Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-31763 KRONOS WORLDWIDE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpor ...

Table of Contents Commission file number 1-31763 KRONOS WORLDWIDE, INC. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (State or other jurisdiction of incorpo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-31763 KRONOS WORLDWIDE, INC. (Exact name of Registrant as specified in its charter) DELAWARE 76-0294959 (State or other jurisdiction of incorporat ...

Part I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201%2E%20Financial%20Statements) Presents Kronos Worldwide's unaudited financial statements as of September 30, 2021, showing significant increases in net income and operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$2,004.5 million** by September 30, 2021, with liabilities decreasing and stockholders' equity increasing Condensed Consolidated Balance Sheet Highlights (In millions) | Balance Sheet Item | Dec 31, 2020 | Sep 30, 2021 (unaudited) | | :--- | :--- | :--- | | **Total current assets** | $1,218.3 | $1,219.1 | | **Total assets** | $2,036.7 | $2,004.5 | | **Total current liabilities** | $260.2 | $259.7 | | **Total liabilities** | $1,240.2 | $1,182.5 | | **Total stockholders' equity** | $796.5 | $822.0 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income surged to **$36.0 million** in Q3 2021 and **$81.3 million** for nine months, driven by higher net sales and improved gross margins Income Statement Summary (In millions, except per share data) | Metric | Q3 2020 | Q3 2021 | Nine Months 2020 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $416.9 | $499.8 | $1,223.9 | $1,443.4 | | **Gross margin** | $80.6 | $123.0 | $264.5 | $327.7 | | **Income from operations** | $19.3 | $57.3 | $95.8 | $135.1 | | **Net income** | $8.1 | $36.0 | $53.7 | $81.3 | | **Net income per share** | $0.07 | $0.31 | $0.46 | $0.70 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$126.0 million** for nine months, driven by higher net income and favorable working capital changes Cash Flow Summary - Nine Months Ended Sep 30 (In millions) | Cash Flow Activity | 2020 | 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $56.1 | $126.0 | | **Net cash used in investing activities** | ($36.8) | ($35.9) | | **Net cash used in financing activities** | ($63.6) | ($64.7) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details basis of presentation, ownership, and revenue disaggregation, noting a new **$225 million** credit facility and compliance with debt covenants - The company is indirectly controlled by Ms. Lisa K. Simmons and the Family Trust through their control of Contran Corporation and its subsidiaries, Valhi and NL Industries[22](index=22&type=chunk) Net Sales by Customer Location (Point of Destination) - Nine Months Ended Sep 30 (In millions) | Region | 2020 | 2021 | | :--- | :--- | :--- | | Europe | $578.6 | $712.1 | | North America | $434.4 | $476.9 | | Other | $210.9 | $254.4 | | **Total** | **$1,223.9** | **$1,443.4** | - In April 2021, the company entered into a new **$225 million** global revolving credit facility maturing in April 2026, which was **fully available** at September 30, 2021 The company was in compliance with all debt covenants[31](index=31&type=chunk)[32](index=32&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong performance to higher TiO2 sales volumes and prices, expecting continued demand but facing supply chain and cost challenges [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Operating results significantly improved, with Q3 net sales up **20%** and operating income up **197%**, driven by price and volume growth Q3 2021 vs Q3 2020 Performance (Dollars in millions) | Metric | Q3 2020 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $416.9 | $499.8 | 20% | | **Gross Margin** | $80.6 | $123.0 | 53% | | **Income from Operations** | $19.3 | $57.3 | 197% | - The **20% increase** in Q3 2021 net sales was primarily driven by an **11% increase** in average TiO2 selling prices and a **6% increase** in sales volumes[61](index=61&type=chunk) Nine Months 2021 vs 2020 Performance (Dollars in millions) | Metric | Nine Months 2020 | Nine Months 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,223.9 | $1,443.4 | 18% | | **Gross Margin** | $264.5 | $327.7 | 24% | | **Income from Operations** | $95.8 | $135.1 | 41% | - For the first nine months of 2021, currency exchange rate fluctuations increased net sales by **approximately $47 million** but decreased income from operations by **approximately $15 million** compared to the same period in 2020[77](index=77&type=chunk)[84](index=84&type=chunk) [Outlook](index=22&type=section&id=Outlook) Strong global demand is expected to continue, leading to higher sales and production, despite rising costs and supply chain disruptions - The company expects sales and production volumes to be **higher in 2021 than in 2020** due to **strong global demand**[85](index=85&type=chunk) - Ongoing **challenges include** supply chain disruptions, availability of feedstock, transportation delays, and **increasing production costs** (raw materials, shipping, energy)[85](index=85&type=chunk) - Management expects TiO2 selling prices will **continue to rise** through the remainder of 2021, mitigating cost increases and leading to **higher full-year sales and income from operations** compared to 2020[85](index=85&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong with **$126.0 million** cash from operations and a new **$225 million** credit facility, sufficient for obligations - Cash provided by operating activities **increased by $69.9 million** in the first nine months of 2021 compared to 2020, primarily due to **higher income from operations** and favorable changes in working capital[89](index=89&type=chunk) - The company has a **new $225 million** Global Revolver maturing in April 2026, with the **full amount available** for borrowing as of September 30, 2021[93](index=93&type=chunk)[99](index=99&type=chunk) - Planned capital expenditures for 2021 are **approximately $70 million**, primarily for maintaining and improving existing facilities[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) No material changes in market risk exposure (currency, interest, equity, raw material prices) since the 2020 Annual Report - There have been **no material changes** in market risks (currency exchange, interest rates, equity security, and raw material prices) since the 2020 Annual Report[105](index=105&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were **effective** as of September 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2021[106](index=106&type=chunk)[107](index=107&type=chunk) - **No changes occurred** in internal control over financial reporting during the quarter ended September 30, 2021, that materially affected or are likely to materially affect internal controls[110](index=110&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 12 and the 2020 Annual Report for legal proceedings, noting no material loss from litigation is probable - For information on legal proceedings, the report refers to Note 12 of the financial statements and the 2020 Annual Report[113](index=113&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2020 Annual Report on Form 10-K - The report refers to the risk factors section in the 2020 Annual Report, indicating **no material changes**[114](index=114&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) A dam at the Norway mine was reclassified to the **highest level**, increasing regulatory oversight with unknown operational impact - A dam at the company's mine in Norway was reclassified to the **highest level**, resulting in **increased regulatory oversight** The potential impact on operations is **not yet known**[115](index=115&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) Lists exhibits filed, including CEO and CFO certifications and Inline XBRL data files - The exhibits filed with this report include officer certifications and Inline XBRL data files[116](index=116&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-31763 KRONOS WORLDWIDE, INC. (Exact name of registrant as specified in its charter) Indicate by check mark whether the registrant (1) has file ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-31763 (IRS Employer Identification No.) 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2620 (Address of principal executive offices) Regist ...

Part I [Business Overview](index=4&type=section&id=ITEM%201.%20BUSINESS) Kronos Worldwide is a leading global producer and marketer of titanium dioxide (TiO2) pigments for various industries - Kronos is a leading global producer and marketer of value-added titanium dioxide pigments (TiO2), selling to approximately **4,000 customers in 100 countries**[11](index=11&type=chunk) - At December 31, 2020, approximately **50% of the company's common stock was owned by Valhi, Inc.**, and **30% by a subsidiary of NL Industries, Inc.**, indicating a concentrated ownership structure[15](index=15&type=chunk) 2020 Sales Volume Breakdown | By Geographic Region | Percentage | By End-Use | Percentage | | :--- | :--- | :--- | :--- | | Europe | 46% | Coatings | 58% | | North America | 36% | Plastics | 30% | | Asia Pacific | 11% | Paper | 6% | | Rest of World | 7% | Other | 6% | Market Share in Key Regions | Region | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | Europe | 13% | 18% | 17% | | North America | 17% | 19% | 18% | - The company's business is enhanced by three complementary businesses which comprised approximately **7% of net sales in 2020**: operating ilmenite mines, manufacturing iron-based chemicals, and producing titanium specialty chemicals[27](index=27&type=chunk) TiO2 Production Volumes and Capacity Utilization | Year | Production (Metric Tons) | Capacity Utilization | | :--- | :--- | :--- | | 2018 | 536,000 | 95% | | 2019 | 546,000 | 98% | | 2020 | 517,000 | 92% | - As of December 31, 2020, the company employed **2,242 people**, with approximately **86% of the worldwide workforce** organized under collective bargaining agreements[60](index=60&type=chunk)[62](index=62&type=chunk) - On February 18, 2020, the European Union published a regulation classifying TiO2 powder as a **suspected carcinogen via inhalation**, requiring new hazard labels on certain products[73](index=73&type=chunk) [Risk Factors](index=14&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces operational, financial, legal, and general risks, including industry cyclicality, competition, leverage, and regulatory changes - **Operational Risks**: Profitability is highly dependent on the cyclical TiO2 industry, where the top five producers account for about **52% of global capacity**, and faces risks from raw material costs and availability[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - **Financial Risks**: As of December 31, 2020, total consolidated debt was approximately **$487 million**, and the company is exposed to currency exchange rate risks with **46% of 2020 sales volumes** in European markets[87](index=87&type=chunk)[91](index=91&type=chunk) - **Legal and Regulatory Risks**: The company is exposed to potential litigation and increased compliance costs from new regulations, such as the EU's classification of TiO2 powder as a suspected carcinogen[92](index=92&type=chunk)[93](index=93&type=chunk)[97](index=97&type=chunk) - **COVID-19 Impact**: The pandemic significantly impacted 2020 operations, primarily through **reduced demand**, with the future extent of the impact remaining uncertain[85](index=85&type=chunk) Part II [Market for Common Equity and Related Stockholder Matters](index=19&type=section&id=ITEM%205.%20MARKET%20FOR%20COMMON%20EQUITY%20AND%20RELATED%20STOCKHOLDER%20MATTERS) The company's common stock (NYSE: KRO) has an active repurchase program, and its five-year total return has underperformed its peer group - The company's common stock is listed on the NYSE under the symbol **KRO**[106](index=106&type=chunk) - In 2020, the company repurchased **122,489 shares** of its common stock, with **1,563,519 shares** remaining available for repurchase under the authorized program[107](index=107&type=chunk) Cumulative Total Stockholder Return (2015-2020) | Year | Kronos Common Stock | S&P 500 Composite Stock Index | Peer Group | | :--- | :--- | :--- | :--- | | 2015 | $100 | $100 | $100 | | 2016 | $230 | $112 | $374 | | 2017 | $512 | $136 | $828 | | 2018 | $238 | $130 | $395 | | 2019 | $292 | $171 | $323 | | 2020 | $346 | $203 | $441 | [Selected Financial Data](index=20&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) The five-year financial summary from 2016 to 2020 shows significant fluctuations in performance, with peak net income in 2017 followed by a decline Selected Financial Data (2016-2020) | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales ($M)** | 1,364.3 | 1,729.0 | 1,661.9 | 1,731.1 | 1,638.8 | | **Income from operations ($M)** | 92.9 | 347.8 | 330.1 | 145.8 | 116.2 | | **Net income ($M)** | 43.3 | 354.5 | 205.0 | 87.1 | 63.9 | | **Net income per share ($)** | 0.37 | 3.06 | 1.77 | 0.75 | 0.55 | | **Total assets ($M)** | 1,179.6 | 1,824.4 | 1,898.1 | 1,965.8 | 2,036.7 | | **Long-term debt ($M)** | 339.0 | 474.5 | 456.6 | 445.5 | 487.4 | | **Operating cash flow ($M)** | 89.6 | 276.1 | 188.5 | 160.3 | 102.5 | | **Sales volumes (k metric tons)** | 559 | 586 | 491 | 566 | 531 | | **Production volumes (k metric tons)** | 546 | 576 | 536 | 546 | 517 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes financial performance, attributing the 2020 income decline to pandemic impacts while confirming sufficient liquidity and outlining critical accounting policies [Results of Operations](index=21&type=section&id=Results%20of%20Operations) The company's 2020 net income declined due to lower sales volumes and prices from the COVID-19 pandemic, though a recovery is expected in 2021 Comparison of Results of Operations (2020 vs. 2019) | Metric | 2019 ($M) | 2020 ($M) | % Change | | :--- | :--- | :--- | :--- | | Net sales | 1,731.1 | 1,638.8 | (5)% | | Gross margin | 386.2 | 351.2 | (9)% | | Income from operations | 145.8 | 116.2 | (20)% | | TiO2 Sales volumes (k tons) | 566 | 531 | (6)% | - The **5% decrease in 2020 net sales** was primarily due to a **6% decrease in sales volumes** and a **2% decrease in average TiO2 selling prices**[124](index=124&type=chunk) Comparison of Results of Operations (2019 vs. 2018) | Metric | 2018 ($M) | 2019 ($M) | % Change | | :--- | :--- | :--- | :--- | | Net sales | 1,661.9 | 1,731.1 | 4% | | Gross margin | 562.2 | 386.2 | (31)% | | Income from operations | 330.1 | 145.8 | (56)% | | TiO2 Sales volumes (k tons) | 491 | 566 | 15% | - The **4% increase in 2019 net sales** was driven by a **15% increase in sales volumes**, which was partially offset by a **6% decrease in average TiO2 selling prices**[137](index=137&type=chunk) - **Outlook for 2021**: Management expects sales and income from operations to be **higher than in 2020**, driven by anticipated higher average TiO2 selling prices and sales volumes[157](index=157&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20accounting%20policies%20and%20estimates) Key accounting judgments involve impairment of long-lived assets, pension plan assumptions, and the realizability of deferred tax assets - The most critical accounting policies involve significant judgment regarding **long-lived assets, defined benefit pension plans, and income taxes**[164](index=164&type=chunk) Pension Plan Discount Rate Assumptions (for Obligations) | Region | at Dec 31, 2018 | at Dec 31, 2019 | at Dec 31, 2020 | | :--- | :--- | :--- | :--- | | Germany | 1.8% | 1.0% | 0.7% | | Canada | 3.5% | 3.0% | 2.4% | | Norway | 2.5% | 2.3% | 1.7% | | U.S. | 4.1% | 3.1% | 2.2% | - The company has substantial net operating loss carryforwards in Germany (**$531 million**) and Belgium (**$20 million**) as of December 31, 2020[179](index=179&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains sufficient liquidity through cash from operations and credit facilities despite a decrease in operating cash flow in 2020 Consolidated Cash Flow Summary | Cash Flow Activity ($M) | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | Operating activities | 188.5 | 160.3 | 102.5 | | Investing activities | (42.7) | (52.5) | (61.3) | | Financing activities | (80.4) | (87.9) | (85.3) | - At December 31, 2020, the company had consolidated debt of **$487.4 million**, primarily comprising **€400 million of 3.75% Senior Secured Notes due 2025**[188](index=188&type=chunk)[190](index=190&type=chunk) - At December 31, 2020, the company had **$107.6 million** available under its North American revolving credit facility and the full **€90 million** ($110.3 million) available under its European facility[192](index=192&type=chunk) - The company intends to spend approximately **$85 million on capital expenditures in 2021**, including **$23 million for environmental programs**[201](index=201&type=chunk) Contractual Commitments as of December 31, 2020 | Contractual Commitment ($M) | 2021 | 2022/2023 | 2024/2025 | 2026 and after | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Indebtedness (Principal & Interest) | 19.1 | 37.8 | 521.9 | - | 578.8 | | Operating leases | 7.4 | 6.8 | 3.1 | 20.1 | 37.4 | | Long-term supply contracts (TiO2 feedstock) | 483.5 | 690.1 | - | - | 1,173.6 | | Other supply contracts & obligations | 79.8 | 53.8 | 46.0 | 3.3 | 182.9 | | **Total** | **$590.8** | **$788.5** | **$571.0** | **$23.4** | **$1,973.7** | [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks stem from currency exchange rates, interest rates, and raw material prices, with significant exposure from non-U.S. operations - The company's primary market risks are from changes in **currency exchange rates, interest rates, and raw material prices**[210](index=210&type=chunk) - The majority of the company's debt is **fixed-rate**, which minimizes earnings volatility from interest rate changes, but the euro-denominated Senior Secured Notes expose the company to currency exchange rate risk[211](index=211&type=chunk)[216](index=216&type=chunk) - A hypothetical **10% adverse change in the euro exchange rate** at December 31, 2020, would increase the U.S. dollar equivalent of the Senior Secured Notes by approximately **$49 million**[216](index=216&type=chunk) Financial Statements and Supplementary Data [Consolidated Financial Statements](index=49&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a decrease in 2020 net income and operating cash flow, alongside an increase in total assets and long-term debt Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2019 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $390.8 | $355.3 | | Total current assets | $1,219.7 | $1,218.3 | | Net property and equipment | $490.6 | $524.6 | | **Total assets** | **$1,965.8** | **$2,036.7** | | Total current liabilities | $270.6 | $260.2 | | Long-term debt | $444.0 | $486.7 | | **Total liabilities** | **$1,149.7** | **$1,240.2** | | **Total stockholders' equity** | **$816.1** | **$796.5** | Consolidated Statement of Income Highlights (in millions) | Account | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | Net sales | $1,661.9 | $1,731.1 | $1,638.8 | | Gross margin | $562.2 | $386.2 | $351.2 | | Income from operations | $330.1 | $145.8 | $116.2 | | **Net income** | **$205.0** | **$87.1** | **$63.9** | | **Net income per share** | **$1.77** | **$0.75** | **$0.55** | [Notes to Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, debt instruments, pension plans, income taxes, and significant related party transactions - The company accounts for its **50% interest** in the Louisiana Pigment Company, L.P. (LPC) joint venture using the equity method[328](index=328&type=chunk)[329](index=329&type=chunk) - Long-term debt primarily consists of **€400 million in 3.75% Senior Secured Notes** issued by subsidiary KII, due in 2025[340](index=340&type=chunk) - At year-end 2020, the non-U.S. pension plans had a total underfunded status of **$364.9 million**, while the U.S. plan had an underfunded status of **$3.3 million**[353](index=353&type=chunk)[361](index=361&type=chunk) - The company has significant net operating loss (NOL) carryforwards in Germany (**$531 million**) and Belgium (**$20 million**) with indefinite carryforward periods[381](index=381&type=chunk) - **Significant related party transactions** exist with parent and affiliated companies, including intercorporate service agreements, shared insurance programs, and tax sharing agreements[397](index=397&type=chunk)[400](index=400&type=chunk)[405](index=405&type=chunk) - The company has long-term supply contracts with minimum purchase commitments for TiO2 feedstock aggregating approximately **$1.2 billion** subsequent to December 31, 2020[414](index=414&type=chunk)

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Kronos Worldwide, Inc.'s unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2020, reflecting the COVID-19 pandemic's impact [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2020, total assets decreased slightly to **$1.947 billion**, primarily due to reduced cash, while total liabilities increased and equity decreased Condensed Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | Dec 31, 2019 | Sep 30, 2020 (unaudited) | | :--- | :--- | :--- | | **Total Current Assets** | $1,219.7 | $1,188.7 | | **Total Assets** | $1,965.8 | $1,946.9 | | **Total Current Liabilities** | $270.6 | $235.5 | | **Total Liabilities** | $1,149.7 | $1,145.2 | | **Total Stockholders' Equity** | $816.1 | $801.7 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income significantly decreased in Q3 2020 to **$8.1 million** and for the nine months to **$53.7 million**, driven by lower net sales and gross margin Income Statement Summary (in millions, except per share data) | Metric | Q3 2019 | Q3 2020 | Nine Months 2019 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $437.4 | $416.9 | $1,358.4 | $1,223.9 | | Gross Margin | $87.7 | $80.6 | $306.5 | $264.5 | | Income from Operations | $33.1 | $19.3 | $128.6 | $95.8 | | Net Income | $17.9 | $8.1 | $77.7 | $53.7 | | Net Income per Share | $0.16 | $0.07 | $0.67 | $0.46 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities sharply decreased to **$56.1 million** for the first nine months of 2020, primarily due to lower net income and working capital changes Cash Flow Summary (Nine months ended Sep 30, in millions) | Cash Flow Activity | 2019 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $123.8 | $56.1 | | Net cash used in investing activities | $(39.2) | $(36.8) | | Net cash used in financing activities | $(66.1) | $(63.6) | | **Net change in cash** | $18.5 | $(44.3) | - The financial statements have been prepared on the same basis as the audited statements in the 2019 Annual Report on Form 10-K, with all necessary normal recurring adjustments made for fair presentation[25](index=25&type=chunk) - Operating results for the first nine months of 2020 were significantly impacted by the **COVID-19 pandemic**, primarily through reduced product demand due to the global economic contraction[26](index=26&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, attributing lower net income in Q3 and the first nine months of 2020 to reduced sales volumes and lower TiO2 selling prices due to the COVID-19 pandemic [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Net sales decreased **5%** in Q3 and **10%** year-to-date 2020, driven by lower sales volumes and average TiO2 selling prices, leading to reduced production capacity utilization Q3 2020 vs Q3 2019 Performance | Metric | Q3 2019 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $437.4M | $416.9M | (5)% | | Income from Operations | $33.1M | $19.3M | (42)% | | Sales Volumes (k metric tons) | 144 | 136 | (6)% | | Production Volumes (k metric tons) | 136 | 122 | (11)% | Nine Months 2020 vs 2019 Performance | Metric | Nine Months 2019 | Nine Months 2020 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,358.4M | $1,223.9M | (10)% | | Income from Operations | $128.6M | $95.8M | (26)% | | Sales Volumes (k metric tons) | 445 | 396 | (11)% | | Production Volumes (k metric tons) | 406 | 387 | (5)% | - The decrease in Q3 2020 net sales was primarily due to a **6% decrease in sales volumes** and a **4% decrease in average TiO2 selling prices**[67](index=67&type=chunk) - Production capacity utilization rates decreased significantly in the third quarter of 2020 to **86%**, compared to **97%** in the same period of 2019, as the company aligned production with lower demand[63](index=63&type=chunk)[64](index=64&type=chunk) [Effects of Currency Exchange Rates](index=22&type=section&id=Effects%20of%20Currency%20Exchange%20Rates) Currency fluctuations had a mixed impact, increasing Q3 2020 net sales by **$7 million** but decreasing income from operations by **$5 million**, with varied effects year-to-date Impact of Currency Exchange Rates (in millions) | Period | Impact on Net Sales | Impact on Income from Operations | | :--- | :--- | :--- | | Q3 2020 vs Q3 2019 | +$7 | -$5 | | 9M 2020 vs 9M 2019 | -$4 | +$6 | [Outlook](index=23&type=section&id=Outlook) The company anticipates continued negative impact from COVID-19 on sales and earnings for the remainder of 2020, while managing hurricane-related disruptions at its LPC joint venture - The company expects sales volumes and earnings for the rest of 2020 to remain lower than 2019 due to the ongoing impact of COVID-19 on the global economy[94](index=94&type=chunk) - The company believes it has sufficient liquidity, with **$348 million in cash** and **$231 million in available credit**, to navigate the uncertainty and is prepared to implement cash-saving strategies if needed[95](index=95&type=chunk) - The Louisiana Pigment Company (LPC) facility, a 50%-owned joint venture, experienced temporary production halts due to Hurricanes Laura and Delta, with most losses expected to be covered by insurance[96](index=96&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operations decreased to **$56.1 million** for the first nine months of 2020, but the company maintains sufficient liquidity with **$353.9 million** in cash and **$231 million** in available credit - Cash from operating activities decreased by **$67.7 million** in the first nine months of 2020 compared to 2019, primarily due to lower income from operations and higher cash used for working capital[98](index=98&type=chunk) - Capital expenditures for the first nine months of 2020 were **$38.3 million**, with projected total 2020 capital expenditures of approximately **$60 million**[101](index=101&type=chunk)[112](index=112&type=chunk) - At September 30, 2020, total available liquidity included **$353.9 million in cash** and approximately **$231 million in borrowing capacity** under its North American and European credit facilities[111](index=111&type=chunk) - During the first nine months of 2020, the company paid **$62.4 million in dividends** and repurchased **$1.0 million of its common stock**[103](index=103&type=chunk)[104](index=104&type=chunk) - The company identifies TiO2 selling prices, sales and production volumes, manufacturing costs (especially feedstock and energy), and currency exchange rates as the key factors impacting operating results[56](index=56&type=chunk)[58](index=58&type=chunk) - Net income for Q3 2020 was **$8.1 million**, down from **$17.9 million** in Q3 2019, and for the first nine months of 2020, it was **$53.7 million**, compared to **$77.7 million** in the prior-year period, attributed to lower sales volumes and prices due to the COVID-19 pandemic[57](index=57&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) No material changes in market risk exposure, including currency, interest rates, equity, and raw material prices, have occurred since the 2019 Annual Report filing - There have been no material changes in market risks (currency, interest rates, equity, raw materials) since the 2019 Annual Report[118](index=118&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[119](index=119&type=chunk) - No changes to internal control over financial reporting occurred during the third quarter of 2020 that have materially affected, or are reasonably likely to materially affect, the company's internal controls[123](index=123&type=chunk) [Part II. OTHER INFORMATION](index=29&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements and the 2019 Annual Report for details on legal proceedings - For information on legal proceedings, the report refers to Note 13 of the financial statements and the 2019 Annual Report[126](index=126&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred during the nine months ended September 30, 2020, since the 2019 Annual Report - There have been no material changes to the company's risk factors during the first nine months of 2020[127](index=127&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The exhibits filed with the report include officer certifications and Inline XBRL data files[128](index=128&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-31763 KRONOS WORLDWIDE, INC. (Exact name of registrant as specified in its charter) For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to DELAWARE 76-0294959 (State or other jurisdiction of incorp ...

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Kronos Worldwide reported decreased Q1 2020 net income and total assets, a shift to negative operating cash flow, and anticipates future COVID-19 impacts [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities decreased, leading to a decline in total stockholders' equity from year-end 2019 to Q1 2020 Condensed Consolidated Balance Sheet Highlights (In millions) | Account | Dec 31, 2019 | Mar 31, 2020 (unaudited) | | :--- | :--- | :--- | | **Total Current Assets** | $1,219.7 | $1,163.4 | | **Total Assets** | **$1,965.8** | **$1,874.8** | | **Total Current Liabilities** | $270.6 | $231.2 | | **Total Liabilities** | $1,149.7 | $1,092.5 | | **Total Stockholders' Equity** | $816.1 | $782.3 | | **Total Liabilities and Stockholders' Equity** | **$1,965.8** | **$1,874.8** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income decreased in Q1 2020 due to lower net sales and gross margin, despite a positive currency transaction gain Condensed Consolidated Statements of Income (In millions, except per share data) | Metric | Q1 2019 | Q1 2020 | | :--- | :--- | :--- | | Net sales | $436.5 | $421.0 | | Gross margin | $109.3 | $88.1 | | Income from operations | $49.0 | $43.5 | | **Net income** | **$30.3** | **$27.0** | | Net income per share | $0.26 | $0.23 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a comprehensive loss in Q1 2020, a significant reversal from prior year's income, primarily driven by a net loss from currency translation Comprehensive Income (Loss) (In millions) | Metric | Q1 2019 | Q1 2020 | | :--- | :--- | :--- | | Net income | $30.3 | $27.0 | | Other comprehensive income (loss), net | $2.1 | $(39.0) | | **Comprehensive income (loss)** | **$32.4** | **$(12.0)** | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity decreased in Q1 2020 due to a comprehensive loss and dividend payments, partially offset by net income - Dividends of **$0.18 per share** were paid in Q1 2020, totaling **$20.8 million**[18](index=18&type=chunk) - The company acquired **$1.0 million** of its common stock as treasury stock during Q1 2020[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow shifted to a net use in Q1 2020 due to working capital changes, while investing and financing cash flows remained relatively stable Net Cash Flow Summary (In millions) | Activity | Q1 2019 | Q1 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $7.0 | $(9.8) | | Net cash used in investing activities | $(17.5) | $(13.8) | | Net cash used in financing activities | $(21.0) | $(21.9) | | **Net change in Cash** | **$(31.5)** | **$(45.5)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail ownership, presentation, and disaggregated net sales, noting the adoption of ASU 2019-12 and the expected negative impact of the COVID-19 pandemic - At March 31, 2020, **Valhi, Inc. held approximately 50%** and an **NL Industries, Inc. subsidiary held 30%** of the company's outstanding common stock[25](index=25&type=chunk) Net Sales by Point of Destination (In millions) | Region | Q1 2019 | Q1 2020 | | :--- | :--- | :--- | | Europe | $215.2 | $214.5 | | North America | $146.8 | $132.3 | | Other | $74.5 | $74.2 | | **Total** | **$436.5** | **$421.0** | - The CARES Act provided a **$0.5 million cash tax benefit** in Q1 2020 from the reversal of a valuation allowance on disallowed interest expense[47](index=47&type=chunk) - The **COVID-19 pandemic** is expected to result in **lower sales and earnings** for the remainder of 2020, with the full extent of impact uncertain[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2020 net income decline to lower sales volumes and higher costs, anticipates negative COVID-19 impacts, but maintains strong liquidity [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Income from operations decreased in Q1 2020 due to lower TiO2 sales volumes and gross margin, partially offset by favorable currency exchange rates TiO2 Operating Statistics (Thousands of metric tons) | Metric | Q1 2019 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales volumes | 143 | 136 | (5)% | | Production volumes | 134 | 132 | (1)% | - Net sales decreased by **4% ($15.5 million)**, primarily due to a **5% decrease in sales volumes**, with comparable average TiO2 selling prices year-over-year[69](index=69&type=chunk) - Currency exchange rate changes decreased net sales by approximately **$7 million** but increased income from operations by approximately **$11 million** in Q1 2020[71](index=71&type=chunk)[74](index=74&type=chunk)[79](index=79&type=chunk) [Outlook](index=21&type=section&id=Outlook) Management anticipates lower sales and earnings for the remainder of 2020 due to COVID-19, despite essential operations, with the full impact remaining uncertain - The company's manufacturing facilities are designated as essential businesses and remain open, operating at near planned capacities[82](index=82&type=chunk) - Due to COVID-19's global economic impact, the company expects **lower sales and earnings** than originally planned for 2020[84](index=84&type=chunk) - The company maintains sufficient liquidity with over **$341 million in cash** and over **$200 million in available credit**, prepared for cash-saving strategies if needed[81](index=81&type=chunk)[86](index=86&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial cash and credit, despite negative operating cash flow in Q1 2020, and plans approximately $60 million in capital expenditures - Cash used in operating activities was **$9.8 million** in Q1 2020, a **$16.8 million decrease** from cash provided of $7.0 million in Q1 2019[88](index=88&type=chunk) Key Working Capital Metrics | Metric | Dec 31, 2019 | Mar 31, 2020 | | :--- | :--- | :--- | | DSO (Days Sales Outstanding) | 71 days | 69 days | | DSI (Days Sales in Inventory) | 83 days | 66 days | - At March 31, 2020, the company had **$342.9 million in cash** and access to approximately **$216.2 million in available credit**[98](index=98&type=chunk) - The company plans to invest approximately **$60 million** in capital expenditures during 2020[99](index=99&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) No material changes in the company's exposure to market risks, including currency, interest rates, equity, and commodity prices, have occurred since the 2019 Annual Report - There have been **no material changes** to the company's market risk exposures, including currency, interest rates, and commodity prices, since the 2019 Annual Report[105](index=105&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during Q1 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2020[106](index=106&type=chunk) - No material changes to internal control over financial reporting occurred during Q1 2020[109](index=109&type=chunk) [Part II. OTHER INFORMATION](index=26&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company has not accrued for litigation matters, believing a material loss is not reasonably possible, as detailed in Note 13 and the 2019 Annual Report - The company has **not accrued amounts for litigation matters**, as a material loss is not reasonably possible[52](index=52&type=chunk)[112](index=112&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred during the first quarter of 2020 since the 2019 Annual Report - There have been **no material changes** to the company's risk factors during the first quarter of 2020[113](index=113&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 122,489 shares of common stock for approximately $1.0 million in Q1 2020, with 1,563,519 shares remaining available for repurchase Common Stock Purchases - Q1 2020 | Period | Total Shares Purchased | Average Price Paid | Shares Remaining for Repurchase | | :--- | :--- | :--- | :--- | | March 2020 | 122,489 | $8.00 | 1,563,519 | [Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL interactive data files - Filed exhibits include **CEO and CFO certifications** under Sarbanes-Oxley and **XBRL data files**[116](index=116&type=chunk)