementing accounting and manufacturing software systems;

● Potential consolidation of our competitors;

● Potential consolidation of our customers;

● The impact of pricing and production decisions;

● Competitive technology positions;

● Our ability to protect or defend intellectual property rights;

● The introduction of trade barriers or trade disputes;

● The ability of our subsidiaries to pay us dividends;

● The impact of current or future government regulations (including employee healthcare benefit related regulations);

● Uncertainties associated with new product development and the development of new product features;

● Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone) or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies;

● Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, cyber-attacks and public health crises such as COVID-19);

● Decisions to sell operating assets other than in the ordinary course of business;

● The timing and amounts of insurance recoveries;

● Our ability to renew, amend, refinance or establish credit facilities;

● Potential increases in interest rates;

● Our ability to maintain sufficient liquidity;

● The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform;

● Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria;

● Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation at sites related to our former operations);

● Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products) including new environmental health and safety regulations such as those seeking to limit or classify TiO₂ or its use;

● The ultimate resolution of pending litigation (such as NL’s lead pigment and environmental matters);

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● Our ability to comply with covenants contained in our revolving bank credit facilities;

● Our ability to complete and comply with the conditions of our licenses and permits;

● Changes in real estate values and construction costs in Henderson, Nevada;

● Water levels in Lake Mead; and

● Possible future litigation.

Should one or more of these risks materialize (or the consequences of such development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those currently forecasted or expected. We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.

Operations Overview

Quarter Ended March 31, 2022 Compared to the Quarter Ended March 31, 2021 –

We reported net income attributable to Valhi stockholders of $45.4 million or $1.59 per diluted share in the first quarter of 2022 compared to net income of $14.8 million or $.52 per diluted share in the first quarter of 2021. As discussed more fully below, our net income attributable to Valhi stockholders increased from 2021 to 2022 primarily due to higher operating income from our Chemicals Segment.

Our diluted net income per share in the first quarter of 2021 includes income of $.11 per share related to a Real Estate Management and Development Segment tax infrastructure reimbursement.

Current Forecast for 2022 –

We currently expect to report higher consolidated operating income for 2022 as compared to 2021 primarily due to the net effects of:

● higher operating income from our Chemicals Segment in 2022 as the favorable impact of higher expected average TiO₂ selling prices is expected to more than offset the negative impact of higher manufacturing costs;

● lower operating income from our Real Estate Management and Development Segment in 2022 due to lower land sales revenues;

● higher expected corporate expenses, primarily due to increased litigation fees and related costs and environmental remediation and related costs at NL; and

● an aggregate $16 million gain on land sales in 2021, which is not expected to recur.

Segment Operating Results – 2022 Compared to 2021 –

Chemicals –

We consider TiO₂ to be a “quality of life” product, with demand affected by gross domestic product, or GDP, and overall economic conditions in our markets located in various regions of the world. Over the long-term, we expect demand for TiO₂ will grow by 2% to 3% per year, consistent with our expectations for the long-term growth in GDP. However, even if our Chemicals Segment and its competitors maintain consistent shares of the worldwide market, demand for TiO₂ in any interim or annual period may not change in the same proportion as the change in GDP, in part due to relative changes in the TiO₂ inventory levels of our Chemicals Segment’s customers. We believe our Chemicals Segment’s customers’ inventory levels are influenced in part by their expectations for future changes in TiO₂ selling prices as well as their expectations for future availability of product. Although certain of our Chemicals Segment’s TiO₂ grades are considered specialty pigments, the majority of its grades and substantially all of its production are considered commodity pigment products with price and availability being the most significant competitive factors along with product quality and customer and technical support services.

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The factors having the most impact on our Chemicals Segment’s reported operating results are:

● TiO₂ selling prices,

● our Chemicals Segment’s TiO₂ sales and production volumes,

● manufacturing costs, particularly raw materials such as third-party feedstock, maintenance and energy-related expenses, and

● currency exchange rates (particularly the exchange rates for the U.S. dollar relative to the euro, the Norwegian krone and the Canadian dollar and the euro relative to the Norwegian krone).

Key performance indicators are our Chemicals Segment’s TiO₂ average selling prices, the level of TiO₂ sales and production volumes, and the cost of our Chemicals Segment’s titanium-containing feedstock purchased from third parties. TiO₂ selling prices generally follow industry trends and selling prices will increase or decrease generally as a result of competitive market pressures.

	Three months ended March 31,
	2021			2022			% Change
	(Dollars in millions)
Net sales	$	465.0		$	562.9		21	%
Cost of sales		369.7			413.9		12
Gross margin	$	95.3		$	149.0		56
Operating income	$	37.7		$	86.4		129
Percent of net sales:
Cost of sales		79	%		74	%
Gross margin		21			26
Operating income		8			15
TiO2 operating statistics:
Sales volumes*		141			144		2	%
Production volumes*		130			138		6
Percent change in TiO2 net sales:
TiO2 product pricing							24	%
TiO2 sales volumes							2
TiO2 product mix/other							—
Changes in currency exchange rates							(5)
Total							21	%

*            Thousands of metric tons

Current Industry Conditions – Our Chemicals Segment started 2022 with average TiO₂ selling prices 16% higher than at the beginning of 2021 and average TiO₂ selling prices increased 7% in the first quarter of 2022 in response to customer demand and its rising production costs. Our Chemicals Segment experienced higher sales volumes in its North American, European and Latin American markets in the first three months of 2022 as compared to the same period of 2021.

Our Chemicals Segment operated its production facilities at full practical capacity in the first quarter of 2022 compared to an average capacity rate of 97% in the first quarter of 2021.

Net Sales – Our Chemicals Segment’s net sales in the first quarter of 2022 increased 21%, or $97.9 million, compared to the first quarter of 2021 primarily due to a 24% increase in average TiO₂ selling prices (which increased net sales by approximately $112 million) and a 2% increase in sales volumes (which increased net sales by approximately $9 million). We estimate that changes in currency exchange rates (primarily the euro) decreased our Chemicals Segment’s net sales by approximately $22 million in the first quarter of 2022 as compared to the first quarter of 2021. TiO₂ selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.

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Our Chemicals Segment’s sales volumes increased 2% in the first quarter of 2022 as compared to the first quarter of 2021 due to the effects of continuing high demand and improvements in its delivery and distribution network in 2022.

Cost of Sales and Gross Margin – Our Chemicals Segment’s cost of sales increased $44.2 million, or 12%, in the first quarter of 2022 compared to the first quarter of 2021 due to the net effects of higher production costs of approximately $64 million (including higher costs for raw materials and energy), a 2% increase in sales volumes and more favorable absorption of fixed costs due to a 6% increase in production volumes.  Our Chemicals Segment’s cost of sales as a percentage of net sales improved to 74% in the first quarter of 2022 compared to 79% in the same period of 2021 as the favorable effects of higher average TiO₂ selling prices and increased coverage of fixed costs from higher production more than offset the unfavorable impact of higher production costs including higher raw material and energy costs, as discussed above.

Our Chemicals Segment’s gross margin as a percentage of net sales increased to 26% in the first quarter of 2022 compared to 21% in the first quarter of 2021. As discussed and quantified above, our Chemicals Segment’s gross margin as a percentage of net sales increased primarily due to the net effects of higher average TiO₂ selling prices, higher production and sales volumes, higher production costs and changes in currency exchange rates.

Operating Income – Our Chemicals Segment’s operating income increased by $48.7 million, or 129%, in the first quarter of 2022 compared to the first quarter of 2021. Operating income as a percentage of net sales increased to 15% in the first quarter of 2022 from 8% in the same period of 2021 as a result of the factors impacting gross margin discussed above. We estimate changes in currency exchange rates decreased our Chemicals Segment’s operating income by approximately $5 million in the first quarter of 2022 as compared to the same period in 2021, as discussed in the Currency Exchange Rates section below.

Our Chemicals Segment’s operating income is net of amortization of purchase accounting adjustments made in conjunction with our acquisitions of interests in NL and Kronos. As a result, we recognize additional depreciation expense above the amounts Kronos reports separately, substantially all of which is included within cost of sales. We recognized additional depreciation expense of $.3 million in the first three months of 2022 and $.4 million in the same period of 2021, which reduced our reported Chemicals Segment’s operating income as compared to amounts reported by Kronos.

Currency Exchange Rates – Our Chemicals Segment has substantial operations and assets located outside the United States (primarily in Germany, Belgium, Norway and Canada). The majority of our Chemicals Segment’s sales from non-U.S. operations are denominated in currencies other than the U.S. dollar, principally the euro, other major European currencies and the Canadian dollar. A portion of our Chemicals Segment’s sales generated from its non-U.S. operations is denominated in the U.S. dollar (and consequently our Chemicals Segment’s non-U.S. operations will generally hold U.S. dollars from time to time). Certain raw materials used in all our Chemicals Segment’s production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies. Consequently, the translated U.S. dollar value of our Chemicals Segment’s non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings and may affect the comparability of period-to-period operating results. In addition to the impact of the translation of sales and expenses over time, our Chemicals Segment’s non-U.S. operations also generate currency transaction gains and losses which primarily relate to (i) the difference between the currency exchange rates in effect when non-local currency sales or operating costs (primarily U.S. dollar denominated) are initially accrued and when such amounts are settled with the non-local currency, and (ii) changes in currency exchange rates during time periods when our Chemicals Segment’s non-U.S. operations are holding non-local currency (primarily U.S. dollars).

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Overall, we estimate that fluctuations in currency exchange rates had the following effects on the reported amounts of our Chemicals Segment’s sales and operating income for the periods indicated.

Impact of changes in currency exchange rates
Three months ended March 31, 2022 vs March 31, 2021
							Translation
							losses -		Total currency
	Transaction losses recognized						impact of		impact
	2021		2022		Change		rate changes		2022 vs 2021
	(In millions)
Impact on:
Net sales	$	—	$	—	$	—	$	(22)	$	(22)
Operating income		(1)		(2)		(1)		(4)		(5)

The $22 million decrease in our Chemicals Segment’s net sales (translation losses) was caused primarily by a strengthening of the U.S. dollar relative to the euro, as its euro-denominated sales were translated into fewer U.S. dollars in 2022 as compared to 2021. The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2022 did not have a significant effect on the reported amount of our Chemicals Segment’s net sales, as a substantial portion of the sales generated by our Chemicals Segment’s Canadian and Norwegian operations is denominated in the U.S. dollar.

The $5 million decrease in our Chemicals Segment’s operating income was comprised of the following:

● Higher net currency transaction losses of approximately $1 million primarily caused by relative changes in currency exchange rates at each applicable balance sheet date between the U.S. dollar and the euro, Canadian dollar and the Norwegian krone, and between the euro and the Norwegian krone, which causes increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held by our Chemicals Segment’s non-U.S. operations, and in Norwegian krone denominated receivables and payables held by our Chemicals Segment’s non-U.S. operations, and

● Approximately $4 million from net currency translation losses primarily caused by a strengthening of the U.S. dollar relative to the euro as the negative effects of the stronger U.S. dollar on our Chemicals Segment’s euro-denominated sales more than offset the favorable effects of euro-denominated operating costs being translated into fewer U.S. dollars in 2022 as compared to 2021.

Outlook – Based on current market conditions, we expect global demand for consumer products, including those of our Chemicals Segment’s customers, to remain strong throughout the remainder of 2022. Therefore, we expect our Chemicals Segment to continue to produce at full practical capacity and to match sales volumes with production volumes which would result in lower sales volumes in 2022 as compared to 2021 based on current inventory levels. Our Chemicals Segment continues to experience disruptions in global supply chains including availability of certain third-party feedstock and other raw materials along with certain transportation and logistics delays. Thus far our Chemicals Segment has managed through these disruptions with minimal impact on its operations; however, our Chemicals Segment expects these challenges to continue for the foreseeable future. Our Chemicals Segment experienced increases in its feedstock costs in the first quarter of 2022 as compared to the same period in 2021, and our Chemicals Segment expects its feedstock costs to continue to increase for the remainder of 2022 as compared to its average 2021 costs. In addition to feedstock cost increases, our Chemicals Segment continues to experience increasing production costs, including higher raw material and related shipping costs and significantly higher energy and utility costs, especially in Europe, all of which are likely to continue throughout 2022. At the beginning of 2022, our Chemicals Segment’s average TiO₂ selling prices were 16% higher than at the beginning of 2021 and average TiO₂ selling prices increased 7% in the first quarter of 2022. Our Chemicals Segment expects strong demand will support increasing selling prices for TiO₂ throughout 2022, sufficient to mitigate the effects of increases in distribution, raw material, energy and other production costs. We expect our Chemicals Segment’s 2022 sales and operating income will be higher than in 2021; however, increasing costs will continue to challenge margins. Our Chemicals Segment continues to monitor current and anticipated near-term customer demand levels and will align its production and inventories accordingly.

Our expectations for the TiO₂ industry and our Chemicals Segment’s operations are based on a number of factors outside our control. As noted above, our Chemicals Segment has experienced global supply chain disruptions; and future impacts on its operations

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will depend on, among other things, any future disruption in its operations or its suppliers’ operations, or related possible shipping delays, and the timing and effectiveness of the global measures deployed to fight COVID-19 and its variants, all of which remain uncertain and cannot be predicted.

Component Products –

Our Component Products Segment’s product offerings consist of a significantly large number of products that have a wide variation in selling price and manufacturing cost, which results in certain practical limitations on its ability to quantify the impact of changes in individual product sales quantities and selling prices on the segment’s net sales, cost of sales and gross margin. In addition, small variations in period-to-period net sales, cost of sales and gross margin can result from changes in the relative mix of our Component Products Segment’s products sold. The key performance indicator for our Component Products Segment is operating income and margins.

In the first quarter of 2022 our Component Products Segment’s operating income increased to $6.3 million compared to $5.8 million in the first quarter of 2021. The increase in our Component Products Segment’s operating income in the first quarter of 2022 compared to 2021 is primarily due to higher sales for both the security products and marine components reporting units somewhat offset by increased production costs.

	Three months ended March 31,
	2021			2022			% Change
	(Dollars in millions)
Net sales:
Security products	$	25.9		$	29.6		14	%
Marine components		10.0			12.5		24
Total net sales		35.9			42.1		17
Cost of sales		24.9			30.0		20
Gross margin	$	11.0		$	12.1		9
Operating income	$	5.8		$	6.3		8
Percent of net sales:
Cost of sales		69	%		71	%
Gross margin		31			29
Operating income		16			15

Net Sales – Our Component Products Segment’s net sales increased $6.2 million in the first quarter of 2022 compared to the same period in 2021 due to higher security products sales across a variety of markets and, to a lesser extent, higher marine components sales primarily to the towboat market. Relative to the first quarter of 2021, security products’ sales were $1.4 million higher to the government security market, $.9 million higher to distributors, and $.7 million higher to the office furniture market. Marine components’ sales increased in the first quarter of 2022 compared to the same period last year primarily due to increased sales of $2.0 million to several original equipment boat manufacturers in the towboat market.

Costs of Sales and Gross Margin – Our Component Products Segment’s cost of sales as a percentage of net sales increased 2% in the first quarter of 2022 compared to the same period in 2021 and, as a result, gross margin as a percentage of net sales decreased over the same period. Gross margin percentage decreased in the first quarter of 2022 compared to the same period in 2021 due to increased production costs at both security products and marine components. Security products’ gross margin as a percentage of net sales for the first quarter of 2022 declined as compared to 2021 as increased coverage of fixed costs from higher sales were more than offset by higher production costs including increased raw material costs across a variety of commodities and component inputs, higher shipping costs, and increased labor costs due to higher wages, overtime costs and increased headcount. Marine components’ gross margin as a percentage of net sales decreased in the first quarter of 2022 compared to the same period last year due to higher cost of sales driven by higher raw materials (primarily stainless steel and aluminum), higher shipping costs, and increased labor costs resulting from higher wages, overtime costs and increased headcount, partially offset by increased coverage of fixed costs from higher sales.

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Operating Income – As a percentage of net sales, our Component Products Segment’s operating income for the first quarter of 2022 decreased slightly compared to the same period of 2021 due to the factors impacting gross margin, partially offset by increased coverage of operating costs and expenses from higher sales.

Outlook – During the first quarter of 2022, our Component Products Segment experienced strong demand at both the security products and marine components reporting units. Our Component Products Segment operated its manufacturing facilities at elevated production rates during the quarter in line with improved demand, although labor markets are tight in each of the regions in which it operates and, as a result, our Component Products Segment has experienced and continues to have challenges maintaining staffing levels aligned with current and forecasted demand, particularly at its marine components reporting unit.

Based on current market conditions, our Component Products Segment expects demand levels to remain strong in 2022 and we expect to report increased net sales and operating income for the segment in 2022 compared to 2021. Our Component Products Segment’s supply chains remain intact, although the current global and domestic supply chain disruptions continue to present challenges in sourcing certain raw materials due to increased lead times, availability shortages and transportation and logistics delays. Thus far our Component Products Segment has been able to manage through these disruptions with minimal impact on its operations.  In addition, our Component Products Segment is experiencing increased production costs including higher labor, shipping, and increasing costs of many of the raw materials it uses including zinc, brass, stainless steel and aluminum. In response, our Component Products Segment implemented price increases and surcharges; however, the extent to which the price increases and surcharges will mitigate the rising costs is uncertain and it expects increasing production costs will continue to pressure gross margins in 2022 as inventory costs are expected to remain above prior year costs for the foreseeable future. Our Component Products Segment’s operations teams meet frequently to ensure they are taking appropriate actions to minimize material or supply related operational disruptions, manage inventory levels, improve operating margins and maintain a safe working environment for all its employees.

Our Component Products Segment’s expectations for its operations and the markets it serves are based on a number of factors outside its control. As noted above, there continue to be global and domestic supply chain challenges and any future impacts on our Component Products Segment’s operations will depend on, among other things, any future disruption in its operations or its suppliers’ operations, demand for its products and the timing and effectiveness of the global measures deployed to fight COVID-19, particularly in China, all of which remain uncertain and cannot be predicted.

Real Estate Management and Development  –

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales:
Land sales	$	6.6	$	22.2
Water delivery sales		1.0		1.5
Utility and other		.5		.3
Total net sales		8.1		24.0
Cost of sales		5.1		14.4
Gross margin	$	3.0	$	9.6
Operating income	$	7.8	$	8.0

General – Our Real Estate Management and Development Segment consists of BMI and LandWell. BMI provides utility services, among other things, to an industrial park located in Henderson, Nevada and is responsible for the delivery of water to the City of Henderson and various other users through a water distribution system owned by BMI. LandWell is actively engaged in efforts to develop certain real estate in Henderson, Nevada, including approximately 2,100 acres zoned for residential/planned community purposes and approximately 400 acres zoned for commercial and light industrial use.

LandWell began marketing land for sale in the residential/planned community in December 2013 and at March 31, 2022 approximately 115 saleable acres remain, including approximately 70 acres in escrow.  LandWell has been actively marketing and selling the land zoned for commercial and light industrial use and at March 31, 2022 approximately 50 saleable acres remain. Contracts

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for land sales are negotiated on an individual basis and sales terms and prices will vary based on such factors as location (including location within a planned community), expected development work, and individual buyer needs. Although land may be under contract or in escrow, in most instances buyers can cancel the escrow agreement with no financial penalties until shortly before the closing date. Land sales may be completed but we do not recognize revenue until we have satisfied the criteria for revenue recognition set forth in ASC Topic 606. In some instances, we will receive cash proceeds at the time the contract closes and record deferred revenue for some or all of the cash amount received, with such deferred revenue being recognized in subsequent periods. We expect substantially all of the land in the residential/planned community will be sold by the end of 2022; however, we expect the development work to take three to five years to complete.

Net Sales and Operating Income – A substantial portion of the net sales from our Real Estate Management and Development Segment in the first quarters of 2021 and 2022 consisted of revenues from land sales. As noted above, we recognize revenue in our residential/planned community over time using cost-based input methods and substantially all of the land sales revenue we recognized in 2021 and 2022 was under this method of revenue recognition. The contracts on these sales (both within the planned community and otherwise) include approximately 965 acres of the residential planned community and certain other acreage which closed in December 2013 and through the first quarter of 2022. Land sales revenues were higher in the first quarter of 2022 as compared to the same period in 2021 primarily due to an increase in development activity in 2022 compared to 2021. Cost of sales related to land sales revenues was $13.0 million in the first three months of 2022 compared to $3.7 million in the first three months of 2021. Operating income includes $6.2 million in the first three months of 2021 related to the recognition of tax increment reimbursement note receivables, as discussed in Note 11 to our Condensed Consolidated Financial Statements.

The remainder of net sales and cost of sales related to this segment primarily relates to water delivery fees and expenses. We deliver water to several customers under long-term contracts.

Outlook – LandWell is focused on developing the land it manages, primarily to residential builders, for the residential/planned community in Henderson. As noted above, if current land sales in escrow close as scheduled, we expect substantially all of the land in the residential/planned community will be sold by the end of 2022.  Because we recognize revenue over time using cost-based inputs, we expect to continue to recognize revenue on land previously sold over the development period, currently expected to take three to five years.  At March 31, 2022 we have deferred revenue of $188.8 million related to previously closed land sales.  Any delays or curtailments in infrastructure development related to post-closing obligation activities will lower the amount of revenue we recognize on previously closed land sales. As noted above, we cannot guarantee land held in escrow will close as currently scheduled because builders can generally cancel without financial penalty until shortly before scheduled closing. In addition, under LandWell’s development agreement with the City of Henderson, the issuance of a specified number of housing permits requires LandWell to complete certain large infrastructure projects. LandWell began construction on several of these community-wide large projects in late 2021 with the bulk of such construction continuing into 2022 and, as a result of the increase in activity, we expect these land development costs to increase during 2022. Because these large projects relate to the entirety of the residential/planned community, the costs associated with these large projects are not part of the cost-based inputs used to recognize revenue and therefore this spending will not correlate to revenue recognition. However, this spending is expected to be eligible for tax increment reimbursement and delays or curtailments in eligible infrastructure development activities will also delay LandWell’s ability to submit completed costs to the City of Henderson for approval of additional tax increment reimbursement note receivables.

Our water delivery system operates 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.  If the lake levels continue to fall it may negatively impact our ability to operate the water system. If we were unable to operate the water system for a sustained period of time, we would consider it a triggering event which would cause us to evaluate the assets of our water system for impairment.  At March 31, 2022 the carrying value of the water system was approximately $16 million.

General Corporate Items, Interest Expense, Income Taxes and Noncontrolling Interest – 2022 Compared to 2021

Changes in the Market Value of Valhi Common Stock held by Subsidiaries – Our subsidiaries, Kronos and NL, hold shares of our common stock. As discussed in the 2021 Annual Report, we account for our proportional interest in these shares of our common stock as treasury stock, at Kronos’ and NL’s historical cost basis. The remaining portion of these shares of our common stock, which are attributable to the noncontrolling interest of Kronos and NL, are reflected in our Condensed Consolidated Balance Sheet at fair value. Kronos and NL recognize unrealized gains or losses on these shares of our common stock in the determination of each of their respective net income or losses. Under the principles of consolidation we eliminate any gains or losses associated with our common

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stock to the extent of our proportional ownership interest in each subsidiary. We recognized a gain of $.1 million in the first quarter of 2022 compared to a gain of $1.3 million in the same period of 2021 in our Condensed Consolidated Statements of Income, which represents the unrealized gain in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NL.

Other General Corporate Items – Corporate expenses in the first quarter of 2022 were comparable to the same period of 2021. Included in corporate expense are:

● litigation fees and related costs at NL of $.6 million in the first quarter of 2022 compared to $.3 million in the first quarter of 2021; and

● environmental remediation and related costs of $.3 million in the first quarter of 2022 compared to nil in the first quarter of 2021.

Overall, we currently expect that our general corporate expenses in 2022 will be higher than 2021 primarily due to higher expected litigation fees and related costs and higher environmental remediation and related costs.

The level of our litigation fees and related expenses varies from period to period depending upon, among other things, the number of cases in which we are currently involved, the nature of such cases and the current stage of such cases (e.g. discovery, pre-trial motions, trial or appeal, if applicable). See Note 15 to our Condensed Consolidated Financial Statements. If our current expectations regarding the number of cases in which we expect to be involved during 2022, or the nature of such cases, were to change, our corporate expenses could be higher than we currently estimate.

Obligations for environmental remediation and related costs are difficult to assess and estimate, and it is possible that actual costs for environmental remediation and related costs will exceed accrued amounts or that costs will be incurred in the future for sites in which we cannot currently estimate the liability. If these events occur in 2022, our corporate expense could be higher than we currently estimate. In addition, we adjust our accruals for environmental remediation and related costs as further information becomes available to us or as circumstances change. Such further information or changed circumstances could result in an increase or reduction in our accrued environmental remediation and related costs. See Note 15 to our Condensed Consolidated Financial Statements.

Interest Expense – Interest expense of $6.9 million in the first quarter of 2022 decreased $1.7 million compared to the same prior year period primarily due to lower average balances on variable-rate indebtedness in 2022.

We expect interest expense in 2022 will be comparable to 2021 as lower average debt balances will be offset by higher average rates.

Provision for Income Taxes – We recognized income tax expense of $19.9 million in the first quarter of 2022 compared to income tax expense of $8.0 million in the first quarter of 2021. The increase is primarily due to higher earnings in the first quarter of 2022. Our earnings are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of our non-U.S. operations are generally higher than the income tax rates applicable to our U.S. operations. We would generally expect our overall effective tax rate to be higher than the U.S. federal statutory tax rate of 21% primarily because of our non-U.S. operations.

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. At December 31, 2021, we had recognized a deferred income tax liability with respect to our direct investment in Kronos of $45.4 million. There is a maximum amount (or cap) of such deferred income taxes we are required to recognize with respect to our direct investment in Kronos. The maximum amount of such deferred income tax liability we would be required to recognize (the cap) is $155.4 million. During the first quarter of 2022, we recognized a non-cash deferred income tax benefit with respect to our direct investment in Kronos of $.3 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 reduction related to our equity in Kronos’ net income during such period. We recognized a similar deferred income tax benefit of $.1 million in the first quarter of 2021. 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’

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other comprehensive income (loss) items, and the amounts allocated to other comprehensive income (loss) items includes amounts related to our equity in Kronos’ other comprehensive income (loss) items.

See Note 12 to our Condensed Consolidated Financial Statements for a tabular reconciliation of our statutory income tax provision to our actual tax provision.

Noncontrolling Interest in Net Income of Subsidiaries – Noncontrolling interest in operations of subsidiaries increased in 2022 compared to 2021 primarily due to increased operating income at Kronos and CompX. See Note 13 to our Condensed Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated Cash Flows

Operating Activities –

Trends in cash flows from operating activities (excluding the impact of significant asset dispositions and relative changes in assets and liabilities) are generally similar to trends in our operating income. In addition to the impact of the operating, investing and financing cash flows discussed below, changes in the amount of cash, cash equivalents and restricted cash we report from period to period can be impacted by changes in currency exchange rates, since a portion of our cash, cash equivalents and restricted cash is held by our non-U.S. subsidiaries.

Cash used in operating activities was $22.8 million in the first quarter of 2022 compared to cash provided by operating activities of $56.6 million in the first quarter of 2021. This $79.4 million decrease in cash from operating activities was primarily due to the net effect of the following items:

● a $107.8 million increase in the amount of net cash used in relative changes in receivables, inventories, payables and accrued liabilities in the first quarter of 2022;

● consolidated operating income of $100.7 million in the first quarter of 2022, an increase of $49.4 million compared to operating income of $51.3 million in the first quarter of 2021; and

● higher net cash paid for income taxes in 2022 of $2.3 million due to increased earnings.

Changes in working capital were affected by accounts receivable and inventory changes as shown below:

● Kronos’ average days sales outstanding (“DSO”) decreased from December 31, 2021 to March 31, 2022 primarily due to relative changes in the timing of collections.

● Kronos’ average days sales in inventory (“DSI”) decreased from December 31, 2021 to March 31, 2022 primarily due to lower inventory volumes attributable to sales volumes exceeding production volumes in the first three months of 2022 compared to 2021 and due to supply disruptions and other transportation delays impacting the timing of raw material shipments.

● CompX’s average DSO decreased from December 31, 2021 to March 31, 2022 primarily as a result of relative changes in the timing of collections.

● CompX’s average DSI decreased from December 31, 2021 to March 31, 2022 primarily due to sales growth at both the security products and marine components reporting units in the first quarter of 2022.

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For comparative purposes, we have also provided comparable prior period numbers below.

	December 31,	March 31,	December 31,	March 31,
	2020	2021	2021	2022
Kronos:
Days sales outstanding	68 days	64 days	65 days	63 days
Days sales in inventory	74 days	56 days	59 days	54 days
CompX:
Days sales outstanding	33 days	43 days	42 days	38 days
Days sales in inventory	75 days	66 days	96 days	85 days

We do not have complete access to the cash flows of our majority-owned subsidiaries, due in part to limitations contained in certain credit agreements of our subsidiaries and because we do not own 100% of these subsidiaries. A detail of our consolidated cash flows from operating activities is presented in the table below. Intercompany dividends have been eliminated.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Cash provided by (used in) operating activities:
Kronos	$	56.7	$	(18.6)
Valhi exclusive of subsidiaries		8.6		9.2
CompX		(2.4)		(2.2)
NL exclusive of subsidiaries		6.5		7.7
Tremont		(.7)		(.6)
BMI		.3		1.5
LandWell		9.1		3.5
Eliminations and other		(21.5)		(23.3)
Total	$	56.6	$	(22.8)

Investing Activities –

We spent $16.2 million in capital expenditures during the first three months of 2022 including:

● $14.2 million in our Chemicals Segment;

● $1.7 million in our Component Products Segment; and

● $.3 million in our Real Estate Management and Development Segment.

Financing Activities –

During the three months ended March 31, 2022:

● we repaid $5.7 million under the Contran credit facility;

● we paid aggregate quarterly dividends to Valhi stockholders of $.08 per share ($2.2 million); and

● Kronos acquired shares of its common stock for an aggregate purchase price of $1.1 million.

The declaration and payment of future dividends, and the amount thereof, is discretionary and is dependent upon a number of factors including our current and future expected results of operations, financial condition, cash requirements for our businesses, contractual and other requirements and restrictions and other factors deemed relevant by our board of directors. The amount and timing

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of past dividends is not necessarily indicative of the amount or timing of any future dividends which might be paid. There are currently no contractual restrictions on the amount of dividends which we may pay. Distributions to noncontrolling interest in subsidiaries in the first three months of 2022 are comprised of CompX dividends paid to shareholders other than NL and Kronos dividends paid to shareholders other than us and NL.

Outstanding Debt Obligations

At March 31, 2022, our consolidated indebtedness was comprised of:

● Valhi’s $167.2 million outstanding on its $225 million credit facility with Contran which is due no earlier than December 31, 2023;

● €400 million aggregate outstanding on the KII 3.75% Senior Secured Notes ($442.9 million carrying amount, net of unamortized debt issuance costs) due in September 2025;

● $15.9 million on BMI’s bank loan ($15.4 million carrying amount, net of unamortized debt issuance costs) due through June 2032;

● $13.5 million on LandWell’s bank loan due in April 2036; and

● approximately $2.3 million of other indebtedness.

Kronos had no outstanding borrowings at March 31, 2022 on its $225 million global revolving credit facility (“Global Revolver”) and the full $225 million was available for borrowings thereunder. Kronos’ Senior Secured Notes and its Global Revolver contain a number of covenants and restrictions which, among other things, restrict its ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of its assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types. Kronos’ credit agreements contain provisions which could result in the acceleration of indebtedness prior to their stated maturity for reasons other than defaults for failure to comply with typical financial or payment covenants. For example, the credit agreements allow the lender to accelerate the maturity of the indebtedness upon a change of control (as defined in the agreement) of the borrower. In addition, the credit agreements could result in the acceleration of all or a portion of the indebtedness following a sale of assets outside the ordinary course of business. The terms of all of our debt instruments are discussed in Note 9 in our 2021 Annual Report. We were in compliance with all of our debt covenants at March 31, 2022. We believe we will be able to maintain compliance with the financial covenants contained in our credit facilities through their maturity.

Future Cash Requirements

Liquidity –

Our primary source of liquidity on an ongoing basis is our cash flows from operating activities and borrowings under various lines of credit and notes. We generally use these amounts to (i) fund capital expenditures, (ii) repay short-term indebtedness incurred primarily for working capital purposes and (iii) provide for the payment of dividends (including dividends paid to us by our subsidiaries) or treasury stock purchases. From time-to-time we will incur indebtedness, generally to (i) fund short-term working capital needs, (ii) refinance existing indebtedness, (iii) make investments in marketable and other securities (including the acquisition of securities issued by our subsidiaries and affiliates) or (iv) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business. Occasionally we sell assets outside the ordinary course of business, and we generally use the proceeds to (i) repay existing indebtedness (including indebtedness which may have been collateralized by the assets sold), (ii) make investments in marketable and other securities, (iii) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business or (iv) pay dividends.

We routinely compare our liquidity requirements and alternative uses of capital against the estimated future cash flows we expect to receive from our subsidiaries, and the estimated sales value of those units. As a result of this process, we have in the past sought, and may in the future seek, to raise additional capital, refinance or restructure indebtedness, repurchase indebtedness in the

35

market or otherwise, modify our dividend policies, consider the sale of our interests in our subsidiaries, affiliates, business units, marketable securities or other assets, or take a combination of these and other steps, to increase liquidity, reduce indebtedness and fund future activities. Such activities have in the past and may in the future involve related companies. From time to time, we and our subsidiaries may enter into intercompany loans as a cash management tool. Such notes are structured as revolving demand notes and pay and receive interest on terms we believe are generally more favorable than current debt and investment market rates. The companies that borrow under these notes have sufficient liquidity to repay the notes. All of these notes and related interest expense and income are eliminated in our Condensed Consolidated Financial Statements.

We periodically evaluate acquisitions of interests in or combinations with companies (including our affiliates) that may or may not be engaged in businesses related to our current businesses. We intend to consider such acquisition activities in the future and, in connection with this activity, may consider issuing additional equity securities and increasing indebtedness. From time to time, we also evaluate the restructuring of ownership interests among our respective subsidiaries and related companies.

We believe we will be able to comply with the financial covenants contained in our credit facilities through their maturities; however, if future operating results differ materially from our expectations we may be unable to maintain compliance. Based upon our expectations of our operating performance, and the anticipated demands on our cash resources, we expect to have sufficient liquidity to meet our short-term (defined as the twelve-month period ending March 31, 2023) and long-term obligations (defined as the five-year period ending March 31, 2027). If actual developments differ from our expectations, our liquidity could be adversely affected.

At March 31, 2022, we had $57.8 million available for borrowing under our credit facility with Contran. Amounts available under this facility are at Contran’s discretion. At March 31, 2022, the full $225 million was available for borrowing under Kronos’ Global Revolver and Kronos could borrow all available amounts without violating its existing debt covenants. See Note 6 to our Condensed Consolidated Financial Statements.

At March 31, 2022, we had an aggregate of $744.9 million of restricted and unrestricted cash, cash equivalents and marketable securities, including $76.2 million held by our non-U.S. subsidiaries. A detail by entity is presented in the table below.

	Total		Held outside
	amount		U.S.
	(In millions)
Kronos	$	356.2	$	76.2
CompX		70.2		—
NL exclusive of its subsidiaries		103.1		—
BMI		27.8		—
Tremont exclusive of its subsidiaries		9.4		—
LandWell		176.3		—
Valhi exclusive of its subsidiaries		1.9		—
Total cash and cash equivalents, restricted cash and marketable securities	$	744.9	$	76.2

Capital Expenditures and Other –

We currently expect our aggregate capital expenditures for 2022 will be approximately $103 million as follows:

● $95 million by our Chemicals Segment;

● $7 million by our Component Products Segment; and

● $1 million by our Real Estate Management and Development Segment.

Capital spending for 2022 is expected to be funded through cash generated from operations or borrowing under our existing credit facilities. Planned capital expenditures in 2022 at Kronos and CompX will primarily be to maintain and improve the cost-effectiveness of our facilities and, as it relates to CompX, to increase capacity and address capability needs. It is possible we will delay

36

planned capital projects based on market conditions including but not limited to the general availability of materials, equipment and supplies necessary to complete such projects.

Repurchases of Common Stock –

We, Kronos and CompX have programs to repurchase common stock from time to time as market conditions permit. These stock repurchase programs do not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, these programs may be terminated prior to completion. Cash on hand will be used to acquire the shares, and repurchased shares will be added to treasury shares and cancelled.

At March 31, 2022, Valhi had approximately .3 million shares available to repurchase under authorizations made by our board of directors.

Kronos’ board of directors 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. During the first three months of 2022, Kronos acquired 73,881 shares of its common stock in market transactions for an aggregate purchase price of $1.1 million. At March 31, 2022, approximately 1.5 million shares were available for repurchase under these authorizations.

CompX’s board of directors previously authorized the repurchase 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. During the first three months of 2021, CompX acquired 50,000 shares of its Class A common stock in an open market purchase under such repurchase program for $.8 million. At March 31, 2022, approximately .6 million shares were available for repurchase under these authorizations.

Dividends –

Because our operations are conducted primarily through subsidiaries and affiliates, our long-term ability to meet parent company level corporate obligations is largely dependent on the receipt of dividends or other distributions from our subsidiaries and affiliates. Kronos paid a regular dividend of $.18 per share in each quarter of 2021 for which we received $41.8 million.  In February 2022 the Kronos board of directors approved a regular quarterly dividend of $.19 per share. If Kronos were to pay its $.19 per share dividend in each quarter of 2022 based on the 58.0 million shares we held of Kronos common stock at March 31, 2022, we would receive aggregate annual regular dividends from Kronos of $44.1 million. NL paid a quarterly dividend of $.06 per share in 2021 for which we received $9.7 million. In March 2022 the NL board of directors approved a quarterly dividend of $.07 per share. If NL were to pay its $.07 per share dividend in each quarter of 2022 based on the 40.4 million shares we hold of NL common stock at March 31, 2022, we would receive aggregate annual dividends from NL of $11.3 million. BMI and LandWell pay cash dividends from time to time, but the timing and amount of such dividends are uncertain. In this regard, we received aggregate dividends from BMI and LandWell of $74.8 million in 2021 and nil in the first three months of 2022. We do not know if we will receive dividends from BMI and LandWell during 2022. All of our ownership interest in CompX is held through our ownership in NL; as such we do not receive any dividends from CompX. Instead any dividend paid by CompX is paid to NL.

Our subsidiaries have various credit agreements with unrelated third-party lenders which contain customary limitations on the payment of dividends; however, these restrictions in the past have not significantly impacted their ability to pay dividends.

Investment in our Subsidiaries and Affiliates and Other Acquisitions –

We have in the past, and may in the future, purchase the securities of our subsidiaries and affiliates or third parties in market or privately-negotiated transactions. We base our purchase decisions on a variety of factors, including an analysis of the optimal use of our capital, taking into account the market value of the securities and the relative value of expected returns on alternative investments. In connection with these activities, we may consider issuing additional equity securities or increasing our indebtedness. We may also evaluate the restructuring of ownership interests of our businesses among our subsidiaries and related companies.

We generally do not guarantee any indebtedness or other obligations of our subsidiaries or affiliates. Our subsidiaries are not required to pay us dividends. If one or more of our subsidiaries were unable to maintain its current level of dividends, either due to

37

restrictions contained in a credit agreement or to satisfy its liabilities or otherwise, our ability to service our liabilities or to pay dividends on our common stock could be adversely impacted. If this were to occur, we might consider reducing or eliminating our dividends or selling interests in subsidiaries or other assets. If we were required to liquidate assets to generate funds to satisfy our liabilities, we might be required to sell at less than what we believe is the long-term value of such assets.

Prior to 2021, we entered into a $50 million revolving credit facility with a subsidiary of NL secured with approximately 35.2 million shares of the common stock of Kronos held by NL’s subsidiary as collateral. Outstanding borrowings under the credit facility bear interest at the prime rate plus 1.875% per annum, payable quarterly, with all amounts due on December 31, 2023. The maximum principal amount which may be outstanding from time-to-time under the credit facility is limited to 50% of the value of the Kronos stock using the most recent closing price. The credit facility contains a number of covenants and restrictions which, among other things, restrict NL’s subsidiary’s ability to incur additional debt, incur liens, and merge or consolidate with, or sell or transfer substantially all of NL’s subsidiary’s assets to, another entity, and require NL’s subsidiary to maintain a minimum specified level of consolidated net worth. Upon an event of default (as defined in the credit facility), Valhi will be entitled to terminate its commitment to make further loans to NL’s subsidiary, declare the outstanding loans (with interest) immediately due and payable, and exercise its rights with respect to the collateral under the loan documents. Such collateral rights include, upon certain insolvency events with respect to NL’s subsidiary or NL, the right to purchase all of the Kronos common stock at a purchase price equal to the aggregate market value, less amounts owing to Valhi under the loan documents, and up to 50% of such purchase price may be paid by Valhi in the form of an unsecured promissory note bearing interest at the prime rate plus 2.75% per annum, payable quarterly, with all amounts due no later than five years from the date of purchase, with the remainder of such purchase price payable in cash at the date of purchase. We also eliminate any such intercompany borrowings in our Condensed Consolidated Financial Statements. There is $.5 million outstanding under this facility at March 31, 2022.

We have an unsecured revolving demand promissory note with Kronos which, as amended, provides for borrowings from Kronos of up to $30 million. We eliminate any such intercompany borrowings in our Condensed Consolidated Financial Statements. The facility, as amended, is due on demand, but in any event no earlier than December 31, 2023. We had no borrowings from Kronos under this facility during the first three months of 2022, and there was no outstanding balance at March 31, 2022. We could borrow the full $30.0 million under our current intercompany facility with Kronos at March 31, 2022. Kronos’ obligation to loan us money under this note is at Kronos’ discretion.

We also have an unsecured revolving demand promissory note with CompX which, as amended, provides for borrowings from CompX of up to $30 million. We eliminate these intercompany borrowings in our Condensed Consolidated Financial Statements. The facility, as amended, is due on demand, but in any event no earlier than December 31, 2023. We had gross borrowings of $7.1 million and gross repayments of $7.7 million during the first three months of 2022, and $18.1 million was outstanding at March 31, 2022. We could borrow $11.9 million under our current intercompany facility with CompX at March 31, 2022. CompX’s obligation to loan us money under this note is at CompX’s discretion.

Commitments and Contingencies

There have been no material changes in our contractual obligations since we filed our 2021 Annual Report and we refer you to that report for a complete description of these commitments.

We are subject to certain commitments and contingencies, as more fully described in our 2021 Annual Report, or in Notes 12 and 15 to our Condensed Consolidated Financial Statements and in Part II, Item 1 of this Quarterly Report, including:

● certain income tax contingencies in various U.S. and non-U.S. jurisdictions;

● certain environmental remediation matters involving NL and BMI;

● certain litigation related to NL’s former involvement in the manufacture of lead pigment and lead-based paint; and

● certain other litigation to which we are a party.

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In addition to such legal proceedings, various legislation and administrative regulations have, from time to time, been proposed that seek to (i) impose various obligations on present and former manufacturers of lead pigment and lead-based paint (including NL) with respect to asserted health concerns associated with the use of such products and (ii) effectively overturn court decisions in which NL and other pigment manufacturers have been successful. Examples of such proposed legislation include bills which would permit civil liability for damages on the basis of market share, rather than requiring plaintiffs to prove that the defendant’s product caused the alleged damage, and bills which would revive actions barred by the statute of limitations. While no legislation or regulations have been enacted to date that are expected to have a material adverse effect on our consolidated financial position, results of operations or liquidity, enactment of such legislation could have such an effect.

Recent Accounting Pronouncements

Not applicable

Critical Accounting Policies

There have been no changes in the first three months of 2022 with respect to our critical accounting policies presented in Management’s Discussion and Analysis of Financial Condition and Results of Operation in our 2021 Annual Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, including currency exchange rates, interest rates and security prices, and raw material prices. There have been no material changes in these market risks since we filed our 2021 Annual Report, and refer you to Part I, Item 7A. – “Quantitative and Qualitative Disclosure About Market Risk” in our 2021 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures which, as defined in Exchange Act Rule 13a-15(e), means controls and other procedures that are designed to ensure that information required to be disclosed in the reports we file or submit to the SEC under the Securities Exchange Act of 1934, as amended (the “Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports we file or submit to the SEC under the Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions to be made regarding required disclosure. Each of Robert D. Graham, our Vice Chairman of the Board, President and Chief Executive Officer, and Amy Allbach Samford, our Senior Vice President and Chief Financial Officer, have evaluated the design and effectiveness of our disclosure controls and procedures as of March 31, 2022. Based upon their evaluation, these executive officers have concluded that our disclosure controls and procedures were effective as of the date of such evaluation.

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,

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and

39

● Provide reasonable assurance regarding prevention or timely detection of an unauthorized acquisition, use or disposition of assets that could have a material effect on our Consolidated Financial Statements.

Other

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 investment 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.

Changes in Internal Control over Financial Reporting

There has been no change to our internal control over financial reporting during the quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

In addition to the matter discussed below, refer to Note 15 to our Condensed Consolidated Financial Statements and our 2021 Annual Report for descriptions of certain legal proceedings.

Certain Underwriters at Lloyds, London et al v. NL Industries, Inc. In March 2022, the appellate court entered an order denying the insurer’s interlocutory appeal and affirming the trial court’s finding that the arguments raised by the insurers did not bar NL from coverage.

ITEM 1A. Risk Factors.

For a discussion of the risk factors related to our businesses, please refer to Part I, Item 1A, “Risk Factors,” in our 2021 Annual Report.

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ITEM 6. Exhibits.

ITEM No.	Exhibit Index
31.1	Certification
31.2	Certification
32.1	Certification
101.INS	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
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

41

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		VALHI, INC.
		(Registrant)
Date:	May 5, 2022	/s/ Amy Allbach Samford
		Amy Allbach Samford (Senior Vice President and Chief Financial Officer)
Date:	May 5, 2022	/s/ Patty S. Brinda
		Patty S. Brinda (Vice President and Controller)

42

EX-31.1

Exhibit 31.1

I, Robert D. Graham, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Valhi, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2022

/s/ Robert D. Graham

Robert D. Graham

Vice Chairman of the Board, President and

  Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Amy A. Samford, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of Valhi, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2022

/s/Amy A. Samford

Amy A. Samford

Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Valhi, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Robert D. Graham, Vice Chairman of the Board, President and Chief Executive Officer, and Amy A. Samford, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Robert D. Graham	/s/ Amy A. Samford
Robert D. Graham Vice Chairman of the Board, President and   Chief Executive Officer May 5, 2022	Amy A. Samford Senior Vice President and Chief Financial Officer May 5, 2022

Note:    The certification the registrant furnishes in this exhibit is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the Securities and Exchange Commission shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	Apr. 29, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Trading Symbol	VHI
Entity Registrant Name	VALHI, INC.
Entity Central Index Key	0000059255
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		28,277,093
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	1-5467
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-0110150
Entity Address, Address Line One	5430 LBJ Freeway
Entity Address, Address Line Two	Suite 1700
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75240-2620
City Area Code	972
Local Phone Number	233-1700
Security Exchange Name	NYSE
Title of 12(b) Security	Common stock
Document Quarterly Report	true
Document Transition Report	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 640.0	$ 698.4
Restricted cash equivalents	55.9	52.6
Marketable securities	2.2	2.6
Accounts and other receivables, net	443.3	403.7
Inventories, net	493.1	458.7
Prepaid expenses and other	69.7	57.2
Total current assets	1,704.2	1,673.2
Other assets:
Investment in TiO2 manufacturing joint venture	105.7	101.9
Goodwill	379.7	379.7
Deferred income taxes	79.1	86.8
Other assets	190.7	200.0
Total other assets	755.2	768.4
Property and equipment:
Land	50.6	50.3
Buildings	250.0	252.6
Equipment	1,192.6	1,194.6
Mining properties	23.2	26.3
Construction in progress	90.3	82.9
Gross property and equipment	1,606.7	1,606.7
Less accumulated depreciation and amortization	1,042.8	1,043.1
Net property and equipment	563.9	563.6
Total assets	3,023.3	3,005.2
Current liabilities:
Current maturities of long-term debt	3.1	3.1
Accounts payable and accrued liabilities	428.9	448.1
Income taxes	19.0	12.3
Total current liabilities	451.0	463.5
Noncurrent liabilities:
Long-term debt	638.2	649.9
Deferred income taxes	44.9	46.2
Payable to affiliate - income taxes	44.5	44.5
Accrued pension costs	285.9	291.1
Accrued environmental remediation and related costs	94.1	94.1
Other liabilities	243.7	257.5
Total noncurrent liabilities	1,351.3	1,383.3
Equity: Valhi stockholders' equity:
Common stock	0.3	0.3
Additional paid-in capital	670.4	669.0
Retained earnings	444.3	401.1
Accumulated other comprehensive loss	(185.4)	(191.3)
Treasury stock, at cost	(49.6)	(49.6)
Total Valhi stockholders' equity	880.0	829.5
Noncontrolling interest in subsidiaries	341.0	328.9
Total equity	1,221.0	1,158.4
Total liabilities and equity	3,023.3	$ 3,005.2
Commitments and contingencies (Notes 6, 12 and 15)

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues and other income:
Net sales	$ 629.0	$ 509.0
Other income, net		7.0
Total revenues and other income	629.0	516.0
Cost and expenses:
Cost of sales	458.3	399.7
Selling, general and administrative	77.2	70.9
Other components of net periodic pension and OPEB expense	3.3	4.3
Interest	6.9	8.6
Total costs and expenses	545.7	483.5
Income before income taxes	83.3	32.5
Income tax expense	19.9	8.0
Net income	63.4	24.5
Noncontrolling interest in net income of subsidiaries	18.0	9.7
Net income attributable to Valhi stockholders	$ 45.4	$ 14.8
Amounts attributable to Valhi stockholders:
Net income per basic share	$ 1.59	$ 0.52
Net income per diluted share	$ 1.59	$ 0.52
Weighted average shares outstanding - basic	28.5	28.5
Weighted average shares outstanding - diluted	28.5	28.5

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 63.4	$ 24.5
Other comprehensive income (loss), net of tax:
Currency translation	5.8	1.7
Defined benefit pension plans	2.4	3.4
Other	(0.2)	(0.2)
Total other comprehensive income (loss), net	8.0	4.9
Comprehensive income	71.4	29.4
Comprehensive income attributable to noncontrolling interest	20.1	11.0
Comprehensive income attributable to Valhi stockholders	$ 51.3	$ 18.4

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Millions	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss	Treasury stock	Non-controlling interest	Total
Balance at Dec. 31, 2020	$ 0.3	$ 668.3	$ 282.9	$ (219.4)	$ (49.6)	$ 324.4	$ 1,006.9
Net income			14.8			9.7	24.5
Other comprehensive income, net				3.6		1.3	4.9
Dividends paid to noncontrolling interest						(4.8)	(4.8)
Cash dividends			(2.2)				(2.2)
Equity transaction with noncontrolling interest, net and other		0.9				(1.6)	(0.7)
Balance at Mar. 31, 2021	0.3	669.2	295.5	(215.8)	(49.6)	329.0	1,028.6
Balance at Dec. 31, 2021	0.3	669.0	401.1	(191.3)	(49.6)	328.9	1,158.4
Net income			45.4			18.0	63.4
Other comprehensive income, net				5.9		2.1	8.0
Dividends paid to noncontrolling interest						(5.2)	(5.2)
Cash dividends			(2.2)				(2.2)
Equity transaction with noncontrolling interest, net and other		1.4				(2.8)	(1.4)
Balance at Mar. 31, 2022	$ 0.3	$ 670.4	$ 444.3	$ (185.4)	$ (49.6)	$ 341.0	$ 1,221.0

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement Of Stockholders Equity [Abstract]
Cash dividends per share	$ 0.08	$ 0.08

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 63.4	$ 24.5
Depreciation and amortization	14.8	14.7
Benefit plan expense greater than cash funding	1.8	3.5
Deferred income taxes	3.1	1.3
Contributions to TiO2 manufacturing joint venture, net	(3.8)	(3.4)
Other, net	2.7	0.9
Change in assets and liabilities:
Accounts and other receivables, net	(43.9)	(29.7)
Land held for development, net	7.1	(4.9)
Inventories, net	(35.3)	35.7
Accounts payable and accrued liabilities	(37.7)	(2.0)
Income taxes	7.1	1.9
Accounts with affiliates	8.1	4.5
Other, net	(10.2)	9.6
Net cash provided by (used in) operating activities	(22.8)	56.6
Cash flows from investing activities:
Capital expenditures	(16.2)	(11.5)
Purchases of marketable securities	(0.1)	(0.9)
Proceeds from disposal of marketable securities	0.8	3.0
Other, net		2.1
Net cash used in investing activities	(15.5)	(7.3)
Cash flows from financing activities:
Principal payments on indebtedness	(5.9)	(3.9)
Valhi cash dividends paid	(2.2)	(2.2)
Distributions to noncontrolling interest in subsidiaries	(5.2)	(4.8)
Subsidiary treasury stock acquired	(1.1)	(0.8)
Net cash used in financing activities	(14.4)	(11.7)
Cash, cash equivalents and restricted cash and cash equivalents - net change from:
Operating, investing and financial activities	(52.7)	37.6
Effect of exchange rates on cash	(0.4)	(7.0)
Balance at beginning of period	792.9	570.3
Balance at end of period	739.8	600.9
Cash paid for:
Interest, net of amounts capitalized	10.2	12.0
Income taxes, net	6.2	3.9
Noncash investing activities:
Change in accruals for capital expenditures	$ 3.8	$ 2.4

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Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1 – Organization and basis of presentation:

Organization – We are majority owned by a wholly-owned subsidiary of Contran Corporation (“Contran”), which owns approximately 92% of our outstanding common stock at March 31, 2022. A majority of Contran’s outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) 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. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at March 31, 2022, Ms. Simmons and the Family Trust may be deemed to control Contran and us.

Basis of Presentation – Consolidated in this Quarterly Report are the results of our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and The LandWell Company (“LandWell”). Kronos (NYSE: KRO), NL (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the Securities and Exchange Commission (“SEC”).

The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 that we filed with the SEC on March 10, 2022 (the “2021 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments), in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, 2021 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, 2021) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim period ended March 31, 2022 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our 2021 Consolidated Financial Statements contained in our 2021 Annual Report.

Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Valhi, Inc. and its subsidiaries (NYSE: VHI), taken as a whole.

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Business Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Business Segment Information

Note 2 – Business segment information:

		% controlled at
Business segment	Entity	March 31, 2022
Chemicals	Kronos	81%
Component products	CompX	87%
Real estate management and development	BMI and LandWell	63% - 77%

Our control of Kronos includes approximately 50% we hold directly and approximately 31% held directly by NL. We own approximately 83% of NL. Our control of CompX is through NL. We own approximately 63% of BMI. Our control of LandWell includes the approximately 27% we hold directly and 50% held by BMI.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales:
Chemicals	$	465.0	$	562.9
Component products		35.9		42.1
Real estate management and development		8.1		24.0
Total net sales	$	509.0	$	629.0
Cost of sales:
Chemicals	$	369.7	$	413.9
Component products		24.9		30.0
Real estate management and development		5.1		14.4
Total cost of sales	$	399.7	$	458.3
Gross margin:
Chemicals	$	95.3	$	149.0
Component products		11.0		12.1
Real estate management and development		3.0		9.6
Total gross margin	$	109.3	$	170.7
Operating income:
Chemicals	$	37.7	$	86.4
Component products		5.8		6.3
Real estate management and development		7.8		8.0
Total operating income		51.3		100.7
General corporate items:
Interest income and other		.9		.9
Other components of net periodic pension and OPEB expense		(4.3)		(3.3)
Changes in market value of Valhi common stock held by subsidiaries		1.3		.1
General expenses, net		(8.1)		(8.2)
Interest expense		(8.6)		(6.9)
Income before income taxes	$	32.5	$	83.3

Segment results we report may differ from amounts separately reported by our various subsidiaries due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material. Infrastructure reimbursement is included in the determination of Real Estate Management and Development operating income. See Note 11.

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Accounts and Other Receivables, Net

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Accounts and Other Receivables, Net

Note 3 – Accounts and other receivables, net:

	December 31,		March 31,
	2021		2022
	(In millions)
Trade accounts receivable:
Kronos	$	326.3	$	374.1
CompX		15.6		17.8
BMI/LandWell		2.8		2.0
VAT and other receivables		38.0		30.3
Refundable income taxes		4.5		4.0
Receivables from affiliates:
Louisiana Pigment Company, L.P. ("LPC")		15.8		15.2
Contran - trade items		.1		.3
Other - trade items		2.6		2.8
Allowance for doubtful accounts		(2.0)		(3.2)
Total	$	403.7	$	443.3

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Inventories, Net

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Inventories, Net

Note 4 – Inventories, net:

	December 31,		March 31,
	2021		2022
	(In millions)
Raw materials:
Chemicals	$	76.3	$	97.1
Component products		5.0		6.1
Total raw materials		81.3		103.2
Work in process:
Chemicals		30.4		35.6
Component products		16.8		17.7
Total in-process products		47.2		53.3
Finished products:
Chemicals		246.4		249.8
Component products		3.8		4.3
Total finished products		250.2		254.1
Supplies (chemicals)		80.0		82.5
Total	$	458.7	$	493.1

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Other Assets

3 Months Ended

Mar. 31, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Assets

Note 5 – Other assets:

	December 31,		March 31,
	2021		2022
	(In millions)
Other noncurrent assets:
Restricted cash and cash equivalents	$	41.9	$	43.9
Note receivables - OPA		38.7		36.0
Land held for development		36.0		31.0
IBNR receivables		34.4		29.9
Operating lease right-of-use assets		19.9		21.5
Pension asset		9.0		9.5
Marketable securities		3.3		2.9
Other		16.8		16.0
Total	$	200.0	$	190.7

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Long-Term Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Long-Term Debt

Note 6 – Long-term debt:

	December 31,		March 31,
	2021		2022
	(In millions)
Valhi:
Contran credit facility	$	172.9	$	167.2
Subsidiary debt:
Kronos:
Senior Secured Notes		448.8		442.9
BMI:
Bank loan Western Alliance Bank		15.4		15.4
LandWell:
Note payable to Western Alliance Business Trust		13.5		13.5
Other		2.4		2.3
Total subsidiary debt		480.1		474.1
Total debt		653.0		641.3
Less current maturities		(3.1)		(3.1)
Total long-term debt	$	649.9	$	638.2

Valhi – Contran credit facility – During the first three months of 2022, we had no borrowings and repaid $5.7 million under this facility. The average interest rate on the existing balance for the three months ended March 31, 2022 was 4.29%. At March 31, 2022, the interest rate was 4.5% and $57.8 million was available for borrowing under this facility.

Kronos – Senior Notes – At March 31, 2022, the carrying value of Kronos’ 3.75% Senior Secured Notes due September 15, 2025 (€400 million aggregate principal amount outstanding) is stated net of unamortized debt issuance costs of $3.2 million.

Revolving credit facility – During the first three months of 2022, Kronos had no borrowings or repayments under its $225 million global revolving credit facility (“Global Revolver”) and at March 31, 2022, the full $225 million was available for borrowing under the Global Revolver.

Other – We are in compliance with all of our debt covenants at March 31, 2022.

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Accounts Payable and Accrued Liabilities

3 Months Ended

Mar. 31, 2022

Payables And Accruals [Abstract]

Accounts Payable and Accrued Liabilities

Note 7 – Accounts payable and accrued liabilities:

	December 31,		March 31,
	2021		2022
	(In millions)
Accounts payable:
Kronos	$	143.6	$	132.5
CompX		3.4		5.1
BMI and LandWell		5.3		10.3
Other		.4		.4
Total		152.7		148.3
Payables to affiliates:
Contran - income taxes		1.5		4.4
LPC		17.3		20.8
Accrued litigation settlement		11.8		11.9
Deferred income		125.8		120.5
Employee benefits		39.9		37.0
Accrued sales discounts and rebates		28.7		11.1
Interest		5.3		1.4
Operating lease liabilities		3.7		3.9
Environmental remediation and related costs		3.5		3.5
Other		57.9		66.1
Total	$	448.1	$	428.9

The accrued litigation settlement is discussed in Note 15.

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Other Noncurrent Liabilities

3 Months Ended

Mar. 31, 2022

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

Note 8 – Other noncurrent liabilities:

	December 31,		March 31,
	2021		2022
	(In millions)
Deferred income	$	81.6	$	73.8
Accrued development costs		55.4		54.1
Accrued litigation settlement		38.5		38.7
Insurance claims and expenses		36.4		32.0
Operating lease liabilities		15.8		17.2
Other postretirement benefits		10.2		10.2
Employee benefits		6.1		5.9
Reserve for uncertain tax positions		3.5		4.8
Other		10.0		7.0
Total	$	257.5	$	243.7

The accrued litigation settlement is discussed in Note 15.

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Revenue - Disaggregation of Sales

3 Months Ended

Mar. 31, 2022

Revenue From Contract With Customer [Abstract]

Revenue - Disaggregation of Sales

Note 9 – Revenue – disaggregation of sales:

The following table disaggregates the net sales of our Chemicals Segment by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales - point of origin:
United States	$	253.9	$	326.4
Germany		231.2		276.5
Canada		97.2		96.4
Belgium		66.5		92.8
Norway		71.0		78.4
Eliminations		(254.8)		(307.6)
Total	$	465.0	$	562.9
Net sales - point of destination:
Europe	$	227.3	$	269.5
North America		145.3		179.9
Other		92.4		113.5
Total	$	465.0	$	562.9

The following table disaggregates the net sales of our Component Products and Real Estate Management and Development Segments by major product line.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Component Products:
Net sales:
Security products	$	25.9	$	29.6
Marine components		10.0		12.5
Total	$	35.9	$	42.1
Real Estate Management and Development:
Net sales:
Land sales	$	6.6	$	22.2
Water delivery		1.0		1.5
Utility and other		.5		.3
Total	$	8.1	$	24.0

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Defined Benefit Pension Plans

3 Months Ended

Mar. 31, 2022

Compensation And Retirement Disclosure [Abstract]

Defined Benefit Pension Plans

Note 10 – Defined benefit pension plans:

The components of our net periodic defined benefit pension cost are presented in the table below.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Service cost	$	3.8	$	3.0
Interest cost		2.4		3.2
Expected return on plan assets		(3.4)		(3.5)
Recognized actuarial losses		5.4		3.8
Total	$	8.2	$	6.5

We expect to contribute the equivalent of approximately $20 million to all of our defined benefit pension plans during 2022.

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Other Income, Net

3 Months Ended

Mar. 31, 2022

Other Income And Expenses [Abstract]

Other Income, Net

Note 11 – Other income, net:

	Three months ended
	March 31,
	2021		2022
	(In millions)
Interest income and other:
Interest and dividends	$	.9	$	1.1
Securities transactions, net		—		(.2)
Total		.9		.9
Infrastructure reimbursements		6.2		—
Currency transactions, net		(.5)		(1.5)
Other, net		.4		.6
Total	$	7.0	$	—

Infrastructure reimbursement – As disclosed in Note 7 to our 2021 Annual Report, under an Owner Participation Agreement (“OPA”) entered into by LandWell with the Redevelopment Agency of the City of Henderson, Nevada, as LandWell develops certain real property for commercial and residential purposes in its master planned community in Henderson, Nevada, the cost of certain public infrastructure may be reimbursed to LandWell through tax increment. During the first three months of 2021, LandWell received approval for additional tax increment reimbursement of $6.2 million which was recognized as other income and is evidenced by a promissory note issued to LandWell by the City of Henderson.

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 – Income taxes:

	Three months ended
	March 31,
	2021		2022
	(In millions)
Expected tax expense at U.S. federal statutory income tax   rate of 21%	$	6.8	$	17.5
Non-U.S. tax rates		.8		2.1
Incremental net tax benefit on earnings and losses of U.S.   and non-U.S. tax group companies		(1.1)		(.9)
Valuation allowance		1.2		.6
Global intangible low-tax income, net		.5		.7
Adjustment to the reserve for uncertain tax positions, net		(.4)		(.7)
U.S. state income taxes and other, net		.2		.6
Income tax expense	$	8.0	$	19.9
Comprehensive provision for income taxes allocable to:
Net income	$	8.0	$	19.9
Other comprehensive income (loss):
Currency translation		.2		.7
Pension plans		2.1		1.4
Other		(.1)		.2
Total	$	10.2	$	22.2

The amount shown in the preceding table of our income tax rate reconciliation for non-U.S. tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our non-U.S. subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S. jurisdiction and the U.S. federal statutory tax rate. The amount shown on such table for incremental net tax benefit on earnings and losses on non-U.S. and non-tax group companies includes, as applicable, (i) deferred income taxes (or deferred income tax benefits) associated with the current year earnings of all our Chemicals Segment’s non-U.S. subsidiaries, (ii) current U.S. income taxes (or current income tax benefit) including U.S. personal holding company tax, as applicable, attributable to current-year income (losses) of one of our Chemicals Segment’s non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, to the extent the current year income (losses) of such subsidiary is subject to U.S. income tax under the U.S. dual-resident provisions of the Internal Revenue Code, (iii) deferred income taxes associated with our direct investment in Kronos and (iv) current and deferred income taxes associated with distributions and earnings from our investments in LandWell and BMI.

Tax authorities are examining certain of our U.S. and non-U.S. income tax returns and may propose tax deficiencies, including penalties and interest. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. We currently estimate that our unrecognized tax benefits will decrease by approximately $3.7 million during the next twelve months primarily due to the expiration of certain statutes of limitations.

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Noncontrolling Interest in Subsidiaries

3 Months Ended

Mar. 31, 2022

Noncontrolling Interest [Abstract]

Noncontrolling Interest in Subsidiaries

Note 13 – Noncontrolling interest in subsidiaries:

	December 31,		March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	226.6	$	232.3
NL Industries		75.7		78.7
CompX International		22.5		22.8
BMI		8.3		9.5
LandWell		(4.2)		(2.3)
Total	$	328.9	$	341.0

	Three months ended March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	3.8	$	11.1
NL Industries		2.3		3.2
CompX International		.6		.6
BMI		1.1		1.2
LandWell		1.9		1.9
Total	$	9.7	$	18.0

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Stockholders' Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders' Equity

Note 14 – Stockholders’ equity:

Accumulated other comprehensive loss – Changes in accumulated other comprehensive income (loss) attributable to Valhi stockholders are presented in the table below.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Accumulated other comprehensive income (loss) (net of tax and   noncontrolling interest):
Marketable securities:
Balance at beginning of period	$	1.8	$	1.7
Other comprehensive income:
Unrealized gain arising during the period		—		—
Balance at end of period	$	1.8	$	1.7
Currency translation:
Balance at beginning of period	$	(67.4)	$	(72.2)
Other comprehensive gain arising during the period		1.3		4.2
Balance at end of period	$	(66.1)	$	(68.0)
Defined benefit pension plans:
Balance at beginning of period	$	(154.1)	$	(120.9)
Other comprehensive loss:
Amortization of prior service cost and net losses included  in net periodic pension cost		2.5		1.8
Balance at end of period	$	(151.6)	$	(119.1)
OPEB plans:
Balance at beginning of period	$	.3	$	.1
Amortization of prior service credit and net losses  included in net periodic OPEB cost		(.2)		(.1)
Balance at end of period	$	.1	$	—
Total accumulated other comprehensive loss:
Balance at beginning of period	$	(219.4)	$	(191.3)
Other comprehensive income		3.6		5.9
Balance at end of period	$	(215.8)	$	(185.4)

Other – During the first three months of 2022, Kronos acquired an additional 73,881 shares of its common stock in market transactions for an aggregate purchase price of $1.1 million which are accounted for as Kronos’ treasury stock at March 31, 2022.  At March 31, 2022, approximately 1.5 million shares were available for repurchase under Kronos’ prior repurchase authorizations.  

During the first three months of 2021, CompX acquired 50,000 shares of its Class A common stock in a market transaction for approximately $.8 million. At March 31, 2022, approximately .6 million shares were available for repurchase under CompX’s prior repurchase authorizations.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 15 – Commitments and contingencies:

Lead pigment litigation – NL

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 these actions are without merit, and 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 do not have any amounts accrued 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.

In the terms of the County of Santa Clara v. Atlantic Richfield Company, et al. (Superior Court of the State of California, County of Santa Clara, Case No. 1-00-CV-788657) global settlement agreement, NL has four annual installment payments remaining ($12.0 million for the next three installments and $16.7 million for the final installment). NL’s final installment will be made with funds already on deposit at the court, which are included in noncurrent restricted cash on our Condensed 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). See Note 18 to our 2021 Annual Report.

New cases may continue to be filed against NL. We cannot assure you that we will not incur liability in the future with respect to 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 NL 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 NL 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 estimable. 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.

Environmental matters and litigation

Our operations are governed by various environmental laws and regulations. Certain of our businesses are and have been engaged in the handling, manufacture or use of substances or compounds that may be considered toxic or hazardous within the meaning of applicable environmental laws and regulations. As with other companies engaged in similar businesses, certain of our past and current operations and products have the potential to cause environmental or other damage. 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. From time to time, our businesses may be subject to environmental regulatory enforcement under U.S. and non-U.S. statutes, the resolution of which typically involves the establishment 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. We believe all of our facilities are in substantial compliance with applicable environmental laws.

Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative proceedings or investigations arising under federal and state environmental laws and common law. Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (“PRP”) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (“CERCLA”), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors, and NL or its predecessors, our subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (“EPA”) Superfund National Priorities List or similar state lists. These proceedings seek cleanup costs, damages for personal injury or property damage and/or damages for injury to natural resources. Certain of these proceedings involve claims for substantial amounts. Although we may be jointly and severally liable for these costs, in most cases we are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated. In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from our operations.

Obligations associated with environmental remediation and related matters are difficult to assess and estimate for numerous reasons including the:

● complexity and differing interpretations of governmental regulations,

● number of PRPs and their ability or willingness to fund such allocation of costs,

● financial capabilities of the PRPs and the allocation of costs among them,

● solvency of other PRPs,

● multiplicity of possible solutions,

● number of years of investigatory, remedial and monitoring activity required,

● uncertainty over the extent, if any, to which our former operations might have contributed to the conditions allegedly giving rise to such personal injury, property damage, natural resource and related claims, and

● 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. Actual costs could exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and costs may be incurred for sites where no estimates presently can be made. Further, additional environmental and related matters may arise in the future. If we were to incur any future liability, this could have a material adverse effect on our consolidated financial statements, results of operations and liquidity.

We record liabilities related to environmental remediation and related matters (including costs associated with damages for personal injury or property damage and/or damages for injury to natural resources) when estimated future expenditures are probable and reasonably estimable. We adjust such accruals as further information becomes available to us or as circumstances change. Unless the amounts and timing of such estimated future expenditures are fixed and reasonably determinable, we generally do not discount estimated future expenditures to their present value due to the uncertainty of the timing of the payout. We recognize recoveries of costs from other parties, if any, as assets when their receipt is deemed probable.

We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs. The timing of payments depends upon a number of factors, including but not limited to the timing of the actual remediation process; which in turn depends on factors outside of our control. At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next twelve months, and we classify this estimate as a current liability. We classify the remaining accrued environmental costs as a noncurrent liability.

The table below presents a summary of the activity in our accrued environmental costs during the first three months of 2022.

	Amount
	(In millions)
Balance at the beginning of the period	$	97.6
Additions charged to expense, net		.3
Payments, net		(.3)
Balance at the end of the period	$	97.6
Amounts recognized in the Consolidated Balance Sheet at the end of the period:
Current liabilities	$	3.5
Noncurrent liabilities		94.1
Total	$	97.6

NL – On a quarterly basis, NL evaluates the potential range of its liability for environmental remediation and related costs at sites where it has been named as a PRP or defendant. At March 31, 2022, NL had accrued approximately $93 million related to approximately 32 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.

NL believes that it is not reasonably possible to estimate the range of costs for certain sites. At March 31, 2022, 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. At certain of these previously inactive sites, NL has received general and special notices of liability from the EPA and/or state agencies alleging that NL, sometimes with other PRPs, is liable for past and future costs of remediating environmental contamination allegedly caused by former operations. These notifications may assert that NL, along with any other alleged PRPs, is liable for past and/or future clean-up costs. As further information becomes available to us for any of these sites which would allow us to estimate a range of costs, we would at that time adjust our accruals. Any such adjustment could result in the recognition of an accrual that would have a material effect on our consolidated financial statements, results of operations and liquidity.

Other – We have also accrued approximately $5 million at March 31, 2022 for other environmental cleanup matters which represents our best estimate of the liability.

Insurance coverage claims – NL

NL is involved in certain legal proceedings with a number of its former insurance carriers regarding the nature and extent of the carriers’ obligations to NL under insurance policies with respect to certain lead pigment and asbestos lawsuits. The issue of whether insurance coverage for defense costs or indemnity or both will be found to exist for NL’s lead pigment and asbestos litigation depends upon a variety of factors, and we cannot assure you that such insurance coverage will be available.

NL has agreements with certain of its former insurance carriers pursuant to which the carriers reimburse it for a portion of its future lead pigment litigation defense costs, and one such carrier reimburses NL for a portion of its future asbestos litigation defense costs. We are not able to determine how much NL will ultimately recover from these carriers for defense costs incurred by NL because of certain issues that arise regarding which defense costs qualify for reimbursement. While NL continues to seek additional insurance recoveries, we do not know if we will be successful in obtaining reimbursement for either defense costs or indemnity. 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.

For a complete discussion of certain litigation involving NL and certain of its former insurance carriers, please refer to our 2021 Annual Report.

Other litigation

In addition to the litigation described above, we and our affiliates are also involved in various other environmental, contractual, product liability, patent (or intellectual property), employment and other claims and disputes incidental to our present and former businesses. In certain cases, we have insurance coverage for these items, although we do not expect additional material insurance coverage for our environmental matters. We currently believe the disposition of all of these various other claims and disputes (including asbestos-related claims), individually and in the aggregate, should not have a material adverse effect on our consolidated financial position, results of operations or liquidity beyond the accruals already provided.

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Fair Value Measurements and Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements and Financial Instruments

Note 16 – Fair value measurements and financial instruments:

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure:

	December 31, 2021				March 31, 2022
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	792.9	$	792.9	$	739.8	$	739.8
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		448.8		460.2		442.9		435.7
Valhi credit facility with Contran		172.9		172.9		167.2		167.2
BMI bank note payable		15.4		15.9		15.4		15.9
LandWell bank note payable		13.5		13.5		13.5		13.5

At March 31, 2022, the estimated market price of Kronos’ Senior Notes was €977 per €1,000 principal amount. The fair value of Kronos’ Senior Notes was based on quoted market prices; however, these quoted market prices represent Level 2 inputs because the markets in which the term loan trades were not active. The fair value of variable interest rate debt and other fixed-rate debt, which represents Level 2 inputs, is deemed to approximate carrying values. See Note 6. Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value. See Notes 3 and 7.

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Organization and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Organization

Organization – We are majority owned by a wholly-owned subsidiary of Contran Corporation (“Contran”), which owns approximately 92% of our outstanding common stock at March 31, 2022. A majority of Contran’s outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) 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. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at March 31, 2022, Ms. Simmons and the Family Trust may be deemed to control Contran and us.

Basis of Presentation

Basis of Presentation – Consolidated in this Quarterly Report are the results of our wholly-owned and majority-owned subsidiaries, including NL Industries, Inc., Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and The LandWell Company (“LandWell”). Kronos (NYSE: KRO), NL (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the Securities and Exchange Commission (“SEC”).

The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 that we filed with the SEC on March 10, 2022 (the “2021 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments), in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, 2021 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, 2021) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim period ended March 31, 2022 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our 2021 Consolidated Financial Statements contained in our 2021 Annual Report.

Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Valhi, Inc. and its subsidiaries (NYSE: VHI), taken as a whole.

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Holding Percentage of Subsidiaries

		% controlled at
Business segment	Entity	March 31, 2022
Chemicals	Kronos	81%
Component products	CompX	87%
Real estate management and development	BMI and LandWell	63% - 77%

Segment Operating Performance

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales:
Chemicals	$	465.0	$	562.9
Component products		35.9		42.1
Real estate management and development		8.1		24.0
Total net sales	$	509.0	$	629.0
Cost of sales:
Chemicals	$	369.7	$	413.9
Component products		24.9		30.0
Real estate management and development		5.1		14.4
Total cost of sales	$	399.7	$	458.3
Gross margin:
Chemicals	$	95.3	$	149.0
Component products		11.0		12.1
Real estate management and development		3.0		9.6
Total gross margin	$	109.3	$	170.7
Operating income:
Chemicals	$	37.7	$	86.4
Component products		5.8		6.3
Real estate management and development		7.8		8.0
Total operating income		51.3		100.7
General corporate items:
Interest income and other		.9		.9
Other components of net periodic pension and OPEB expense		(4.3)		(3.3)
Changes in market value of Valhi common stock held by subsidiaries		1.3		.1
General expenses, net		(8.1)		(8.2)
Interest expense		(8.6)		(6.9)
Income before income taxes	$	32.5	$	83.3

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Accounts and Other Receivables, Net (Tables)

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Components of Accounts and Other Receivables

	December 31,		March 31,
	2021		2022
	(In millions)
Trade accounts receivable:
Kronos	$	326.3	$	374.1
CompX		15.6		17.8
BMI/LandWell		2.8		2.0
VAT and other receivables		38.0		30.3
Refundable income taxes		4.5		4.0
Receivables from affiliates:
Louisiana Pigment Company, L.P. ("LPC")		15.8		15.2
Contran - trade items		.1		.3
Other - trade items		2.6		2.8
Allowance for doubtful accounts		(2.0)		(3.2)
Total	$	403.7	$	443.3

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Inventories, Net (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Inventories, Net

	December 31,		March 31,
	2021		2022
	(In millions)
Raw materials:
Chemicals	$	76.3	$	97.1
Component products		5.0		6.1
Total raw materials		81.3		103.2
Work in process:
Chemicals		30.4		35.6
Component products		16.8		17.7
Total in-process products		47.2		53.3
Finished products:
Chemicals		246.4		249.8
Component products		3.8		4.3
Total finished products		250.2		254.1
Supplies (chemicals)		80.0		82.5
Total	$	458.7	$	493.1

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Other Assets (Tables)

3 Months Ended

Mar. 31, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Assets

	December 31,		March 31,
	2021		2022
	(In millions)
Other noncurrent assets:
Restricted cash and cash equivalents	$	41.9	$	43.9
Note receivables - OPA		38.7		36.0
Land held for development		36.0		31.0
IBNR receivables		34.4		29.9
Operating lease right-of-use assets		19.9		21.5
Pension asset		9.0		9.5
Marketable securities		3.3		2.9
Other		16.8		16.0
Total	$	200.0	$	190.7

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Long-Term Debt

	December 31,		March 31,
	2021		2022
	(In millions)
Valhi:
Contran credit facility	$	172.9	$	167.2
Subsidiary debt:
Kronos:
Senior Secured Notes		448.8		442.9
BMI:
Bank loan Western Alliance Bank		15.4		15.4
LandWell:
Note payable to Western Alliance Business Trust		13.5		13.5
Other		2.4		2.3
Total subsidiary debt		480.1		474.1
Total debt		653.0		641.3
Less current maturities		(3.1)		(3.1)
Total long-term debt	$	649.9	$	638.2

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Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Payables And Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

	December 31,		March 31,
	2021		2022
	(In millions)
Accounts payable:
Kronos	$	143.6	$	132.5
CompX		3.4		5.1
BMI and LandWell		5.3		10.3
Other		.4		.4
Total		152.7		148.3
Payables to affiliates:
Contran - income taxes		1.5		4.4
LPC		17.3		20.8
Accrued litigation settlement		11.8		11.9
Deferred income		125.8		120.5
Employee benefits		39.9		37.0
Accrued sales discounts and rebates		28.7		11.1
Interest		5.3		1.4
Operating lease liabilities		3.7		3.9
Environmental remediation and related costs		3.5		3.5
Other		57.9		66.1
Total	$	448.1	$	428.9

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Other Noncurrent Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

	December 31,		March 31,
	2021		2022
	(In millions)
Deferred income	$	81.6	$	73.8
Accrued development costs		55.4		54.1
Accrued litigation settlement		38.5		38.7
Insurance claims and expenses		36.4		32.0
Operating lease liabilities		15.8		17.2
Other postretirement benefits		10.2		10.2
Employee benefits		6.1		5.9
Reserve for uncertain tax positions		3.5		4.8
Other		10.0		7.0
Total	$	257.5	$	243.7

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Revenue - Disaggregation of Sales (Tables)

3 Months Ended

Mar. 31, 2022

Revenue From Contract With Customer [Abstract]

Schedule of Disaggregates of Net Sales

The following table disaggregates the net sales of our Chemicals Segment by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Net sales - point of origin:
United States	$	253.9	$	326.4
Germany		231.2		276.5
Canada		97.2		96.4
Belgium		66.5		92.8
Norway		71.0		78.4
Eliminations		(254.8)		(307.6)
Total	$	465.0	$	562.9
Net sales - point of destination:
Europe	$	227.3	$	269.5
North America		145.3		179.9
Other		92.4		113.5
Total	$	465.0	$	562.9

The following table disaggregates the net sales of our Component Products and Real Estate Management and Development Segments by major product line.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Component Products:
Net sales:
Security products	$	25.9	$	29.6
Marine components		10.0		12.5
Total	$	35.9	$	42.1
Real Estate Management and Development:
Net sales:
Land sales	$	6.6	$	22.2
Water delivery		1.0		1.5
Utility and other		.5		.3
Total	$	8.1	$	24.0

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Defined Benefit Pension Plans (Tables)

3 Months Ended

Mar. 31, 2022

Defined Benefit Pension Plans

Components of Net Periodic Defined Benefit Cost

The components of our net periodic defined benefit pension cost are presented in the table below.

	Three months ended
	March 31,
	2021		2022
	(In millions)
Service cost	$	3.8	$	3.0
Interest cost		2.4		3.2
Expected return on plan assets		(3.4)		(3.5)
Recognized actuarial losses		5.4		3.8
Total	$	8.2	$	6.5

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Other Income, Net (Tables)

3 Months Ended

Mar. 31, 2022

Other Income And Expenses [Abstract]

Schedule of Components of Other Income

	Three months ended
	March 31,
	2021		2022
	(In millions)
Interest income and other:
Interest and dividends	$	.9	$	1.1
Securities transactions, net		—		(.2)
Total		.9		.9
Infrastructure reimbursements		6.2		—
Currency transactions, net		(.5)		(1.5)
Other, net		.4		.6
Total	$	7.0	$	—

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Component of Income Taxes Expenses

	Three months ended
	March 31,
	2021		2022
	(In millions)
Expected tax expense at U.S. federal statutory income tax   rate of 21%	$	6.8	$	17.5
Non-U.S. tax rates		.8		2.1
Incremental net tax benefit on earnings and losses of U.S.   and non-U.S. tax group companies		(1.1)		(.9)
Valuation allowance		1.2		.6
Global intangible low-tax income, net		.5		.7
Adjustment to the reserve for uncertain tax positions, net		(.4)		(.7)
U.S. state income taxes and other, net		.2		.6
Income tax expense	$	8.0	$	19.9
Comprehensive provision for income taxes allocable to:
Net income	$	8.0	$	19.9
Other comprehensive income (loss):
Currency translation		.2		.7
Pension plans		2.1		1.4
Other		(.1)		.2
Total	$	10.2	$	22.2

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Noncontrolling Interest in Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2022

Noncontrolling Interest [Abstract]

Noncontrolling Interest in Net Assets of Subsidiaries

	December 31,		March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	226.6	$	232.3
NL Industries		75.7		78.7
CompX International		22.5		22.8
BMI		8.3		9.5
LandWell		(4.2)		(2.3)
Total	$	328.9	$	341.0

Schedule of Noncontrolling Interest in Net Income of Subsidiaries

	Three months ended March 31,
	2021		2022
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	3.8	$	11.1
NL Industries		2.3		3.2
CompX International		.6		.6
BMI		1.1		1.2
LandWell		1.9		1.9
Total	$	9.7	$	18.0

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Accumulated Other Comprehensive Loss

	Three months ended
	March 31,
	2021		2022
	(In millions)
Accumulated other comprehensive income (loss) (net of tax and   noncontrolling interest):
Marketable securities:
Balance at beginning of period	$	1.8	$	1.7
Other comprehensive income:
Unrealized gain arising during the period		—		—
Balance at end of period	$	1.8	$	1.7
Currency translation:
Balance at beginning of period	$	(67.4)	$	(72.2)
Other comprehensive gain arising during the period		1.3		4.2
Balance at end of period	$	(66.1)	$	(68.0)
Defined benefit pension plans:
Balance at beginning of period	$	(154.1)	$	(120.9)
Other comprehensive loss:
Amortization of prior service cost and net losses included  in net periodic pension cost		2.5		1.8
Balance at end of period	$	(151.6)	$	(119.1)
OPEB plans:
Balance at beginning of period	$	.3	$	.1
Amortization of prior service credit and net losses  included in net periodic OPEB cost		(.2)		(.1)
Balance at end of period	$	.1	$	—
Total accumulated other comprehensive loss:
Balance at beginning of period	$	(219.4)	$	(191.3)
Other comprehensive income		3.6		5.9
Balance at end of period	$	(215.8)	$	(185.4)

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2022

Commitments And Contingencies Disclosure [Abstract]

Change in Accrued Environmental Remediation and Related Costs

The table below presents a summary of the activity in our accrued environmental costs during the first three months of 2022.

	Amount
	(In millions)
Balance at the beginning of the period	$	97.6
Additions charged to expense, net		.3
Payments, net		(.3)
Balance at the end of the period	$	97.6
Amounts recognized in the Consolidated Balance Sheet at the end of the period:
Current liabilities	$	3.5
Noncurrent liabilities		94.1
Total	$	97.6

XML

Fair Value Measurements and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Financial Instruments not Carried at Fair Value

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure:

	December 31, 2021				March 31, 2022
	Carrying		Fair		Carrying		Fair
	amount		value		amount		value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	792.9	$	792.9	$	739.8	$	739.8
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		448.8		460.2		442.9		435.7
Valhi credit facility with Contran		172.9		172.9		167.2		167.2
BMI bank note payable		15.4		15.9		15.4		15.9
LandWell bank note payable		13.5		13.5		13.5		13.5

XML

Organization and Basis of Presentation - Additional Information (Detail)	Mar. 31, 2022
Contran | Valhi Incorporation
Basis Of Presentation And Significant Accounting Policies [Line Items]
Parent company ownership interest	92.00%

XML

Business Segment Information - Holding Percentage of Subsidiaries (Detail)	Mar. 31, 2022
Chemicals
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	81.00%
Component Products
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	87.00%
Real Estate Management And Development | BMI
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	63.00%
Real Estate Management And Development | LandWell | Aggregate General And Limited Interests
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	77.00%

XML

Business Segment Information - Additional Information (Detail)	Mar. 31, 2022
Kronos Worldwide, Inc. | Valhi Incorporation
Segment Reporting Information [Line Items]
Direct ownership percentage by parent	50.00%
Kronos Worldwide, Inc. | NL
Segment Reporting Information [Line Items]
Indirect controlling interest in subsidiary	31.00%
NL | Valhi Incorporation
Segment Reporting Information [Line Items]
Direct ownership percentage by parent	83.00%
LandWell | Valhi Incorporation
Segment Reporting Information [Line Items]
Direct ownership percentage by parent	27.00%
LandWell | BMI
Segment Reporting Information [Line Items]
Indirect controlling interest in subsidiary	50.00%
BMI | Valhi Incorporation
Segment Reporting Information [Line Items]
Direct ownership percentage by parent	63.00%

XML

Business Segment Information - Segment Operating Performance (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Net sales	$ 629.0	$ 509.0
Cost of sales	458.3	399.7
Gross margin	170.7	109.3
Operating income	100.7	51.3
Securities earnings	0.9	0.9
Interest income and other	0.9	0.9
Other components of net periodic pension and OPEB expense	(3.3)	(4.3)
Changes in market value of Valhi common stock held by subsidiaries	0.1	1.3
General expenses, net	(8.2)	(8.1)
Interest expense	(6.9)	(8.6)
Income before income taxes	83.3	32.5
Chemicals
Segment Reporting Information [Line Items]
Net sales	562.9	465.0
Cost of sales	413.9	369.7
Gross margin	149.0	95.3
Operating income	86.4	37.7
Component Products
Segment Reporting Information [Line Items]
Net sales	42.1	35.9
Cost of sales	30.0	24.9
Gross margin	12.1	11.0
Operating income	6.3	5.8
Real Estate Management And Development
Segment Reporting Information [Line Items]
Net sales	24.0	8.1
Cost of sales	14.4	5.1
Gross margin	9.6	3.0
Operating income	$ 8.0	$ 7.8

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Accounts and Other Receivables, Net - Components of Accounts and Other Receivables (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Trade accounts receivable:
VAT and other receivables	$ 30.3	$ 38.0
Refundable income taxes	4.0	4.5
Allowance for doubtful accounts	(3.2)	(2.0)
Total	443.3	403.7
Trade Accounts Receivable | Kronos Worldwide, Inc.
Trade accounts receivable:
Accounts receivable	374.1	326.3
Trade Accounts Receivable | CompX
Trade accounts receivable:
Accounts receivable	17.8	15.6
Trade Accounts Receivable | BMI and LandWell
Trade accounts receivable:
Accounts receivable	2.0	2.8
Contran | Trade Items
Trade accounts receivable:
Receivables from affiliates	0.3	0.1
Louisiana Pigment Company, L.P. ("LPC")
Trade accounts receivable:
Receivables from affiliates	15.2	15.8
Other | Trade Items
Trade accounts receivable:
Receivables from affiliates	$ 2.8	$ 2.6

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Inventories, Net - Inventories, Net (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Inventory [Line Items]
Raw materials	$ 103.2	$ 81.3
Work in process	53.3	47.2
Finished products	254.1	250.2
Supplies (chemicals)	82.5	80.0
Total	493.1	458.7
Chemicals
Inventory [Line Items]
Raw materials	97.1	76.3
Work in process	35.6	30.4
Finished products	249.8	246.4
Component Products
Inventory [Line Items]
Raw materials	6.1	5.0
Work in process	17.7	16.8
Finished products	$ 4.3	$ 3.8

XML

Other Assets - Other Assets (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Other noncurrent assets:
Restricted cash and cash equivalents	$ 43.9	$ 41.9
Note receivables - OPA	36.0	38.7
Land held for development	31.0	36.0
IBNR receivables	29.9	34.4
Operating lease right-of-use assets	21.5	19.9
Pension asset	9.5	9.0
Marketable securities	2.9	3.3
Other	16.0	16.8
Total	$ 190.7	$ 200.0

XML

Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Long-term debt
Total debt	$ 641.3	$ 653.0
Less current maturities	(3.1)	(3.1)
Total long-term debt	638.2	649.9
VALHI, INC. | Contran Credit Facility
Long-term debt
Total debt	167.2	172.9
Kronos Worldwide, Inc. | 3.75% Senior Secured Notes due September 15, 2025 | Kronos International, Inc
Long-term debt
Total debt	442.9	448.8
BMI | Bank loan | Western Alliance Bank
Long-term debt
Total debt	15.4	15.4
LandWell | Unsecured Debt | Western Alliance Bank
Long-term debt
Total debt	13.5	13.5
Other Subsidiary | Other
Long-term debt
Total debt	2.3	2.4
Subsidiary
Long-term debt
Total debt	$ 474.1	$ 480.1

XML

Long-Term Debt - Valhi Contran Credit Facility - Additional Information (Detail) - VALHI, INC. - Contran Credit Facility $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Debt Instrument [Line Items]
Debt instrument, Interest rate at period end	4.50%
Debt instrument, Interest rate during period	4.29%
Amount available for borrowing	$ 57.8
Borrowings of credit facility	0.0
Repaid credit facility	$ 5.7

XML

Long-Term Debt - Kronos Senior Secured Notes - Additional Information (Detail) - Kronos Worldwide, Inc. - 3.75% Senior Secured Notes due September 15, 2025 - Kronos International, Inc € in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022 EUR (€)	Mar. 31, 2022 USD ($)
Debt Instrument [Line Items]
Debt instrument interest rate	3.75%	3.75%
Debt instrument maturity date	Sep. 15, 2025
Debt instrument principal amount | €	€ 400
Unamortized debt issuance costs | $		$ 3.2

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Long-Term Debt - Revolving Credit Facility - Additional Information (Detail) - Kronos Worldwide, Inc. - Global Revolver Credit Facility $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Line Of Credit Facility [Line Items]
Line of credit maximum borrowing capacity	$ 225,000
Borrowings on credit facilities	0
Repayment of credit facility	0
Amount available for borrowing	$ 225,000

XML

Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Accounts payable:
Accounts payable	$ 148.3	$ 152.7
Payable to affiliates:
Accrued litigation settlement	11.9	11.8
Deferred income	120.5	125.8
Employee benefits	37.0	39.9
Accrued sales discounts and rebates	11.1	28.7
Interest	1.4	5.3
Operating lease liabilities	$ 3.9	$ 3.7
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total	Total
Environmental remediation and related costs	$ 3.5	$ 3.5
Other	66.1	57.9
Total	428.9	448.1
Kronos Worldwide, Inc.
Accounts payable:
Accounts payable	132.5	143.6
CompX
Accounts payable:
Accounts payable	5.1	3.4
BMI and LandWell
Accounts payable:
Accounts payable	10.3	5.3
Other
Accounts payable:
Accounts payable	0.4	0.4
Contran | Income Taxes Payable
Payable to affiliates:
Payable to affiliates	4.4	1.5
LPC
Payable to affiliates:
Payable to affiliates	$ 20.8	$ 17.3

XML

Other Noncurrent Liabilities - Other Noncurrent Liabilities (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Deferred income	$ 73.8	$ 81.6
Accrued development costs	54.1	55.4
Accrued litigation settlement	38.7	38.5
Insurance claims and expenses	32.0	36.4
Operating lease liabilities	$ 17.2	$ 15.8
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Total	Total
Other postretirement benefits	$ 10.2	$ 10.2
Employee benefits	5.9	6.1
Reserve for uncertain tax positions	4.8	3.5
Other	7.0	10.0
Total	$ 243.7	$ 257.5

XML

Revenue - Disaggregation of Sales - Schedule of Disaggregates of Net Sales of our Chemicals Segment (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation Of Revenue [Line Items]
Net sales	$ 629.0	$ 509.0
Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	562.9	465.0
Point of Origin | Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	562.9	465.0
Point of Origin | Chemicals | United States
Disaggregation Of Revenue [Line Items]
Net sales	326.4	253.9
Point of Origin | Chemicals | Germany
Disaggregation Of Revenue [Line Items]
Net sales	276.5	231.2
Point of Origin | Chemicals | Canada
Disaggregation Of Revenue [Line Items]
Net sales	96.4	97.2
Point of Origin | Chemicals | Belgium
Disaggregation Of Revenue [Line Items]
Net sales	92.8	66.5
Point of Origin | Chemicals | Norway
Disaggregation Of Revenue [Line Items]
Net sales	78.4	71.0
Point of Origin | Chemicals | Eliminations
Disaggregation Of Revenue [Line Items]
Net sales	(307.6)	(254.8)
Point of Destination | Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	562.9	465.0
Point of Destination | Chemicals | Europe
Disaggregation Of Revenue [Line Items]
Net sales	269.5	227.3
Point of Destination | Chemicals | North America
Disaggregation Of Revenue [Line Items]
Net sales	179.9	145.3
Point of Destination | Chemicals | Other
Disaggregation Of Revenue [Line Items]
Net sales	$ 113.5	$ 92.4

XML

Revenue - Disaggregation of Sales - Schedule of Disaggregates of Net Sales of our Component Products and Real Estate Management and Development Segments (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation Of Revenue [Line Items]
Net sales	$ 629.0	$ 509.0
Component Products
Disaggregation Of Revenue [Line Items]
Net sales	42.1	35.9
Component Products | Security Products
Disaggregation Of Revenue [Line Items]
Net sales	29.6	25.9
Component Products | Marine Components
Disaggregation Of Revenue [Line Items]
Net sales	12.5	10.0
Real Estate Management And Development
Disaggregation Of Revenue [Line Items]
Net sales	24.0	8.1
Real Estate Management And Development | Land Sales
Disaggregation Of Revenue [Line Items]
Net sales	22.2	6.6
Real Estate Management And Development | Water Delivery
Disaggregation Of Revenue [Line Items]
Net sales	1.5	1.0
Real Estate Management And Development | Utility and Other
Disaggregation Of Revenue [Line Items]
Net sales	$ 0.3	$ 0.5

XML

Defined Benefit Pension Plans - Components of Net Periodic Defined Benefit Pension Benefit Cost (Detail) - Defined Benefit Pension Plans - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 3.0	$ 3.8
Interest cost	3.2	2.4
Expected return on plan assets	(3.5)	(3.4)
Recognized actuarial losses	3.8	5.4
Total	$ 6.5	$ 8.2

XML

Defined Benefit Pension Plans - Additional Information (Detail) $ in Millions	Mar. 31, 2022 USD ($)
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Expected contribution	$ 20

XML

Other Income, Net - Schedule of Components of Other Income (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest income and other:
Interest and dividends	$ 1.1	$ 0.9
Securities transactions, net	(0.2)
Total	0.9	0.9
Infrastructure reimbursement		6.2
Currency transactions, net	(1.5)	(0.5)
Other, net	$ 0.6	0.4
Total		$ 7.0

XML

Other Income, Net - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Disclosure Other Income Net Additional Information Detail [Line Items]
Infrastructure reimbursement	$ 6.2
City Of Henderson
Disclosure Other Income Net Additional Information Detail [Line Items]
Infrastructure reimbursement	$ 6.2

XML

Income Taxes - Components of Comprehensive Provision for Income Taxes Allocation (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	21.00%

XML

Income Taxes - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Income Tax Disclosure [Abstract]
Decrease in unrecognized tax benefits due to the expiration of certain statutes of limitations	$ 3.7

XML

Income Taxes - Components of Comprehensive Provision for Income Taxes Allocation (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule Of Income Tax [Line Items]
Expected tax expense, at U.S. federal statutory income tax rate of 21%	$ 17.5	$ 6.8
Non-U.S. tax rates	2.1	0.8
Incremental net tax benefit on earnings and losses of non-U.S., U.S. and non-tax group companies	(0.9)	(1.1)
Valuation allowance	0.6	1.2
Global intangible low-tax income, net	0.7	0.5
U.S. state income taxes and other, net	0.6	0.2
Adjustment to the reserve for uncertain tax positions, net	(0.7)	(0.4)
Income tax expense	19.9	8.0
Comprehensive provision for income taxes allocable to:
Net income	19.9	8.0
Other comprehensive income (loss):
Currency translation	0.7	0.2
Other	0.2	(0.1)
Total	22.2	10.2
Pension Plans
Other comprehensive income (loss):
Defined benefit plans	$ 1.4	$ 2.1

XML

Noncontrolling Interest in Subsidiaries - Noncontrolling Interest in Net Assets of Subsidiaries (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	$ 341.0	$ 328.9
Kronos Worldwide, Inc.
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	232.3	226.6
NL Industries
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	78.7	75.7
CompX International
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	22.8	22.5
BMI
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	9.5	8.3
LandWell
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	$ (2.3)	$ (4.2)

XML

Noncontrolling Interest in Subsidiaries - Schedule of Noncontrolling Interest in Net Income of Subsidiaries (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	$ 18.0	$ 9.7
Kronos Worldwide, Inc.
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	11.1	3.8
NL
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	3.2	2.3
CompX
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	0.6	0.6
BMI
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	1.2	1.1
LandWell
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	$ 1.9	$ 1.9

XML

Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Kronos Worldwide, Inc.
Schedule Of Stockholders Equity [Line Items]
Shares acquired	73,881
Shares acquired, value	$ 1.1
Shares available for purchase	1,500,000
Class A | CompX
Schedule Of Stockholders Equity [Line Items]
Shares acquired		50,000
Shares acquired, value		$ 0.8
Shares available for purchase	600,000

XML

Stockholders' Equity - Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	$ 829.5
Balance at end of period	880.0
Marketable Securities
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	1.7	$ 1.8
Balance at end of period	1.7	1.8
Currency Translation
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(72.2)	(67.4)
Other comprehensive income (loss)	4.2	1.3
Balance at end of period	(68.0)	(66.1)
Accumulated Defined Benefit Plans Adjustment | Defined Benefit Pension Plans
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(120.9)	(154.1)
Other comprehensive income (loss)	1.8	2.5
Balance at end of period	(119.1)	(151.6)
Accumulated Defined Benefit Plans Adjustment | OPEB
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	0.1	0.3
Other comprehensive income (loss)	(0.1)	(0.2)
Balance at end of period		0.1
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(191.3)	(219.4)
Other comprehensive income (loss)	5.9	3.6
Balance at end of period	$ (185.4)	$ (215.8)

XML

Commitments and Contingencies - Lead Pigment Litigation-NL and Environmental Matters and Litigation - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($) site case installment	Dec. 31, 2021 USD ($)
Commitments And Contingent Liabilities [Line Items]
Accrual for reasonably estimable environmental remediation and related matters	$ 97.6	$ 97.6
Other Environmental Cleanup Matters
Commitments And Contingent Liabilities [Line Items]
Accrual for reasonably estimable environmental remediation and related matters	5.0
NL | Environmental Remediation Sites NL Named As PRP Or Defendant
Commitments And Contingent Liabilities [Line Items]
Accrual for reasonably estimable environmental remediation and related matters	$ 93.0
Number of sites associated with remediation and related costs | site	32
Number of sites for which NL not currently able to reasonably estimate range of costs | site	5
NL | Maximum | Environmental Remediation Sites NL Named As PRP Or Defendant
Commitments And Contingent Liabilities [Line Items]
Upper end range, estimate costs for remediation and related matters	$ 118.0
Lead Pigment Litigation | NL
Commitments And Contingent Liabilities [Line Items]
Number of cases settled and dismissed and found not liable | case	100
Period by which loss contingency claims settled and dismissed	30 years
C A Lead Paint Litigation | NL
Commitments And Contingent Liabilities [Line Items]
Number of annual installment payments | installment	4
Remaining litigation settlement charge due in first installment	$ 12.0
Remaining litigation settlement charge due in second installment	12.0
Remaining litigation settlement charge due in third installment	12.0
Remaining litigation settlement charge due in fourth installment	$ 16.7

XML

Commitments and Contingencies - Changes in Accrued Environmental Remediation and Related Costs (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Environmental Remediation Obligations [Abstract]
Balance at the beginning of the period	$ 97.6
Additions charged to expense, net	0.3
Payments, net	(0.3)
Balance at the end of the period	97.6
Amounts recognized in the Condensed Consolidated Balance Sheet at the end of the period:
Current liabilities	3.5	$ 3.5
Noncurrent liabilities	94.1	94.1
Total	$ 97.6	$ 97.6

XML

Fair Value Measurements and Financial Instruments - Financial Instruments not Carried at Fair Value (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Reported Value Measurement [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash, cash equivalents and restricted cash equivalents	$ 739.8	$ 792.9
Estimate of Fair Value Measurement [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash, cash equivalents and restricted cash equivalents	739.8	792.9
Kronos Worldwide, Inc. | 3.75% Senior Secured Notes due September 15, 2025 | Kronos International, Inc
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	442.9	448.8
Long term debt, fair value	435.7	460.2
VALHI, INC. | Contran Credit Facility
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	167.2	172.9
Long term debt, fair value	167.2	172.9
BMI | Bank note payable | Meadows Term Loan
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	15.4	15.4
Long term debt, fair value	15.9	15.9
LandWell | Bank note payable
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	13.5	13.5
Long term debt, fair value	$ 13.5	$ 13.5

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Fair Value Measurements and Financial Instruments - Additional Information (Detail) - Kronos Worldwide, Inc. - 3.75% Senior Secured Notes due September 15, 2025 - Kronos International, Inc	Mar. 31, 2022 EUR (€)
Financial Instrument At Fair Value [Line Items]
Estimated market price of the notes	€ 977
Principal amount of debt instrument	€ 1,000