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, 2020

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 (§232.405 of this chapter) 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, 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.☐

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 30, 2020: 339,235,449

VALHI, INC. AND SUBSIDIARIES

INDEX

			Page number
Part I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets – December 31, 2019 and March 31, 2020 (unaudited)		3
		Condensed Consolidated Statements of Income (unaudited) – Three months endedMarch 31, 2019 and 2020		5
		Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) – Three months ended March 31, 2019 and 2020		6
		Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – Three months ended March 31, 2019 and 2020		7
		Condensed Consolidated Statements of Cash Flows (unaudited) – Three months endedMarch 31, 2019 and 2020		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 5.	Other Information		40
	Item 6.	Exhibits		41

Items 2, 3 and 4 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,
	2019		2020
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	523.8	$	483.1
Restricted cash equivalents		27.0		12.5
Marketable securities		2.1		2.1
Accounts and other receivables, net		329.2		351.0
Inventories, net		522.1		499.2
Other current assets		21.2		23.3
Total current assets		1,425.4		1,371.2
Other assets:
Investment in TiO2 manufacturing joint venture		90.2		92.4
Goodwill		379.7		379.7
Deferred income taxes		106.0		104.1
Other assets		230.1		233.8
Total other assets		806.0		810.0
Property and equipment:
Land		46.2		45.5
Buildings		248.0		239.0
Equipment		1,166.0		1,133.7
Mining properties		26.2		8.1
Construction in progress		62.7		58.9
		1,549.1		1,485.2
Less accumulated depreciation and amortization		986.1		955.8
Net property and equipment		563.0		529.4
Total assets	$	2,794.4	$	2,710.6

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VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(In millions)

	December 31,			March 31,
	2019			2020
				(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	4.9		$	3.8
Accounts payable and accrued liabilities		307.4			257.6
Income taxes		10.2			15.9
Total current liabilities		322.5			277.3
Noncurrent liabilities:
Long-term debt		789.4			779.7
Deferred income taxes		38.1			33.0
Payable to affiliate - income taxes		56.3			56.3
Accrued pension costs		315.6			309.3
Accrued environmental remediation and related costs		95.2			94.6
Other liabilities		197.2			193.5
Total noncurrent liabilities		1,491.8			1,466.4
Equity:
Valhi stockholders' equity:
Preferred stock		667.3			667.3
Common stock		3.6			3.6
Additional paid-in capital		-			-
Retained earnings		239.4			256.4
Accumulated other comprehensive loss		(220.7	)		(246.2	)
Treasury stock, at cost		(49.6	)		(49.6	)
Total Valhi stockholders' equity		640.0			631.5
Noncontrolling interest in subsidiaries		340.1			335.4
Total equity		980.1			966.9
Total liabilities and equity	$	2,794.4		$	2,710.6

Commitments and contingencies (Notes 12 and 15)

See accompanying Notes to Condensed Consolidated Financial Statements.

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VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

	Three months ended
	March 31,
	2019		2020
	(unaudited)
Revenues and other income:
Net sales	$	479.6	$	459.3
Other income, net		6.6		34.9
Total revenues and other income		486.2		494.2
Costs and expenses:
Cost of sales		357.8		359.6
Selling, general and administrative		71.4		70.9
Other components of net periodic pension expense		4.1		4.7
Interest		10.3		9.7
Total costs and expenses		443.6		444.9
Income before income taxes		42.6		49.3
Income tax expense		14.2		11.4
Net income		28.4		37.9
Noncontrolling interest in net income of subsidiaries		10.2		13.5
Net income attributable to Valhi stockholders	$	18.2	$	24.4
Amounts attributable to Valhi stockholders:
Basic and diluted net income per share	$	.05	$	.07
Basic and diluted weighted average shares outstanding		342.0		342.1

See accompanying Notes to Condensed Consolidated Financial Statements.

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VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

	Three months ended
	March 31,
	2019			2020
	(unaudited)
Net income	$	28.4		$	37.9
Other comprehensive income (loss), net of tax:
Currency translation		(.3	)		(37.7	)
Defined benefit pension plans		2.3			3.0
Other		(.2	)		(.1	)
Total other comprehensive income (loss), net		1.8			(34.8	)
Comprehensive income		30.2			3.1
Comprehensive income attributable to noncontrolling interest		10.7			4.2
Comprehensive income (loss) attributable to Valhi stockholders	$	19.5		$	(1.1	)

See accompanying Notes to Condensed Consolidated Financial Statements.

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VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

	Three months ended March 31, 2019 (unaudited)
										Accumulated
					Additional		Retained			other						Non-
	Preferred		Common		paid-in		earnings			comprehensive			Treasury			controlling
	stock		stock		capital		(deficit)			loss			stock			interest			Total
Balance at December 31, 2018	$	667.3	$	3.6	$	-	$	220.3		$	(206.2	)	$	(49.6	)	$	353.6		$	989.0
Net income		-		-		-		18.2			-			-			10.2			28.4
Other comprehensive income, net		-		-		-		-			1.3			-			.5			1.8
Dividends paid to noncontrolling interest		-		-		-		-			-			-			(6.3	)		(6.3	)
Cash dividends - $.02 per share		-		-		-		(6.8	)		-			-			-			(6.8	)
Balance at March 31, 2019	$	667.3	$	3.6	$	-	$	231.7		$	(204.9	)	$	(49.6	)	$	358.0		$	1,006.1
	Three months ended March 31, 2020 (unaudited)
										Accumulated
					Additional		Retained			other						Non-
	Preferred		Common		paid-in		earnings			comprehensive			Treasury			controlling
	stock		stock		capital		(deficit)			loss			stock			interest			Total
Balance at December 31, 2019	$	667.3	$	3.6	$	-	$	239.4		$	(220.7	)	$	(49.6	)	$	340.1		$	980.1
Net income		-		-		-		24.4			-			-			13.5			37.9
Other comprehensive loss, net		-		-		-		-			(25.5	)		-			(9.3	)		(34.8	)
Dividends paid to noncontrolling interest		-		-		-		-			-			-			(8.6	)		(8.6	)
Cash dividends - $.02 per share		-		-		-		(6.8	)		-			-			-			(6.8	)
Equity transaction with noncontrolling interest, net and other		-		-		-		(.6	)		-			-			(.3	)		(.9	)
Balance at March 31, 2020	$	667.3	$	3.6	$	-	$	256.4		$	(246.2	)	$	(49.6	)	$	335.4		$	966.9

See accompanying Notes to Condensed Consolidated Financial Statements.

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VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three months ended
	March 31,
	2019			2020
	(unaudited)
Cash flows from operating activities:
Net income	$	28.4		$	37.9
Depreciation and amortization		12.8			17.0
Benefit plan expense greater than cash funding		1.1			3.1
Deferred income taxes		3.6			-
Contributions to TiO2 manufacturing joint venture, net		(.8	)		(2.2	)
Other, net		1.1			3.1
Change in assets and liabilities:
Accounts and other receivables, net		(46.0	)		(39.7	)
Inventories, net		(3.7	)		2.7
Land held for development, net		(1.1	)		(2.7	)
Accounts payable and accrued liabilities		(4.2	)		(35.0	)
Accounts with affiliates		1.8			(1.5	)
Income taxes		1.6			11.8
Other, net		3.2			(12.7	)
Net cash used in operating activities		(2.2	)		(18.2	)
Cash flows from investing activities:
Capital expenditures		(16.8	)		(16.0	)
Purchases of marketable securities		(1.0	)		(.4	)
Proceeds from disposal of marketable securities		1.7			.6
Other, net		-			2.7
Net cash used in investing activities		(16.1	)		(13.1	)
Cash flows from financing activities:
Principal payments on indebtedness		(2.1	)		(3.2	)
Valhi cash dividends paid		(6.8	)		(6.8	)
Distributions to noncontrolling interest in subsidiaries		(6.3	)		(8.6	)
Subsidiary treasury stock acquired		-			(1.0	)
Net cash used in financing activities		(15.2	)		(19.6	)
Cash, cash equivalents and restricted cash and cash equivalents - net change from:
Operating, investing and financing activities		(33.5	)		(50.9	)
Effect of exchange rates on cash		(2.6	)		(3.9	)
Balance at beginning of period		523.7			583.8
Balance at end of period	$	487.6		$	529.0
Supplemental disclosures:
Cash paid (received) for:
Interest, net of capitalized interest	$	13.7		$	12.7
Income taxes, net		6.3			(.7	)
Noncash investing activities:
Change in accruals for capital expenditures		2.0			2.2

See accompanying Notes to Condensed Consolidated Financial Statements.

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VALHI, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

(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, 2020.  At March 31, 2020, a majority of Contran’s outstanding voting stock was held directly by Lisa K. Simmons and Serena Simmons Connelly and various family trusts established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which Ms. Simmons or Ms. Connelly, as applicable, served as trustee (collectively, the “Other Trusts”). In addition, each of Ms. Simmons and Ms. Connelly served as co-chair of the Contran board of directors.  The remainder of Contran’s outstanding voting stock was held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which a third-party financial institution serves as trustee.  Consequently, at March 31, 2020, Ms. Simmons, Ms. Connelly and the Family Trust may be deemed to control Contran, and us.  

Following the death of Ms. Connelly on April 22, 2020, Ms. Simmons and the Family Trust continue to directly hold their shares of Contran voting stock.  Under the terms of the Contran Corporation Amended and Restated Stockholders Agreement dated September 9, 2019 (the “Contran Stockholders Agreement”), and with respect to the shares of Contran voting stock held directly by Ms. Connelly at the time of her death (the “Connelly Direct Shares”), the independent executor of the estate of Ms. Connelly (prior to the completion of the probate of such estate) and the legatee of the Connelly Direct Shares (following completion of the probate of such estate) is required to vote the Connelly Direct Shares in the same manner as Ms. Simmons.  Also under the terms of the Contran Stockholders Agreement, and with respect to the shares of Contran voting stock held by the Other Trusts for which Ms. Connelly previously served as trustee and for which her successor trustee is someone other than Ms. Simmons (the “Connelly Indirect Shares”), such successor trustee is also required to vote the Connelly Indirect Shares in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons with respect to the Connelly Direct Shares and the Connelly Indirect Shares last through April 22, 2030 and are personal to Ms. Simmons. Consequently, as of April 22, 2020, 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, 2019 that we filed with the SEC on March 12, 2020 (the “2019 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, 2019 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, 2019) 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, 2020 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 2019 Consolidated Financial Statements contained in our 2019 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:

Business segment	Entity	% controlled at March 31, 2020
Chemicals	Kronos	80	%
Component products	CompX	86	%
Real estate management and development	BMI and LandWell	63 – 77	%

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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. We own 63% of BMI.  Our control of LandWell includes the 27% we hold directly and 50% held by BMI.  

	Three months ended
	March 31,
	2019			2020
	(unaudited)
Net sales:
Chemicals	$	436.5		$	421.0
Component products		31.2			32.3
Real estate management and development		11.9			6.0
Total net sales	$	479.6		$	459.3
Cost of sales:
Chemicals	$	327.7		$	333.3
Component products		21.5			21.9
Real estate management and development		8.6			4.4
Total cost of sales	$	357.8		$	359.6
Gross margin:
Chemicals	$	108.8		$	87.7
Component products		9.7			10.4
Real estate management and development		3.3			1.6
Total gross margin	$	121.8		$	99.7
Operating income:
Chemicals	$	52.8		$	46.8
Component products		4.4			5.0
Real estate management and development		3.2			19.2
Total operating income		60.4			71.0
General corporate items:
Securities earnings		3.1			1.6
Insurance recoveries		.3			1.6
Changes in market value of Valhi common stock held by subsidiaries		1.1			(2.4	)
Other components of net periodic pension expense		(4.1	)		(4.7	)
General expenses, net		(7.9	)		(8.1	)
Interest expense		(10.3	)		(9.7	)
Income before income taxes	$	42.6		$	49.3

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 income is included in the determination of Real Estate Management and Development operating income. See Note 11.

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Note 3—Accounts and other receivables, net:

	December31,			March 31,
	2019			2020
	(In millions)
Trade accounts receivable:
Kronos	$	270.5		$	306.5
CompX		11.9			15.3
BMI and LandWell		1.6			1.4
VAT and other receivables		31.2			23.2
Refundable income taxes		7.9			3.4
Receivable from affiliates:
Contran - trade items		.4			.4
Louisiana Pigment Company, L.P. ("LPC")		4.7			-
Other - trade items		2.2			2.2
Allowance for doubtful accounts		(1.2	)		(1.4	)
Total	$	329.2		$	351.0

Note 4—Inventories, net:

	December31,		March 31,
	2019		2020
	(In millions)
Raw materials:
Chemicals	$	124.4	$	125.5
Component products		2.9		3.1
Total raw materials		127.3		128.6
Work in process:
Chemicals		39.0		43.0
Component products		11.8		12.2
Total in-process products		50.8		55.2
Finished products:
Chemicals		270.7		246.7
Component products		3.6		3.6
Total finished products		274.3		250.3
Supplies (chemicals)		69.7		65.1
Total	$	522.1	$	499.2

Note 5—Other noncurrent assets:

	December31,		March 31,
	2019		2020
	(In millions)
Other noncurrent assets:
Land held for development	$	125.3	$	116.2
Operating lease right-of-use assets		29.0		27.0
Restricted cash and cash equivalents		33.0		33.4
IBNR receivables		8.5		7.9
Marketable securities		6.2		5.5
Pension asset		7.4		7.8
Note receivables - OPA		8.8		27.6
Other		11.9		8.4
Total	$	230.1	$	233.8

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Note 6—Long-term debt:

	December 31,			March 31,
	2019			2020
	(In millions)
Valhi:
Contran credit facility	$	313.0		$	313.0
Subsidiary debt:
Kronos:
Senior Notes		442.6			435.1
Tremont:
Promissory note payable		2.0			.5
BMI:
Bank loan - Western Alliance Bank		17.2			17.2
LandWell:
Note payable to Western Alliance Business Trust		15.0		14.9
Note payable to the City of Henderson		1.6			-
Other		2.9			2.8
Total subsidiary debt		481.3			470.5
Total debt		794.3			783.5
Less current maturities		(4.9	)		(3.8	)
Total long-term debt	$	789.4		$	779.7

Valhi – Contran credit facility –During the first three months of 2020, we had no borrowings or repayments under this facility.The average interest rate on the existing balance for the three months ended March 31, 2020 was 5.4%. At March 31, 2020, the interest rate was 4.25% and $47.0 million was available for borrowing under this facility.

Kronos – Senior Notes -  At March 31, 2020, 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 $4.9 million.

North American and European revolving credit facilities– During the first three months of 2020, Kronos had no borrowings or repayments under its North American revolving credit facility and its European revolving credit facility.  At March 31, 2020, approximately $117.2 million was available for borrowing under the North American revolving credit facility.  Kronos’ European revolving credit facility requires the maintenance of certain financial ratios, and one of such requirements is based on the ratio of net debt to last twelve months earnings before income tax, interest, depreciation and amortization expense (EBITDA) of the borrowers.  Based upon the borrowers’ last twelve months EBITDA as of March 31, 2020 and the net debt to EBITDA financial test, the full €90.0 million of the credit facility ($99.0 million) was available for borrowing at March 31, 2020.    

Tremont – Promissory note payable –During the first three months of 2020,Tremont prepaid (without penalty) $1.5 million principal amount on the note as required under the terms of the note agreement.  The remaining outstanding balance of $.5 million was repaid in April 2020.

LandWell – In January 2020, LandWell fully prepaid (without penalty) its promissory note payable to the City of Henderson, Nevada.

Restrictions and other – Certain of the credit facilities with unrelated, third-party lenders described above require the respective borrowers to maintain minimum levels of equity, require the maintenance of certain financial ratios, limit dividends and additional indebtedness and contain other provisions and restrictive covenants customary in lending transactions of this type. We are in compliance with all of our debt covenants at March 31, 2020.

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Note 7—Accounts payable and accrued liabilities:

	December31,		March 31,
	2019		2020
	(In millions)
Accounts payable:
Kronos	$	137.2	$	111.2
CompX		2.5		2.8
BMI and LandWell		3.7		2.2
NL		.9		.5
Other		.4		.4
Payable to affiliates:
Contran - income taxes		4.0		3.6
LPC		16.4		16.3
Accrued litigation settlement		11.8		11.9
Employee benefits		30.6		28.1
Operating lease liabilities		6.2		6.0
Accrued sales discounts and rebates		33.7		21.5
Deferred income		10.3		12.1
Environmental remediation and related costs		4.5		4.5
Interest		5.2		1.4
Other		40.0		35.1
Total	$	307.4	$	257.6

Note8—Other noncurrent liabilities:

	December 31,		March 31,
	2019		2020
	(In millions)
Operating lease liabilities	$	22.2	$	20.3
Reserve for uncertain tax positions		13.6		14.7
Accrued litigation settlement		60.1		60.4
Deferred income		47.4		46.1
Other postretirement benefits		10.5		9.7
Employee benefits		6.0		5.8
Insurance claims and expenses		11.0		10.1
Deferred payment obligation		9.9		9.9
Accrued development costs		8.3		8.0
Other		8.2		8.5
Total	$	197.2	$	193.5

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.

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	Three months ended
	March 31,
	2019			2020
	(In millions)
Net sales - point of origin:
United States	$	245.3		$	237.0
Germany		219.2			229.1
Canada		78.5			67.7
Belgium		69.7			66.1
Norway		51.5			54.3
Eliminations		(227.7	)		(233.2	)
Total	$	436.5		$	421.0
Net sales - point of destination:
Europe	$	215.2		$	214.5
North America		146.8			132.3
Other		74.5			74.2
Total	$	436.5		$	421.0

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,
	2019		2020
	(In millions)
Component Products:
Net sales:
Security products	$	24.7	$	25.5
Marine components		6.5		6.8
Total	$	31.2	$	32.3
Real Estate Management and Development:
Net sales:
Land sales	$	9.5	$	3.6
Water delivery		1.9		1.9
Utility and other		.5		.5
Total	$	11.9	$	6.0

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,
	2019			2020
	(In millions)
Service cost	$	2.8		$	3.2
Interest cost		4.0			3.0
Expected return on plan assets		(3.7	)		(2.8	)
Amortization of unrecognized prior service cost		.1			-
Recognized actuarial losses		3.8			4.8
Total	$	7.0		$	8.2

We expect to contribute the equivalent of approximately $19.0 million to all of our defined benefit pension plans during 2020.

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Note 11—Other income, net:

	Three months ended
	March 31,
	2019		2020
	(In millions)
Securities earnings:
Dividends and interest	$	2.9	$	2.0
Securities transactions, net		.2		(.4	)
Total		3.1		1.6
Currency transactions, net		.9		12.2
Insurance recoveries		.3		1.6
Infrastructure reimbursement		1.1		19.1
Gain on land sales		-		.5
Other, net		1.2		(0.1	)
Total	$	6.6	$	34.9

Insurance recoveries reflect, in part, amounts NL received from certain of its former insurance carriers and relate to the recovery of prior lead pigment and asbestos litigation defense costs incurred by NL.  See Note 15.  In the first three months of 2020, Kronos recognized a $1.5 million gain related to an insurance settlement for a property damage claim.

Infrastructure reimbursement–As disclosed in Note 7 to our 2019 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 quarters of 2019 and 2020, we received approval for additional tax increment reimbursement of $1.1 million and $19.1 million, respectively, which was recognized as other income and is evidenced by a promissory note issued to LandWell by the City of Henderson.

Note 12—Income taxes:

	Three months ended
	March 31,
	2019			2020
	(In millions)
Expected tax expense, at U.S. federal statutory    income tax rate of 21%	$	8.9		$	10.3
Incremental net tax benefit on earnings and losses of non-U.S., U.S. and non-tax group companies		(.2	)		(1.8	)
Non-U.S. tax rates		2.3			.9
Valuation allowance		1.0			(.2	)
Adjustment to the reserve for uncertain tax positions, net		.5			.6
Global intangible low-tax income, net		.7			1.2
U.S. state income taxes and other, net		1.0			.4
Income tax expense	$	14.2		$	11.4
Comprehensive provision for income taxes allocable to:
Net income	$	14.2		$	11.4
Other comprehensive income (loss):
Currency translation		-			(4.7	)
Pension plans		1.5			1.8
Other		-			(.2	)
Total	$	15.7		$	8.3

The amount shown in the above 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

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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 expense (benefit) on earnings and losses on non-U.S., U.S. and non-tax group companies includes, as applicable, (i) deferred state and non-U.S. income taxes (or deferred income tax benefits) and deferred withholding taxes, as applicable, associated with the current-year change in the aggregate amount of undistributed earnings of all of our non-U.S. subsidiaries, which earnings are not permanently reinvested , (ii) current U.S. income taxes (or current income tax benefit) attributable to current-year income (losses) of one of Kronos’ non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, (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.

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law in response to the COVID-19 pandemic.  The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, modifications to the limitation of business interest for tax years beginning in 2019 and 2020 and technical corrections to tax depreciation methods for qualified improvement property.  The modification to the business interest provisions increases the business interest limitation from 30% of adjusted taxable income to 50% of adjusted taxable income which increases our allowable interest expense deduction for 2019 and 2020.  Consequently, in the first quarter of 2020 we recognized a cash tax benefit of $1.0 million related to the reversal of the valuation allowance recognized in 2019 for the portion of the disallowed interest expense we did not expect to fully utilize at December 31, 2019.  We have determined other provisions of the CARES Act will not have a material impact on our provision for income taxes in 2020.  

     Tax authorities may in the future propose tax deficiencies, including penalties and interest, related to examinations of our U.S. and non-U.S. income tax returns.  Because of the uncertainties involved in settlement initiatives and court and tax proceedings, we cannot guarantee that these tax matters, if any, will be resolved in our favor, and therefore our potential exposure, if any, is also uncertain. 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 $5.5 million during the next twelve months primarily due to certain adjustments to our prior year returns and the expiration of certain statutes of limitations.

Note 13—Noncontrolling interest in subsidiaries:

	December31,		March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	216.6	$	209.9
NL Industries		65.8		64.2
CompX International		22.7		23.1
BMI		20.1		20.6
LandWell		14.9		17.6
Total	$	340.1	$	335.4

	Three months ended March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	5.9	$	5.2
NL Industries		2.6		.3
CompX International		.5		.6
BMI		.5		2.8
LandWell		.7		4.6
Total	$	10.2	$	13.5

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Note 14—Stockholders’ equity:

Accumulated Other Comprehensive Income – Changes in accumulated other comprehensive income (loss) attributable to Valhi stockholders for the three months ended March 31, 2019 and 2020 are presented in the table below.

	Three months ended
	March 31,
	2019			2020
	(In millions)
Accumulated other comprehensive income (loss), net of tax    and noncontrolling interest:
Marketable securities:
Balance at beginning of period	$	1.7		$	1.7
Other comprehensive loss - unrealized losses arising   during the period		-			-
Balance at end of period	$	1.7		$	1.7
Currency translation adjustment:
Balance at beginning of period	$	(75.6	)	$	(76.8	)
Other comprehensive income (loss)		(.2	)		(27.6	)
Balance at end of period	$	(75.8	)	$	(104.4	)
Defined benefit pension plans:
Balance at beginning of period	$	(134.0	)	$	(146.6	)
Other comprehensive income - amortization of   prior service cost and net losses included in net   periodic pension cost	1.7				2.3
Balance at end of period	$	(132.3	)	$	(144.3	)
OPEB plans:
Balance at beginning of period	$	1.7		$	1.0
Other comprehensive loss - amortization of prior service credit and net losses included in net periodic OPEB cost		(.2	)		(.2	)
Balance at end of period	$	1.5		$	.8
Total accumulated other comprehensive income (loss):
Balance at beginning of period	$	(206.2	)	$	(220.7	)
Other comprehensive income (loss)		1.3			(25.5	)
Balance at end of period	$	(204.9	)	$	(246.2	)

Reverse stock split – As disclosed in our proxy statement filed with the Securities and Exchange Commission on April 7, 2020, our stockholders will vote on a proposal to approve a reverse stock split of our common stock at a reverse stock split ratio of 1-for-8, 1-for-10 or 1-for-12, as determined by our board of directors following stockholder approval, at our annual meeting of stockholders scheduled to be held on May 28, 2020. Also as disclosed in our proxy statement, our controlling stockholder has indicated its intention to have its shares represented at the meeting and to vote its shares in favor of the reverse stock split proposal, in which case the proposal will be approved.  We expect to effect the reverse stock split promptly following the annual meeting, at the reverse stock split ratio selected by our board of directors immediately following the stockholders meeting.  Once the reverse stock split has been implemented, we will adjust all share and per-share disclosures for all periods presented in our consolidated financial statements to give effect to the split. 

Other – During the first three months of 2020, Kronos acquired 122,489 shares of its common stock in market transactions for an aggregate purchase price of $1.0 million.  At March 31, 2020, 1.6 million shares are available for repurchase under Kronos’ previously authorized stock repurchase program.

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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.

We believe that these actions are without merit, and NL intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.  Other than with respect to the Santa Clara, California public nuisance case discussed below, we do not believe it is probable that we have incurred any liability with respect to all of the 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, other than with respect to the Santa Clara case discussed below, we have not accrued any amounts for any of the pending lead pigment and lead-based paint litigation cases filed by or on behalf of states, counties, cities or their public housing authorities and school districts, or those asserted as class actions. In addition, we have determined that liability to NL which may result, if any, cannot be reasonably estimated at this time because there is no prior history of a loss of this nature on which an estimate could be made and there is no substantive information available upon which an estimate could be based.

In the matter titled 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), on July 24, 2019 an order approving a global settlement agreement entered into among all of the plaintiffs and the three defendants remaining in the case (the Sherwin Williams Company, ConAgra Grocery Products and NL) was entered by the court and the case was dismissed with prejudice.  The global settlement agreement provides that an aggregate $305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between NL and its co-defendants in respect to the case. In the agreement, NL expressly denies any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against NL.  The settlement agreement fully concludes this matter.    

Under the terms of the global settlement agreement, each defendant must pay an aggregate $101.7 million to the plaintiffs as follows: $25.0 million within sixty days of the court’s approval of the settlement and dismissal of the case and the remaining $76.7 million in six annual installments beginning on the first anniversary of the initial payment ($12.0 million for the first five installments and $16.7 million for the sixth installment).  NL’s sixth installment will be made with funds already on deposit at the court 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). For financial reporting purposes we used a discount rate of 1.9% per annum to discount the settlement to the estimated net present value.  We recognized additional litigation settlement expense of $19.3 million during 2019 (primarily during the second quarter).

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New cases may continue to be filed against NL.  We do not know if we will 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. We 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, we 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 that all of our facilities are in substantial compliance with applicable environmental laws.

Certain properties and facilities used in 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, 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. It is possible that actual costs will exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and it is possible that costs will be incurred for sites where no estimates presently can be made. Further, additional environmental and related matters may arise in the

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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 our 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 2020.

	Amount
	(In millions)
Balance at the beginning of the year	$	99.7
Additions charged to expense		.1
Payments, net		(.5	)
Other, net		(.2	)
Balance at the end of the period	$	99.1
Amounts recognized in our Condensed Consolidated Balance Sheet at the end of the period:
Current liabilities	$	4.5
Noncurrent liabilities		94.6
Total	$	99.1

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, 2020, NL had accrued approximately $94 million related to approximately 32 sites associated with remediation and related matters that 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 we believe it is possible to estimate costs is approximately $115 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, 2020, there were approximately five sites for which NL is not currently able to 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 us. 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 financial position, results of operations and liquidity.

Other – We have also accrued approximately $5 million at March 31, 2020 for other environmental cleanup matters.

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

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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 additional discussion of certain litigation involving NL and certain of its former insurance carriers, please refer to our 2019 Annual Report.

Other litigation

In addition to the litigation described above, we and our affiliates are 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 any additional material insurance coverage for our environmental claims. We currently believe that the disposition of all of these various other claims and disputes (including asbestos-related claims), individually or 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, 2019				March 31, 2020
	Carrying amount		Fair value		Carrying amount		Fair value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	583.8	$	583.8	$	529.0	$	529.0
Deferred payment obligation		9.9		9.9		9.9		9.9
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		442.6		457.0		435.1		374.8
Valhi credit facility with Contran		313.0		313.0		313.0		313.0
Tremont promissory note payable		2.0		2.0		.5		.5
BMI bank note payable		17.2		17.9		17.2		17.9
LandWell note payable to the City of Henderson		1.6		1.6		-		-
LandWell bank note payable		15.0		15.0		14.9		15.0

At March 31, 2020, the estimated market price of Kronos’ Senior Notes was €852 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.

Note 17—Recent accounting pronouncements:

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, which changes the accounting for certain income tax transactions and reduces complexity in accounting for income taxes in certain areas.  The ASU introduces new guidance including providing a policy election for an entity to not allocate consolidated current and deferred tax expense when a member of a consolidated tax return is not subject to income tax in its separate financial statements and is a disregarded entity by the taxing authority; and providing guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The ASU also changes existing guidance in a number of areas, including: the method of making an intraperiod allocation of total income tax expense if there is a loss in continuing operations and gains outside of continuing operations; determining when a deferred tax liability is recognized after an investor in a non-U.S. entity transitions to or from the equity method of accounting; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income.  We adopted this ASU as of January 1, 2020.  The adoption of this ASU in the first quarter of 2020 did not have a material effect on our Condensed Consolidated Financial Statements.

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Note 18 – Subsequent event:

Following the  spread of the COVID-19 virus beyond China in late January 2020, various national, state and local governments began to implement a number of increasingly restrictive measures to contain the spread of the virus, including  travel restrictions, gathering limitations,  event cancellations, border closures and stay-at-home orders, resulting in sharp contractions of vast areas of the global economy beginning in March 2020. While measured efforts are underway to resume commercial activities in most global markets, the impacts of COVID-19, including the efforts to mitigate its spread, are expected to continue to challenge workers, businesses and governments for the foreseeable future.  Although the COVID-19 pandemic had limited impact on our operations during the first quarter of 2020, we believe U.S. and worldwide gross domestic product will be significantly impacted for an indeterminate period, including the demand for our products and those of our customers. Consequently, we expect to report lower sales and earnings than would otherwise have been expected for the remainder of 2020. The extent of the impact will depend on numerous factors, including future developments, and therefore is uncertain and cannot be predicted.

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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 and trim tabs 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);

• 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 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;

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• 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) 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;

• 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);

• 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.

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Operations Overview

Quarter Ended March 31, 2020 Compared to the Quarter Ended March 31, 2019 —

We reported net income attributable to Valhi stockholders of $24.4 million or $.07 per diluted share in the first quarter of 2020 compared to $18.2 million or $.05 per diluted share in the first quarter of 2019.  As discussed more fully below, our net income  attributable to Valhi stockholders increased from 2019 to 2020 primarily due to the net effects of:

• lower operating income from our Chemicals Segment in 2020 compared to 2019; and

• income from tax increment infrastructure reimbursement of $19.1 million in 2020 compared to $1.1 million in 2019.

Our diluted net income per share in the first quarter of 2020 includes income of $.03 per share related to the tax increment infrastructure reimbursement.

Current Forecast for 2020—

We currently expect to report lower consolidated operating income for 2020 as compared to 2019 primarily due to the net effects of:

• lower operating income from our Chemicals Segment and our Component Products Segment in 2020 due to the unfavorable impact of the COVID -19 pandemic on sales and earnings as further discussed below; and

• higher operating income from our Real Estate Management and Development Segment in 2020 as the recognition of tax increment infrastructure reimbursement will more than offset lower expected land sales due to the impact of the COVID-19 pandemic.  

The advance of the COVID-19 pandemic and the global efforts to mitigate its spread have already resulted in sharp contractions of vast areas of the global economy and are expected to continue to challenge workers, businesses and governments for the foreseeable future. Government actions in various regions to gradually  permit the  resumption of limited commercial activities  following various regional shutdowns are currently in progress, but it is believed that the success and timing of these actions  will depend in part on  deployment of  effective tools to fight COVID-19, including increased testing, enhanced monitoring, data analysis and effective treatments, before  economic growth returns to pre-pandemic levels, particularly in service related sectors of the economy.  Even as these measures are implemented and become effective, they will not directly address the business and employment losses already experienced. As a result, we expect U.S. and worldwide gross domestic product to be significantly impacted for an indeterminate period which in turn would impact demand for our products and those of our customers.  Consequently, we expect to report lower sales and earnings than would otherwise have been expected for the remainder of 2020. The extent of the impact will depend on numerous factors, including future developments, and therefore is uncertain and cannot be predicted.

Segment Operating Results—2020 Compared to 2019 –

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 to be consistent with our expectations for the long-term growth in GDP. However, even if we and our 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 customers. We believe that our customers’ inventory levels are influenced in part by their expectations for future changes in market TiO₂ selling prices as well as their expectations for future availability of product. Although certain of our TiO₂ grades are considered specialty pigments, the majority of our grades and substantially all of our 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 service.

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

• TiO₂ selling prices,

• our 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 rate for the U.S. dollar relative to the euro, the Norwegian krone and the Canadian dollar).

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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 third-party feedstock. TiO₂ selling prices generally follow industry trends and prices will increase or decrease generally as a result of competitive market pressures.

	Three months ended March 31,
	2019			2020			% Change
	(Dollars in millions)
Net sales	$	436.5		$	421.0			(4	)	%
Cost of sales		327.7			333.3			2
Gross margin	$	108.8		$	87.7			(19	)
Operating income	$	52.8		$	46.8			(11	)
Percent of net sales:
Cost of sales		75	%	79		%
Gross margin		25		21
Operating income		12		11
Ti02 operating statistics:
Sales volumes*		143		136				(5	)	%
Production volumes*		134		132				(1	)
Percent change in net sales:
Ti02 sales volumes								(5	)	%
Ti02 product pricing								-
Ti02 product mix/other								3
Changes in currency exchange rates								(2	)
Total								(4	)	%

* Thousands of metric tons

Current Industry Conditions—Our Chemicals Segment started 2020 with average TiO₂ selling prices 1% lower than at the beginning of 2019, and average TiO₂ selling prices at the end of the first quarter of 2020 were 2% lower than at the end of 2019.  Our Chemicals Segment experienced lower sales volumes in the North American, Latin American and export markets partially offset by higher sales volumes in the European market in the first three months of 2020 as compared to the same period of 2019.

Our Chemicals Segment operated our production facilities at overall average capacity utilization rates of 95% in the first quarter of 2020 compared to 97% in the first quarter of 2019.  

Primarily due to a moderate rise in the cost of third-party feedstock we procured in 2019, our Chemicals Segment’s cost of sales per metric ton of TiO₂ sold in the first three months of 2020 was higher as compared to the first three months of 2019 (excluding the effect of changes in currency exchange rates).

Net Sales—Our Chemicals Segment’s net sales in the first quarter of 2020 decreased 4%, or $15.5 million, compared to the first quarter of 2019 primarily due to a 5% decrease in sales volumes (which decreased net sales by approximately $22 million). Our Chemicals Segment’s average TiO₂ selling prices in the first quarter of 2020 were comparable to our average TiO₂ selling prices in the first quarter of 2019.  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.

Our Chemicals Segment’s sales volumes decreased 5% in the first quarter of 2020 as compared to the first quarter of 2019 primarily due to lower sales volumes in the North American, Latin American and export markets partially offset by higher sales volumes in the European market.  In addition to the impact of lower sales volumes, we estimate that changes in currency exchange rates (primarily the euro) decreased our Chemicals Segment’s net sales by approximately $7 million in the first quarter of 2020 as compared to the first quarter of 2019.

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Cost of Sales and Gross Margin—Our Chemicals Segment’s cost of sales increased 2% in the first quarter of 2020 compared to the first quarter of 2019 due to the net effect of higher raw materials and other production costs of approximately $23 million (including higher cost for third-party feedstock, energy and other raw materials), favorable effects from currency fluctuations (primarily the euro) and a 5% decrease in sales volumes.  Our cost of sales as a percentage of net sales increased to 79% in the first quarter of 2020 compared to 75% in the same period of 2019 primarily due to the unfavorable effects of higher raw materials and other production costs, as discussed above.

Our Chemicals Segment’s gross margin as a percentage of net sales decreased to 21% in the first quarter of 2020 compared to 25% in the first quarter of 2019.  As discussed and quantified above, our Chemicals Segment’s gross margin decreased primarily due to the effects of lower sales volumes and higher raw materials and other production costs.

Operating Income—Our Chemicals Segment’s operating income decreased 11% in the first quarter of 2020 compared to the first quarter of 2019, and operating income as a percentage of net sales decreased to 11% in 2020 from 12% in 2019.  This decrease was driven by the lower gross margin discussed above.  We estimate that changes in currency exchange rates increased our Chemicals Segment’s operating income by approximately $11 million in the first quarter of 2020 as compared to the same period in 2019, as discussed 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 $.5 million in the first three months of 2020 and $.6 million in the same period of 2019, 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 sales generated from our non-U.S. operations is denominated in the U.S. dollar (and consequently our non-U.S. operations will generally hold U.S. dollars from time to time).  Certain raw materials used worldwide, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production costs are purchased primarily in local currencies.  Consequently, the translated U.S. dollar value of our 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 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, (ii) changes in currency exchange rates during time periods when our non-U.S. operations are holding non-local currency (primarily U.S. dollars), and (iii) relative changes in the aggregate fair value of currency forward contracts held from time to time.  Our Chemicals Segment periodically uses currency forward contracts to manage a portion of our currency exchange risk, and relative changes in the aggregate fair value of any currency forward contracts we hold from time to time serve in part to mitigate the currency transaction gains or losses we would otherwise recognize from the first two items described above.

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, 2020 vs March 31, 2019
							Translation losses - impact of rate changes		Total currency impact 2020 vs 2019
	Transaction gains recognized
	2019		2020		Change
	(In millions)
Impact on:
Net sales	$	—	$	—	$	—	$	(7)	$	(7)
Operating income		1		12		11		—		11

The $7 million decrease in our Chemicals Segment’s net sales (translation loss) was caused primarily by a strengthening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into fewer U.S. dollars in 2020 as compared to 2019.  The strengthening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2020 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 are denominated in the U.S. dollar.

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The $11 million increase in our Chemicals Segment’s operating income from net currency transaction gains was caused primarily 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 cause increases or decreases, as applicable, in U.S. dollar-denominated receivables and payables and U.S. dollar currency held by our non-U.S. operations and in Norwegian krone denominated receivables and payables held by our non-U.S. operations.

Outlook—To-date, the COVID-19 pandemic, including the measures employed to mitigate its spread, has had limited impact on our Chemicals Segment’s operations and financial performance. Our manufacturing facilities have remained open, operating at near planned capacities, and the availability of raw materials has not been materially impacted. Our Chemicals Segment’s first quarter financial results, including sales and production volumes, have been within our expectations. At the end of the first quarter, our Chemicals Segment had over $341 million in cash and cash equivalents, and over $200 million available for borrowing under our existing revolving credit facilities.

Our Chemicals Segment’s products are vital to the production of numerous critically needed end-user products, and therefore our facilities have been designated as essential businesses in each of the regions in which we operate. Our manufacturing and administrative facilities are generally located in densely populated regions of Europe and North America which have experienced substantial outbreaks of COVID-19. Some of our manufacturing and distribution processes are labor-intensive, and we recognize the elevated health risk that COVID-19 represents for our employees, contractors and partners. We are using a variety of methods to protect the health and well-being of our workforce and our customers, including the implementation of social distancing, contact tracing, deep cleaning of facilities, work-from-home strategies and staggered shift deployment, among other health and safety protocols. To-date, we have had limited cases of COVID-19 among our workforce and all of our facilities have remained in operation.

The advance of the COVID-19 pandemic and the global efforts to mitigate its spread have already resulted in sharp contractions of vast areas of the global economy and are expected to continue to challenge workers, businesses and governments for the foreseeable future. Government actions in various regions to gradually  permit the resumption of limited commercial activities  following various regional shutdowns are currently in progress, but it is believed that the success and timing of these actions will depend in part on deployment of effective tools to fight COVID-19, including increased testing, enhanced monitoring, data analysis and effective treatments, before economic growth returns to pre-pandemic levels, particularly in service related sectors of the economy.  Even as these measures are implemented and become effective, they will not directly address the business and employment losses already experienced. As a result, we expect U.S. and worldwide gross domestic product to be significantly impacted for an indeterminate period. While we believe that demand for our Chemicals Segment’s products and the products of our customers will be negatively impacted in the coming months, many of our Chemicals Segment’s products are used by our customers in end-products that to date remain in demand across the world economy. The breadth and depth of the negative impact COVID-19 will have on our business remains unknown.

Given the impact of COVID-19 on the global economy, we expect our Chemicals Segment’s sales and earnings will be lower than originally planned for 2020. The extent of the impact will depend on numerous factors, including future developments, and therefore is uncertain and cannot be predicted. If significant declines in global demand occur, we would expect a reduction in our Chemicals Segment’s sales volumes and potentially, average sales prices, which in turn would cause us to reduce our production volumes, resulting in an increase to our per unit costs of production. If this occurs, spending for raw materials and other production costs would be reduced, but not enough to offset the negative impacts of reduced sales. Depending on the length and severity of the impact of COVID-19 on the global economy, we may decide to curtail production or temporarily close manufacturing facilities, or we may be required to temporarily close certain facilities if outbreaks escalate in a particular region. We will continue to monitor current and anticipated near-term customer demand throughout the year and align our production and inventory levels accordingly.

Though it is not possible to predict the impact of the COVID-19 pandemic on future demand for our Chemicals Segment’s products or those of our customers, we believe that we have sufficient cash on-hand and available borrowing capacity under our revolving credit facilities to meet our obligations, and we are prepared to implement multiple cash-saving strategies if necessary, including reduction of inventories, delays in capital expenditures and other cost saving initiatives.

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 our 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 products sold. The key performance indicator for our Component Products Segment is operating income and margins.

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	Three months ended March 31,
	2019			2020			% Change
	(Dollars in millions)
Net sales:
Security products	$	24.7		$	25.5			3	%
Marine components		6.5			6.8			6
Total net sales		31.2			32.3			4
Cost of sales		21.5			21.9			2
Gross margin	$	9.7		$	10.4			8
Operating income	$	4.4		$	5.0			14
Percent of net sales:
Cost of sales		69	%		68	%
Gross margin	31			32
Operating income	14			15

Net Sales — Our Component Products Segment’s net sales increased $1.1 million in the first quarter of 2020 compared to the same period in 2019 primarily due to higher sales of security products to existing government security customers and to a lesser extent higher sales of marine components to the towboat and center console boat markets. Relative changes in selling prices did not have a material impact on net sales comparisons.

Costs of Sales and Gross Margin — As a percentage of net sales, our Component Products Segment’s cost of sales decreased 1% in the first quarter of 2020 compared to the same period in 2019 due to the favorable effects of customer and product mix, partially offset by increased medical costs for both security products and marine components.  As a result, gross margin as a percentage of sales increased over the same period. Gross margin dollars increased due to higher sales for both business segments.

Operating Income — Our Component Products Segment’s operating income as a percentage of net sales for the first quarter of 2020 increased compared to the same period of 2019 and was primarily impacted by the factors impacting cost of sales and gross margin discussed above.

Outlook— Our Component Products Segment experienced minimal disruptions to our supply chain or customer base from COVID-19 during the first quarter of 2020. First quarter sales reflect continued strong demand for our products, including high-security applications for our existing government customers as well as our marine products. We have been identified as an essential business in the states where we operate, and we are considered critical in supplying components to many essential and mandatory markets. Beginning in late March 2020, we began receiving requests from certain customers of both our security products and marine components reporting units to delay or postpone shipments, in some cases because our customers’ production facilities have temporarily closed. We operate three facilities, each of which specializes in certain manufacturing processes and is therefore dependent upon the other facilities to some extent to manufacture finished goods. With the onset of COVID-19, within each facility we increased sanitizing, mandated social distancing and implemented other health and safety protocols.  In late April 2020, we temporarily closed our facility that is located outside of Chicago, Illinois, which has been considered a COVID-19 “hotspot,” due to an increase of COVID-19 cases in the community. During the closure we completed a deep clean and sanitization within the facility, and we successfully reopened the plant and resumed production after a one week pause. We believe the temporary closure of our Illinois facility will have minimal negative impact on our ability to manufacture and ship during the second quarter, in part due to the anticipated decline in demand during the same period.

Based on current conditions, we expect to report reduced revenue and operating income during the second quarter of 2020 compared to the first quarter of 2020, but the severity of the decline will depend on customer demand for our products, including the timing and extent to which our customers restart their operations, on our customers’ perception as to when consumer demand for their products will return and on any future disruptions in our operations or our suppliers’ operations, all of which are difficult to predict. Our operations teams meet daily to ensure we are maintaining a safe working environment for all of our employees, minimizing operational disruptions and managing inventory levels. It is possible we may temporarily close one or more of our facilities again for the health and safety of our employees before the COVID-19 crisis is over.  CompX has significant cash balances of approximately $58.6 million at March 31, 2020, and believes it is well positioned to navigate the uncertainty ahead.

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Real Estate Management and Development  –

	Three months ended
	March 31,
	2019		2020
	(In millions)
Net sales:
Land sales	$	9.5	$	3.6
Water delivery sales		1.9		1.9
Utility and other		.5		.5
Total net sales		11.9		6.0
Cost of sales		8.6		4.4
Gross margin	$	3.3	$	1.6
Operating income	$	3.2	$	19.2

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.

Beginning in December 2013 and through the first quarter of 2020, LandWell has closed or entered into escrow on approximately 680 acres of the residential/planned community and approximately 68 acres zoned for commercial and light industrial use. Contracts 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, 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 the development work to continue for 10 to 15 years on the rest of the land held for development, especially the remainder of the residential/planned community.

Net Sales and Operating Income— A substantial portion of the net sales from our Real Estate Management and Development Segment in the first quarter of 2019 and 2020 consisted of revenues from land sales. As noted above we recognize revenue in our residential/planned community over time using cost based input methods (previously known as percentage completion method) and substantially all of the revenue we recognized in 2019 and 2020 was under this method of revenue recognition.  The contracts on these sales (both within the planned community and otherwise) include approximately 645 acres of the residential planned community and certain other acreage which closed in December 2013 and through the first quarter of 2020. Land sales revenues were lower in the first quarter of 2020 as compared to the first quarter of 2019 primarily due to a decrease in the amount of acreage sold in 2020 compared to 2019 and due to higher infrastructure development spending in 2019. Cost of sales related to land sales revenues was $2.7 million in the first quarter of 2020 compared to $6.9 million in the first quarter of 2019. Operating income also includes $19.1 million in the first quarter of 2020 and $1.1 million in the first quarter of 2019 of income 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—Our Real Estate Management and Development Segment experienced minimal impact on operations and financial performance from COVID-19 during the first quarter of 2020.  BMI continues to provide utility and water delivery services to its customers without interruption and LandWell is continuing to actively develop and sell land it manages, primarily to residential builders, for the approximately 2,100 acres zoned for a residential/planned community in Henderson, Nevada. Our Real Estate Management and Development management team is focused on protecting the health and safety of our employees and contractors through implementation of social distancing and work-from-home strategies among other health and safety protocols.

In April 2020 LandWell began receiving requests from some residential builders to delay or cancel closing on certain parcels in escrow. Given the impact of COVID-19 on the overall economy, including the greater Las Vegas area, we expect the level of land sales to be negatively impacted in the near term.  The extent of the impact will depend on numerous factors, including customer demand and future developments, and therefore is uncertain and cannot be predicted. Given the current liquidity of our Real Estate

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Management and Development Segment, including approximately $11.2 million of cash and cash equivalents at March 31, 2020, we believe we are well positioned to meet our obligations. Depending on the length and severity of the impact of COVID-19 on the economy and our operations, we may decide to delay or curtail infrastructure development activities in the near term where possible and implement other cash-saving initiatives. Because we recognize revenue over time using cost based inputs for most of our land sales, delays or curtailments in infrastructure development activities will lower the amount of revenue we would recognize on previously closed land sales.  As a result we expect land sales revenue to be lower in the second quarter of 2020 than the first quarter of 2020.  In addition delays or curtailments in infrastructure development activities will also delay our ability to submit completed costs to the City of Henderson for approval of additional tax increment reimbursement note receivables and, as a result, we would not expect to recognize significant additional note receivables during 2020.

General Corporate Items, Interest Expense, Income Taxes and Noncontrolling Interest—2020 Compared to 2019

Insurance Recoveries—NL has agreements with certain insurance carriers pursuant to which the carriers reimburse NL for a portion of its past lead pigment and asbestos litigation defense costs.  Insurance recoveries include amounts NL received from these insurance carriers.  

The agreements with certain of NL’s insurance carriers also include reimbursement for a portion of its future litigation defense costs.  We are not able to determine how much we 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.  Accordingly, these insurance recoveries are recognized when the receipt is probable and the amount is determinable.   See Note 15 to our Condensed Consolidated Financial Statements.

Kronos recognized $1.5 million of insurance recoveries in the first quarter of 2020 related to a property damage claim.

Other Components of Net Periodic Pension Expense—We recognized other components of net periodic pension  expense of $4.7 million in the first quarter of 2020 compared to $4.1 million in the same period of 2019.  The expense increased in both periods primarily due to pension costs as a result of actuarial amortizations, discount rates and expected returns on plan assets.

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 2019 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 stock to the extent of our proportional ownership interest in each subsidiary.  We recognized a loss of $2.4 million in the first quarter of 2020 compared to a gain of $1.1 million in the same period of 2019 in our Condensed Consolidated Statements of Income which represents the unrealized gain or loss in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NL

Other General Corporate Items—Corporate expenses were 3% higher in the first quarter of 2020 compared to the first quarter of 2019 primarily due to higher environmental remediation and related costs.  Included in corporate expense are:

• litigation and related costs at NL of $.6 million in the first quarter of 2020 compared to $.8 million in the first quarter of 2019; and

• environmental remediation and related costs of $.1 million in the first quarter of 2020 compared to a benefit of $.7 million in the first quarter of 2019.

Overall, we currently expect that our net general corporate expenses in 2020 will be comparable to 2019.

The level of our litigation 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 2020, 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 2020, 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. .

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Interest Expense—Interest expense decreased to $9.7 million in the first quarter of 2020 from $10.3 million in the first quarter of 2019 primarily due to lower average interest rates on variable-rate indebtedness in 2020.  

We expect interest expense will continue to be lower in the remainder of 2020 as compared to 2019 due to lower average rates.

Provision for Income Taxes— We recognized income tax expense of $11.4 million in the first quarter of 2020 compared to  income tax expense of $14.2 million in the first quarter of 2019.  The decrease is primarily due to lower earnings at Kronos in 2020. 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.  Excluding the effect of any increase or decrease in our deferred income tax asset valuation allowance or changes in our reserve for uncertain tax positions, 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, 2019, we had recognized a deferred income tax liability with respect to our direct investment in Kronos of $37.8 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 have recognized (the cap) is $155.4 million.  During the first quarter of 2020, we recognized a non-cash deferred income tax expense with respect to our direct investment in Kronos of $.2 million for the increase in the deferred income taxes required to be recognized with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock, to the extent such increase related to our equity in Kronos’ net income during such period.  We recognized a similar non-cash deferred income tax expense of $1.0 million in the first quarter of 2019.   A portion of the net change with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock during such periods related to our equity in Kronos’ other comprehensive income (loss) items, and the amounts 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 (Loss) of Subsidiaries—Noncontrolling interest in operations of subsidiaries increased from 2019 to 2020 primarily due to increased earnings at BMI and LandWell. See Note 13 to our Condensed Consolidated Financial Statements.

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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 for operating activities was $18.2 million in the first three months of 2020 compared to a use of cash of $2.2 million in the first three months of 2019. This $16.0 million increase in cash used was primarily due to the net effect of the following items:

• consolidated operating income of $71.0 million in the first quarter of 2020, an increase of $10.6 million compared to operating income of $60.4 million in the first quarter of 2019;

• lower net cash paid for income taxes in 2020 of $7.0 million; and

• a $20.3 million increase in the amount of net cash used in relative changes in receivables, inventories, payables and accrued liabilities in the first quarter of 2020.

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, 2019 to March 31, 2020 primarily due to relative changes in the timing of collections.

• Kronos’ average days sales in inventory (“DSI”) decreased from December 31, 2019 to March 31, 2020 primarily due to lower inventory volumes attributable in part to sales volumes exceeding production volumes in the first quarter of 2020, which was not the case in the fourth quarter of 2019.

• CompX’s average DSO at March 31, 2020 increased from December 31, 2019 primarily due to relative changes in the timing of collections.

• CompX’s average DSI at March 31, 2020 is comparable to December 31, 2019.  

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

	December 31, 2018		March 31, 2019		December 31, 2019		March 31, 2020
Kronos:
Days sales outstanding		76 days		70 days		71 days		69 days
Days sales in inventory		113 days		82 days		83 days		66 days
CompX:
Days sales outstanding		40 days		45 days		36 days		43 days
Days sales in inventory		80 days		78 days		81 days		79 days

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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,
	2019			2020
	(In millions)
Cash provided by (used in) operating activities:
Valhi exclusive of its subsidiaries	$	6.7		$	10.0
Kronos		6.9			(9.8)
NL exclusive of its subsidiaries		4.3			5.4
CompX		(2.6	)		(1.2)
BMI		8.3			5.6
LandWell		(3.3	)		(.2)
Tremont exclusive of its subsidiaries		2.8			5.3
Eliminations and other		(25.3	)		(33.3)
Total	$	(2.2	)	$	(18.2)

Investing Activities—

We spent $16.0 million in capital expenditures during the first quarter of 2020 including:

• $15.3 million in our Chemicals Segment;

• $.4 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, 2020, we:

• repaid $1.5 million under Tremont’s promissory note payable and $1.6 million under LandWell’s note payable to the City of Henderson;

• paid quarterly dividends to Valhi stockholders of $.02 per share ($6.8 million) and;

• Kronos acquired shares of its common stock for an aggregate purchase of price of $1.0 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 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 three months of 2020 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, 2020, our consolidated indebtedness was comprised of:

• Valhi’s $313.0 million outstanding on its $360 million credit facility with Contran which is due no earlier than December 31, 2021;

• €400 million aggregate outstanding on our KII 3.75% Senior Secured Notes ($435.1 million carrying amount, net of unamortized debt issuance costs) due in September 2025;

• Tremont’s promissory note payable ($.5 million outstanding) due in December 2023 which was fully repaid in April 2020;

• $17.9 million on BMI’s bank loan ($17.2 million carrying amount, net of unamortized debt issuance costs) due through September 2032;

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• $15.0 million on LandWell’s bank loan ($14.9 million carrying amount, net of unamortized debt issuance costs) due in April 2036; and

• approximately $2.8 million of other indebtedness.

Certain of our credit facilities require the respective borrowers to maintain a number of covenants and restrictions which, among other things, restrict our ability to incur additional debt, incur liens, pay dividends or merge or consolidate with, or sell or transfer substantially all of our assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of this type. Certain of our 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, certain 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, certain 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. Kronos’ North American and European revolvers contain a number of covenants and restrictions which, among other things, restrict its ability to incur additional debt, incur liens, pay dividends 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 this type.  Kronos’ European revolving credit facility also requires the maintenance of certain financial ratios, and one of such requirements is based on the ratio of net debt to the last twelve months EBITDA of the borrowers.  The terms of all of our debt instruments (including revolving lines of credit for which we have no outstanding borrowings at March 31, 2020) are discussed in Note 9 to our 2019 Annual Report.  We are in compliance with all of our debt covenants at March 31, 2020.  We believe that we will be able to continue to comply with the financial covenants contained in our credit facilities through their maturity; however, if future operating results differ materially from our expectations we may be unable to maintain compliance.

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 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, 2021) and long-term obligations (defined as the five-year period ending March 31, 2025). If actual developments differ from our expectations, our liquidity could be adversely affected.

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At March 31, 2020, we had credit available under existing facilities of $263.2 million, which was comprised of:

• $99.0⁽¹⁾ million under Kronos’ European revolving credit facility;

• $117.2 million under Kronos’ North American revolving credit facility; and

• $47.0⁽²⁾ million under Valhi’s Contran credit facility.

(1) Based on Kronos’ EBITDA over the last twelve months ending March 31, 2020, the full €90.0 million amount is available for borrowing at such date.

(2) Amounts available under this facility are at the sole discretion of Contran.

At March 31, 2020, we had an aggregate of $536.6 million of restricted and unrestricted cash, cash equivalents and marketable securities, including $109.5 million held by our non-U.S. subsidiaries. Following implementation of a territorial tax system under the 2017 Tax Act, repatriation of any cash and cash equivalents held by our non-U.S. subsidiaries would not be expected to result in any material income tax liability as a result of such repatriation.A detail by entity is presented in the table below.

	Total		Amount held outside U.S.
	(In millions)
Kronos	$	343.0	$	109.5
CompX		58.6		-
NL exclusive of its subsidiaries		98.4		-
Tremont exclusive of its subsidiaries		8.4		-
LandWell		10.6		-
BMI		16.9		-
Valhi exclusive of its subsidiaries		.7		-
Total restricted and unrestricted cash, cash equivalents and    marketable securities	$	536.6	$	109.5

Capital Expenditures and Other –

We currently expect our aggregate capital expenditures for 2020 will be approximately $66 million as follows:

• $60 million by our Chemicals Segment,

• $4 million by our Component Products Segment; and

• $2 million by our Real Estate Management and Development Segment.

Capital spending for 2020 is expected to be funded primarily through cash generated from operations and borrowing under existing credit facilities. Planned capital expenditures in 2020 at Kronos and CompX will primarily be to maintain and improve the cost-effectiveness of our facilities. In addition, Kronos’ capital expenditures in the area of environmental compliance, protection and improvement include expenditures which are primarily focused on increased operating efficiency but also result in improved environmental protection, such as lower emissions from our manufacturing plants. We may further reduce planned capital spending and land development activities if economic conditions warrant.

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, 2020 Valhi had approximately 4.0 million shares of our common stock available to repurchase under the authorizations made by our board of directors.

Kronos’ board of directors authorized the repurchase of up to 2.0 million shares of its common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time. Kronos may repurchase its common stock from time to time as market conditions permit. During the first three months of 2020,

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Kronos acquired 122,489 shares of its common stock in open market purchases under such repurchase program for an aggregate purchase price of $1.0 million..  At March 31, 2020, approximately 1.6 million shares are available for repurchase.  

CompX’s board of directors 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. At March 31, 2020, approximately .7 million shares were available for purchase 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 2019. If Kronos were to pay its $.18 per share in each quarter of 2020 based on the 58.0 million shares we held of Kronos common stock at March 31, 2020, we would receive aggregate annual regular dividends from Kronos of $41.8 million.  In February 2020 the NL board of directors approved a quarterly dividend of $.04 per share. If NL were to pay its $.04 per share dividend in each quarter of 2020 based on the 40.4 million shares we hold of NL common stock at March 31, 2020, we would receive aggregate annual dividends from NL of $6.5 million. BMI and LandWell do 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 $29.1 million in 2019 and $5.9 million during the first three months of 2020.   We do not know if we will receive additional dividends from BMI and LandWell during 2020.  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, typically a percentage of net income or cash flow; however, these restrictions in the past have not significantly impacted their ability to pay dividends.

As disclosed in our proxy statement filed with the Securities and Exchange Commission on April 7, 2020, our stockholders will vote on a proposal to approve a reverse stock split of our common stock at a reverse stock split ratio of 1-for-8, 1-for-10 or 1-for-12, as determined by our board of directors following stockholder approval, at our annual meeting of stockholders scheduled to be held on May 28, 2020. Also as disclosed in our proxy statement, our controlling stockholder has indicated its intention to have its shares represented at the meeting and to vote its shares in favor of the reverse stock split proposal, in which case the proposal will be approved.  We expect to effect the reverse stock split promptly following the annual meeting, at the reverse stock split ratio selected by our board of directors immediately following the stockholders meeting.  Once the reverse stock split has been implemented, we will adjust all share and per-share disclosures for all periods presented in our consolidated financial statements to give effect to the split. 

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 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 2019, 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

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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. Prior to 2019 NL’s subsidiary borrowed $.5 million under this facility, no additional amounts have been borrowed since then, and $.5 million is outstanding under this facility at March 31, 2020. We eliminate any such intercompany borrowings in our Consolidated Financial Statements.

We have an unsecured revolving demand promissory note with Kronos which, as amended, provides for borrowings from Kronos of up to $60 million. We also 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, 2021.  We had no borrowings from Kronos under this facility during the first quarter of 2020, and there was no outstanding balance at March 31, 2020.  We could borrow $60.0 million under our current intercompany facility with Kronos at March 31, 2020.  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 $40 million. We also 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, 2021.  We had gross borrowings of $14.9 million and gross repayments of $18.2 million during the first quarter of 2020, and $30.5 million was outstanding at March 31, 2020.  We could borrow $9.5 million under our current intercompany facility with CompX at March 31, 2020.  CompX’s obligation to loan us money under this note is at CompX’s discretion.

Off-balance Sheet Financing

We do not have any off-balance sheet financing arrangements.  

Commitments and Contingencies

There have been no material changes in our contractual obligations since we filed our 2019 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 Notes 1, 14 and 18 to our 2019 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.

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

See Note 17 to our Condensed Consolidated Financial Statements.

Critical Accounting Policies

There have been no changes in the first quarter of 2020 with respect to our critical accounting policies presented in Management’s Discussion and Analysis of Financial Condition and Results of Operation in our 2019 Annual Report.

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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 2019 Annual Report, and refer you to Part I, Item 7A.—“Quantitative and Qualitative Disclosure About Market Risk” in our 2019 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 James W. Brown, our Senior Vice President and Chief Financial Officer, have evaluated the design and effectiveness of our disclosure controls and procedures as of March 31, 2020. 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

• 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, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings.

Refer to Note 15 to our Condensed Consolidated Financial Statements and our 2019 Annual Report for descriptions of certain legal proceedings.

Refined Metals Corporation v.  NL Industries, Inc.  In March 2020, Refined Metals’ state law claims were dismissed with prejudice and the court entered a final judgment in favor of NL.

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 2019 Annual Report. There have been no material changes to such risk factors during the three months ending March 31, 2020.

Item 5. Other Information.

On April 24, 2020, we received notification from the New York Stock Exchange (“NYSE”) that we are no longer compliant with NYSE continued listing criteria set forth in Section 802.01C of the Listed Company Manual of the NYSE that requires listed companies to maintain an average closing share price of at least $1.00 over a consecutive 30 trading-day period.  Pursuant to Section 802.01C, we have at least six months from receipt of the notice to regain compliance with the NYSE’s minimum share price requirement.  During this period our common stock will continue to be listed and trade on the NYSE, subject to our continued compliance with other NYSE listing requirements.  We have notified the NYSE of our intent to cure the deficiency. We intend to cure the share price non-compliance through the reverse stock split of our common stock, subject to stockholder approval and as determined by our board of directors, discussed in Note 14 to our Condensed Consolidated Financial Statements, and we expect to effect the reverse stock split even if we regain compliance by virtue of future share closing prices.

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Item 6. Exhibits.

Item No.	Exhibit Index
31.1	Certification
31.2	Certification
32.1	Certification
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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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 7, 2020	/s/ James W. Brown
		James W. Brown (Senior Vice President and Chief Financial Officer)
Date:	May 7, 2020	/s/ Amy Allbach Samford
		Amy Allbach Samford (Vice President and Controller)

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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; and
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 7, 2020

/s/ Robert D. Graham

Robert D. Graham

Vice Chairman of the Board, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, James W. Brown, 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; and
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 7, 2020

/s/ James W. Brown

James W. Brown

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 three months ended March 31, 2020 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 James W. Brown, 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/ James W. Brown
Robert D. Graham Vice Chairman of the Board, President and Chief Executive Officer May 7, 2020	James W. Brown Senior Vice President and Chief Financial Officer May 7, 2020

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.

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Fair Value Measurements and Financial Instruments - Financial Instruments not Carried at Fair Value (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
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	$ 435.1	$ 442.6
Long term debt, fair value	374.8	457.0
VALHI, INC. | Contran Credit Facility
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	313.0	313.0
Long term debt, fair value	313.0	313.0
Tremont | Promissory Note
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	0.5	2.0
Long term debt, fair value	0.5	2.0
BMI | Bank note payable | Meadows Term Loan
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	17.2	17.2
Long term debt, fair value	17.9	17.9
LandWell | Bank note payable
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount	14.9	15.0
Long term debt, fair value	15.0	15.0
LandWell | Unsecured Debt
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Long term debt, carrying amount		1.6
Long term debt, fair value		1.6
Carrying Amount
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash, cash equivalents and restricted cash equivalents	529.0	583.8
Deferred payment obligation	9.9	9.9
Fair Value
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash, cash equivalents and restricted cash equivalents	529.0	583.8
Deferred payment obligation	$ 9.9	$ 9.9

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Long-Term Debt - Revolving Credit Facility - Additional Information (Detail) - 3 months ended Mar. 31, 2020 € in Millions, $ in Millions	USD ($)	EUR (€)
Line Of Credit Facility [Line Items]
Revolving credit facility, borrowings	$ 0.0
European Revolving Credit Facility | Kronos Worldwide, Inc.
Line Of Credit Facility [Line Items]
Amount available for borrowing	99.0	€ 90.0
Revolving credit facility, borrowings	0.0
Repayment of credit facility	0.0
North American Revolving Credit Facility | Kronos Worldwide, Inc.
Line Of Credit Facility [Line Items]
Amount available for borrowing	117.2
Revolving North American Credit Facility | Kronos Worldwide, Inc.
Line Of Credit Facility [Line Items]
Revolving credit facility, borrowings	0.0
Repayment of credit facility	$ 0.0

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues and other income:
Net sales	$ 459.3	$ 479.6
Other income, net	34.9	6.6
Total revenues and other income	494.2	486.2
Costs and expenses:
Cost of sales	359.6	357.8
Selling, general and administrative	70.9	71.4
Other components of net periodic pension expense	4.7	4.1
Interest	9.7	10.3
Total costs and expenses	444.9	443.6
Income before income taxes	49.3	42.6
Income tax expense	11.4	14.2
Net income	37.9	28.4
Noncontrolling interest in net income of subsidiaries	13.5	10.2
Net income attributable to Valhi stockholders	$ 24.4	$ 18.2
Amounts attributable to Valhi stockholders:
Basic and diluted net income per share	$ 0.07	$ 0.05
Basic and diluted weighted average shares outstanding	342.1	342.0

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 37.9	$ 28.4
Depreciation and amortization	17.0	12.8
Benefit plan expense greater than cash funding	3.1	1.1
Deferred income taxes		3.6
Contributions to TiO2 manufacturing joint venture, net	(2.2)	(0.8)
Other, net	3.1	1.1
Change in assets and liabilities:
Accounts and other receivables, net	(39.7)	(46.0)
Inventories, net	2.7	(3.7)
Land held for development, net	(2.7)	(1.1)
Accounts payable and accrued liabilities	(35.0)	(4.2)
Accounts with affiliates	(1.5)	1.8
Income taxes	11.8	1.6
Other, net	(12.7)	3.2
Net cash used in operating activities	(18.2)	(2.2)
Cash flows from investing activities:
Capital expenditures	(16.0)	(16.8)
Purchases of marketable securities	(0.4)	(1.0)
Proceeds from disposal of marketable securities	0.6	1.7
Other, net	2.7
Net cash used in investing activities	(13.1)	(16.1)
Cash flows from financing activities:
Principal payments on indebtedness	(3.2)	(2.1)
Valhi cash dividends paid	(6.8)	(6.8)
Distributions to noncontrolling interest in subsidiaries	(8.6)	(6.3)
Subsidiary treasury stock acquired	(1.0)
Net cash used in financing activities	(19.6)	(15.2)
Cash, cash equivalents and restricted cash and cash equivalents - net change from:
Operating, investing and financing activities	(50.9)	(33.5)
Effect of exchange rates on cash	(3.9)	(2.6)
Balance at beginning of period	583.8	523.7
Balance at end of period	529.0	487.6
Cash paid (received) for:
Interest, net of capitalized interest	12.7	13.7
Income taxes, net	(0.7)	6.3
Noncash investing activities:
Change in accruals for capital expenditures	$ 2.2	$ 2.0

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Revenue - Disaggregation of Sales - Schedule of Disaggregates of Net Sales of our Chemicals Segment (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation Of Revenue [Line Items]
Net sales	$ 459.3	$ 479.6
Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	421.0	436.5
Point of Origin | Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	421.0	436.5
Point of Origin | Chemicals | Germany
Disaggregation Of Revenue [Line Items]
Net sales	229.1	219.2
Point of Origin | Chemicals | United States
Disaggregation Of Revenue [Line Items]
Net sales	237.0	245.3
Point of Origin | Chemicals | Canada
Disaggregation Of Revenue [Line Items]
Net sales	67.7	78.5
Point of Origin | Chemicals | Belgium
Disaggregation Of Revenue [Line Items]
Net sales	66.1	69.7
Point of Origin | Chemicals | Norway
Disaggregation Of Revenue [Line Items]
Net sales	54.3	51.5
Point of Origin | Chemicals | Eliminations
Disaggregation Of Revenue [Line Items]
Net sales	(233.2)	(227.7)
Point of Destination | Chemicals
Disaggregation Of Revenue [Line Items]
Net sales	421.0	436.5
Point of Destination | Chemicals | Europe
Disaggregation Of Revenue [Line Items]
Net sales	214.5	215.2
Point of Destination | Chemicals | North America
Disaggregation Of Revenue [Line Items]
Net sales	132.3	146.8
Point of Destination | Chemicals | Other
Disaggregation Of Revenue [Line Items]
Net sales	$ 74.2	$ 74.5

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Component of Income Taxes Expenses

	Three months ended
	March 31,
	2019			2020
	(In millions)
Expected tax expense, at U.S. federal statutory    income tax rate of 21%	$	8.9		$	10.3
Incremental net tax benefit on earnings and losses of non-U.S., U.S. and non-tax group companies		(.2	)		(1.8	)
Non-U.S. tax rates		2.3			.9
Valuation allowance		1.0			(.2	)
Adjustment to the reserve for uncertain tax positions, net		.5			.6
Global intangible low-tax income, net		.7			1.2
U.S. state income taxes and other, net		1.0			.4
Income tax expense	$	14.2		$	11.4
Comprehensive provision for income taxes allocable to:
Net income	$	14.2		$	11.4
Other comprehensive income (loss):
Currency translation		-			(4.7	)
Pension plans		1.5			1.8
Other		-			(.2	)
Total	$	15.7		$	8.3

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Other Noncurrent Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

	December 31,		March 31,
	2019		2020
	(In millions)
Operating lease liabilities	$	22.2	$	20.3
Reserve for uncertain tax positions		13.6		14.7
Accrued litigation settlement		60.1		60.4
Deferred income		47.4		46.1
Other postretirement benefits		10.5		9.7
Employee benefits		6.0		5.8
Insurance claims and expenses		11.0		10.1
Deferred payment obligation		9.9		9.9
Accrued development costs		8.3		8.0
Other		8.2		8.5
Total	$	197.2	$	193.5

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Other Income, Net

3 Months Ended

Mar. 31, 2020

Other Income And Expenses [Abstract]

Other Income, Net

Note 11—Other income, net:

	Three months ended
	March 31,
	2019		2020
	(In millions)
Securities earnings:
Dividends and interest	$	2.9	$	2.0
Securities transactions, net		.2		(.4	)
Total		3.1		1.6
Currency transactions, net		.9		12.2
Insurance recoveries		.3		1.6
Infrastructure reimbursement		1.1		19.1
Gain on land sales		-		.5
Other, net		1.2		(0.1	)
Total	$	6.6	$	34.9

Insurance recoveries reflect, in part, amounts NL received from certain of its former insurance carriers and relate to the recovery of prior lead pigment and asbestos litigation defense costs incurred by NL.  See Note 15.  In the first three months of 2020, Kronos recognized a $1.5 million gain related to an insurance settlement for a property damage claim.

Infrastructure reimbursement–As disclosed in Note 7 to our 2019 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 quarters of 2019 and 2020, we received approval for additional tax increment reimbursement of $1.1 million and $19.1 million, respectively, 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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Accounts and Other Receivables, Net

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Accounts and Other Receivables, Net

Note 3—Accounts and other receivables, net:

	December31,			March 31,
	2019			2020
	(In millions)
Trade accounts receivable:
Kronos	$	270.5		$	306.5
CompX		11.9			15.3
BMI and LandWell		1.6			1.4
VAT and other receivables		31.2			23.2
Refundable income taxes		7.9			3.4
Receivable from affiliates:
Contran - trade items		.4			.4
Louisiana Pigment Company, L.P. ("LPC")		4.7			-
Other - trade items		2.2			2.2
Allowance for doubtful accounts		(1.2	)		(1.4	)
Total	$	329.2		$	351.0

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Accounts Payable and Accrued Liabilities

3 Months Ended

Mar. 31, 2020

Payables And Accruals [Abstract]

Accounts Payable and Accrued Liabilities

Note 7—Accounts payable and accrued liabilities:

	December31,		March 31,
	2019		2020
	(In millions)
Accounts payable:
Kronos	$	137.2	$	111.2
CompX		2.5		2.8
BMI and LandWell		3.7		2.2
NL		.9		.5
Other		.4		.4
Payable to affiliates:
Contran - income taxes		4.0		3.6
LPC		16.4		16.3
Accrued litigation settlement		11.8		11.9
Employee benefits		30.6		28.1
Operating lease liabilities		6.2		6.0
Accrued sales discounts and rebates		33.7		21.5
Deferred income		10.3		12.1
Environmental remediation and related costs		4.5		4.5
Interest		5.2		1.4
Other		40.0		35.1
Total	$	307.4	$	257.6

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

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.

We believe that these actions are without merit, and NL intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.  Other than with respect to the Santa Clara, California public nuisance case discussed below, we do not believe it is probable that we have incurred any liability with respect to all of the 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, other than with respect to the Santa Clara case discussed below, we have not accrued any amounts for any of the pending lead pigment and lead-based paint litigation cases filed by or on behalf of states, counties, cities or their public housing authorities and school districts, or those asserted as class actions. In addition, we have determined that liability to NL which may result, if any, cannot be reasonably estimated at this time because there is no prior history of a loss of this nature on which an estimate could be made and there is no substantive information available upon which an estimate could be based.

In the matter titled 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), on July 24, 2019 an order approving a global settlement agreement entered into among all of the plaintiffs and the three defendants remaining in the case (the Sherwin Williams Company, ConAgra Grocery Products and NL) was entered by the court and the case was dismissed with prejudice.  The global settlement agreement provides that an aggregate $305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between NL and its co-defendants in respect to the case. In the agreement, NL expressly denies any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against NL.  The settlement agreement fully concludes this matter.    

Under the terms of the global settlement agreement, each defendant must pay an aggregate $101.7 million to the plaintiffs as follows: $25.0 million within sixty days of the court’s approval of the settlement and dismissal of the case and the remaining $76.7 million in six annual installments beginning on the first anniversary of the initial payment ($12.0 million for the first five installments and $16.7 million for the sixth installment).  NL’s sixth installment will be made with funds already on deposit at the court 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). For financial reporting purposes we used a discount rate of 1.9% per annum to discount the settlement to the estimated net present value.  We recognized additional litigation settlement expense of $19.3 million during 2019 (primarily during the second quarter).

New cases may continue to be filed against NL.  We do not know if we will 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. We 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, we 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 that all of our facilities are in substantial compliance with applicable environmental laws.

Certain properties and facilities used in 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, 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. It is possible that actual costs will exceed accrued amounts or the upper end of the range for sites for which estimates have been made, and it is possible that costs will 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 our 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 2020.

	Amount
	(In millions)
Balance at the beginning of the year	$	99.7
Additions charged to expense		.1
Payments, net		(.5	)
Other, net		(.2	)
Balance at the end of the period	$	99.1
Amounts recognized in our Condensed Consolidated Balance Sheet at the end of the period:
Current liabilities	$	4.5
Noncurrent liabilities		94.6
Total	$	99.1

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, 2020, NL had accrued approximately $94 million related to approximately 32 sites associated with remediation and related matters that 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 we believe it is possible to estimate costs is approximately $115 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, 2020, there were approximately five sites for which NL is not currently able to 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 us. 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 financial position, results of operations and liquidity.

Other – We have also accrued approximately $5 million at March 31, 2020 for other environmental cleanup matters.

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 additional discussion of certain litigation involving NL and certain of its former insurance carriers, please refer to our 2019 Annual Report.

Other litigation

In addition to the litigation described above, we and our affiliates are 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 any additional material insurance coverage for our environmental claims. We currently believe that the disposition of all of these various other claims and disputes (including asbestos-related claims), individually or 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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Organization and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2020

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, 2020.  At March 31, 2020, a majority of Contran’s outstanding voting stock was held directly by Lisa K. Simmons and Serena Simmons Connelly and various family trusts established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which Ms. Simmons or Ms. Connelly, as applicable, served as trustee (collectively, the “Other Trusts”). In addition, each of Ms. Simmons and Ms. Connelly served as co-chair of the Contran board of directors.  The remainder of Contran’s outstanding voting stock was held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which a third-party financial institution serves as trustee.  Consequently, at March 31, 2020, Ms. Simmons, Ms. Connelly and the Family Trust may be deemed to control Contran, and us.  

Following the death of Ms. Connelly on April 22, 2020, Ms. Simmons and the Family Trust continue to directly hold their shares of Contran voting stock.  Under the terms of the Contran Corporation Amended and Restated Stockholders Agreement dated September 9, 2019 (the “Contran Stockholders Agreement”), and with respect to the shares of Contran voting stock held directly by Ms. Connelly at the time of her death (the “Connelly Direct Shares”), the independent executor of the estate of Ms. Connelly (prior to the completion of the probate of such estate) and the legatee of the Connelly Direct Shares (following completion of the probate of such estate) is required to vote the Connelly Direct Shares in the same manner as Ms. Simmons.  Also under the terms of the Contran Stockholders Agreement, and with respect to the shares of Contran voting stock held by the Other Trusts for which Ms. Connelly previously served as trustee and for which her successor trustee is someone other than Ms. Simmons (the “Connelly Indirect Shares”), such successor trustee is also required to vote the Connelly Indirect Shares in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons with respect to the Connelly Direct Shares and the Connelly Indirect Shares last through April 22, 2030 and are personal to Ms. Simmons. Consequently, as of April 22, 2020, 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, 2019 that we filed with the SEC on March 12, 2020 (the “2019 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, 2019 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, 2019) 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, 2020 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 2019 Consolidated Financial Statements contained in our 2019 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.

Recent accounting pronouncements

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, which changes the accounting for certain income tax transactions and reduces complexity in accounting for income taxes in certain areas.  The ASU introduces new guidance including providing a policy election for an entity to not allocate consolidated current and deferred tax expense when a member of a consolidated tax return is not subject to income tax in its separate financial statements and is a disregarded entity by the taxing authority; and providing guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The ASU also changes existing guidance in a number of areas, including: the method of making an intraperiod allocation of total income tax expense if there is a loss in continuing operations and gains outside of continuing operations; determining when a deferred tax liability is recognized after an investor in a non-U.S. entity transitions to or from the equity method of accounting; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income.  We adopted this ASU as of January 1, 2020.  The adoption of this ASU in the first quarter of 2020 did not have a material effect on our Condensed Consolidated Financial Statements.

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Equity - Additional Information (Detail) $ in Millions		3 Months Ended
	Apr. 07, 2020	Mar. 31, 2020 USD ($) shares
Kronos Worldwide, Inc.
Equity Class Of Treasury Stock [Line Items]
Common stock, Repurchased		122,489
Stock repurchase, aggregate purchase price | $		$ 1.0
Shares available for purchase		1,600,000
Subsequent Event
Equity Class Of Treasury Stock [Line Items]
Reverse stock split, description	Reverse stock split – As disclosed in our proxy statement filed with the Securities and Exchange Commission on April 7, 2020, our stockholders will vote on a proposal to approve a reverse stock split of our common stock at a reverse stock split ratio of 1-for-8, 1-for-10 or 1-for-12, as determined by our board of directors following stockholder approval, at our annual meeting of stockholders scheduled to be held on May 28, 2020.
Subsequent Event | Scenario One
Equity Class Of Treasury Stock [Line Items]
Reverse stock split, conversion ratio	8
Subsequent Event | Scenario Two
Equity Class Of Treasury Stock [Line Items]
Reverse stock split, conversion ratio	10
Subsequent Event | Scenario Three
Equity Class Of Treasury Stock [Line Items]
Reverse stock split, conversion ratio	12

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Other Income, Net - Schedule of Components of Other Income (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Securities earnings:
Dividends and interest	$ 2.0	$ 2.9
Securities transactions, net	(0.4)	0.2
Total	1.6	3.1
Currency transactions, net	12.2	0.9
Insurance recoveries	1.6	0.3
Infrastructure reimbursement	19.1	1.1
Gain on land sales	0.5
Other, net	(0.1)	1.2
Total	$ 34.9	$ 6.6

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions			3 Months Ended
	Mar. 27, 2020	Mar. 26, 2020	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Business interest income, adjusted taxable income		30.00%
CARES act of 2020, Business interest income, adjusted taxable income	50.00%
Cash tax benefit recognized			$ 1.0
Decrease in unrecognized tax benefits due to certain adjustments to our prior year returns and the expiration of certain statutes of limitations			$ 5.5

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Inventories, Net - Inventories, Net (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Inventory [Line Items]
Raw materials	$ 128.6	$ 127.3
Work in process	55.2	50.8
Finished products	250.3	274.3
Supplies (chemicals)	65.1	69.7
Total	499.2	522.1
Chemicals
Inventory [Line Items]
Raw materials	125.5	124.4
Work in process	43.0	39.0
Finished products	246.7	270.7
Component Products
Inventory [Line Items]
Raw materials	3.1	2.9
Work in process	12.2	11.8
Finished products	$ 3.6	$ 3.6

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Business Segment Information - Holding Percentage of Subsidiaries (Detail)	Mar. 31, 2020
Chemicals | Kronos Worldwide, Inc.
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	80.00%
Component Products | CompX
Segment Reporting Information [Line Items]
Parent company ownership interest	86.00%
Real Estate Management And Development | BMI
Segment Reporting Information [Line Items]
Parent company ownership interest	63.00%
Real Estate Management And Development | LandWell | Aggregate General And Limited Interests
Segment Reporting Information [Line Items]
Controlling interest in subsidiary	77.00%

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Fair Value Measurements and Financial Instruments

3 Months Ended

Mar. 31, 2020

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, 2019				March 31, 2020
	Carrying amount		Fair value		Carrying amount		Fair value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	583.8	$	583.8	$	529.0	$	529.0
Deferred payment obligation		9.9		9.9		9.9		9.9
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		442.6		457.0		435.1		374.8
Valhi credit facility with Contran		313.0		313.0		313.0		313.0
Tremont promissory note payable		2.0		2.0		.5		.5
BMI bank note payable		17.2		17.9		17.2		17.9
LandWell note payable to the City of Henderson		1.6		1.6		-		-
LandWell bank note payable		15.0		15.0		14.9		15.0

At March 31, 2020, the estimated market price of Kronos’ Senior Notes was €852 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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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Holding Percentage of Subsidiaries

Business segment	Entity	% controlled at March 31, 2020
Chemicals	Kronos	80	%
Component products	CompX	86	%
Real estate management and development	BMI and LandWell	63 – 77	%

Segment Operating Performance

	Three months ended
	March 31,
	2019			2020
	(unaudited)
Net sales:
Chemicals	$	436.5		$	421.0
Component products		31.2			32.3
Real estate management and development		11.9			6.0
Total net sales	$	479.6		$	459.3
Cost of sales:
Chemicals	$	327.7		$	333.3
Component products		21.5			21.9
Real estate management and development		8.6			4.4
Total cost of sales	$	357.8		$	359.6
Gross margin:
Chemicals	$	108.8		$	87.7
Component products		9.7			10.4
Real estate management and development		3.3			1.6
Total gross margin	$	121.8		$	99.7
Operating income:
Chemicals	$	52.8		$	46.8
Component products		4.4			5.0
Real estate management and development		3.2			19.2
Total operating income		60.4			71.0
General corporate items:
Securities earnings		3.1			1.6
Insurance recoveries		.3			1.6
Changes in market value of Valhi common stock held by subsidiaries		1.1			(2.4	)
Other components of net periodic pension expense		(4.1	)		(4.7	)
General expenses, net		(7.9	)		(8.1	)
Interest expense		(10.3	)		(9.7	)
Income before income taxes	$	42.6		$	49.3

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Other Income, Net - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disclosure Other Income Net Additional Information Detail [Line Items]
Infrastructure reimbursement	$ 19.1	$ 1.1
Kronos Worldwide, Inc.
Disclosure Other Income Net Additional Information Detail [Line Items]
Gain on insurance settlement related to property damage claim	1.5
City Of Henderson
Disclosure Other Income Net Additional Information Detail [Line Items]
Infrastructure reimbursement	$ 1.1	$ 19.1

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Noncontrolling Interest in Subsidiaries - Noncontrolling Interest in Net Assets of Subsidiaries (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	$ 335.4	$ 340.1
Kronos Worldwide, Inc.
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	209.9	216.6
NL Industries
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	64.2	65.8
CompX International
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	23.1	22.7
BMI
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	20.6	20.1
LandWell
Noncontrolling interest in net assets:
Noncontrolling interest in subsidiaries	$ 17.6	$ 14.9

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Commitments and Contingencies - Lead Pigment Litigation-NL and Environmental Matters and Litigation - Additional Information (Detail) $ in Millions		3 Months Ended
	Jul. 24, 2019 USD ($) Defendant Installment	Mar. 31, 2020 USD ($) Cases site	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Commitments And Contingent Liabilities [Line Items]
Litigation settlement		$ 11.9		$ 11.8
Accrual for reasonably estimable environmental remediation and related matters		99.1		$ 99.7
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		$ 94.0
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		$ 115.0
Lead Pigment Litigation | NL
Commitments And Contingent Liabilities [Line Items]
Number of cases settled and dismissed and found not liable | Cases		100
Period by which loss contingency claims settled and dismissed		30 years
California Lead Paint Litigation | NL
Commitments And Contingent Liabilities [Line Items]
Description of defendants		July 24, 2019 an order approving a global settlement agreement entered into among all of the plaintiffs and the three defendants remaining in the case (the Sherwin Williams Company, ConAgra Grocery Products and NL) was entered by the court and the case was dismissed with prejudice. The global settlement agreement provides that an aggregate $305 million will be paid collectively by the three co-defendants in full satisfaction of all claims resulting in a dismissal of the case with prejudice and the resolution of (i) all pending and future claims by the plaintiffs in the case, and (ii) all potential claims for contribution or indemnity between NL and its co-defendants in respect to the case.
Number of Defendant | Defendant	3
Settlement amount	$ 305.0
Litigation settlement	101.7
Litigation settlement charge upon approval of settlement terms	25.0
Remaining litigation settlement charge	$ 76.7
Number of annual installments | Installment	6
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	12.0
Remaining litigation settlement charge due in fifth installment	12.0
Remaining litigation settlement charge due in sixth installment	$ 16.7
Discounted rate for estimated present value of remaining litigation amount	1.90%
Litigation settlement expense, net			$ 19.3

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Accounts and Other Receivables, Net - Components of Accounts and Other Receivables (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Trade accounts receivable:
VAT and other receivables	$ 23.2	$ 31.2
Refundable income taxes	3.4	7.9
Allowance for doubtful accounts	(1.4)	(1.2)
Total	351.0	329.2
Trade Accounts Receivable | Kronos Worldwide, Inc.
Trade accounts receivable:
Accounts receivable	306.5	270.5
Trade Accounts Receivable | CompX
Trade accounts receivable:
Accounts receivable	15.3	11.9
Trade Accounts Receivable | BMI and LandWell
Trade accounts receivable:
Accounts receivable	1.4	1.6
Contran | Trade Items
Trade accounts receivable:
Receivable from affiliates	0.4	0.4
LPC
Trade accounts receivable:
Receivable from affiliates		4.7
Other | Trade Items
Trade accounts receivable:
Receivable from affiliates	$ 2.2	$ 2.2

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Organization and Basis of Presentation - Additional Information (Detail)	Mar. 31, 2020
Contran | Valhi Incorporation
Basis Of Presentation And Significant Accounting Policies [Line Items]
Parent company ownership interest	92.00%

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Commitments and Contingencies - Changes in Accrued Environmental Remediation and Related Costs (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Environmental Remediation Obligations [Abstract]
Balance at the beginning of the year	$ 99.7
Additions charged to expense	0.1
Payments, net	(0.5)
Other, net	(0.2)
Balance at the end of the period	99.1
Amounts recognized in our Condensed Consolidated Balance Sheet at the end of the period:
Current liabilities		$ 4.5	$ 4.5
Noncurrent liabilities		94.6	95.2
Total	$ 99.1	$ 99.1	$ 99.7

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Long-Term Debt - Tremont Promissory Note Payable - Additional Information (Detail) - Promissory Note - Tremont - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Apr. 30, 2021	Mar. 31, 2020
Debt Instrument [Line Items]
Principal prepayments of note		$ 1.5
Subsequent Event
Debt Instrument [Line Items]
Principal prepayments of note	$ 0.5

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 483.1	$ 523.8
Restricted cash equivalents	12.5	27.0
Marketable securities	2.1	2.1
Accounts and other receivables, net	351.0	329.2
Inventories, net	499.2	522.1
Other current assets	23.3	21.2
Total current assets	1,371.2	1,425.4
Other assets:
Investment in TiO2 manufacturing joint venture	92.4	90.2
Goodwill	379.7	379.7
Deferred income taxes	104.1	106.0
Other assets	233.8	230.1
Total other assets	810.0	806.0
Property and equipment:
Land	45.5	46.2
Buildings	239.0	248.0
Equipment	1,133.7	1,166.0
Mining properties	8.1	26.2
Construction in progress	58.9	62.7
Gross property and equipment	1,485.2	1,549.1
Less accumulated depreciation and amortization	955.8	986.1
Net property and equipment	529.4	563.0
Total assets	2,710.6	2,794.4
Current liabilities:
Current maturities of long-term debt	3.8	4.9
Accounts payable and accrued liabilities	257.6	307.4
Income taxes	15.9	10.2
Total current liabilities	277.3	322.5
Noncurrent liabilities:
Long-term debt	779.7	789.4
Deferred income taxes	33.0	38.1
Payable to affiliate - income taxes	56.3	56.3
Accrued pension costs	309.3	315.6
Accrued environmental remediation and related costs	94.6	95.2
Other liabilities	193.5	197.2
Total noncurrent liabilities	1,466.4	1,491.8
Equity: Valhi stockholders' equity:
Preferred stock	667.3	667.3
Common stock	3.6	3.6
Retained earnings	256.4	239.4
Accumulated other comprehensive loss	(246.2)	(220.7)
Treasury stock, at cost	(49.6)	(49.6)
Total Valhi stockholders' equity	631.5	640.0
Noncontrolling interest in subsidiaries	335.4	340.1
Total equity	966.9	980.1
Total liabilities and equity	2,710.6	2,794.4
Commitments and contingencies (Notes 13 and 16)

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement Of Stockholders Equity [Abstract]
Cash dividends per share	$ 0.02	$ 0.02

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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, 2020	Mar. 31, 2019
Disaggregation Of Revenue [Line Items]
Net sales	$ 459.3	$ 479.6
Component Products
Disaggregation Of Revenue [Line Items]
Net sales	32.3	31.2
Component Products | Security Products
Disaggregation Of Revenue [Line Items]
Net sales	25.5	24.7
Component Products | Marine Components
Disaggregation Of Revenue [Line Items]
Net sales	6.8	6.5
Real Estate Management And Development
Disaggregation Of Revenue [Line Items]
Net sales	6.0	11.9
Real Estate Management And Development | Land Sales
Disaggregation Of Revenue [Line Items]
Net sales	3.6	9.5
Real Estate Management And Development | Water Delivery
Disaggregation Of Revenue [Line Items]
Net sales	1.9	1.9
Real Estate Management And Development | Utility and Other
Disaggregation Of Revenue [Line Items]
Net sales	$ 0.5	$ 0.5

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Other Income, Net (Tables)

3 Months Ended

Mar. 31, 2020

Other Income And Expenses [Abstract]

Schedule of Components of Other Income

	Three months ended
	March 31,
	2019		2020
	(In millions)
Securities earnings:
Dividends and interest	$	2.9	$	2.0
Securities transactions, net		.2		(.4	)
Total		3.1		1.6
Currency transactions, net		.9		12.2
Insurance recoveries		.3		1.6
Infrastructure reimbursement		1.1		19.1
Gain on land sales		-		.5
Other, net		1.2		(0.1	)
Total	$	6.6	$	34.9

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Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Payables And Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

	December31,		March 31,
	2019		2020
	(In millions)
Accounts payable:
Kronos	$	137.2	$	111.2
CompX		2.5		2.8
BMI and LandWell		3.7		2.2
NL		.9		.5
Other		.4		.4
Payable to affiliates:
Contran - income taxes		4.0		3.6
LPC		16.4		16.3
Accrued litigation settlement		11.8		11.9
Employee benefits		30.6		28.1
Operating lease liabilities		6.2		6.0
Accrued sales discounts and rebates		33.7		21.5
Deferred income		10.3		12.1
Environmental remediation and related costs		4.5		4.5
Interest		5.2		1.4
Other		40.0		35.1
Total	$	307.4	$	257.6

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Inventories, Net

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventories, Net

Note 4—Inventories, net:

	December31,		March 31,
	2019		2020
	(In millions)
Raw materials:
Chemicals	$	124.4	$	125.5
Component products		2.9		3.1
Total raw materials		127.3		128.6
Work in process:
Chemicals		39.0		43.0
Component products		11.8		12.2
Total in-process products		50.8		55.2
Finished products:
Chemicals		270.7		246.7
Component products		3.6		3.6
Total finished products		274.3		250.3
Supplies (chemicals)		69.7		65.1
Total	$	522.1	$	499.2

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Other Noncurrent Liabilities

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Noncurrent Liabilities

Note8—Other noncurrent liabilities:

	December 31,		March 31,
	2019		2020
	(In millions)
Operating lease liabilities	$	22.2	$	20.3
Reserve for uncertain tax positions		13.6		14.7
Accrued litigation settlement		60.1		60.4
Deferred income		47.4		46.1
Other postretirement benefits		10.5		9.7
Employee benefits		6.0		5.8
Insurance claims and expenses		11.0		10.1
Deferred payment obligation		9.9		9.9
Accrued development costs		8.3		8.0
Other		8.2		8.5
Total	$	197.2	$	193.5

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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 12—Income taxes:

	Three months ended
	March 31,
	2019			2020
	(In millions)
Expected tax expense, at U.S. federal statutory    income tax rate of 21%	$	8.9		$	10.3
Incremental net tax benefit on earnings and losses of non-U.S., U.S. and non-tax group companies		(.2	)		(1.8	)
Non-U.S. tax rates		2.3			.9
Valuation allowance		1.0			(.2	)
Adjustment to the reserve for uncertain tax positions, net		.5			.6
Global intangible low-tax income, net		.7			1.2
U.S. state income taxes and other, net		1.0			.4
Income tax expense	$	14.2		$	11.4
Comprehensive provision for income taxes allocable to:
Net income	$	14.2		$	11.4
Other comprehensive income (loss):
Currency translation		-			(4.7	)
Pension plans		1.5			1.8
Other		-			(.2	)
Total	$	15.7		$	8.3

The amount shown in the above 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 expense (benefit) on earnings and losses on non-U.S., U.S. and non-tax group companies includes, as applicable, (i) deferred state and non-U.S. income taxes (or deferred income tax benefits) and deferred withholding taxes, as applicable, associated with the current-year change in the aggregate amount of undistributed earnings of all of our non-U.S. subsidiaries, which earnings are not permanently reinvested , (ii) current U.S. income taxes (or current income tax benefit) attributable to current-year income (losses) of one of Kronos’ non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, (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.

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law in response to the COVID-19 pandemic.  The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, modifications to the limitation of business interest for tax years beginning in 2019 and 2020 and technical corrections to tax depreciation methods for qualified improvement property.  The modification to the business interest provisions increases the business interest limitation from 30% of adjusted taxable income to 50% of adjusted taxable income which increases our allowable interest expense deduction for 2019 and 2020.  Consequently, in the first quarter of 2020 we recognized a cash tax benefit of $1.0 million related to the reversal of the valuation allowance recognized in 2019 for the portion of the disallowed interest expense we did not expect to fully utilize at December 31, 2019.  We have determined other provisions of the CARES Act will not have a material impact on our provision for income taxes in 2020.  

     Tax authorities may in the future propose tax deficiencies, including penalties and interest, related to examinations of our U.S. and non-U.S. income tax returns.  Because of the uncertainties involved in settlement initiatives and court and tax proceedings, we cannot guarantee that these tax matters, if any, will be resolved in our favor, and therefore our potential exposure, if any, is also uncertain. 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 $5.5 million during the next twelve months primarily due to certain adjustments to our prior year returns and the expiration of certain statutes of limitations.

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Inventories, Net (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventories, Net

	December31,		March 31,
	2019		2020
	(In millions)
Raw materials:
Chemicals	$	124.4	$	125.5
Component products		2.9		3.1
Total raw materials		127.3		128.6
Work in process:
Chemicals		39.0		43.0
Component products		11.8		12.2
Total in-process products		50.8		55.2
Finished products:
Chemicals		270.7		246.7
Component products		3.6		3.6
Total finished products		274.3		250.3
Supplies (chemicals)		69.7		65.1
Total	$	522.1	$	499.2

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Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Equity

Note 14—Stockholders’ equity:

Accumulated Other Comprehensive Income – Changes in accumulated other comprehensive income (loss) attributable to Valhi stockholders for the three months ended March 31, 2019 and 2020 are presented in the table below.

	Three months ended
	March 31,
	2019			2020
	(In millions)
Accumulated other comprehensive income (loss), net of tax    and noncontrolling interest:
Marketable securities:
Balance at beginning of period	$	1.7		$	1.7
Other comprehensive loss - unrealized losses arising   during the period		-			-
Balance at end of period	$	1.7		$	1.7
Currency translation adjustment:
Balance at beginning of period	$	(75.6	)	$	(76.8	)
Other comprehensive income (loss)		(.2	)		(27.6	)
Balance at end of period	$	(75.8	)	$	(104.4	)
Defined benefit pension plans:
Balance at beginning of period	$	(134.0	)	$	(146.6	)
Other comprehensive income - amortization of   prior service cost and net losses included in net   periodic pension cost	1.7				2.3
Balance at end of period	$	(132.3	)	$	(144.3	)
OPEB plans:
Balance at beginning of period	$	1.7		$	1.0
Other comprehensive loss - amortization of prior service credit and net losses included in net periodic OPEB cost		(.2	)		(.2	)
Balance at end of period	$	1.5		$	.8
Total accumulated other comprehensive income (loss):
Balance at beginning of period	$	(206.2	)	$	(220.7	)
Other comprehensive income (loss)		1.3			(25.5	)
Balance at end of period	$	(204.9	)	$	(246.2	)

Reverse stock split – As disclosed in our proxy statement filed with the Securities and Exchange Commission on April 7, 2020, our stockholders will vote on a proposal to approve a reverse stock split of our common stock at a reverse stock split ratio of 1-for-8, 1-for-10 or 1-for-12, as determined by our board of directors following stockholder approval, at our annual meeting of stockholders scheduled to be held on May 28, 2020. Also as disclosed in our proxy statement, our controlling stockholder has indicated its intention to have its shares represented at the meeting and to vote its shares in favor of the reverse stock split proposal, in which case the proposal will be approved.  We expect to effect the reverse stock split promptly following the annual meeting, at the reverse stock split ratio selected by our board of directors immediately following the stockholders meeting.  Once the reverse stock split has been implemented, we will adjust all share and per-share disclosures for all periods presented in our consolidated financial statements to give effect to the split. 

Other – During the first three months of 2020, Kronos acquired 122,489 shares of its common stock in market transactions for an aggregate purchase price of $1.0 million.  At March 31, 2020, 1.6 million shares are available for repurchase under Kronos’ previously authorized stock repurchase program.

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Subsequent Event

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent event

Note 18 – Subsequent event:

Following the  spread of the COVID-19 virus beyond China in late January 2020, various national, state and local governments began to implement a number of increasingly restrictive measures to contain the spread of the virus, including  travel restrictions, gathering limitations,  event cancellations, border closures and stay-at-home orders, resulting in sharp contractions of vast areas of the global economy beginning in March 2020. While measured efforts are underway to resume commercial activities in most global markets, the impacts of COVID-19, including the efforts to mitigate its spread, are expected to continue to challenge workers, businesses and governments for the foreseeable future.  Although the COVID-19 pandemic had limited impact on our operations during the first quarter of 2020, we believe U.S. and worldwide gross domestic product will be significantly impacted for an indeterminate period, including the demand for our products and those of our customers. Consequently, we expect to report lower sales and earnings than would otherwise have been expected for the remainder of 2020. The extent of the impact will depend on numerous factors, including future developments, and therefore is uncertain and cannot be predicted.

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Business Segment Information - Additional Information (Detail)	Mar. 31, 2020
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	30.00%
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%

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

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 2020.

	Amount
	(In millions)
Balance at the beginning of the year	$	99.7
Additions charged to expense		.1
Payments, net		(.5	)
Other, net		(.2	)
Balance at the end of the period	$	99.1
Amounts recognized in our Condensed Consolidated Balance Sheet at the end of the period:
Current liabilities	$	4.5
Noncurrent liabilities		94.6
Total	$	99.1

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Other Noncurrent Assets - Other Noncurrent Assets (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Other noncurrent assets:
Land held for development	$ 116.2	$ 125.3
Operating lease right-of-use assets	27.0	29.0
Restricted cash and cash equivalents	33.4	33.0
IBNR receivables	7.9	8.5
Marketable securities	5.5	6.2
Pension asset	7.8	7.4
Note receivables - OPA	27.6	8.8
Other	8.4	11.9
Total	$ 233.8	$ 230.1

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Income Taxes - Components of Comprehensive Provision for Income Taxes Allocation (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	21.00%	21.00%

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Equity - Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	$ 640.0
Balance at end of period	631.5
Marketable Securities
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	1.7	$ 1.7
Balance at end of period	1.7	1.7
Currency Translation Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(76.8)	(75.6)
Other comprehensive income (loss)	(27.6)	(0.2)
Balance at end of period	(104.4)	(75.8)
Accumulated Defined Benefit Plans Adjustment | Defined Benefit Pension Plans
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(146.6)	(134.0)
Other comprehensive income (loss)	2.3	1.7
Balance at end of period	(144.3)	(132.3)
Accumulated Defined Benefit Plans Adjustment | OPEB
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	1.0	1.7
Other comprehensive income (loss)	(0.2)	(0.2)
Balance at end of period	0.8	1.5
Total Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at beginning of period	(220.7)	(206.2)
Other comprehensive income (loss)	(25.5)	1.3
Balance at end of period	$ (246.2)	$ (204.9)

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Defined Benefit Pension Plans - Additional Information (Detail) $ in Millions	Mar. 31, 2020 USD ($)
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Expected contribution	$ 19.0

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Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2020

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, 2020.  At March 31, 2020, a majority of Contran’s outstanding voting stock was held directly by Lisa K. Simmons and Serena Simmons Connelly and various family trusts established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which Ms. Simmons or Ms. Connelly, as applicable, served as trustee (collectively, the “Other Trusts”). In addition, each of Ms. Simmons and Ms. Connelly served as co-chair of the Contran board of directors.  The remainder of Contran’s outstanding voting stock was held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and Ms. Connelly and their children and for which a third-party financial institution serves as trustee.  Consequently, at March 31, 2020, Ms. Simmons, Ms. Connelly and the Family Trust may be deemed to control Contran, and us.  

Following the death of Ms. Connelly on April 22, 2020, Ms. Simmons and the Family Trust continue to directly hold their shares of Contran voting stock.  Under the terms of the Contran Corporation Amended and Restated Stockholders Agreement dated September 9, 2019 (the “Contran Stockholders Agreement”), and with respect to the shares of Contran voting stock held directly by Ms. Connelly at the time of her death (the “Connelly Direct Shares”), the independent executor of the estate of Ms. Connelly (prior to the completion of the probate of such estate) and the legatee of the Connelly Direct Shares (following completion of the probate of such estate) is required to vote the Connelly Direct Shares in the same manner as Ms. Simmons.  Also under the terms of the Contran Stockholders Agreement, and with respect to the shares of Contran voting stock held by the Other Trusts for which Ms. Connelly previously served as trustee and for which her successor trustee is someone other than Ms. Simmons (the “Connelly Indirect Shares”), such successor trustee is also required to vote the Connelly Indirect Shares in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons with respect to the Connelly Direct Shares and the Connelly Indirect Shares last through April 22, 2030 and are personal to Ms. Simmons. Consequently, as of April 22, 2020, 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, 2019 that we filed with the SEC on March 12, 2020 (the “2019 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, 2019 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, 2019) 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, 2020 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 2019 Consolidated Financial Statements contained in our 2019 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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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	3 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2020 EUR (€)
Debt Instrument [Line Items]
Debt instrument interest rate	3.75%	3.75%
Debt instrument maturity date	Sep. 15, 2025
Debt instrument principal amount | €		€ 400,000,000
Unamortized debt issuance costs | $	$ 4.9

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net income	$ 37.9	$ 28.4
Other comprehensive income (loss), net of tax:
Currency translation	(37.7)	(0.3)
Total other comprehensive income (loss), net	(34.8)	1.8
Comprehensive income	3.1	30.2
Comprehensive income attributable to noncontrolling interest	4.2	10.7
Comprehensive income (loss) attributable to Valhi stockholders	(1.1)	19.5
Defined Benefit Pension Plans
Other comprehensive income (loss), net of tax:
Pension and other postretirement benefit plan	3.0	2.3
OPEB
Other comprehensive income (loss), net of tax:
Pension and other postretirement benefit plan	$ (0.1)	$ (0.2)

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Other Noncurrent Liabilities - Other Noncurrent Liabilities (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Other Liabilities Disclosure [Abstract]
Operating lease liabilities	$ 20.3	$ 22.2
Reserve for uncertain tax positions	14.7	13.6
Accrued litigation settlement	60.4	60.1
Deferred income	46.1	47.4
Other postretirement benefits	9.7	10.5
Employee benefits	5.8	6.0
Insurance claims and expenses	10.1	11.0
Deferred payment obligation	9.9	9.9
Accrued development costs	8.0	8.3
Other	8.5	8.2
Total	$ 193.5	$ 197.2

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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, 2020 EUR (€)
Financial Instrument At Fair Value [Line Items]
Estimated market price of the notes	€ 852
Principal amount of debt instrument	€ 1,000

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Long-Term Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Note 6—Long-term debt:

	December 31,			March 31,
	2019			2020
	(In millions)
Valhi:
Contran credit facility	$	313.0		$	313.0
Subsidiary debt:
Kronos:
Senior Notes		442.6			435.1
Tremont:
Promissory note payable		2.0			.5
BMI:
Bank loan - Western Alliance Bank		17.2			17.2
LandWell:
Note payable to Western Alliance Business Trust		15.0		14.9
Note payable to the City of Henderson		1.6			-
Other		2.9			2.8
Total subsidiary debt		481.3			470.5
Total debt		794.3			783.5
Less current maturities		(4.9	)		(3.8	)
Total long-term debt	$	789.4		$	779.7

Valhi – Contran credit facility –During the first three months of 2020, we had no borrowings or repayments under this facility.The average interest rate on the existing balance for the three months ended March 31, 2020 was 5.4%. At March 31, 2020, the interest rate was 4.25% and $47.0 million was available for borrowing under this facility.

Kronos – Senior Notes -  At March 31, 2020, 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 $4.9 million.

North American and European revolving credit facilities– During the first three months of 2020, Kronos had no borrowings or repayments under its North American revolving credit facility and its European revolving credit facility.  At March 31, 2020, approximately $117.2 million was available for borrowing under the North American revolving credit facility.  Kronos’ European revolving credit facility requires the maintenance of certain financial ratios, and one of such requirements is based on the ratio of net debt to last twelve months earnings before income tax, interest, depreciation and amortization expense (EBITDA) of the borrowers.  Based upon the borrowers’ last twelve months EBITDA as of March 31, 2020 and the net debt to EBITDA financial test, the full €90.0 million of the credit facility ($99.0 million) was available for borrowing at March 31, 2020.    

Tremont – Promissory note payable –During the first three months of 2020,Tremont prepaid (without penalty) $1.5 million principal amount on the note as required under the terms of the note agreement.  The remaining outstanding balance of $.5 million was repaid in April 2020.

LandWell – In January 2020, LandWell fully prepaid (without penalty) its promissory note payable to the City of Henderson, Nevada.

Restrictions and other – Certain of the credit facilities with unrelated, third-party lenders described above require the respective borrowers to maintain minimum levels of equity, require the maintenance of certain financial ratios, limit dividends and additional indebtedness and contain other provisions and restrictive covenants customary in lending transactions of this type. We are in compliance with all of our debt covenants at March 31, 2020.

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Defined Benefit Pension Plans

3 Months Ended

Mar. 31, 2020

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,
	2019			2020
	(In millions)
Service cost	$	2.8		$	3.2
Interest cost		4.0			3.0
Expected return on plan assets		(3.7	)		(2.8	)
Amortization of unrecognized prior service cost		.1			-
Recognized actuarial losses		3.8			4.8
Total	$	7.0		$	8.2

We expect to contribute the equivalent of approximately $19.0 million to all of our defined benefit pension plans during 2020.

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Revenue - Disaggregation of Sales (Tables)

3 Months Ended

Mar. 31, 2020

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,
	2019			2020
	(In millions)
Net sales - point of origin:
United States	$	245.3		$	237.0
Germany		219.2			229.1
Canada		78.5			67.7
Belgium		69.7			66.1
Norway		51.5			54.3
Eliminations		(227.7	)		(233.2	)
Total	$	436.5		$	421.0
Net sales - point of destination:
Europe	$	215.2		$	214.5
North America		146.8			132.3
Other		74.5			74.2
Total	$	436.5		$	421.0

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,
	2019		2020
	(In millions)
Component Products:
Net sales:
Security products	$	24.7	$	25.5
Marine components		6.5		6.8
Total	$	31.2	$	32.3
Real Estate Management and Development:
Net sales:
Land sales	$	9.5	$	3.6
Water delivery		1.9		1.9
Utility and other		.5		.5
Total	$	11.9	$	6.0

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Other Noncurrent Assets (Tables)

3 Months Ended

Mar. 31, 2020

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Noncurrent Assets

	December31,		March 31,
	2019		2020
	(In millions)
Other noncurrent assets:
Land held for development	$	125.3	$	116.2
Operating lease right-of-use assets		29.0		27.0
Restricted cash and cash equivalents		33.0		33.4
IBNR receivables		8.5		7.9
Marketable securities		6.2		5.5
Pension asset		7.4		7.8
Note receivables - OPA		8.8		27.6
Other		11.9		8.4
Total	$	230.1	$	233.8

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Noncontrolling Interest in Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2020

Noncontrolling Interest [Abstract]

Noncontrolling Interest in Net Assets of Subsidiaries

	December31,		March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	216.6	$	209.9
NL Industries		65.8		64.2
CompX International		22.7		23.1
BMI		20.1		20.6
LandWell		14.9		17.6
Total	$	340.1	$	335.4

Schedule of Noncontrolling Interest in Net Income of Subsidiaries

	Three months ended March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	5.9	$	5.2
NL Industries		2.6		.3
CompX International		.5		.6
BMI		.5		2.8
LandWell		.7		4.6
Total	$	10.2	$	13.5

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Long-Term Debt - Valhi Contran Credit Facility - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Debt Instrument [Line Items]
Borrowings of credit facility	$ 0.0
Repayment of credit facility	$ 0.0
VALHI, INC. | Contran Credit Facility
Debt Instrument [Line Items]
Debt instrument, Interest rate at period end	5.40%
Debt instrument, Interest rate during period	4.25%
Amount available for borrowing	$ 47.0

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Trading Symbol	VHI
Entity Registrant Name	VALHI INC /DE/
Entity Central Index Key	0000059255
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		339,235,449
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

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Preferred stock	Common stock	Retained earnings (deficit)	Accumulated other comprehensive loss	Treasury stock	Non-controlling interest
Balance at Dec. 31, 2018	$ 989.0	$ 667.3	$ 3.6	$ 220.3	$ (206.2)	$ (49.6)	$ 353.6
Net income	28.4			18.2			10.2
Other comprehensive income (loss), net	1.8				1.3		0.5
Dividends paid to noncontrolling interest	(6.3)						(6.3)
Cash dividends	(6.8)			(6.8)
Balance at Mar. 31, 2019	1,006.1	667.3	3.6	231.7	(204.9)	(49.6)	358.0
Balance at Dec. 31, 2019	980.1	667.3	3.6	239.4	(220.7)	(49.6)	340.1
Net income	37.9			24.4			13.5
Other comprehensive income (loss), net	(34.8)				(25.5)		(9.3)
Dividends paid to noncontrolling interest	(8.6)						(8.6)
Cash dividends	(6.8)			(6.8)
Equity transactions with noncontrolling interest, net and other	(0.9)			(0.6)			(0.3)
Balance at Mar. 31, 2020	$ 966.9	$ 667.3	$ 3.6	$ 256.4	$ (246.2)	$ (49.6)	$ 335.4

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Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Payable to affiliates:
Accrued litigation settlement	$ 11.9	$ 11.8
Employee benefits	28.1	30.6
Operating lease liabilities	6.0	6.2
Accrued sales discounts and rebates	21.5	33.7
Deferred income	12.1	10.3
Environmental remediation and related costs	4.5	4.5
Interest	1.4	5.2
Other	35.1	40.0
Total	257.6	307.4
Kronos Worldwide, Inc.
Accounts payable:
Accounts payable	111.2	137.2
CompX
Accounts payable:
Accounts payable	2.8	2.5
BMI and LandWell
Accounts payable:
Accounts payable	2.2	3.7
NL
Accounts payable:
Accounts payable	0.5	0.9
Other
Accounts payable:
Accounts payable	0.4	0.4
Contran | Income Taxes Payable
Payable to affiliates:
Payable to affiliates	3.6	4.0
LPC
Payable to affiliates:
Payable to affiliates	$ 16.3	$ 16.4

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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, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 3.2	$ 2.8
Interest cost	3.0	4.0
Expected return on plan assets	(2.8)	(3.7)
Amortization of unrecognized prior service cost		0.1
Recognized actuarial losses	4.8	3.8
Total	$ 8.2	$ 7.0

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Business Segment Information

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Business Segment Information

Note 2—Business segment information:

Business segment	Entity	% controlled at March 31, 2020
Chemicals	Kronos	80	%
Component products	CompX	86	%
Real estate management and development	BMI and LandWell	63 – 77	%

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. We own 63% of BMI.  Our control of LandWell includes the 27% we hold directly and 50% held by BMI.  

	Three months ended
	March 31,
	2019			2020
	(unaudited)
Net sales:
Chemicals	$	436.5		$	421.0
Component products		31.2			32.3
Real estate management and development		11.9			6.0
Total net sales	$	479.6		$	459.3
Cost of sales:
Chemicals	$	327.7		$	333.3
Component products		21.5			21.9
Real estate management and development		8.6			4.4
Total cost of sales	$	357.8		$	359.6
Gross margin:
Chemicals	$	108.8		$	87.7
Component products		9.7			10.4
Real estate management and development		3.3			1.6
Total gross margin	$	121.8		$	99.7
Operating income:
Chemicals	$	52.8		$	46.8
Component products		4.4			5.0
Real estate management and development		3.2			19.2
Total operating income		60.4			71.0
General corporate items:
Securities earnings		3.1			1.6
Insurance recoveries		.3			1.6
Changes in market value of Valhi common stock held by subsidiaries		1.1			(2.4	)
Other components of net periodic pension expense		(4.1	)		(4.7	)
General expenses, net		(7.9	)		(8.1	)
Interest expense		(10.3	)		(9.7	)
Income before income taxes	$	42.6		$	49.3

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 income is included in the determination of Real Estate Management and Development operating income. See Note 11.

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Other Noncurrent Assets

3 Months Ended

Mar. 31, 2020

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Noncurrent Assets

Note 5—Other noncurrent assets:

	December31,		March 31,
	2019		2020
	(In millions)
Other noncurrent assets:
Land held for development	$	125.3	$	116.2
Operating lease right-of-use assets		29.0		27.0
Restricted cash and cash equivalents		33.0		33.4
IBNR receivables		8.5		7.9
Marketable securities		6.2		5.5
Pension asset		7.4		7.8
Note receivables - OPA		8.8		27.6
Other		11.9		8.4
Total	$	230.1	$	233.8

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Revenue - Disaggregation of Sales

3 Months Ended

Mar. 31, 2020

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,
	2019			2020
	(In millions)
Net sales - point of origin:
United States	$	245.3		$	237.0
Germany		219.2			229.1
Canada		78.5			67.7
Belgium		69.7			66.1
Norway		51.5			54.3
Eliminations		(227.7	)		(233.2	)
Total	$	436.5		$	421.0
Net sales - point of destination:
Europe	$	215.2		$	214.5
North America		146.8			132.3
Other		74.5			74.2
Total	$	436.5		$	421.0

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,
	2019		2020
	(In millions)
Component Products:
Net sales:
Security products	$	24.7	$	25.5
Marine components		6.5		6.8
Total	$	31.2	$	32.3
Real Estate Management and Development:
Net sales:
Land sales	$	9.5	$	3.6
Water delivery		1.9		1.9
Utility and other		.5		.5
Total	$	11.9	$	6.0

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Equity (Tables)

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income – Changes in accumulated other comprehensive income (loss) attributable to Valhi stockholders for the three months ended March 31, 2019 and 2020 are presented in the table below.

	Three months ended
	March 31,
	2019			2020
	(In millions)
Accumulated other comprehensive income (loss), net of tax    and noncontrolling interest:
Marketable securities:
Balance at beginning of period	$	1.7		$	1.7
Other comprehensive loss - unrealized losses arising   during the period		-			-
Balance at end of period	$	1.7		$	1.7
Currency translation adjustment:
Balance at beginning of period	$	(75.6	)	$	(76.8	)
Other comprehensive income (loss)		(.2	)		(27.6	)
Balance at end of period	$	(75.8	)	$	(104.4	)
Defined benefit pension plans:
Balance at beginning of period	$	(134.0	)	$	(146.6	)
Other comprehensive income - amortization of   prior service cost and net losses included in net   periodic pension cost	1.7				2.3
Balance at end of period	$	(132.3	)	$	(144.3	)
OPEB plans:
Balance at beginning of period	$	1.7		$	1.0
Other comprehensive loss - amortization of prior service credit and net losses included in net periodic OPEB cost		(.2	)		(.2	)
Balance at end of period	$	1.5		$	.8
Total accumulated other comprehensive income (loss):
Balance at beginning of period	$	(206.2	)	$	(220.7	)
Other comprehensive income (loss)		1.3			(25.5	)
Balance at end of period	$	(204.9	)	$	(246.2	)

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Defined Benefit Pension Plans (Tables)

3 Months Ended

Mar. 31, 2020

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,
	2019			2020
	(In millions)
Service cost	$	2.8		$	3.2
Interest cost		4.0			3.0
Expected return on plan assets		(3.7	)		(2.8	)
Amortization of unrecognized prior service cost		.1			-
Recognized actuarial losses		3.8			4.8
Total	$	7.0		$	8.2

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Long-Term Debt

	December 31,			March 31,
	2019			2020
	(In millions)
Valhi:
Contran credit facility	$	313.0		$	313.0
Subsidiary debt:
Kronos:
Senior Notes		442.6			435.1
Tremont:
Promissory note payable		2.0			.5
BMI:
Bank loan - Western Alliance Bank		17.2			17.2
LandWell:
Note payable to Western Alliance Business Trust		15.0		14.9
Note payable to the City of Henderson		1.6			-
Other		2.9			2.8
Total subsidiary debt		481.3			470.5
Total debt		794.3			783.5
Less current maturities		(4.9	)		(3.8	)
Total long-term debt	$	789.4		$	779.7

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Noncontrolling Interest in Subsidiaries

3 Months Ended

Mar. 31, 2020

Noncontrolling Interest [Abstract]

Noncontrolling Interest in Subsidiaries

Note 13—Noncontrolling interest in subsidiaries:

	December31,		March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net assets:
Kronos Worldwide	$	216.6	$	209.9
NL Industries		65.8		64.2
CompX International		22.7		23.1
BMI		20.1		20.6
LandWell		14.9		17.6
Total	$	340.1	$	335.4

	Three months ended March 31,
	2019		2020
	(In millions)
Noncontrolling interest in net income of subsidiaries:
Kronos Worldwide	$	5.9	$	5.2
NL Industries		2.6		.3
CompX International		.5		.6
BMI		.5		2.8
LandWell		.7		4.6
Total	$	10.2	$	13.5

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2020

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 17—Recent accounting pronouncements:

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, which changes the accounting for certain income tax transactions and reduces complexity in accounting for income taxes in certain areas.  The ASU introduces new guidance including providing a policy election for an entity to not allocate consolidated current and deferred tax expense when a member of a consolidated tax return is not subject to income tax in its separate financial statements and is a disregarded entity by the taxing authority; and providing guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The ASU also changes existing guidance in a number of areas, including: the method of making an intraperiod allocation of total income tax expense if there is a loss in continuing operations and gains outside of continuing operations; determining when a deferred tax liability is recognized after an investor in a non-U.S. entity transitions to or from the equity method of accounting; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income.  We adopted this ASU as of January 1, 2020.  The adoption of this ASU in the first quarter of 2020 did not have a material effect on our Condensed Consolidated Financial Statements.

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Accounts and Other Receivables, Net (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Components of Accounts and Other Receivables

	December31,			March 31,
	2019			2020
	(In millions)
Trade accounts receivable:
Kronos	$	270.5		$	306.5
CompX		11.9			15.3
BMI and LandWell		1.6			1.4
VAT and other receivables		31.2			23.2
Refundable income taxes		7.9			3.4
Receivable from affiliates:
Contran - trade items		.4			.4
Louisiana Pigment Company, L.P. ("LPC")		4.7			-
Other - trade items		2.2			2.2
Allowance for doubtful accounts		(1.2	)		(1.4	)
Total	$	329.2		$	351.0

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Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Long-term debt
Total debt	$ 783.5	$ 794.3
Less current maturities	(3.8)	(4.9)
Total long-term debt	779.7	789.4
VALHI, INC. | Contran Credit Facility
Long-term debt
Total debt	313.0	313.0
Kronos Worldwide, Inc. | 3.75% Senior Secured Notes due September 15, 2025 | Kronos International, Inc
Long-term debt
Total debt	435.1	442.6
Tremont | Promissory Note
Long-term debt
Total debt	0.5	2.0
BMI | Bank loan | Western Alliance Bank
Long-term debt
Total debt	17.2	17.2
LandWell | Unsecured Debt
Long-term debt
Total debt		1.6
LandWell | Unsecured Debt | Western Alliance Bank
Long-term debt
Total debt	14.9	15.0
Other Subsidiary | Other
Long-term debt
Total debt	2.8	2.9
Subsidiary
Long-term debt
Total debt	$ 470.5	$ 481.3

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Business Segment Information - Segment Operating Performance (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting Information [Line Items]
Net sales	$ 459.3	$ 479.6
Cost of sales	359.6	357.8
Gross margin	99.7	121.8
Operating income	71.0	60.4
Securities earnings	1.6	3.1
Insurance recoveries	1.6	0.3
Changes in market value of Valhi common stock held by subsidiaries	(2.4)	1.1
Other components of net periodic pension expense	(4.7)	(4.1)
General expenses, net	(8.1)	(7.9)
Interest expense	(9.7)	(10.3)
Income before income taxes	49.3	42.6
Chemicals
Segment Reporting Information [Line Items]
Net sales	421.0	436.5
Cost of sales	333.3	327.7
Gross margin	87.7	108.8
Operating income	46.8	52.8
Component Products
Segment Reporting Information [Line Items]
Net sales	32.3	31.2
Cost of sales	21.9	21.5
Gross margin	10.4	9.7
Operating income	5.0	4.4
Real Estate Management And Development
Segment Reporting Information [Line Items]
Net sales	6.0	11.9
Cost of sales	4.4	8.6
Gross margin	1.6	3.3
Operating income	$ 19.2	$ 3.2

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Fair Value Measurements and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

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, 2019				March 31, 2020
	Carrying amount		Fair value		Carrying amount		Fair value
	(In millions)
Cash, cash equivalents and restricted cash equivalents	$	583.8	$	583.8	$	529.0	$	529.0
Deferred payment obligation		9.9		9.9		9.9		9.9
Long-term debt (excluding capitalized leases):
Kronos Senior Notes		442.6		457.0		435.1		374.8
Valhi credit facility with Contran		313.0		313.0		313.0		313.0
Tremont promissory note payable		2.0		2.0		.5		.5
BMI bank note payable		17.2		17.9		17.2		17.9
LandWell note payable to the City of Henderson		1.6		1.6		-		-
LandWell bank note payable		15.0		15.0		14.9		15.0

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Income Taxes - Components of Comprehensive Provision for Income Taxes Allocation (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Schedule Of Income Tax [Line Items]
Expected tax expense, at U.S. federal statutory income tax rate of 21%	$ 10.3	$ 8.9
Incremental net tax benefit on earnings and losses of non-U.S., U.S. and non-tax group companies	(1.8)	(0.2)
Non-U.S. tax rates	0.9	2.3
Valuation allowance	(0.2)	1.0
Adjustment to the reserve for uncertain tax positions, net	0.6	0.5
Global intangible low-tax income, net	1.2	0.7
U.S. state income taxes and other, net	0.4	1.0
Income tax expense	11.4	14.2
Comprehensive provision for income taxes allocable to:
Net income	11.4	14.2
Other comprehensive income (loss):
Currency translation	(4.7)
Total	8.3	15.7
OPEB
Other comprehensive income (loss):
Defined benefit plans	(0.2)
Pension Plans
Other comprehensive income (loss):
Defined benefit plans	$ 1.8	$ 1.5

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Noncontrolling Interest in Subsidiaries - Schedule of Noncontrolling Interest in Net Income of Subsidiaries (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	$ 13.5	$ 10.2
Kronos Worldwide, Inc.
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	5.2	5.9
NL Industries
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	0.3	2.6
CompX International
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	0.6	0.5
BMI
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	2.8	0.5
LandWell
Noncontrolling interest in net income of subsidiaries:
Noncontrolling interest in net income of subsidiaries	$ 4.6	$ 0.7