Business Segment Information

3 Months Ended

Mar. 31, 2020

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.