Business Segment Information

9 Months Ended

Sep. 30, 2013

Business Segment Information

Note 2—Business segment information:

Business segment	Entity	%controlledat September30, 2013
Chemicals	Kronos		80	%
Component products	CompX		87	%
Waste management	WCS		100	%

Our control of Kronos includes 50% we hold directly and 30% held directly by NL. We own 83% of NL. Our control of CompX is through NL. At September 30, 2013 we had an aggregate of 12.0million shares of our Kronos common stock pledged as collateral for certain debt obligations of Contran.  We receive a fee from Contran for pledging these Kronos shares, determined by a formula based on the market value of the shares pledged.

	Threemonthsended September30,						Nine months ended September30,
	2012			2013				2012			2013
	(In millions)
Net sales:
Chemicals	$	472.9		$	419.1			$	1,579.5		$	1,363.8
Component products		21.4			24.2				63.9			69.7
Waste management		14.5			4.9				16.5			29.9
Total net sales	$	508.8		$	448.2			$	1,659.9		$	1,463.4
Cost of sales:
Chemicals	$	387.5		$	372.4			$	1,070.5		$	1,304.8
Component products		15.1			16.7				45.1			48.6
Waste management		8.7			10.5				24.4			31.3
Total cost of sales	$	411.3		$	399.6			$	1,140.0		$	1,384.7
Gross margin:
Chemicals	$	85.4		$	46.7			$	509.0		$	59.0
Component products		6.3			7.5				18.8			21.1
Waste management		5.8			(5.6	)			(7.9	)		(1.4	)
Total gross margin	$	97.5		$	48.6			$	519.9		$	78.7
Operating income (loss):
Chemicals	$	40.4		$	(35.2	)		$	364.1		$	(125.6	)
Component products		1.7			3.0				5.4			7.4
Waste management		(1.0	)		(10.3	)			(21.9	)		(16.3	)
Total operating income (loss)		41.1			(42.5	)			347.6			(134.5	)
Equity in earnings of investees		(.1	)		—				(.1	)		(.8	)
General corporate items:
Securities earnings		7.3			6.6				21.5			19.9
Insurance recoveries		1.2			2.2				2.6			3.8
Litigation settlement gain		—			—				14.7			—
Loss on prepayment of debt		—			(2.3	)			(7.2	)		(8.9	)
General expenses, net		(7.9	)		(10.1	)			(37.4	)		(41.4	)
Interest expense		(14.6	)		(13.7	)			(42.4	)		(43.8	)
Income (loss) from continuing operations before income taxes	$	27.0		$	(59.8	)		$	299.3		$	(205.7	)

Segment results we report may differ from amounts separately reported by our various subsidiaries and affiliates due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material.  The operating loss of our Chemicals Segment for the third quarter and first nine months of 2013 includes a $35 million charge related to a litigation settlement, see Note 16.