SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934





For the quarter ended   June 30, 2005           Commission file number 1-31763
                        -------------                                  -------




                             KRONOS WORLDWIDE, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)




           Delaware                                               76-0294959
-------------------------------                              -------------------
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)


             5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697
--------------------------------------------------------------------------------
            (Address of principal executive offices)     (Zip Code)



Registrant's telephone number, including area code:             (972) 233-1700
                                                                ----------------




Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X  No
                     ---   ---



Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes X  No
                                                                  ---   ---



Number of shares of the Registrant's  common stock outstanding on July 29, 2005:
48,949,549.






                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                                      INDEX




                                                                          Page
                                                                         number

Part I.      FINANCIAL INFORMATION

  Item 1.    Financial Statements

             Consolidated Balance Sheets -
              December 31, 2004; June 30, 2005 (Unaudited)                  3

             Consolidated Statements of Income -
              Three months and six months ended
               June 30, 2004 and 2005 (Unaudited)                           5

             Consolidated Statements of Comprehensive Income -
              Six months ended June 30, 2004 and 2005 (Unaudited)           6

             Consolidated Statement of Stockholders' Equity -
              Six months ended June 30, 2005 (Unaudited)                    7

             Consolidated Statements of Cash Flows -
              Six months ended June 30, 2004 and 2005 (Unaudited)           8

             Notes to Consolidated Financial Statements (Unaudited)        10

  Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          17

  Item 4.    Controls and Procedures                                       27

Part II.     OTHER INFORMATION

  Item 1.    Legal Proceedings                                             28

  Item 4.    Submission of Matters to a Vote of Security Holders           28

  Item 6.    Exhibits                                                      29

                                      -2-
<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)
<TABLE>


               ASSETS                                   December 31,        June 30,
                                                            2004              2005
                                                        ------------       -----------
                                                                           (Unaudited)
 Current assets:
<S>                                                     <C>                 <C>
   Cash and cash equivalents                            $    60,790         $    17,645
   Restricted cash                                            1,529               1,047
   Accounts and other receivables                           190,319             219,658
   Refundable income taxes                                    3,272                 991
   Receivable from affiliates                                    16                   -
   Inventories                                              233,858             234,932
   Prepaid expenses and other                                 4,529               6,514
   Deferred income taxes                                      1,205               3,214
                                                        -----------         -----------

       Total current assets                                 495,518             484,001
                                                        -----------         -----------

 Other assets:
   Investment in TiO2 manufacturing joint venture           120,251             119,601
   Deferred income taxes                                    238,284             232,641
   Other                                                     32,340              27,786
                                                        -----------         -----------

       Total other assets                                   390,875             380,028
                                                        -----------         -----------

 Property and equipment:
   Land                                                      35,511              31,835
   Buildings                                                196,983             180,348
   Equipment                                                857,714             785,192
   Mining properties                                         71,980              65,733
   Construction in progress                                  16,753              18,277
                                                        -----------         -----------
                                                          1,178,941           1,081,385
   Less accumulated depreciation and amortization           712,051             667,068
                                                        -----------         -----------

       Net property and equipment                           466,890             414,317
                                                        -----------         -----------

                                                        $ 1,353,283         $ 1,278,346
                                                        ===========         ===========
</TABLE>


                                      -3-
<PAGE>







                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)
<TABLE>


    LIABILITIES AND STOCKHOLDER'S EQUITY              December 31,         June 30,
                                                          2004               2005
                                                      ------------       ------------
                                                                          (Unaudited)

 Current liabilities:
<S>                                                   <C>                  <C>
   Current maturities of long-term debt               $    13,792         $       156
   Accounts payable and accrued liabilities               170,009             140,988
   Payable to affiliates                                    9,231              10,250
   Income taxes                                            17,129              19,202
   Deferred income taxes                                    2,722               2,665
                                                      -----------         -----------


       Total current liabilities                          212,883             173,261
                                                      -----------         -----------


 Noncurrent liabilities:
   Long-term debt                                         519,403             461,154
   Deferred income taxes                                   60,081              58,204
   Accrued pension costs                                   61,300              56,350
   Accrued postretirement benefits costs                   11,288              10,790
   Other                                                   17,407              13,130
                                                      -----------         -----------

       Total noncurrent liabilities                       669,479             599,628
                                                      -----------         -----------

 Minority interest                                             76                  72
                                                      -----------         -----------

 Stockholders' equity:
   Common stock                                               489                 489
   Additional paid-in capital                           1,060,643           1,061,167
   Retained deficit                                      (463,352)           (433,560)
   Accumulated other comprehensive loss:
     Currency translation                                 (88,181)            (83,957)
     Pension liabilities                                  (38,754)            (38,754)
                                                      -----------         -----------

       Total stockholders' equity                         470,845             505,385
                                                      -----------         -----------

                                                      $ 1,353,283         $ 1,278,346
                                                      ===========         ===========
</TABLE>



Commitments and contingencies (Notes 9 and 11)



          See accompanying notes to consolidated financial statements.

                                      -4-
<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                      (In thousands, except per share data)

                                   (Unaudited)
<TABLE>

                                                            Three months ended               Six months ended
                                                                 June 30,                        June 30,
                                                        --------------------------       ------------------------
                                                            2004            2005            2004           2005
                                                            ----            ----            ----           ----
                                                         (Restated)                      (Restated)

<S>                                                      <C>             <C>             <C>            <C>
Net sales                                                $ 295,789       $ 311,688       $ 559,056      $ 603,562
Cost of sales                                              227,505         217,048         429,736        424,725
                                                         ---------       ---------       ---------      ---------

    Gross margin                                            68,284          94,640         129,320        178,837

Selling, general and administrative expense                 34,970          37,844          70,214         75,097
Other operating income (expense):
  Currency transaction gains, net                              302           2,395             556          3,323
  Disposition of property and equipment                         21            (120)             (2)          (154)
  Other income                                               6,266              76           6,280            112
  Corporate expense                                           (841)         (1,448)         (1,279)         (2,873)
                                                         ---------       ---------       ---------      ---------

    Income from operations                                  39,062          57,699          64,661        104,148

Other income (expense):
  Trade interest income                                        206             142             412            220
  Other interest income                                        222             279             373            620
  Securities transaction gain                                 -              5,439            -             5,439
  Interest expense to affiliates                            (4,476)           -             (8,951)          -
  Interest expense                                          (8,594)        (11,625)        (17,809)       (23,397)
                                                         ---------       ---------       ---------      ---------

    Income before income taxes and minority interest        26,420          51,934          38,686         87,030

 Provision (benefit) for income taxes                     (258,381)         19,066        (255,931)        32,757

Minority interest in after-tax earnings                         12               3              20              7
                                                         ---------       ---------       ---------      ---------

    Net income                                           $ 284,789       $  32,865       $ 294,597      $   54,266
                                                         =========       =========       =========      ==========

Cash dividend per share                                  $     .25       $     .25       $     .50      $      .50
                                                         =========       =========       =========      ==========

Basic and diluted net income per share                   $    5.82       $     .67       $    6.02      $     1.11
                                                         =========       =========       =========      ==========

Basic and diluted weighted-average shares used in
   the calculation of net income per share                  48,944         48,948           48,944          48,947
                                                         =========       =========       =========      ==========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      -5-
<PAGE>


                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                     Six months ended June 30, 2004 and 2005

                                 (In thousands)

                                   (Unaudited)
<TABLE>

                                                              2004            2005
                                                              ----            ----
                                                           (Restated)

<S>                                                        <C>              <C>
Net income                                                 $ 294,597        $ 54,266

Other comprehensive income (loss),
   net of tax - currency translation adjustment               (5,763)          4,224
                                                           ---------        --------

          Comprehensive income                             $ 288,834        $ 58,490
                                                           =========        ========
</TABLE>





          See accompanying notes to consolidated financial statements.


                                      -6-
<PAGE>








                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                         Six months ended June 30, 2005

                                 (In thousands)

                                   (Unaudited)
<TABLE>

                                                                              Accumulated other
                                                                              comprehensive loss
                                              Additional                    ----------------------        Total
                                   Common       paid-in       Retained       Currency      Pension     stockholder's
                                    stock       capital        deficit     translation   liabilities      equity
                                  -------    -----------     ----------    -----------   -----------   -------------

<S>                  <C> <C>      <C>         <C>            <C>            <C>           <C>            <C>
 Balance at December 31, 2004     $  489      $1,060,643     $(463,352)     $(88,181)     $(38,754)      $470,845

 Net income                            -               -        54,266             -          -            54,266

 Dividends                             -               -       (24,474)            -          -           (24,474)

 Other comprehensive income         -               -             -            4,224          -             4,224

 Other                              -                524          -             -             -               524
                                  ------      ----------     ---------      --------      --------       --------

 Balance at June 30, 2005         $  489      $1,061,167     $(433,560)     $(83,957)     $(38,754)      $505,385
                                  ======      ==========     =========      ========      ========       ========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      -7-
<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Six months ended June 30, 2004 and 2005

                                 (In thousands)
                                   (Unaudited)


<TABLE>

                                                           2004               2005
                                                           ----               ----
                                                        (Restated)
 Cash flows from operating activities:
<S>                                                     <C>                <C>
   Net income                                           $ 294,597          $  54,266
   Depreciation and amortization                           21,806             22,136
   Noncash interest expense                                 1,222              1,546
   Deferred income taxes                                 (262,365)            12,615
   Minority interest                                           20                  7
   Net loss from disposition of property
     and equipment                                              2                154
   Securities transaction gain                                  -             (5,439)
   Distributions from TiO2 manufacturing
     joint venture, net                                     8,300                650
   Pension cost, net                                          227             (2,639)
   Other postretirement benefits, net                        (427)              (437)
   Other, net                                                 949             (1,772)
   Change in assets and liabilities:
     Accounts and other receivables                       (48,004)           (46,936)
     Inventories                                           51,362            (20,328)
     Prepaid expenses                                         414             (2,978)
     Accounts payable and accrued liabilities             (26,059)           (12,054)
     Income taxes                                          28,016              5,683
     Accounts with affiliates                               1,858              2,900
     Other, net                                            (4,461)            (4,969)
                                                        ---------          ---------

         Net cash provided by operating activities         67,457              2,405
                                                        ---------          ---------

 Cash flows from investing activities:
   Capital expenditures                                   (10,828)           (11,524)
   Change in restricted cash equivalents                      273                437
   Proceeds from disposal of interest in
     Norwegian smelting operation                               -              3,542
   Other, net                                                  84                 32
                                                        ---------          ---------

         Net cash used in investing activities            (10,471)            (7,513)
                                                        ---------          ---------

 Cash flows from financing activities:
   Indebtedness:
     Borrowings                                            99,968               -
     Principal payments                                   (99,994)           (13,015)
   Dividends paid                                         (24,473)           (24,474)
   Other, net                                                -                   641
                                                        ---------          ---------

         Net cash used in financing activities            (24,499)           (36,848)
                                                        ---------          ---------

</TABLE>


                                      -8-
<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                     Six months ended June 30, 2004 and 2005

                                 (In thousands)
                                   (Unaudited)

<TABLE>

                                                           2004               2005
                                                           ----               ----
                                                        (Restated)

 Cash and cash equivalents - net change from:
<S>                                                      <C>               <C>
   Operating, investing and financing activities         $ 32,487          $(41,956)
   Currency translation                                        71            (1,189)
 Cash and cash equivalents at beginning of period          55,876            60,790
                                                         --------          --------

 Cash and cash equivalents at end of period              $ 88,434          $ 17,645
                                                         ========          ========


 Supplemental disclosures:
   Cash paid (received) for:
     Interest, net of amounts capitalized                $ 25,638          $ 21,360
     Income taxes, net                                    (22,208)           13,016

     Noncash investing activity - inventory
        received as partial consideration
        for disposal of interest in Norwegian
        smelting operation                               $   -             $  1,897

</TABLE>



          See accompanying notes to consolidated financial statements.

                                      -9-
<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Note 1 - Organization and basis of presentation:

     Kronos  Worldwide,  Inc.  ("Kronos")  (NYSE: KRO) is a subsidiary of Valhi,
Inc.  (NYSE:  VHI).  Kronos'  sole  business  segment  is  associated  with  the
production and sale of titanium dioxide pigments ("TiO2"). At June 30, 2005, (i)
Valhi  held  approximately  57%  of  Kronos'  outstanding  common  stock  and NL
Industries,  Inc. (NYSE:NL) held an additional 36% of Kronos' common stock, (ii)
Valhi owned approximately 83% of NL's outstanding common stock and (iii) Contran
Corporation and its subsidiaries held  approximately 91% of Valhi's  outstanding
common stock. Substantially all of Contran's outstanding voting stock is held by
trusts  established  for the benefit of certain  children and  grandchildren  of
Harold C.  Simmons,  of which Mr.  Simmons  is sole  trustee,  or is held by Mr.
Simmons or persons or other entities related to Mr. Simmons.  Consequently,  Mr.
Simmons may be deemed to control each of such companies.

     The  consolidated  balance  sheet of Kronos at  December  31, 2004 has been
condensed from the Company's audited  consolidated  financial statements at that
date.  The  consolidated  balance sheet at June 30, 2005,  and the  consolidated
statements of income,  comprehensive income, stockholders' equity and cash flows
for the interim  periods ended June 30, 2004 and 2005, have been prepared by the
Company,  without audit,  in accordance  with  accounting  principles  generally
accepted in the United States of America ("GAAP"). In the opinion of management,
all adjustments,  consisting only of normal recurring adjustments,  necessary to
state fairly the consolidated financial position, results of operations and cash
flows have been made.

     The  results of  operations  for the interim  periods  are not  necessarily
indicative  of the  operating  results for a full year or of future  operations.
Certain  information  normally  included  in  financial  statements  prepared in
accordance   with  GAAP  has  been  condensed  or  omitted.   The   accompanying
consolidated  financial  statements  should  be read  in  conjunction  with  the
Company's  Annual Report on Form 10-K for the year ended  December 31, 2004 (the
"2004 Annual Report").

     During the fourth quarter of 2004,  Kronos  determined  that it should have
recognized an additional $17.3 million,  or $.35 per diluted share, net deferred
income tax benefit during the second quarter of 2004,  primarily  related to the
amount of the valuation  allowance  related to Kronos' German  operations  which
should have been  reversed.  While the additional tax benefit is not material to
the Company's second quarter 2004 results,  the Company's  quarterly  results of
operations for 2004, as presented  herein,  reflects this additional  income tax
benefit.

     The Company  has not issued any stock  options to  purchase  Kronos  common
stock. However, certain employees of the Company have been granted options by NL
to purchase NL common stock. As disclosed in the 2004 Annual Report, the Company
accounts for  stock-based  employee  compensation  in accordance with Accounting
Principles  Board  Opinion  ("APBO")  No. 25,  "Accounting  for Stock  Issued to
Employees," and its various interpretations.  See Note 12. Under APBO No. 25, no
compensation  cost is generally  recognized for fixed stock options in which the
exercise  price is greater  than or equal to the market price on the grant date.
Prior to 2004,  and following the cash  settlement of certain stock options held
by employees of NL and the Company,  the Company  commenced  accounting  for its
stock options using the variable accounting method of APBO No. 25 because Kronos
could not overcome the  presumption  that it would not similarly cash settle the

                                      -10-
<PAGE>

remaining stock options.  Under the variable  accounting  method,  the intrinsic
value of all unexercised stock options (including stock options with an exercise
price at least equal to the market  price on the date of grant) is accrued as an
expense,  with subsequent  increases  (decreases) in the Company's  market price
resulting  in the  recognition  of  additional  compensation  expense  (income).
Aggregate  compensation expense related to NL stock options held by employees of
the Company was  approximately  $200,000 and $900,000 in the second  quarter and
first six months of 2004,  respectively  and aggregate  compensation  income was
approximately  $1.0  million and  $900,000  in the second  quarter and first six
months of 2005, respectively.

     The following  table presents what the Company's  consolidated  net income,
and  related  per share  amounts,  would have been in the 2004 and 2005  periods
presented  if the Company and its  subsidiaries  had each elected to account for
their respective  stock-based employee  compensation related to stock options in
accordance  with the fair  value-based  recognition  provisions  of Statement of
Financial  Accounting  Standards  ("SFAS") No. 123,  "Accounting for Stock-Based
Compensation," for all awards granted subsequent to January 1, 1995.

<TABLE>

                                                      Three months                Six months
                                                     ended June 30,             ended June 30,
                                                 --------------------        --------------------
                                                  2004          2005          2004          2005
                                                  ----          ----          ----          ----
                                                      (In millions, except per share amounts)

<S>                                              <C>           <C>           <C>           <C>
Net income as reported                           $284.8        $ 32.9        $294.6        $ 54.3

Adjustments, net of applicable income
 tax effects and minority interest:
  Stock-based employee compensation
   expense determined under APBO No. 25              .1           (.7)           .6          (.6)
  Stock-based employee compensation
   expense determined under SFAS No. 123             -             -             -             -
                                                 ------        ------        ------        ------

Pro forma net income                             $284.9        $ 32.2        $295.2        $ 53.7
                                                 ======        ======        ======        ======

Basic and diluted earnings per share:
  As reported                                    $ 5.82        $  .67        $ 6.02         $1.11
  Pro forma                                        5.82           .66          6.03          1.10
</TABLE>

Note 2 - Accounts and other receivables:
<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

<S>                                                    <C>                 <C>
 Trade receivables                                     $176,332            $208,292
 Insurance claims                                            32                  29
 Recoverable VAT and other receivables                   16,332              13,464
 Allowance for doubtful accounts                         (2,377)             (2,127)
                                                       --------            --------

                                                       $190,319            $219,658
                                                       ========            ========
</TABLE>


                                      -11-
<PAGE>



Note 3 - Inventories:
<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

<S>                                                    <C>                 <C>
 Raw materials                                         $ 45,962            $ 36,956
 Work in process                                         16,612              14,634
 Finished products                                      130,385             143,968
 Supplies                                                40,899              39,374
                                                       --------            --------

                                                       $233,858            $234,932
                                                       ========            ========
</TABLE>

Note 4 - Other noncurrent assets:
<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

<S>                                                    <C>                 <C>
 Deferred financing costs, net                         $ 10,921            $  9,447
 Restricted marketable debt securities                    2,877               2,649
 Unrecognized net pension obligations                    13,518              12,703
 Other                                                    5,024               2,987
                                                       --------            --------

                                                       $ 32,340            $ 27,786
                                                       ========            ========
</TABLE>

Note 5 - Accounts payable and accrued liabilities:

<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

<S>                                                    <C>                 <C>
 Accounts payable                                      $ 91,713            $ 58,833
 Employee benefits                                       36,861              30,829
 Interest                                                   152                 130
 Other                                                   41,283              51,196
                                                       --------            --------

                                                       $170,009            $140,988
                                                       ========            ========
</TABLE>


Note 6 - Long-term debt:
<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

 Kronos International, Inc. and subsidiaries:
<S>                                                    <C>                 <C>
   8.875% Senior Secured Notes                         $519,225            $461,067
   European bank credit facility                         13,622                -
   Other                                                    348                 243
                                                       --------            --------

                                                        533,195             461,310
 Less current maturities                                 13,792                 156
                                                       --------            --------

                                                       $519,403            $461,154
                                                       ========            ========
</TABLE>

     As previously reported in the 2004 Annual Report,  Kronos International has
pledged 65% of the common stock or other  ownership  interests of certain of its
first-tier  operating  subsidiaries  as collateral for its Senior Secured Notes.
Such operating  subsidiaries  are Kronos Titan GmbH,  Kronos Denmark ApS, Kronos
Limited and Societe Industrielle Du Titane, S.A.

                                      -12-
<PAGE>


     During the first six months of 2005,  the Company  repaid an  aggregate  of
euro 10 million ($12.9 million when repaid) under its European Credit  Facility.
During the second quarter of 2005, the Company extended the respective  maturity
dates of its European  and U.S.  Credit  Facilities  each by three years to June
2008 and September 2008, respectively.

Note 7 - Other noncurrent liabilities:
<TABLE>

                                                     December 31,          June 30,
                                                         2004                2005
                                                     ------------         ----------
                                                              (In thousands)

<S>                                                    <C>                 <C>
 Employee benefits                                     $  5,107            $  4,586
 Insurance claims and expenses                            1,927               1,081
 Asset retirement obligations                               958                 926
 Other                                                    9,415               6,537
                                                       --------            --------

                                                       $ 17,407            $ 13,130
                                                       ========            ========
</TABLE>



Note 8 - Other income:
<TABLE>

                                                             Six months ended
                                                                 June 30,
                                                         ------------------------
                                                         2004                2005
                                                         ----                ----
                                                              (In millions)

<S>                                                     <C>                 <C>
 Contract dispute settlement                            $6,289              $  -
 Other income (expense), net                                (9)                112
                                                        ------              ------

                                                        $6,280              $  112
                                                        ======              ======
</TABLE>

     Securities  transaction gains in the second quarter of 2005,  classified as
nonoperating income,  relates to the sale of the Company's passive interest in a
Norwegian smelting  operation,  which had a nominal carrying value for financial
reporting  purposes,  for aggregate  consideration of approximately $5.4 million
consisting of cash of $3.5 million and inventory with a value of $1.9 million.

Note 9 - Provision for income taxes:
<TABLE>

                                                             Six months ended
                                                                 June 30,
                                                         ------------------------
                                                         2004                2005
                                                         ----                ----
                                                              (In millions)

<S>                                                    <C>                  <C>
 Expected tax expense                                  $  13.5              $ 30.5
 Incremental U.S. tax and rate differences on                                   .2
  equity in earnings of non-tax group companies             -
 Non-U.S. tax rates                                        (.2)                (.1)
 Change in deferred income tax valuation
   allowance, net                                       (277.3)                 -
 Refund of prior year income taxes                        (3.1)                 -
 Nondeductible expenses                                    1.6                 1.8
 Other, net                                                9.6                  .4
                                                       -------              ------

                                                       $(255.9)             $ 32.8
                                                       =======              ======
</TABLE>

                                      -13-
<PAGE>


     Certain of the Company's  U.S. and non-U.S.  tax returns are being examined
and tax authorities have or may propose tax  deficiencies,  including  penalties
and interest. For example:

o    Kronos has received a preliminary  tax assessment  related to 1993 from the
     Belgian tax  authorities  proposing  tax  deficiencies,  including  related
     interest,  of  approximately  euro 6 million ($7 million at June 30, 2005).
     Kronos  has  filed  a  protest  to this  assessment,  and  believes  that a
     significant  portion of the  assessment is without  merit.  The Belgian tax
     authorities  have filed a lien on the fixed assets of Kronos'  Belgian TiO2
     operations  in  connection  with this  assessment.  In April  2003,  Kronos
     received a notification from the Belgian tax authorities of their intent to
     assess a tax  deficiency  related  to 1999  that,  including  interest,  is
     expected to be approximately euro 9 million ($11 million).  Kronos believes
     the proposed  assessment is  substantially  without  merit,  and Kronos has
     filed a written response.

o    The  Norwegian  tax  authorities  have  notified  Kronos of their intent to
     assess tax  deficiencies  of  approximately  kroner 12 million ($2 million)
     relating  to the years  1998  through  2000.  Kronos has  objected  to this
     proposed assessment.

o    Kronos has  received a  preliminary  tax  assessment  from the Canadian tax
     authorities  related to the years 1998 and 1999 proposing tax deficiencies,
     including  interest,  of Cdn. $5 million ($4  million).  Kronos has filed a
     protest and believes a  significant  portion of the  assessment  is without
     merit.

     No  assurance  can be given that these tax matters  will be resolved in the
Company's  favor in view of the inherent  uncertainties  involved in  settlement
initiatives  and court and tax  proceedings.  The Company  believes  that it has
provided  adequate  accruals for additional  taxes and related  interest expense
which may  ultimately  result from all such  examinations  and believes that the
ultimate  disposition of such  examinations  should not have a material  adverse
effect  on  its  consolidated  financial  position,  results  of  operations  or
liquidity.

Note 10 - Employee benefit plans:

     The components of net periodic  defined  benefit pension cost are presented
in the table below.
<TABLE>

                                                  Three months ended             Six months ended
                                                       June 30,                      June 30,
                                                ---------------------         ----------------------
                                                 2004           2005           2004            2005
                                                 ----           ----           ----            ----
                                                                   (In thousands)

<S>                                             <C>          <C>             <C>             <C>
Service cost                                    $ 1,446      $ 1,914         $ 3,057         $ 3,901
Interest cost                                     4,287        4,454           8,615           9,034
Expected return on plan assets                   (3,788)      (4,004)         (7,620)         (8,118)
Amortization of prior service cost                  140          150             281             304
Amortization of net transition obligations          163          153             323             310
Recognized actuarial losses                         746          927           1,488           1,878
                                                -------      -------         -------         -------

                                                $ 2,994      $ 3,594         $ 6,144         $ 7,309
                                                =======      =======         =======         =======
</TABLE>

                                      -14-
<PAGE>


     The components of net periodic  postretirement benefits other than pensions
("OPEB") cost are presented in the table below.
<TABLE>

                                                  Three months ended             Six months ended
                                                       June 30,                      June 30,
                                                ---------------------         ----------------------
                                                 2004           2005           2004            2005
                                                 ----           ----           ----            ----
                                                                   (In thousands)

<S>                                             <C>          <C>            <C>              <C>
Service cost                                    $    56      $    54        $    113         $   109
Interest cost                                       179          144             360             289
Amortization of prior service credit               (183)        (160)           (366)           (320)
Recognized actuarial losses                          39           17              78              35
                                                -------      -------         -------         -------

                                                $    91      $    55         $   185         $   113
                                                =======      =======         =======         =======
</TABLE>

Note 11 - Commitments and contingencies:

     Reference  is made to the 2004 Annual  Report for a  discussion  of certain
other legal proceedings to which the Company is a party.

     As  noted  in the  2004  Annual  Report,  the  Company's  principal  German
operating  subsidiary,  Kronos Titan GmbH,  leases the land under its Leverkusen
TiO2 production facility pursuant to a lease with Bayer AG that expires in 2050.
The  Leverkusen  facility  itself,  which  is  owned by the  Company  and  which
represents  approximately  one-third of the  Company's  current TiO2  production
capacity,  is located within Bayer's extensive  manufacturing  complex. Rent for
the  land  lease  associated  with  the  Leverkusen   facility  is  periodically
established by agreement with Bayer for periods of at least two years at a time.
The  lease  agreement  provides  for no  formula,  index or other  mechanism  to
determine  changes in the rent for such land  lease;  rather,  any change in the
rent is subject  solely to periodic  negotiation  between Bayer and the Company.
Any change in the rent based on such negotiations is recognized as part of lease
expense  starting from the time such change is agreed upon by both  parties,  as
any such change in the rent is deemed "contingent rentals" under GAAP.

     The Company and its  affiliates  are from time to time  involved in various
environmental,   contractual,   product   liability,   patent  (or  intellectual
property),  employment and other claims and disputes  incidental to its past and
current  operations.  In certain cases,  the Company has insurance  coverage for
such items.  The Company  currently  believes that the disposition of all claims
and  disputes,  individually  or in the  aggregate,  should  not have a material
adverse effect on its consolidated financial position,  results of operations or
liquidity.

Note 12 - Accounting principles not yet implemented:

     Inventory costs. The Company will adopt SFAS No. 151,  "Inventory Costs, an
amendment of ARB No. 43,  Chapter 4," for inventory  costs  incurred on or after
January 1, 2006.  SFAS No. 151 requires that the allocation of fixed  production
overhead costs to inventory shall be based on normal  capacity.  Normal capacity
is not defined as a fixed amount;  rather,  normal capacity refers to a range of
production  levels expected to be achieved over a number of periods under normal
circumstances,  taking into account the loss of capacity  resulting from planned
maintenance  shutdowns.  The amount of fixed overhead  allocated to each unit of
production is not increased as a consequence of idle plant or production  levels

                                      -15-
<PAGE>


below the low end of normal  capacity,  but instead a portion of fixed  overhead
costs is charged to expense as incurred. Alternatively, in periods of production
above the high end of  normal  capacity,  the  amount  of fixed  overhead  costs
allocated to each unit of  production is decreased so that  inventories  are not
measured above cost.  SFAS No. 151 also clarifies  existing GAAP to require that
abnormal freight and wasted materials (spoilage) are to be expensed as incurred.
The Company  believes its production cost accounting  already  complies with the
requirements  of SFAS No. 151, and the Company does not expect  adoption of SFAS
No. 151 will have a material effect on its consolidated financial statements.

     Stock  options.  As permitted by regulations of the Securities and Exchange
Commission ("SEC"), the Company will adopt SFAS No. 123R, "Share-Based Payment,"
as of January  1, 2006.  SFAS No.  123R,  among  other  things,  eliminates  the
alternative in existing GAAP to use the intrinsic value method of accounting for
stock-based  employee  compensation under APBO No. 25. Upon adoption of SFAS No.
123R,  the Company will  generally be required to recognize the cost of employee
services  received in exchange for an award of equity  instruments  based on the
grant-date  fair value of the award,  with the cost  recognized  over the period
during  which an employee is  required to provide  services in exchange  for the
award (generally, the vesting period of the award). No compensation cost will be
recognized in the aggregate for equity  instruments  for which the employee does
not render the requisite service (generally,  the instrument is forfeited before
it has vested). The grant-date fair value will be estimated using option-pricing
models  (e.g.   Black-Scholes   or  a  lattice  model).   Under  the  transition
alternatives  permitted  under SFAS No.  123R,  the  Company  will apply the new
standard  to all new  awards  granted on or after  January  1, 2006,  and to all
awards  existing  as of  December  31,  2005  which are  subsequently  modified,
repurchased or cancelled.  Additionally, as of January 1, 2006, the Company will
be required to  recognize  compensation  cost for the portion of any  non-vested
award  existing  as of  December  31, 2005 over the  remaining  vesting  period.
Because the number of non-vested  awards as of December 31, 2005 with respect to
options  granted  by NL to  employees  of  the  Company  is not  expected  to be
material,  and  because  the  Company  has not  granted any options and does not
expect to grant any  options  prior to January 1, 2006,  the effect of  adopting
SFAS No.  123R is not  expected  to be  significant  in so far as it  relates to
existing stock options.  Should the Company or its  subsidiaries and affiliates,
however,  either  grant a  significant  number of  options to  employees  of the
Company or modify,  repurchase  or cancel  existing  options in the future,  the
effect on the Company's consolidated financial statements could be material.

Note 13 - Stockholders' equity:

     During the first six months of 2005, Valhi purchased  certain shares of the
Company's  common  stock in  market  transactions.  Within  six  months  of such
purchases,  NL had sold certain  shares of the Company's  common stock in market
transactions.  In settlement  of any alleged  short-swing  profits  derived from
these  transactions  as calculated  pursuant to Section 16(b) of the  Securities
Exchange Act of 1934, as amended, Valhi remitted approximately  $641,000,  which
amount,  net of income  taxes,  has been  recorded  by the  Company as a capital
contribution, increasing additional paid-in capital.

                                      -16-
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS:

Executive summary

     Relative  changes in the  Company's  TiO2 sales and income from  operations
during the 2004 and 2005 periods  presented are primarily due to the net effects
of (i) higher average TiO2 selling  prices,  (ii) lower TiO2 selling volumes and
(iii) relative  changes in foreign currency  exchange rates.  Selling prices for
TiO2 (in billing currencies) were generally  decreasing during the first half of
2004 and increasing in the last half of 2004 and the first six months of 2005.

     The  Company  reported  net income of $32.9  million,  or $.67 per  diluted
share,  in the  second  quarter  of 2005 as  compared  to net  income  of $284.8
million,  or $5.82 per diluted share, in the second quarter of 2004. The Company
reported net income of $54.3 million,  or $1.11 per diluted share,  in the first
six months of 2005 as  compared  to net income of $294.6  million,  or $6.02 per
diluted share,  in the first six months of 2004. The Company  reported lower net
income in 2005 as the favorable  effect of higher income from  operations  and a
security  transaction gain in 2005 was more than offset by an income tax benefit
recognized  in 2004.  Net  income  in the first six  months of 2005  includes  a
securities transaction gain of $.07 per diluted share related to the sale of the
Company's passive interest in a Norwegian smelting operation.  Net income in the
first six  months of 2004  includes  (i) a second  quarter  income  tax  benefit
related to the reversal of Kronos' deferred income tax asset valuation allowance
in  Germany  of $5.49 per  diluted  share and (ii)  income  related  to  Kronos'
contract  dispute  settlement of $.08 per diluted share.  Each of these items is
more fully  discussed  below and/or in the notes to the  Consolidated  Financial
Statements.

Forward-looking information

     As  provided  by the  safe  harbor  provisions  of the  Private  Securities
Litigation  Reform Act of 1995, the Company cautions that the statements in this
Quarterly  Report on Form 10-Q relating to matters that are not historical facts
are  forward-looking   statements  that  represent   management's   beliefs  and
assumptions based on currently available information. Forward-looking statements
can be  identified  by the use of words such as  "believes,"  "intends,"  "may,"
"should," "could," "anticipates,"  "expected" or comparable  terminology,  or by
discussions  of  strategies  or trends.  Although the Company  believes that the
expectations  reflected in such  forward-looking  statements are reasonable,  it
cannot give any  assurances  that these  expectations  will prove to be correct.
Such statements by their nature involve substantial risks and uncertainties that
could  significantly  impact expected  results,  and actual future results could
differ materially from those described in such forward-looking statements. While
it is not possible to identify all factors,  the Company  continues to face many
risks and  uncertainties.  The factors that could cause actual future results to
differ  materially are the risks and  uncertainties  discussed in this Quarterly
Report and those described from time to time in the Company's other filings with
the SEC include, but are not limited to, the following:

o    Future supply and demand for the Company's products,
o    The extent of the  dependence  of certain of the  Company's  businesses  on
     certain market sectors,
o    The cyclicality of the Company's businesses,

                                      -17-
<PAGE>


o    Customer  inventory  levels  (such as the  extent  to which  the  Company's
     customers may, from time to time,  accelerate  purchases of TiO2 in advance
     of  anticipated  price  increases or defer  purchases of TiO2 in advance of
     anticipated price decreases),
o    Changes in raw material and other operating costs (such as energy costs),
o    The  possibility  of labor  disruptions,
o    General global  economic and political  conditions  (such as changes in the
     level of gross  domestic  product in  various  regions of the world and the
     impact of such changes on demand for TiO2),
o    Competitive products and substitute products,
o    Customer and competitor strategies,
o    The impact of pricing and production decisions,
o    Competitive technology positions,
o    The introduction of trade barriers,
o    Fluctuations  in currency  exchange  rates (such as changes in the exchange
     rate between the U.S. dollar and each of the euro, the Norwegian kroner and
     the Canadian dollar),
o    Operating  interruptions  (including,  but not limited to, labor  disputes,
     leaks,   fires,   explosions,   unscheduled   or  unplanned   downtime  and
     transportation interruptions),
o    The ability of the Company to renew or refinance credit facilities,
o    The ultimate  outcome of income tax audits,  tax settlement  initiatives or
     other tax matters,
o    The ultimate ability to utilize income tax attributes, the benefit of which
     has been recognized under the "more-likely-than-not" recognition criteria,
o    Environmental  matters  (such as those  requiring  emission  and  discharge
     standards for existing and new facilities),
o    Government laws and regulations and possible changes therein,
o    The ultimate resolution of pending litigation, and
o    Possible future litigation.

     Should one or more of these risks  materialize (or the consequences of such
a development  worsen),  or should the underlying  assumptions  prove incorrect,
actual results could differ  materially from those  forecasted or expected.  The
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking statement whether as a result of changes in information,  future
events or otherwise.

                                      -18-
<PAGE>


<TABLE>

                                                      Three months ended                   Six months ended
                                                          June 30,                             June 30,
                                               --------------------------------     -------------------------------
                                                2004        2005      % Change       2004        2005     % Change
                                                ----        ----      --------       ----        ----     --------
                                                            (In millions, except percentages and volumes)

<S>                                           <C>          <C>             <C>      <C>         <C>             <C>
Net sales                                     $295.8       $311.7        + 5%       $559.1      $603.5        + 8%
Cost of sales                                  227.5        217.1        - 5%        429.8       424.7        - 1%
                                              ------       ------                   ------      ------

Gross margin                                    68.3         94.6        +39%        129.3       178.8        +38%

Selling, general and administrative
    expense                                    (35.0)       (37.8)                   (70.2)      (75.1)
Currency transaction gains, net                   .3          2.4                       .6         3.3
Contract dispute settlement                      6.3           -                       6.3          -
Other                                             -           (.1)                      -           -
Corporate expense                                (.8)        (1.4)                    (1.3)       (2.9)
                                              ------       ------                   ------      ------

Income from operations                        $ 39.1       $ 57.7        +48%       $ 64.7      $104.1        +61%
                                              ======       ======                   ======      ======

TiO2 operating statistics:

  Percent change in average selling
    prices:
      Using actual foreign currency
        exchange rates                                                   +15%                                 +14%
      Impact of changes in foreign
         currency exchange rates                                         - 4%                                 - 4%
                                                                         ----                                 ----

      In billing currencies                                              +11%                                 +10%
                                                                         ====                                 ====

  Sales volumes*                               136          122          -10%        255         237          - 7%
  Production volumes*                          122          127          + 4%        240         249          + 4%
________________________________

*    Thousands of metric tons
</TABLE>

     Kronos' sales  increased  $15.9 million (5%) in the second  quarter of 2005
compared to the second  quarter of 2004 and increased  $44.4 million (8%) in the
first six months of 2005 as  compared  to the same period in 2004 due to the net
effects of higher average TiO2 selling  prices,  lower TiO2 selling  volumes and
the favorable effect of fluctuations in foreign currency  exchange rates,  which
increased sales by approximately $10 million and $21 million,  respectively,  as
further  discussed  below.  Excluding the effect of fluctuations in the value of
the U.S.  dollar  relative to other  currencies,  Kronos'  average  TiO2 selling
prices in billing  currencies in the second quarter and first six months of 2005
were 11%  higher as  compared  to the  second  quarter of 2004 and 10% higher as
compared  to the  first  six  months  of  2004.  When  translated  from  billing
currencies  to  U.S.  dollars  using  actual  foreign  currency  exchange  rates
prevailing during the respective periods, Kronos' average TiO2 selling prices in
the second  quarter of 2005 increased 15% compared to the second quarter of 2004
and  increased  14% for the first six months of 2005  compared  to the first six
months  of  2004.   Reflecting  the   implementation  of  prior  price  increase
announcements, Kronos' average TiO2 selling prices in the second quarter of 2005
increased 2% compared to the first quarter of 2005.

     Kronos' sales are  denominated  in various  currencies,  including the U.S.
dollar,  the euro, other major European  currencies and the Canadian dollar. The
disclosure of the  percentage  change in Kronos'  average TiO2 selling prices in

                                      -19-
<PAGE>


billing  currencies  (which excludes the effects of fluctuations in the value of
the U.S.  dollar  relative  to other  currencies)  is  considered  a  "non-GAAP"
financial measure under regulations of the SEC. The disclosure of the percentage
change in Kronos'  average TiO2 selling  prices  using actual  foreign  currency
exchange rates prevailing  during the respective  periods is considered the most
directly  comparable  financial measure presented in accordance with GAAP ("GAAP
measure").  Kronos  discloses  percentage  changes in its average TiO2 prices in
billing  currencies  because Kronos  believes such  disclosure  provides  useful
information  to  investors  to allow them to analyze  such  changes  without the
impact of changes in  foreign  currency  exchange  rates,  thereby  facilitating
period-to-period  comparisons of the relative  changes in average selling prices
in the actual various billing currencies. Generally, when the U.S. dollar either
strengthens  or weakens  against  other  currencies,  the  percentage  change in
average  selling  prices  in  billing   currencies  will  be  higher  or  lower,
respectively,  than such percentage changes would be using actual exchange rates
prevailing during the respective periods. The difference between the 15% and 14%
increases in Kronos'  average TiO2 selling  prices during the second quarter and
first six months of 2005 as compared to the second  quarter and first six months
of 2004 using actual  foreign  currency  exchange  rates  prevailing  during the
respective periods (the GAAP measure),  and the 11% and 10% increases in Kronos'
average TiO2 selling prices in billing  currencies (the non-GAAP measure) during
each of such  periods  is due to the  effect  of  changes  in  foreign  currency
exchange rates.  The above table presents in a tabular format (i) the percentage
change in Kronos'  average TiO2 selling  prices  using actual  foreign  currency
exchange rates prevailing during the respective periods (the GAAP measure), (ii)
the  percentage  change in  Kronos'  average  TiO2  selling  prices  in  billing
currencies (the non-GAAP measure) and (iii) the percentage change due to changes
in foreign currency exchange rates (or the reconciling item between the non-GAAP
measure and the GAAP measure).

     Kronos'  TiO2 sales  volumes in the second  quarter and first six months of
2005 decreased 10% and 7%, respectively,  compared to the corresponding  periods
in 2004,  with  volumes  lower in all  regions of the world and with the largest
decline in Europe.  Kronos' income from  operations  comparisons  were favorably
impacted by higher production  levels,  which increased 4% in each of the second
quarter and first six months of 2005 as  compared  to the same  periods in 2004.
Kronos'  operating  rates were near full capacity in those periods,  and Kronos'
production volume in the first six months of 2005 was a new record for Kronos.

     The  Company's  cost of sales  decreased  $10.4  million (5%) in the second
quarter of 2005  compared  to the second  quarter of 2004,  and  decreased  $5.1
million (1%) in the year-to-date period largely due to lower sales volumes. As a
result of the higher  average TiO2  selling  prices in billing  currencies,  the
Company's  cost of sales,  as a percentage of net sales,  decreased  from 77% in
each of the  second  quarter  and first six months of 2004 to 70% in each of the
second quarter and first six months of 2005.

     The Company's  gross margins for the second quarter of 2005 increased $26.3
million (39%) from the second quarter of 2004 and increased  $49.5 million (38%)
in the first six months of 2005 as  compared to the first six months of 2004 due
to the net effects of the aforementioned increases in net sales.

     Selling,  general and  administrative  expenses increased $2.8 million (8%)
and $4.9 million (7%), respectively,  in the second quarter and first six months
of 2005 as compared to the  corresponding  periods in 2004.  These increases are
largely attributable to the impact of translating foreign currencies  (primarily
the euro) into U.S.  dollars.  Corporate  expense  increased  $600,000  and $1.6
million,  respectively,  in the second  quarter  and first six months of 2005 as
compared  to  the  corresponding   periods  of  2004  due  primarily  to  higher
professional fees and other costs associated with Kronos being a public company.

                                      -20-
<PAGE>


     Income from  operations in the second  quarter of 2004  includes  income of
$6.3 million  ($4.1  million,  or $.08 per diluted  share,  net of income taxes)
related to settlement of a contract dispute with a customer.

     The Company  has  substantial  operations  and assets  located  outside the
United  States  (particularly  in  Germany,   Belgium,  Norway  and  Canada).  A
significant amount of the Company's sales generated from its non-U.S. operations
are denominated in currencies other than the U.S. dollar,  principally the euro,
other  major  European  currencies  and the  Canadian  dollar.  A portion of the
Company's  sales  generated from its non-U.S.  operations are denominated in the
U.S. dollar. Certain raw materials,  primarily  titanium-containing  feedstocks,
are  purchased  in U.S.  dollars,  while  labor and other  production  costs are
denominated  primarily in local  currencies.  Consequently,  the translated U.S.
dollar value of the Company's foreign sales and operating results are subject to
currency  exchange rate  fluctuations  which may  favorably or adversely  impact
reported earnings and may affect the comparability of period-to-period operating
results. Overall, fluctuations in the value of the U.S. dollar relative to other
currencies,  primarily the euro, increased TiO2 sales by approximately a net $10
million in the second quarter of 2005 as compared to the same period in 2004 and
increased  TiO2  sales in the first  six  months  of 2005 by  approximately  $21
million  compared to the same period in 2004.  Fluctuations  in the value of the
U.S.  dollar  relative to other  currencies  similarly  impacted  the  Company's
foreign  currency-denominated  operating expenses. The Company's operating costs
that are not denominated in the U.S. dollar,  when translated into U.S. dollars,
were  higher in the second  quarter  and first six months of 2005 as compared to
the  second  quarter  and first six months of 2004.  Overall,  the net impact of
currency   exchange  rate   fluctuations  on  the  Company's   operating  income
comparisons  resulted in  approximately  a net $2 million  increase and a net $3
million  increase in the Company's  income from operations in the second quarter
and first six months of 2005,  respectively,  as compared  to the  corresponding
periods in 2004.

Outlook

     Kronos  expects its income from  operations  in 2005 will be  significantly
higher than 2004, due primarily to higher average selling prices.  The quarterly
price improvements in average selling prices since the third quarter of 2004 are
the key to Kronos'  anticipation that second half income from operations in 2005
will be significantly higher than the second half of 2004. Average prices in the
second half of 2005 as  compared to the second  quarter of 2005 will likely rise
modestly in North America,  reflecting the expected  partial  implementation  of
prior selling price announcements.  In Europe and export markets, average prices
in the second half of 2005 will likely  decline from the second quarter of 2005.
Production  volumes in the second  half of 2005 will  likely be similar to those
achieved in the second half of 2004 and are expected to be below the  production
volumes in the first half of 2005, due primarily to certain  finishing  capacity
being taken temporarily offline in order to complete debottlenecking projects at
the Company's Leverkusen,  Germany facility. Sales volumes in the second half of
2005 are  expected  to be lower than those in the second  half of 2004,  and are
likely to be similar to the sales  volumes in the first half of 2005.  While the
Company  expects its income from operations in calendar 2005 will be higher than
calendar 2004,  Kronos expects its income from  operations in the second half of
2005 will be below the first half of 2005. Kronos' expectations as to the future
prospects  of Kronos  and the TiO2  industry  are based upon a number of factors
beyond Kronos' control,  including  worldwide growth of gross domestic  product,
competition in the  marketplace,  unexpected or  earlier-than-expected  capacity
additions and technological advances. If actual developments differ from Kronos'
expectations, Kronos' results of operations could be unfavorably affected.

                                      -21-
<PAGE>


     The Company's  efforts to  debottleneck  its production  facilities to meet
long-term  demand continue to prove  successful.  Such  debottlenecking  efforts
included,  among other things, the addition of back-end finishing capacity to be
able to  process a larger  quantity  of the base  TiO2  produced  and  equipment
upgrades  and  enhancements  to  allow  for  reduced  downtime  for  maintenance
activities. The Company's production capacity has increased by approximately 30%
over the past ten  years due to  debottlenecking  programs,  with only  moderate
capital  expenditures.  The Company  believes its annual  attainable  production
capacity  for 2005 is  approximately  500,000  metric tons,  with  approximately
10,000 metric tons additional  capacity  available in 2006 through its continued
debottlenecking efforts.

Other income (expense)
<TABLE>

                                           Three months ended                       Six months ended
                                                June 30,                                June 30,
                                   -----------------------------------     ----------------------------------
                                     2004        2005      Difference       2004        2005      Difference
                                                                  (In millions)

<S>                                <C>         <C>          <C>            <C>         <C>          <C>
Trade interest income              $   .2      $   .1       $  (.1)        $   .4      $   .2       $  (.2)
Other interest income                  .2          .3           .1             .4          .7           .3
Securities transaction gain           -           5.4          5.4             -          5.4          5.4
Interest expense to affiliates       (4.5)        -            4.5           (9.0)        -            9.0
Other interest expense               (8.6)      (11.6)        (3.0)         (17.8)      (23.4)        (5.6)
                                   ------      ------       ------         ------      ------       ------

                                   $(12.7)     $ (5.8)      $  6.9         $(26.0)     $(17.1)      $  8.9
                                   ======      ======       ======         ======      ======       ======
</TABLE>

     Securities  transaction  gains in the second quarter of 2005 relates to the
sale of the Company's passive interest in a Norwegian smelting operation,  which
had a nominal  carrying value for financial  reporting  purposes,  for aggregate
consideration of approximately  $5.4 million  consisting of cash of $3.5 million
and  inventory  with a value of $1.9  million.  See  Note 8 to the  Consolidated
Financial Statements.

     Interest  expense  to  affiliates  in 2004  relates to the  Company's  $200
million long-term notes payable to affiliates,  which were prepaid in the fourth
quarter of 2004.

     Kronos has a significant amount of outstanding  indebtedness denominated in
the euro, including Kronos International, Inc.'s ("KII") euro 375 million Senior
Secured Notes.  Accordingly,  the reported amount of interest  expense will vary
depending on relative changes in foreign currency exchange rates. Other interest
expense in the second quarter and first six months of 2005 was $11.6 million and
$23.4 million, respectively, increases of $3.0 million and $5.6 million from the
second quarter and first six months of 2004. The increases were due primarily to
higher  levels of  outstanding  indebtedness  resulting  from the issuance of an
additional  euro 90 million  principal  amount of KII's Senior  Secured Notes in
November  2004.  In  addition,  the  increases  in interest  expense were due to
relative  changes in foreign currency  exchange rates,  which increased the U.S.
dollar equivalent of interest expense on the euro 285 million KII Senior Secured
Notes  outstanding  during both periods by approximately  $400,000 in the second
quarter of 2005 and $1.0  million in the first six months of 2005 as compared to
the second quarter and first six months of 2004.  Assuming no significant change
in interest rates or foreign currency exchange rates, other interest expense for
the full-year 2005 is expected to be higher than amounts for the same periods in
2004 due  primarily  to the  effect of the  additional  euro 90  million  Senior
Secured Notes issued in November 2004.

                                      -22-
<PAGE>


Provision for income taxes

     The principal  reasons for the difference  between the Company's  effective
income tax rates and the U.S.  federal  statutory income tax rates are explained
in Note 9 to the Consolidated Financial Statements.

     At June 30,  2005,  Kronos  has the  equivalent  of $590  million  and $178
million of income tax loss  carryforwards  for  German  corporate  and trade tax
purposes,  respectively,  all of which have no  expiration  date.  As more fully
described in the 2004 Annual Report, during 2004 Kronos concluded the benefit of
such income tax loss  carryforwards met the  "more-likely-than-not"  recognition
criteria of GAAP, and  accordingly in 2004 Kronos  reversed the deferred  income
tax asset valuation allowance related to such German carryforwards and other net
deductible temporary differences related to Germany. Because the benefit of such
net operating loss carryforwards and other deductible  temporary  differences in
Germany has now been recognized,  the Company's effective income tax rate in the
second quarter and first six months of 2005 is higher than its effective  income
tax rate in the  second  quarter  and first six  months  of 2004,  although  its
current and future cash income tax rate was not  affected by the reversal of the
valuation allowance. Prior to the complete utilization of such carryforwards, it
is possible  that the Company  might  conclude in the future that the benefit of
such carryforwards would no longer meet the  "more-likely-than-not"  recognition
criteria,  at which point the Company would be required to recognize a valuation
allowance   against  the   then-remaining   tax  benefit   associated  with  the
carryforwards.  The Company's  income tax benefit in the second  quarter of 2004
includes a $268.6  million tax  benefit  ($5.49 per  diluted  share)  related to
reversal of the German deferred income tax asset valuation allowance.

Accounting principles not yet implemented

     See Note 12 to the Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES:

Consolidated cash flows

     The  Company's  consolidated  cash  flows  from  operating,  investing  and
financing  activities  for the six  months  ended  June  30,  2004  and 2005 are
presented below:
<TABLE>

                                                             Six months ended
                                                                 June 30,
                                                         ------------------------
                                                         2004                2005
                                                         ----                ----
                                                              (In millions)

 Net cash provided (used) by:
<S>                                                     <C>                 <C>
   Operating activities                                 $ 67.5              $  2.4
   Investing activities                                  (10.5)               (7.5)
   Financing activities                                  (24.5)              (36.9)
                                                        ------              ------

     Net cash provided (used) by operating,
          investing and financing activities            $ 32.5              $(42.0)
                                                        ======              ======
</TABLE>

                                      -23-
<PAGE>


Summary

     The  Company's  primary  source of liquidity on an ongoing  short-term  and
long-term basis is its cash flows from operating activities,  which is generally
used to (i) fund capital  expenditures,  (ii) repay any short-term  indebtedness
incurred  primarily  for  working  capital  purposes  and (iii)  provide for the
payment of  dividends.  In  addition,  from  time-to-time  the Company may incur
indebtedness,  generally to (i) fund  short-term  working  capital  needs,  (ii)
refinance existing  indebtedness or (iii) fund major capital expenditures or the
acquisition of other assets outside the ordinary  course of business.  Also, the
Company  may from  time-to-time  sell  assets  outside  the  ordinary  course of
business,  the  proceeds  of which  are  generally  used to (i)  repay  existing
indebtedness  (including  indebtedness which may have been collateralized by the
assets sold),  (ii) make investments in marketable and other  securities,  (iii)
fund major capital  expenditures  or the acquisition of other assets outside the
ordinary course of business or (iv) pay dividends.

Operating activities

     The TiO2 industry is cyclical and changes in economic conditions within the
industry  significantly  impact the  earnings  and  operating  cash flows of the
Company. Cash flow from operations is considered the primary source of liquidity
for the Company. Changes in TiO2 pricing, production volume and customer demand,
among other  things,  could  significantly  affect the liquidity of the Company.
Trends  in cash  flows  from  operating  activities  (excluding  the  impact  of
significant  asset  dispositions and relative changes in assets and liabilities)
are generally  similar to trends in the  Company's  earnings.  However,  certain
items included in the  determination  of net income are non-cash,  and therefore
such  items have no impact on cash flows  from  operating  activities.  Non-cash
items  included in the  determination  of net income  include  depreciation  and
amortization  expense,  deferred  income  taxes and non-cash  interest  expense.
Non-cash interest expense consists of amortization of original issue discount or
premium on certain indebtedness and amortization of deferred financing costs.

     Certain other items included in the determination of net income may have an
impact on cash flows from operating activities,  but the impact of such items on
cash  flows from  operating  activities  will  differ  from their  impact on net
income. For example, the amount of periodic defined benefit pension plan expense
and periodic OPEB expense  depends upon a number of factors,  including  certain
actuarial assumptions,  and changes in such actuarial assumptions will result in
a change in the  reported  expense.  In  addition,  the amount of such  periodic
expense  generally  differs from the  outflows of cash  required to be currently
paid for such benefits.

     Relative changes in assets and liabilities generally result from the timing
of production,  sales, purchases and income tax payments.  Such relative changes
can  significantly  impact the  comparability  of cash flow from operations from
period to period,  as the income  statement  impact of such items may occur in a
different period from when the underlying cash transaction  occurs. For example,
raw  materials  may be  purchased  in one  period,  but the payment for such raw
materials may occur in a subsequent period. Similarly,  inventory may be sold in
one period,  but the cash collection of the receivable may occur in a subsequent
period.

     Cash flows from operating  activities decreased from $67.5 million provided
by operating  activities in the first six months of 2004 to $2.4 million of cash
provided by  operating  activities  in the first six months of 2005.  This $65.1
million decrease was due primarily to the net effects of (i) lower net income of
$240.3 million,  (ii) higher  depreciation and amortization  expense of $300,000
(iii)  higher  deferred   income  taxes  of  $275.0  million,   (iv)  lower  net
distributions from the TiO2 manufacturing  joint venture of $7.6 million,  (v) a
higher  amount  of  net  cash  used  from  relative  changes  in  the  Company's
inventories,  receivables,  payables and accruals of $55.6  million in the first
six months of 2005 as  compared  to the first six months of 2004 and (vi) higher

                                      -24-
<PAGE>


cash  paid  for  income  taxes of $35.2  million,  due in large  part to a $20.1
million  tax refund  received  during the first three  months of 2004.  Relative
changes in accounts  receivable are affected by, among other things,  the timing
of sales and the collection of the resulting  receivables.  Relative  changes in
inventories and accounts payable and accrued  liabilities are affected by, among
other  things,  the timing of raw  material  purchases  and the payment for such
purchases  and the  relative  difference  between  production  volumes and sales
volumes.  The Company's average days sales outstanding ("DSO") increased from 60
days at  December  31,  2004 to 64 days at June 30,  2005,  due to the timing of
collection  on the slightly  higher  accounts  receivable  balance at the end of
June.  At June 30, 2005,  the average  number of days in  inventory  ("DII") was
consistent with the Company's December 31, 2004 average at 97 days.

Investing and financing activities

     The Company's capital  expenditures were $10.8 million and $11.5 million in
the first six months of 2004 and 2005,  respectively.  During the second quarter
of 2005, the Company received $3.5 million from the sale of its passive interest
in a Norwegian smelting operation.

     During the first six months of 2005,  the  Company  repaid  euro 10 million
($12.9 million when repaid) under its European Credit  Facility.  In each of the
first and second quarters of 2005, the Company paid a regular quarterly dividend
to stockholders of $.25 per share, aggregating $24.5 million.

     At June 30, 2005,  unused credit  available  under Kronos'  existing credit
facilities  approximated $155 million, which was comprised of: $95 million under
its European  revolving credit  facility,  $11 million under its Canadian credit
facility,  $45 million under its U.S. credit facility and $4 million under other
non-US facilities. At June 30, 2005, KII had approximately $84 million available
for payment of dividends and other restrictive payments as defined in the Senior
Secured Notes  indenture.  Based upon Kronos'  expectation for the TiO2 industry
and anticipated  demands on Kronos' cash resources as discussed  herein,  Kronos
expects to have sufficient  liquidity to meets its future obligations  including
operations,  capital expenditures,  debt service and current dividend policy. To
the extent that actual  developments differ from Kronos'  expectations,  Kronos'
liquidity could be adversely affected.

     Provisions  contained in certain of Kronos' credit  agreements could result
in the acceleration of the applicable  indebtedness prior to its stated maturity
for reasons other than  defaults  from failing to comply with typical  financial
covenants. For example, certain credit agreements allow the lender to accelerate
the  maturity of the  indebtedness  upon a change of control (as defined) of the
borrower.   In  addition,   certain  credit   agreements  could  result  in  the
acceleration of all or a portion of the indebtedness  following a sale of assets
outside the ordinary course of business.  Other than operating  leases discussed
in the  2004  Annual  Report,  neither  Kronos  nor any of its  subsidiaries  or
affiliates are parties to any off-balance sheet financing arrangements.

Other

     At June 30, 2005, the Company and its subsidiaries had (i) current cash and
cash  equivalents  aggregating  $17.6  million  ($11.3  million held by non-U.S.
subsidiaries), (ii) current restricted cash of $1.0 million and (iii) noncurrent
restricted marketable debt securities of $2.6 million.

     At June 30,  2005,  Kronos'  outstanding  debt was  comprised of (i) $461.1
million related to KII's Senior Secured Notes and (ii) approximately $200,000 of
other indebtedness.  During the second quarter of 2005, the Company extended the
respective  maturity dates of its European and U.S.  Credit  Facilities  each by
three years to June 2008 and September 2008, respectively.

                                      -25-
<PAGE>


     KII's  assets   consist   primarily  of   investments   in  its   operating
subsidiaries, and its ability to service its parent level obligations, including
the  Senior  Secured  Notes,  depends  in large  part upon the  distribution  of
earnings  of its  subsidiaries,  whether in the form of  dividends,  advances or
payments on account of  intercompany  obligation,  or  otherwise.  None of KII's
subsidiaries have guaranteed the Senior Secured Notes,  although KII has pledged
65% of the  common  stock  or  other  ownership  interest  of  certain  of KII's
first-tier operating subsidiaries as collateral of such Senior Secured Notes.

     Pricing  within the TiO2  industry  is  cyclical,  and  changes in industry
economic  conditions  significantly  impact Kronos'  earnings and operating cash
flows.  Cash flows from operations is considered the primary source of liquidity
for Kronos.  Changes in TiO2 pricing,  production  volumes and customer  demand,
among other things, could significantly affect the liquidity of Kronos.

     Based upon  Kronos'  expectations  for the TiO2  industry  and  anticipated
demand for Kronos' cash  resources as discussed  herein,  Kronos expects to have
sufficient  short-term (defined as the twelve-month period ending June 30, 2006)
and long-term  (defined as the five-year  period ending  December 31, 2009,  the
time period for which the Company generally does long-term  budgeting) liquidity
to meet its obligations including operations, capital expenditures, debt service
and  dividends.  To the extent that  actual  developments  differ  from  Kronos'
expectations, Kronos' liquidity could be adversely affected.

     See Note 9 to the Consolidated  Financial Statements for certain income tax
examinations  currently  underway with respect to certain of Kronos'  income tax
returns in various non-U.S.  jurisdictions,  and see Note 11 to the Consolidated
Financial  Statements with respect to certain legal  proceedings with respect to
Kronos.

     Certain  of  Kronos'  sales  generated  by  its  non-U.S.   operations  are
denominated in U.S. dollars. Kronos periodically uses currency forward contracts
to manage a very nominal  portion of foreign  exchange rate risk associated with
receivables  denominated  in a  currency  other  than  the  holder's  functional
currency or similar exchange rate risk associated with future sales.  Kronos has
not entered  into these  contracts  for trading or  speculative  purposes in the
past,  nor does Kronos  currently  anticipate  entering into such  contracts for
trading  or  speculative  purposes  in the  future.  Derivatives  used to  hedge
forecasted transactions and specific cash flows associated with foreign currency
denominated  financial assets and liabilities  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  transactions.  For the
periods  ended June 30, 2004 and 2005 the Company has not used hedge  accounting
for any of its  contracts.  To manage such exchange rate risk, at June 30, 2005,
Kronos  held a series of  contracts,  which  mature  at  various  dates  through
December  2005, to exchange an aggregate of U.S. $22.5 million for an equivalent
amount of Canadian dollars at an exchange rates of Cdn. $1.23 per U.S. dollar to
Cdn. $1.26 per U.S. dollar.  At June 30, 2005, the actual exchange rate was Cdn.
$1.23 per U.S. dollar. The estimated fair value of such foreign currency forward
contracts at June 30, 2005 was not material.

                                      -26-
<PAGE>


     Kronos periodically evaluates its liquidity requirements,  alternative uses
of capital,  capital needs and availability of resources in view of, among other
things,  its  dividend  policy,   its  debt  service  and  capital   expenditure
requirements  and estimated  future  operating  cash flows.  As a result of this
process, Kronos has in the past and may in the future seek to reduce, refinance,
repurchase or restructure  indebtedness,  raise additional  capital,  repurchase
shares of its common stock,  modify its dividend policy,  restructure  ownership
interests, sell interests in subsidiaries or other assets, or take a combination
of such steps or other steps to manage its liquidity and capital  resources.  In
the  normal  course  of  its  business,  Kronos  may  review  opportunities  for
acquisitions, divestitures, joint ventures or other business combinations in the
chemicals or other  industries,  as well as the acquisition of interests in, and
loans to, related  entities.  In the event of any such  transaction,  Kronos may
consider using its available cash,  issuing its equity  securities or increasing
its  indebtedness to the extent  permitted by the agreements  governing  Kronos'
existing debt.

     Kronos has  substantial  operations  located  outside the United States for
which the functional  currency is not the U.S. dollar. As a result, the reported
amounts of Kronos' assets and  liabilities  related to its non-U.S.  operations,
and therefore Kronos' consolidated net assets, will fluctuate based upon changes
in currency exchange rates.

Non-GAAP financial measures

     In an effort to provide investors with additional information regarding the
Company's results of operations as determined by GAAP, the Company has disclosed
certain  non-GAAP   information  which  the  Company  believes  provides  useful
information to investors.

o    The Company discloses percentage changes in its average TiO2 selling prices
     in billing  currencies,  which  excludes  the  effects of foreign  currency
     translation.  The Company  believes  disclosure of such percentage  changes
     allows  investors to analyze such changes  without the impact of changes in
     foreign  currency  exchange rates,  thereby  facilitating  period-to-period
     comparisons of the relative changes in average selling prices in the actual
     various  billing  currencies.   Generally,  when  the  U.S.  dollar  either
     strengthens or weakens against other  currencies,  the percentage change in
     average  selling  prices  in  billing  currencies  will be higher or lower,
     respectively,  than such percentage  changes would be using actual exchange
     rates prevailing during the respective periods. See page 19.

ITEM 4. CONTROLS AND PROCEDURES

     Evaluation of Disclosure  Controls and Procedures.  The Company maintains a
system of disclosure controls and procedures.  The term "disclosure controls and
procedures,"  as defined by  regulations  of the SEC,  means  controls and other
procedures that are designed to ensure that information required to be disclosed
in the reports that the Company files or submits to the SEC under the Securities
Exchange Act of 1934, as amended (the "Act"), is recorded, processed, summarized
and  reported,  within the time periods  specified in the SEC's rules and forms.
Disclosure  controls and procedures include,  without  limitation,  controls and
procedures  designed to ensure that information  required to be disclosed by the
Company  in the  reports  that it files or  submits  to the SEC under the Act is
accumulated  and  communicated  to  the  Company's  management,   including  its
principal  executive  officer and its principal  financial  officer,  or persons
performing  similar  functions,  as appropriate to allow timely  decisions to be
made regarding  required  disclosure.  Each of Harold C. Simmons,  the Company's
Chief Executive Officer, and Gregory M. Swalwell,  the Company's Vice President,
Finance and Chief  Financial  Officer,  has evaluated  the Company's  disclosure

                                      -27-
<PAGE>


controls and procedures as of June 30, 2005. Based upon their evaluation,  these
executive  officers have  concluded that the Company's  disclosure  controls and
procedures are effective as of the date of such evaluation.

     Internal  Control Over  Financial  Reporting.  The Company  also  maintains
internal  control over  financial  reporting.  The term  "internal  control over
financial  reporting,"  as defined by  regulations  of the SEC,  means a process
designed by, or under the supervision of, the Company's  principal executive and
principal  financial  officers,  or persons performing  similar  functions,  and
effected by the Company's board of directors, management and other personnel, to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with GAAP, and includes those policies and procedures that:

o    Pertain to the maintenance of records that in reasonable  detail accurately
     and fairly reflect the  transactions  and dispositions of the assets of the
     Company,

o    Provide reasonable assurance that transactions are recorded as necessary to
     permit  preparation  of financial  statements in accordance  with GAAP, and
     that  receipts  and  expenditures  of the  Company  are being  made only in
     accordance with  authorizations of management and directors of the Company,
     and

o    Provide reasonable assurance regarding prevention or timely detection of an
     unauthorized  acquisition,  use or disposition of the Company's assets that
     could  have a  material  effect  on the  Company's  Consolidated  Financial
     Statements.

     As permitted by the SEC, the Company's  assessment of internal control over
financial  reporting  excludes (i) internal control over financial  reporting of
its equity method  investees and (ii) internal  control over the  preparation of
the Company's financial statement schedules required by Article 12 of Regulation
S-X.  However,  the  Company's  assessment  of internal  control over  financial
reporting with respect to the Company's  equity method investees did include the
Company's  controls  over the  recording  of amounts  related  to the  Company's
investments   that  are  recorded  in  the  Company's   consolidated   financial
statements,  including controls over the selection of accounting methods for the
Company's investments,  the recognition of equity method earnings and losses and
the determination,  valuation and recording of the Company's  investment account
balances.

     There has been no change to the Company's  internal  control over financial
reporting  during the quarter ended June 30, 2005 that has materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reporting.

                           Part II. OTHER INFORMATION

Item 1. Legal Proceedings

     Reference is made to Note 11 of the Consolidated  Financial  Statements and
to the 2004 Annual Report for descriptions of certain legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

     The Company's 2005 Annual Meeting of Shareholders was held on May 19, 2005.
Keith R. Coogan, Cecil H. Moore, Jr., George E. Poston, Glenn R. Simmons, Harold
C.  Simmons,  R. Gerald  Turner and Steven L. Watson were elected as  directors,
each  receiving  votes  "For"  their  election  from at least  97.8% of the 48.9
million common shares eligible to vote at the Annual Meeting.

                                      -28-
<PAGE>


Item 6. Exhibits

        10.1 - Second  Amendment  Agreement  Relating  to a  Facility  Agreement
               dated June 25,  2002  executed  as of June 14,  2005 by and among
               Deutsche  Bank AG,  as  mandated  lead  arranger,  Deutsche  Bank
               Luxembourg S.A. as agent, the participating lenders, Kronos Titan
               GmbH,  Kronos Europe S.A./N.V,  Kronos Titan AS, Kronos Norge AS,
               Titania AS and Kronos Denmark ApS - incorporated  by reference to
               Exhibit 10.1 of Kronos International,  Inc.s' Form 8-K dated June
               14,  2005.  Certain  schedules,  exhibits,  annexes  and  similar
               attachments  to this  Exhibit  10.1  have  not been  filed;  upon
               request, the Reporting Persons will furnish supplementally to the
               Commission a copy of any omitted exhibit, annex or attachment.

        31.1 - Certification

        31.2 - Certification

        32.1 - Certification


     The Company  has  retained a signed  original of any of the above  exhibits
that  contains  signatures,  and the Company  will  provide  such exhibit to the
Commission or its staff upon request. Kronos will also furnish,  without charge,
a copy of its Code of Business Conduct and Ethics,  its Audit Committee  Charter
and its Corporate Governance Guidelines,  each as adopted by the Company's board
of directors, upon request. Such requests should be directed to the attention of
Kronos's  Corporate  Secretary at Kronos's corporate offices located at 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240.

                                      -29-
<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                 Kronos Worldwide, Inc.
                                          ----------------------------------
                                                      (Registrant)



Date   August 3, 2005                      By /s/ Gregory M. Swalwell
                                              ---------------------------------
                                              Gregory M. Swalwell
                                              Vice President, Finance and Chief
                                               Financial Officer (Principal
                                               Financial Officer)


Date   August 3, 2005                      By /s/ James W. Brown
                                              ---------------------------------
                                              James W. Brown
                                              Vice President and Controller
                                              (Principal Accounting Officer)

                                      -30-
<PAGE>