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   September 30, 2004       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    No X
                                                                  ---   ---



Number of shares of the  Registrant's  common stock  outstanding  on October 29,
2004: 48,946,049.


<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                                      INDEX




                                                                          Page
                                                                         number

Part I.          FINANCIAL INFORMATION

  Item 1.        Financial Statements

                 Consolidated Balance Sheets -
                  December 31, 2003 and September 30, 2004                   3

                 Consolidated Statements of Income -
                  Three months and nine months ended September 30,
                  2003 and 2004                                              5

                 Consolidated Statements of Comprehensive Income -
                  Nine months ended September 30, 2003 and 2004              6

                 Consolidated Statement of Stockholders' Equity -
                  Nine months ended September 30, 2004                       7

                 Consolidated Statements of Cash Flows -
                  Nine months ended September 30, 2003 and 2004              8

                 Notes to Consolidated Financial Statements                 10

  Item 2.        Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                       18

  Item 4.        Controls and Procedures                                    29

Part II.         OTHER INFORMATION

  Item 1.        Legal Proceedings                                          31

  Item 6.        Exhibits and Reports on Form 8-K                           31


<PAGE>


                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)

<TABLE>

               ASSETS                                             December 31,       September 30,
                                                                      2003               2004
                                                                  ------------       -------------


 Current assets:
<S>                                                               <C>                 <C>
   Cash and cash equivalents                                      $   55,876          $  118,504
   Restricted cash and cash equivalents                                1,313                 916
   Accounts and other receivables                                    156,212             203,976
   Refundable income taxes                                            35,336               1,729
   Receivables from affiliates                                         1,209                   7
   Inventories                                                       266,020             203,171
   Prepaid expenses                                                    4,456               9,551
   Deferred income taxes                                               2,755               3,089
                                                                  ----------          ----------

       Total current assets                                          523,177             540,943
                                                                  ----------          ----------
 Other assets:
   Investment in TiO2 manufacturing joint venture                    129,011             119,911
   Deferred income taxes                                               6,682             180,036
   Other                                                              28,040              29,410
                                                                  ----------          ----------

       Total other assets                                            163,733             329,357
                                                                  ----------          ----------
 Property and equipment:
   Land                                                               32,339              31,957
   Buildings                                                         179,472             178,554
   Equipment                                                         765,231             766,836
   Mining properties                                                  63,701              62,764
   Construction in progress                                            9,666              20,468
                                                                  ----------          ----------
                                                                   1,050,409           1,060,579
   Less accumulated depreciation and amortization                    615,442             641,027
                                                                  ----------          ----------

       Net property and equipment                                    434,967             419,552
                                                                  ----------          ----------

                                                                  $1,121,877          $1,289,852
                                                                  ==========          ==========
</TABLE>

<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)

<TABLE>

    LIABILITIES AND STOCKHOLDERS' EQUITY                          December 31,       September 30,
                                                                      2003               2004
                                                                  ------------       -------------


 Current liabilities:
<S>                                                               <C>                 <C>
   Current maturities of long-term debt                           $      288          $      148
   Accounts payable                                                   97,446              70,476
   Accrued liabilities                                                69,218              92,442
   Payable to affiliates                                               8,919               9,040
   Income taxes                                                       12,354              12,338
   Deferred income taxes                                               3,436                -
                                                                  ----------          ----------

       Total current liabilities                                     191,661             184,444
                                                                  ----------          ----------

 Noncurrent liabilities:
   Long-term debt                                                    356,451             350,380
   Notes payable to affiliates                                       200,000             200,000
   Accrued pension costs                                              68,161              65,662
   Accrued postretirement benefits costs                              11,176              10,768
   Deferred income taxes                                             119,825              51,843
   Other                                                              14,727              13,681
                                                                  ----------          ----------

       Total noncurrent liabilities                                  770,340             692,334
                                                                  ----------          ----------

 Minority interest                                                       525                 528
                                                                  ----------          ----------

 Stockholders' equity:
   Common stock                                                          489                 489
   Additional paid-in capital                                      1,060,157           1,060,247
   Retained deficit                                                 (729,260)           (478,631)
   Accumulated other comprehensive loss:
     Currency translation                                           (133,009)           (130,533)
     Pension liabilities                                             (39,026)            (39,026)
                                                                  ----------          ----------

       Total stockholders' equity                                    159,351             412,546
                                                                  ----------          ----------

                                                                  $1,121,877          $1,289,852
                                                                  ==========          ==========
</TABLE>



Commitments and contingencies (Notes 9 and 12)


          See accompanying notes to consolidated financial statements.


<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                      (In thousands, except per share data)

<TABLE>

                                                          Three months ended               Nine months ended
                                                             September 30,                    September 30,
                                                         --------------------            ---------------------
                                                           2003         2004               2003          2004
                                                           ----         ----               ----          ----

<S>                                                     <C>          <C>               <C>            <C>
Net sales                                               $ 242,931    $ 286,058         $ 762,535      $ 845,114
Cost of sales                                             177,432      219,382           563,498        649,118
                                                        ---------    ---------         ---------      ---------

    Gross margin                                           65,499       66,676           199,037        195,996

Selling, general and administrative expense                29,705       35,777            90,059        105,991
Other operating income (expense):
  Currency transaction losses, net                           (458)      (1,414)           (4,299)          (858)
  Disposition of property and equipment                      (227)        (197)             (271)          (199)
  Other income                                                115          234               227          6,514
  Corporate expense                                          (930)        (589)           (2,614)        (1,868)
                                                        ---------    ---------         ---------      ---------

    Income from operations                                 34,294       28,933           102,021         93,594

Other income (expense):
  Trade interest income                                       200          287               561            699
  Interest income from affiliates                               -         -                  723           -
  Other interest income                                        54          284               128            657
  Interest expense to affiliates                                -       (4,529)             (703)       (13,480)
  Interest expense                                         (8,338)      (8,720)          (24,688)       (26,529)
                                                        ---------    ---------         ---------      ---------

    Income before income taxes and
      minority interest                                    26,210       16,255            78,042         54,941

 Income tax expense (benefit)                              10,241        6,189             3,567       (232,436)

Minority interest in after-tax earnings                        18           18                61             38
                                                        ---------    ---------         ---------      ---------

    Net income                                          $  15,951    $  10,048         $  74,414      $ 287,339
                                                        =========    =========         =========      =========

Basic and diluted net income per share                  $     .33    $     .21         $    1.52      $    5.87
                                                        =========    =========         =========      =========
Basic and diluted weighted-average shares used in
   the calculation of net income per share                 48,943       48,946            48,943         48,945
                                                        =========    =========         =========      =========
</TABLE>


          See accompanying notes to consolidated financial statements.

<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                  Nine months ended September 30, 2003 and 2004

                                 (In thousands)

<TABLE>


                                                                      2003           2004
                                                                      ----           ----

<S>                                                               <C>             <C>
Net income                                                        $  74,414       $ 287,339

Other comprehensive income, net of tax - currency translation
   adjustment                                                        14,291           2,476
                                                                  ---------       ---------

          Comprehensive income                                    $  88,705       $ 289,815
                                                                  =========       =========

</TABLE>

          See accompanying notes to consolidated financial statements.


<PAGE>




                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                      Nine months ended September 30, 2004

                                 (In thousands)

<TABLE>

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

<S>                                  <C>          <C>            <C>             <C>              <C>             <C>
Balance at December 31, 2003         $  489       $1,060,157     $(729,260)      $(133,009)       $(39,026)       $159,351

Net income                             -                -          287,339            -               -            287,339

Dividends                              -                -          (36,710)           -               -            (36,710)

Issuance of common stock               -                  90          -               -               -                 90

Other comprehensive income             -                -             -              2,476            -              2,476
                                     ------       ----------     ---------       ---------        --------        --------

Balance at September 30, 2004        $  489       $1,060,247     $(478,631)      $(130,533)       $(39,026)       $412,546
                                     ======       ==========     =========       =========        ========        ========
</TABLE>



          See accompanying notes to consolidated financial statements.

<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  Nine months ended September 30, 2003 and 2004

                                 (In thousands)


<TABLE>

                                                                    2003           2004
                                                                    ----           ----

 Cash flows from operating activities:
<S>                                                               <C>            <C>
   Net income                                                     $ 74,414       $287,339
   Depreciation and amortization                                    29,127         32,588
   Noncash interest expense                                          1,628          1,852
   Deferred income taxes                                             6,040       (243,922)
   Minority interest                                                    61             38
   Net loss from disposition of property and equipment                 271            199
   Pension cost, net                                                (3,646)           461
   Distributions from TiO2 manufacturing joint venture, net          2,175          9,100
   Other postretirement benefits, net                                 (870)          (506)
   Other, net                                                        1,070          1,942
   Change in assets and liabilities:
     Accounts and other receivables                                (30,802)       (49,582)
     Inventories                                                    22,993         61,122
     Prepaid expenses                                                 (888)        (4,729)
     Accounts payable and accrued liabilities                      (28,332)        (6,351)
     Income taxes                                                    2,333         33,290
     Accounts with affiliates                                        7,852          1,297
     Other, net                                                         20         (4,310)
                                                                  --------       --------

         Net cash provided by operating activities                  83,446        119,828
                                                                  --------       --------

 Cash flows from investing activities:
   Capital expenditures                                            (23,735)       (21,417)
   Change in restricted cash equivalents                              (911)           409
   Other, net                                                           81             83
                                                                  --------       --------

         Net cash used in investing activities                     (24,565)       (20,925)
                                                                  --------       --------

 Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                     16,106         99,968
     Principal payments                                            (45,868)      (100,030)
     Loans to affiliates                                             8,000              -
     Repayment of loans from affiliates                            (52,600)             -
   Dividends paid                                                   (7,000)       (36,710)
   Other capital transactions with affiliates, net                  19,700              -
   Other, net                                                          (14)          -
                                                                  --------       --------

         Net cash used in financing activities                     (61,676)       (36,772)
                                                                  --------       --------

</TABLE>

<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                  Nine months ended September 30, 2003 and 2004

                                 (In thousands)

<TABLE>

                                                                    2003              2004
                                                                    ----              ----


 Cash and cash equivalents - net change from:
<S>                                                               <C>               <C>
   Operating, investing and financing activities                  $ (2,795)         $ 62,131
   Currency translation                                              1,544               497
 Cash and cash equivalents at beginning of period                   40,685            55,876
                                                                  --------          --------

 Cash and cash equivalents at end of period                       $ 39,434          $118,504
                                                                  ========          ========

 Supplemental disclosures - cash paid (received) for:
     Interest, net of amounts capitalized                         $ 17,048          $ 30,369
     Income taxes, net                                             (11,524)          (22,433)
</TABLE>


          See accompanying notes to consolidated financial statements.

<PAGE>



                     KRONOS WORLDWIDE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and basis of presentation:

     At September 30, 2004, (i) NL Industries, Inc. (NYSE:NL) held approximately
49% of Kronos common  stock,  (ii) Valhi,  Inc.  (NYSE:VHI)  and a  wholly-owned
subsidiary of Valhi held  approximately  83% of NL's  outstanding  common stock,
(iii) Valhi and such wholly-owned  subsidiary of Valhi held an additional 45% of
Kronos'   outstanding  common  stock  and  (iv)  Contran   Corporation  and  its
subsidiaries  held  approximately  90%  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.  Mr. Simmons,  the Chairman of
the Board of Valhi,  Contran, NL and the Company,  may be deemed to control each
of such companies.

     The  consolidated  balance  sheet of Kronos at  December  31, 2003 has been
condensed from the Company's audited  consolidated  financial statements at that
date. The consolidated balance sheet at September 30, 2004, and the consolidated
statements of income,  comprehensive income, stockholders' equity and cash flows
for the interim periods ended September 30, 2003 and 2004, 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
present 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,  and  certain  prior year
amounts have been reclassified to conform to the current year presentation.  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,
2003 (the "2003 Annual Report").

     The  Company  has  complied  with the  consolidation  requirements  of FASB
Interpretation ("FIN") No. 46R, "Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51," as amended, as of March 31, 2004. See Note 13.

     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 2003 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.  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 2003,
the  Company  commenced  accounting  for its stock  options  using the  variable
accounting  method of APBO No. 25,  which  requires 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)  to be  accrued  as an
expense,  with subsequent  increases  (decreases) in the Company's  market price
resulting in recognition of additional compensation expense (income).  Aggregate
compensation income related to NL stock options held by employees of the Company
was approximately $300,000 in each of the third quarter and first nine months of
2003 and aggregate  compensation  expense was  approximately $1 million and $1.9
million in the third quarter and first nine months of 2004, respectively.
<PAGE>
     The following  table presents what the Company's  consolidated  net income,
and  related  per share  amounts,  would have been in the 2003 and 2004  periods
presented if the Company and its subsidiaries and affiliates 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
Statements of Financial  Accounting Standards ("SFAS") SFAS No. 123, "Accounting
for Stock-Based  Compensation,"  for all awards granted subsequent to January 1,
1995.

<TABLE>

                                                          Three months ended               Nine months ended
                                                             September 30,                    September 30,
                                                         --------------------            ---------------------
                                                           2003         2004               2003          2004
                                                           ----         ----               ----          ----
                                                                (In millions, except per share amounts)

<S>                                                        <C>          <C>                <C>          <C>
Net income as reported                                     $16.0        $10.0              $74.4        $287.3

Adjustments,  net of  applicable  income tax
  effects and minority    interest,    of
  stock-based    employee compensation
  determined under:
     APBO No. 25                                             (.2)          .6                (.2)          1.2
     SFAS No. 123                                            (.1)         -                  (.2)           -
                                                           -----        -----              -----        ------

Pro forma net income                                       $15.7        $10.6              $74.0        $288.5
                                                           =====        =====              =====        ======

Basic and diluted net income per share:
         As reported                                       $ .33        $ .21              $1.52        $ 5.87
         Pro forma                                           .32          .22               1.51          5.89
</TABLE>


Note 2 - Accounts and other receivables:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Trade receivables                                                  $147,029             $193,634
 Recoverable VAT and other receivables                                12,103               13,191
 Allowance for doubtful accounts                                      (2,920)              (2,849)
                                                                    --------             --------

                                                                    $156,212             $203,976
                                                                    ========             ========
</TABLE>

Note 3 - Inventories:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Raw materials                                                      $ 61,959             $ 36,363
 Work in process                                                      19,855               16,762
 Finished products                                                   147,270              113,128
 Supplies                                                             36,936               36,918
                                                                    --------             --------

                                                                    $266,020             $203,171
                                                                    ========             ========
</TABLE>
<PAGE>
Note 4 - Other noncurrent assets:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Deferred financing costs, net                                      $ 10,417             $  8,613
 Restricted marketable debt securities                                 2,586                2,556
 Unrecognized net pension obligations                                 13,747               13,810
 Other                                                                 1,290                4,431
                                                                    --------             --------

                                                                    $ 28,040             $ 29,410
                                                                    ========             ========
</TABLE>

Note 5 - Accrued liabilities:

<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Employee benefits                                                  $ 31,732             $ 33,702
 Interest                                                                207                7,992
 Other                                                                37,279               50,748
                                                                    --------             --------

                                                                    $ 69,218             $ 92,442
                                                                    ========             ========
</TABLE>


Note 6 - Long-term debt:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Kronos International, Inc. and subsidiaries:
   Senior Secured Notes                                             $356,136             $350,180
   Other                                                                 603                  348
                                                                    --------             --------

                                                                     356,739              350,528
 Less current maturities                                                 288                  148
                                                                    --------             --------

                                                                    $356,451             $350,380
                                                                    ========             ========
</TABLE>

     During the first quarter of 2004, certain of Kronos' operating subsidiaries
in Europe  borrowed a net Euro 26 million ($32 million when borrowed)  under the
European  revolving  credit  facility at an interest rate of 3.8%.  Such amounts
were  repaid in the  second  quarter  of 2004.  In  October  2004 one of Kronos'
operating  subsidiaries  in Europe  borrowed  Euro 10 million  ($12 million when
borrowed)  under the European  revolving  credit facility at an interest rate of
3.83%.

Note 7 - Other noncurrent liabilities:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)

<S>                                                                 <C>                  <C>
 Employee benefits                                                  $  4,849             $  4,611
 Insurance                                                             1,673                1,385
 Other                                                                 8,205                7,685
                                                                    --------             --------

                                                                    $ 14,727             $ 13,681
                                                                    ========             ========
</TABLE>
<PAGE>
Note 8 - Other income:
<TABLE>

                                                                          Nine months ended
                                                                            September 30,
                                                                      -------------------------
                                                                      2003                 2004
                                                                      ----                 ----
                                                                           (In thousands)

<S>                                                                 <C>                   <C>
 Contract dispute settlement                                        $   -                 $ 6,289
 Other income                                                            227                  225
                                                                    --------             --------

                                                                    $    227              $ 6,514
                                                                    ========             ========
</TABLE>

     The contract dispute settlement relates to the Company's  settlement with a
customer. As part of the settlement, the customer agreed to make payments to the
Company through 2007 aggregating $7.3 million.  The $6.3 million gain recognized
represents  the present value of the future  payments to be paid by the customer
to the  Company.  Of such $7.3  million,  $1.5 million was paid to Kronos in the
second  quarter of 2004,  $1.75 million is due in each of the second  quarter of
2005 and  2006 and  $2.25  million  is due in the  second  quarter  of 2007.  At
September 30, 2004, the present value of the remaining amounts due to be paid to
Kronos aggregated  approximately $5.0 million, of which $1.7 million is included
in accounts receivable and $3.3 million is included in other noncurrent assets.


Note 9 - Income tax expense (benefit):
<TABLE>

                                                                          Nine months ended
                                                                            September 30,
                                                                      -------------------------
                                                                      2003                 2004
                                                                      ----                 ----
                                                                           (In thousands)

<S>                                                                 <C>                 <C>
 Expected tax expense                                               $   27.3            $    19.2
 Change in deferred income tax valuation
   allowance, net                                                        (.7)              (254.3)
 Refund of prior year income taxes                                     (24.6)                (3.1)
 Incremental U.S. tax and rate differences on
   equity in earnings of non-tax group companies                          .1                  (.1)
 Non-U.S. tax rates                                                       .2                   -
 Nondeductible expenses                                                  1.9                  2.3
 Other, net                                                              (.6)                 3.6
                                                                    --------             --------

                                                                    $    3.6             $ (232.4)
                                                                    ========             ========
</TABLE>

     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  September  30,
     2004).  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
     titanium  dioxide  pigments  ("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 13 million
     ($16 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 at
     September 30, 2004) relating to the years 1998 to 2000. Kronos has objected
     to this proposed assessment.
<PAGE>
     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,  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.

     At December 31, 2003, Kronos had a significant amount of net operating loss
carryforwards for German corporate and trade tax purposes,  all of which have no
expiration date. These net operating loss carryforwards were generated by Kronos
International,  Inc.  ("KII")  principally  during  the  1990's  when  KII had a
significantly  higher  level  of  outstanding  indebtedness  than  is  currently
outstanding.  For financial reporting purposes, however, the benefit of such net
operating loss  carryforwards had not previously been recognized  because Kronos
did not believe they met the  "more-likely-than-not"  recognition criteria,  and
accordingly  Kronos  had  a  deferred  income  tax  asset  valuation   allowance
offsetting  the benefit of such net  operating  loss  carryforwards  and Kronos'
other tax attributes in Germany. KII had generated taxable income in Germany for
both German  corporate and trade tax purposes  since 2000, and starting with the
quarter  ended  December  31,  2002 and for  each  quarter  thereafter,  KII had
cumulative  taxable  income in  Germany  for the most  recent  twelve  quarters.
However, offsetting this positive evidence was the fact that prior to the end of
2003, Kronos believed there was significant uncertainty regarding its ability to
utilize  such  net  operating  loss  carryforwards  under  German  tax law  and,
principally because of the uncertainty caused by this negative evidence,  Kronos
had concluded the benefit of the net operating loss  carryforwards  did not meet
the  "more-likely-than-not"  criteria.  By the end of 2003,  and  primarily as a
result of a favorable German court ruling in 2003 and the procedures  Kronos had
completed  during 2003 with respect to the filing of certain  amended German tax
returns  (as  discussed  below),  Kronos  had  concluded  that  the  significant
uncertainty   regarding  its  ability  to  utilize  such  net   operating   loss
carryforwards  under German tax law had been eliminated.  However, at the end of
2003,  Kronos  believed  at that time that it would  generate a taxable  loss in
Germany  during 2004.  Such  expectation  was based  primarily upon then current
levels of prices for TiO2, and the fact that Kronos was  experiencing a downward
trend in its TiO2 selling  prices and Kronos did not have any positive  evidence
to indicate that the downward trend would improve.  If the price trend continued
downward  throughout  all of 2004 (which was a  possibility  given Kronos' prior
experience), Kronos would likely have a taxable loss in Germany for 2004. If the
downward  trend in prices had abated,  ceased,  or reversed at some point during
2004,  then Kronos  would  likely have  taxable  income in Germany  during 2004.
Accordingly, Kronos continued to conclude at the end of 2003 that the benefit of
the   German   net   operating   loss    carryforwards    did   not   meet   the
"more-likely-than-not"  criteria and that it would not be appropriate to reverse
the deferred  income tax asset  valuation  allowance,  given the likelihood that
Kronos would generate a taxable loss in Germany during 2004. The expectation for
a taxable  loss in Germany  continued  through  the end of the first  quarter of
2004. By the end of the second  quarter of 2004,  however,  Kronos' TiO2 selling
prices had started to  increase,  and Kronos  believes  its selling  prices will
continue to increase  during the  remainder  of 2004 after  Kronos and its major
competitors  announced an  additional  round of price  increases.  The fact that
Kronos'  selling prices  started to increase  during the second quarter of 2004,
combined with the fact that Kronos and its competitors had announced  additional
price increases  (which based on past  experience  indicated to Kronos that some
<PAGE>

portion of the additional price increases would be realized in the marketplace),
provided additional positive evidence that was not present at December 31, 2003.
Consequently, Kronos' revised projections now reflect taxable income for Germany
in 2004 as well as 2005. Accordingly, based on all available evidence, including
the fact that (i) Kronos had generated  positive taxable income in Germany since
2000, and starting with the quarter ended December 31, 2002 and for each quarter
thereafter,  KII had  cumulative  taxable  income in Germany for the most recent
twelve  quarters,  (ii) Kronos was now  projecting  positive  taxable  income in
Germany for 2004 and 2005 and (iii) the German net operating loss  carryforwards
have no expiration date,  Kronos concluded that the benefit of the net operating
loss    carryforwards    and   other    German    tax    attributes    met   the
"more-likely-than-not"  recognition  criteria,  and Kronos reversed the deferred
income tax asset valuation allowance related to Germany.  Given the magnitude of
the German net operating loss carryforwards and the fact that current provisions
of German law limit the annual  utilization of net operations loss carryforwards
to 60% of taxable  income  after the first  euro 1 million  of  taxable  income,
Kronos  believes it will take several years to fully utilize the benefit of such
operating  loss  carryforwards.  However,  given  the  number of years for which
Kronos has now generated  positive taxable income in Germany,  combined with the
fact that the net operating loss carryforwards were generated during a time when
KII  had a  significantly  higher  level  of  outstanding  indebtedness  than it
currently  has   outstanding,   and  the  fact  that  the  net  operating   loss
carryforwards  have no expiration  date,  Kronos concluded it was appropriate to
reverse  all of the  valuation  allowance  related  to the  net  operating  loss
carryforwards. Accordingly, in the first six months of 2004, Kronos recognized a
$254.3  million  income tax benefit  related to the  reversal  of such  deferred
income  tax  asset  valuation  allowance  attributable  to  Kronos'  income  tax
attributes in Germany  (principally  the net operating loss  carryforwards).  Of
such $254.3 million,  $8.7 million  relates  primarily to the utilization of the
German net operating loss carryforwards during the first six months of 2004, the
benefit of which had previously not met the  "more-likely-than-not"  recognition
criteria,  and $245.6 million  relates to the German  deferred  income tax asset
valuation  allowance  attributable  to the remaining  German net operating  loss
carryforwards and other tax attributes as of June 30, 2004, the benefit of which
Kronos has concluded now meet the  "more-likely-than-not"  recognition criteria.
At September 30, 2004, the net operating loss carryforwards for German corporate
and trade tax  purposes  aggregated  the  equivalent  of $602  million  and $244
million, respectively, all of which have no expiration date.


     In the first quarter of 2003, KII was notified by the German Federal Fiscal
Court that the Court had ruled in KII's favor concerning a claim for refund suit
in which KII sought  refunds of prior taxes paid during the periods 1990 through
1997. KII and KII's German  operating  subsidiary  were required to file amended
tax returns with the German tax  authorities to receive  refunds for such years,
and all of such amended  returns were filed  during 2003.  Such amended  returns
reflected an aggregate  net refund of taxes and related  interest to KII and its
German  operating  subsidiary  of Euro 26.9  million  ($32.1  million),  and the
Company  recognized  the benefit  for these net  refunds in its 2003  results of
operations.  During the first nine  months of 2004,  the  Company  recognized  a
benefit of Euro 2.5 million ($3.1  million)  related to additional  net interest
which has accrued on the  outstanding  refund  amounts.  Assessments and refunds
will be  processed  by year as the  respective  returns are  reviewed by the tax
authorities.  Certain interest components may also be refunded  separately.  The
German tax  authorities  have  reviewed and  accepted  the amended  returns with
respect to the 1990 through 1994 tax years. Through September 2004, KII's German
operating  subsidiary  had  received  net  refunds of Euro 27.2  million  ($33.6
million when  received).  KII believes it will receive the  remainder of the net
refunds  of taxes and  related  interest  for the  remaining  years  during  the
remainder of 2004. In addition to the refunds for the 1990 to 1997 periods,  the
court  ruling also  resulted in a refund of 1999 income  taxes and  interest for
which KII received Euro 21.5 million  ($24.6  million) in 2003,  and the Company
recognized the benefit of this refund in the second quarter of 2003.
<PAGE>
Note 10 - Employee benefit plans:

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

                                                          Three months ended               Nine months ended
                                                             September 30,                    September 30,
                                                         --------------------            ---------------------
                                                           2003         2004               2003          2004
                                                           ----         ----               ----          ----
                                                                            (In thousands)

<S>                                                      <C>          <C>                <C>           <C>
 Service cost benefits                                   $ 1,272      $ 1,772            $ 3,790       $ 4,829
 Interest cost on projected benefit obligations            3,847        4,267             11,375        12,882
 Expected return on plan assets                           (3,556)      (3,776)           (11,411)      (11,396)
 Amortization of prior service cost                           88          140                263           421
 Amortization of net transition obligations                  202          159                586           482
 Recognized actuarial losses                                 306          739                925         2,227
                                                         -------      -------            -------       -------

                                                         $ 2,159      $ 3,301            $ 5,528       $ 9,445
                                                         =======      =======            =======       =======
</TABLE>

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

                                                          Three months ended               Nine months ended
                                                             September 30,                    September 30,
                                                         --------------------            ---------------------
                                                           2003         2004               2003          2004
                                                           ----         ----               ----          ----
                                                                             (In thousands)

<S>                                                     <C>           <C>                <C>           <C>
 Service cost                                           $     39      $    57            $   112       $   170
 Interest cost                                               173          180                509           540
 Amortization of prior service credit                       (263)        (182)              (791)         (548)
 Recognized actuarial losses                                  22           38                 64           116
                                                         -------      -------            -------       -------

                                                         $   (29)     $    93            $  (106)      $   278
                                                         =======      =======            =======       =======
</TABLE>



     The Medicare  Prescription Drug,  Improvement and Modernization Act of 2003
(the "Medicare 2003 Act") introduced a prescription  drug benefit under Medicare
(Medicare  Part D) as well as a federal  subsidy to sponsors  of retiree  health
care  benefit  plans  that  provide  a  benefit  that  is at  least  actuarially
equivalent  to Medicare  Part D. During the third  quarter of 2004,  the Company
determined that benefits provided by its plan are actuarially  equivalent to the
Medicare  Part D benefit and  therefore  the Company is eligible for the federal
subsidy provided for by the Medicare 2003 Act. The effect of such subsidy, which
is  accounted  for  prospectively  from  the  date  actuarial   equivalence  was
determined,  as  permitted  by and in  accordance  with FASB Staff  Position No.
106-2, did not have a material impact on the accumulated  postretirement benefit
obligation,  and will not have a material  impact on the net periodic  OPEB cost
going  forward.  At  September  30,  2004,  approximately  55% of the  Company's
consolidated  accrued OPEB costs relates to the  Company's  U.S.  plan,  and the
remainder relates to the Company's Canadian plan.
<PAGE>
Note 11 - Accounts with affiliates:
<TABLE>

                                                                  December 31,        September 30,
                                                                      2003                 2004
                                                                  ------------        -------------
                                                                           (In thousands)
 Current receivables from affiliates -
<S>                                                                 <C>                  <C>
   NL - income taxes and other                                      $  1,209             $      7
                                                                    ========             ========

 Current payables to affiliates:
   NL                                                               $    359             $    105
   Income taxes payable to Valhi                                           -                  121
   Louisiana Pigment Company                                           8,560                8,814
                                                                    --------             --------

                                                                    $  8,919             $  9,040
                                                                    ========             ========

 Notes payable to affiliates:
     NL                                                             $200,000             $ 31,423
     Valhi                                                              -                   6,077
     Valcor, Inc.                                                       -                 162,500
                                                                    --------             --------

                                                                    $200,000             $200,000
                                                                    ========             ========
</TABLE>

     On September 24, 2004, NL completed the acquisition of the shares of common
stock of CompX International,  Inc. previously held by Valhi and Valcor, Inc., a
wholly-owned  subsidiary of Valhi.  The purchase price for these shares was paid
by NL's transfer to Valhi and Valcor of an aggregate $168.6 million of NL's $200
million   long-term  note  receivable  from  Kronos.  In  October  2004,  Valcor
distributed its note receivable from Kronos to Valhi,  and  subsequently  Kronos
prepaid $100.0 million on the note payable to Valhi (including accrued interest)
principally using available cash on hand.

Note 12 - Commitments and contingencies:

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

Note 13 - Accounting principle newly adopted in 2004:

     The Company  complied with the  consolidation  requirements of FIN No. 46R,
"Consolidation of Variable Interest Entities,  an interpretation of ARB No. 51,"
as amended, as of March 31, 2004. The Company does not have any involvement with
any variable interest entity (as that term is defined in FIN No. 46R) covered by
the scope of FIN No. 46R which had not  already  been  consolidated  under prior
applicable  GAAP,  and  therefore  the  impact to the  Company of  adopting  the
consolidation requirements of FIN No. 46R was not material.

Note 14 - Subsequent event:

     On October 8, 2004,  the Company filed a  registration  statement  with the
Securities and Exchange Commission ("SEC") for a proposed offering of up to 8.25
million shares of its common stock. The registration  statement has not yet been
declared  effective by the SEC. There can be no assurance that the  registration
statement  will be  declared  effective,  or if  declared  effective,  that  the
offering would be completed.

Note 15 - Stockholders' equity:

     Kronos has a long-term  incentive  compensation  plan that provides for the
discretionary  grant of, among other things,  qualified incentive stock options,
nonqualified  stock  options,  restricted  common stock,  stock awards and stock
appreciation  rights.  Up to 150,000 shares of Kronos common stock may be issued
pursuant to this plan.  As of September  30,  2004,  no options had been granted
pursuant to this plan,  and 147,000  shares were  available  for future  grants.
During the first nine months of 2004,  an  aggregate  of 3,000  shares of Kronos
common  stock were  awarded  pursuant  to this plan to members of the  Company's
board of directors.

<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  third  quarter  and the  first  nine  months  of 2003  and 2004 are
primarily  due to (i)  relative  changes in average TiO2  selling  prices,  (ii)
relative  changes in TiO2 sales  volumes and (iii)  relative  changes in foreign
currency  exchange rates.  Selling prices were generally:  increasing during the
first quarter of 2003, flat during the second quarter of 2003, decreasing during
the third and fourth quarters of 2003 and the first quarter of 2004, flat during
the second quarter of 2004 and increasing during the third quarter of 2004.

     The  Company  reported  net income of $10.0  million,  or $.21 per  diluted
share, in the third quarter of 2004 compared to net income of $16.0 million,  or
$.33 per diluted share,  in the third quarter of 2003. For the first nine months
of 2004, the Company reported net income of $287.3 million, or $5.87 per diluted
share,  compared to net income of $74.4 million,  or $1.52 per diluted share, in
the first nine months of 2003.  The increase in the Company's  diluted  earnings
per share from the first nine  months of 2003 to the same  period in 2004 is due
primarily to the net effects of (i)  significantly  higher tax benefit generated
from the reversal of the Company's  German  deferred  income tax asset valuation
allowance,   (ii)  lower  gross  margins,  (iii)  higher  selling,  general  and
administrative  expense,  (iv) income from a contract dispute settlement and (v)
higher interest  expense to affiliates.  Overall,  the Company  believes its net
income in 2004 will be higher  than 2003 as the  impact of the  reversal  of the
Company's deferred income tax asset valuation allowance is expected to more than
offset the effect of expected  lower income from  operations.  Net income in the
first nine  months of 2003  includes  certain  income tax  benefits  relating to
Germany  aggregating $.50 per diluted share. Net income in the first nine months
of 2004 includes (a) certain income tax benefits related to Germany  aggregating
$5.02 per diluted share and (b) income related to contract dispute settlement of
$.08 per diluted share. These items are more fully described below.

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,"  "expects" 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.  Among 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 Securities and Exchange  Commission ("SEC") including,  but not
limited to, the following:
<PAGE>

o    Future supply and demand for the Company's products,
o    The cyclicality of the Company's businesses,
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    The introduction of trade barriers,
o    Customer and competitor strategies,
o    The impact of pricing and production decisions,
o    Competitive technology positions,
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  forecast or expected.  The
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking statement whether as a result of new information,  future events
or otherwise.
<PAGE>



Net sales and income from operations
<TABLE>

                                                      Three months ended                     Nine months ended
                                                        September 30,                          September 30,
                                               ----------------------------------   ----------------------------------
                                                 2003         2004      % Change      2003         2004      % Change
                                                 ----         ----      --------      ----         ----      --------
                                                          (In millions, except percentages and volumes)

<S>                                            <C>           <C>           <C>      <C>          <C>            <C>
    Net sales                                 $  242.9      $  286.1       +18%     $  762.5     $  845.1       +11%
    Cost of sales                                177.4         219.4       +24%        563.5        649.1       +15%
                                              --------      --------                --------     --------

    Gross margin                                 65.5           66.7        +2%        199.0        196.0        -2%

    Selling, general and administrative
        expense                                 (29.7)         (35.8)                  (90.1)      (106.0)
    Currency transaction gains (losses), net      (.5)          (1.4)                   (4.3)         (.8)
    Disposition of property and equipment         (.2)           (.2)                    (.2)         (.2)
    Contract dispute settlement                    -              -                       -           6.3
    Other income                                   .1             .2                      .2           .2
    Corporate expense                             (.9)           (.6)                   (2.6)        (1.9)
                                              --------      --------                --------     --------

    Income from operations                    $   34.3      $   28.9        -16%    $  102.0     $   93.6        -8%
                                              ========      ========                ========     ========

    TiO2 data:

      Percent change in average TiO2
          selling prices:
             Using actual foreign currency
                exchange rates                                              +3%                                  +2%
             Impact of changes in foreign
                currency exchange rates                                     -4%                                  -5%
                                                                           ----                                 ----

             In billing currencies                                          -1%                                  -3%
                                                                           ====                                 ====

      Sales volumes*                            111           128          +16%         350          383         +9%
      Production volumes*                       118           123           +5%         354          363         +3%
</TABLE>

________________________________

     *    Thousands of metric tons

     Kronos'  sales  increased  $43.2 million (18%) in the third quarter of 2004
compared to the third quarter of 2003 and  increased  $82.6 million (11%) in the
first nine months of 2004  compared to the same period in 2003, as the favorable
effect of fluctuations in foreign currency exchange rates, which increased sales
and production by approximately $11 million and $46 million,  respectively,  (as
more fully  discussed  below) and  increased  sales volumes more than offset the
impact  of  lower  average  TiO2  selling   prices.   Excluding  the  effect  of
fluctuations in the value of the U.S. dollar relative to other  currencies,  the
Company's average TiO2 selling prices in billing currencies were 1% lower in the
third  quarter of 2004 as compared to the third  quarter of 2003 and 3% lower in
the first nine months of 2004 as compared to the first nine months of 2003. When
translated  from billing  currencies  into U.S.  dollars  using  actual  foreign
currency  exchange  rates  prevailing  during the  respective  periods,  Kronos'
average TiO2 selling prices in the third quarter of 2004 were 3% higher than the
third  quarter of 2003 and 2% higher for the first nine months of 2004  compared
to the first  nine  months of 2003.  Kronos'  TiO2  sales  volumes  in the third
quarter  and first  nine  months  of 2004  increased  16% and 9%,  respectively,
compared to the same periods of 2003,  as higher  volumes in Europe,  the United
States and export markets more than offset lower volumes in Canada. Kronos' TiO2
sales volumes in the first nine months of 2004 were a new record for Kronos.

     The Company's  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 the Company's  average TiO2 selling
prices in 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 the  Company's  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").  The Company discloses percentage changes
in its average TiO2 prices in billing  currencies  because the Company  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 3% and 2% increase in the Company's  average TiO2 selling  prices during the
third  quarter and first nine months of 2004, as compared to the same periods in
2003  using  actual  foreign  currency  exchange  rates  prevailing  during  the
respective  periods  (the  GAAP  measure)  and  the 1% and 3%  decreases  in the
Company's  average  TiO2  selling  price in  billing  currencies  (the  non-GAAP
measure)  during the third  quarter  and first nine months of 2004 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 the  Company's  average TiO2
selling prices using actual foreign currency  exchange rates  prevailing  during
the  respective  periods (the GAAP measure),  (ii) the percentage  change in the
Company's  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).

     The  Company's  cost of sales  increased  $42.0  million (24%) in the third
quarter of 2004  compared  to the third  quarter of 2003,  and  increased  $85.6
million (15%) in the  year-to-date  period  largely due to the  increased  sales
volumes and the effects of translating  foreign currencies  (primarily the euro)
into U.S.  dollars.  As a result of the lower  average  TiO2  selling  prices in
billing  currencies,  the Company's cost of sales,  as a percentage of net sales
increased from 73% and 74% in each of the third quarter and first nine months of
2003,  respectively,  to 77% in the third quarter and first nine months of 2004.
Kronos'  TiO2  production  volumes  in the third  quarter of 2004  increased  5%
compared to the third quarter of 2003, and increased 3% in the first nine months
of 2004 as compared to the same period in 2003,  with operating  rates near full
capacity in those  periods.  Kronos' TiO2  production  volumes in the first nine
months of 2004 were also a new record for Kronos.
<PAGE>
     The Company's  gross margins for the third quarter of 2004  increased  $1.2
million (2%) from the third quarter of 2003, as the higher sales volumes and the
favorable  effect of relative  changes in foreign  currency  exchange rates more
than offset the effect of lower average selling prices.  However,  gross margins
decreased  $3.0  million  (2%) from the first nine months of 2003 as compared to
the first nine months of 2004, as the  unfavorable  effect of lower average TiO2
selling prices more than offset the favorable effect of higher sales volumes and
relative changes in foreign currency exchange rates.

     Selling,  general and administrative  expenses increased $6.1 million (20%)
and $15.9  million  (18%),  respectively,  in the third  quarter  and first nine
months of 2004 as compared to the corresponding periods in 2003. These increases
are largely  attributable  to the higher sales  volumes as well as the impact of
translating foreign currencies (primarily the euro) into U.S. dollars.

     Kronos'  income  from  operations  in the  first  nine  months of 2004 also
includes $6.3 million of income related to the settlement of a certain  contract
dispute  with a  customer  in  the  second  quarter  of  2004.  As  part  of the
settlement,  the  customer  agreed  to make  payments  to  Kronos  through  2007
aggregating  $7.3  million.  The $6.3 million  recognized  gain  represents  the
present value of the future  payments to be paid by the customer to Kronos.  The
dispute  with the  customer  concerned  the  customer's  alleged past failure to
purchase  the  required  amount of TiO2 from  Kronos  under the terms of Kronos'
contract with the customer. Under the settlement,  the customer agreed to pay an
aggregate of $7.3 million to Kronos through 2007, to resolve such dispute.

     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,  primarily the euro,
other major European currencies and the Canadian dollar. In addition,  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 in the third quarter of 2004 by a net amount of approximately  $11 million
compared to the same period in 2003 and  increased  TiO2 sales in the first nine
months of 2004 by approximately $46 million compared to the same period in 2003.
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 third quarter and
first nine months of 2004 compared to the third quarter and first nine months of
2003. Overall, currency exchange rate fluctuations resulted in a net increase in
the Company's  income from operations of  approximately  $7 million in the first
nine months of 2004 as compared  to the same period in 2003.  Currency  exchange
rate  fluctuations  did not have a material effect on the Company's  income from
operations  in the third  quarter of 2004 as  compared  to the third  quarter of
2003.
<PAGE>
Outlook

     Reflecting  the impact of partial  implementation  of prior price  increase
announcements,  the Company's average TiO2 selling prices in billing  currencies
in the third quarter of 2004 were 3% higher than the second quarter of 2004, the
first quarter with an upward trend in selling  prices since the third quarter of
2003. In June 2004, the Company announced  additional price increases of 4 cents
per pound in the  U.S.,  Canadian  6 cents per pound in Canada  and Euro 120 per
metric ton in Europe,  all of which are targeted to be implemented in the fourth
quarter of 2004.  In September  2004,  the Company  announced  additional  price
increases  of 3 cents to 6 cents  per  pound in the  U.S.,  Canadian  4 cents to
Canadian 8 cents per pound in Canada and Euro 110 per metric ton in Europe,  all
of which are in addition to the July/August announced increases and are targeted
to be  implemented  in January  2005.  The Company is also  targeting to achieve
price  increases in export markets in the fourth quarter of the year. The extent
to which all of such price  increases  will be realized  will  depend on,  among
other things, economic factors.

     The Company  expects its TiO2 sales and production  volumes in 2004 will be
higher than 2003.  The  Company's  average TiO2 selling  price,  which  declined
during the second half of 2003 and first quarter of 2004,  commenced to begin to
rise  during  the  second  quarter  of 2004,  and was  higher by 3% in the third
quarter of 2004 as compared to the second quarter of 2004,  and should  continue
to rise during the remainder of the year. Nevertheless,  the Company expects its
average TiO2 selling prices,  in billing  currencies,  will be lower in calendar
2004 as compared  to 2003 and expects its gross  margin in 2004 to be lower than
2003. The Company's  expectations as to the future  prospects of the Company and
the TiO2  industry  are  based  upon a number of  factors  beyond  its  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  the  Company's
expectations, the Company's results of operations could be unfavorably affected.

Other income (expense)
<TABLE>

                                                      Three months ended                     Nine months ended
                                                        September 30,                          September 30,
                                               ----------------------------------   ----------------------------------
                                                 2003         2004      Difference      2003         2004      Difference
                                                 ----         ----      ----------      ----         ----      ----------
                                                                              (In millions)

<S>                                             <C>          <C>           <C>          <C>         <C>          <C>
Trade interest income                          $    .2       $    .3      $    .1     $    .6      $    .7      $    .1
Interest income from affiliates                     -             -            -           .7            -          (.7)
Other interest income                               .1            .3           .2          .1           .6           .5
Interest expense to affiliates                      -           (4.5)        (4.5)        (.7)       (13.5)       (12.8)
Other interest expense                            (8.4)         (8.7)         (.3)      (24.7)       (26.5)        (1.8)
                                               -------       -------      -------     -------      -------      -------

                                               $  (8.1)      $ (12.6)     $  (4.5)    $ (24.0)     $ (38.7)     $ (14.7)
                                               =======       =======      =======     =======      =======      =======
</TABLE>
<PAGE>
     Interest  expense  to  affiliates  increased  $4.5  million  from the third
quarter of 2003 to $4.5  million in the third  quarter  of 2004,  and  increased
$12.8  million in the first nine months of 2004 to $13.5 million due to the $200
million  long-term notes payable to affiliates which the Company  distributed to
NL in  December  2003.  See Note 11 to the  Consolidated  Financial  Statements.
Because of this  distribution,  interest  expense to  affiliates  is expected to
continue  to be higher  during the  remainder  of 2004 as  compared  to the same
periods in 2003.

     Kronos has a significant amount of outstanding  indebtedness denominated in
the euro,  including  KII's Euro 285 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 third quarter
and first nine months of 2004 was $8.7 million and $26.5 million,  respectively,
increases of $400,000 and $1.8 million, respectively, from the third quarter and
first nine months of 2003. The increases were due primarily to relative  changes
in foreign currency  exchange rates,  which increased the U.S. dollar equivalent
of interest expense on the KII Senior Secured Notes by approximately $500,000 in
the third  quarter and $2.2 million in the first nine months of 2004 as compared
to the third  quarter  and first nine months of 2003.  Assuming  no  significant
change in interest  rates or foreign  currency  exchange  rates,  other interest
expense for the  full-year  2004 is expected to be slightly  higher than amounts
for the same periods in 2003.

     As stated in Note 6 to the Consolidated Financial Statements,  one of KII's
operating  subsidiaries  borrowed  Euro 10  million  in  October  2004 under the
European revolving credit facility at an interest rate of 3.83%.

Income tax benefit

     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 September 30, 2004,  Kronos had the  equivalent of $602 million and $244
million,  respectively, of net operating loss carryforwards for German corporate
and trade tax  purposes,  all of which have no  expiration  date.  As more fully
described  in  Note 9 to  the  Consolidated  Financial  Statements,  Kronos  had
previously  provided a deferred  income tax asset  valuation  allowance  against
substantially all of these tax loss carryforwards and other deductible temporary
differences   in  Germany   because   Kronos  did  not  believe   they  met  the
"more-likely-than-not"  recognition  criteria.  During  the first six  months of
2004,  Kronos  reduced its  deferred  income tax asset  valuation  allowance  by
approximately $8.7 million, primarily as a result of utilization of these German
net operating loss  carryforwards,  the benefit of which had not previously been
recognized.  At June 30, 2004, after considering all available evidence,  Kronos
concluded  that  these  German  tax  loss  carryforwards  and  other  deductible
temporary  differences  met  the  "more-likely-than-not"  recognition  criteria.
Accordingly,  as of June 30, 2004,  Kronos reversed the remaining $245.6 million
valuation  allowance  related to such  items.  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
third quarter of 2004 was higher than the effective income tax rate in the first
half of the year  (exclusive of the reversal of the German  deferred  income tax
asset valuation allowance) and the Company's future effective income tax rate is
expected  to  continue  to be higher  than what it would  have  otherwise  been,
although its future cash income tax rate would not be affected.

     In  January  2004,  the  German  federal  government  enacted  new  tax law
amendments  that limit the annual  utilization of income tax loss  carryforwards
effective  January  1, 2004 to 60% of  taxable  income  after  the first  Euro 1
million of taxable income. The new law will have a significant effect on Kronos'
cash tax  payments  in  Germany  going  forward,  the  extent  of which  will be
dependent on the level of income earned in Germany.

     In October  2004,  the American  Jobs Creation Act of 2004 was enacted into
law.  The new law  contains  several  provisions  that could impact the Company.
These provisions  provide for, among other things, a special deduction from U.S.
taxable  income  equal to a  stipulated  percentage  of  qualified  income  from
domestic  activities (as defined) beginning in 2005, and a special 85% dividends
received  deduction  for certain  dividends  received  from  controlled  foreign
corporations,  which  deduction is subject to a number of  limitations.  Both of
these provisions are complex and subject to numerous  restrictions.  The Company
is still studying the new law, including the technical provisions related to the
two complex provisions noted above. The effect on the Company of the new law, if
any,  has not yet been  determined,  in part  because  the  Company  has not yet
determined  whether its operations  qualify for the special deduction or whether
it would benefit from the special dividends received deduction.
<PAGE>
Recently adopted accounting principle

     See Note 13 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 nine months ended  September 30, 2003 and 2004 are
presented below:
<TABLE>

                                                                          Nine months ended
                                                                            September 30,
                                                                      -------------------------
                                                                      2003                 2004
                                                                      ----                 ----
                                                                            (In millions)

 Net cash provided (used) by:
<S>                                                                 <C>                  <C>
   Operating activities                                             $   83.4             $  119.8
   Investing activities                                                (24.5)               (20.9)
   Financing activities                                                (61.7)               (36.8)
                                                                    --------             --------

     Net cash provided (used) by operating, investing
        and financing activities                                    $   (2.8)            $   62.1
                                                                    ========             ========
</TABLE>


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 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.
<PAGE>
     Cash flows from operating  activities increased from $83.4 million provided
in the first nine months of 2003 to $119.8 million of cash provided by operating
activities in the first nine months of 2004. This $36.4 million increase was due
primarily  to the net effects of (i) higher net income of $212.9  million,  (ii)
higher  depreciation  and  amortization  expense of $3.5  million,  (iii)  lower
deferred income taxes of $250.0 million,  (iv) higher net distributions from the
TiO2  manufacturing  joint  venture of $9.1  million in the first nine months of
2004 compared to a $2.2 million  distribution  in the first nine months of 2003,
(v) a higher  amount of net cash  provided by relative  changes in the Company's
inventories,  receivables, payables and accruals and accounts with affiliates of
$34.8  million in the first nine  months of 2004 as  compared  to the first nine
months  of 2003 and (vi)  lower  net cash  received  for  income  taxes of $10.9
million.  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.

Investing and financing activities

     The Company's capital  expenditures were $23.7 million and $21.4 million in
the first nine months of 2003 and 2004, respectively.

     In the first  quarter  of 2004 KII's  operating  subsidiaries  in  Germany,
Belgium and Norway  borrowed a net Euro 26 million ($32  million when  borrowed)
under the European  revolving  credit facility at an interest rate of 3.8%. Such
amounts  were repaid in the second  quarter of 2004.  As stated in Note 6 to the
Consolidated Financial statements,  one of KII's operating subsidiaries borrowed
Euro 10 million in October 2004 under the European  revolving  credit  facility.
The Company  currently expects to repay such Euro 10 million of borrowing by the
end of the year.

     In October 2004,  Valcor  distributed  its note  receivable  from Kronos to
Valhi,  and  subsequently  Kronos  prepaid $100.0 million on the note payable to
Valhi (including accrued interest) principally using available cash on hand.

     In each of the first, second and third quarters of 2004, the Company paid a
regular quarterly dividend to stockholders of $.25 per share,  aggregating $36.7
million.

     At September 30, 2004,  unused  credit  available  under  Kronos'  existing
credit facilities approximated $144 million, which was comprised of: $95 million
under its European  revolving  credit  facility,  $8 million  under its Canadian
credit facility, $38 million under its U.S. credit facility and $3 million under
other non-US  facilities.  At September  30, 2004,  KII had  approximately  $220
million  available  for payment of dividends and other  restrictive  payments as
defined in the Senior Secured Notes indenture.

     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  2003  Annual  Report,  neither  Kronos  nor any of its  subsidiaries  or
affiliates are parties to any off-balance sheet financing arrangements.
<PAGE>
     In October 2004,  the Company filed a  registration  statement with the SEC
for a proposed  offering of up to 8.25 million  shares of its common stock.  The
registration statement has not yet been declared effective by the SEC. There can
be no assurance that the registration  statement will be declared effective,  or
if declared effective,  that the offering would be completed. The securities may
not be offered for sale or sold nor may offers to buy be  accepted  prior to the
time the registration statement becomes effective. If the offering is completed,
the Company  would use a portion of the net proceeds from such offering to repay
the remaining  balance of its long-term  notes payable to  affiliates,  with the
balance  of the net  proceeds  available  for the  Company's  general  corporate
purposes, including possible acquisitions.

     Cash,  cash  equivalents,  restricted  cash and restricted  marketable debt
securities

     At September  30, 2004,  the Company and its  subsidiaries  had (i) current
cash and cash  equivalents  aggregating  $118.5  million  ($81.8 million held by
non-U.S. subsidiaries), (ii) current restricted cash equivalents of $900,000 and
(iii) noncurrent restricted marketable debt securities of $2.6 million.

     At September 30, 2004, Kronos' outstanding debt was comprised of (i) $350.2
million related to KII's Senior Secured Notes and (ii) approximately $300,000 of
other indebtedness. In addition, Kronos had $200 million long-term notes payable
to affiliates due in 2010.

     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.

     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  U.S.  and  non-U.S.  jurisdictions,  and see Note 12 to the
Consolidated Financial Statements with respect to certain legal proceedings with
respect to Kronos.

     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.
<PAGE>
     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 TiO2 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.

ITEM 4.  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, 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,  have evaluated the Company's  disclosure  controls and
procedures  as of  September  30,  2004.  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.

     The Company also  maintains a system of internal  controls  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:
<PAGE>
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
     unauthorized  acquisition,  use or disposition of the Company's assets that
     could  have a  material  effect  on the  Company's  consolidated  financial
     statements.

     There has been no change to the Company's system of internal  controls over
financial  reporting  during  the  quarter  ended  September  30,  2004 that has
materially affected, or is reasonably likely to materially affect, the Company's
system of internal controls over financial reporting.

     Section 404 of the  Sarbanes-Oxley  Act of 2002 will require the Company to
annually  include  a  management  report  on  internal  control  over  financial
reporting  starting  in the  Company's  Annual  Report on Form 10-K for the year
ended  December  31,  2004.  The  Company's  independent  auditors  will also be
required to annually  attest to the Company's  internal  control over  financial
reporting. In order to achieve compliance with Section 404, the Company has been
documenting,   testing  and  evaluating  its  internal  control  over  financial
reporting  since 2003,  using a combination of internal and external  resources.
The  process of  documenting,  testing and  evaluating  the  Company's  internal
control over financial reporting under the applicable  guidelines is complex and
time  consuming,  and  available  internal and external  resources  necessary to
assist the  Company in the  documentation  and  testing  required to comply with
Section 404 are limited.  While the Company currently  believes it has dedicated
the appropriate  resources and that it will be able to fully comply with Section
404 in its Annual  Report on Form 10-K for the year ended  December 31, 2004 and
be in a position to conclude that the Company's  internal control over financial
reporting  is  effective  as  of  December  31,  2004,  because  the  applicable
requirements are complex and time consuming,  and because  currently  unforeseen
events or circumstances  beyond the Company's control could arise,  there can be
no  assurance  that the Company  will  ultimately  be able to fully  comply with
Section 404 in its Annual  Report on Form 10-K for the year ended  December  31,
2004 or whether it will be able to conclude the Company's  internal control over
financial reporting is effective as of December 31, 2004.

<PAGE>



                           Part II. OTHER INFORMATION

Item 1. Legal Proceedings

     Reference is made to Note 12 of the Consolidated Financial Statements,  the
2003 Annual  Report and the  Company's  Quarterly  Reports on Forms 10-Q for the
quarters  ended  March 31, 2004 and June 30,  2004 for  descriptions  of certain
legal proceedings.

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

          The Company has retained a signed original of any exhibit listed below
          that  contains  signatures,  and the  Company  will  provide  any such
          exhibit to the SEC or its staff upon  request.  The Company  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 approved by the Company's  board of directors and
          each  of  which  are  also  available  at  the  Company's  website  at
          www.kronosww.com,  upon request.  Such requests  should be directed to
          the  attention of the Company's  corporate  secretary at the Company's
          corporate  offices  located at 5430 LBJ Freeway,  Suite 1700,  Dallas,
          Texas 75240.

        10.1 - First  Amendment  Agreement, dated September 3, 2004, Relating to
               a Facility Agreement dated June 25, 2002 among Kronos Titan GmbH,
               Kronos  Europe  S.A./N.V.,  Kronos  Titan AS and Titania  A/S, as
               borrowers,  Kronos Titan GmbH, Kronos Europe S.A./N.V. and Kronos
               Norge  AS,  as  guarantors,   Kronos  Denmark  ApS,  as  security
               provider,  with Deutsche Bank Luxembourg S.A.,  acting as agent -
               incorporated  by reference  to Exhibit  10.8 to the  Registration
               Statement on Form S-1 of the Registrant (File No. 333-119639).

        10.2 - Promissory   Note  dated  September  24,  2004  in  the  original
               principal  amount of  $31,422,500.00  payable  to the order of NL
               Industries, Inc. and executed by the Registrant - incorporated by
               reference to Exhibit 10.2 to the Current Report on Form 8-K of NL
               Industries, Inc. (File No. 1-640) dated September 24, 2004.

        10.3 - Promissory   Note  dated  September  24,  2004  in  the  original
               principal  amount  of  $162,500,000.00  payable  to the  order of
               Valcor,  Inc. and executed by the  Registrant -  incorporated  by
               reference to Exhibit 99.1 to the Current Report on Form 8-K of NL
               Industries, Inc. (File No. 1-640) dated September 24, 2004.

        10.4 - Promissory   Note  dated  September  24,  2004  in  the  original
               principal amount of $6,077,500.00  payable to the order of Valhi,
               Inc. and executed by the Registrant -  incorporated  by reference
               to  Exhibit  99.2  to  the  Current  Report  on  Form  8-K  of NL
               Industries, Inc. (File No. 1-640) dated September 24, 2004.

          31.1 - Certification

          31.2 - Certification

          32.1 - Certification

     (b)  Reports on Form 8-K

          Reports on Form 8-K for the quarter ended September 30, 2004.

          August 6, 2004 - Reported Item 9 and Item 12.
          September 1, 2004 - Reported Item 7.01 and Item 9.
          September 7, 2004 - Reported Item 2.03
<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   November 8, 2004                        By /s/ Gregory M. Swalwell
       ----------------                           -------------------------
                                                  Gregory M. Swalwell
                                                    Vice President, Finance and
                                                    Chief Financial Officer
                                                   (Principal Financial Officer)


Date   November 8, 2004                        By /s/ James W. Brown
       ----------------                           -------------------------
                                                  James W. Brown
                                                   Vice President and Controller
                                                  (Principal Accounting Officer)