Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | KRO | |
Entity Registrant Name | KRONOS WORLDWIDE INC | |
Entity Central Index Key | 1,257,640 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 115,907,698 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 432.3 | $ 322 |
Restricted cash | 1.1 | 1.7 |
Accounts and other receivables | 340.7 | 346.5 |
Inventories, net | 446.2 | 382.3 |
Prepaid expenses and other | 18.1 | 10 |
Total current assets | 1,238.4 | 1,062.5 |
Other assets: | ||
Investment in TiO2 manufacturing joint venture | 79.7 | 86.5 |
Marketable securities | 4 | 10.7 |
Note receivable from Valhi | 13.6 | |
Deferred income taxes | 115.6 | 139.2 |
Other | 5.3 | 5.5 |
Total other assets | 204.6 | 255.5 |
Property and equipment: | ||
Land | 41.4 | 42 |
Buildings | 217.8 | 221.6 |
Equipment | 1,125.7 | 1,103.2 |
Mining properties | 119.5 | 115.7 |
Construction in progress | 34.8 | 52.6 |
Gross property and equipment | 1,539.2 | 1,535.1 |
Less accumulated depreciation and amortization | 1,047.3 | 1,028.7 |
Net property and equipment | 491.9 | 506.4 |
Total assets | 1,934.9 | 1,824.4 |
Current liabilities: | ||
Current maturities of long-term debt | 0.7 | 0.7 |
Accounts payable and accrued liabilities | 212.3 | 205.8 |
Income taxes | 36.6 | 25 |
Total current liabilities | 249.6 | 231.5 |
Noncurrent liabilities: | ||
Long-term debt | 465.2 | 473.8 |
Accrued pension costs | 247.5 | 254.2 |
Accrued postretirement benefits costs | 7.5 | 7.7 |
Payable to affiliate - income taxes | 58.1 | 70.1 |
Deferred income taxes | 11.9 | 11.3 |
Other | 21.7 | 21.5 |
Total noncurrent liabilities | 811.9 | 838.6 |
Stockholders' equity: | ||
Common stock | 1.2 | 1.2 |
Additional paid-in capital | 1,399.1 | 1,399 |
Retained deficit | (140.5) | (267.2) |
Accumulated other comprehensive loss | (386.4) | (378.7) |
Total stockholders' equity | 873.4 | 754.3 |
Total liabilities and stockholders' equity | 1,934.9 | 1,824.4 |
Commitments and contingencies (Notes 11 and 13) |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 410.3 | $ 464.5 | $ 1,312.5 | $ 1,275.7 |
Cost of sales | 291.2 | 309.5 | 846.8 | 882.3 |
Gross margin | 119.1 | 155 | 465.7 | 393.4 |
Selling, general and administrative expense | 57.3 | 51.3 | 173.7 | 147.6 |
Other operating income (expense): | ||||
Currency transactions, net | (0.6) | (4.3) | 4.2 | (8) |
Other operating expense, net | (3.1) | (3.3) | (10.7) | (11) |
Income from operations | 58.1 | 96.1 | 285.5 | 226.8 |
Other income (expense): | ||||
Interest and dividend income | 1.5 | 0.4 | 3.7 | 0.7 |
Marketable equity securities | (4.3) | (6.7) | ||
Other components of net periodic pension and OPEB cost | (3.7) | (4.5) | (11.3) | (12.8) |
Loss on prepayment of debt, net | (7.1) | (7.1) | ||
Interest expense | (4.9) | (5) | (14.7) | (14.5) |
Income before income taxes | 46.7 | 79.9 | 256.5 | 193.1 |
Income tax expense (benefit) | 14.1 | 6.1 | 75.5 | (114) |
Net income | $ 32.6 | $ 73.8 | $ 181 | $ 307.1 |
Net income per basic and diluted share | $ 0.28 | $ 0.64 | $ 1.56 | $ 2.65 |
Cash dividends per share | $ 0.17 | $ 0.15 | $ 0.51 | $ 0.45 |
Weighted average shares used in the calculation of net income per share | 115.9 | 115.9 | 115.9 | 115.9 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 32.6 | $ 73.8 | $ 181 | $ 307.1 |
Other comprehensive income (loss), net of tax: | ||||
Currency translation | 4.5 | 29.9 | (10) | 53.7 |
Marketable securities | (0.6) | (1.2) | ||
Interest rate swap | 1.8 | 2 | ||
Total other comprehensive income (loss), net | 6.9 | 33.5 | (2.9) | 60.6 |
Comprehensive income | 39.5 | 107.3 | 178.1 | 367.7 |
Defined Benefit Pension Plans | ||||
Other comprehensive income (loss), net of tax: | ||||
Defined benefit plans | $ 2.4 | $ 2.4 | 7.3 | 6.3 |
OPEB | ||||
Other comprehensive income (loss), net of tax: | ||||
Defined benefit plans | $ (0.2) | $ (0.2) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive loss |
Beginning Balance at Dec. 31, 2016 | $ (452.8) | ||||
Balance as adjusted at Dec. 31, 2016 | (452.8) | ||||
Net income | $ 307.1 | ||||
Other comprehensive income (loss), net of tax | 60.6 | ||||
Ending Balance at Sep. 30, 2017 | (392.2) | ||||
Beginning Balance at Jun. 30, 2017 | (425.7) | ||||
Balance as adjusted at Jun. 30, 2017 | (425.7) | ||||
Net income | 73.8 | ||||
Other comprehensive income (loss), net of tax | 33.5 | ||||
Ending Balance at Sep. 30, 2017 | (392.2) | ||||
Beginning Balance at Dec. 31, 2017 | 754.3 | $ 1.2 | $ 1,399 | $ (267.2) | (378.7) |
Change in accounting principle - ASU 2016-01 at Dec. 31, 2017 | 4.8 | (4.8) | |||
Balance as adjusted at Dec. 31, 2017 | 754.3 | 1.2 | 1,399 | (262.4) | (383.5) |
Net income | 181 | 181 | |||
Other comprehensive income (loss), net of tax | (2.9) | (2.9) | |||
Issuance of common stock | 0.1 | 0.1 | |||
Dividends paid | (59.1) | (59.1) | |||
Ending Balance at Sep. 30, 2018 | 873.4 | 1.2 | 1,399.1 | (140.5) | (386.4) |
Beginning Balance at Jun. 30, 2018 | (393.3) | ||||
Balance as adjusted at Jun. 30, 2018 | (393.3) | ||||
Net income | 32.6 | ||||
Other comprehensive income (loss), net of tax | 6.9 | ||||
Ending Balance at Sep. 30, 2018 | $ 873.4 | $ 1.2 | $ 1,399.1 | $ (140.5) | $ (386.4) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 181 | $ 307.1 |
Depreciation and amortization | 36.9 | 30.7 |
Deferred income taxes | 20.5 | (139.9) |
Benefit plan expense greater than cash funding | 6.5 | 9.2 |
Marketable equity securities | 6.7 | |
Distributions from TiO2 manufacturing joint venture, net | 5.5 | 3.8 |
Loss on prepayment of debt | 7.1 | |
Payment for termination of interest rate swap contract | (3.3) | |
Other, net | 1.8 | 1.7 |
Change in assets and liabilities: | ||
Accounts and other receivables | (25.6) | (77) |
Inventories | (70.3) | 39.9 |
Prepaid expenses | (8.1) | (1.5) |
Accounts payable and accrued liabilities | 13 | 43.8 |
Income taxes | 11.9 | 15.3 |
Accounts with affiliates | 17.1 | (15.1) |
Other, net | 2.1 | (3.5) |
Net cash provided by operating activities | 199 | 218.3 |
Cash flows from investing activities: | ||
Capital expenditures | (35.4) | (40.7) |
Net cash used in investing activities | (21.8) | (40.7) |
Indebtedness: | ||
Borrowings | 731.5 | |
Principal payments | (0.5) | (594.3) |
Deferred financing fees | (8.3) | |
Dividends paid | (59.1) | (52.2) |
Net cash provided by (used in) financing activities | (59.6) | 76.7 |
Cash, cash equivalents and restricted cash - net change from: | ||
Operating, investing and financing activities | 117.6 | 254.3 |
Currency translation | (7.9) | 11.4 |
Balance at beginning of period | 323.7 | 52.3 |
Balance at end of period | 433.4 | 318 |
Cash paid for: | ||
Interest, net of amount capitalized | 18.3 | 15.4 |
Income taxes | 36.4 | 18.7 |
Accrual for capital expenditures | 3.5 | 3.7 |
Valhi | ||
Cash flows from investing activities: | ||
Loans | (2.6) | (2.8) |
Collections | $ 16.2 | $ 2.8 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1 - Organization and basis of presentation: Organization At September 30, 2018, Valhi, Inc. (NYSE: VHI) held approximately 50% of our outstanding common stock and a wholly-owned subsidiary of NL Industries, Inc. (NYSE: NL) held approximately 30% of our common stock, Valhi owned approximately 83% of NL’s outstanding common stock and a wholly-owned subsidiary of Contran Corporation held approximately 92% of Valhi’s outstanding common stock. All of Contran’s outstanding voting stock is held by a family trust established for the benefit of Lisa K. Simmons and Serena Simmons Connelly and their children, for which Ms. Simmons and Ms. Connelly are co-trustees, or is held directly by Ms. Simmons and Ms. Connelly or entities related to them. Consequently, Ms. Simmons and Ms. Connelly may be deemed to control Contran, Valhi, NL and us. Basis of presentation - The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2017 that we filed with the Securities and Exchange Commission (“SEC”) on March 12, 2018 (“2017 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments other than the reversal of the deferred income tax asset valuation allowance recognized in the second quarter of 2017, as discussed in Note 11), in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, 2017 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, 2017) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim periods ended September 30, 2018 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our 2017 Consolidated Financial Statements contained in our 2017 Annual Report. Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Kronos Worldwide, Inc. and its subsidiaries (NYSE: KRO) taken as a whole. |
Accounts and Other Receivables
Accounts and Other Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Accounts and Other Receivables | Note 2 - Accounts and other receivables: December September 2017 2018 (In millions) Trade receivables $ 301.4 $ 318.5 Recoverable VAT and other receivables 19.0 20.1 Receivable from affiliates: Income taxes, net - Valhi 15.3 - Louisiana Pigment Company, L.P. ("LPC") 8.9 - Other 3.2 3.3 Refundable income taxes .1 - Allowance for doubtful accounts (1.4 ) (1.2 ) Total $ 346.5 $ 340.7 |
Inventories, Net
Inventories, Net | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Note 3 - Inventories, net: December September 2017 2018 (In millions) Raw materials $ 106.9 $ 106.1 Work in process 20.8 26.6 Finished products 191.5 248.8 Supplies 63.1 64.7 Total $ 382.3 $ 446.2 |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | Note 4 - Marketable securities: Our marketable securities consist of investments in the publicly-traded shares of related parties: Valhi, NL and CompX International Inc. NL owns the majority of CompX’s outstanding common stock. All of our marketable securities are accounted for as available-for-sale securities, which are carried at fair value using quoted market prices in active markets for each marketable security. Prior to 2018, any unrealized gains or losses on the securities were recognized through other comprehensive income, net of deferred income taxes. Beginning on January 1, 2018 with the adoption of Accounting Standards Update (“ASU”) 2016-01, all of our marketable equity securities will continue to be carried at fair value as noted above, but any unrealized gains or losses on the securities are now recognized in Marketable equity securities on our Condensed Consolidated Statements of Income. The fair value of our equity securities represent a Level 1 input within the fair value hierarchy. See Note 14. Fair measurement Market Cost Marketable security level value basis Unrealized gain (In millions) December 31, 2017: Valhi common stock 1 $ 10.6 $ 3.2 $ 7.4 NL and CompX common stocks 1 .1 .1 - Total $ 10.7 $ 3.3 $ 7.4 September 30, 2018: Valhi common stock 1 $ 3.9 $ 3.2 $ .7 NL and CompX common stocks 1 .1 .1 - Total $ 4.0 $ 3.3 $ .7 At December 31, 2017 and September 30, 2018, we held approximately 1.7 million shares of Valhi’s common stock. We also held a nominal number of shares of CompX and NL common stocks. At December 31, 2017 and September 30, 2018, the quoted per share market price of Valhi’s common stock was $6.17 and $2.28, respectively. During the first nine months of 2018 we recognized a loss of $6.7 million related to the aggregate net change in market value of our marketable equity securities during such period. The Valhi, CompX and NL common stocks we own are subject to the restrictions on resale pursuant to certain provisions of SEC Rule 144. In addition, as a majority-owned subsidiary of Valhi we cannot vote our shares of Valhi common stock under Delaware General Corporation law, but we do receive dividends from Valhi on these shares, when declared and paid. |
Other Noncurrent Assets
Other Noncurrent Assets | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Noncurrent Assets | Note 5 - Other noncurrent assets: December September 2017 2018 (In millions) Pension asset $ 1.6 $ 3.3 Deferred financing costs, net 1.1 .9 Other 2.8 1.1 Total $ 5.5 $ 5.3 |
Long-Term debt
Long-Term debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 6 - Long-term debt: December 31, September 30, 2017 2018 (In millions) Kronos International, Inc. 3.75% Senior Secured Notes $ 471.1 $ 463.0 Other 3.4 2.9 Total debt 474.5 465.9 Less current maturities .7 .7 Total long-term debt $ 473.8 $ 465.2 Senior Secured Notes - At September 30, 2018, the carrying value of our 3.75% Senior Secured Notes due September 15, 2025 (€400 million aggregate principal amount outstanding) is stated net of unamortized debt issuance costs of $6.7 million. Revolving credit facilities – During the first nine months of 2018, we had no borrowings or repayments under our North American revolving credit facility and our European revolving credit facility. At September 30, 2018, approximately $106.2 million was available for additional borrowing under the North American revolving credit facility. Our European revolving credit facility requires the maintenance of certain financial ratios, and one of such requirements is based on the ratio of net debt to last twelve months earnings before income tax, interest, depreciation and amortization expense (“EBITDA”) of the borrowers. Based upon the borrowers’ last twelve months EBITDA as of September 30, 2018 and the net debt to EBITDA financial test, the full €90 million amount of the credit facility ($105.7 million) is available for borrowing at September 30, 2018. Other We are in compliance with all of our debt covenants at September 30, 2018. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 7 - Accounts payable and accrued liabilities: December September 2017 2018 (In millions) Accounts payable $ 107.9 $ 105.8 Employee benefits 27.0 29.1 Accrued sales discounts and rebates 11.7 25.4 Payable to affiliates: LPC 16.2 12.7 Income taxes, net - Valhi - 5.5 Other 43.0 33.8 Total $ 205.8 $ 212.3 |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Noncurrent Liabilities | Note 8 - Other noncurrent liabilities: December 31, September 30, 2017 2018 (In millions) Employee benefits $ 8.5 $ 8.3 Other 13.0 13.4 Total $ 21.5 $ 21.7 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 9 - Revenue recognition: Our sales involve single performance obligations to ship our products pursuant to customer purchase orders. In some cases, the purchase order is supported by an underlying master sales agreement, but our purchase order acceptance generally evidences the contract with our customer by specifying the key terms of product and quantity ordered, price and delivery and payment terms. Effective January 1, 2018 with the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue is recorded in an amount that reflects the net consideration we expect to receive in exchange for our products. Prices for our products are based on terms specified in published list prices and purchase orders, which generally do not include financing components, noncash consideration or consideration paid to our customers. As our standard payment terms are less than one year, we have elected the practical expedient under ASC 606 and have not assessed whether a contract has a significant financing component. We state sales net of price, early payment, and distributor discounts and volume rebates (collectively, variable consideration). Variable consideration, to the extent present, is recognized as the amount to which we are most-likely to be entitled, using all information (historical, current and forecasted) that is reasonably available to us, and only to the extent that a significant reversal in the amount of the cumulative revenue recognized is not probable of occurring in a future period. Differences, if any, between estimates of the amount of variable consideration to which we will be entitled and the actual amount of such variable consideration have not been material in the past. Amounts received or receivable from our customers with respect to variable consideration we expect to refund to our customers is recognized as a current liability and classified as accrued sales discounts and rebates (see Note 7). We report any tax assessed by a governmental authority that we collect from our customers that is both imposed on and concurrent with our revenue-producing activities (such as sales, use, value added and excise taxes) on a net basis (meaning we do not recognize these taxes either in our revenues or in our costs and expenses). Frequently, we receive orders for products to be delivered over dates that may extend across reporting periods. We invoice for each delivery upon shipment and recognize revenue for each distinct shipment when all sales recognition criteria for that shipment have been satisfied. As scheduled delivery dates for these orders are within a one year period, under the optional exemption provided by ASC 606, we do not disclose sales allocated to future shipments of partially completed contracts. The following table disaggregates our net sales by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (as required by ASC 606). Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Net sales - point of origin: Germany $ 256.6 $ 211.9 $ 672.1 $ 704.1 United States 209.3 234.5 623.6 640.2 Canada 70.4 82.3 228.2 236.1 Belgium 75.6 66.4 205.7 205.0 Norway 58.2 49.8 156.8 159.4 Eliminations (205.6 ) (234.6 ) (610.7 ) (632.3 ) Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 Net sales - point of destination: Europe $ 246.0 $ 191.8 $ 652.3 $ 664.2 North America 131.4 142.0 393.5 412.6 Other 87.1 76.5 229.9 235.7 Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Note 10 - Employee benefit plans: The components of net periodic defined benefit pension cost are presented in the table below. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Service cost $ 3.0 $ 2.9 $ 8.5 $ 8.8 Interest cost 3.6 3.5 10.3 10.7 Expected return on plan assets (2.6 ) (3.3 ) (7.6 ) (9.9 ) Amortization of prior service cost - .1 .2 .2 Recognized actuarial losses 3.5 3.3 10.0 10.3 Total $ 7.5 $ 6.5 $ 21.4 $ 20.1 The components of net periodic postretirement benefits other than pension (“OPEB”) cost are presented in the table below. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Service cost $ - $ - $ .1 $ .1 Interest cost .1 .1 .2 .2 Amortization of prior service credit (.1 ) (.1 ) (.4 ) (.4 ) Recognized actuarial losses - .1 .1 .2 Total $ - $ .1 $ - $ .1 Upon the adoption of ASU 2017-07, Compensation - Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost We expect our 2018 contributions for our pension and other postretirement plans to be approximately $17 million. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 - Income taxes: Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Expected tax expense, at U.S. federal statutory income tax rate of 35% in 2017 and 21% in 2018 $ 28.0 $ 9.8 $ 67.6 $ 53.9 Non-U.S. tax rates (3.4 ) 3.6 (8.2 ) 18.6 Incremental net tax expense on earnings and losses of U.S. and non-U.S. companies .2 1.8 6.8 2.9 Valuation allowance (7.8 ) - (170.4 ) - Adjustment to reserve for uncertain tax positions, net (8.1 ) - (7.6 ) 1.4 Transition tax - (1.7 ) - (1.7 ) Canada-Germany APA (3.2 ) - (3.2 ) (1.4 ) Other, net .4 .6 1.0 1.8 Income tax expense (benefit) $ 6.1 $ 14.1 $ (114.0 ) $ 75.5 Comprehensive provision for income taxes (benefit) allocable to: Net income $ 6.1 $ 14.1 $ (114.0 ) $ 75.5 Other comprehensive income (loss): Currency translation 6.4 - 19.7 - Pension plans 1.1 1.0 3.2 3.2 OPEB plans - - (.1 ) (.1 ) Marketable securities (.3 ) - (.6 ) - Interest rate swap 1.0 - 1.1 - Total $ 14.3 $ 15.1 $ (90.7 ) $ 78.6 The amount shown in the above table of our income tax rate reconciliation for non-U.S. tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our non-U.S. subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S. jurisdiction and the U.S. federal statutory tax rate of 35% in 2017 and 21% in 2018. The amount shown on such table for incremental net tax expense on earnings and losses of U.S. and non-U.S. companies includes, as applicable, (i) deferred income taxes (or deferred income tax benefits) associated with the current-year change in the aggregate amount of undistributed earnings of our Canadian subsidiary and, beginning in 2018, deferred income taxes (or deferred income tax benefits) associated with the current-year earnings of all of our non-U.S. subsidiaries (the undistributed earnings of our European subsidiaries were subject to a permanent reinvestment plan until December 31, 2017) and (ii) current U.S. income taxes (or current income tax benefit), including U.S. personal holding company tax, as applicable, attributable to current-year income (losses) of one of our non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, to the extent the current-year income (losses) of such subsidiary is subject to U.S. income tax under the U.S. dual-resident provisions of the Internal Revenue Code. We have substantial net operating loss (“NOL”) carryforwards in Germany (the equivalent of $652 million for German corporate purposes and $.5 million for German trade tax purposes at December 31, 2017) and in Belgium (the equivalent of $50 million for Belgian corporate tax purposes at December 31, 2017), all of which have an indefinite carryforward period. As a result, we have net deferred income tax assets with respect to these two jurisdictions, primarily related to these NOL carryforwards. The German corporate tax is similar to the U.S. federal income tax, and the German trade tax is similar to the U.S. state income tax. As discussed in the 2017 Annual Report, commencing June 30, 2015, we concluded that we were required to recognize a non-cash deferred income tax asset valuation allowance under the more-likely-than-not recognition criteria with respect to our German and Belgian net deferred income tax assets at such date. During the first six months of 2017, we recognized an aggregate non-cash deferred income tax benefit of $12.7 million as a result of a net decrease in such deferred income tax asset valuation allowance, due to utilizing a portion of both the German and Belgian NOL during the period, including $7.7 million in the second quarter of 2017. As also discussed in the 2017 Annual Report, at June 30, 2017, we concluded we had sufficient positive evidence under the more-likely-than-not recognition criteria to support reversal of the entire valuation allowance related to our German and Belgian operations. In accordance with the ASC 740-270 guidance regarding accounting for income taxes at interim dates, the amount of the valuation allowance reversed at June 30, 2017 ($149.9 million, of which $141.9 million related to Germany and $8.0 million related to Belgium) relates to our change in judgment at that date regarding the realizability of the related deferred income tax asset as it relates to future years (i.e., 2018 and after). A change in judgment regarding the realizability of deferred tax assets as it relates to the current year is considered in determining the estimated annual effective tax rate for the year and is recognized throughout the year, including interim periods subsequent to the date of the change in judgment. Accordingly, our income tax benefit in calendar 2017 includes an aggregate non-cash deferred income tax benefit of $186.7 million related to the reversal of the German and Belgian valuation allowance, comprised of $12.7 million recognized in the first half of 2017 (noted above) related to the utilization of a portion of both the German and Belgian NOLs during such period, $149.9 million related to the portion of the valuation allowance reversed as of June 30, 2017 and $24.1 million recognized in the second half of 2017 (including $7.8 million reversed in the third quarter) related to the utilization of a portion of both the German and Belgian NOLs during such period. Our deferred income tax asset valuation allowance increased $13.7 million in 2017 as a result of changes in currency exchange rates, which increase was recognized as part of other comprehensive income (loss). As discussed in the 2017 Annual Report, on December 22, 2017, the 2017 Tax Act was enacted into law. This new tax legislation, among other changes, (i) reduced the U.S. Federal corporate income tax rate from 35% to 21% effective January 1, 2018; (ii) implemented a territorial tax system and imposed a one-time repatriation tax (“Transition Tax”) on the deemed repatriation of the post-1986 undistributed earnings of non-U.S. subsidiaries accumulated up through December 31, 2017, regardless of whether such earnings are repatriated; (iii) eliminated U.S. tax on future non-U.S. earnings (subject to certain exceptions); (iv) eliminated the domestic production activities deduction beginning in 2018; (v) eliminated the net operating loss carryback and provides for an indefinite carryforward period subject to an 80% annual usage limitation; (vi) allows for the expensing of certain capital expenditures; (vii) imposed a tax on global intangible low-tax income (“GILTI”) beginning in 2018; (viii) imposed a base erosion anti-abuse tax (“BEAT”) beginning in 2018; and (ix) amended the rules limiting the deduction for business interest expense beginning in 2018. Following the enactment of the 2017 Tax Act, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) 118 to provide guidance on the accounting and reporting impacts of the 2017 Tax Act. SAB 118 states that companies should account for changes related to the 2017 Tax Act in the period of enactment if all information is available and the accounting can be completed. In situations where companies do not have enough information to complete the accounting in the period of enactment, a company must either 1) record an estimated provisional amount if the impact of the change can be reasonably estimated; or 2) continue to apply the accounting guidance that was in effect immediately prior to the 2017 Tax Act if the impact of the change cannot be reasonably estimated. If estimated provisional amounts are recorded, SAB 118 provides a measurement period of no longer than one year during which companies should adjust those amounts as additional information becomes available in the reporting period within the measurement period in which such adjustment is determined. Under GAAP, we are required to revalue our net deferred tax asset associated with our U.S. net deductible temporary differences in the period in which the new tax legislation is enacted based on deferred tax balances as of the enactment date, to reflect the effect of such reduction in the corporate income tax rate. Our temporary differences as of December 31, 2017 were not materially different from our temporary differences as of the enactment date, accordingly revaluation of our net deductible temporary differences was based on our net deferred tax asset as of December 31, 2017. Such revaluation was recognized in continuing operations and was not material to us. Prior to the enactment of the 2017 Tax Act, the undistributed earnings of our European subsidiaries were deemed to be permanently reinvested (we had not made a similar determination with respect to the undistributed earnings of our Canadian subsidiary). Pursuant to the Transition Tax provisions imposing a one-time repatriation tax on post-1986 undistributed earnings, we recognized a provisional current income tax expense of $76.2 million in the fourth quarter of 2017. The amounts recorded as of December 31, 2017 as a result of the 2017 Tax Act represented estimates based on information currently available. We elected to pay such tax over an eight year period beginning in 2018, including approximately $6.1 million which was paid in April 2018 (for the 2017 tax year) and $4.6 million which was paid in the second and third quarters of 2018 (for the 2018 tax year). We did not make any measurement-period adjustments to the provisional amounts recorded for this item during the first six months of 2018 because no new information became available during the period that required an adjustment. During the third quarter of 2018, in conjunction with finalizing our federal income tax return and based on additional information that became available (including proposed regulations issued by the IRS in August 2018 with respect to the Transition Tax), we recognized a provisional income tax benefit of $1.7 million which amount is recorded as a measurement-period adjustment, reducing the provisional income tax expense of $76.2 million recognized in the fourth quarter of 2017. As a result, at September 30, 2018, taking into account the prior Transition Tax installments payments of $10.7 million (noted above), the balance of our unpaid Transition Tax aggregates $63.8 million, which will be paid in quarterly installments over the remainder of the eight year period. Of such $63.8 million, $58.1 million is recorded as a noncurrent payable to affiliate (income taxes payable to Valhi) classified as a noncurrent liability in our Condensed Consolidated Balance Sheet at September 30, 2018, and $5.7 million is included with our current payable to affiliate (income taxes payable to Valhi) classified as a current liability (a portion of our noncurrent income tax payable to affiliate was reclassified to our current payable to affiliate for the portion of our 2019 Transition Tax installment due within the next twelve months). The issuance of final regulations and/or additional guidance with respect to the Transition Tax may impact the amount of the Transition Tax recognized in the fourth quarter of 2017, as adjusted in the third quarter of 2018. We are also continuing to gather information and await further guidance from the state jurisdictions in which we operate with respect to the Transition Tax. We will complete our accounting for this item within the prescribed measurement period ending December 22, 2018, pursuant to the guidance under SAB 118, and if we determine an adjustment to the provisional amounts recognized at December 31, 2017 and September 30, 2018 is required, we will recognize such adjustment in the reporting period within the SAB 118 measurement period in which such adjustment is determined. Prior to the enactment of the 2017 Tax Act the undistributed earnings of our European subsidiaries were deemed to be permanently reinvested (we had not made a similar determination with respect to the undistributed earnings of our Canadian subsidiary). As a result of the implementation of a territorial tax system under the 2017 Tax Act, effective January 1, 2018, and the Transition Tax which in effect taxes the post-1986 undistributed earnings of our non-U.S. subsidiaries accumulated up through December 31, 2017, we determined effective December 31, 2017 that all of the post-1986 undistributed earnings of our European subsidiaries are not permanently reinvested. Accordingly, in the fourth quarter of 2017 we recognized an aggregate provisional non-cash deferred income tax expense of $4.5 million based on our reasonable estimates of the U.S. state and non-U.S. income tax and withholding tax liability attributable to all of such previously-considered permanently reinvested undistributed earnings through December 31, 2017. The amounts recorded as of December 31, 2017 as a result of the 2017 Tax Act represented estimates based on information currently available. We have not made any measurement-period adjustments to the provisional amounts recorded at December 31, 2017 for this item during the first nine months of 2018. However, we recorded a provisional non-cash deferred income tax expense of $2.5 million for the estimated U.S. state and non-U.S. income tax and withholding tax liability attributable to the 2018 undistributed earnings of our non-U.S. subsidiaries in the first nine months of 2018, including withholding taxes related to the undistributed earnings of our Canadian subsidiary. We are continuing our review of certain other provisions under the 2017 Tax Act and waiting on further guidance primarily from the state jurisdictions in which we operate that may impact our determination of the aggregate temporary differences attributable to our investments in our non-U.S. subsidiaries. We will complete our accounting for this item within the prescribed measurement period ending December 22, 2018, pursuant to the guidance under SAB 118, and if we determine an adjustment to the provisional amounts recognized at December 31, 2017 and September 30, 2018 are required, we will recognize such adjustment in the reporting period within the SAB 118 measurement period in which such adjustment is determined. Under U.S. GAAP, as it relates to the new GILTI tax rules, we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the measurement of our deferred taxes (the “deferred method”). Our selection of an accounting policy related to the GILTI tax provisions will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. While our future global operations depend on a number of different factors, we do expect to have future U.S. inclusions in taxable income related to GILTI. As such, we performed an analysis of GILTI’s impact on our provision and determined the impact is not material. Because the impact is not material to our tax provision, we have not recorded any adjustments related to potential GILTI tax in our financial statements in the first nine months of 2018. Further, we have not made a policy decision regarding whether to record deferred taxes on GILTI or record GILTI tax as a current-period expense when incurred. We will complete our policy election for this item within the prescribed measurement period ending December 22, 2018, pursuant to the guidance under SAB 118 and if we determine such policy election impacts our provision, we will recognize an adjustment in the reporting period within the SAB 118 measurement period in which such adjustment is determined. Similarly, we have evaluated the tax impact of BEAT on our tax provision in the first nine months of 2018 and determined that the tax law has no material impact on our tax provision as we have historically not entered into international payments between related parties that are unrelated to cost of goods sold. None of our U.S. and non-U.S. tax returns are currently under examination. As a result of prior audits in certain jurisdictions, which are now settled, in 2008 we filed Advance Pricing Agreement Requests with the tax authorities in the U.S., Canada and Germany. These requests have been under review with the respective tax authorities since 2008 and prior to 2016, it was uncertain whether an agreement would be reached between the tax authorities and whether we would agree to execute and finalize such agreements. • During the third quarter of 2017, our Canadian subsidiary executed and finalized an Advance Pricing Agreement with the Competent Authority for Canada (the “Canada-Germany APA”) effective for tax years 2005 - 2017. Pursuant to the terms of the Canada-Germany APA, the Canadian and German tax authorities agreed to certain prior year changes to taxable income of our Canadian and German subsidiaries. As a result of such agreed-upon changes, we reversed a significant portion of our reserve for uncertain tax positions and recognized a non-cash income tax benefit of $8.1 million related to such reversal in the third quarter of 2017. In addition, we recognized a $2.6 million non-cash income tax benefit related to an increase in our German NOLs and a $.6 million German cash tax refund related to the Canada-Germany APA in the third quarter of 2017. • During the first quarter of 2018, our German subsidiary executed and finalized the related Advance Pricing Agreement with the Competent Authority for Germany (the “Germany-Canada APA”) effective for tax years 2005 - 2017. In the first quarter of 2018, we recognized a net $1.4 million non-cash income tax benefit related to an APA tax settlement payment between our German and Canadian subsidiaries. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. During the first nine months of 2018, we recognized a $1.4 million increase to our reserve for uncertain tax positions (recognized in the first quarter of 2018). We believe the ultimate disposition of any future tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. We do not expect our unrecognized tax benefits to materially change during the next twelve months. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 12 - Accumulated other comprehensive loss: Changes in accumulated other comprehensive loss are presented in the table below. See Note 4 for further discussion of our marketable securities, Note 10 for discussion of our defined benefit pension plans and OPEB plans, and Note 14 for discussion of our interest rate swap contract. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Accumulated other comprehensive loss, net of tax: Currency translation: Balance at beginning of period $ (245.8 ) $ (226.4 ) $ (269.6 ) $ (211.9 ) Other comprehensive income (loss) 29.9 4.5 53.7 (10.0 ) Balance at end of period $ (215.9 ) $ (221.9 ) $ (215.9 ) $ (221.9 ) Defined benefit pension plans: Balance at beginning of period $ (180.9 ) $ (167.9 ) $ (184.8 ) $ (172.8 ) Other comprehensive income - amortization of prior service cost and net losses included in net periodic pension cost 2.4 2.4 6.3 7.3 Balance at end of period $ (178.5 ) $ (165.5 ) $ (178.5 ) $ (165.5 ) OPEB plans: Balance at beginning of period $ 1.6 $ 1.0 $ 1.8 $ 1.2 Other comprehensive loss - amortization of prior service credit and net losses included in net periodic OPEB cost - - (.2 ) (.2 ) Balance at end of period $ 1.6 $ 1.0 $ 1.6 $ 1.0 Marketable securities: Balance at beginning of period $ 1.2 $ - $ 1.8 $ 4.8 Change in accounting principle - - - (4.8 ) Balance at beginning of period, as adjusted 1.2 - 1.8 - Other comprehensive loss - unrealized losses arising during the period (.6 ) - (1.2 ) - Balance at end of period $ .6 $ - $ .6 $ - Interest rate swap: Balance at beginning of period $ (1.8 ) $ - $ (2.0 ) $ - Other comprehensive income (loss): Unrealized losses arising during the period (.7 ) - (1.5 ) - Reclassification adjustment for amounts included in earnings 2.5 - 3.5 - Balance at end of period $ - $ - $ - $ - Total accumulated other comprehensive loss: Balance at beginning of period $ (425.7 ) $ (393.3 ) $ (452.8 ) $ (378.7 ) Change in accounting principle - - - (4.8 ) Balance at beginning of period, as adjusted (425.7 ) (393.3 ) (452.8 ) (383.5 ) Other comprehensive income (loss) 33.5 6.9 60.6 (2.9 ) Balance at end of period $ (392.2 ) $ (386.4 ) $ (392.2 ) $ (386.4 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - Commitments and contingencies: We are involved in various environmental, contractual, product liability, patent (or intellectual property), employment and other claims and disputes incidental to our business. At least quarterly our management discusses and evaluates the status of any pending litigation to which we are a party. The factors considered in such evaluation include, among other things, the nature of such pending cases, the status of such pending cases, the advice of legal counsel and our experience in similar cases (if any). Based on such evaluation, we make a determination as to whether we believe (i) it is probable a loss has been incurred, and if so if the amount of such loss (or a range of loss) is reasonably estimable, or (ii) it is reasonably possible but not probable a loss has been incurred, and if so if the amount of such loss (or a range of loss) is reasonably estimable, or (iii) the probability a loss has been incurred is remote. In March 2013, we were served with the complaint, Los Gatos Mercantile, Inc. d/b/a Los Gatos Ace Hardware, et al v. E.I. Du Pont de Nemours and Company, et al. (United States District Court, for the Northern District of California, Case No. 3:13-cv-01180-SI). The defendants include us, E.I. Du Pont de Nemours & Company, Huntsman International LLC and Millennium Inorganic Chemicals, Inc. As amended by plaintiffs’ third amended complaint (Harrison, Jan, et al v. E.I. Du Pont de Nemours and Company, et al), plaintiffs seek to represent a class consisting of indirect purchasers of titanium dioxide in the states of Arizona, Arkansas, California, the District of Columbia, Florida, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Oregon and Tennessee that indirectly purchased titanium dioxide from one or more of the defendants on or after March 1, 2002. The complaint alleges that the defendants conspired and combined to fix, raise, maintain, and stabilize the price at which titanium dioxide was sold in the United States and engaged in other anticompetitive conduct. In December 2017, the Court preliminarily approved a settlement agreement with the class plaintiffs. In January 2018, without admitting any fault or wrongdoing, we paid an immaterial amount in full settlement of this matter, and in August 2018 the Court issued a final approval of the settlement. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Note 14 - Financial instruments: The following table summarizes the valuation of our financial instruments recorded on a fair value basis as of December 31, 2017 and September 30, 2018: Fair Value Measurements Quoted Significant prices in other Significant active observable unobservable markets inputs inputs Total (Level 1) (Level 2) (Level 3) (In millions) Asset: December 31, 2017 - Noncurrent marketable securities (See Note 4) $ 10.7 $ 10.7 $ - $ - September 30, 2018 - Noncurrent marketable securities (See Note 4) $ 4.0 $ 4.0 $ - $ - Our earnings and cash flows are subject to fluctuations due to changes in currency exchange rates and interest rates. Our risk management policy allows for the use of derivative financial instruments to prudently manage exposure to currency exchange rates and interest rates. Derivatives that we use are primarily currency forward contracts and interest rate swaps. We have not entered into these contracts for trading or speculative purposes in the past, nor do we currently anticipate entering into such contracts for trading or speculative purposes in the future. Currency forward contracts - Certain of our sales generated by our non-U.S. operations are denominated in U.S. dollars. We periodically use currency forward contracts to manage a very nominal portion of currency exchange rate risk associated with trade receivables denominated in a currency other than the holder’s functional currency or similar exchange rate risk associated with future sales. Derivatives used to hedge forecasted transactions and specific cash flows associated with financial assets and liabilities denominated in currencies other than the U.S. dollar and which meet the criteria for hedge accounting are designated as cash flow hedges. Consequently, the effective portion of gains and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings. Contracts that do not meet the criteria for hedge accounting are marked-to-market at each balance sheet date with any resulting gain or loss recognized in income currently as part of net currency transaction gains and losses. The fair value of the currency forward contracts is determined using Level 1 inputs based on the currency spot forward rates quoted by banks or currency dealers. During 2017 and the first nine months of 2018, we had no currency forward contracts outstanding. Interest rate swap contract – See the 2017 Annual Report for a discussion of the interest rate swap we had entered into in August 2015, and which was voluntarily terminated in September 2017. The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure: December 31, 2017 September 30, 2018 Carrying amount Fair value Carrying amount Fair value (In millions) Cash, cash equivalents and restricted cash $ 323.7 $ 323.7 $ 433.4 $ 433.4 Long-term debt - Fixed rate Senior Notes 471.1 495.1 463.0 455.1 Common stockholders' equity 754.3 2,986.8 873.4 1,883.5 At September 30, 2018, the estimated market price of our Senior Notes was €969 per €1,000 principal amount. The fair value of our Senior Notes is based on quoted market prices; however, these quoted market prices represented Level 2 inputs because the markets in which the Senior Notes trade are not active. The fair value of our common stockholders’ equity is based upon quoted market prices at each balance sheet date, which represent Level 1 inputs. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Note 15 - Recent accounting pronouncements: Adopted On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, we adopted ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Pending Adoption In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization At September 30, 2018, Valhi, Inc. (NYSE: VHI) held approximately 50% of our outstanding common stock and a wholly-owned subsidiary of NL Industries, Inc. (NYSE: NL) held approximately 30% of our common stock, Valhi owned approximately 83% of NL’s outstanding common stock and a wholly-owned subsidiary of Contran Corporation held approximately 92% of Valhi’s outstanding common stock. All of Contran’s outstanding voting stock is held by a family trust established for the benefit of Lisa K. Simmons and Serena Simmons Connelly and their children, for which Ms. Simmons and Ms. Connelly are co-trustees, or is held directly by Ms. Simmons and Ms. Connelly or entities related to them. Consequently, Ms. Simmons and Ms. Connelly may be deemed to control Contran, Valhi, NL and us. |
Basis of Presentation | Basis of presentation - The unaudited Condensed Consolidated Financial Statements contained in this Quarterly Report have been prepared on the same basis as the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2017 that we filed with the Securities and Exchange Commission (“SEC”) on March 12, 2018 (“2017 Annual Report”). In our opinion, we have made all necessary adjustments (which include only normal recurring adjustments other than the reversal of the deferred income tax asset valuation allowance recognized in the second quarter of 2017, as discussed in Note 11), in order to state fairly, in all material respects, our consolidated financial position, results of operations and cash flows as of the dates and for the periods presented. We have condensed the Consolidated Balance Sheet at December 31, 2017 contained in this Quarterly Report as compared to our audited Consolidated Financial Statements at that date, and we have omitted certain information and footnote disclosures (including those related to the Consolidated Balance Sheet at December 31, 2017) normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our results of operations for the interim periods ended September 30, 2018 may not be indicative of our operating results for the full year. The Condensed Consolidated Financial Statements contained in this Quarterly Report should be read in conjunction with our 2017 Consolidated Financial Statements contained in our 2017 Annual Report. Unless otherwise indicated, references in this report to “we,” “us” or “our” refer to Kronos Worldwide, Inc. and its subsidiaries (NYSE: KRO) taken as a whole. |
Revenue Recognition | Our sales involve single performance obligations to ship our products pursuant to customer purchase orders. In some cases, the purchase order is supported by an underlying master sales agreement, but our purchase order acceptance generally evidences the contract with our customer by specifying the key terms of product and quantity ordered, price and delivery and payment terms. Effective January 1, 2018 with the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue is recorded in an amount that reflects the net consideration we expect to receive in exchange for our products. Prices for our products are based on terms specified in published list prices and purchase orders, which generally do not include financing components, noncash consideration or consideration paid to our customers. As our standard payment terms are less than one year, we have elected the practical expedient under ASC 606 and have not assessed whether a contract has a significant financing component. We state sales net of price, early payment, and distributor discounts and volume rebates (collectively, variable consideration). Variable consideration, to the extent present, is recognized as the amount to which we are most-likely to be entitled, using all information (historical, current and forecasted) that is reasonably available to us, and only to the extent that a significant reversal in the amount of the cumulative revenue recognized is not probable of occurring in a future period. Differences, if any, between estimates of the amount of variable consideration to which we will be entitled and the actual amount of such variable consideration have not been material in the past. Amounts received or receivable from our customers with respect to variable consideration we expect to refund to our customers is recognized as a current liability and classified as accrued sales discounts and rebates (see Note 7). We report any tax assessed by a governmental authority that we collect from our customers that is both imposed on and concurrent with our revenue-producing activities (such as sales, use, value added and excise taxes) on a net basis (meaning we do not recognize these taxes either in our revenues or in our costs and expenses). Frequently, we receive orders for products to be delivered over dates that may extend across reporting periods. We invoice for each delivery upon shipment and recognize revenue for each distinct shipment when all sales recognition criteria for that shipment have been satisfied. As scheduled delivery dates for these orders are within a one year period, under the optional exemption provided by ASC 606, we do not disclose sales allocated to future shipments of partially completed contracts. The following table disaggregates our net sales by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (as required by ASC 606). Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Net sales - point of origin: Germany $ 256.6 $ 211.9 $ 672.1 $ 704.1 United States 209.3 234.5 623.6 640.2 Canada 70.4 82.3 228.2 236.1 Belgium 75.6 66.4 205.7 205.0 Norway 58.2 49.8 156.8 159.4 Eliminations (205.6 ) (234.6 ) (610.7 ) (632.3 ) Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 Net sales - point of destination: Europe $ 246.0 $ 191.8 $ 652.3 $ 664.2 North America 131.4 142.0 393.5 412.6 Other 87.1 76.5 229.9 235.7 Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 |
Derivatives | We periodically use currency forward contracts to manage a very nominal portion of currency exchange rate risk associated with trade receivables denominated in a currency other than the holder’s functional currency or similar exchange rate risk associated with future sales. Derivatives used to hedge forecasted transactions and specific cash flows associated with financial assets and liabilities denominated in currencies other than the U.S. dollar and which meet the criteria for hedge accounting are designated as cash flow hedges. Consequently, the effective portion of gains and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings. Contracts that do not meet the criteria for hedge accounting are marked-to-market at each balance sheet date with any resulting gain or loss recognized in income currently as part of net currency transaction gains and losses. |
New Accounting Pronouncements, Policy | Adopted On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) On January 1, 2018, we adopted ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Pending Adoption In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Accounts and Other Receivables
Accounts and Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Accounts and Other Receivables | December September 2017 2018 (In millions) Trade receivables $ 301.4 $ 318.5 Recoverable VAT and other receivables 19.0 20.1 Receivable from affiliates: Income taxes, net - Valhi 15.3 - Louisiana Pigment Company, L.P. ("LPC") 8.9 - Other 3.2 3.3 Refundable income taxes .1 - Allowance for doubtful accounts (1.4 ) (1.2 ) Total $ 346.5 $ 340.7 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | December September 2017 2018 (In millions) Raw materials $ 106.9 $ 106.1 Work in process 20.8 26.6 Finished products 191.5 248.8 Supplies 63.1 64.7 Total $ 382.3 $ 446.2 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Classification of Marketable Securities | Fair measurement Market Cost Marketable security level value basis Unrealized gain (In millions) December 31, 2017: Valhi common stock 1 $ 10.6 $ 3.2 $ 7.4 NL and CompX common stocks 1 .1 .1 - Total $ 10.7 $ 3.3 $ 7.4 September 30, 2018: Valhi common stock 1 $ 3.9 $ 3.2 $ .7 NL and CompX common stocks 1 .1 .1 - Total $ 4.0 $ 3.3 $ .7 |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Noncurrent Assets | December September 2017 2018 (In millions) Pension asset $ 1.6 $ 3.3 Deferred financing costs, net 1.1 .9 Other 2.8 1.1 Total $ 5.5 $ 5.3 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Components of Long Term Debt | December 31, September 30, 2017 2018 (In millions) Kronos International, Inc. 3.75% Senior Secured Notes $ 471.1 $ 463.0 Other 3.4 2.9 Total debt 474.5 465.9 Less current maturities .7 .7 Total long-term debt $ 473.8 $ 465.2 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Components of Accounts Payable and Accrued Liabilities | December September 2017 2018 (In millions) Accounts payable $ 107.9 $ 105.8 Employee benefits 27.0 29.1 Accrued sales discounts and rebates 11.7 25.4 Payable to affiliates: LPC 16.2 12.7 Income taxes, net - Valhi - 5.5 Other 43.0 33.8 Total $ 205.8 $ 212.3 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Noncurrent Liabilities | December 31, September 30, 2017 2018 (In millions) Employee benefits $ 8.5 $ 8.3 Other 13.0 13.4 Total $ 21.5 $ 21.7 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Net Sales by Place of Manufacture and to Location of Customer | The following table disaggregates our net sales by place of manufacture (point of origin) and to the location of the customer (point of destination), which are the categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors (as required by ASC 606). Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Net sales - point of origin: Germany $ 256.6 $ 211.9 $ 672.1 $ 704.1 United States 209.3 234.5 623.6 640.2 Canada 70.4 82.3 228.2 236.1 Belgium 75.6 66.4 205.7 205.0 Norway 58.2 49.8 156.8 159.4 Eliminations (205.6 ) (234.6 ) (610.7 ) (632.3 ) Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 Net sales - point of destination: Europe $ 246.0 $ 191.8 $ 652.3 $ 664.2 North America 131.4 142.0 393.5 412.6 Other 87.1 76.5 229.9 235.7 Total $ 464.5 $ 410.3 $ 1,275.7 $ 1,312.5 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic defined benefit pension cost are presented in the table below. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Service cost $ 3.0 $ 2.9 $ 8.5 $ 8.8 Interest cost 3.6 3.5 10.3 10.7 Expected return on plan assets (2.6 ) (3.3 ) (7.6 ) (9.9 ) Amortization of prior service cost - .1 .2 .2 Recognized actuarial losses 3.5 3.3 10.0 10.3 Total $ 7.5 $ 6.5 $ 21.4 $ 20.1 The components of net periodic postretirement benefits other than pension (“OPEB”) cost are presented in the table below. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Service cost $ - $ - $ .1 $ .1 Interest cost .1 .1 .2 .2 Amortization of prior service credit (.1 ) (.1 ) (.4 ) (.4 ) Recognized actuarial losses - .1 .1 .2 Total $ - $ .1 $ - $ .1 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Effective Income Tax Rate Reconciliation and Comprehensive Provision for Income Taxes Allocation | Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Expected tax expense, at U.S. federal statutory income tax rate of 35% in 2017 and 21% in 2018 $ 28.0 $ 9.8 $ 67.6 $ 53.9 Non-U.S. tax rates (3.4 ) 3.6 (8.2 ) 18.6 Incremental net tax expense on earnings and losses of U.S. and non-U.S. companies .2 1.8 6.8 2.9 Valuation allowance (7.8 ) - (170.4 ) - Adjustment to reserve for uncertain tax positions, net (8.1 ) - (7.6 ) 1.4 Transition tax - (1.7 ) - (1.7 ) Canada-Germany APA (3.2 ) - (3.2 ) (1.4 ) Other, net .4 .6 1.0 1.8 Income tax expense (benefit) $ 6.1 $ 14.1 $ (114.0 ) $ 75.5 Comprehensive provision for income taxes (benefit) allocable to: Net income $ 6.1 $ 14.1 $ (114.0 ) $ 75.5 Other comprehensive income (loss): Currency translation 6.4 - 19.7 - Pension plans 1.1 1.0 3.2 3.2 OPEB plans - - (.1 ) (.1 ) Marketable securities (.3 ) - (.6 ) - Interest rate swap 1.0 - 1.1 - Total $ 14.3 $ 15.1 $ (90.7 ) $ 78.6 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss are presented in the table below. See Note 4 for further discussion of our marketable securities, Note 10 for discussion of our defined benefit pension plans and OPEB plans, and Note 14 for discussion of our interest rate swap contract. Three months ended Nine months ended September 30, September 30, 2017 2018 2017 2018 (In millions) Accumulated other comprehensive loss, net of tax: Currency translation: Balance at beginning of period $ (245.8 ) $ (226.4 ) $ (269.6 ) $ (211.9 ) Other comprehensive income (loss) 29.9 4.5 53.7 (10.0 ) Balance at end of period $ (215.9 ) $ (221.9 ) $ (215.9 ) $ (221.9 ) Defined benefit pension plans: Balance at beginning of period $ (180.9 ) $ (167.9 ) $ (184.8 ) $ (172.8 ) Other comprehensive income - amortization of prior service cost and net losses included in net periodic pension cost 2.4 2.4 6.3 7.3 Balance at end of period $ (178.5 ) $ (165.5 ) $ (178.5 ) $ (165.5 ) OPEB plans: Balance at beginning of period $ 1.6 $ 1.0 $ 1.8 $ 1.2 Other comprehensive loss - amortization of prior service credit and net losses included in net periodic OPEB cost - - (.2 ) (.2 ) Balance at end of period $ 1.6 $ 1.0 $ 1.6 $ 1.0 Marketable securities: Balance at beginning of period $ 1.2 $ - $ 1.8 $ 4.8 Change in accounting principle - - - (4.8 ) Balance at beginning of period, as adjusted 1.2 - 1.8 - Other comprehensive loss - unrealized losses arising during the period (.6 ) - (1.2 ) - Balance at end of period $ .6 $ - $ .6 $ - Interest rate swap: Balance at beginning of period $ (1.8 ) $ - $ (2.0 ) $ - Other comprehensive income (loss): Unrealized losses arising during the period (.7 ) - (1.5 ) - Reclassification adjustment for amounts included in earnings 2.5 - 3.5 - Balance at end of period $ - $ - $ - $ - Total accumulated other comprehensive loss: Balance at beginning of period $ (425.7 ) $ (393.3 ) $ (452.8 ) $ (378.7 ) Change in accounting principle - - - (4.8 ) Balance at beginning of period, as adjusted (425.7 ) (393.3 ) (452.8 ) (383.5 ) Other comprehensive income (loss) 33.5 6.9 60.6 (2.9 ) Balance at end of period $ (392.2 ) $ (386.4 ) $ (392.2 ) $ (386.4 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Valuation of Financial Instruments Recorded on Fair Value Basis | The following table summarizes the valuation of our financial instruments recorded on a fair value basis as of December 31, 2017 and September 30, 2018: Fair Value Measurements Quoted Significant prices in other Significant active observable unobservable markets inputs inputs Total (Level 1) (Level 2) (Level 3) (In millions) Asset: December 31, 2017 - Noncurrent marketable securities (See Note 4) $ 10.7 $ 10.7 $ - $ - September 30, 2018 - Noncurrent marketable securities (See Note 4) $ 4.0 $ 4.0 $ - $ - |
Financial Instruments not Carried at Fair Value but which Require Fair Value Disclosure | The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure: December 31, 2017 September 30, 2018 Carrying amount Fair value Carrying amount Fair value (In millions) Cash, cash equivalents and restricted cash $ 323.7 $ 323.7 $ 433.4 $ 433.4 Long-term debt - Fixed rate Senior Notes 471.1 495.1 463.0 455.1 Common stockholders' equity 754.3 2,986.8 873.4 1,883.5 |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018 | |
Valhi Inc | Kronos Worldwide, Inc. | |
Organization And Basis Of Presentation [Line Items] | |
Ownership percentage in subsidiary | 50.00% |
Valhi Inc | NL Industries Inc. | |
Organization And Basis Of Presentation [Line Items] | |
Ownership percentage in company | 83.00% |
NL Industries Inc. | Kronos Worldwide, Inc. | |
Organization And Basis Of Presentation [Line Items] | |
Ownership percentage | 30.00% |
Contran | |
Organization And Basis Of Presentation [Line Items] | |
Controlling interest description | Consequently, Ms. Simmons and Ms. Connelly may be deemed to control Contran, Valhi, NL and us. |
Contran | Valhi Inc | |
Organization And Basis Of Presentation [Line Items] | |
Ownership percentage of parent company held by related party | 92.00% |
Accounts and Other Receivable_2
Accounts and Other Receivables - Accounts and Other Receivables (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts Notes And Loans Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (1.2) | $ (1.4) |
Total | 340.7 | 346.5 |
Trade receivables | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts and other receivables | 318.5 | 301.4 |
Recoverable VAT and other receivables | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts and other receivables | 20.1 | 19 |
Other | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from affiliates | $ 3.3 | 3.2 |
Refundable income taxes | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Refundable income taxes | 0.1 | |
Valhi | Income taxes, net | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from affiliates | 15.3 | |
Louisiana Pigment Company, L.P. ("LPC'') | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Receivable from affiliates | $ 8.9 |
Inventories, Net - Schedule of
Inventories, Net - Schedule of Inventories, Net (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 106.1 | $ 106.9 |
Work in process | 26.6 | 20.8 |
Finished products | 248.8 | 191.5 |
Supplies | 64.7 | 63.1 |
Total | $ 446.2 | $ 382.3 |
Marketable Securities - Classif
Marketable Securities - Classification of Marketable Securities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Marketable Securities [Line Items] | ||
Market value | $ 4 | $ 10.7 |
Cost basis | 3.3 | 3.3 |
Unrealized gain | 0.7 | 7.4 |
Level 1 | Common stock | Valhi | ||
Marketable Securities [Line Items] | ||
Market value | 3.9 | 10.6 |
Cost basis | 3.2 | 3.2 |
Unrealized gain | 0.7 | 7.4 |
Level 1 | Common stock | NL And CompX | ||
Marketable Securities [Line Items] | ||
Market value | 0.1 | 0.1 |
Cost basis | $ 0.1 | $ 0.1 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - Valhi Inc - Common stock - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Marketable Securities [Line Items] | ||
Investments in publicly-traded shares | 1.7 | 1.7 |
Quoted market price of per share | $ 2.28 | $ 6.17 |
Loss on marketable equity securities | $ (6.7) |
Other Noncurrent Assets - Sched
Other Noncurrent Assets - Schedule of Other Noncurrent Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Disclosure Other Non Current Assets Schedule Of Other Non Current Assets [Abstract] | ||
Pension asset | $ 3.3 | $ 1.6 |
Deferred financing costs, net | 0.9 | 1.1 |
Other | 1.1 | 2.8 |
Total | $ 5.3 | $ 5.5 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Detail) € in Millions, $ in Millions | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Kronos International, Inc. 3.75% Senior Secured Notes | $ 463 | $ 471.1 | |
Other | 2.9 | 3.4 | |
Total debt | 465.9 | 474.5 | |
Less current maturities | 0.7 | 0.7 | |
Total long-term debt | 465.2 | 473.8 | |
Kronos International, Inc | 3.75% Senior Secured Notes due September 15, 2025 | |||
Debt Instrument [Line Items] | |||
Kronos International, Inc. 3.75% Senior Secured Notes | $ 463 | € 400 | $ 471.1 |
Long-Term Debt - Senior Secured
Long-Term Debt - Senior Secured Notes - Additional Information (Detail) € in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Aggregate principal amount outstanding | $ 463 | $ 471.1 | |
Kronos International, Inc | 3.75% Senior Secured Notes due September 15, 2025 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount outstanding | $ 463 | € 400 | $ 471.1 |
Debt instrument interest rate | 3.75% | 3.75% | |
Unamortized debt issuance costs | $ 6.7 | ||
Debt instrument maturity date | Sep. 15, 2025 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facilities - Additional Information (Detail) - 9 months ended Sep. 30, 2018 € in Millions | USD ($) | EUR (€) |
European Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Borrowings under credit facility during the period | $ 0 | |
Repayments of Lines of Credit | 0 | |
Amount available for Borrowing | 105,700,000 | € 90 |
North American Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Borrowings under credit facility during the period | 0 | |
Repayments of Lines of Credit | 0 | |
Amount available for additional borrowing | $ 106,200,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts Payable And Accrued Liabilities [Line Items] | ||
Accounts payable | $ 105.8 | $ 107.9 |
Employee benefits | 29.1 | 27 |
Accrued sales discounts and rebates | 25.4 | 11.7 |
Other | 33.8 | 43 |
Total | 212.3 | 205.8 |
LPC | ||
Accounts Payable And Accrued Liabilities [Line Items] | ||
Payable to affiliate | 12.7 | $ 16.2 |
Valhi | Income taxes, net | ||
Accounts Payable And Accrued Liabilities [Line Items] | ||
Payable to affiliate | $ 5.5 |
Other Noncurrent Liabilities -
Other Noncurrent Liabilities - Components of Other Noncurrent Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Noncurrent [Abstract] | ||
Employee benefits | $ 8.3 | $ 8.5 |
Other | 13.4 | 13 |
Total | $ 21.7 | $ 21.5 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Net Sales by Place of Manufacture and to Location of Customer (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | $ 410.3 | $ 464.5 | $ 1,312.5 | $ 1,275.7 |
ASC 606 | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 410.3 | 464.5 | 1,312.5 | 1,275.7 |
ASC 606 | Point of origin | Reportable Geographical Components | Germany | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 211.9 | 256.6 | 704.1 | 672.1 |
ASC 606 | Point of origin | Reportable Geographical Components | United States | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 234.5 | 209.3 | 640.2 | 623.6 |
ASC 606 | Point of origin | Reportable Geographical Components | Canada | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 82.3 | 70.4 | 236.1 | 228.2 |
ASC 606 | Point of origin | Reportable Geographical Components | Belgium | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 66.4 | 75.6 | 205 | 205.7 |
ASC 606 | Point of origin | Reportable Geographical Components | Norway | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 49.8 | 58.2 | 159.4 | 156.8 |
ASC 606 | Point of origin | Eliminations | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | (234.6) | (205.6) | (632.3) | (610.7) |
ASC 606 | Point of destination | Europe | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 191.8 | 246 | 664.2 | 652.3 |
ASC 606 | Point of destination | North America | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | 142 | 131.4 | 412.6 | 393.5 |
ASC 606 | Point of destination | Other | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Net sales | $ 76.5 | $ 87.1 | $ 235.7 | $ 229.9 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2.9 | $ 3 | $ 8.8 | $ 8.5 |
Interest cost | 3.5 | 3.6 | 10.7 | 10.3 |
Expected return on plan assets | (3.3) | (2.6) | (9.9) | (7.6) |
Amortization of prior service cost (credit) | 0.1 | 0.2 | 0.2 | |
Recognized actuarial losses | 3.3 | 3.5 | 10.3 | 10 |
Total | 6.5 | 7.5 | 20.1 | 21.4 |
OPEB | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.1 | 0.1 | ||
Interest cost | 0.1 | 0.1 | 0.2 | 0.2 |
Amortization of prior service cost (credit) | (0.1) | $ (0.1) | (0.4) | (0.4) |
Recognized actuarial losses | 0.1 | 0.2 | $ 0.1 | |
Total | $ 0.1 | $ 0.1 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Compensation And Retirement Disclosure [Abstract] | |
Expected contributions for pension plans in 2018 | $ 17 |
Income Taxes - Components of In
Income Taxes - Components of Income Taxes and Comprehensive Provision for Income Taxes Allocation (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule Of Income Tax [Line Items] | |||||
Expected tax expense, at U.S. federal statutory income tax rate of 35% in 2017 and 21% in 2018 | $ 9.8 | $ 28 | $ 53.9 | $ 67.6 | |
Non-U.S. tax rates | 3.6 | (3.4) | 18.6 | (8.2) | |
Incremental net tax expense on earnings and losses of U.S. and non-U.S. companies | 1.8 | 0.2 | 2.9 | 6.8 | |
Valuation allowance | (7.8) | (170.4) | |||
Adjustment to reserve for uncertain tax positions, net | (8.1) | 1.4 | (7.6) | ||
Transition tax | (1.7) | $ 76.2 | (1.7) | ||
Other, net | 0.6 | 0.4 | 1.8 | 1 | |
Income tax expense (benefit) | 14.1 | 6.1 | 75.5 | (114) | |
Comprehensive provision for income taxes (benefit) allocable to: | |||||
Net income | 14.1 | 6.1 | 75.5 | (114) | |
Other comprehensive income (loss): | |||||
Currency translation | 6.4 | 19.7 | |||
Marketable securities | (0.3) | (0.6) | |||
Interest rate swap | 1 | 1.1 | |||
Total | 15.1 | 14.3 | 78.6 | (90.7) | |
Canada - Germany APA | |||||
Schedule Of Income Tax [Line Items] | |||||
Canada-Germany APA | (3.2) | (1.4) | (3.2) | ||
Defined Benefit Pension Plans | |||||
Other comprehensive income (loss): | |||||
Benefit plans | $ 1 | $ 1.1 | 3.2 | 3.2 | |
OPEB | |||||
Other comprehensive income (loss): | |||||
Benefit plans | $ (0.1) | $ (0.1) |
Income Taxes - Components of _2
Income Taxes - Components of Income Taxes and Comprehensive Provision for Income Taxes Allocation (Parenthetical) (Detail) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory income tax rate | 21.00% | 35.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2018 |
Income Tax [Line Items] | |||||||||||
U.S. Federal statutory income tax rate | 21.00% | 35.00% | |||||||||
Transition tax | $ (1.7) | $ 76.2 | $ (1.7) | ||||||||
Income tax liability payable period | 8 years | ||||||||||
Aggregate Transition tax installments payments made | 10.7 | 10.7 | |||||||||
Noncurrent payable to affiliate | $ 70.1 | 58.1 | 70.1 | $ 70.1 | 58.1 | $ 70.1 | |||||
Income tax expense (benefit) related to increase (decrease) in reserve for uncertain tax positions | $ (8.1) | $ 1.4 | $ (7.6) | ||||||||
Canada - Germany APA | |||||||||||
Income Tax [Line Items] | |||||||||||
Advance Pricing Agreement, description | None of our U.S. and non-U.S. tax returns are currently under examination. As a result of prior audits in certain jurisdictions, which are now settled, in 2008 we filed Advance Pricing Agreement Requests with the tax authorities in the U.S., Canada and Germany. These requests have been under review with the respective tax authorities since 2008 and prior to 2016, it was uncertain whether an agreement would be reached between the tax authorities and whether we would agree to execute and finalize such agreements. | ||||||||||
Canada - Germany APA | German Subsidiary | |||||||||||
Income Tax [Line Items] | |||||||||||
Noncash income tax benefit related to APA tax settlement payment | $ 1.4 | ||||||||||
Canada - Germany APA | Canadian Subsidiary | |||||||||||
Income Tax [Line Items] | |||||||||||
Income tax expense (benefit) related to increase (decrease) in reserve for uncertain tax positions | (8.1) | ||||||||||
Non-cash income tax benefit related to increase in German NOLs | 2.6 | ||||||||||
Cash tax refund | 0.6 | ||||||||||
European and Canadian Subsidiaries | |||||||||||
Income Tax [Line Items] | |||||||||||
Deferred income tax on undistributed earnings of european and canadian subsidiaries | 4.5 | $ 2.5 | |||||||||
Valhi | Income Tax Payable | |||||||||||
Income Tax [Line Items] | |||||||||||
Income tax expense paid in current period | $ 4.6 | $ 4.6 | |||||||||
Payable to affiliate | $ 63.8 | ||||||||||
Noncurrent payable to affiliate | 58.1 | ||||||||||
Current payable to affiliate | $ 5.7 | ||||||||||
Valhi | Income Tax Receivable | |||||||||||
Income Tax [Line Items] | |||||||||||
Prior period income tax expense paid in current fiscal year | 6.1 | 6.1 | 6.1 | 6.1 | |||||||
Maximum | |||||||||||
Income Tax [Line Items] | |||||||||||
Percentage of annual usage limitation on net operating loss carryforward | 80.00% | ||||||||||
Reversal of Valuation Allowance | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | (7.8) | (24.1) | $ (149.9) | ||||||||
Effect of Currency Exchange Rates | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | 13.7 | ||||||||||
Germany | Reversal of Valuation Allowance | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | (141.9) | ||||||||||
Germany | Corporate Purposes | |||||||||||
Income Tax [Line Items] | |||||||||||
Net operating loss carryforwards | 652 | 652 | 652 | 652 | |||||||
Germany | Trade Tax Purposes | |||||||||||
Income Tax [Line Items] | |||||||||||
Net operating loss carryforwards | 0.5 | 0.5 | 0.5 | 0.5 | |||||||
Belgium | Reversal of Valuation Allowance | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | (8) | ||||||||||
Belgium | Corporate Purposes | |||||||||||
Income Tax [Line Items] | |||||||||||
Net operating loss carryforwards | $ 50 | $ 50 | $ 50 | 50 | |||||||
Germany and Belgian | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | $ (7.8) | (12.7) | $ (186.7) | ||||||||
Germany and Belgian | Current Periods Net Operating Loss Utilization | |||||||||||
Income Tax [Line Items] | |||||||||||
Increase (decrease) in non-cash deferred income tax asset valuation allowance | $ (7.7) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | $ 754.3 | ||||
Balance as adjusted | 754.3 | ||||
Ending Balance | $ 873.4 | 873.4 | |||
Currency Translation | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (226.4) | $ (245.8) | (211.9) | $ (269.6) | |
Other comprehensive income (loss) | 4.5 | 29.9 | (10) | 53.7 | |
Ending Balance | (221.9) | (215.9) | (221.9) | (215.9) | |
Marketable Securities | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | 1.2 | 4.8 | 1.8 | ||
Change in accounting principle | (4.8) | (4.8) | |||
Balance as adjusted | 1.2 | 1.8 | |||
Other comprehensive income (loss) | (0.6) | (1.2) | |||
Ending Balance | 0.6 | 0.6 | |||
Accumulated Defined Benefit Plans Adjustment | Defined Benefit Pension Plans | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (167.9) | (180.9) | (172.8) | (184.8) | |
Other comprehensive income (loss) | 2.4 | 2.4 | 7.3 | 6.3 | |
Ending Balance | (165.5) | (178.5) | (165.5) | (178.5) | |
Accumulated Defined Benefit Plans Adjustment | OPEB Plans | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | 1 | 1.6 | 1.2 | 1.8 | |
Other comprehensive income (loss) | (0.2) | (0.2) | |||
Ending Balance | 1 | 1.6 | 1 | 1.6 | |
Interest Rate Swap | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (1.8) | (2) | |||
Other comprehensive income (loss) | (0.7) | (1.5) | |||
Reclassification adjustment for amounts included in earnings | 2.5 | 3.5 | |||
Total Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (393.3) | (425.7) | (378.7) | (452.8) | |
Change in accounting principle | (4.8) | (4.8) | $ (4.8) | ||
Balance as adjusted | (393.3) | (425.7) | (383.5) | (452.8) | |
Other comprehensive income (loss) | 6.9 | 33.5 | (2.9) | 60.6 | |
Ending Balance | $ (386.4) | $ (392.2) | $ (386.4) | $ (392.2) |
Financial Instruments - Valuati
Financial Instruments - Valuation of Financial Instruments Recorded on Fair Value Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Noncurrent marketable securities | $ 4 | $ 10.7 |
Fair Value Measurements Recurring | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Noncurrent marketable securities | 4 | 10.7 |
Fair Value Measurements Recurring | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Noncurrent marketable securities | $ 4 | $ 10.7 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018EUR (€)DerivativeContract | Dec. 31, 2017DerivativeContract | |
Senior Notes | ||
Financial Instrument At Fair Value [Line Items] | ||
Debt instrument base principal amount | € 1,000 | |
Debt instrument estimated market price per €1000 principal amount | € 969 | |
Currency Forward Contracts | ||
Financial Instrument At Fair Value [Line Items] | ||
Number of derivative contacts outstanding | DerivativeContract | 0 | 0 |
Financial Instruments - Financi
Financial Instruments - Financial Instruments not Carried at Fair Value but which Require Fair Value Disclosure (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||||
Cash, cash equivalents and restricted cash, Carrying amount | $ 433.4 | $ 323.7 | $ 318 | $ 52.3 |
Fixed rate Senior Notes, Carrying amount | 463 | 471.1 | ||
Common stockholders' equity, Carrying amount | 873.4 | 754.3 | ||
Cash, cash equivalents and restricted cash, Fair value | 433.4 | 323.7 | ||
Fixed rate Senior Notes, Fair value | 455.1 | 495.1 | ||
Common stockholders' equity, Fair value | $ 1,883.5 | $ 2,986.8 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Jan. 01, 2018 | |
ASU 2017-07 | Cost of Sales | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Reclassification adjustment to other components of net periodic pension and OPEB cost | $ 2.8 | $ 8 | |
ASU 2017-07 | Selling, General and Administrative Expenses | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Reclassification adjustment to other components of net periodic pension and OPEB cost | $ 1.7 | $ 4.8 | |
ASU 2016-01 | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Accumulated other comprehensive income related to marketable securities reclassified to beginning retained earnings | $ 4.8 |