Note 2 – Business segment information: | | | | | | | | | | % controlled at | | Business segment | | Entity | | June 30, 2026 | | Chemicals | | Kronos | | 81% | | Component products | | CompX | | 87% | | Real estate management and development | | BMI and LandWell | | 63% - 77% | |
Our control of Kronos includes approximately 50% we hold directly and approximately 31% held directly by NLI. We own approximately 83% of NLI. Our control of CompX is through NLI. We own approximately 63% of BMI. Our control of LandWell includes the approximately 27% we hold directly and 50% held by BMI. Our chief operating decision maker (“CODM”) evaluates segment performance based on each segment’s operating income, which is defined as income before income taxes and interest expense, exclusive of certain non-recurring items (such as gains or losses on disposition of business units and other long-lived assets outside the ordinary course of business and certain legal settlements) and certain general corporate income and expense items (including securities transactions gains and losses and interest and dividend income), which are not attributable to the operations of the reportable operating segments. Segment results we report may differ from amounts separately reported by our various subsidiaries due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material. Interest income included in the calculation of segment operating income is not significant for the three and six months ended June 30, 2025 and 2026. | | | | | | | | | | | | | | | Three months ended | | Six months ended | | | June 30, | | June 30, | | | 2025 | | 2026 | | 2025 | | 2026 | | | | (In millions) | Net sales: | | | | | | | | | | | | | Chemicals | | $ | 494.4 | | $ | 558.1 | | $ | 984.2 | | $ | 1,067.9 | Component products | | | 40.3 | | | 43.6 | | | 80.6 | | | 84.2 | Real estate management and development | | | 5.7 | | | 4.4 | | | 14.2 | | | 14.1 | Total net sales | | $ | 540.4 | | $ | 606.1 | | $ | 1,079.0 | | $ | 1,166.2 | Cost of sales: | | | | | | | | | | | | | Chemicals | | $ | 432.1 | | $ | 455.8 | | $ | 815.5 | | $ | 882.8 | Component products | | | 27.4 | | | 28.1 | | | 55.5 | | | 55.4 | Real estate management and development | | | 2.8 | | | 2.1 | | | 7.4 | | | 4.9 | Total cost of sales | | $ | 462.3 | | $ | 486.0 | | $ | 878.4 | | $ | 943.1 | Gross margin: | | | | | | | | | | | | | Chemicals | | $ | 62.3 | | $ | 102.3 | | $ | 168.7 | | $ | 185.1 | Component products | | | 12.9 | | | 15.5 | | | 25.1 | | | 28.8 | Real estate management and development | | | 2.9 | | | 2.3 | | | 6.8 | | | 9.2 | Total gross margin | | $ | 78.1 | | $ | 120.1 | | $ | 200.6 | | $ | 223.1 | Operating income: | | | | | | | | | | | | | Chemicals | | $ | 10.3 | | $ | 40.4 | | $ | 51.5 | | $ | 54.9 | Component products | | | 6.3 | | | 8.9 | | | 12.2 | | | 16.0 | Real estate management and development | | | 18.9 | | | 18.4 | | | 21.9 | | | 29.7 | Total operating income | | | 35.5 | | | 67.7 | | | 85.6 | | | 100.6 | General corporate items: | | | | | | | | | | | | | Interest income and other | | | 3.7 | | | 4.0 | | | 8.0 | | | 7.5 | Other components of net periodic pension and OPEB expense | | | (.7) | | | (.8) | | | (1.5) | | | (1.6) | Changes in market value of Valhi common stock held by subsidiaries | | | — | | | .1 | | | (1.7) | | | .6 | General expenses, net | | | (9.2) | | | (9.0) | | | (17.1) | | | (16.3) | Interest expense | | | (13.8) | | | (14.7) | | | (27.0) | | | (29.4) | Income before income taxes | | $ | 15.5 | | $ | 47.3 | | $ | 46.3 | | $ | 61.4 |
| | | | | | | | | | | | | | | Three months ended | | Six months ended | | | June 30, | | June 30, | | | 2025 | | 2026 | | 2025 | | 2026 | | | | (In millions) | Depreciation and amortization: | | | | | | | | | | | | | Chemicals | | $ | 15.6 | | $ | 16.3 | | $ | 30.0 | | $ | 32.3 | Component products | | | .9 | | | .8 | | | 1.9 | | | 1.7 | Real estate management and development | | | — | | | — | | | — | | | — | Total | | $ | 16.5 | | $ | 17.1 | | $ | 31.9 | | $ | 34.0 |
Included in the determination of the Real Estate Management and Development Segment operating income are infrastructure reimbursements and a gain from the sale of a building. See Note 12.
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