UNITED
STATES
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|
SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
10-K
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X
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Annual
Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act
of 1934:
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For the fiscal year ended
December 31,
2009
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Commission
file number 1-31763
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KRONOS WORLDWIDE, INC.
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(Exact
name of Registrant as specified in its charter)
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DELAWARE
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76-0294959
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(State
or other jurisdiction of
incorporation
or organization)
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(IRS
Employer Identification No.)
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5430
LBJ Freeway, Suite 1700
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Dallas,
Texas 75240-2697
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(Address
of principal executive offices)
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Registrant's
telephone number, including area
code: (972) 233-1700
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Securities
registered pursuant to Section 12(b) of the Act:
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|
Title of each class
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Name
of each exchange on
which
registered
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Common
stock
($.01
par value)
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New
York Stock Exchange
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*
|
The
registrant has not yet been phased into the interactive data
requirements.
|
·
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Future
supply and demand for our products
|
·
|
The
extent of the dependence of certain of our businesses on certain market
sectors
|
·
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The
cyclicality of our businesses
|
·
|
Customer
inventory levels (such as the extent to which our customers may, from time
to time, accelerate purchases of titanium dioxide pigments (“TiO2“)in
advance of anticipated price increases or defer purchases of TiO2 in
advance of anticipated price
decreases)
|
·
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Changes
in raw material and other operating costs (such as energy
costs)
|
·
|
General
global economic and political conditions (such as changes in the level of
gross domestic product in various regions of the world and the impact of
such changes on demand for TiO2)
|
·
|
Competitive
products and substitute products
|
·
|
Customer
and competitor strategies
|
·
|
Potential
consolidation or solvency of our
competitors
|
·
|
The
impact of pricing and production
decisions
|
·
|
Competitive
technology positions
|
·
|
Possible
disruption of our business or increases in the cost of doing business
resulting from terrorist activities or global
conflicts
|
·
|
The
introduction of trade barriers
|
·
|
Fluctuations
in currency exchange rates (such as changes in the exchange rate between
the U.S. dollar and each of the euro, the Norwegian krone and the Canadian
dollar)
|
·
|
Operating
interruptions (including, but not limited to, labor disputes, leaks,
natural disasters, fires, explosions, unscheduled or unplanned downtime
and transportation interruptions)
|
·
|
The
timing and amounts of insurance
recoveries
|
·
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Our
ability to renew or refinance credit
facilities
|
·
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Our
ability to maintain sufficient
liquidity
|
·
|
The
ultimate outcome of income tax audits, tax settlement initiatives or other
tax matters
|
·
|
Our
ability to utilize income tax attributes, the benefits of which have been
recognized under the more-likely-than-not recognition
criteria
|
·
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Environmental
matters (such as those requiring compliance with emission and discharge
standards for existing and new
facilities)
|
·
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Government
laws and regulations and possible changes
therein
|
·
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The
ultimate resolution of pending
litigation
|
·
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Possible
future litigation
|
2007
|
2008
|
2009
|
|
Europe
|
19%
|
19%
|
19%
|
North
America
|
15%
|
16%
|
16%
|
·
|
We
own and operate two ilmenite mines in Norway pursuant to a governmental
concession with an unlimited term. We commenced production from
our second mine in 2009. Ilmenite is a raw material used
directly as a feedstock by some sulfate-process TiO2
plants, including all of our European sulfate-process
plants. We also sell ilmenite ore to third-parties, some of
whom are our competitors. The mines have estimated aggregate
reserves which are expected to last for at least another 60
years.
|
·
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We
manufacture and sell iron-based chemicals, which are co-products and
processed co-products of sulfate and chloride process TiO2
pigment production. These co-product chemicals are marketed
through our Ecochem division and are primarily used as treatment and
conditioning agents for industrial effluents and municipal wastewater as
well as in the manufacture of iron pigments, cement and agricultural
products.
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·
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We
manufacture and sell titanium oxychloride and titanyl sulfate, which are
side-stream specialty products from the production of TiO2. Titanium
oxychloride is used in specialty applications in the formulation of
pearlescent pigments, production of electroceramic capacitors for cell
phones and other electronic devices. Titanyl sulfate products
are used in pearlescent pigments, natural gas pipe and other specialty
applications.
|
·
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Chloride production
process. Approximately
three-fourths of our current production capacity is based on the chloride
process. The chloride process is a continuous process in which
chlorine is used to extract rutile TiO2. The
chloride process typically has lower manufacturing costs than the sulfate
process due to newer technology, higher yield, less waste, lower energy
requirements and lower labor costs. The chloride process
produces less waste than the sulfate process because much of the chlorine
is recycled and feedstock bearing a higher titanium content is
used.
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·
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Sulfate production
process. The sulfate process is a batch chemical process
that uses sulfuric acid to extract both rutile and anatase TiO2. In
addition to the factors indicated above, the higher production costs
associated with the sulfate process result in part from the need to
process the spent sulfuric acid remaining at the end of the production
process.
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Production Process/Raw
Material
|
Raw
Materials Procured or Mined
|
(In
thousands of metric tons)
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Chloride
process plants:
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Purchased
slag or natural rutile ore
|
351
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Sulfate
process plants:
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Raw
ilmenite ore mined & used internally
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226
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Purchased
slag
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13
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Europe
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2,000
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Canada
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400
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United
States(1)
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40
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Total
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2,440
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(1)Excludes
employees of our Louisiana joint
venture.
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·
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making
it more difficult for us to satisfy our obligations with respect to our
liabilities;
|
·
|
increasing
our vulnerability to adverse general economic and industry
conditions;
|
·
|
requiring
that a portion of our cash flows from operations be used for the payment
of interest on our debt, which reduces our ability to use our cash flow to
fund working capital, capital expenditures, dividends on our common stock,
acquisitions or general corporate
requirements;
|
·
|
limiting
our ability to obtain additional financing to fund future working capital,
capital expenditures, acquisitions or general corporate
requirements;
|
·
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limiting
our flexibility in planning for, or reacting to, changes in our business
and the industry in which we operate;
and
|
·
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placing
us at a competitive disadvantage relative to other less leveraged
competitors.
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ITEM
1B.
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UNRESOLVED
STAFF COMMENTS.
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None.
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ITEM
2.
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PROPERTIES
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Location
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Description
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Leverkusen,
Germany (1)
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TiO2
production, chloride and sulfate
process, co-products
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Nordenham,
Germany
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TiO2
production, sulfate process, co-products
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Langerbrugge,
Belgium
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TiO2
production, chloride process, co-products, titanium chemicals
products
|
Fredrikstad,
Norway (2)
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TiO2
production, sulfate process, co-products
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Varennes,
Quebec, Canada
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TiO2
production, chloride and sulfate process, slurry facility, titanium
chemicals products
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Lake
Charles, Louisiana (3)
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TiO2
production, chloride process
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Lake
Charles, Louisiana
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Slurry
facility
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Hauge
i Dalane, Norway
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Ilmenite
mines
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(1)
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The
Leverkusen facility is located within an extensive manufacturing complex
owned by Bayer AG. We own the Leverkusen facility, which
represents about one-third of our current TiO2
production capacity, but we lease the land under the facility from Bayer
under a long term agreement which expires in 2050. Lease
payments are periodically negotiated with Bayer for periods of at least
two years at a time. Bayer provides some raw materials,
including chlorine, auxiliary and operating materials, utilities and
services necessary to operate the Leverkusen facility under separate
supplies and services agreements.
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(2)
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The
Fredrikstad plant is located on public land and is leased until 2013, with
an option to extend the lease for an additional 50
years.
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(3)
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We
operate this facility in a 50/50 joint venture with
Huntsman. See Note 6 to the Consolidated Financial
Statements.
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ITEM 5.
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MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
|
High
|
Low
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Cash
dividends
paid
|
||||||||||
Year
ended December 31, 2008
|
||||||||||||
First
Quarter
|
$ | 24.57 | $ | 15.74 | $ | .25 | ||||||
Second
Quarter
|
31.42 | 15.39 | .25 | |||||||||
Third
Quarter
|
17.20 | 11.46 | .25 | |||||||||
Fourth
Quarter
|
14.08 | 8.05 | .25 | |||||||||
Year
ended December 31, 2009
|
||||||||||||
First
Quarter
|
$ | 17.00 | $ | 5.25 | $ | - | ||||||
Second
Quarter
|
8.90 | 6.50 | - | |||||||||
Third
Quarter
|
10.31 | 5.85 | - | |||||||||
Fourth
Quarter
|
17.34 | 9.59 | - | |||||||||
January
1, 2010 through February
26,
2010
|
17.20 | 14.57 | - |
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
|
Kronos
common stock
|
$100
|
$
74
|
$
86
|
$
48
|
$
34
|
$
48
|
S&P
500 Composite Stock Index
|
100
|
105
|
121
|
128
|
81
|
102
|
S&P
500 Diversified Chemicals Index
|
100
|
90
|
100
|
98
|
51
|
83
|
ITEM
6.
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SELECTED
FINANCIAL DATA
|
Years ended December 31, | ||||||||||||||||||||
2005 | 2006 (2) | 2007 | 2008 | 2009 | ||||||||||||||||
(In millions, except per share data and TiO2operating statistics) | ||||||||||||||||||||
STATEMENTS
OF OPERATIONS DATA:
|
||||||||||||||||||||
Net
sales
|
$ | 1,196.7 | $ | 1,279.4 | $ | 1,310.3 | $ | 1,316.9 | $ | 1,142.0 | ||||||||||
Gross
margin
|
327.5 | 310.5 | 251.4 | 220.6 | 130.3 | |||||||||||||||
Income
(loss) from operations
|
176.0 | 143.2 | 84.9 | 47.2 | (15.7 | ) | ||||||||||||||
Net
income (loss)
|
71.5 | 82.0 | (66.7 | ) | 9.0 | (34.7 | ) | |||||||||||||
Net
income (loss) per share
|
1.46 | 1.67 | (1.36 | ) | .18 | (.71 | ) | |||||||||||||
Cash
dividends per share
|
1.00 | 1.00 | 1.00 | 1.00 | - | |||||||||||||||
BALANCE
SHEET DATA (at year end):
|
||||||||||||||||||||
Total
assets
|
$ | 1,298.9 | $ | 1,421.5 | $ | 1,455.0 | $ | 1,358.7 | $ | 1,325.0 | ||||||||||
Notes
payable and long-term debt including current maturities
|
465.3 | 536.2 | 606.2 | 638.5 | 613.2 | |||||||||||||||
Common
stockholders’ equity
|
412.5 | 448.4 | 411.0 | 317.9 | 312.5 | |||||||||||||||
STATEMENTS
OF CASH FLOW DATA:
|
||||||||||||||||||||
Net
cash provided by (used in):
|
||||||||||||||||||||
Operating
activities
|
$ | 97.8 | $ | 71.9 | $ | 90.0 | $ | 2.7 | $ | 86.3 | ||||||||||
Investing
activities
|
(39.7 | ) | (50.9 | ) | (47.4 | ) | (68.1 | ) | (23.7 | ) | ||||||||||
Financing
activities
|
(44.8 | ) | (35.0 | ) | (39.8 | ) | 10.3 | (49.8 | ) | |||||||||||
TiO2 OPERATING
STATISTICS:
|
||||||||||||||||||||
Sales
volume(1)
|
478 | 511 | 519 | 478 | 445 | |||||||||||||||
Production
volume(1)
|
492 | 516 | 512 | 514 | 402 | |||||||||||||||
Production
capacity at beginning of year(1)
|
495 | 516 | 525 | 532 | 532 | |||||||||||||||
Production
rate as a percentage of capacity
|
99 | % |
Full
|
98 | % | 97 | % | 76 | % | |||||||||||
(1)
|
Metric
tons in thousands
|
(2)
|
We adopted the asset and
liability recognition provisions of Accounting Standard Codification Topic
715, Compensation –
Retirement Benefits, effective December 31, 2006. See
Note 10 to our Consolidated Financial
Statements.
|
ITEM 7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
·
|
Our
TiO2
sales and production volumes,
|
·
|
TiO2
selling prices,
|
·
|
Currency
exchange rates (particularly the exchange rate for the U.S. dollar
relative to the euro, Norwegian krone and the Canadian dollar)
and
|
·
|
Manufacturing
costs, particularly raw materials, maintenance and energy-related
expenses.
|
·
|
Long-lived
assets. We recognize an impairment charge associated
with our long-lived assets, including property and equipment, whenever we
determine that recovery of such long-lived asset is not
probable. Such determination is made in accordance with the
applicable GAAP requirements of Accounting Standard Codification (“ASC”)
Topic 360-10-35 Property, Plant and
Equipment and is based upon, among other things, estimates of the
amount of future net cash flows to be generated by the long-lived asset
and estimates of the current fair value of the
asset. Significant judgment is required in estimating such cash
flows. Adverse changes in such estimates of future net cash
flows or estimates of fair value could result in an inability to recover
the carrying value of the long-lived asset, thereby possibly requiring an
impairment charge to be recognized in the future. We do not
assess our property and equipment for impairment unless certain impairment
indicators specified in ASC Topic 360-10-35 are present. We did
not evaluate any long-lived assets for impairment during 2009 because no
such impairment indicators were
present.
|
·
|
Benefit
Plans. We maintain various defined benefit pension plans
and postretirement benefits other than pensions (“OPEB”). The
amounts recognized as defined benefit pension and OPEB expenses and the
reported amounts of pension asset and accrued pension and OPEB costs are
actuarially determined based on several assumptions, including discount
rates, expected rates of returns on plan assets and expected health care
trend rates. Variances from these actuarially assumed rates
will result in increases or decreases, as applicable, in the recognized
pension and OPEB obligations, pension and OPEB expenses and funding
requirements. These assumptions are more fully described below
under “Defined Benefit Pension Plans” and “OPEB
Plans.”
|
·
|
Income
taxes. We recognize deferred taxes for future tax
effects of temporary differences between financial and income tax
reporting in accordance with the recognition criteria of ASC Topic 740
Income
Taxes. We record a valuation allowance to reduce our
deferred income tax assets to the amount that is believed to be realized
under the more-likely-than-not recognition criteria. While we
have considered future taxable income and ongoing prudent and feasible tax
planning strategies in assessing the need for a valuation allowance, it is
possible that in the future we may change our estimate of the amount of
the deferred income tax assets that would more-likely-than-not be realized
in the future, resulting in an adjustment to the deferred income tax asset
valuation allowance that would either increase or decrease, as applicable,
reported net income in the period such change in estimate was
made. For example, we have substantial net operating loss
carryforwards in Germany (the equivalent of $941 million for German
corporate purposes and $288 million for German trade tax purposes at
December 31, 2009). At December 31, 2009, we have concluded
that no deferred income tax asset valuation allowance is required to be
recognized with respect to such carryforwards, principally because (i)
such carryforwards have an indefinite carryforward period, (ii) we have
utilized a portion of such carryforwards during the most recent three-year
period and
(iii) we currently expect to utilize the remainder of such carryforwards
over the long term. However, prior to the complete utilization
of such carryforwards, particularly if the economic recovery were to be
short-lived or we were to generate losses in our German operations for an
extended period of time, it is possible that we might conclude the benefit
of such carryforwards would no longer meet the more-likely-than-not
recognition criteria, at which point we would be required to recognize a
valuation allowance against some or all of the then-remaining tax benefit
associated with the carryforwards.
|
·
|
Contingencies. We
record accruals for legal and other contingencies when estimated future
expenditures associated with such contingencies and commitments become
probable and the amounts can be reasonably estimated. However,
new information may become available or circumstances (such as applicable
laws and regulations) may change, thereby resulting in an increase or
decrease in the amount required to be accrued for such matters (and
therefore a decrease or increase in reported net income in the period of
such change).
|
Year
ended
December 31,
|
||||||||||||||||
2008
|
2009
|
|||||||||||||||
(Dollars
in millions)
|
||||||||||||||||
Net
sales
|
$ | 1,316.9 | 100 | % | $ | 1,142.0 | 100 | % | ||||||||
Cost
of sales
|
1,096.3 | 83 | 1,011.7 | 89 | ||||||||||||
Gross
margin
|
220.6 | 17 | 130.3 | 11 | ||||||||||||
Other
operating income and expenses, net
|
173.4 | 13 | 146.0 | 13 | ||||||||||||
Income
(loss) from operations
|
$ | 47.2 | 4 | % | $ | (15.7 | ) | (2 | )% | |||||||
%
|
||||||||||||||||
Change
|
||||||||||||||||
TiO2
operating statistics:
|
||||||||||||||||
Sales
volumes*
|
478 | 445 | (7 | )% | ||||||||||||
Production
volumes*
|
514 | 402 | (22 | )% | ||||||||||||
Percent
change in net sales:
|
||||||||||||||||
TiO2
product pricing
|
(1 | )% | ||||||||||||||
TiO2
sales volumes
|
(7 | ) | ||||||||||||||
TiO2
product mix
|
(2 | ) | ||||||||||||||
Changes
in currency exchange rates
|
(3 | ) | ||||||||||||||
Total
|
(13 | )% |
·
|
Our
income tax benefit for 2009 includes a non-cash benefit of $4.7 million
related to a net decrease in our reserve for uncertain tax positions,
primarily as a result of the resolution of tax audits in Belgium and
Germany in the third and fourth
quarters.
|
·
|
Our
income tax benefit for 2008 includes a non-cash benefit of $7.2 million
relating to a European Court ruling that resulted in the favorable
resolution of certain income tax issues in Germany and an increase in the
amount of our German corporate and trade tax net operating loss
carryforwards.
|
Year
ended
December 31,
|
||||||||||||||||
2007
|
2008
|
|||||||||||||||
(Dollars
in millions)
|
||||||||||||||||
Net
sales
|
$ | 1,310.3 | 100 | % | $ | 1,316.9 | 100 | % | ||||||||
Cost
of sales
|
1,058.9 | 81 | 1,096.3 | 83 | ||||||||||||
Gross
margin
|
251.4 | 19 | 220.6 | 17 | ||||||||||||
Other
operating income and expenses, net
|
166.5 | 13 | 173.4 | 13 | ||||||||||||
Income
from operations
|
$ | 84.9 | 6 | % | $ | 47.2 | 4 | % | ||||||||
Percent
|
||||||||||||||||
Change
|
||||||||||||||||
TiO2
operating statistics:
|
||||||||||||||||
Sales
volumes*
|
519 | 478 | (8 | )% | ||||||||||||
Production
volumes*
|
512 | 514 | - | |||||||||||||
Percent
change in net sales:
|
||||||||||||||||
TiO2
product pricing
|
2 | % | ||||||||||||||
TiO2
sales volumes
|
(8 | ) | ||||||||||||||
TiO2
product mix
|
2 | |||||||||||||||
Changes
in currency exchange rates
|
5 | |||||||||||||||
Total
|
1 | % |
·
|
Our
income tax benefit for 2008 includes a non-cash benefit of $7.2 million
relating to a European Court ruling that resulted in the favorable
resolution of certain income tax issues in Germany and an increase in the
amount of our German corporate and trade tax net operating loss
carryforwards.
|
·
|
Our
income tax expense in 2007 includes a non-cash charge of $90.8 million
relating to a decrease in our net deferred income tax asset in Germany
resulting from the reduction in its income tax
rates;
|
·
|
a
non-cash charge of $8.7 million relating to the adjustment of certain
German income tax attributes; and
|
·
|
a
non-cash income tax benefit of $2.0 million resulting from a net reduction
in our reserve for uncertain tax
positions.
|
Impact
of changes in foreign currency - 2008 vs 2009
|
|||||
Transaction
gains/(losses) recognized
|
Translation
gain/loss-
impact
of rate changes
|
Total
currency impact
2008 vs 2009
|
|||
2008
|
2009
|
Change
|
|||
(in
millions)
|
|||||
Impact
on:
|
|||||
Net
sales
|
$ -
|
$ -
|
$ -
|
$ (35)
|
$ (35)
|
Income
(loss)
from
operations
|
1
|
10
|
9
|
31
|
40
|
Impact
of Changes in foreign currency - 2007 vs 2008
|
|||||
Transaction
gains/(losses) recognized
|
Translation
gain/loss-
impact
of rate changes
|
Total
currency impact
2007 vs 2008
|
|||
2007
|
2008
|
Change
|
|||
(in
millions)
|
|||||
Impact
on:
|
|||||
Net
sales
|
$ -
|
$ -
|
$ -
|
$ 61
|
$ 61
|
Income
(loss) from operations
|
-
|
1
|
1
|
(5)
|
(4)
|
·
|
lower
income (loss) from operations in 2009 of $62.9
million;
|
·
|
higher
net cash provided by relative changes in our inventories, receivables,
payables and accruals of $148.3 million in 2009 as compared to 2008,
primarily due to relative changes in our inventory levels, as discussed
below; and
|
·
|
lower
net distributions from our TiO2
joint venture in 2009 of $2.3 million due to related changes in their cash
requirements.
|
·
|
lower
income from operations in 2008 of $37.7
million;
|
·
|
higher
net cash used by relative changes in our inventories, receivables,
payables and accruals of $74.7 million in 2008 as compared to 2007, due
primarily to relative changes in our inventory levels, as discussed
below;
|
·
|
lower
cash paid for income taxes in 2008 of $19.7 million, in part due to lower
taxable income and the receipt of tax refunds at our European operating
units;
|
·
|
higher
net distributions from our TiO2
joint venture in 2008 of $14.9 million due to related changes in their
cash flow;
|
·
|
higher
cash paid for interest in 2008 of $3.2 million, as a result
of increased borrowing and the effects of currency exchange
rates on the semiannual interest payments on our 6.5% Senior Secured
Notes; and
|
·
|
higher
depreciation expense of $2.4 million in 2008, primarily as a result of the
effects of currency exchange rates.
|
·
|
Our
average days sales outstanding (“DSO”) decreased at December 31, 2009
compared to December 31, 2008 due to the timing of collections on
receivable balances; and
|
·
|
Our
average days sales in inventory (“DSI”) decreased at December 31, 2009
compared to December 31, 2008, as our TiO2
sales volumes in 2009 exceeded our production
volumes.
|
December
31,
|
December
31,
|
December
31,
|
|
2007
|
2008
|
2009
|
|
Days
sales outstanding
|
63
days
|
64
days
|
56
days
|
Days
sales in inventory
|
59
days
|
113
days
|
58
days
|
·
|
made
net borrowings of $3.0 million under our U.S. credit
facility;
|
·
|
borrowed
and repaid $31.5 million under our European credit facility;
and
|
·
|
made
net payments of $19.2 million on our credit facility with our affiliate
NL.
|
·
|
made
net payments of $1.7 million on our U.S. credit
facility;
|
·
|
made
net borrowings of $44.4 million on our European credit facility;
and
|
·
|
made
net borrowings of $19.2 million on our credit facility with our affiliate
NL.
|
·
|
euro
400 million principal amount of our 6.5% Senior Secured Notes ($574.6
million) due in 2013;
|
·
|
euro
9 million ($13.0 million) under our European revolving credit facility
which matures in May 2011;
|
·
|
$16.7
million under our U.S. revolving credit facility which matures in
September 2011; and
|
·
|
approximately
$8.9 million of other indebtedness.
|
|
Payment due date
|
|||||||||||||||||||
Contractual commitment
|
2010
|
2011/2012 | 2013/2014 |
2015
and
after
|
Total
|
|||||||||||||||
(In
millions)
|
||||||||||||||||||||
Indebtedness(1)
|
$ | 2.1 | $ | 34.1 | $ | 576.3 | $ | .7 | $ | 613.2 | ||||||||||
Interest
payments onindebtedness
(2)
|
38.7 | 75.8 | 12.6 | - | 127.1 | |||||||||||||||
Operating
leases
|
5.4 | 6.4 | 3.1 | 20.0 | 34.9 | |||||||||||||||
Long-term
supply contracts for the purchase of TiO2 feedstock
(3)
|
227.0 | 208.0 | 114.0 | - | 549.0 | |||||||||||||||
Long-term
service andother supply
contracts (4)
|
87.7 | 51.4 | 30.1 | 7.2 | 176.4 | |||||||||||||||
Fixed
asset acquisitions
|
18.7 | - | - | - | 18.7 | |||||||||||||||
Estimated
tax obligations (5)
|
3.6 | - | - | - | 3.6 | |||||||||||||||
$ | 383.2 | $ | 375.7 | $ | 736.1 | $ | 27.9 | $ | 1,522.9 | |||||||||||
(1)
|
A
significant portion of the amount shown for indebtedness relates to our
6.5% Senior Secured Notes ($574.6 million at December 31,
2009). Such indebtedness is denominated in euro. See
Item 7A – “Quantitative and Qualitative Disclosures About Market Risk” and
Note 8 to the Consolidated Financial Statements. With respect
to the revolving credit facilities the amounts shown for indebtedness are
based upon the actual amounts outstanding at December 31,
2009.
|
(2)
|
The
amounts shown for interest for any outstanding variable-rate indebtedness
is based upon the December 31, 2009 interest rates and assumes that such
variable-rate indebtedness remains outstanding until
maturity.
|
(3)
|
Our
contracts for the purchase of TiO2
feedstock contain fixed quantities that we are required to purchase,
although certain of these contracts allow for an upward or downward
adjustment in the quantity purchased, generally no more than 10%, based on
our feedstock requirements. The pricing under these agreements
is generally based on a fixed price with price escalation clauses
primarily based on consumer price indices, as defined in the respective
contracts. The timing and amount shown for our commitments
related to the long-term supply contracts for TiO2
feedstock are based upon our current estimate of the quantity of material
that will be purchased in each time period shown, the payment that would
be due based upon such estimated purchased quantity and an estimate of the
effect of the price escalation clause. The actual amount of
material purchased and the actual amount that would be payable by us, may
vary from such estimated amounts. Our obligation for the
purchase of TiO2
feedstock is more fully described in Note 14 to our Consolidated Financial
Statements and above in “Business – raw
materials.”
|
(4)
|
The
amounts shown for the long-term service and other supply contracts
primarily pertain to agreements we have entered into with various
providers of products or services which help to run our plant facilities
(electricity, natural gas, etc.), utilizing December 31, 2009 exchange
rates.
|
(5)
|
The
amount shown for estimated tax obligations is the consolidated amount of
income taxes payable at December 31, 2009, which is assumed to be paid
during 2010.
|
·
|
Any
amounts we might pay to fund our defined benefit pension plans and OPEB
plans, as the timing and amount of any such future fundings are unknown
and dependent on, among other things, the future performance of defined
benefit pension plan assets, interest rate assumptions and actual future
retiree medical costs. We expect to be required to contribute
approximately $24.7 million to our defined benefit pension plans and OPEB
plans during 2010. Such defined benefit pension plans and OPEB
plans are discussed below in greater detail. See Note 10 to our
Consolidated Financial Statements.
|
·
|
Any
amounts we might pay related to our asset retirement obligations as the
terms and amounts of such future fundings are
unknown;
|
·
|
Any
amounts we might pay to settle any of our uncertain tax positions, as the
timing and amount of any such future settlements are unknown and dependent
on, among other things, the timing of tax audits. See Notes 9
and 16 to our Consolidated Financial Statements;
and
|
·
|
Any
amounts we might pay to acquire TiO2 from
our TiO2
manufacturing joint venture, as the timing and amount of such purchases
are unknown and dependent on, among other things, the amount of TiO2
produced by the joint venture in the future and the joint venture’s future
cost of producing such TiO2. However,
the table does include amounts related to our share of the joint venture’s
ore requirements necessary to produce TiO2 for
us. See Item 1, “Business” and Note 6 to our Consolidated
Financial Statements.
|
Discount
rates used for:
|
|||||
Obligations
at
December
31, 2007 and expense in 2008
|
Obligations
at
December
31, 2008 and expense in 2009
|
Obligations
at December 31, 2009 and expense in 2010
|
|||
Germany
|
5.5%
|
5.8%
|
5.5%
|
||
Canada
|
5.3%
|
6.5%
|
6.0%
|
||
Norway
|
5.5%
|
5.8%
|
5.3%
|
||
U.S.
|
6.1%
|
6.1%
|
5.7%
|
·
|
In
Germany, the composition of our plan assets is established to satisfy the
requirements of the German insurance
commissioner.
|
·
|
In
Canada, we currently have a plan asset target allocation of 55% to equity
securities, 45% to fixed income securities and the remainder primarily to
cash and liquid investments. We expect the long-term rate of
return for such investments to average approximately 125 basis points
above the applicable equity or fixed income
index.
|
·
|
In
Norway, we currently have a plan asset target allocation of 14% to equity
securities, 72% to fixed income securities, and the remainder primarily to
cash and liquid investments. The expected long-term rate of
return for such investments is approximately 9.0%, 5.0%, and 4.0%,
respectively.
|
·
|
In
the U.S. substantially all of the assets were invested in The Combined
Master Retirement Trust (“CMRT”), a collective investment trust sponsored
by Contran to permit the collective investment by certain master trusts
which fund certain employee benefits plans sponsored by Contran and
certain of its affiliates. Harold C. Simmons is the sole
trustee of the CMRT and is a member of the CMRT investment
committee. The CMRT’s long-term investment objective is to
provide a rate of return exceeding a composite of broad market equity and
fixed income indices (including the S&P 500 and certain Russell
indices), while utilizing both third-party investment managers as well as
investments directed by Mr. Simmons. During the history of the
CMRT from its inception in 1988 through December 31, 2009, the average
annual rate of return has been 11%.
|
December 31, 2009
|
||||||||||||||||
Germany
|
Canada
|
Norway
|
CMRT
|
|||||||||||||
Equity
securities and limited
partnerships
|
18 | % | 58 | % | 18 | % | 68 | % | ||||||||
Fixed
income securities
|
61 | 40 | 80 | 31 | ||||||||||||
Real
estate
|
12 | - | - | 1 | ||||||||||||
Cash,
cash equivalents and other
|
9 | 2 | 2 | - | ||||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % |
December 31, 2008
|
||||||||||||||||
Germany
|
Canada
|
Norway
|
CMRT
|
|||||||||||||
Equity
securities and limited
partnerships
|
24 | % | 53 | % | 14 | % | 53 | % | ||||||||
Fixed
income securities
|
52 | 39 | 83 | 43 | ||||||||||||
Real
estate
|
12 | - | - | - | ||||||||||||
Cash,
cash equivalents and other
|
12 | 8 | 3 | 4 | ||||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % |
2007
|
2008
|
2009
|
||||
Germany
|
5.8%
|
5.3%
|
5.3%
|
|||
Canada
|
6.8%
|
6.3%
|
6.0%
|
|||
Norway
|
5.5%
|
6.1%
|
5.8%
|
|||
U.S.
|
10.0%
|
10.0%
|
10.0%
|
25
basis
point increase
|
25
basis
point decrease
|
|
(In
millions)
|
||
Effect
on net OPEB cost during 2009
|
$ (.1)
|
$ .1
|
Effect
at December 31, 2009 on
postretirement
obligation
|
(.6)
|
.6
|
1% Increase
|
1% Decrease
|
|
(In
millions)
|
||
Effect
on net OPEB cost during 2009
|
$ (
.2)
|
$ .2
|
Effect
at December 31, 2009 on
postretirement
obligation
|
(2.7)
|
2.2
|
Amount
|
||||||||||||||||
Indebtedness
|
Carrying
value
|
Fair
value
|
Interest
rate
|
Maturity
date
|
||||||||||||
(In
millions)
|
||||||||||||||||
Fixed-rate
indebtedness - euro-denominated:
|
||||||||||||||||
Senior
Secured Notes
|
$ | 574.6 | $ | 466.2 | 6.5 | % | 2013 | |||||||||
Variable
rate indebtedness:
|
||||||||||||||||
U.S.
credit facility – dollar denominated
|
$ | 16.7 | $ | 16.7 | 3.3 | % | 2011 | |||||||||
Europe
credit facility – euro denominated
|
13.0 | 13.0 | 3.5 | % | 2011 | |||||||||||
$ | 29.7 | $ | 29.7 |
·
|
an
aggregate of $48.0 million for an equivalent value of Canadian dollars at
an exchange rate of Cdn. $1.04 per U.S. dollar. These contracts
with Wachovia Bank, National Association mature from January 2010 through
December 2010 and are subject to early redemption provisions at our
option; and
|
·
|
an
aggregate of $64 million for an equivalent value of Norwegian kroner at
exchange rates ranging from kroner 5.83 to kroner 6.06 per U.S.
dollar. These contracts with DnB Nor Bank ASA mature from
February 2010 through January 2011 and are subject to early redemption
provisions at our option.
|
ITEM 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our
assets,
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that
receipts and expenditures are being made only in accordance with
authorizations of management and directors
and
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of an
unauthorized acquisition, use or disposition of assets that could have a
material effect on our Condensed Consolidated Financial
Statements.
|
(b)
|
Exhibits
|
2.1
|
Form
of Distribution Agreement between NL Industries, Inc. and Kronos
Worldwide, Inc. – incorporated by reference to Exhibit 2.1 of the
Registration Statement on Form 10 of the Registrant (File No.
001-31763).
|
3.1
|
First
Amended and Restated Certificate of Incorporation of Kronos Worldwide,
Inc. – incorporated by reference to Exhibit 3.1 of the Registration
statement on Form 10 of the Registrant (File No.
001-31763).
|
3.2
|
Amended
and Restated Bylaws of Kronos Worldwide, Inc. as of October 25, 2007 –
incorporated by reference to Exhibit 3.1 of the Registrant’s Current
Report on Form 8-K filed (File No. 001-31763) with the U.S. Securities and
Exchange Commission on October 31,
2007.
|
4.1
|
Indenture
governing the 6.5% Senior Secured Notes due 2013,
dated
|
|
as
of April 11, 2006, between Kronos International, Inc. and
The
|
|
Bank
of New York, as trustee (incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K of Kronos International, Inc. (File No.
333-100047) that was filed with the U.S. Securities and Exchange
Commission on April 11, 2006).
|
4.2
|
Form
of certificate of Series A 6.5% Senior Secured Note due 2013(incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kronos
International, Inc. (File No. 333-100047)that was filed with
the U.S. Securities and Exchange Commission on
April 11, 2006).
|
4.3
|
Form
of certificate of Series B 6.5% Senior Secured Note due
2013 (incorporated by reference to Exhibit 4.3 to the
Current Report on Form 8-K of Kronos International, Inc.
(File No. 333-100047) that was filed with the U.S.
Securities and Exchange Commission on April 11,
2006).
|
4.4
|
Purchase
Agreement dated April 5, 2006 between
Kronos International, Inc. and Deutsche Bank AG London
(incorporated by reference to
Exhibit 4.1 to the Current Report on Form
8-K of Kronos International, Inc.
(File No. 333-100047) that was filed with the
U.S. Securities and Exchange Commission on April
11, 2006).
|
4.5
|
Registration
Rights Agreement dated as of April 11, 2006
between Kronos International, Inc. and Deutsche Bank AG
London (incorporated by reference to Exhibit
4.5 to the Current Report on Form 8-K of
Kronos International, Inc. (File No.
333-100047) that was filed with the
U.S. Securities and Exchange Commission on April 11,
2006)
|
4.6
|
Collateral
Agency Agreement, dated April 11, 2006, among The Bank of
New York, U.S. Bank, N.A. and Kronos International,
Inc. (incorporated by reference to Exhibit 4.6 to
the Current Report on Form 8-K of
Kronos International, Inc. (File No.
333-100047) that was filed with the
U.S. Securities and Exchange Commission on April 11,
2006).
|
4.7
|
Security
Over Shares Agreement, dated April 11, 2006, between Kronos International,
Inc. and The Bank of New York (incorporated by reference
to Exhibit 4.7 to the Current Report on Form 8-K
of Kronos International, Inc. (File
No. 333-100047) that was filed with the
U.S. Securities and Exchange Commission on April
11, 2006).
|
4.8
|
Pledge
of Shares (shares in Kronos Denmark ApS), dated April
11, 2006, between Kronos International, Inc. and U.S.
Bank, N.A. (incorporated by reference to
Exhibit 4.8 to the Current Report on Form 8-K
of Kronos International, Inc. (File No.
333-100047) that was filed with the
U.S. Securities and Exchange Commission on April 11,
2006).
|
4.9
|
Pledge
Agreement (shares in Societe Industrielle du Titane
S.A.), dated April 11, 2006, between Kronos
International, Inc. and U.S. Bank, N.A. (incorporated by
reference to Exhibit 4.9 to the Current Report on Form
8-K of Kronos International, Inc. (File No.
333-100047) that was filed with the U.S. Securities and Exchange
Commission on April 11, 2006)
|
4.10
|
Share
Pledge Agreement (shares in Kronos Titan GmbH), dated
April 11, 2006, between Kronos International, Inc. and
U.S. Bank, N.A. (incorporated by reference to
Exhibit 4.10 to the Current Report on Form 8-K of Kronos
International, Inc. (File No. 333-100047) that was filed
with the U.S. Securities and Exchange Commission on April 11,
2006).
|
10.1
|
Form
of Tax Agreement between Valhi, Inc. and Kronos Worldwide, Inc. –
incorporated by reference to Exhibit 10.1 of the Registration statement on
Form 10 of the Registrant (File No.
001-31763).
|
10.2
|
Intercorporate
Services Agreement by and between Contran Corporation and Kronos
Worldwide, Inc., effective as of January 1, 2004 – incorporated by
reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the
Registrant (File No. 001-31763) for the quarter ended March 31,
2004.
|
10.3*
|
Form
of Kronos Worldwide, Inc. 2003 Long-Term Incentive Plan – incorporated by
reference to Exhibit 10.4 of the Registration statement on Form 10 of the
Registrant (File No. 001-31763).
|
10.4
|
Euro
80,000,000 Facility Agreement, dated June 25, 2002, among Kronos Titan
GmbH & Co. OHG, Kronos Europe S.A./N.V., Kronos Titan A/S and Titania
A/S, as borrowers, Kronos Titan GmbH & Co. OHG, Kronos Europe
S.A./N.V. and Kronos Norge AS, as guarantors, Kronos Denmark ApS, as
security provider, Deutsche Bank AG, as mandated lead arranger, Deutsche
Bank Luxembourg S.A., as agent and security agent, and KBC Bank NV, as
fronting bank, and the financial institutions listed in Schedule 1
thereto, as lenders - incorporated by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of NL Industries, Inc. (File No. 001-00640)
for the quarter ended June 30,
2002.
|
10.5
|
First
Amendment Agreement, dated September 3, 2004, Relating to a Facility
Agreement dated June 25, 2002 among Kronos Titan GmbH, Kronos Europe
S.A./N.V., Kronos Titan AS and Titania A/S, as borrowers, Kronos Titan
GmbH, Kronos Europe S.A./N.V. and Kronos Norge AS, as guarantors, Kronos
Denmark ApS, as security provider, with Deutsche Bank Luxembourg S.A.,
acting as agent – incorporated by reference to Exhibit 10.1 of the Current
Report on Form 8-K of the Registrant dated November 17, 2004 (File No.
333-119639).
|
10.6
|
Second
Amendment Agreement Relating to a Facility Agreement dated June 25, 2002
executed as of June 14, 2005 by and among Deutsche Bank AG, as mandated
lead arranger, Deutsche Bank Luxembourg S.A. as agent, the participating
lenders, Kronos Titan GmbH, Kronos Europe S.A./N.V, Kronos Titan AS,
Kronos Norge AS, Titania AS and Kronos Denmark ApS – incorporated by
reference to Exhibit 10.3 to the Annual Report on Form 10-K of Kronos
International, Inc.(File No. 333-100047) for the year ended December 31,
2009.
|
10.7
|
Third
Amendment Agreement Relating to a Facility Agreement dated June 25, 2002
executed as of May 26, 2008 by and among Deutsche Bank AG, as mandated
lead arranger, Deutsche Bank Luxembourg S.A., as agent, the participating
lenders, Kronos Titan GmbH, Kronos Europe S.A.,/N.V, Kronos Titan AS,
Kronos Norge AS, Titania AS and Kronos Denmark ApS – incorporated by
reference to Exhibit 10.4 to the Annual Report on Form 10-K of Kronos
International, Inc. (File No. 333-100047) for the year ended December 31,
2009.
|
10.8
|
Fourth
Amendment Agreement Relating to a Facility Agreement dated June 25, 2002
executed as of September 15, 2009 by and among Deutsche Bank AG, as
mandated lead arranger, Deutsche Bank Luxembourg S.A., as agent, the
participating lenders, Kronos Titan GmbH, Kronos Europe S.A./N.V., Kronos
Titan AS, Kronos Norge AS, Titania AS and Kronos Denmark ApS –
incorporated by reference to Exhibit 10.5 to the Annual Report on Form
10-K of Kronos International, Inc. (File No. 333-1000047) for the year
ended December 31, 2009.
|
10.9
|
$40,000,000
Unsecured Revolving Demand Promissory Note dated October 29, 2008 and
payable to NL Industries, Inc. – incorporated by reference to Exhibit 10.1
to the Registrant’s Current Report on Form 8-K (File No. 001-00640) that
was filed with the U.S. Securities and Exchange Commission on October 29,
2008.
|
10.10
|
Lease
Contract, dated June 21, 1952, between Farbenfabriken Bayer
Aktiengesellschaft and Titangesellschaft mit beschrankter Haftung (German
language version and English translation thereof)- incorporated by
reference to Exhibit 10.14 to the Annual Report on Form 10-K (File No.
001-00640)of NL Industries, Inc. for the year ended December 31,
1985.
|
10.11
|
Master
Technology Exchange Agreement, dated as of October 18, 1993, among Kronos
Worldwide, Inc. (f/k/a Kronos, Inc.), Kronos Louisiana, Inc., Kronos
International, Inc., Tioxide Group Limited and Tioxide Group Services
Limited - incorporated by reference to Exhibit 10.8 to the Quarterly
Report on Form 10-Q (File No. 001-00640) of NL Industries, Inc. for the
quarter ended September 30, 1993.
|
10.12
|
Form
of Assignment and Assumption Agreement, dated as of January 1, 1999,
between Kronos Inc. (formerly known as Kronos (USA), Inc.) and Kronos
International, Inc. - incorporated by reference to Exhibit 10.9 to Kronos
International, Inc.'s Registration Statement on Form S-4 (File No.
333-100047).
|
10.13
|
Form
of Cross License Agreement, effective as of January 1, 1999, between
Kronos Inc. (formerly known as Kronos (USA), Inc.) and Kronos
International, Inc. - incorporated by reference to Exhibit to Kronos
International, Inc.'s Registration Statement on Form S-4 (File No.
333-100047).
|
10.14
|
Formation
Agreement dated as of October 18, 1993 among Tioxide Americas Inc., Kronos
Louisiana, Inc. and Louisiana Pigment Company, L.P. - incorporated by
reference to Exhibit 10.2 to NL Industries, Inc.'s Quarterly Report on
Form 10-Q (File No. 001-00640) for the quarter ended September 30,
1993.
|
10.15
|
Joint
Venture Agreement dated as of October 18, 1993 between Tioxide Americas
Inc. and Kronos Louisiana, Inc. - incorporated by reference to Exhibit
10.3 to NL Industries, Inc.'s Quarterly Report on Form 10-Q (File No.
001-00640) for the quarter ended September 30,
1993.
|
10.16
|
Kronos
Offtake Agreement dated as of October 18, 1993 between Kronos Louisiana,
Inc. and Louisiana Pigment Company, L.P. - incorporated by reference to
Exhibit 10.4 to NL Industries, Inc.'s Quarterly Report on Form 10-Q (File
No. 001-00640) for the quarter ended September 30,
1993.
|
10.17
|
Amendment
No. 1 to Kronos Offtake Agreement dated as of December 20, 1995 between
Kronos Louisiana, Inc. and Louisiana Pigment Company, L.P. - incorporated
by reference to Exhibit 10.22 to NL Industries, Inc.'s Annual Report on
Form 10-K (File No. 001-00640) for the year ended December 31,
1995.
|
10.18
|
Tioxide
Americas Offtake Agreement dated as of October 18, 1993 between Tioxide
Americas Inc. and Louisiana Pigment Company, L.P. - incorporated by
reference to Exhibit 10.5 to NL Industries, Inc.'s Quarterly Report on
Form 10-Q (File No. 001-00640) for the quarter ended September 30,
1993.
|
10.19
|
Amendment
No. 1 to Tioxide Americas Offtake Agreement dated as of December 20, 1995
between Tioxide Americas Inc. and Louisiana Pigment Company, L.P. -
incorporated by reference to Exhibit 10.24 to NL Industries, Inc.'s Annual
Report on Form 10-K (File No. 001-00640) for the year ended December 31,
1995.
|
10.20
|
Parents'
Undertaking dated as of October 18, 1993 between ICI American Holdings
Inc. and Kronos Worldwide, Inc. (f/k/a Kronos, Inc.) - incorporated by
reference to Exhibit 10.9 to NL Industries, Inc.'s Quarterly Report on
Form 10-Q (File No. 001-00640) for the quarter ended September 30,
1993.
|
10.21
|
Allocation
Agreement dated as of October 18, 1993 between Tioxide Americas Inc., ICI
American Holdings, Inc., Kronos Worldwide, Inc. (f/k/a Kronos, Inc.) and
Kronos Louisiana, Inc. - incorporated by reference to Exhibit 10.10 to NL
Industries, Inc.'s Quarterly Report on Form 10-Q (File No. 001-00640) for
the quarter ended September 30,
1993.
|
10.22
|
Insurance
sharing agreement dated October 30, 2003 by and among CompX International
Inc., Contran Corporation, Keystone Consolidated Industries, Inc.,
Titanium Metals Corp., Valhi, Inc., NL Industries, Inc. and Kronos
Worldwide, Inc. – incorporated by reference to Exhibit 10.48 to NL
Industries, Inc.’s Annual Report on Form 10-K (File No. 001-00640) for the
year ended December 31, 2003.
|
21.1
|
Subsidiaries.
|
23.1
|
Consent
of PricewaterhouseCoopers, LLP.
|
31.1
|
Certification.
|
31.2
|
Certification.
|
By:/s/ Steven L.
Watson
|
Steven
L. Watson
|
March
9, 2010
|
(Vice
Chairman and Chief
Executive Officer)
|
/s/ Steven L.
Watson
|
|
Harold
C. Simmons, March 9, 2010
|
Steven
L. Watson, March 9, 2010
|
(Chairman
of the Board)
|
(Vice
Chairman and Chief Executive
|
|
Officer)
|
/s/ George E.
Poston
|
/s/ Glenn R.
Simmons
|
George
E. Poston, March 9, 2010
|
Glenn
R. Simmons, March 9, 2010
|
(Director)
|
(Director)
|
/s/ C. H. Moore,
Jr.
|
/s/ Keith R.
Coogan
|
C.
H. Moore, Jr., March 9, 2010
|
Keith
R. Coogan, March 9, 2010
|
(Director)
|
(Director)
|
/s/ R. Gerald
Turner
|
/s/ Gregory M.
Swalwell
|
R.
Gerald Turner, March 9, 2010
|
Gregory
M. Swalwell, March 9, 2010
|
(Director)
|
(Executive
Vice President and Chief Financial Officer, Principal
Financial
Officer)
|
/s/ Tim C.
Hafer
|
|
Tim
C. Hafer, March 9, 2010
|
|
(Vice
President, Controller,
Principal
Accounting Officer)
|
Financial
Statements
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets - December 31, 2008 and 2009
|
F-4
|
Consolidated
Statements of Operations -
|
|
Years
ended December 31, 2007, 2008 and 2009
|
F-6
|
Consolidated
Statements of Comprehensive Income (Loss) -
|
|
Years
ended December 31, 2007, 2008 and 2009
|
F-7
|
Consolidated
Statements of Stockholders' Equity -
|
|
Years
ended December 31, 2007, 2008 and 2009
|
F-8
|
Consolidated
Statements of Cash Flows -
|
|
Years
ended December 31, 2007, 2008 and 2009
|
F-9
|
Notes
to Consolidated Financial Statements
|
F-11
|
Financial
Statement Schedule
|
|
Schedule
I – Condensed Financial Information of Registrant
|
S-1
|
Schedules
II, III and IV are omitted because they are not applicable or the required
amounts are either not material or are presented in the Notes to the
Consolidated Financial Statements.
|
ASSETS
|
December 31,
|
|||||||
2008
|
2009
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 13.6 | $ | 31.1 | ||||
Restricted
cash
|
1.5 | 1.7 | ||||||
Accounts
and other receivables
|
177.2 | 189.5 | ||||||
Receivable
from affiliates
|
1.4 | .1 | ||||||
Inventories
|
385.1 | 294.8 | ||||||
Prepaid
expenses
|
6.6 | 9.0 | ||||||
Deferred
income taxes
|
4.1 | 3.7 | ||||||
Total
current assets
|
589.5 | 529.9 | ||||||
Other
assets:
|
||||||||
Investment
in TiO2
manufacturing joint venture
|
105.6 | 98.7 | ||||||
Deferred
income taxes
|
166.4 | 185.5 | ||||||
Other
|
11.7 | 11.2 | ||||||
Total
other assets
|
283.7 | 295.4 | ||||||
Property
and equipment:
|
||||||||
Land
|
37.5 | 46.8 | ||||||
Buildings
|
215.9 | 233.0 | ||||||
Equipment
|
949.8 | 1,027.4 | ||||||
Mining
properties
|
73.9 | 115.7 | ||||||
Construction
in progress
|
41.7 | 14.6 | ||||||
1,318.8 | 1,437.5 | |||||||
Less
accumulated depreciation and amortization
|
833.3 | 937.8 | ||||||
Net
property and equipment
|
485.5 | 499.7 | ||||||
Total
assets
|
$ | 1,358.7 | $ | 1,325.0 |
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
December 31,
|
|||||||
2008
|
2009
|
|||||||
Current
liabilities:
|
||||||||
Current
maturities of long-term debt
|
$ | .8 | $ | 2.1 | ||||
Accounts
payable and accrued liabilities
|
180.6 | 192.4 | ||||||
Payable
to affiliates
|
14.7 | 12.6 | ||||||
Income
taxes
|
3.7 | 3.6 | ||||||
Deferred
income taxes
|
4.6 | 4.7 | ||||||
Total
current liabilities
|
204.4 | 215.4 | ||||||
Noncurrent
liabilities:
|
||||||||
Long-term
debt
|
637.7 | 611.1 | ||||||
Deferred
income taxes
|
35.7 | 31.1 | ||||||
Accrued
pension cost
|
125.5 | 118.3 | ||||||
Accrued
postretirement benefits cost
|
8.7 | 13.4 | ||||||
Other
|
28.8 | 23.2 | ||||||
Total
noncurrent liabilities
|
836.4 | 797.1 | ||||||
Stockholders'
equity:
|
||||||||
Common
stock, $.01 par value; 60.0 shares authorized; 49.0 shares
issued
|
.5 | .5 | ||||||
Additional
paid-in capital
|
1,061.8 | 1,061.9 | ||||||
Retained
deficit
|
(567.9 | ) | (602.6 | ) | ||||
Accumulated
other comprehensive income (loss):
|
||||||||
Currency
translation
|
(89.3 | ) | (65.2 | ) | ||||
Defined
benefit pension plans
|
(88.6 | ) | (81.0 | ) | ||||
Postretirement
benefit (OPEB) plans
|
1.4 | (1.1 | ) | |||||
Total
stockholders' equity
|
317.9 | 312.5 | ||||||
Total
liabilities and stockholders' equity
|
$ | 1,358.7 | $ | 1,325.0 | ||||
Years ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net
sales
|
$ | 1,310.3 | $ | 1,316.9 | $ | 1,142.0 | ||||||
Cost
of sales
|
1,058.9 | 1,096.3 | 1,011.7 | |||||||||
Gross
margin
|
251.4 | 220.6 | 130.3 | |||||||||
Selling,
general and administrative expense
|
162.1 | 167.4 | 148.2 | |||||||||
Other
operating income (expense):
|
||||||||||||
Currency
transaction gains, net
|
.2 | .6 | 9.9 | |||||||||
Disposition
of property and equipment
|
(.8 | ) | (.9 | ) | (.9 | ) | ||||||
Other
income, net
|
1.3 | .7 | .6 | |||||||||
Corporate
expense
|
(5.1 | ) | (6.4 | ) | (7.4 | ) | ||||||
Income
(loss) from operations
|
84.9 | 47.2 | (15.7 | ) | ||||||||
Other
income (expense):
|
||||||||||||
Trade
interest income
|
2.2 | 1.0 | .2 | |||||||||
Other
interest income
|
.3 | - | - | |||||||||
Interest
expense
|
(39.4 | ) | (42.2 | ) | (41.4 | ) | ||||||
Income
(loss) before income taxes
|
48.0 | 6.0 | (56.9 | ) | ||||||||
Provision
for income taxes (benefit)
|
114.7 | (3.0 | ) | (22.2 | ) | |||||||
Net
income (loss)
|
$ | (66.7 | ) | $ | 9.0 | $ | (34.7 | ) | ||||
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