VALHI INC /DE/
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
VHI$16.10+12.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001104659-26-057165
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001104659-26-092027
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 137 current paragraphs.
61 unchanged; 51 reworded; 17 added; 12 removed; 2 previous and 8 current paragraphs rearranged.
Tables are not compared: 83 previous and 96 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our diluted net income per share in the second quarter of 2025 includes income of $.31 per share related to tax increment infrastructure reimbursement.
Current report
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025–
Current report
Our diluted net income per share in the first six months of 2026 includes:
Current report
Our diluted net income per share in the first six months of 2025 includes income of $.31 per share related to tax increment infrastructure reimbursement.
Current report
Our Chemicals Segment’s sales volumes increased 16% in the second quarter of 2026 as compared to the second quarter of 2025 primarily due to market share gains in all major markets resulting from changing competitive and supply conditions and anti-dumping duties that remain in effect in certain markets.
Current report
Our Chemicals Segment’s net sales in the first six months of 2026 increased 9%, or $83.7 million, compared to the first six months of 2025 primarily due to the effects of a 10% increase in sales volumes (which increased net sales by approximately $98 million) and the favorable impact of changes in currency exchange rates (primarily the euro), which our Chemicals Segment estimates increased its net sales by approximately $41 million. These increases were partially offset by a 4% decrease in average TiO 2 selling prices (which decreased net sales by approximately $39 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in its complementary businesses.
Current report
Our Chemicals Segment’s sales volumes increased 10% in the first six months of 2026 as compared to the same period in 2025 primarily due to market share gains in all major markets resulting from changing competitive and supply conditions and anti-dumping duties that remain in effect in certain markets.
Current report
Our Chemicals Segment’s cost of sales increased by $67.3 million, or 8%, in the first six months of 2026 compared to the first six months of 2025 due to a 10% increase in sales volumes and the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock), and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in the first six months of 2026 compared to $30 million in the first six months of 2025.
Current report
Our Chemicals Segment’s cost of sales as a percentage of net sales was comparable at 83% in the first six months of 2026 and 2025 as the favorable effects of higher sales volumes and lower cost of inventory sold were offset by lower average TiO 2 selling prices, the unfavorable impact of changes in currency exchange rates, and lower average selling prices and sales volumes within our Chemicals Segment’s complementary businesses.
Current report
Our Chemicals Segment’s gross margin as a percentage of net sales was comparable at 17% in the first six months of 2026 and 2025 based on the factors affecting net sales and cost of sales, discussed above.
Current report
Outlook – During the second quarter of 2026, our Chemicals Segment continued the positive momentum from the first quarter, with sales volumes improving compared to the same period in 2025. Volume growth was driven by higher sales across all major markets as a result of market share gains, particularly in Europe, reflecting changing competitive and supply conditions that created opportunities to expand its customer base. While demand has improved compared to 2025, overall demand remains below historical levels, particularly in North America, where demand continues to be affected by broader economic uncertainty, prolonged elevated interest rates and subdued consumer spending. Our Chemicals Segment believes industry-wide TiO 2 inventories remain constrained and customer order levels have improved in response to geopolitical instability and recent supply and shipping disruptions in certain regions. As a result, customer order lead times have lengthened. Our Chemicals Segment’s order backlog entering the third quarter is favorable compared to prior year, providing greater flexibility in its near- and intermediate-term production planning.
Current report
Based on our Chemicals Segment’s performance during the first six months of 2026, our Chemicals Segment currently expects full-year net sales to exceed 2025 levels and it expects gross margin and operating income margins to improve compared to 2025. Our Chemicals Segment implemented additional price increases and surcharges during the second quarter of 2026 in response to higher production, energy and logistic costs, and it expects the overall pricing environment to remain favorable through the remainder of the year. While our Chemicals Segment’s overall selling prices remain below prior year levels, industry supply conditions and ongoing pricing initiatives are expected to support further price increases during the second half of 2026. However, additional pricing actions may be required to further improve profit margins toward historical levels.
Current report
six months of 2026, and our Chemicals Segment currently expects to continue operating within its normal capacity range for the remainder of the year.
Current report
Net Sales– Our Component Products Segment’s net sales increased $3.3 million and $3.6 million in the second quarter and for the first six months of 2026, respectively, compared to the same periods in 2025 due to higher security products sales across a variety of markets and higher marine components sales to the industrial market. The increase in second quarter security products sales was primarily due to $.9 million higher sales to the healthcare market, $.7 million higher sales to the transportation market, $.5 million higher sales to distributors and $.4 million higher sales to the tool storage market. The increase in security products sales for the first six months of 2026 was primarily due to $.8 million higher sales to the transportation market, $.7 million higher sales to the tool storage market,
Current report
*Outlook –*Our Component Products Segment’s results for the first six months of 2026 reflected higher sales and favorable customer and product mix for both the security products and marine components reporting units. Our Component Products Segment expects these trends to continue through the remainder of 2026, and it currently expects net sales for the full year of 2026 to exceed 2025 levels. Within the security products reporting unit, it expects demand from several end markets, including healthcare, transportation and tool storage, to remain strong in the second half of 2026. Within the marine components reporting unit, it expects increased demand will continue to be driven by industrial market demand, particularly aeroderivative demand, while recreational marine and towboat-related demand is expected to remain relatively consistent with 2025 levels (excluding the impact of the one-time stocking event noted above). Based on our Component Products Segment’s first-half operating performance, it currently expects full-year gross margin and operating income margins to exceed 2025 levels, although margins during the second half of 2026 may be challenged by the factors discussed below. Future operating results will continue to be influenced by product and customer mix, raw material costs and overall demand levels in the markets it serves.
Current report
During the six months ended June 30, 2026:
Current report
During the six months ended June 30, 2026:
Removed paragraphs (12)
Previous report
Our Chemicals Segment’s sales volumes increased 4% in the first quarter of 2026 as compared to the first quarter of 2025 primarily due to higher sales volumes in our Chemicals Segment’s North American, Latin American and export markets partially offset by lower sales volumes in the European market. The incremental market share gains our Chemicals Segment achieved in the European market during the second half of 2025, primarily as a result of competitor plant closures, continued into the first quarter of 2026. However, gains were not sufficient to offset the underlying decline in overall European demand.
Previous report
Outlook – During the first quarter of 2026, our Chemicals Segment’s sales volumes improved compared to the same period in 2025, primarily driven by higher sales volumes in our Chemicals Segment’s North American, Latin American, and export markets. While our Chemicals Segment gained market share in Europe as a result of competitor capacity reductions in 2025, these gains were not sufficient to offset further weakening end-market demand in the region. Although customers remain reluctant to build inventory, order lead times have increased, which provides our Chemicals Segment with greater flexibility in near-and intermediate-term production planning. Our Chemicals Segment’s order backlog at the beginning of 2026 was generally higher than the comparable prior-year period and has continued to show positive trends entering the second quarter. However, overall demand remains below historical levels, and the timing and sustainability of a broader market recovery remain uncertain. Our Chemicals Segment implemented price increases during the first quarter of 2026; however, selling prices remain below 2025 levels, and additional price increases will be required to improve its operating margins.
Previous report
Industry supply conditions tightened during the first quarter of 2026 due to the recent geopolitical conflict in the Middle East and related supply chain disruptions, including sulfuric acid pricing pressures, and higher energy costs, particularly in Europe. As a result, our Chemicals Segment is beginning to experience higher shipping and production costs driven by increased energy, utility and
Previous report
raw material costs, especially in Europe. These cost pressures are expected to persist as long as uncertainty related to the conflict in the Middle East and broader global conditions continue. In response to rising costs, our Chemicals Segment implemented surcharges in most major markets and announced price increases effective in the second quarter of 2026. Our Chemicals Segment expects TiO₂ selling prices to continue to rise during 2026, which would help mitigate increases in distribution, raw material, energy, and other production costs, although margins will remain below historical levels.
Previous report
Net Sales– Our Component Products Segment’s net sales increased $.3 million in the first quarter of 2026 compared to the same period in 2025 primarily due to higher marine components sales to the industrial market partially offset by lower security products sales. Security products net sales decreased 1% in the first quarter of 2026 compared to the same period last year primarily due to lower
Previous report
*Outlook –*Our Component Products Segment’s net sales for the first quarter of 2026 exceeded the prior year period, primarily driven by improved demand in the industrial market at the marine components reporting unit. Security products sales reflected mixed performance across the original equipment manufacturer (“OEM”) markets, driven by differences in customer demand cycles and project timing, resulting in slightly lower net sales compared to the prior year period. Our Component Products Segment’s operating income increased compared to the prior year primarily due to a more favorable customer and product mix at the security products reporting unit and, to a lesser extent, the impact of higher sales at the marine components reporting unit.
Previous report
For the full year 2026, our Component Products Segment expects modest net sales growth* *as our Component Product Segment continues to align pricing, product features, and service levels with market conditions and customer requirements. Net sales growth at the marine components reporting unit is expected to be driven primarily by the industrial market. Recreational marine sales have largely stabilized and sales to the towboat market in 2026 are expected to be generally comparable to 2025 (excluding the impact of the one-time stocking event noted above). At the security products reporting unit, it expects net sales to be consistent with the prior year, reflecting anticipated continued variability across multiple OEM markets.
Previous report
Our Component Products Segment expects gross margin and operating income margins across both the security products and marine components reporting units in 2026 to remain generally comparable to 2025. Operating income margin at the security products reporting unit benefited from favorable mix in the first quarter of 2026; however, margins are expected to moderate over the remainder of the year.
Previous report
Our Component Products Segment increased inventory levels across both the security products and marine components reporting units during 2025 to support customer demand. These actions included an insourcing initiative at security products and a shift in customer mix at marine components. Our Component Products Segment’s inventory levels at the end of the first quarter of 2026 were comparable to those at December 31, 2025, and are expected to remain at these levels, consistent with near-term operating requirements.
Previous report
to the City for approval of additional OPA note receivables. We currently expect to receive approval for the remaining $11 million infrastructure reimbursement note receivables – up to the $170 million cap – in 2026, and we expect to receive cash payments on the notes for the next 5 to 7 years.
Previous report
During the three months ended March 31, 2026, we spent $10.6 million in capital expenditures including $10.2 million in our Chemicals Segment and $.4 million in our Component Products Segment.
Previous report
During the three months ended March 31, 2026:
Reworded paragraphs (51)
Previous wording
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.
Current wording
We are primarily a holding company. We operate through our wholly-owned and majority-owned subsidiaries, including NLI Holdings, Inc. (formerly NL Industries, Inc.), Kronos Worldwide, Inc., CompX International Inc., Tremont LLC, Basic Management, Inc. (“BMI”) and The LandWell Company (“LandWell”). Kronos (NYSE: KRO), NLI (NYSE: NL) and CompX (NYSE American: CIX) each file periodic reports with the SEC.
Previous wording
We reported net income attributable to Valhi stockholders of $2.0 million, or $.07 per diluted share, in the first quarter of 2026 compared to net income attributable to Valhi stockholders of $16.9 million, or $.59 per diluted share, in the first quarter of 2025. As discussed more fully below, our net income attributable to Valhi stockholders decreased from 2025 to 2026 primarily due to lower operating income from our Chemicals Segment partially offset by higher operating income from our Component Products and our Real Estate Management and Development Segments.
Current wording
We reported net income attributable to Valhi stockholders of $22.3 million, or $.78 per diluted share, in the second quarter of 2026 compared to net income attributable to Valhi stockholders of $.9 million, or $.03 per diluted share, in the second quarter of 2025. Our net income attributable to Valhi stockholders increased from 2025 to 2026 primarily due to higher operating income from our Chemicals Segment of $40.4 million in 2026 compared to operating income of $10.3 million in 2025.
Previous wording
Our diluted net income per share in the first quarter of 2026 includes:
Current wording
Our diluted net income per share in the second quarter of 2026 includes:
Previous wording
Current Industry Conditions– Our Chemicals Segment started 2026 with average TiO 2 selling prices lower than at the beginning of 2025; however, its average TiO 2 selling prices increased 2% during the first quarter of 2026. Our Chemicals Segment’s average TiO 2 selling prices in the first quarter of 2026 were 6% lower than average TiO 2 selling prices during the first quarter of 2025. Overall, our Chemicals Segment’s sales volumes increased in the first quarter of 2026 compared to the same period in 2025 due to higher overall sales volumes in the North American, Latin American and export markets partially offset by lower sales volumes in the European market.
Current wording
Current Industry Conditions– Our Chemicals Segment started 2026 with average TiO 2 selling prices lower than at the beginning of 2025; however, its average TiO 2 selling prices increased 4% during the first six months of 2026. During the second quarter of 2026, our Chemicals Segment announced and implemented various price increases and surcharges in response to higher operating costs. Our Chemicals Segment’s average TiO 2 selling prices in the first six months of 2026 were 4% lower than its average TiO 2 selling prices for the first six months of 2025. Overall, our Chemicals Segment’s sales volumes increased in the first six months of 2026 compared to the same period in 2025 primarily due to market share gains across all markets resulting from changing competitive and supply conditions and the continued effect of anti-dumping duties which remain in effect in certain markets.
Previous wording
During the fourth quarter of 2025, our Chemicals Segment implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve its cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. As a result, beginning in the first quarter of 2026, our Chemicals Segment’s normal production capacity range has been adjusted to reflect its production capabilities under this new cost structure.
Current wording
During the fourth quarter of 2025, our Chemicals Segment implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve its cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. As a result, our Chemicals Segment adjusted its normal production capacity range in 2026 to reflect its production capabilities under this new cost structure.
Previous wording
Excluding the effect of changes in currency exchange rates, our Chemicals Segment’s cost of sales per metric ton of TiO 2 sold in the first quarter of 2026 was lower as compared to the first quarter of 2025 due to decreases in per metric ton production costs driven primarily by the cost reduction initiatives discussed above, as well as lower raw material and energy costs.
Current wording
Excluding the effect of changes in currency exchange rates, our Chemicals Segment’s cost of sales per metric ton of TiO 2 sold in the first half of 2026 was lower than the comparable period of 2025 due to decreases in per metric ton production costs driven primarily by the cost reduction initiatives discussed above, as well as lower raw material costs (primarily feedstock costs) and lower unabsorbed fixed costs.
Previous wording
Net Sales– Our Chemicals Segment’s net sales in the first quarter of 2026 increased 4%, or $20.0 million, compared to the first quarter of 2025 due to the effects of a 4% increase in sales volumes (which increased net sales by approximately $20 million) and the favorable impact of changes in currency exchange rates (primarily the euro), which we estimate increased our Chemicals Segment’s net sales by approximately $30 million. These increases were partially offset by a 6% decrease in average TiO 2 selling prices (which decreased net sales by approximately $30 million). TiO 2 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.
Current wording
Net Sales– Our Chemicals Segment’s net sales in the second quarter of 2026 increased 13%, or $63.7 million, compared to the second quarter of 2025 primarily due to the effects of a 16% increase in sales volumes (which increased net sales by approximately $79 million) and the favorable impact of changes in currency exchange rates (primarily the euro) which our Chemicals Segment estimates increased its net sales by approximately $10 million. These increases were partially offset by a 3% decrease in average TiO 2 selling prices (which decreased net sales by approximately $15 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in its complementary businesses. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.
Previous wording
Cost of Sales and Gross Margin–Our Chemicals Segment’s cost of sales increased by $43.6 million, or 11%, in thefirst quarter of 2026 compared to thefirst quarter of 2025 due to the effects of a 4% increase in sales volumesand the unfavorable impact from changes in currency exchange rates, partially offset by lower production costs driven primarily by the cost reduction initiatives as well as lower raw material and energy costs. In addition, unabsorbed fixed costs were not material in the first quarter of 2026 compared to $10 million of unabsorbed fixed costs in the first quarter of 2025.
Current wording
Cost of Sales and Gross Margin– Our Chemicals Segment’s cost of sales increased by $23.7 million, or 5%, in thesecond quarter of 2026 compared to thesecond quarter of 2025 due to a 16% increase in sales volumesand the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock) and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in thesecond quarter of 2026 compared to approximately $20 million in thesecond quarter of 2025.
Previous wording
Our Chemicals Segment’s cost of sales as a percentage of net sales increased to 84% in the first quarter of 2026 compared to 78% in the same period of 2025, as the unfavorable impact of lower average TiO 2 selling prices more than offset the favorable effects of lower production costs.
Current wording
Our Chemicals Segment’s cost of sales as a percentage of net sales improved to 82% in the second quarter of 2026 compared to 87% in the same period of 2025, primarily due to the favorable effects of higher sales volumes and lower production costs, discussed above. These favorable impacts were partially offset by lower average TiO 2 selling prices and the unfavorable impact of lower average selling prices and sales volumes within our Chemicals Segment’s complementary businesses.
Previous wording
Gross margin as a percentage of net sales decreased to 16% in the first quarter of 2026 compared to 22% in the first quarter of 2025. As discussed and quantified above, our Chemicals Segment’s gross margin as a percentage of net sales decreased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costsand changes in currency exchange rates.
Current wording
Our Chemicals Segment’s gross margin as a percentage of net sales increased to 18% in the second quarter of 2026 compared to 13% in the second quarter of 2025. Our Chemicals Segment’s gross margin as a percentage of net sales increased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costs as discussed above, and the unfavorable impact from changes in currency exchange rates.
Previous wording
Operating Income– Our Chemicals Segment’s operating income decreased $26.7 million to $14.5 million in the first quarter of 2026 compared to $41.2 million in the first quarter of 2025, primarily as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates decreased operating income by approximately $6 million in the first quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.
Current wording
Operating Income– Our Chemicals Segment’s operating income increased by $30.1 million to $40.4 million in the second quarter of 2026 compared to $10.3 million in the second quarter of 2025, primarily as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates decreased our Chemicals Segment’s operating income by approximately $12 million in the second quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.
Previous wording
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 $.6 million and $.5 million in the first three months of 2026 and 2025, respectively, which reduced our reported Chemicals Segment’s operating income as compared to amounts reported by Kronos.
Current wording
Our Chemicals Segment’s operating income is net of amortization of purchase accounting adjustments made in conjunction with our acquisitions of interests in NLI 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 $1.2 million and $1.0 million in the first six months of 2026 and 2025, respectively, which reduced our reported Chemicals Segment’s operating income as compared to amounts reported by Kronos.
Previous wording
The $30 million increase in our Chemicals Segment net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into more U.S. dollars in 2026 as compared to 2025. The weakening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2026 did not have a significant effect on our net sales, as a substantial portion of the sales generated by our Canadian and Norwegian operations is denominated in the U.S. dollar.
Current wording
The $10 million increase in our Chemicals Segment net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as its euro-denominated sales were translated into more U.S. dollars in 2026 as compared to 2025. The weakening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2026 did not have a significant effect on our Chemicals Segment’s net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.
Previous wording
The $6 million decrease in our Chemicals Segment’s operating income was comprised of the following:
Current wording
The $12 million decrease in our Chemicals Segment’s operating income was comprised of the following:
Previous wording
During the fourth quarter of 2025, our Chemicals Segment implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve its cost structure and enable more efficient operation of its facilities at lower production rates for extended periods. Our Chemicals Segment operated its facilities slightly below normal capacity during the first quarter of 2026. Our Chemicals Segment’s operating model balances improved cost efficiency with flexibility to respond to changes in demand. During the first quarter of 2026, our Chemicals Segment sold through higher cost inventory produced in the fourth quarter of 2025 and expects gross margin to improve as it realizes the benefit of lower cost inventory produced during 2026.
Current wording
The cost reduction initiatives implemented by our Chemicals Segment during the fourth quarter of 2025, including workforce reductions and other measures, designed to align its cost structure with current demand levels, continue to benefit its operating results in 2026. During the second quarter of 2026, our Chemicals Segment realized improved gross margins, and it expects margins to continue to benefit from lower cost inventory produced during 2026 and more favorable selling prices. Our Chemicals Segment’s operational restructuring allows it to run its facilities more efficiently at lower production rates for extended periods while maintaining flexibility to respond to changing market conditions. Our Chemicals Segment operated its facilities within its normal capacity range during the first
Previous wording
Our Chemicals Segment is focused on improving operating margins through pricing actions, disciplined cost management, and continued execution of its operating cost structural realignment initiatives. Our Chemicals Segment is also continuing to pursue targeted market share opportunities in regions and markets impacted by competitor curtailments, closures, logistical disruptions, or trade measures such as tariffs or duties that have reduced the competitiveness of low-cost imports. These actions are intended to support improved operating performance while maintaining flexibility in the event of continued demand volatility.
Current wording
Our Chemicals Segment remains focused on improving profitability through pricing actions, disciplined cost management, and continued execution of its operating cost structural realignment initiatives. Our Chemicals Segment also continues to pursue sales growth opportunities in regions affected by changing competitive and supply conditions, logistical challenges and trade measures that have reduced the competitiveness of certain imports.
Previous wording
Liquidity and capital resources remain sufficient to support our Chemicals Segment’s operations and planned capital investments. While our Chemicals Segment typically experiences a significant seasonal cash usage in the first quarter, our Chemicals Segment expects cash on hand to improve over the remainder of the year. Our Chemicals Segment will continue to actively manage working capital, including inventories and receivables, to bolster operating cash flows and maintain financial flexibility. Our Chemicals Segment believes its revolver availability, combined with the absence of near-term debt maturities and improved operating cash flows, will provide adequate liquidity for expected working capital needs and capital allocation requirements.
Current wording
Liquidity and capital resources remain sufficient to support our Chemicals Segment’s operations and planned capital investments. While our Chemicals Segment typically experiences significant seasonal cash usage in the first half of the year, it expects cash on hand to improve over the remainder of the year. Our Chemicals Segment will continue to actively manage working capital, including inventories and receivables, to bolster operating cash flows and maintain financial flexibility. Our Chemicals Segment believes its revolving credit facility availability, combined with the absence of near-term debt maturities and improved operating cash flows, will provide adequate liquidity for expected working capital needs and capital allocation requirements.
Previous wording
Our expectations for the TiO 2 industry and our Chemicals Segment’s operations are based on a number of factors outside its control. Our Chemicals Segment’s operations are affected by global and regional economic, political and regulatory factors, and it has experienced global market disruptions. Future impacts on our Chemicals Segment’s operations will depend on, among other things, future energy costs, the effect of newly enacted tariffs in jurisdictions where it or its customers and suppliers operate, its success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on its operations or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Current wording
Our expectations for the TiO 2 industry and our Chemicals Segment’s operations are based on a number of factors outside our control. Our Chemicals Segment’s operations are affected by global and regional economic, political and regulatory factors, and it has experienced global market disruptions. Future impacts on our Chemicals Segment’s operations will depend on, among other things, future energy costs, the effect of newly enacted tariffs in jurisdictions where it or its customers and suppliers operate, its success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on its operations or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous wording
Our Component Products Segment’s operating income in the first quarter of 2026 was $7.1 million compared to $5.9 million in the first quarter of 2025. The increase in operating income in the first quarter of 2026 compared to 2025 is primarily due to higher gross margin at the security products reporting unit and, to a lesser extent, the impact of higher sales at the marine components reporting unit.
Current wording
Our Component Products Segment’s operating income in the second quarter of 2026 was $8.9 million compared to $6.3 million in the second quarter of 2025. Operating income for the first six months of 2026 was $16.0 million compared to $12.2 million for the comparable prior year period. Our Component Products Segment’s operating income increased in the second quarter and for the first six months of 2026 due to higher sales and gross margins, predominantly at the security products reporting unit, and to a lesser extent, at the marine components reporting unit.
Previous wording
sales across a variety of markets. The decrease was driven by $.3 million lower sales to the healthcare market and $.2 million lower sales to each of the general cabinetry, electric control panel, and gas station security markets. These decreases were partially offset by $.3 million higher sales to the tool storage market and $.2 million higher sales to the institutional furniture market. Marine components net sales increased 6% in the first quarter of 2026 compared to the same period last year primarily due to $1.9 million higher sales to the industrial market partially offset by $1.4 million lower sales to the towboat market. Towboat market sales in the first quarter of 2025 benefitted from a one-time customer stocking event that did not repeat in 2026.
Current wording
$.6 million higher sales to the healthcare market and $.4 million higher sales to distributors. Sales to the government security market in the second quarter and in the first six months of 2026 were comparable to the same periods in 2025. The increase in second quarter marine components sales was primarily due to $1.6 million higher sales to the industrial market, partially offset by $1.0 million lower sales to the government market. The increase in marine components sales for the first six months of 2026 was primarily due to $3.5 million higher sales to the industrial market, partially offset by $1.5 million lower sales to the towboat market and $1.0 million lower sales to the government market. Towboat market sales in the first quarter of 2025 benefited from a one-time customer stocking event that did not repeat in 2026.
Previous wording
Cost of Sales and Gross Margin– Our Component Products Segment’s cost of sales as a percentage of net sales decreased 3% in the first quarter of 2026 compared to the same period in 2025. As a result, gross margin as a percentage of net sales increased over the same period. Security products gross margin as a percentage of net sales increased in the first quarter primarily due to a more favorable customer and product mix. Marine components gross margin as a percentage of net sales decreased in the first quarter of 2026 compared to the same period last year primarily due to higher cost inventory produced during the fourth quarter of 2025 and sold in the first quarter of 2026, partially offset by increased coverage of fixed costs on higher sales.
Current wording
Cost of Sales and Gross Margin– Our Component Products Segment’s cost of sales as a percentage of net sales improved by 4% and 3% in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025. As a result, gross margin as a percentage of net sales increased over the same periods. The improvement in gross margin percentage for the second quarter and first six months of 2026 was primarily due to a higher gross margin percentage at security products. In addition, improved gross margin performance at marine components contributed favorably to the increase in the second-quarter comparative period. Marine components’ gross margin as a percentage of net sales increased in the second quarter of 2026 compared to the same period in 2025 primarily due to a more favorable customer and product mix, partially offset by higher cost of sales, including increased maintenance and supply costs. Marine components’ gross margin as a percentage of net sales for the first six months of 2026 was comparable to the same period in 2025 as a more favorable customer and product mix and increased coverage of fixed costs on higher sales were largely offset by higher cost of sales, including sales of higher-cost inventory and increased maintenance and supply costs. Security products’ gross margin as a percentage of net sales increased in the second quarter and first six months of 2026 compared to the same periods in 2025 primarily due to a more favorable customer and product mix and lower cost of sales driven by lower employer-related medical expenses and the recovery of one-time prior-period import costs recognized during the second quarter of 2026.
Previous wording
Operating Income– As a percentage of net sales, our Component Products Segment’s operating income for the first quarter of 2026 increased compared to the same period of 2025 and was primarily impacted by the factors affecting sales, cost of sales and gross margin discussed above.
Current wording
Operating Income– As a percentage of net sales, our Component Products Segment’s operating income for the second quarter and the first six months of 2026 increased compared to the same periods of 2025 and was primarily impacted by the factors affecting sales, cost of sales and gross margin discussed above.
Previous wording
Our Component Products Segment manufactures substantially all its products in the U.S. and source a substantial majority of its raw materials from U.S. suppliers. Our Component Products Segment also sources certain components, primarily electronic components, from suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the first quarter of 2026, our Component Products Segment incurred tariff-related surcharges on certain raw materials, primarily electronic components. In addition, some of our Component Products Segment’s U.S.-based suppliers are applying tariff-related surcharges on certain domestically sourced materials. Where possible, our Component Products Segment increases selling prices to recover these higher raw material costs, although the extent to which our Component Products Segment can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, duration of tariffs, and our Component Products Segment’s customers’ ability to substitute alternative products. Our Component Products Segment will continue to monitor current and anticipated near-term customer demand levels to ensure its production capabilities and inventories are aligned accordingly.
Current wording
Our Component Products Segment manufactures substantially all its products in the U.S. and sources a substantial majority of its raw materials from U.S. suppliers. Our Component Products Segment also sources certain components, primarily electronic components, from suppliers in Asia, including China. Beginning in the second quarter of 2025 and continuing through the second quarter of 2026, our Component Products Segment experienced cost increases for certain imported raw materials, primarily electronic components, including increases in tariffs and shipping costs. In addition, inflationary pressures have increased costs for certain domestically-sourced raw materials. Where possible, our Component Products Segment increases selling prices to recover these higher raw material costs, although the extent to which our Component Products Segment can fully recover such costs will depend on a variety of factors including the ultimate tariff rate, duration of tariffs, and our Component Products Segment’s customers’ ability to substitute alternative products. Accordingly, our Component Products Segment will continue to closely monitor raw material costs, including zinc, brass, aluminum, steel and energy, as well as current and anticipated customer demand levels, to ensure its production capacity and inventory levels remain aligned with market conditions.
Previous wording
Our Component Products Segment’s expectations for its operations and the markets it serves are based on a number of factors outside its control. Currently, our Component Products Segment’s supply chains are stable and transportation and logistical delays are minimal. Our Component Products Segment has experienced global and domestic supply chain challenges in the past. Any future impacts on its operations will depend on, among other things, disruption to its operations or its suppliers’ operations, the effect of tariffs,
Current wording
Our Component Products Segment’s expectations for its operations and the markets it serves are based on a number of factors outside its control. Currently, our Component Products Segment’s supply chains are stable and transportation and logistical delays are minimal. Our Component Products Segment has experienced global and domestic supply chain challenges in the past. Any future impacts on its operations will depend on, among other things, disruption to its operations or its suppliers’ operations, the effect of tariffs, and the impact of broader economic conditions, consumer confidence, and geopolitical events affecting demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous wording
*General –*Our Real Estate Management and Development Segment consists of BMI and LandWell. BMI and LandWell own real property in Henderson, Nevada. LandWell is actively engaged in developing certain real estate in Henderson, Nevada including approximately 2,100 acres zoned for residential/planned community purposes.
Current wording
*General –*Our Real Estate Management and Development Segment consists of BMI and LandWell. BMI and LandWell owned and developed real property in Henderson, Nevada. LandWell is actively engaged in developing a residential/planned community in Henderson.
Previous wording
Net Sales and Operating Income – Substantially all of the net sales from our Real Estate Management and Development Segment in the first quarter of 2026 and 2025 were from land sales. Net sales increased $1.2 million in the first quarter of 2026 compared to the same period in 2025 primarily due to the sale of the final commercial parcel for $7.3 million, which had no further development obligations and was therefore recognized immediately as revenue. This increase was partially offset by the effects of a slower pace of development activity for previously sold parcels within the residential/planned community as our Real Estate Management and Development Segment nears completion of its development work. As noted above, we recognize revenue in our residential/planned community over time using cost-based input methods. All of the revenue we recognized in the first quarters of 2025 and 2026 for our residential/planned community was under this method of revenue recognition. The pace of development activities is dictated by a number of factors such as city permit and design approval, approval from the Nevada Department of Environmental Protection, labor and materials availability, and the amount of remaining development obligations. Cost of sales was $2.8 million in the first quarter of 2026 compared to $4.6 million in the first quarter of 2025. Included in operating income for the first quarter of 2026 was income related to tax increment infrastructure reimbursement of $5.4 million.
Current wording
Net Sales and Operating Income – Substantially all of the net sales from our Real Estate Management and Development Segment in the second quarter and the first six months of 2026 and 2025 were from land sales. We recognized $4.4 million in revenues on land sales during the second quarter of 2026 compared to $5.7 million in revenues in the second quarter of 2025 and $14.1 million in the first six months of 2026 compared to $14.2 million in the same prior year period. Net sales decreased $1.3 million in the second quarter of 2026 compared to the same period in 2025 primarily because of a slower pace of development activity for previously sold parcels within the residential/planned community as our Real Estate Management and Development Segment nears completion of its development work. Net sales for the first six months of 2026 slightly decreased compared to the first six months of 2025 due to the effect of a significantly slower pace of development activity for previously sold parcels within the residential/planned community, which was offset by the sale of the final commercial parcel for $7.3 million in the first quarter of 2026, which had no further development obligations and was therefore immediately recognized as revenue. As noted above, we recognize revenue in our residential/planned community over time using cost-based input methods. All of the revenue we recognized in 2025 and 2026 for our residential/planned community was under this method of revenue recognition. The pace of development activities is dictated by a number of factors such as city permit and design approval, approval from the Nevada Department of Environmental Protection, labor and materials availability, and the amount of remaining development obligations. Cost of sales were $2.1 million and $4.9 million in the second quarter and the first six months of 2026, respectively, compared to $2.8 million and $7.4 million in the second quarter and first six months of 2025, respectively. We recognized income of $11.3 million and $16.7 million in the second quarter and first six months of 2026, respectively, related to tax increment infrastructure reimbursement compared to $17.2 million in the second quarter and first six months of 2025. Additionally, in the second quarter of 2026, LandWell sold the office building used in operations and recognized a gain on the sale of approximately $5.8 million.
Previous wording
*Outlook –*LandWell is focused on completing development of the land it manages for the residential/planned community in Henderson. At March 31, 2026, all of the land in the residential/planned community had been sold and all saleable acreage zoned for light industrial and commercial use adjacent to the 2,100 acre residential/planned community has also been sold, with the final parcel closing in the first quarter of 2026. At March 31, 2026 we have deferred revenue of $24.8 million related to post-closing obligations on land sales in the residential/planned community closed prior to 2026. Because we recognize revenue over time using cost-based inputs, we will continue to recognize revenue on land previously sold over the development period, even though we have already received all the cash proceeds related to these sales. We currently expect to recognize all remaining deferred revenue during 2026. Any delays or curtailments in infrastructure development related to post-closing obligation activities would delay the timing of revenue recognized on these previously closed land sales.
Current wording
*Outlook –*LandWell is focused on completing development of the land it manages for the residential/planned community in Henderson. At June 30, 2026, all of the land in the residential/planned community had been sold as well as all saleable acreage zoned for light industrial and commercial use, including the office building LandWell used for its operations. As a result, we no longer own saleable land in Henderson. At June 30, 2026, we have deferred revenue of $24.0 million related to post-closing obligations on land sales in the residential/planned community closed prior to 2026. Because we recognize revenue over time using cost-based inputs, we will continue to recognize revenue on land previously sold over the development period, even though we have already received all the cash proceeds related to these sales. We currently expect to recognize substantially all remaining deferred revenue during 2026. Any delays or curtailments in infrastructure development related to post-closing obligation activities would delay the timing of revenue recognized on these previously closed land sales.
Previous wording
Under LandWell’s development agreement with the City of Henderson, the issuance of a specified number of housing permits requires LandWell to complete certain large community-wide infrastructure projects. Construction on several of these large projects began in late 2021 and is expected to be completed in 2027. We expect 2026 land development costs to be comparable to those in 2025 due to the timing of planned infrastructure projects and the availability of certain construction materials. Because these large infrastructure projects relate to the entirety of the residential/planned community, the associated costs are not part of the cost-based inputs used to recognize revenue, and therefore, this spending will not correlate to revenue recognition. However, this spending is expected to be eligible for tax increment reimbursement under our Owner Participation Agreement (“OPA”) with the City of Henderson, and delays or curtailments in eligible infrastructure development activities will also delay LandWell’s ability to submit completed costs
Current wording
Under LandWell’s development agreement with the City of Henderson, the issuance of a specified number of housing permits requires LandWell to complete certain large community-wide infrastructure projects. Construction on several of these large projects began in late 2021 and is expected to be completed in late 2027. We expect 2026 land development costs to be lower than those in 2025 due to the timing of planned infrastructure projects and the availability of certain construction materials. Because these large
Previous wording
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 2025 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 loss. 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 gain of $.5 million in the first quarter of 2026 compared to a loss of $1.7 million in the first quarter of 2025 in our Condensed Consolidated Statements of Income, which represents the unrealized gain (loss) in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NL.
Current wording
Changes in the Market Value of Valhi Common Stock held by Subsidiaries– Our subsidiaries, Kronos and NLI, hold shares of our common stock. As discussed in the 2025 Annual Report, we account for our proportional interest in these shares of our common stock as treasury stock at Kronos’ and NLI’s historical cost basis. The remaining portion of these shares of our common stock, which are attributable to the noncontrolling interest of Kronos and NLI, are reflected in our Condensed Consolidated Balance Sheet at fair value. Kronos and NLI recognize unrealized gains or losses on these shares of our common stock in the determination of each of their respective net income or loss. 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 $.1 million gain in the second quarter of 2026 compared to no gain or loss in the second quarter of 2025 and a gain of $.6 million in the first six months of 2026 compared to a loss of $1.7 million in the first six months of 2025, each of which was recognized in our Condensed Consolidated Statements of Income and represent the unrealized gain (loss) in respect of these shares during such periods attributable to the noncontrolling interest of Kronos and NLI.
Previous wording
Interest Income and Other– Interest income and other decreased $.8 million in the first quarter of 2026 compared to the same period of 2025 primarily due to decreased average investment balances and lower average interest rates. See Note 12 to our Condensed Consolidated Financial Statements.
Current wording
Interest Income and Other– Interest income and other increased $.3 million in the second quarter of 2026 primarily due to increased interest income received on the Real Estate Management and Development OPA note receivable offset by decreased average investment balances and lower average interest rates. Interest income and other decreased $.5 million in the first six months of 2026 compared to the same period of 2025 primarily due to decreased average investment balances and lower average interest rates partially offset by increased interest income received on the Real Estate Management and Development OPA note receivable. See Note 12 to our Condensed Consolidated Financial Statements.
Previous wording
Other General Corporate Items– Corporate expenses in the first quarter of 2026 declined slightly as compared to the same period in 2025 primarily due to lower administrative and environmental remediation and related costs. Included in corporate expense are:
Current wording
Other General Corporate Items– Corporate expenses were 2% lower in the second quarter of 2026 and 5% lower in the first six months of 2026 compared to the same respective periods in 2025 primarily due to lower environmental remediation and related costs. Included in corporate expense are:
Previous wording
Overall, we currently expect that our net general corporate expenses in 2026 will be higher than in 2025 primarily due to expected increases in litigation fees and related costs. See Note 16 to our Condensed Consolidated Financial Statements.
Current wording
Overall, we currently expect that our net general corporate expenses in 2026 will be higher than in 2025 primarily due to expected increases in litigation fees and related costs, predominantly in the second half of the year. See Note 16 to our Condensed Consolidated Financial Statements.
Previous wording
Interest Expense– Interest expense increased $1.5 million in the first quarter of 2026 compared to the respective period in 2025 primarily due to higher overall debt levels and higher average interest rates. See Note 7 to our Condensed Consolidated Financial Statements.
Current wording
Interest Expense– Interest expense increased $.9 million and $2.4 million in the second quarter and first six months of 2026, respectively, compared to the same periods in 2025 primarily due to higher overall debt levels and higher average interest rates. See Note 7 to our Condensed Consolidated Financial Statements.
Previous wording
We expect interest expense will be higher in 2026 as compared to 2025 primarily due to higher debt balances and higher interest rates on Kronos’ debt issued in 2025.
Current wording
We expect interest expense will be higher in 2026 as compared to 2025 primarily due to higher average debt balances and higher interest rates on Kronos’ debt issued in the third quarter of 2025.
Previous wording
Income Tax Expense* *– We recognized income tax expense of $6.3 million in the first quarter of 2026 compared to income tax expense of $8.0 million in the first quarter of 2025. The decrease in the first quarter of 2026 is primarily due to lower earnings in 2026 and the jurisdictional mix of such earnings somewhat offset by a net uncertain tax position of $2.0 million recognized in the first quarter of 2026. During interim periods, our effective tax rate may not necessarily correspond to the current period income (loss) before taxes
Current wording
Income Tax Expense* *– We recognized income tax expense of $11.8 million in the second quarter of 2026 compared to income tax expense of $8.0 million in the second quarter of 2025 and income tax expense of $18.1 million in the first six months of 2026 compared to $16.0 million in the first six months of 2025. The increase in the second quarter and first six months of 2026 is primarily due to higher earnings in 2026, the jurisdictional mix of such earnings, and a net uncertain tax position of $2.0 million recognized in the first quarter of 2026. During interim periods, our effective tax rate may not necessarily correspond to the current period income (loss) before taxes due to the application of accounting for income taxes in interim periods which requires us to base our effective rate on full year projections of pre-tax income (loss).
Previous wording
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, 2025, we recognized a deferred income tax liability with respect to our direct investment in Kronos of $49.7 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 the cap is $153.6 million. During the first three months of 2026, we recognized a $1.4 million non-cash deferred income tax benefit with respect to our direct investment in Kronos. This benefit reflects a decrease in the deferred income taxes required to be recognized on the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock and was related to our equity in Kronos’ net income during the period. We recognized a similar deferred income tax benefit of $.5 million in the first three months of 2025. 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.
Current wording
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, 2025, we recognized a deferred income tax liability with respect to our direct investment in Kronos of $49.7 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 the cap is $153.6 million. During the first six months of 2026, we recognized a $2.8 million non-cash deferred income tax benefit with respect to our direct investment in Kronos. This benefit reflects a decrease in the deferred income taxes required to be recognized on the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock and was related to our equity in Kronos’ net income during the period. We recognized a similar deferred income tax benefit of $2.2 million in the first six months of 2025. 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.
Previous wording
Noncontrolling Interest in Net Income of Subsidiaries– Noncontrolling interest in operations of subsidiaries in the first three months of 2026 was comparable to the same period in 2025 primarily due to decreased operating income at our Chemicals Segment offset by higher operating income from our Component Products and Real Estate and Management Development segments. See Note 14 to our Condensed Consolidated Financial Statements.
Current wording
Noncontrolling Interest in Net Income of Subsidiaries– Noncontrolling interest in operations of subsidiaries in the first six months of 2026 was higher compared to the same period in 2025 primarily due to increased operating income at our Real Estate Management and Development Segment and improved results of NLI. See Note 14 to our Condensed Consolidated Financial Statements.
Previous wording
Cash used in operating activities was $46.1 million in the first three months of 2026 compared to cash used in operating activities of $155.9 million in the first three months of 2025. This $109.8 million decrease in cash used in operating activities in the first three months of 2026 includes:
Current wording
Cash provided by operating activities was $13.0 million in the first six months of 2026 compared to cash used in operating activities of $134.2 million in the first six months of 2025. This $147.2 million increase in cash provided by operating activities in the first six months of 2026 includes:
Previous wording
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 first three months of 2026 are comprised of CompX dividends paid to shareholders other than NL, Kronos dividends paid to shareholders other than us and NL, and LandWell dividends paid to partners other than us and BMI.
Current wording
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 first six months of 2026 are comprised of CompX dividends paid to shareholders other than NLI, Kronos dividends paid to shareholders other than us and NLI, and LandWell dividends paid to partners other than us and BMI.
Previous wording
Availability under Kronos’ Global Revolver is subject to a borrowing base calculation, as defined in the agreement. The borrowing base calculated for the period ended March 31, 2026 was approximately $287 million.
Current wording
Availability under Kronos’ Global Revolver is subject to a borrowing base calculation, as defined in the agreement. The borrowing base calculated for the period ended June 30, 2026 was approximately $261 million.
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Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
We reported net income attributable to Valhi stockholders of $24.3 million, or $.85 per diluted share, in the first six months of 2026 compared to net income attributable to Valhi stockholders of $17.8 million, or $.62 per diluted share, in the first six months of 2025. Our net income attributable to Valhi stockholders increased from 2025 to 2026 primarily due to the effects of:
Current report — wording carried from elsewhere
Our Chemicals Segment’s operating income increased by $3.4 million to $54.9 million in the first six months of 2026 compared to $51.5 million in the first six months of 2025, primarily as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates decreased our Chemicals Segment’s operating income by approximately $18 million in the first six months of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.
Current report — wording carried from elsewhere
The $41 million increase in our Chemicals Segment’s net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as its euro-denominated sales were translated into more U.S. dollars in 2026 as compared to 2025. The weakening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2026 did not have a significant effect on our Chemicals Segment’s net sales, as a substantial portion of the sales generated by its Canadian and Norwegian operations is denominated in the U.S. dollar.
Current report — wording carried from elsewhere
The $18 million decrease in our Chemicals Segment’s operating income was comprised of the following:
Current report — wording carried from elsewhere
infrastructure projects relate to the entirety of the residential/planned community, the associated costs are not part of the cost-based inputs used to recognize revenue, and therefore, this spending will not correlate to revenue recognition. However, this spending is eligible for tax increment reimbursement under our Owner Participation Agreement (“OPA”) with the City of Henderson. During the second quarter of 2026, LandWell received approval for the remaining $11 million of tax increment reimbursement, bringing the total approved reimbursement under the OPA to the maximum amount of $170 million. We expect to receive cash payments on the related notes receivables over the next 5 to 7 years.
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
loans to NLI’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 NLI’s subsidiary or NLI, 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 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. There is $.5 million outstanding under this facility at June 30, 2026.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
and the impact of broader economic conditions, consumer confidence, and geopolitical events affecting demand for its products or its customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous report — wording carried elsewhere
due to the application of accounting for income taxes in interim periods which requires us to base our effective rate on full year projections of pre-tax income (loss).