Marketable securities

9 Months Ended

Sep. 30, 2012

Marketable securities

Note 4—Marketable securities:

	Fair value measurement level	Market value		Cost basis		Unrealized gains
		(in thousands)
December 31, 2011:
Noncurrent assets
(available-for-sale):
Valhi common stock	1	$	289,711	$	24,347	$	265,364
TIMET common stock	1		21,708		7,351		14,357
Total		$	311,419	$	31,698	$	279,721
September 30, 2012:
Noncurrent assets
(available-for-sale):
Valhi common stock	1	$	175,350	$	24,347	$	151,003
TIMET common stock	1		18,592		7,351		11,241
Total		$	193,942	$	31,698	$	162,244

Our marketable securities include investments in the publicly-traded shares of related parties: Valhi and Titanium Metals Corporation (TIMET). Contran, Mr. Harold Simmons and persons and other entities related to Mr. Simmons own a majority of Valhi’s and TIMET’s outstanding common stock. We account for our investments in Valhi and TIMET common stocks as available-for-sale marketable equity securities and any unrealized gains or losses on the securities are recognized through other comprehensive income. All of our marketable securities at December 31, 2011 and September 30, 2012 were carried at fair value based on quoted market prices, representing a Level 1 input within the fair value hierarchy.

At December 31, 2011 and September 30, 2012, we held approximately 14.4 million shares of Valhi’s common stock and 1.4 million shares of TIMET common stock. At September 30, 2012, the quoted market price of Valhi’s and TIMET’s common stock was $12.20 and $12.83 per share, respectively. At December 31, 2011, such quoted market prices were $20.16 and $14.98 per share, respectively. In May 2012, Valhi implemented a 3-for-1 split of its common stock. We have adjusted all share and per-share disclosures related to our investment in Valhi stock for all periods prior to May 2012 to give effect to the stock split. The stock split had no financial statement impact to us, and our ownership interest in Valhi did not change as a result of the split.

The Valhi and TIMET common stock we own is subject to the restrictions on resale pursuant to certain provisions of the SEC Rule 144. In addition, as a majority-owned subsidiary of Valhi we cannot vote our shares of Valhi common stock under Delaware Corporation Law, but we do receive dividends from Valhi on these shares, when declared and paid.