Financial Performance - Net income from continuing operations attributable to Valhi stockholders decreased to $13.1 million or $0.04 per diluted share in Q3 2019, down from $142.8 million or $0.42 per diluted share in Q3 2018 [116]. - For the first nine months of 2019, net income from continuing operations attributable to Valhi stockholders was $38.5 million or $0.11 per diluted share, compared to $205.8 million or $0.60 per diluted share in the same period of 2018 [118]. - The company anticipates lower consolidated operating income for 2019 compared to 2018 due to various factors impacting its segments [121]. - Consolidated operating income was $167.6 million in the first nine months of 2019, a decrease of $150.4 million compared to $318.0 million in the same period of 2018 [186]. - Cash flows from operating activities decreased to $113.0 million in the first nine months of 2019 from $191.5 million in the same period of 2018, a decrease of $78.5 million [186]. - Cash provided by operating activities decreased from $191.5 million in 2018 to $113.0 million in 2019, representing a decline of approximately 40.9% [189]. Chemicals Segment Performance - The Chemicals Segment experienced lower operating income in 2019 compared to 2018, primarily due to lower average selling prices and higher raw material costs [122]. - The Chemicals Segment's key performance indicators include TiO2 average selling prices, sales and production volumes, and third-party feedstock costs [124]. - Net sales for the Chemicals Segment increased by 7% to $437.4 million in Q3 2019 compared to Q3 2018, with a total increase of 3% to $1,358.4 million for the first nine months of 2019 [125][130][132]. - Sales volumes of TiO2 increased by 17% in Q3 2019 and 16% in the first nine months of 2019, reaching 144 thousand metric tons and 445 thousand metric tons respectively [125][130][133]. - The average TiO2 selling prices decreased by 5% in Q3 2019 and 7% in the first nine months of 2019, negatively impacting net sales by approximately $21 million and $92 million respectively [130][132]. - Cost of sales increased by 20% in Q3 2019 and 24% in the first nine months of 2019, with costs per metric ton rising due to higher raw materials and production costs [134][136]. - Gross margin as a percentage of net sales decreased to 20% in Q3 2019 from 29% in Q3 2018, and to 22% from 35% for the first nine months of 2019 [135][137]. - Operating income fell by 40% in Q3 2019 and 53% in the first nine months of 2019, with operating income as a percentage of net sales decreasing to 8% and 10% respectively [138][139]. - The Chemicals Segment recognized additional depreciation expense of $1.6 million in the first nine months of 2019 related to acquisitions, impacting reported operating income [140]. - The Chemicals Segment expects production volumes in 2019 to be slightly higher compared to 2018, with anticipated sales volumes also increasing [148]. - The Chemicals Segment anticipates stable selling prices for the remainder of 2019, considering rising raw material costs and seasonal demand fluctuations [150]. - The Chemicals Segment's sales in 2019 are expected to be higher than in 2018, driven by increased sales volumes but offset by lower average selling prices and higher operating costs [151]. Real Estate Management and Development - The Real Estate Management and Development Segment's total net sales decreased from $14.9 million in Q3 2018 to $8.1 million in Q3 2019, primarily due to lower land sales revenues [159]. - Land sales revenues in the first nine months of 2019 increased compared to the same period in 2018, attributed to a higher amount of acreage sold and increased infrastructure development spending [161]. - The Real Estate Management and Development Segment expects to maximize cash proceeds from land sales and continue development work over the next several years [163]. Corporate Expenses and Legal Matters - Corporate expenses were 30% higher in Q3 2019 compared to Q3 2018, primarily due to increased environmental remediation costs [171]. - Litigation settlement expenses were $62.0 million in Q2 2018 and $19.3 million in Q2 2019, associated with lead pigment litigation in California [169]. - The company is subject to various legal proceedings and proposed legislation that could potentially affect its financial position, although no material adverse effects are expected at this time [217]. Debt and Liquidity - As of September 30, 2019, consolidated indebtedness was $34.2 million in the Chemicals Segment, $2.5 million in the Component Products Segment, and $1.2 million in the Real Estate Management and Development Segment [191]. - Valhi had $313.0 million outstanding on its $360 million credit facility, due no earlier than December 31, 2020 [192]. - At September 30, 2019, the company had $557.9 million in cash, cash equivalents, and marketable securities, including $165.5 million held by non-U.S. subsidiaries [198]. - Future liquidity is expected to be sufficient to meet short-term and long-term obligations, with $263.9 million available under existing credit facilities [198][197]. - The company plans to fund capital expenditures primarily through cash generated from operations and existing credit facilities [201]. - The company is considering future acquisitions and may issue additional equity securities or increase indebtedness to finance such activities [196]. Capital Expenditures - Capital expenditures for the first nine months of 2019 totaled $37.9 million, with an expectation of approximately $81 million for the entire year [190][200]. Currency Exchange and Market Risks - The company has substantial operations outside the United States, exposing it to currency exchange rate fluctuations [221]. - The company uses currency forward contracts to manage a nominal portion of currency exchange rate market risk, primarily related to its Chemicals Segment [222].

Financial Performance - Net income from continuing operations attributable to Valhi stockholders decreased to $7.1 million or $0.02 per diluted share in Q2 2019, down from $11.3 million or $0.03 per diluted share in Q2 2018 [120]. - For the first six months of 2019, net income from continuing operations attributable to Valhi stockholders was $25.3 million or $0.07 per diluted share, compared to $63.0 million or $0.18 per diluted share in the same period of 2018 [121]. - The company expects lower consolidated operating income for 2019 compared to 2018 due to various factors including litigation expenses and market conditions [125]. - The company anticipates that its sales in 2019 will be higher than in 2018, primarily due to increased sales volumes, although operating income is expected to be lower due to lower average selling prices and higher raw material costs [154]. - Consolidated operating income was $126.3 million in the first six months of 2019, a decrease of $122.5 million compared to $248.8 million in the same period of 2018 [189]. Sales and Revenue - Net sales for Q2 2019 were $484.5 million, a 3% increase from $471.8 million in Q2 2018, while cost of sales rose by 25% to $375.4 million [129]. - Net sales in the second quarter of 2019 increased by 3%, or $12.7 million, driven by a 15% increase in sales volumes, which added approximately $71 million to net sales [133]. - Component Products Segment's net sales increased by $1.3 million (4%) in Q2 2019 and $4.1 million (7%) for the first six months compared to the same periods in 2018, driven by higher marine component sales [159]. - The Real Estate Management and Development Segment's total net sales increased from $6.0 million in Q2 2018 to $10.4 million in Q2 2019, and from $13.2 million to $22.3 million for the first six months [164]. Costs and Expenses - The gross margin for Q2 2019 was $109.1 million, a decrease of 36% from $171.3 million in Q2 2018, reflecting a gross margin percentage drop from 36% to 23% [129]. - The cost of sales increased by 25% in the second quarter of 2019 compared to the same period in 2018, with cost of sales as a percentage of net sales rising to 77% from 64% [137]. - Operating income decreased by 59% in the second quarter of 2019 compared to the same period in 2018, with operating income as a percentage of net sales dropping to 10% from 26% [141]. - Cost of sales as a percentage of sales for the Component Products Segment increased by approximately 3% in Q2 2019 and 2% for the first six months compared to 2018, leading to a decrease in gross profit percentage [160]. Production and Capacity - TiO2 sales volumes increased by 15% in Q2 2019 compared to Q2 2018, with production volumes remaining stable [129]. - The Chemicals Segment operated at an average capacity utilization rate of 97% in the first half of 2019, up from 96% in the same period of 2018 [131]. - The Chemicals Segment expects production volumes in 2019 to be slightly higher compared to 2018, with anticipated sales volumes also expected to increase [151]. Litigation and Settlements - A pre-tax litigation settlement expense of $19.6 million was recognized in Q2 2019, compared to $62.0 million in Q2 2018 [123]. - Corporate expenses decreased by 4% in Q2 2019 and 24% in the first six months compared to the same periods in 2018, attributed to lower litigation and environmental remediation costs [175]. - The company anticipates that net general corporate expenses in 2019 will be lower than in 2018 due to reduced litigation and related costs [175]. Cash Flow and Capital Expenditures - Cash flows from operating activities decreased to $32.8 million in the first six months of 2019 from $159.7 million in the same period of 2018, a decrease of $126.9 million [189]. - The company spent $28.3 million in capital expenditures during the first six months of 2019 [193]. - The company expects capital expenditures for 2019 to be approximately $93 million, primarily funded through cash generated from operations and existing credit facilities [204]. Debt and Liquidity - Valhi's outstanding debt included $313.0 million on its $360 million credit facility with Contran, due no earlier than December 31, 2020 [195]. - The company has sufficient liquidity to meet short-term and long-term obligations, with expectations of compliance with financial covenants through the maturities of credit facilities [200]. - The company expects interest expense to continue to be lower in the remainder of 2019 compared to 2018 due to lower average balances of outstanding borrowings [181]. Shareholder Returns - Kronos' board authorized the repurchase of up to 2.0 million shares of common stock, with approximately 1,841,000 shares available for repurchase as of June 30, 2019 [209]. - Kronos paid a regular dividend of $0.17 per share in each quarter of 2018, which increased to $0.18 per share in February 2019, resulting in an expected annual dividend of $41.8 million based on shares held [211]. Currency Management - The company uses currency forward contracts to manage a nominal portion of currency exchange rate market risk associated with trade receivables [227]. - Some currency forward contracts meet the criteria for hedge accounting under GAAP and are designated as cash flow hedges [227].

SECURITIES AND EXCHANGE COMMISSION QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 VALHI, INC. (Exact name of registrant as specified in its charter) Washington, D.C. 20549 For the quarter ended March 31, 2019 FORM 10-Q Commission file number 1-5467 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ | Non-accelerated filer | ☐ | Smaller reporting company ☐ | | --- | --- | --- | | Emerging growth company | ...

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, 2018 Commission file number 1-5467 VALHI, INC. (Exact name of Registrant as specified in its charter) Delaware 87-0110150 (State or other jurisdiction of Incorporation or organization) (IRS Employer Identification No.) 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697 (Address of principal executive offices) (Zi ...