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Business Segment Information
 6 Months Ended
Jun. 30, 2011
Business Segment Information  
Business Segment Information

Note 2 - Business segment information:

 

Business segment

   

Entity

    % controlled at
June  30, 2011		  
Chemicals    Kronos      80 % 
Component products    CompX      87 % 
Waste management    WCS      100 % 

Our control of Kronos includes 50% we hold directly and 30% held directly by NL. We own 83% of NL. Our control of CompX is through NL.

 

     Three months ended
June  30,		     Six months ended
June 30,		  
     2010     2011     2010     2011  
     (In millions)  

Net sales:

         

Chemicals

    $ 380.1      $ 537.6      $ 699.8      $ 958.0   

Component products

      34.4        35.2        67.2        70.0   

Waste management

      1.2        .3        5.5        .8   
                                

Total net sales

    $ 415.7      $ 573.1      $ 772.5      $ 1,028.8   
                                

Cost of sales:

         

Chemicals

    $ 295.3      $ 341.2      $ 555.3      $ 615.8   

Component products

      25.5        25.4        49.2        51.5   

Waste management

      5.5        5.8        12.5        11.9   
                                

Total cost of sales

    $ 326.3      $ 372.4      $ 617.0      $ 679.2   
                                

Gross margin:

         

Chemicals

    $ 84.8      $ 196.4      $ 144.5      $ 342.2   

Component products

      8.9        9.8        18.0        18.5   

Waste management

      (4.3 )      (5.5 )      (7.0 )      (11.1 ) 
                                

Total gross margin

    $ 89.4      $ 200.7      $ 155.5      $ 349.6   
                                

Operating income (loss):

         

Chemicals

    $ 40.4      $ 145.9      $ 63.0      $ 249.4   

Component products

      3.0        3.1        4.7        11.9   

Waste management

      (8.0 )      (9.2 )      (14.7 )      (18.2 ) 
                                

Total operating income

      35.4        139.8        53.0        243.1   

Equity in earnings of investee

      (.2 )      (.1 )      (.1 )      (.2 ) 

General corporate items:

         

Securities earnings

      6.6        7.4        13.1        14.8   

Insurance recoveries

      .1        .1        18.3        .5   

Litigation settlement expense

      —          —          (32.2 )      —     

General expenses, net

      (6.7 )      (16.8 )      (14.4 )      (23.4 ) 

Loss on prepayment of debt

      —          —          —          (3.3 ) 

Interest expense

      (17.0 )      (15.9 )      (34.4 )      (33.1 ) 
                                

Income before income taxes

    $ 18.2      $ 114.5      $ 3.3      $ 198.4   
                                

 

Segment results we report may differ from amounts separately reported by our various subsidiaries and affiliates due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material. We received approximately $7.5 million for a patent litigation settlement in the first quarter of 2011 related to CompX which is included in the determination of its operating income. See Notes 11 and 14. Of the $33.3 million aggregate litigation settlement and contract termination expense we recognized in the first quarter of 2010, $1.1 million relates to WCS and is included in the determination of its operating loss, and the remaining $32.2 million relates to NL. Please refer to Notes 9 and 17 in our 2010 Annual Report.

In July of 2011, CompX completed the acquisition of an ergonomic component products business for initial cash consideration of approximately $5 million, with additional cash consideration of up to approximately $1.5 million payable in the first quarter of 2013 contingent upon the acquired business achieving certain specified financial targets. The acquisition is intended to expand CompX's ergonomics product line. The business had net sales of $4.2 million in 2010 and the pro-forma effect to us, assuming this acquisition had been completed as of January 1, 2011, is not material.