0001558370-23-008111.txt : 20230504 0001558370-23-008111.hdr.sgml : 20230504 20230504161601 ACCESSION NUMBER: 0001558370-23-008111 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 96 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230504 DATE AS OF CHANGE: 20230504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALHI INC /DE/ CENTRAL INDEX KEY: 0000059255 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 870110150 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05467 FILM NUMBER: 23888962 BUSINESS ADDRESS: STREET 1: 5430 LBJ FRWY STREET 2: STE 1700 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9722331700 MAIL ADDRESS: STREET 1: THREE LINCOLN CENTER STREET 2: 5430 LBJ FREEWAY SUITE 1700 CITY: DALLAS STATE: TX ZIP: 75240-2620 FORMER COMPANY: FORMER CONFORMED NAME: LLC CORP DATE OF NAME CHANGE: 19870329 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY LOAN CORP DATE OF NAME CHANGE: 19800414 10-Q 1 vhl-20230331x10q.htm 10-Q
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as

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, 2023

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: (972233-1700

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

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common stock

VHI

NYSE

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

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

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

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

Smaller reporting company

 

Emerging growth company

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

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

Number of shares of the registrant’s common stock, $.01 par value per share, outstanding on April 28, 2023:  28,279,493

VALHI, INC. AND SUBSIDIARIES

INDEX

Page
number

Part I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets –
December 31, 2022 and March 31, 2023 (unaudited)

3

Condensed Consolidated Statements of Operations (unaudited) –
Three months ended March 31, 2022 and 202
3

5

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) –
Three months ended March 31, 2022 and 2023

6

Condensed Consolidated Statements of Stockholders’ Equity (unaudited) –
Three months ended March 31, 2022 and 2023

7

Condensed Consolidated Statements of Cash Flows (unaudited) –
Three months ended March 31, 2022 and 2023

8

Notes to Condensed Consolidated Financial Statements (unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

39

Part II.

OTHER INFORMATION

Item 1.

Legal Proceedings

40

Item 1A.

Risk Factors

40

Item 6.

Exhibits

40

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

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

ASSETS

December 31, 

March 31, 

    

2022

    

2023

(unaudited)

Current assets:

 

  

 

  

Cash and cash equivalents

$

478.5

$

298.1

Restricted cash equivalents

 

46.3

 

47.2

Marketable securities

 

75.1

 

101.0

Accounts and other receivables, net

 

281.9

 

328.8

Inventories, net

 

640.8

 

643.8

Prepaid expenses and other

 

66.9

 

55.4

Total current assets

 

1,589.5

 

1,474.3

Other assets:

 

  

 

  

Marketable securities

 

1.2

 

1.6

Investment in TiO2 manufacturing joint venture

 

112.9

 

113.6

Goodwill

 

379.7

 

379.7

Deferred income taxes

 

40.5

 

42.6

Other assets

 

188.1

 

178.3

Total other assets

 

722.4

 

715.8

Property and equipment:

 

  

 

  

Land

 

47.8

 

48.3

Buildings

 

244.1

 

247.5

Equipment

 

1,152.3

 

1,164.3

Mining properties

 

13.5

 

2.5

Construction in progress

 

77.2

 

84.3

 

1,534.9

 

1,546.9

Less accumulated depreciation and amortization

 

1,011.1

 

1,018.9

Net property and equipment

 

523.8

 

528.0

Total assets

$

2,835.7

$

2,718.1

3

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(In millions)

LIABILITIES AND STOCKHOLDERS' EQUITY

December 31, 

March 31, 

    

2022

    

2023

(unaudited)

Current liabilities:

 

  

 

  

Current maturities of long-term debt

$

1.8

$

1.6

Accounts payable and accrued liabilities

 

477.7

 

387.8

Income taxes

 

13.3

 

7.6

Total current liabilities

 

492.8

 

397.0

Noncurrent liabilities:

 

  

 

  

Long-term debt

 

557.7

 

559.9

Deferred income taxes

 

63.5

 

64.1

Payable to affiliate - income taxes

 

33.4

 

33.4

Accrued pension costs

 

131.6

 

132.4

Accrued environmental remediation and related costs

 

93.5

 

93.4

Other liabilities

 

156.4

 

149.1

Total noncurrent liabilities

 

1,036.1

 

1,032.3

Equity:

 

  

 

  

Preferred stock

 

 

Common stock

 

.3

 

.3

Additional paid-in capital

 

669.5

 

668.6

Retained earnings

 

482.3

 

475.1

Accumulated other comprehensive loss

 

(143.9)

 

(148.0)

Treasury stock, at cost

 

(49.6)

 

(49.6)

Total Valhi stockholders' equity

 

958.6

 

946.4

Noncontrolling interest in subsidiaries

 

348.2

 

342.4

Total equity

 

1,306.8

 

1,288.8

Total liabilities and equity

$

2,835.7

$

2,718.1

Commitments and contingencies (Notes 13 and 16)

See accompanying Notes to Condensed Consolidated Financial Statements.

4

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

Three months ended

March 31, 

    

2022

    

2023

(unaudited)

Revenues and other income:

 

  

 

  

Net sales

$

629.0

$

492.7

Other income, net

 

 

13.1

Total revenues and other income

 

629.0

 

505.8

Cost and expenses:

 

  

 

  

Cost of sales

 

458.3

 

438.6

Selling, general and administrative

 

77.2

 

68.8

Other components of net periodic pension and OPEB expense

 

3.3

 

1.2

Interest

 

6.9

 

7.0

Total costs and expenses

 

545.7

 

515.6

Income (loss) before income taxes

 

83.3

 

(9.8)

Income tax expense (benefit)

 

19.9

 

(6.1)

Net income (loss)

 

63.4

 

(3.7)

Noncontrolling interest in net income of subsidiaries

 

18.0

 

1.2

Net income (loss) attributable to Valhi stockholders

$

45.4

$

(4.9)

Amounts attributable to Valhi stockholders:

 

  

 

  

Basic and diluted net income (loss) per share

$

1.59

$

(.17)

Basic and diluted weighted average shares outstanding

 

28.5

 

28.5

See accompanying Notes to Condensed Consolidated Financial Statements.

5

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

Three months ended

March 31, 

    

2022

    

2023

(unaudited)

Net income (loss)

$

63.4

$

(3.7)

Other comprehensive income (loss), net of tax:

 

  

 

  

Currency translation

 

5.8

 

(6.1)

Defined benefit pension plans

 

2.4

 

.7

Other

 

(.2)

 

(.2)

Total other comprehensive income (loss), net

 

8.0

 

(5.6)

Comprehensive income (loss)

 

71.4

 

(9.3)

Comprehensive income (loss) attributable to noncontrolling interest

 

20.1

 

(.3)

Comprehensive income (loss) attributable to Valhi stockholders

$

51.3

$

(9.0)

See accompanying Notes to Condensed Consolidated Financial Statements.

6

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

Three months ended March 31, 2022 and 2023 (unaudited)

Accumulated

Additional

other

Non-

Preferred

Common

paid-in

Retained

comprehensive

Treasury

controlling

stock

stock

capital

earnings

loss

stock

interest

Total

Balance at December 31, 2021

$

$

.3

$

669.0

$

401.1

$

(191.3)

$

(49.6)

$

328.9

$

1,158.4

Net income

 

 

 

 

45.4

 

 

 

18.0

 

63.4

Other comprehensive income, net

 

 

 

 

 

5.9

 

 

2.1

 

8.0

Dividends paid to noncontrolling interest

 

 

 

 

 

 

 

(5.2)

 

(5.2)

Cash dividends - $.08 per share

 

 

 

 

(2.2)

 

 

 

 

(2.2)

Equity transactions with noncontrolling
  interest, net and other

 

 

 

1.4

 

 

 

 

(2.8)

 

(1.4)

Balance at March 31, 2022

$

$

.3

$

670.4

$

444.3

$

(185.4)

$

(49.6)

$

341.0

$

1,221.0

Balance at December 31, 2022

$

$

.3

$

669.5

$

482.3

$

(143.9)

$

(49.6)

$

348.2

$

1,306.8

Net income (loss)

 

 

 

 

(4.9)

 

 

 

1.2

 

(3.7)

Other comprehensive loss, net

 

 

 

 

 

(4.1)

 

 

(1.5)

 

(5.6)

Dividends paid to noncontrolling interest

 

 

 

 

 

 

 

(5.2)

 

(5.2)

Cash dividends - $.08 per share

 

 

 

 

(2.3)

 

 

 

 

(2.3)

Equity transactions with noncontrolling
  interest, net and other

 

 

 

(.9)

 

 

 

 

(.3)

 

(1.2)

Balance at March 31, 2023

$

$

.3

$

668.6

$

475.1

$

(148.0)

$

(49.6)

$

342.4

$

1,288.8

See accompanying Notes to Condensed Consolidated Financial Statements.

7

VALHI, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Three months ended

March 31, 

    

2022

    

2023

(unaudited)

Cash flows from operating activities:

 

  

 

  

Net income (loss)

$

63.4

$

(3.7)

Depreciation and amortization

 

14.8

 

14.3

Benefit plan expense greater (less) than cash funding

 

1.8

 

(2.0)

Deferred income taxes

 

3.1

 

.3

Contributions to TiO2 manufacturing joint venture, net

 

(3.8)

 

(.7)

Other, net

 

2.7

 

1.7

Change in assets and liabilities:

 

  

 

  

Accounts and other receivables, net

 

(43.9)

 

(39.0)

Inventories, net

 

(35.3)

 

1.5

Land held for development, net

7.1

(8.4)

Accounts payable and accrued liabilities

 

(37.7)

 

(82.6)

Income taxes

 

7.1

 

(1.3)

Accounts with affiliates

 

8.1

 

(15.4)

Other, net

 

(10.2)

 

8.5

Net cash used in operating activities

 

(22.8)

 

(126.8)

Cash flows from investing activities:

 

  

 

  

Capital expenditures

(16.2)

(16.7)

Purchases of marketable securities

 

(.1)

 

(33.8)

Proceeds from disposal of marketable securities

 

.8

 

8.5

Net cash used in investing activities

 

(15.5)

 

(42.0)

Cash flows from financing activities:

 

  

 

  

Principal payments on indebtedness

 

(5.9)

 

(7.4)

Valhi cash dividends paid

 

(2.2)

 

(2.3)

Distributions to noncontrolling interest in subsidiaries

 

(5.2)

 

(5.2)

Subsidiary treasury stock acquired

 

(1.1)

 

(1.4)

Net cash used in financing activities

 

(14.4)

 

(16.3)

Cash, cash equivalents and restricted cash and cash equivalents - net change from:

Operating, investing and financing activities

(52.7)

(185.1)

Effect of exchange rates on cash

(.4)

(.7)

Balance at beginning of period

792.9

562.0

Balance at end of period

$

739.8

$

376.2

Supplemental disclosures:

Cash paid (received) for:

Interest, net of amounts capitalized

$

10.2

$

10.5

Income taxes, net

6.2

(2.4)

Noncash investing activities:

Change in accruals for capital expenditures

3.8

6.3

See accompanying Notes to Condensed Consolidated Financial Statements.

8

VALHI, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(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, 2023. A majority of Contran’s outstanding voting stock is held directly by Lisa K. Simmons and various family trusts established for the benefit of Ms. Simmons, Thomas C. Connelly (the husband of Ms. Simmons’ late sister) and their children and for which Ms. Simmons or Mr. Connelly, as applicable, serve as trustee (collectively, the “Other Trusts”). With respect to the Other Trusts for which Mr. Connelly serves as trustee, he is required to vote the shares of Contran voting stock held in such trusts in the same manner as Ms. Simmons. Such voting rights of Ms. Simmons last through April 22, 2030 and are personal to Ms. Simmons. The remainder of Contran’s outstanding voting stock is held by another trust (the “Family Trust”), which was established for the benefit of Ms. Simmons and her late sister and their children and for which a third-party financial institution serves as trustee. Consequently, at March 31, 2023, 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, 2022 that we filed with the SEC on March 9, 2023 (the “2022 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, 2022 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, 2022) 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, 2023 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 2022 Consolidated Financial Statements contained in our 2022 Annual Report.

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

Note 2 – Business segment information:

    

    

% controlled at

 

Business segment

Entity

March 31, 2023

 

Chemicals

 

Kronos

 

81%

Component products

 

CompX

 

87%

Real estate management and development

 

BMI and LandWell

 

63% - 77%

9

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

Three months ended

March 31, 

    

2022

    

2023

(In millions)

Net sales:

Chemicals

$

562.9

$

426.3

Component products

 

42.1

 

41.2

Real estate management and development

 

24.0

 

25.2

Total net sales

$

629.0

$

492.7

Cost of sales:

 

  

 

  

Chemicals

$

413.9

$

395.8

Component products

 

30.0

 

28.5

Real estate management and development

 

14.4

 

14.3

Total cost of sales

$

458.3

$

438.6

Gross margin:

 

  

 

  

Chemicals

$

149.0

$

30.5

Component products

 

12.1

 

12.7

Real estate management and development

 

9.6

 

10.9

Total gross margin

$

170.7

$

54.1

Operating income (loss):

 

  

 

  

Chemicals

$

86.4

$

(15.1)

Component products

 

6.3

 

7.0

Real estate management and development

 

8.0

 

10.6

Total operating income

 

100.7

 

2.5

General corporate items:

 

  

 

  

Interest income and other

.9

4.9

Other components of net periodic pension and OPEB expense

 

(3.3)

 

(1.2)

Changes in market value of Valhi common stock held by subsidiaries

 

.1

 

(1.1)

General expenses, net

 

(8.2)

 

(7.9)

Interest expense

 

(6.9)

 

(7.0)

Income (loss) before income taxes

$

83.3

$

(9.8)

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. Included in the determination of Chemicals operating loss is a business interruption insurance settlement gain of $1.7 million recognized in the first quarter of 2023 (see Note 12).

BMI provides certain utility services, among other things, to an industrial park located in Henderson, Nevada and prior to the bankruptcy filing on September 10, 2022 of Basic Water Company (“BWC”), a wholly-owned subsidiary of BMI, was responsible for the delivery of water to the City of Henderson and various other users under long-term contracts through a water delivery system owned and operated by BWC.  BWC’s water delivery system operated on Lake Mead in Nevada.  Due to the Western drought, water levels in Lake Mead have been declining for much of the last twenty years. As a result of water release curtailments upstream of Lake Mead which began late in the second quarter, Lake Mead water levels have dropped precipitously to historically low levels. On June 30, 2022 BWC was no longer able to pump water without the risk of damaging the system and consequently ceased operations at its water intake facility to best preserve the system.  Without the ability to pump and deliver water to its customers, BWC’s operating expenses exceeded its revenues, and on September 10, 2022 BWC and its subsidiaries voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Nevada.  Because BWC has filed for bankruptcy protection, we and BMI can no longer affirmatively assert we control BWC and, as such, in accordance with ASC 810, Consolidation, we deconsolidated BWC as of the date of the bankruptcy filing.

10

Note 3 – Accounts and other receivables, net:

December 31, 

March 31, 

    

2022

    

2023

(In millions)

Trade accounts receivable:

 

  

 

  

Kronos

$

220.3

$

261.2

CompX

 

17.9

 

18.8

BMI/LandWell

 

2.3

 

1.7

VAT and other receivables

 

35.4

 

35.6

Refundable income taxes

8.0

4.3

Receivables from affiliates:

Louisiana Pigment Company, L.P. ("LPC")

10.4

Contran trade items

.2

.6

Other 

2.7

1.1

Allowance for doubtful accounts

 

(4.9)

 

(4.9)

Total

$

281.9

$

328.8

Note 4 – Inventories, net:

December 31, 

March 31, 

    

2022

    

2023

(In millions)

Raw materials:

 

  

 

  

Chemicals

$

145.3

$

158.9

Component products

 

6.2

 

6.0

Total raw materials

 

151.5

 

164.9

Work in process:

 

  

 

  

Chemicals

 

32.0

 

36.7

Component products

 

20.0

 

19.4

Total in-process products

 

52.0

 

56.1

Finished products:

 

  

 

  

Chemicals

 

350.7

 

334.5

Component products

 

5.1

 

4.9

Total finished products

 

355.8

 

339.4

Supplies (chemicals)

 

81.5

 

83.4

Total

$

640.8

$

643.8

Note 5 – Marketable securities:

Cost or

amortized

Unrealized

Market value

cost

loss, net

(In millions)

December 31, 2022:

 

  

 

  

 

  

Current assets

$

75.1

$

75.7

$

(.6)

Noncurrent assets

$

1.2

$

1.2

$

March 31, 2023:

 

  

 

  

 

  

Current assets

$

101.0

$

101.5

$

(.5)

Noncurrent assets

$

1.6

$

1.6

$

Our marketable securities are primarily invested in U.S. government treasuries which are carried at fair value using Level 2 inputs. The fair value of our marketable securities are either determined using Level 1 inputs (because the securities are actively traded)

11

or determined using Level 2 inputs (because although these securities are traded, in many cases the market is not active and the period-end valuation is generally based on the last trade of the period, which may be several days prior to the end of the period).

Note 6 – Other assets:

    

December 31, 

    

March 31, 

2022

2023

(In millions)

Other noncurrent assets:

 

  

 

  

Restricted cash and cash equivalents

$

37.2

$

30.9

Note receivables - OPA

49.3

46.5

Land held for development

29.7

29.6

Operating lease right-of-use assets

 

21.5

 

21.3

IBNR receivables

 

16.8

 

15.4

Pension asset

 

9.3

 

9.8

Other

 

24.3

 

24.8

Total

$

188.1

$

178.3

Note receivables - OPA – As disclosed in Note 7 to our 2022 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. Once the tax increment reimbursement is approved, the amount is recognized as other income and is evidenced by a promissory note issued to LandWell by the City of Henderson. No additional tax increment amounts were approved during the first three months of 2022 and 2023.    

Note 7 – Long-term debt:

December 31, 

March 31, 

    

2022

    

2023

(In millions)

Valhi:

 

  

 

  

Contran credit facility

$

121.4

$

114.2

Subsidiary debt:

 

  

 

  

Kronos:

 

  

 

  

Senior Notes

 

424.1

 

433.5

LandWell:

 

  

 

  

Note payable to Western Alliance Business Trust

 

12.9

 

12.9

Other

 

1.1

 

.9

Total subsidiary debt

 

438.1

 

447.3

Total debt

 

559.5

 

561.5

Less current maturities

 

1.8

 

1.6

Total long-term debt

$

557.7

$

559.9

Valhi – Contran credit facility – During the first three months of 2023, we had no borrowings and repaid $7.2 million under this facility. The average interest rate on the credit facility for the three months ended March 31, 2023 was 8.69%. At March 31, 2023, the interest rate was 9.00% and $60.8 million was available for borrowing under this facility.

Kronos – Senior Notes – At March 31, 2023, 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 $2.2 million.

Revolving credit facility – During the first three months of 2023, Kronos had no borrowings or repayments under its $225 million global revolving credit facility and at March 31, 2023, the full $225 million was available for borrowing.

Other – We are in compliance with all of our debt covenants at March 31, 2023.

12

Note 8 – Accounts payable and accrued liabilities:

December 31, 

March 31, 

    

2022

    

2023

(In millions)

Accounts payable:

 

  

 

  

Kronos

$

177.2

$

144.6

CompX

 

3.5

 

3.9

BMI/LandWell

 

18.7

 

8.1

Total

199.4

156.6

Payables to affiliates:

LPC

17.1

19.0

Contran - income taxes

5.8

3.1

Deferred income

110.7

100.1

Employee benefits

34.4

28.9

Accrued litigation settlement

11.8

11.9

Accrued sales discounts and rebates

 

25.6

 

8.3

Operating lease liabilities

 

3.8

 

3.7

Environmental remediation and related costs

 

3.8

 

2.9

Interest

 

4.9

 

1.1

Other

 

60.4

 

52.2

Total

$

477.7

$

387.8

The accrued litigation settlement is discussed in Note 16.

Note 9 – Other noncurrent liabilities:

    

December 31, 

    

March 31, 

2022

2023

(In millions)

Accrued development costs

$

48.1

$

45.8

Accrued litigation settlement

 

27.4

27.6

Deferred income

25.9

22.0

Insurance claims and expenses

 

18.7

 

17.2

Operating lease liabilities

17.4

17.2

Other postretirement benefits

 

7.1

 

7.0

Employee benefits

 

4.8

 

4.9

Reserve for uncertain tax positions

 

.3

 

.3

Other

 

6.7

 

7.1

Total

$

156.4

$

149.1

The accrued litigation settlement is discussed in Note 16.

13

Note 10 – 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, 

   

2022

   

2023

(In millions)

Net sales - point of origin:

 

  

 

  

United States

$

326.4

$

255.8

Germany

276.5

186.0

Canada