| UNITED STATES                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                             |
| Washington, D.C. 20549                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                           |
| FORM 10-K                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                           |
|  X  Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934:                                                                                                                                                        |
| For the fiscal year ended December 31, 2010                                                                                                                                                                                                                    |
| Commission file number 333-100047                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                           |
| KRONOS INTERNATIONAL, INC                                                                                                                                                                                                                                      |
| (Exact name of Registrant as specified in its charter)                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                           |
|     DELAWARE                                      |     22-2949593    |
| (State or other jurisdiction ofincorporation or organization)                                                                                                                                                                                                  | (IRS Employer Identification No.) |
|                                                                                                                                                                                                                                                           |
| 5430 LBJ Freeway, Suite 1700                                                                                                                                                                                                                                   |
|        Dallas, Texas   75240-2697                                                                                                                                         |
| (Address of principal executive offices)                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                           |
| Registrant's telephone number, including area code:          (972) 233-1700                                                                                                                             |

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| ·   | Future supply and demand for our products |
|--------------------|-------------------------------------------|

| ·   | The extent of the dependence of certain of our businesses on certain market sectors |
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| ·   | The cyclicality of our businesses |
|--------------------|-----------------------------------|

| ·   | Customer inventory levels |
|--------------------|---------------------------|

| ·   | Changes in raw material and other operating costs (such as energy and ore costs) |
|--------------------|----------------------------------------------------------------------------------|

| ·   | Changes in the availability of raw material (such as ore) |
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| ·   | 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) |
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| ·   | Competitive products and substitute products |
|--------------------|----------------------------------------------|

| ·   | Customer and competitor strategies |
|--------------------|------------------------------------|

| ·   | Potential consolidation of our competitors |
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| ·   | The impact of pricing and production decisions |
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| ·   | Competitive technology positions |
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| ·   | Possible disruption of our business or increases in the cost of doing business resulting from terrorist activities or global conflicts |
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| ·   | The introduction of trade barriers |
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| ·   | Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro and the Norwegian krone) |
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| ·   | Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime and transportation interruptions) |
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| ·   | The timing and amounts of insurance recoveries |
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| ·   | Our ability to renew or refinance credit facilities |
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| ·   | Our ability to maintain sufficient liquidity |
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| ·   | The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Our ability to utilize income tax attributes, the benefits of which have been recognized under the more-likely-than-not recognition criteria |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities) |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | Government laws and regulations and possible changes therein |
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| ·   | The ultimate resolution of pending litigation |
|--------------------|-----------------------------------------------|

| ·   | Possible future litigation |
|--------------------|----------------------------|

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| Sales Volumes Percentagesby Geographic Region |     | Sales Volumes Percentagesby End Use |
|-----------------------------------------------|----------|-------------------------------------|
|                                          |     |                                |   |   |
| Europe                                        | 80%      |                                | Coatings | 50% |
| North America                                 |  1% |                                | Plastics | 32% |
| Asia Pacific                                  | 14%      |                                | Paper | 16% |
| Rest of World                                 |  5% |                                | Other |   2% |

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| ·   | We own and operate two ilmenite mines in Norway pursuant to a governmental concession with an unlimited term.  We commenced production from our second mine in 2009.  Ilmenite is a raw material used directly as a feedstock by some sulfate-process TiO2 plants.  We believe we have a significant competitive advantage because our mines supply our feedstock requirements for all of our European sulfate-process plants.  We also sell ilmenite ore to third-parties, some of whom are our competitors.  The mines have estimated ilmenite reserves that are expected to last at least 60 years. |
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| ·   | We manufacture and sell iron-based chemicals, which are co-products and processed co-products of the sulfate and chloride process TiO2 pigment production.  These co-product chemicals are marketed through our Ecochem division and are primarily used as treatment and conditioning agents for industrial effluents and municipal wastewater as well as in the manufacture of iron pigments, cement and agricultural products. |
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| ·   | We manufacture and sell titanium oxychloride and titanyl sulfate, which are side-stream specialty products from the production of TiO2.  Titanium oxychloride is used in specialty applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices.  Titanyl sulfate productions are used in pearlescent pigments, natural gas pipe and other specialty applications. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Chloride Process.  The chloride process is a continuous process in which chlorine is used to extract rutile TiO2.  The chloride process typically has lower manufacturing costs than the sulfate process due to higher yield, less waste, lower energy requirements and lower labor costs.  This process has also gained market share over the sulfate process because of the relatively lower upfront capital investment in plant and equipment required.  The chloride process produces less waste than the sulfate process because much of the chlorine is recycled and feedstock bearing higher titanium content is used.  The chloride process produces an intermediate base pigment with a wide range of properties. |
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| ·   | Sulfate Process.  The Sulfate process is a batch process in which sulfuric acid is used to extract the TiO2 from ilmenite or titanium slag.  After separation from the impurities in the ore (mainly iron) the TiO2 is precipitated and calcined to form an intermediate base pigment ready for sale or can be upgraded through finishing treatment. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                    |                                                                        |   | % of Capacity by TiO2 Manufacturing Process |   |
|-------------------------|-----------------------------------------------------------------------------|--------|---------------------------------------------|--------|
| Facility                | Description                                                                 |   | Chloride                                    |   |   | Sulfate |   |
|                    |                                                                        |   |                                        |   |   |   |   |
| Leverkusen, Germany (1) | TiO2 production, chloride and sulfate process, co-products                  |   |                                        | 67     | % |   |   | 30 | % |
|                    |                                                                        |   |                                        |   |   |   |   |   |   |
| Nordenham, Germany      | TiO2 production, sulfate process, co-products                               |   |                                        | -      |   |   |   | 47 |   |
|                    |                                                                        |   |                                        |   |   |   |   |   |   |
| Langerbrugge, Belgium   | TiO2 production, chloride process, co-products, titanium chemicals products |   |                                        | 33     |   |   |   | - |   |
|                    |                                                                        |   |                                        |   |   |   |   |   |   |
| Fredrikstad, Norway (2) | TiO2 production, sulfate process, co-products                               |   |                                        | -      |   |   |   | 23 |   |
|                    |                                                                        |   |                                        |   |   |   |   |   |   |
| Total                   |                                                                        |   |                                        | 100    | % |   |   | 100 | % |

|   | (1) | The Leverkusen facility is located within an extensive manufacturing complex owned by Bayer AG.  We own the Leverkusen facility, which represents about one-half of our current TiO2 production capacity, but we lease the land under the facility from Bayer under a long term agreement which expires in 2050.  Lease payments are periodically negotiated with Bayer for periods of at least two years at a time.  Bayer or its affiliates provides some raw materials, including chlorine, auxiliary and operating materials, utilities and services necessary to operate the Leverkusen facility under separate supplies and services agreements. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The Fredrikstad plant is located on public land and is leased until April 2013 with an option to extend the lease for an additional 50 years. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

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| Production Process/Raw Material        | Raw Materials Procured or Mined |
|----------------------------------------|---------------------------------|
|                                   | (In thousands of metric tons)   |
|                                   |                            |
| Chloride process plants:               |                            |
| Purchased slag or natural rutile ore   | 256                             |
|                                   |                            |
| Sulfate process plants:                |                            |
| Ilmenite ore mined and used internally | 328                             |

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| Worldwide Production Capacity - 2010 |   |
|--------------------------------------|--------|
| DuPont                               |   |   | 23 | % |
| Cristal                              |   |   | 14 | % |
| Kronos Worldwide*                    |   |   | 10 | % |
| Huntsman                             |   |   | 9 | % |
| Tronox                               |   |   | 7 | % |
| Other                                |   |   | 37 | % |

|   | * Our production capacity represents approximately 68% of Kronos Worldwide’s production capacity. |
|--------|---------------------------------------------------------------------------------------------------------|

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| ·   | making it more difficult for us to satisfy our obligations with respect to our liabilities; |
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| ·   | increasing our vulnerability to adverse general economic and industry conditions; |
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| ·   | requiring that a portion of our cash flows from operations be used for the payment of interest on our debt, which reduces our ability to use our cash flow to fund working capital, capital expenditures, dividends on our common stock, acquisitions or general corporate requirements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limiting the ability of our subsidiaries to pay dividends to us; |
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| ·   | limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or general corporate requirements; |
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| ·   | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and |
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| ·   | placing us at a competitive disadvantage relative to other less leveraged competitors. |
|--------------------|----------------------------------------------------------------------------------------|

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| ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
|----------|----------------------------|

| ITEM 2. | PROPERTIES |
|---------|------------|

|   |   |
|--------|--------|

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| ITEM 5. | MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS |
|--------------|--------------------------------------------------------------|

| ITEM 6. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

|                                                                   |   |  Years ended December 31, |    |
|------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                   |   | 2006(2)                        |    |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                                   |   | (In millions, except ratios)   |    |
| STATEMENTS OF OPERATIONS DATA:                                         |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                              |   | $                              | 914.2   |   |   | $ | 946.1 |   |   | $ | 952.9 |   |   | $ | 819.9 |   |   | $ | 998.5 |   |
| Gross margin                                                           |   |                           | 223.0   |   |   |   | 196.4 |   |   |   | 170.4 |   |   |   | 67.2 |   |   |   | 224.5 |   |
| Income (loss) from operations                                          |   |                           | 107.4   |   |   |   | 78.7 |   |   |   | 45.1 |   |   |   | (33.8 | ) |   |   | 112.1 |   |
| Net income (loss)                                                      |   |                           | 73.7    |   |   |   | (58.8 | ) |   |   | 21.3 |   |   |   | (46.5 | ) |   |   | 86.5 |   |
|                                                                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE SHEET DATA (at year end):                                      |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                           |   | $                              | 1,080.6 |   |   | $ | 1,103.1 |   |   | $ | 1,053.5 |   |   | $ | 1,013.9 |   |   | $ | 1,023.7 |   |
| Long-term debt including current maturities                            |   |                           | 529.8   |   |   |   | 590.8 |   |   |   | 605.6 |   |   |   | 596.5 |   |   |   | 539.6 |   |
| Stockholder’s equity                                             |   |                           | 211.5   |   |   |   | 181.4 |   |   |   | 137.3 |   |   |   | 103.4 |   |   |   | 180.4 |   |
|                                                                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENTS OF CASH FLOW DATA:                                          |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in):                                        |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating activities                                                   |   | $                              | 62.5    |   |   | $ | 84.9 |   |   | $ | 1.0 |   |   | $ | 67.5 |   |   | $ | 64.7 |   |
| Investing activities                                                   |   |                           | (47.1   | ) |   |   | (42.5 | ) |   |   | (61.7 | ) |   |   | (19.5 | ) |   |   | (31.3 | ) |
| Financing activities                                                   |   |                           | (31.1   | ) |   |   | (34.0 | ) |   |   | 7.2 |   |   |   | (33.6 | ) |   |   | (11.3 | ) |
|                                                                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TiO2 OPERATING STATISTICS:                                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales volume*                                                          |   |                           | 353     |   |   |   | 348 |   |   |   | 317 |   |   |   | 304 |   |   |   | 347 |   |
| Production volume*                                                     |   |                           | 348     |   |   |   | 350 |   |   |   | 350 |   |   |   | 257 |   |   |   | 349 |   |
| Production rate as a percentage of capacity                            |   | Full                           |    |   |   | 98 | % |   |   | 97 | % |   |   | 71 | % |   |   | 97 | % |
|                                                                   |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER FINANCIAL DATA:                                                  |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of earnings to combined  fixed charges (unaudited) (1) |   |                           | 2.0     |   |   |   | 2.6 |   |   |   | 1.5 |   |   |   | - |   |   |   | 2.8 |   |

| *   | Metric tons in thousands |
|---------------|--------------------------|

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| (1)   | Fixed charges represents, as applicable, the sum of (i) total interest expense and (ii) the interest component of rent expense (calculated as one-third of rent expense).  Earnings represents, as applicable, the sum of (i) fixed charges, (ii) income before income taxes and (iii) amortization of capitalized interest.  Total earnings available for fixed charges were insufficient to cover fixed charges for the year ended December 31, 2009 by $73.4 million.  As a result, the ratio of earnings to combined fixed charges is not meaningful for 2009. |
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| (2)   | We adopted the asset and liability recognition provisions of Accounting Standard Codification Topic 715 Compensation – Retirement Benefits effective December 31, 2006. |
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| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|--------------|---------------------------------------------------------------------------------------|

| ·   | Our TiO2 selling prices, |
|--------------------|--------------------------|

| ·   | Our TiO2 sales and production volumes, |
|--------------------|----------------------------------------|

| ·   | Currency exchange rates (particularly the exchange rate for the U.S. dollar relative to the euro and the Norwegian krone) and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | Manufacturing costs, particularly raw materials, maintenance and energy-related expenses. |
|--------------------|-------------------------------------------------------------------------------------------|

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| ·   | Long-lived assets.  We recognize an impairment charge associated with our long-lived assets, including property and equipment, whenever we determine that recovery of such long-lived asset is not probable.  Such determination is made in accordance with the applicable GAAP requirements of Accounting Standard Codification (“ASC”) Topic 360-10-35, Property, Plant and Equipment and is based upon, among other things, estimates of the amount of future net cash flows to be generated by the long-lived asset and estimates of the current fair value of the asset.  Significant judgment is required in estimating such cash flows.  Adverse changes in such estimates of future net cash flows or estimates of fair value could result in an inability to recover the carrying value of the long-lived asset, thereby possibly requiring an impairment charge to be recognized in the future.  We do not assess our property and equipment for impairment unless certain impairment indicators specified in ASC Topic 360-10-35 are present.  We did not evaluate any long-lived assets for impairment during 2010 because no such impairment indicators were present. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pension plans.  We maintain various defined benefit pension plans.  The amounts recognized as defined benefit pension expenses and the reported amounts of pension asset and accrued pension costs are actuarially determined based on several assumptions including discount rates, expected rates of returns on plan assets and expected health care trend rates.  Variances from these actuarially assumed rates will result in increases or decreases, as applicable, in the recognized pension obligations, pension expenses and funding requirements.  These assumptions are more fully described below under “Defined Benefit Pension Plans.” |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Income taxes.  We recognize deferred taxes for future tax effects of temporary differences between financial and income tax reporting.  We record a valuation allowance to reduce our deferred income tax assets to the amount that is believed to be realized under the more-likely-than-not recognition criteria.  While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance, it is possible that in the future we may change our estimate of the amount of the deferred income tax assets that would more-likely-than-not be realized in the future, resulting in an adjustment to the deferred income tax asset valuation allowance that would either increase or decrease, as applicable, reported net income in the period such change in estimate was made.  For example, we have substantial net operating loss carryforwards in Germany (the equivalent of $952 million for German corporate purposes and $349  million for German trade tax purposes at December 31, 2010).  At December 31, 2010, we have concluded that no deferred income tax asset valuation allowance is required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have an indefinite carryforward period, (ii) we have utilized a portion of such carryforwards during the most recent three-year period, and (iii) we currently expect to utilize the remainder of such carryforwards over the long term.  However, prior to the complete utilization of such carryforwards if we were to generate operating losses in our German operations for an extended period of time, it is possible that we might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point we would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Contingencies.  We record accruals for legal and other contingencies when estimated future expenditures associated with such contingencies and commitments become probable and the amounts can be reasonably estimated.  However, new information may become available, or circumstances (such as applicable laws and regulations) may change, thereby resulting in an increase or decrease in the amount required to be accrued for such matters (and therefore a decrease or increase in reported net income in the period of such change). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                     |   | Year ended December 31, |   |
|------------------------------------------|--------|-------------------------|--------|
|                                     |   |  2009              |   |   | 2010 |   |
|                                     |   | (Dollars in millions)   |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| Net sales                                |   | $                       | 819.9  |   |   |   | 100 | % |   | $ | 998.5 |   |   |   | 100 | % |
| Cost of sales                            |   |                    | 752.7  |   |   |   | 92 |   |   |   | 774.0 |   |   |   | 78 |   |
| Gross margin                             |   |                    | 67.2   |   |   |   | 8 |   |   |   | 224.5 |   |   |   | 22 |   |
| Other operating income and expenses, net |   |                    | 101.0  |   |   |   | 12 |   |   |   | 112.4 |   |   |   | 11 |   |
| Income (loss) from operations            |   | $                       | (33.8  | ) |   |   | (4 | )% |   | $ | 112.1 |   |   |   |  11 | % |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   | % |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   | Change |   |
| TiO2 operating statistics:               |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales volumes*                           |   |                    | 304    |   |   |   |   |   |   |   | 347 |   |   |   | 14 | % |
| Production volumes*                      |   |                    | 257    |   |   |   |   |   |   |   | 349 |   |   |   | 36 | % |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Percent change in net sales:       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TiO2 product pricing                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | 12 | % |
| TiO2 sales volumes                       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | 14 |   |
| TiO2 product mix                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Changes in currency exchange rates       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | 22 | % |

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| ·   | Our income tax provision in 2010 includes a $35.2 million non-cash income tax benefit related to a European Court ruling that resulted in the favorable resolution of certain income tax issues in Germany and an increase in the amount of our German corporate and trade tax net operating loss carryforwards. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our income tax benefit for 2009 includes a non-cash benefit of $4.7 million related to a net decrease in our reserve for uncertain tax positions, primarily as a result of the resolution of tax audits in Belgium and Germany in the third and fourth quarters. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                     |   | Year ended December 31, |   |
|------------------------------------------|--------|-------------------------|--------|
|                                     |   | 2008                    |   |   | 2009 |   |
|                                     |   | (Dollars in millions)   |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| Net sales                                |   | $                       | 952.9  |   |   |   | 100 | % |   | $ | 819.9 |   |   |   | 100 | % |
| Cost of sales                            |   |                    | 782.5  |   |   |   | 82 |   |   |   | 752.7 |   |   |   | 92 |   |
| Gross margin                             |   |                    | 170.4  |   |   |   | 18 |   |   |   | 67.2 |   |   |   | 8 |   |
| Other operating income and expenses, net |   |                    | 125.3  |   |   |   | 13 |   |   |   | 101.0 |   |   |   | 12 |   |
| Income (loss) from operations            |   | $                       | 45.1   |   |   |   | 5 | % |   | $ | (33.8 | ) |   |   | (4 | )% |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   | % |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   | Change |   |
| TiO2 operating statistics:               |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales volumes*                           |   |                    | 317    |   |   |   |   |   |   |   | 304 |   |   |   | (4 | )% |
| Production volumes*                      |   |                    | 350    |   |   |   |   |   |   |   | 257 |   |   |   | (27 | )% |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Percent change in net sales:       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TiO2 product pricing                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | (2 | )% |
| TiO2 sales volumes                       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |
| TiO2 product mix                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |
| Changes in currency exchange rates       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |  (14 | )% |

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| ·   | Our income tax benefit for 2009 includes a non-cash benefit of $4.7 million related to a net decrease in our reserve for uncertain tax positions, primarily as a result of the resolution of tax audits in Belgium and Germany in the third and fourth quarters. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our income tax provision for 2008 includes a non-cash benefit of $7.2 million relating to a European Court ruling that resulted in the favorable resolution of certain income tax issues in Germany and an increase in the amount of our German corporate and trade tax net operating loss carryforwards. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Impact of changes in currency exchange rates - 2009 vs. 2010 |   |
|--------------------------------------------------------------|--------|
|                                                         |   | Transaction gains/(losses) recognized |   |   | Translation gain/loss-impact of rate  changes |   |   | Total currency impact2009 vs.  2010 |   |
|                                                         |   | 2009 |   |   | 2010 |   |   | Change |   |
|                                                         |   | (in millions) |   |
| Impact on:                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                    |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | (36 | ) |   | $ | (36 | )  |
| Income (loss) from operations                                |   |   | 8 |   |   |   | 5 |   |   |   | (3 | ) |   |   | (8 | ) |   |   | (11 | ) |

| Impact of changes in currency exchange rates - 2008 vs. 2009 |   |
|--------------------------------------------------------------|--------|
|                                                         |   | Transaction gains/(losses) recognized |   |   | Translation gain/loss-impact of rate  changes |   |   | Total currency impact2008 vs. 2009 |   |
|                                                         |   | 2008 |   |   | 2009 |   |   | Change |   |
|                                                         |   | (in millions) |   |
| Impact on:                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                    |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | (40 | ) |   | $ | (40 | ) |
| Income (loss) from operations                                |   |   | (1 | ) |   |   | 8 |   |   |   | 9 |   |   |   | 15 |   |   |   | 24 |   |

----

| ·   | higher income from operations in 2010 of $145.9 million; |
|--------------------|----------------------------------------------------------|

| ·   | higher cash paid for income taxes in 2010 of $7.2 million due primarily to improved profitability in 2010; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | lower cash paid for interest in 2010 of $2.5 million; and |
|--------------------|-----------------------------------------------------------|

| ·   | higher amount of net cash used for relative charges in our inventories, receivables, payables and accruals of $159.2 million in 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower income (loss) from operations in 2009 of $78.9 million; |
|--------------------|---------------------------------------------------------------|

| ·   | lower cash paid for income taxes in 2009 of $7.8 million, in part due to lower taxable income and the receipt of tax refunds; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | a lower amount of net cash used from relative changes in our inventories, receivables, payables and accruals of $154.4 million in 2009 due primarily to relative changes in our inventory levels, as discussed below; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower depreciation expense of $4.0 million in 2009, primarily as a result of the effects of currency exchange rates. |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

----

| ·   | Our average days sales outstanding (“DSO”) at December 31, 2010 was consistent with December 31, 2009; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | Our average days sales in inventory (“DSI”) increased at December 31, 2010 compared to December 31, 2009, as our TiO2 production volumes in 2010 exceeded our sales volumes. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                | December 31,  | December 31, | December 31,  |
|-------------------------------------|---------------|--------------|---------------|
|                                | 2008          | 2009         | 2010          |
|                                |          |         |          |
|   Days sales outstanding  |  68 days | 55 days      |  54 days |
|   Days sales in inventory | 123 days      | 46 days      |  50 days |

| ·   | euro 400 million principal amount of our 6.5% Senior Secured Notes  ($532.8 million) due in 2013; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | approximately $6.8 million of other indebtedness. |
|--------------------|---------------------------------------------------|

----

----

----

|                                                        |   | Payment due date |   |
|-------------------------------------------------------------|--------|------------------|--------|
|  Contractual commitment                                |   | 2011             |   |   |   | 2012/2013 |   |   |   | 2014/2015 |   |   | 2016 and after |   |   | Total |   |
|                                                        |   | (In millions)    |   |
|                                                        |   |             |   |
| Indebtedness (1)                                            |   | $                | 2.2    |   |   | $ | 536.2 |   |   | $ | .9 |   |   | $ | .3 |   |   | $ | 539.6 |   |
| Interest payments on indebtedness (2)                       |   |             | 34.9   |   |   |   | 46.4 |   |   |   | - |   |   |   | - |   |   |   | 81.3 |   |
| Operating leases                                            |   |             | 4.2    |   |   |   | 6.4 |   |   |   | 3.1 |   |   |   | 18.0 |   |   |   | 31.7 |   |
| Long-term service and  other supply contracts (3) |   |             | 46.3   |   |   |   | 43.8 |   |   |   | 24.2 |   |   |   | 1.1 |   |   |   | 115.4 |   |
| Fixed asset acquisitions                                    |   |             | 22.8   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 22.8 |   |
| Estimated tax obligations (4)                               |   |             | 5.9    |   |   |   |  - |   |   |   |  - |   |   |   | - |   |   |   | 5.9 |   |
|                                                        |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   | $                | 116.3  |   |   | $ | 632.8 |   |   | $ | 28.2 |   |   | $ | 19.4 |   |   | $ | 796.7 |   |

| (1)   | A significant portion of the amount shown for indebtedness relates to our 6.5% Senior Secured Notes ($532.8 million at December 31, 2010).  Such indebtedness is denominated in euro.  See Item 7A – “Quantitative and Qualitative Disclosures About Market Risk” and Note 6 to the Consolidated Financial Statements. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The amounts shown for interest for any outstanding variable-rate indebtedness is based upon the December 31, 2010 interest rates and assumes that such variable-rate indebtedness remains outstanding until maturity. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The amounts shown for the long-term service and other supply contracts primarily pertain to agreements we have entered into with various providers of products or services which help to run our plant facilities (electricity, natural gas, etc.), utilizing December 31, 2010 exchange rates.  See Note 12 to our Consolidated Financial Statements. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | The amount shown for estimated tax obligations is the consolidated amount of net income taxes payable at December 31, 2010, which is assumed to be paid during 2011. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Any amounts we might pay to purchase our TiO2 feedstock requirements.  As discussed above in “Business – Raw Materials,” our affiliate, KUS, purchases the rutile and slag feedstock used as a raw material in all of our chloride process TiO2 facilities.  We purchase feedstock for our chloride process TiO2 facilities from KUS.  See Note 11 to our Consolidated Financial Statements; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Any amounts we might pay to fund our defined benefit pension plans, as the timing and amount of any such future fundings are unknown and dependent on, among other things, the future performance of defined benefit pension plan assets and interest rate assumptions.  We expect to be required to contribute approximately $21.6 million to our defined benefit pension plans during 2011.  Our defined benefit pension plans are discussed below in greater detail.  See Note 8 to our Consolidated Financial Statements. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Any amounts we might pay related to our asset retirement obligations as the terms and amounts of such future fundings are unknown; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Any amounts we might pay to settle any of our uncertain tax positions, as the timing and amount of any such future settlements are unknown and dependent on, among other things, the timing of tax audits.  See Notes 7 and 14 to our Consolidated Financial Statements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|    |   | Discount rates used for:                           |   |
|---------|--------|----------------------------------------------------|--------|
|    |   | Obligations atDecember 31, 2008and expense in 2009 |   |   | Obligations atDecember 31, 2009 and expense in 2010 |   |   | Obligations atDecember 31, 2010 and expense in 2011 |   |
|    |   |                                               |   |   |   |   |   |   |   |
| Germany |   |                                               | 5.8    | % |   |   | 5.5 | % |   |   | 5.2 | % |
| Norway  |   |                                               | 5.8    | % |   |   | 5.3 | % |   |   | 4.8 | % |

----

| ·   | In Germany, the composition of our plan assets is established to satisfy the requirements of the German insurance commissioner. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | In Norway, we currently have a plan asset target allocation of 14% to equity securities, 72% to fixed income securities, and the remainder primarily to cash and liquid investments.  The expected long-term rate of return for such investments is approximately 9.0%, 5.0%, and 4.0%, respectively. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | December 31, 2009 |   |   | December 31, 2010 |   |
|-------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                            |   | Germany           |   |   | Norway            |   |   | Germany |   |   | Norway |   |
|                                            |   |              |   |   |              |   |   |   |   |   |   |   |
| Equity securities and limited partnerships |   |              | 18     | %      |              |   | 18 | % |   |   | 17 | % |   |   | 17 | % |
| Fixed income securities                         |   |              | 61     |   |              |   | 80 |   |   |   | 61 |   |   |   | 68 |   |
| Real estate                                     |   |              | 12     |   |              |   | - |   |   |   | 11 |   |   |   | 2 |   |
| Cash, cash equivalents and other                |   |              | 9      |   |              |   | 2 |   |   |   | 11 |   |   |   | 13 |   |
|                                            |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     Total                   |   |              | 100    | %      |              |   | 100 | % |   |   | 100 | % |   |   | 100 | % |

----

|                |   | 2008   |   |   | 2009   |   |   | 2010   |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                |   |   |   |   |   |   |   |   |   |
|   Germany |   |   | 5.3    | %      |   |   | 5.3    | %      |   |   | 5.0 | % |
|   Norway  |   |   | 6.1    | %      |   |   | 5.8    | %      |   |   | 5.0 | % |

----

|                                                            |   | Amount              |   |   |            |   |   |               |   |
|-----------------------------------------------------------------|--------|---------------------|--------|--------|-----------------|--------|--------|--------------------|--------|
|  Indebtedness                                              |   | Carrying value |   |   | Fair value |   |   | Interest rate |   |   | Maturity date |   |
|                                                            |   | (In millions)       |   |   |            |   |   |               |   |
|    As of December 31, 2010:                           |   |                |   |   |            |   |   |               |   |   |   |   |
|                                                            |   |                |   |   |            |   |   |               |   |   |   |   |
| Fixed-rate indebtedness - euro-denominated:                     |   |                |   |   |            |   |   |               |   |   |   |   |
|         Senior Secured Notes |   | $                   | 532.8  |   |            | $      | 536.0  |               |   |   | 6.5 | % |   |   | 2013 |   |
|                                                            |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
|    As of December 31, 2009:                           |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
|                                                            |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
| Fixed-rate indebtedness - euro-denominated:                     |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
|         Senior Secured Notes |   | $                   | 574.6  |   |            | $      | 466.2  |               |   |   | 6.5 | % |   |   | 2013 |   |
|                                                            |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
|    Variable rate indebtedness:                        |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
| Credit facility – euro denominated                        |   | $                   | 13.0   |   |            | $      | 13.0   |               |   |   | 3.5 | % |   |   | 2013 |   |

----

| ·   | an aggregate $20.1 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 5.94 to kroner 6.60 per U.S. dollar.  These contracts with DnB Nor Bank ASA mature from January 2011 through July 2011 at a rate of $2.3 million to $5.5 million per month. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an aggregate euro 17.8 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 8.16 to kroner 8.28 per euro.  These contracts with DnB Nor Bank ASA mature from January 2011 through August 2011 at a rate of euro 1.8 million to euro 2.5 million per month, subject to early redemption provisions at our option. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|--------------|--------------------------------------------------------------------------------------|

| ·   | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Provide reasonable assurance regarding prevention or timely detection of an unauthorized acquisition, use or disposition of assets that could have a material effect on our Condensed Consolidated Financial Statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|             |   | December 31,   |   |
|------------------|--------|----------------|--------|
|             |   | 2009           |   |   | 2010 |   |
|             |   | (In thousands) |   |
|             |   |           |   |   |   |   |
| Audit(1)         |   | $              | 1,614  |   |   | $ | 1,522 |   |
| Audit related(2) |   |           | 11     |   |   |   | 38 |   |
| Tax(3)           |   |           | 19     |   |   |   | 10 |   |
|             |   |           |   |   |   |   |   |   |
| Total            |   | $              | 1,644  |   |   | $ | 1,570 |   |

| 1)   | Fees for the following services: |
|----------------|----------------------------------|

| a)   | audits of our consolidated year-end financials statements for each year; |
|----------------|--------------------------------------------------------------------------|

| b)   | reviews of the unaudited quarterly financial statements appearing in our Form 10-Q’s for each of the first three quarters of each year; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | consents and assistance with registration statements filed with the Commission; |
|----------------|---------------------------------------------------------------------------------|

| d)   | normally provided statutory or regulatory filings or engagements for each year; and |
|----------------|-------------------------------------------------------------------------------------|

| e)   | the estimated out-of-pocket costs PwC incurred in providing all of such services for which we reimburse PwC. |
|----------------|--------------------------------------------------------------------------------------------------------------|

| 2)   | Fees for assurance and related services reasonably related to the audit or review of our financial statements for each year.  These services included employee benefit plan audits, accounting consultations and attest services concerning financial accounting and reporting standards and advice concerning internal controls. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3)   | Fees for tax compliance, tax advice and tax planning services. |
|----------------|----------------------------------------------------------------|

----

|  (a) and (c) | Financial Statements and Schedule |
|-----------------------------|-----------------------------------|

| 3.1 | Certificate of Incorporation of the Registrant – incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Certificate of Amendment to Certificate of Incorporation of the Registrant, dated March 15, 1989 – incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Certificate of Amendment to Certificate of Incorporation of the Registrant, dated January 1, 1999 – incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4 | Certificate of Amendment to Certificate of Incorporation of the Registrant, dated February 8, 1999 – incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.5 | Certificate of Amendment to Certificate of Incorporation of the Registrant, dated December 15, 1999 – incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.6 | Amended and Restated Bylaws of the Registrant – incorporated by reference to Exhibit 3.6 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047).  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.7 | Amended and Restated Bylaws of Kronos International, Inc. as of October 4, 2010 – incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on October 4, 2010. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4.1 | Indenture governing the 6.5% Senior Secured Notes due 2013, dated as of April 11, 2006, between Kronos International,  Inc. and The Bank of New York, as trustee - incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | Form of certificate of Series A 6.5% Senior Secured Note due 2013 - incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 333-100047) that was filed with the U.S.  Securities and Exchange Commission on April 11, 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | Form of certificate of Series B 6.5% Senior Secured Note due 2013   - incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4 | Purchase Agreement dated April 5, 2006 between Kronos   International, Inc. and Deutsche Bank AG London - incorporated by   reference  to Exhibit  4.1 to the  Registrant’s Current  Report on Form 8-K (File No. 333-100047) that was filed with the U.S.  Securities and Exchange Commission on April 11, 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5 | Registration Rights Agreement dated as of April 11, 2006 between   Kronos International, Inc. and Deutsche Bank AG London - incorporated  by reference to Exhibit 4.5 to the Registrant’s Current  Report on Form 8-K (File No. 333-100047) that was filed with the U.S.  Securities and Exchange Commission on April 11, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.6 | Collateral Agency Agreement, dated April 11, 2006, among The Bank   of New York, U.S. Bank, N.A. and Kronos International, Inc. -  incorporated by reference to Exhibit 4.6 to the Registrant’s Current  Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.7 | Security Over Shares Agreement, dated April 11, 2006, between Kronos International, Inc. and The Bank of New York - incorporated   by reference to Exhibit 4.7 to the Registrant’s Current  Report on Form 8-K (File No. 333-100047) that was filed with the U.S.  Securities and Exchange Commission on April 11, 2006. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.8 | Pledge of Shares (shares in Kronos Denmark ApS), dated April 11,   2006, between Kronos International, Inc. and U.S. Bank, N.A. - incorporated by reference to Exhibit 4.8 to the Registrant’s Current  Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.9 | Pledge Agreement (shares in Societe Industrielle du Titane S.A.),   dated April 11, 2006, between Kronos International, Inc. and U.S.   Bank, N.A. - incorporated by reference to Exhibit 4.9 to the   Registrant’s Current Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.10 | Share Pledge Agreement (shares in Kronos Titan GmbH), dated April   11, 2006, between Kronos International, Inc. and U.S. Bank, N.A. - incorporated by reference to Exhibit 4.10 to the Registrant’s Current Report on Form 8-K (File No. 333-100047) that was filed with the U.S. Securities and Exchange Commission on April 11, 2006. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.1 | Euro 80,000,000 Facility Agreement, dated June 25, 2002, among Kronos Titan GmbH & Co. OHG, Kronos Europe S.A./N.V., Kronos Titan A/S and Titania A/S, as borrowers, Kronos Titan GmbH & Co. OHG, Kronos Europe S.A./N.V. and Kronos Norge AS, as guarantors, Kronos Denmark ApS, as security provider, Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg S.A., as agent and security agent, and KBC Bank NV, as fronting bank, and the financial institutions listed in Schedule 1 thereto, as lenders – incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-00640) of NL Industries, Inc. for the quarter ended June 30, 2002. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | 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 10.1 of the Current Report on Form 8-K of Kronos Worldwide, Inc. dated November 17, 2004 (File No. 333-119639). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3* | Second Amendment Agreement Relating to a Facility Agreement dated June 25, 2002 executed as of June 14, 2005 by and among Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg S.A. as agent, the participating lenders, Kronos Titan GmbH, Kronos Europe S.A./N.V, Kronos Titan AS, Kronos Norge AS, Titania AS and Kronos Denmark ApS. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4* | Third Amendment Agreement Relating to a Facility Agreement dated June 25, 2002 executed as of May 26, 2008 by and among Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg S.A., as agent, the participating lenders, Kronos Titan GmbH, Kronos Europe S.A.,/N.V, Kronos Titan AS, Kronos Norge AS, Titania AS and Kronos Denmark ApS. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5* | Fourth Amendment Agreement Relating to a Facility Agreement dated June 25, 2002 executed as of September 15, 2009 by and among Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg S.A., as agent, the participating lenders, Kronos Titan GmbH, Kronos Europe S.A. /N.V., Kronos Titan AS, Kronos Norge AS, Titania AS and Kronos Denmark ApS. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Fifth Amendment Agreement Relating to a Facility Agreement dated June 25, 2002 executed as of October 28, 2010 by and among Deutsche Bank AG, as mandated lead arranger, Deutsche Bank Luxembourg S.A., as agent, the participating lenders, Kronos Titan GmbH, Kronos Europe S.A./N.V., Kronos Titan AS, Kronos Norge AS, Titania AS and Kronos Denmark ApS – incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated October 28, 2010 (File No. 333-100047). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Lease Contract, dated June 21, 1952, between Farbenfabriken Bayer Aktiengesellschaft and Titangesellschaft mit beschrankter Haftung (German language version and English translation thereof) – incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K (File No. 001-00640) of NL Industries, Inc. for the year ended December 31, 1985. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.8 | Master Technology Exchange Agreement, dated as of October 18, 1993, among Kronos, Inc., Kronos Louisiana, Inc., the Registrant, Tioxide Group Limited and Tioxide Group Services Limited – incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q (File No. 001-00640) of NL Industries, Inc. for the quarter ended September 30, 1993. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9 | Intercorporate Services Agreement, dated as of January 1, 2005, among Kronos Worldwide, Inc., Kronos (US), Inc., Kronos International, Inc. and Kronos Canada, Inc. - incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Tax Agreement, dated as of May 28, 2002, between Kronos, Inc. and the Registrant – incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Services Agreement, dated as of January 1, 2004, among Kronos International, Inc., Kronos Europe S.A./N.V., Kronos (US), Inc., Kronos Titan GmbH, Kronos Denmark ApS, Kronos Canada, Inc., Kronos Limited, Societe Industrielle Du Titane, S.A., Kronos B.V., Kronos Titan AS and Titania AS. - incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Form of Assignment and Assumption Agreement, dated as of January 1, 1999, between Kronos, Inc. (formerly known as Kronos (USA), Inc.) and the Registrant – incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Form of Cross License Agreement, effective as of January 1, 1999, between Kronos Inc. (formerly known as Kronos (USA), Inc.) and the Registrant – incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14** | NL Industries, Inc. 1998 Long-Term Incentive Plan – incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A of NL Industries, Inc. (File No. 001-00640)for the annual meeting of shareholders held on May 6, 1998. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15** | Form of Kronos Worldwide, Inc. 2003 Long-Term Incentive Plan – incorporated by reference to Exhibit 10.4 of Kronos Worldwide, Inc.’s Registration Statement on Form 10 (File No. 001-31763). |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16** | Form of Indemnity Agreement between the Registrant and the officers and directors of the Registrant – incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-4 (File No. 333-100047). |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Agency Agreement, dated as of January 1, 2004, among Kronos International, Inc., Kronos Titan GmbH, Kronos Europe S.A./N.V., Kronos Canada, Inc., Kronos Titan AS and Societe Indutrielle Du Titane, S.A.   – incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.18 | Titanium Dioxide Products and Titanium Chemicals Distribution Agreement, dated as of January 1, 2005, among Kronos Titan GmbH, Kronos Europe S.A./N.V., Kronos Canada, Inc., Kronos Titan AS, Kronos (US), Inc., Kronos Denmark ApS, Kronos Titan GmbH, Kronos Limited, Societe Industrielle Du Titane, S.A. and Kronos B.V. – incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Raw Material Purchase and Sale Agreement, dated as of January 1, 2004, among Kronos (US), Inc., Kronos Titan GmbH, Kronos Europe S.A./N.V. and Kronos Canada, Inc. – incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Promissory note in the amount of euro 65,000,000, dated as of October 12, 2004 between the Registrant and Kronos Worldwide, Inc. - incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21 | Promissory note in the amount of euro 98,094,875, dated as of November 26, 2004 between the Registrant and Kronos Worldwide, Inc. - incorporated by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K (File No. 333-100047) for the year ended December 31, 2004. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12.1 | Statements of Computation of Ratio of Earnings to Fixed Charges |
|------|-----------------------------------------------------------------|

| 31.1 | Certification. |
|------|----------------|

| 31.2 | Certification. |
|------|----------------|

| 32.1 | Certification. |
|------|----------------|

| * | Filed herewith |
|---|----------------|

| ** | Management contract, compensatory plan or arrangement |
|----|-------------------------------------------------------|

----

|   |  March 4, 2011 |
|--------|---------------------|

|   | (Chief Executive Officer) |
|--------|---------------------------|

| /s/ Andrew Kasprowiak                      |   | /s/ Steven L. Watson                                                                 |
|----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Andrew Kasprowiak, March 4, 2011                                                                                           |   | Steven L. Watson, March 4, 2011                                                                                                                                                                                                                                                                                                                                                                                      |
| (Director)                                                                                                                 |   | (Chief Executive Officer)                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| /s/ Dr. Ulfert Fiand                  |   | /s/ Gregory M. Swalwell                                                                                                                                                                                                                                                                                                                                                                                              |
| Dr. Ulfert Fiand, March 4, 2011                                                                                            |   | Gregory M. Swalwell, March 4, 2011                                                                                                                                                                                                                                                                                                                                                                                   |
| (Director)                                                                                                                 |   | (Vice President, Finance, Principal Financial Officer)                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| /s/ Klemens Schlueter_                                                        |   | /s/ Tim C. Hafer                                                                                                                                                                                                                                                                                                                |
| Klemens Schlueter, March 4, 2011                                                                                           |   | Tim C. Hafer, March 4, 2011                                                                                                                                                                                                                                                                                                                                                                                          |
| (Director)                                                                                                                 |   | (Vice President, Controller, Principal Accounting Officer)                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

| KRONOS INTERNATIONAL, INC.                                                                                                                                                                           |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                 |   |
| Annual Report on Form 10-K                                                                                                                                                                           |   |
|                                                                                                                                                                                                 |   |
| Items 8, 15(a) and 15(c)                                                                                                                                                                             |   |
|                                                                                                                                                                                                 |   |
| Index of Financial Statements and Schedules                                                                                                                                                          |   |
|                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                 |   |
| Financial Statements                                                                                                                                                                                 | Page   |
|                                                                                                                                                                                                 |   |
| Report of Independent Registered Public Accounting Firm                                                                                                                                              | F-2    |
|                                                                                                                                                                                                 |   |
| Consolidated Balance Sheets -                                                                                                                                                              |   |
| December 31, 2009 and 2010                                                                                                                                                                           | F-3    |
|                                                                                                                                                                                                 |   |
| Consolidated Statements of Operations -                                                                                                                                                    |   |
| Years ended December 31, 2008, 2009 and 2010                                                                                                                                                         | F-5    |
|                                                                                                                                                                                                 |   |
| Consolidated Statements of Comprehensive Income (Loss) -                                                                                                                                             |   |
| Years ended December 31, 2008, 2009 and 2010                                                                                                                                                         | F-6    |
|                                                                                                                                                                                                 |   |
| Consolidated Statements of Stockholder’s Equity -                                                                                                                                              |   |
| Years ended December 31, 2008, 2009 and 2010                                                                                                                                                         | F-7    |
|                                                                                                                                                                                                 |   |
| Consolidated Statements of Cash Flows -                                                                                                                                                              |   |
| Years ended December 31, 2008, 2009 and 2010                                                                                                                                                         | F-8    |
|                                                                                                                                                                                                 |   |
| Notes to Consolidated Financial Statements                                                                                                                                                           | F-10   |
|                                                                                                                                                                                                 |   |
| Financial Statement Schedule                                                                                                                                                                         |   |
|                                                                                                                                                                                                 |   |
| Schedule I – Condensed Financial Information of Registrant                                                                                                                                     | S-1    |
|                                                                                                                                                                                                 |   |
| Schedules II, III and IV are omitted either because they are not applicable or the required amounts are either not material, or are presented in the Notes to our Consolidated Financial Statements. |   |
|                                                                                                                                                                                                 |   |
| Other Financial Statements filed pursuant to Rule 3-16 of Regulation S-X                                                                                                                             |   |
|                                                                                                                                                                                                 |   |
| Financial Statements of Kronos Titan GmbH                                                                                                                                                            | FA-1   |
|                                                                                                                                                                                                 |   |
| Financial Statements of Kronos Denmark ApS                                                                                                                                                           | FB-1   |

----

----

|               ASSETS |   | December 31, |    |
|--------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                       |   | 2009         |    |   | 2010 |   |
|                                                                                       |   |         |    |   |   |   |
|                                                                                       |   |         |    |   |   |   |
| Current assets:                                                                            |   |         |    |   |   |   |
| Cash and cash equivalents                                                                  |   | $            | 29.4    |   |   | $ | 49.8 |   |
| Restricted cash                                                                            |   |         | 1.7     |   |   |   | 1.9 |   |
| Accounts and other receivables                                                             |   |         | 139.9   |   |   |   | 159.6 |   |
| Receivable from affiliates                                                                 |   |         | 1.6     |   |   |   | 1.9 |   |
| Inventories                                                                                |   |         | 207.7   |   |   |   | 202.9 |   |
| Prepaid expenses                                                                           |   |         | 6.3     |   |   |   | 4.0 |   |
| Deferred income taxes                                                                      |   |         | .1      |   |   |   | .4 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Total current assets                                                                       |   |         | 386.7   |   |   |   | 420.5 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Other assets:                                                                              |   |         |    |   |   |   |   |   |
| Deferred financing costs, net                                                              |   |         | 5.8     |   |   |   | 4.3 |   |
| Deferred income taxes                                                                      |   |         | 185.5   |   |   |   | 191.6 |   |
| Other                                                                                      |   |         | 5.2     |   |   |   | 5.4 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Total other assets                                                                         |   |         | 196.5   |   |   |   | 201.3 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Property and equipment:                                                                    |   |         |    |   |   |   |   |   |
| Land                                                                                       |   |         | 45.1    |   |   |   | 42.4 |   |
| Buildings                                                                                  |   |         | 181.6   |   |   |   | 170.9 |   |
| Equipment                                                                                  |   |         | 862.3   |   |   |   | 828.5 |   |
| Mining properties                                                                          |   |         | 115.7   |   |   |   | 115.9 |   |
| Construction in progress                                                                   |   |         | 7.9     |   |   |   | 10.2 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Total property and equipment                                                               |   |         | 1,212.6 |   |   |   | 1,167.9 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Less accumulated depreciation and amortization                                             |   |         | 781.9   |   |   |   | 766.0 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Net property and equipment                                                                 |   |         | 430.7   |   |   |   | 401.9 |   |
|                                                                                       |   |         |    |   |   |   |   |   |
| Total assets                                                                               |   | $            | 1,013.9 |   |   | $ | 1,023.7 |   |

----

|    LIABILITIES AND STOCKHOLDER’S EQUITY                 |   | December 31, |     |
|------------------------------------------------------------------------------|--------|--------------|----------|
|                                                                         |   | 2009         |     |   | 2010 |   |
|                                                                         |   |         |     |   |   |   |
| Current liabilities:                                                         |   |         |     |   |   |   |
| Current maturities of long-term debt                                         |   | $            | 2.1      |   |   | $ | 2.2 |   |
| Accounts payable and accrued liabilities                                     |   |         | 133.0    |   |   |   | 138.2 |   |
| Payable to affiliates                                                        |   |         | 30.4     |   |   |   | 14.2 |   |
| Income taxes                                                                 |   |         | 3.6      |   |   |   | 6.8 |   |
| Deferred income taxes                                                        |   |         | 4.7      |   |   |   | 4.7 |   |
|                                                                         |   |         |     |   |   |   |   |   |
| Total current liabilities                                                    |   |         | 173.8    |   |   |   | 166.1 |   |
|                                                                         |   |         |     |   |   |   |   |   |
| Noncurrent liabilities:                                                      |   |         |     |   |   |   |   |   |
| Long-term debt                                                               |   |         | 594.4    |   |   |   | 537.4 |   |
| Deferred income taxes                                                        |   |         | 11.6     |   |   |   | 14.9 |   |
| Accrued pension cost                                                         |   |         | 108.6    |   |   |   | 100.7 |   |
| Other                                                                        |   |         | 22.1     |   |   |   | 24.2 |   |
|                                                                         |   |         |     |   |   |   |   |   |
|       Total noncurrent liabilities             |   |         | 736.7    |   |   |   | 677.2 |   |
|                                                                         |   |         |     |   |   |   |   |   |
| Stockholder’s equity:                                                  |   |         |     |   |   |   |   |   |
| Common stock, $100 par value; 100,000 shares authorized; 2,968 shares issued |   |         | .3       |   |   |   | .3 |   |
| Additional paid-in capital                                                   |   |         | 1,962.1  |   |   |   | 1,976.0 |   |
| Retained deficit                                                             |   |         | (1,471.6 | ) |   |   | (1,385.1 | ) |
| Notes receivable from affiliate                                              |   |         | (235.6   | ) |   |   | (255.6 | ) |
| Accumulated other comprehensive loss:                                        |   |         |     |   |   |   |   |   |
| Currency translation                                                         |   |         | (93.9    | ) |   |   | (97.6 | ) |
| Defined benefit pension plans                                                |   |         | (57.9    | ) |   |   | (57.6 | ) |
|                                                                         |   |         |     |   |   |   |   |   |
| Total stockholder’s equity                                             |   |         | 103.4    |   |   |   | 180.4 |   |
|                                                                         |   |         |     |   |   |   |   |   |
| Total liabilities and stockholder’s equity                             |   | $            | 1,013.9  |   |   | $ | 1,023.7 |   |

----

|                                        |   | Years ended December 31, |   |
|---------------------------------------------|--------|--------------------------|--------|
|                                        |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                        |   |                     |   |   |   |   |   |   |   |
| Net sales                                   |   | $                        | 952.9  |   |   | $ | 819.9 |   |   | $ | 998.5 |   |
| Cost of sales                               |   |                     | 782.5  |   |   |   | 752.7 |   |   |   | 774.0 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                |   |                     | 170.4  |   |   |   | 67.2 |   |   |   | 224.5 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expense |   |                     | 130.4  |   |   |   | 115.0 |   |   |   | 125.2 |   |
| Other operating income (expense):           |   |                     |   |   |   |   |   |   |   |   |   |   |
| Currency transaction gains (losses), net    |   |                     | (.8    | ) |   |   | 8.2 |   |   |   | 4.6 |   |
| Disposition of property and equipment       |   |                     | (.9    | ) |   |   | (.8 | ) |   |   | (1.7 | ) |
| Royalty income                              |   |                     | 6.5    |   |   |   | 5.9 |   |   |   | 8.6 |   |
| Other income                                |   |                     | .4     |   |   |   | .8 |   |   |   | 1.5 |   |
| Other expense                               |   |                     | (.1    | ) |   |   | (.1 | ) |   |   | (.2 | ) |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations               |   |                     | 45.1   |   |   |   | (33.8 | ) |   |   | 112.1 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                     |   |                     |   |   |   |   |   |   |   |   |   |   |
| Interest income from affiliates             |   |                     | 17.3   |   |   |   | - |   |   |   | - |   |
| Trade interest income                       |   |                     | 1.0    |   |   |   | .2 |   |   |   | .2 |   |
| Interest expense                            |   |                     | (40.7  | ) |   |   | (40.2 | ) |   |   | (38.0 | ) |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes           |   |                     | 22.7   |   |   |   | (73.8 | ) |   |   | 74.3 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)        |   |                     | 1.4    |   |   |   | (27.3 | ) |   |   | (12.2 | ) |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                           |   | $                        | 21.3   |   |   | $ | (46.5 | ) |   | $ | 86.5 |   |

----

|                                                                                |   | Years ended December 31, |    |
|-------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                |   | 2008                          |    |   | 2009 |   |   | 2010 |   |
|                                                                                |   |                          |    |   |   |   |   |   |   |
| Net income (loss)                                                                   |   | $                             | 21.3    |   |   | $ | (46.5 | ) |   | $ | 86.5 |   |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| Other comprehensive (loss) income, net of tax:                                      |   |                          |    |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| Currency translation                                                                |   |                          | (27.6   | ) |   |   | 14.0 |   |   |   | (3.7 | ) |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| Pension plans:                                                                      |   |                          |    |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost and net losses included in periodic pension cost |   |                          | (.5     | ) |   |   | 3.7 |   |   |   | 3.6 |   |
| Net actuarial gain (loss) arising during year                                       |   |                          | (.8     | ) |   |   | 1.5 |   |   |   | (2.6 | ) |
| Plan amendment                                                                      |   |                          |  - |   |   |   |  - |   |   |   | (.7 | ) |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                          | (1.3    | ) |   |   | 5.2 |   |   |   | .3 |   |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| Total other comprehensive income (loss)                                             |   |                          | (28.9   | ) |   |   | 19.2 |   |   |   | (3.4 | ) |
|                                                                                |   |                          |    |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                         |   | $                             | (7.6    | ) |   | $ | (27.3 | ) |   | $ | 83.1 |   |

----

|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   | Accumulated other       |   |    |    |   |
|-----------------------------------------------|--------|--------|---------|--------|------------|--------|---------|----------|--------|--------|------------|--------|--------|-------------------------|--------|---------|---------|--------|
|                                          |   |   |    |   |       |   |    |     |   |   | Notes      |   |   | comprehensive           |   |    |    |   |
|                                          |   |   |    |   | Additional |   |    |     |   |   | receivable |   |   | _____income (loss)_____ |   |    | Total   |   |
|                                          |   | Common |    |   | paid-in    |   |    | Retained |   |   | from       |   |   | Currency                |   |    | Pension |   |   | stockholder’s |   |
|                                          |   | stock  |    |   | capital    |   |    | deficit  |   |   | affiliates |   |   | translation             |   |    | plans   |   |   | equity |   |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |
| Balance at December 31, 2007                  |   | $      | .3      |   |       | $      | 1,944.2 |     |   | $      | (1,411.5   | )      |   | $                       | (209.5 | )       |    | $      | (80.3 | ) |   | $ | (61.8 | ) |   | $ | 181.4 |   |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                    |   |   | -       |   |       |   | -       |     |   |   | 21.3       |   |   |                    | -      |    |    |   | - |   |   |   | - |   |   |   | 21.3 |   |
| Other comprehensive loss, net of tax          |   |   | -       |   |       |   | -       |     |   |   |       |   |   |                    | -      |    |    |   | (27.6 | ) |   |   | (1.3 | ) |   |   | (28.9 | ) |
| Dividends paid                                |   |   | -       |   |       |   | -       |     |   |   | (34.9      | )      |   |                    | -      |    |    |   | - |   |   |   | - |   |   |   | (34.9 | ) |
| Intercompany interest Kronos Worldwide, Inc.  |   |   | -  |   |       |   | 3.4     |     |   |   | -          |   |   |                    | (5.0   | )  |    |   | - |   |   |   | - |   |   |   | (1.6 | ) |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                  |   |   | .3      |   |       |   | 1,947.6 |     |   |   | (1,425.1   | )      |   |                    | (214.5 | )       |    |   | (107.9 | ) |   |   | (63.1 | ) |   |   |  137.3 |   |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                      |   |   | -       |   |       |   | -       |     |   |   | (46.5      | )      |   |                    | -      |    |    |   | - |   |   |   | - |   |   |   | (46.5 | ) |
| Other comprehensive income, net of tax        |   |   | -       |   |       |   | -       |     |   |   | -          |   |   |                    | -      |    |    |   | 14.0 |   |   |   | 5.2 |   |   |   | 19.2 |   |
| Intercompany interest Kronos Worldwide, Inc.  |   |   | -  |   |       |   | 14.5    |     |   |   | -          |   |   |                    | (21.1  | )       |    |   | - |   |   |   | - |   |   |   | (6.6 | ) |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                  |   |   | .3      |   |       |   | 1,962.1 |     |   |   | (1,471.6   | )      |   |                    | (235.6 | )       |    |   | (93.9 | ) |   |   | (57.9 | ) |   |   | 103.4 |   |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                    |   |   | -       |   |       |   | -       |     |   |   | 86.5       |   |   |                    | -      |    |    |   | - |   |   |   | - |   |   |   | 86.5 |   |
| Other comprehensive income (loss), net of tax |   |   | -       |   |       |   | -       |     |   |   | -          |   |   |                    | -      |    |    |   | (3.7 | ) |   |   | .3 |   |   |   | (3.4 | ) |
| Intercompany interest Kronos Worldwide, Inc.  |   |   |  - |   |       |   | 13.9    |     |   |   |  -    |   |   |                    | (20.0  | )       |    |   |  - |   |   |   |  - |   |   |   | (6.1 | ) |
|                                          |   |   |    |   |       |   |    |     |   |   |       |   |   |                    |   |    |    |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010                  |   | $      | .3      |   |       | $      | 1,976.0 |     |   | $      | (1,385.1   | )      |   | $                       | (255.6 | )       |    | $      | (97.6 | ) |   | $ | (57.6 | ) |   | $ | 180.4 |   |

----

|                                                                  |   | Years ended December 31, |    |
|-----------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                  |   | 2008                     |    |   | 2009 |   |   | 2010 |   |
| Cash flows from operating activities:                                 |   |                     |    |   |   |   |   |   |   |
| Net income (loss)                                                     |   | $                        | 21.3    |   |   | $ | (46.5 | ) |   | $ | 86.5 |   |
| Depreciation and amortization                                         |   |                     | 45.6    |   |   |   | 41.6 |   |   |   | 38.4 |   |
| Deferred income taxes                                                 |   |                     | (6.7    | ) |   |   | (25.1 | ) |   |   | (26.6 | ) |
| Defined benefit pension plan expense greater (less) than cash funding |   |                     | (12.3   | ) |   |   | (.6 | ) |   |   | .3 |   |
| Other, net                                                            |   |                     | 4.7     |   |   |   | 4.0 |   |   |   | 4.8 |   |
| Change in assets and liabilities:                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Accounts and other receivables                                        |   |                     | 16.7    |   |   |   | (3.1 | ) |   |   | (30.9 | ) |
| Inventories                                                           |   |                     | (89.1   | ) |   |   | 98.8 |   |   |   | (9.2 | ) |
| Prepaid expenses                                                      |   |                     | .1      |   |   |   | (2.8 | ) |   |   | 1.8 |   |
| Accounts payable and accrued liabilities                              |   |                     | 12.8    |   |   |   | (5.1 | ) |   |   | (3.4 | ) |
| Income taxes                                                          |   |                     | (1.9    | ) |   |   | .3 |   |   |   | 4.1 |   |
| Accounts with affiliates                                              |   |                     | 9.3     |   |   |   | 16.2 |   |   |   | (14.2 | ) |
| Other noncurrent assets                                               |   |                     | (2.3    | ) |   |   | .5 |   |   |   | (.2 | ) |
| Other noncurrent liabilities                                          |   |                     | 2.8     |   |   |   | (10.7 | ) |   |   | 13.3 |   |
|                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities                             |   |                     | 1.0     |   |   |   | 67.5 |   |   |   | 64.7 |   |
|                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                 |   |                     |    |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                  |   |                     | (61.7   | ) |   |   | (19.5 | ) |   |   | (31.2 | ) |
| Change in restricted cash                                             |   |                     |  - |   |   |   |  - |   |   |   | (.1 | ) |
|                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net cash used in investing activities                                 |   |                     | (61.7   | ) |   |   | (19.5 | ) |   |   | (31.3 | ) |
|                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                 |   |                     |    |   |   |   |   |   |   |   |   |   |
| Indebtedness:                                                         |   |                     |    |   |   |   |   |   |   |   |   |   |
| Borrowings                                                            |   |                     | 57.6    |   |   |   | 29.1 |   |   |   | 41.8 |   |
| Principal payments                                                    |   |                     | (14.6   | ) |   |   | (62.1 | ) |   |   | (52.3 | ) |
|     Deferred financing fees                       |   |                     | (.9     | ) |   |   | (.6 | ) |   |   | (.8 | ) |
| Dividends paid                                                        |   |                     | (34.9   | ) |   |   |   - |   |   |   |   - |   |
|                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) financing activities                   |   |                     | 7.2     |   |   |   | (33.6 | ) |   |   | (11.3 | ) |

----

|                                                                                                 |   | Years ended December 31, |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                 |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |
| Cash and cash equivalents - net change from:                                                         |   |                     |   |   |   |   |   |   |   |
| Operating, investing and financing activities                                                        |   | $                        | (53.5  | ) |   | $ | 14.4 |   |   | $ | 22.1 |   |
| Currency translation                                                                                 |   |                     | (2.7   | ) |   |   | 4.2 |   |   |   | (1.7 | ) |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net change for year                                                                                  |   |                     | (56.2  | ) |   |   | 18.6 |   |   |   | 20.4 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                                                         |   |                     | 67.0   |   |   |   | 10.8 |   |   |   | 29.4 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                                                               |   | $                        | 10.8   |   |   | $ | 29.4 |   |   | $ | 49.8 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Supplemental disclosures –Cash paid for:                                                       |   |                     |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                             |   | $                        | 37.9   |   |   | $ | 38.2 |   |   | $ | 35.7 |   |
| Income taxes                                                                                         |   |                     | 10.0   |   |   |   | 2.2 |   |   |   | 9.4 |   |
| Accrual for capital expenditures                                                                     |   |                     | 6.2    |   |   |   | 3.9 |   |   |   | 9.2 |   |
|             Capital lease obligation incurred |   |                     | -      |   |   |   | 5.9 |   |   |   | - |   |

----

----

|   | · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the assets or liability; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

| Asset                      |   | Useful lives        |
|----------------------------|--------|---------------------|
|                       |   |                |
| Buildings and improvements |   | 10 to 40 years      |
| Machinery and equipment    |   |  3 to 20 years |
| Mine development costs     |   | Units-of-production |

----

----

|                                                       |   | Years ended December 31, |   |
|------------------------------------------------------------|--------|--------------------------|--------|
|                                                       |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                       |   | (In millions)            |   |
|        Geographic areas |   |                     |   |   |   |   |   |   |   |
| Net sales – point of origin:                         |   |                     |   |   |   |   |   |   |   |
| Germany                                                    |   | $                        | 694.8  |   |   | $ | 616.5 |   |   | $ | 714.2 |   |
| Belgium                                                    |   |                     | 207.7  |   |   |   | 164.4 |   |   |   | 209.1 |   |
| Norway                                                     |   |                     | 194.3  |   |   |   | 139.5 |   |   |   | 188.3 |   |
| Eliminations                                               |   |                     | (143.9 | ) |   |   | (100.5 | ) |   |   | (113.1 | ) |
|                                                       |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                                      |   | $                        | 952.9  |   |   | $ | 819.9 |   |   | $ | 998.5 |   |

|                                    |   | Years ended December 31, |   |
|-----------------------------------------|--------|--------------------------|--------|
|                                    |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                    |   | (In millions)            |   |
| Net sales – point of destination: |   |                     |   |   |   |   |   |   |   |
|                                    |   |                     |   |   |   |   |   |   |   |
| Europe                                  |   | $                        | 809.8  |   |   | $ | 669.0 |   |   | $ | 821.8 |   |
| North America                           |   |                     | 15.5   |   |   |   | 20.6 |   |   |   | 11.7 |   |
| Other                                   |   |                     | 127.6  |   |   |   | 130.3 |   |   |   | 165.0 |   |
|                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                   |   | $                        | 952.9  |   |   | $ | 819.9 |   |   | $ | 998.5 |   |

----

|                                              |   | December 31,  |   |
|---------------------------------------------------|--------|---------------|--------|
|                                              |   | 2009          |   |   | 2010 |   |
|                                              |   | (In millions) |   |
|                                              |   |          |   |   |   |   |
| Identifiable assets - net property and equipment: |   |          |   |   |   |   |
|                                              |   |          |   |   |   |   |
| Germany                                           |   | $             | 263.1  |   |   | $ | 236.3 |   |
| Belgium                                           |   |          | 62.8   |   |   |   | 66.3 |   |
| Norway                                            |   |          | 101.2  |   |   |   | 95.2 |   |
| Other                                             |   |          | 3.6    |   |   |   | 4.1 |   |
|                                              |   |          |   |   |   |   |   |   |
| Total                                             |   | $             | 430.7  |   |   | $ | 401.9 |   |

|                                  |   | December 31,  |   |
|---------------------------------------|--------|---------------|--------|
|                                  |   | 2009          |   |   | 2010 |   |
|                                  |   | (In millions) |   |
|                                  |   |          |   |   |   |   |
| Trade receivables                     |   | $             | 126.8  |   |   | $ | 137.9 |   |
| Recoverable VAT and other receivables |   |          | 15.3   |   |   |   | 23.0 |   |
| Refundable income taxes               |   |          | .4     |   |   |   | .9 |   |
| Allowance for doubtful accounts       |   |          | (2.6   | ) |   |   | (2.2 | ) |
|                                  |   |          |   |   |   |   |   |   |
| Total                                 |   | $             | 139.9  |   |   | $ | 159.6 |   |

|              |   | December 31,  |   |
|-------------------|--------|---------------|--------|
|              |   | 2009          |   |   | 2010 |   |
|              |   | (In millions) |   |
|              |   |          |   |   |   |   |
| Raw materials     |   | $             | 46.8   |   |   | $ | 41.5 |   |
| Work in process   |   |          | 13.3   |   |   |   | 9.9 |   |
| Finished products |   |          | 98.9   |   |   |   | 107.0 |   |
| Supplies          |   |          | 48.7   |   |   |   | 44.5 |   |
|              |   |          |   |   |   |   |   |   |
| Total             |   | $             | 207.7  |   |   | $ | 202.9 |   |

|                                |   | December 31,  |   |
|-------------------------------------|--------|---------------|--------|
|                                |   | 2009          |   |   | 2010 |   |
|                                |   | (In millions) |   |
|                                |   |          |   |   |   |   |
| Accounts payable                    |   | $             | 69.9   |   |   | $ | 81.1 |   |
| Employee benefits                   |   |          | 18.7   |   |   |   | 25.0 |   |
| Accrued sales discounts and rebates |   |          | 19.3   |   |   |   | 9.0 |   |
| Accrued interest                    |   |          | 7.9    |   |   |   | 7.4 |   |
| Other                               |   |          | 17.2   |   |   |   | 15.7 |   |
|                                |   |          |   |   |   |   |   |   |
| Total                               |   | $             | 133.0  |   |   | $ | 138.2 |   |

----

|                      |   | December 31,  |   |
|---------------------------|--------|---------------|--------|
|                      |   | 2009          |   |   | 2010 |   |
|                      |   | (In millions) |   |
|                      |   |          |   |   |   |   |
| Long-term debt:           |   |          |   |   |   |   |
| 6.5% Senior Secured Notes |   | $             | 574.6  |   |   | $ | 532.8 |   |
| Revolving credit facility |   |          | 13.0   |   |   |   | - |   |
| Other                     |   |          | 8.9    |   |   |   | 6.8 |   |
|                      |   |          |   |   |   |   |   |   |
| Total debt                |   |          | 596.5  |   |   |   | 539.6 |   |
| Less current maturities   |   |          | 2.1    |   |   |   | 2.2 |   |
|                      |   |          |   |   |   |   |   |   |
| Total long-term debt      |   | $             | 594.4  |   |   | $ | 537.4 |   |

----

| Years ending December 31,                 |   | Amount        |     |
|-------------------------------------------|--------|---------------|----------|
|                                      |   | (In millions) |     |
|                                      |   |          |     |
|   2011                          |   | $             | 2.2      |   |
|   2012                          |   |          | 2.2      |   |
|   2013                          |   |          | 534.0    |   |
|   2014                          |   |          | .5       |   |
|   2015                          |   |          | .4       |   |
|   2016 and thereafter           |   |          |  .3 |   |
|                                      |   |          |     |   |
|       Total |   | $             | 539.6    |   |

----

|                                                                                  |   | Years ended December 31, |   |
|---------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                  |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                  |   | (In millions)            |   |
| Pre-tax income (loss):                                                                |   |                     |   |   |   |   |   |   |   |
| Germany                                                                               |   | $                        | (5.5   | ) |   | $ | (76.1 | ) |   | $ | 36.7 |   |
| Other non-U.S.                                                                        |   |                     | 28.2   |   |   |   | 2.3 |   |   |   | 37.6 |   |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                 |   | $                        | 22.7   |   |   | $ | (73.8 | ) |   | $ | 74.3 |   |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Expected tax expense (benefit), at U.S. federal statutory income tax rate of 35%      |   | $                        | 7.9    |   |   | $ | (25.8 | ) |   | $ | 26.0 |   |
| Non-U.S. tax rates                                                                    |   |                     | (1.0   | ) |   |   | 2.3 |   |   |   | (2.6 | ) |
| Incremental tax and rate differences on equity in earnings of non-tax group companies |   |                     | .3     |   |   |   | - |   |   |   | - |   |
| German tax attribute adjustments                                                      |   |                     | (7.2   | ) |   |   | .2 |   |   |   | (35.2 | ) |
| Nondeductible expenses                                                                |   |                     | 2.2    |   |   |   | 1.9 |   |   |   | 1.8 |   |
| Uncertain tax positions, net                                                          |   |                     | -      |   |   |   | (4.7 | ) |   |   | .7 |   |
| Nontaxable income                                                                     |   |                     | (.9    | ) |   |   | (.9 | ) |   |   | (.9 | ) |
| Tax rate change                                                                       |   |                     | -      |   |   |   | - |   |   |   | (1.7 | ) |
| Other, net                                                                            |   |                     | .1     |   |   |   | (.3 | ) |   |   | (.3 | ) |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)                                                  |   | $                        | 1.4    |   |   | $ | (27.3 | ) |   | $ | (12.2 | ) |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Components of income tax expense (benefit):                                           |   |                     |   |   |   |   |   |   |   |   |   |   |
|   Currently payable:                                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
|   Germany                                                                   |   | $                        | .8     |   |   | $ | .3 |   |   | $ | 1.9 |   |
|   Other non – U.S.                                                    |   |                     | 7.3    |   |   |   | 2.2 |   |   |   | 11.8 |   |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                     | 8.1    |   |   |   | 2.5 |   |   |   | 13.7 |   |
|   Deferred income taxes (benefit):                                          |   |                     |   |   |   |   |   |   |   |   |   |   |
|   Germany                                                                   |   |                     | (7.7   | ) |   |   | (27.0 | ) |   |   | (25.5 | ) |
|   Other non - U.S.                                                          |   |                     | 1.0    |   |   |   | (2.8 | ) |   |   | (.4 | ) |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                     | (6.7   | ) |   |   | (29.8 | ) |   |   | (25.9 | ) |
|                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)                                                  |   | $                        | 1.4    |   |   | $ | (27.3 | ) |   | $ | (12.2 | ) |

|                                                             |   | Years ended December 31, |   |
|------------------------------------------------------------------|--------|--------------------------|--------|
|                                                             |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                             |   | (In millions)            |   |
| Comprehensive provision for income taxes (benefit) allocable to: |   |                     |   |   |   |   |   |   |   |
| Income (loss) from operations                                    |   | $                        | 1.4    |   |   | $ | (27.3 | ) |   | $ | (12.2 | ) |
| Other comprehensive income –Pension plans                  |   |                     | (.4    | ) |   |   | 2.2 |   |   |   | .1 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |   | $                        | 1.0    |   |   | $ | (25.1 | ) |   | $ | (12.1 | ) |

----

|                                                 |   | December 31,  |   |
|------------------------------------------------------|--------|---------------|--------|
|                                                 |   | 2009          |   |   | 2010 |   |
|                                                 |   | Assets        |   |   | Liabilities |   |   | Assets |   |   | Liabilities |   |
|                                                 |   | (In millions) |   |
|                                                 |   |          |   |   |   |   |   |   |   |   |   |   |
| Tax effect of temporary differences related to:      |   |          |   |   |   |   |   |   |   |   |   |   |
| Inventories                                          |   | $             | -      |   |   | $ | (3.5 | ) |   | $ | - |   |   | $ | (3.8 | ) |
| Property and equipment                               |   |          | -      |   |   |   | (35.3 | ) |   |   | - |   |   |   | (37.8 | ) |
| Accrued pension cost                                 |   |          | -      |   |   |   | - |   |   |   | 1.2 |   |   |   |   |   |
| Other accrued liabilities and deductible differences |   |          | 19.1   |   |   |   | - |   |   |   | 13.1 |   |   |   | - |   |
| Other taxable differences                            |   |          | -      |   |   |   | (6.8 | ) |   |   | - |   |   |   | (5.3 | ) |
| Tax loss and tax credit carryforwards                |   |          | 195.8  |   |   |   | - |   |   |   | 205.1 |   |   |   | - |   |
| Valuation allowance                                  |   |          | -      |   |   |   |  - |   |   |   | (.1 | ) |   |   |  - |   |
| Adjusted gross deferred tax assets (liabilities)     |   |          | 214.9  |   |   |   | (45.6 | ) |   |   | 219.3 |   |   |   | (46.9 | ) |
| Netting of items by tax jurisdiction                 |   |          | (29.3  | ) |   |   | 29.3 |   |   |   | (27.3 | ) |   |   | 27.3 |   |
|                                                 |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |          | 185.6  |   |   |   | (16.3 | ) |   |   | 192.0 |   |   |   | (19.6 | ) |
| Less net current deferred tax asset (liability)      |   |          | .1     |   |   |   | (4.7 | ) |   |   | .4 |   |   |   | (4.7 | ) |
|                                                 |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net noncurrent deferred tax asset (liability)        |   | $             | 185.5  |   |   | $ | (11.6 | ) |   | $ | 191.6 |   |   | $ | (14.9 | ) |

----

|                                                                               |   | Year Ended December 31, |   |
|------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                               |   | 2008                    |   |   | 2009 |   |   | 2010 |   |
|                                                                               |   | (In millions)           |   |
| Changes in unrecognized tax benefits:                                              |   |                    |   |   |   |   |   |   |   |
|   Unrecognized tax benefits at beginning of     year |   | $                       | 11.9   |   |   | $ | 10.4 |   |   | $ | 7.0 |   |
|   Net increase (decrease):                                               |   |                    |   |   |   |   |   |   |   |   |   |   |
|     Tax positions taken in prior periods                       |   |                    | (1.1   | ) |   |   | (5.0 | ) |   |   | (.1 | ) |
|     Tax positions taken in current period                      |   |                    | 1.8    |   |   |   | .9 |   |   |   | .6 |   |
|   Settlements with taxing authorities –   cash paid |   |                    | (.1    | ) |   |   | - |   |   |   | - |   |
|   Lapse of applicable statute of limitations                             |   |                    | (.7    | ) |   |   | - |   |   |   | - |   |
|   Change in currency exchange rates                                      |   |                    | (1.4   | ) |   |   | .7 |   |   |   | .4 |   |
|                                                                               |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Unrecognized tax benefits at end of year                               |   | $                       | 10.4   |   |   | $ | 7.0 |   |   | $ | 7.9 |   |

----

| Years ending December 31, |   | Amount        |   |
|---------------------------|--------|---------------|--------|
|                      |   | (In millions) |   |
|                      |   |          |   |
| 2011                      |   | $             | 18.1   |   |
| 2012                      |   |          | 20.6   |   |
| 2013                      |   |          | 19.1   |   |
| 2014                      |   |          | 19.2   |   |
| 2015                      |   |          | 18.4   |   |
| Next 5 years              |   |          | 94.2   |   |

----

|                                                         |   | Years ended December 31, |   |
|--------------------------------------------------------------|--------|--------------------------|--------|
|                                                         |   | 2009                     |   |   | 2010 |   |
|                                                         |   | (In millions)            |   |
| Change in projected benefit obligations (“PBO”): |   |                     |   |   |   |   |
| Benefit obligations at beginning of the year                 |   | $                        | 317.1  |   |   | $ | 347.8 |   |
| Service cost                                                 |   |                     | 6.8    |   |   |   | 8.0 |   |
| Interest cost                                                |   |                     | 18.1   |   |   |   | 17.2 |   |
| Participant contributions                                    |   |                     | 1.5    |   |   |   | 1.7 |   |
| Actuarial losses                                             |   |                     | 7.6    |   |   |   | 12.9 |   |
| Plan amendment                                               |   |                     | -      |   |   |   | 1.0 |   |
| Change in currency exchange rates                            |   |                     | 16.9   |   |   |   | (22.1 | ) |
| Benefits paid                                                |   |                     | (20.2  | ) |   |   | (18.8 | ) |
|                                                         |   |                     |   |   |   |   |   |   |
| Benefit obligations at end of the year                       |   |                     | 347.8  |   |   |   | 347.7 |   |
|                                                         |   |                     |   |   |   |   |   |   |
| Change in plan assets:                                       |   |                     |   |   |   |   |   |   |
| Fair value of plan assets at beginning of the year           |   |                     | 203.1  |   |   |   | 238.0 |   |
| Actual return on plan assets                                 |   |                     | 22.4   |   |   |   | 21.1 |   |
| Employer contributions                                       |   |                     | 18.1   |   |   |   | 17.8 |   |
| Participant contributions                                    |   |                     | 1.5    |   |   |   | 1.7 |   |
| Change in currency exchange rates                            |   |                     | 13.1   |   |   |   | (13.9 | ) |
| Benefits paid                                                |   |                     | (20.2  | ) |   |   | (18.8 | ) |
|                                                         |   |                     |   |   |   |   |   |   |
| Fair value of plan assets at end of year                     |   |                     | 238.0  |   |   |   | 245.9 |   |
|                                                         |   |                     |   |   |   |   |   |   |
| Funded status                                                |   | $                        | (109.8 | ) |   | $ | (101.8 | ) |
|                                                         |   |                     |   |   |   |   |   |   |
| Amounts recognized in the balance sheet:                     |   |                     |   |   |   |   |   |   |
| Noncurrent pension asset                                     |   | $                        | .3     |   |   | $ | .3 |   |
| Accrued pension costs:                                       |   |                     |   |   |   |   |   |   |
| Current                                                      |   |                     | (1.5   | ) |   |   | (1.4 | ) |
| Noncurrent                                                   |   |                     | (108.6 | ) |   |   | (100.7 | ) |
|                                                         |   |                     |   |   |   |   |   |   |
| Total                                                        |   | $                        | (109.8 | ) |   | $ | (101.8 | ) |
|                                                         |   |                     |   |   |   |   |   |   |
| Accumulated other comprehensive loss:                        |   |                     |   |   |   |   |   |   |
| Actuarial losses                                             |   | $                        | 90.1   |   |   | $ | 89.2 |   |
| Prior service cost                                           |   |                     | 3.9    |   |   |   | 4.4 |   |
| Net transition obligations                                   |   |                     | .2     |   |   |   | .2 |   |
|                                                         |   |                     |   |   |   |   |   |   |
| Total                                                        |   | $                        | 94.2   |   |   | $ | 93.8 |   |
|                                                         |   |                     |   |   |   |   |   |   |
| Accumulated benefit obligations (“ABO”)          |   | $                        | 315.5  |   |   | $ | 317.9 |   |

----

|                                       |   | Years ended December 31, |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                       |   | (In millions)            |   |
| Net periodic pension cost:                 |   |                     |   |   |   |   |   |   |   |
| Service cost benefits                      |   | $                        | 7.0    |   |   | $ | 6.8 |   |   | $ | 8.0 |   |
| Interest cost on PBO                       |   |                     | 13.9   |   |   |   | 18.1 |   |   |   | 17.2 |   |
| Expected return on plan assets             |   |                     | (13.4  | ) |   |   | (12.0 | ) |   |   | (12.2 | ) |
| Recognized actuarial losses (gain)         |   |                     | (1.4   | ) |   |   | 4.6 |   |   |   | 4.6 |   |
| Amortization of prior service cost         |   |                     | .6     |   |   |   | .5 |   |   |   | .5 |   |
| Amortization of net transition obligations |   |                     | .2     |   |   |   | .2 |   |   |   | .1 |   |
|                                       |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                      |   | $                        | 6.9    |   |   | $ | 18.2 |   |   | $ | 18.2 |   |

|                                         |   | December 31,  |   |
|----------------------------------------------|--------|---------------|--------|
|                                         |   | 2009          |   |   | 2010 |   |
|                                         |   | (In millions) |   |
|                                         |   |          |   |   |   |   |
| Plans for which the ABO exceeds plan assets: |   |          |   |   |   |   |
| PBO                                          |   | $             | 289.9  |   |   | $ | 287.9 |   |
| ABO                                          |   |          | 266.3  |   |   |   | 265.3 |   |
| Fair value of plan assets                    |   |          | 181.4  |   |   |   | 187.2 |   |

|                                   |   | December 31, |   |
|----------------------------------------|--------|--------------|--------|
| Rate                                   |   | 2009         |   |   | 2010 |   |
|                                   |   |         |   |   |   |   |
| Discount rate                          |   |         | 5.5    | % |   |   | 5.1 | % |
| Increase in future compensation levels |   |         | 3.2    | % |   |   | 3.1 | % |

|                                   |   | Years ended December 31, |   |
|----------------------------------------|--------|-------------------------------|--------|
| Rate                                   |   | 2008                          |   |   | 2009 |   |   | 2010 |   |
|                                   |   |                          |   |   |   |   |   |   |   |
| Discount rate                          |   |                          | 5.5    | % |   |   | 5.8 | % |   |   | 5.5 | % |
| Increase in future compensation levels |   |                          | 3.0    | % |   |   | 3.2 | % |   |   | 3.2 | % |
| Long-term return on plan assets        |   |                          | 5.7    | % |   |   | 5.7 | % |   |   | 5.4 | % |

----

|                                                                                                 |   | Years Ended December 31, |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                 |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                                 |   | (In millions)            |   |
| Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |   |                     |   |   |   |   |   |   |   |
| Current year:                                                                                        |   |                     |   |   |   |   |   |   |   |
| Net actuarial gain (loss)                                                                            |   | $                        | (.9    | ) |   | $ | 2.1 |   |   | $ | (3.8 | ) |
| Plan amendment                                                                                       |   |                     | -      |   |   |   | - |   |   |   | (1.0 | ) |
| Amortization of unrecognized:                                                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net actuarial losses (gain)                                                                     |   |                     | (1.4   | ) |   |   | 4.6 |   |   |   | 4.6 |   |
| Prior service cost                                                                         |   |                     | .6     |   |   |   | .5 |   |   |   | .5 |   |
| Net transition obligations                                                                 |   |                     | .2     |   |   |   | .2 |   |   |   | .1 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
|     Total                                                                        |   | $                        | (1.5   | ) |   | $ | 7.4 |   |   | $ | .4 |   |

| ·   | In Germany, the composition of our plan assets is established to satisfy the requirements of the German insurance commissioner.  Our German pension plan assets represent an investment in a large collective investment fund established and maintained by Bayer AG in which several pension plans, including our German pension plan and Bayer’s pension plans, have invested.  These plan assets are a Level 3 input because there is not an active market that approximates the value of our investment in the Bayer investment fund.  We determine the fair value of the Bayer plan assets based on periodic reports we receive from the managers of the Bayer plan which are subject to audit by the German pension regulator. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In Norway, we currently have a plan asset target allocation of 14% to equity securities, 72% to fixed income securities and the remainder primarily to liquid investments such as money markets.  The expected long-term rate of return for such investments is approximately 9.0%, 5.0% and 4.0%, respectively. The majority of Norwegian plan assets are Level 1 inputs because they are traded in active markets; however a portion of our Norwegian plan assets are invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We also have plan assets in Belgium and the United Kingdom.  The Belgian plan assets are invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input.  The United Kingdom plan assets consist of marketable securities which are Level 1 inputs because they trade in active markets. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                    |   | Fair Value Measurements at December 31, 2009 |      |
|-----------------------------------------|--------|----------------------------------------------|-----------|
|                                    |   | Total                                        |      |   | Quoted Prices in Active Markets  (Level 1) |   |   | Significant Other Observable Inputs  (Level 2) |   |   | Significant Unobservable Inputs  (Level 3) |   |
|                                    |   | (In millions)                                |      |
|                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Germany                                 |   | $                                            | 172.3     |   |   | $ | - |   |   | $ | - |   |   | $ | 172.3 |   |
| Norway:                                 |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Local currency equities     |   |                                         | 3.6       |   |   |   | 3.6 |   |   |   | - |   |   |   | - |   |
|   Non local currency equities |   |                                         | 6.4       |   |   |   | 6.4 |   |   |   | - |   |   |   | - |   |
|   Local currency fixed income |   |                                         | 31.9      |   |   |   | 7.7 |   |   |   | - |   |   |   | 24.2 |   |
|   Non local fixed income      |   |                                         | 4.4       |   |   |   | 1.3 |   |   |   | - |   |   |   | 3.1 |   |
|   Cash and other              |   |                                         | 10.4      |   |   |   | 9.7 |   |   |   | - |   |   |   | .7 |   |
| Other                                   |   |                                         |  9.0 |   |   |   |  2.2 |   |   |   | - |   |   |   |  6.8 |   |
|                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total           |   | $                                            | 238.0     |   |   | $ | 30.9 |   |   | $ | - |   |   | $ | 207.1 |   |

|                                    |   | Fair Value Measurements at December 31, 2010 |   |
|-----------------------------------------|--------|----------------------------------------------|--------|
|                                    |   | Total                                        |   |   | Quoted Prices in Active Markets  (Level 1) |   |   | Significant Other Observable Inputs  (Level 2) |   |   | Significant Unobservable Inputs  (Level 3) |   |
|                                    |   | (In millions)                                |   |
|                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Germany                                 |   | $                                            | 176.2  |   |   | $ |  - |   |   | $ | - |   |   | $ | 176.2 |   |
| Norway:                                 |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Local currency equities     |   |                                         | 11.5   |   |   |   | 11.5 |   |   |   | - |   |   |   | - |   |
|   Non local currency equities |   |                                         | .2     |   |   |   | .2 |   |   |   | - |   |   |   | - |   |
|   Local currency fixed income |   |                                         | 42.3   |   |   |   | 15.9 |   |   |   | - |   |   |   | 26.4 |   |
|   Non local fixed income      |   |                                         | 3.5    |   |   |   | .5 |   |   |   | - |   |   |   | 3.0 |   |
|   Cash and other              |   |                                         | 1.2    |   |   |   | .6 |   |   |   | - |   |   |   | .6 |   |
| Other                                   |   |                                         | 11.2   |   |   |   |  2.5 |   |   |   | - |   |   |   |  8.7 |   |
|                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total           |   | $                                            | 246.1  |   |   | $ | 31.2 |   |   | $ | - |   |   | $ | 214.9 |   |

|                                                   |   | 2009          |   |   | 2010   |   |
|--------------------------------------------------------|--------|---------------|--------|--------|--------|--------|
|                                                   |   | (In millions) |   |
|                                                   |   |          |   |   |   |   |
| Fair value at beginning of year                        |   | $             | 178.9  |   |   | $      | 207.1 |   |
|   Gain on assets held at end of year         |   |          | 19.8   |   |   |   | 15.9 |   |
|   Gain (loss) on assets sold during the year |   |          | (1.4   | )      |   |   | 1.5 |   |
|   Assets purchased                           |   |          | 20.2   |   |   |   | 20.0 |   |
|   Assets sold                                |   |          | (19.0  | )      |   |   | (15.9 | ) |
|   Currency exchange rate fluctuations        |   |          | 8.6    |   |   |   | (13.7 | ) |
|                                                   |   |          |   |   |   |   |   |   |
| Fair value at end of year                              |   | $             | 207.1  |   |   | $      | 214.9 |   |

----

|                                |   | December 31,  |      |
|-------------------------------------|--------|---------------|-----------|
|                                |   | 2009          |      |   | 2010 |   |
|                                |   | (In millions) |      |
|                                |   |          |      |   |   |   |
| Reserve for uncertain tax positions |   | $             | 9.5       |   |   | $ | 10.6 |   |
| Employee benefits                   |   |          | 9.2       |   |   |   | 9.7 |   |
| Other                               |   |          |  3.4 |   |   |   | 3.9 |   |
|                                |   |          |      |   |   |   |   |   |
| Total                               |   | $             | 22.1      |   |   | $ | 24.2 |   |

----

|                                  |   |  December 31, |   |
|---------------------------------------|--------|--------------------|--------|
|                                  |   | 2009               |   |   | 2010 |   |
|                                  |   | (In millions)      |   |
| Current receivables from affiliates:  |   |               |   |   |   |   |
| Kronos Canada Inc. (“KC”) |   | $                  | 1.6    |   |   | $ | 1.9 |   |
|                                  |   |               |   |   |   |   |   |   |
| Current payables to affiliate:        |   |               |   |   |   |   |   |   |
| Kronos (US), Inc. (“KUS”) |   | $                  | 30.2   |   |   | $ | 14.0 |   |
| Kronos Canada, inc.                   |   |               | .2     |   |   |   | .2 |   |
|                                  |   |               |   |   |   |   |   |   |
| Total                                 |   | $                  | 30.4   |   |   | $ | 14.2 |   |

----

----

|                                                                                        | 2008     | 2009     | 2010     |
|---------------------------------------------------------------------------------------------|----------|----------|----------|
|                                                                                        |     |     |     |
|              Europe        | 80%      | 77%      | 80%      |
|              North America |  2% |  3% |  1% |

----

| Years ending December 31, |   | Amount        |   |
|---------------------------|--------|---------------|--------|
|                      |   | (In millions) |   |
|                      |   |          |   |
| 2011                      |   | $             | 4.2    |   |
| 2012                      |   |          | 3.3    |   |
| 2013                      |   |          | 3.1    |   |
| 2014                      |   |          | 1.9    |   |
| 2015                      |   |          | 1.2    |   |
| 2016 and thereafter       |   |          | 18.0   |   |
|                      |   |          |   |   |
| Total                     |   | $             | 31.7   |   |

|                                   |   | Fair Value Measurements |   |
|----------------------------------------|--------|-------------------------|--------|
|                                   |   | Total                   |   |   | Quoted Prices in Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                                   |   | (in millions)           |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                     |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   | $                       | 1.6    |   |   | $ | 1.6 |   |   |   | - |   |   |   | - |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | 2.6    |   |   |   | 2.6 |   |   |   | - |   |   |   | - |   |

----

| ·   | an aggregate $20.1 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 5.94 to kroner 6.60 per U.S. dollar.  These contracts with DnB Nor Bank ASA mature from January 2011 through July 2011 at a rate of $2.3 million to $5.5 million per month. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an aggregate euro 17.8 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 8.16 to kroner 8.28 per euro.  These contracts with DnB Nor Bank ASA mature from January 2011 through August 2011 at a rate of euro 1.8 million to euro 2.5 million per month, subject to early redemption provisions at our option. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | December 31,   |   |   | December 31, |   |
|--------------------------------------------|--------|----------------|--------|--------|--------------|--------|
|                                       |   | 2009           |   |   | 2010         |   |
|                                       |   | CarryingAmount |   |   | FairValue    |   |   | CarryingAmount |   |   | FairValue |   |
|                                       |   | (In millions)  |   |
|                                       |   |           |   |   |         |   |   |   |   |   |   |   |
| Cash, cash equivalents and restricted cash |   | $              | 31.1   |   |         | $      | 31.1 |   |   | $ | 51.7 |   |   | $ | 51.7 |   |
|                                       |   |           |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Notes payable and long-term debt:          |   |           |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Fixed rate with market quotes -            |   |           |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| 6.5% Senior Secured Notes                  |   | $              | 574.6  |   |         | $      | 466.2 |   |   | $ | 532.8 |   |   | $ | 536.0 |   |
| European credit facility                   |   |           | 13.0   |   |         |   | 13.0 |   |   |   | - |   |   |   | - |   |

----

|                         |   | Quarter ended |   |
|------------------------------|--------|---------------|--------|
|                         |   | March 31 |   |   | June 30 |   |   | Sept. 30 |   |   | Dec. 31 |   |
|                         |   | (In millions) |   |
|                         |   |          |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2009 |   |          |   |   |   |   |   |   |   |   |   |   |
| Net sales                    |   | $             | 171.6  |   |   | $ | 196.7 |   |   | $ | 224.6 |   |   | $ | 227.0 |   |
| Gross margin                 |   |          | (6.5   | ) |   |   | (1.0 | ) |   |   | 40.1 |   |   |   | 34.6 |   |
| Net income (loss)            |   |          | (24.0  | ) |   |   | (26.1 | ) |   |   | 3.0 |   |   |   | .6 |   |
|                         |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2010 |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                    |   | $             | 228.8  |   |   | $ | 256.6 |   |   | $ | 250.4 |   |   | $ | 262.7 |   |
| Gross margin                 |   |          | 41.2   |   |   |   | 55.0 |   |   |   | 57.6 |   |   |   | 70.7 |   |
| Net income                   |   |          | 40.3   |   |   |   | 9.0 |   |   |   | 15.4 |   |   |   | 21.8 |   |

----

|                                             |   | December 31, |   |
|--------------------------------------------------|--------|--------------|--------|
|                                             |   | 2009         |   |   | 2010 |   |
|                                             |   |         |   |   |   |   |
| Current assets:                                  |   |         |   |   |   |   |
| Cash and cash equivalents                        |   | $            | 2.7    |   |   | $ | 8.2 |   |
| Receivable from affiliates                       |   |         | 33.0   |   |   |   | 43.4 |   |
| Accounts and notes receivable                    |   |         | 9.7    |   |   |   | 12.8 |   |
| Other                                            |   |         | .4     |   |   |   | .2 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total current assets                             |   |         | 45.8   |   |   |   | 64.6 |   |
|                                             |   |         |   |   |   |   |   |   |
| Other assets:                                    |   |         |   |   |   |   |   |   |
| Investment in subsidiaries                       |   |         | 518.4  |   |   |   | 555.9 |   |
| Deferred income taxes                            |   |         | 197.2  |   |   |   | 206.4 |   |
| Other                                            |   |         | 5.0    |   |   |   | 3.3 |   |
| Property and equipment, net                      |   |         | 6.4    |   |   |   | 7.3 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total other assets                               |   |         | 727.0  |   |   |   | 772.9 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total assets                                     |   | $            | 772.8  |   |   | $ | 837.5 |   |
|                                             |   |         |   |   |   |   |   |   |
| Current liabilities:                             |   |         |   |   |   |   |   |   |
| Accounts payable and accrued liabilities         |   | $            | 14.3   |   |   | $ | 17.2 |   |
| Payable to affiliates                            |   |         | 43.1   |   |   |   | 93.7 |   |
| Income taxes                                     |   |         | 25.9   |   |   |   | .8 |   |
| Deferred income taxes                            |   |         | .2     |   |   |   | .4 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total current liabilities                        |   |         | 83.5   |   |   |   | 112.1 |   |
|                                             |   |         |   |   |   |   |   |   |
| Noncurrent liabilities:                          |   |         |   |   |   |   |   |   |
| Long-term debt                                   |   |         | 574.6  |   |   |   | 532.8 |   |
| Other                                            |   |         | 11.3   |   |   |   | 12.2 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total noncurrent liabilities                     |   |         | 585.9  |   |   |   | 545.0 |   |
|                                             |   |         |   |   |   |   |   |   |
| Stockholder’s equity                       |   |         | 103.4  |   |   |   | 180.4 |   |
|                                             |   |         |   |   |   |   |   |   |
| Total liabilities and stockholder’s equity |   | $            | 772.8  |   |   | $ | 837.5 |   |

----

|                                                    |   | Years ended December 31, |   |
|---------------------------------------------------------|--------|--------------------------|--------|
|                                                    |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
| Revenues and other income:                              |   |                     |   |   |   |   |   |   |   |
| Net sales                                               |   | $                        | 67.2   |   |   | $ | 60.2 |   |   | $ | 62.7 |   |
| Equity in earnings (losses) of   subsidiaries |   |                     | 27.7   |   |   |   | (26.1 | ) |   |   | 70.2 |   |
| Interest income from affiliates                         |   |                     | 19.1   |   |   |   | 2.8 |   |   |   | 4.6 |   |
| Royalty income                                          |   |                     | 19.9   |   |   |   | 16.7 |   |   |   | 22.7 |   |
| Currency translation gains (losses), net                |   |                     | (.8    | ) |   |   | .3 |   |   |   | .1 |   |
| Other income, net                                       |   |                     | .1     |   |   |   | .1 |   |   |   | .8 |   |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                     | 133.2  |   |   |   | 54.0 |   |   |   | 161.1 |   |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                     |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cost of sales                                           |   |                     | 38.2   |   |   |   | 36.0 |   |   |   | 36.9 |   |
| General and administrative                              |   |                     | 41.4   |   |   |   | 36.7 |   |   |   | 39.1 |   |
| Interest expense                                        |   |                     | 40.4   |   |   |   | 38.2 |   |   |   | 36.6 |   |
| Interest expense to affiliates                          |   |                     | 1.5    |   |   |   | 3.2 |   |   |   | 6.3 |   |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                     | 121.5  |   |   |   | 114.1 |   |   |   | 118.9 |   |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes                       |   |                     | 11.7   |   |   |   | (60.1 | ) |   |   | 42.2 |   |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                      |   |                     | (9.6   | ) |   |   | (13.6 | ) |   |   | (44.3 | ) |
|                                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                       |   | $                        | 21.3   |   |   | $ | (46.5 | ) |   | $ | 86.5 |   |

----

|                                                                          |   | Years ended December 31, |       |
|-------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                          |   | 2008                     |       |   | 2009 |   |   | 2010 |   |
| Cash flows from operating activities:                                         |   |                     |       |   |   |   |   |   |   |
| Net income (loss)                                                             |   | $                        | 21.3       |   |   | $ | (46.5 | ) |   | $ | 86.5 |   |
| Cash distributions from subsidiaries                                          |   |                     | 37.5       |   |   |   | 1.0 |   |   |   | 1.0 |   |
| Noncash interest expense                                                      |   |                     | 1.5        |   |   |   | 1.4 |   |   |   | 1.3 |   |
| Deferred income taxes                                                         |   |                     | (15.6      | ) |   |   | (26.3 | ) |   |   | (29.8 | ) |
| Equity in (earnings) losses of   subsidiaries                       |   |                     | (27.7      | ) |   |   | 26.1 |   |   |   | (70.2 | ) |
| Other, net                                                                    |   |                     | 2.2        |   |   |   | 4.7 |   |   |   | 3.8 |   |
| Net change in assets and liabilities                                          |   |                     | 13.3       |   |   |   | 36.9 |   |   |   | 15.5 |   |
|                                                                          |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) operating activities                           |   |                     |  32.5 |   |   |   | (2.7 | ) |   |   |  8.1 |   |
|                                                                          |   |                     |       |   |   |   |   |   |   |   |   |   |
| Cash flows used in investing activities -                                     |   |                     |       |   |   |   |   |   |   |   |   |   |
| capital expenditures                                                          |   |                     | (1.8       | ) |   |   | (.8 | ) |   |   | (2.2 | ) |
|                                                                          |   |                     |       |   |   |   |   |   |   |   |   |   |
| Cash flows used in financing activities -                                     |   |                     |       |   |   |   |   |   |   |   |   |   |
| dividends paid                                                                |   |                     | (34.9      | ) |   |   |  -  |   |   |   |  -  |   |
|                                                                          |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net change during the year from operating, investing and financing activities |   |                     | (4.2       | ) |   |   | (3.5 | ) |   |   | 5.9 |   |
| Currency translation                                                          |   |                     | .1         |   |   |   | 1.3 |   |   |   | (.4 | ) |
| Balance at beginning of year                                                  |   |                     | 9.0        |   |   |   | 4.9 |   |   |   | 2.7 |   |
|                                                                          |   |                     |       |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                                        |   | $                        | 4.9        |   |   | $ | 2.7 |   |   | $ | 8.2 |   |

----

|                                                      |   | December 31,  |      |
|-----------------------------------------------------------|--------|---------------|-----------|
|                                                      |   | 2009          |      |   | 2010 |   |
|                                                      |   | (In millions) |      |
| Current:                                                  |   |          |      |   |   |   |
| Receivable from:                                          |   |          |      |   |   |   |
| Kronos Titan GmbH (“TG”) – income taxes |   | $             | 27.0      |   |   | $ | 37.7 |   |
| Kronos Europe S.A./N.V.                                   |   |          | 1.9       |   |   |   | 2.0 |   |
| Kronos Canada                                             |   |          | 1.7       |   |   |   | 1.9 |   |
| Kronos Titan A/S                                          |   |          | 1.7       |   |   |   | .8 |   |
| Titania A/S                                               |   |          | .4        |   |   |   | .7 |   |
| TG                                                        |   |          |  .3  |   |   |   | .3 |   |
|                                                      |   |          |      |   |   |   |   |   |
|                                                      |   | $             | 33.0      |   |   | $ | 43.4 |   |
| Payable to:                                               |   |          |      |   |   |   |   |   |
| TG                                                        |   | $             | 29.1      |   |   | $ | 80.4 |   |
| Kronos UK                                                 |   |          | 6.2       |   |   |   | 6.0 |   |
| Societe Industrielle du Titane, S.A.                      |   |          |  7.8 |   |   |   | 7.3 |   |
|                                                      |   |          |      |   |   |   |   |   |
|                                                      |   | $             | 43.1      |   |   | $ | 93.7 |   |

|                                   |   | December 31,  |       |
|----------------------------------------|--------|---------------|------------|
|                                   |   | 2009          |       |   | 2010 |   |
|                                   |   | (In millions) |       |
| Investment in:                         |   |          |       |   |   |   |
| TG                                     |   | $             | 287.8      |   |   | $ | 311.3 |   |
| Kronos Denmark ApS (“KDK”) |   |          | 196.5      |   |   |   | 205.1 |   |
| Other                                  |   |          |  34.1 |   |   |   | 39.5 |   |
|                                   |   |          |       |   |   |   |   |   |
|                                   |   | $             | 518.4      |   |   | $ | 555.9 |   |

|                                         |   |  December 31, |      |
|----------------------------------------------|--------|--------------------|-----------|
|                                         |   | 2008               |      |   | 2009 |   |   | 2010 |   |
|                                         |   | (In millions)      |      |
| Equity in earnings (losses) of subsidiaries: |   |               |      |   |   |   |   |   |   |
| TG                                           |   | $                  | 8.0       |   |   | $ | (28.8 | ) |   | $ | 44.2 |   |
| KDK                                          |   |               | 15.2      |   |   |   | (1.2 | ) |   |   | 17.8 |   |
| Other                                        |   |               |  4.5 |   |   |   |  3.9 |   |   |   | 8.2 |   |
|                                         |   |               |      |   |   |   |   |   |   |   |   |   |
|                                         |   | $                  | 27.7      |   |   | $ | (26.1 | ) |   | $ | 70.2 |   |

----

|                               |   |  December 31, |   |
|------------------------------------|--------|--------------------|--------|
|                               |   | 2009               |   |   | 2010 |   |
|                               |   | (In millions)      |   |
|                               |   |               |   |   |   |   |
| 6.5% Senior Secured Notes due 2013 |   | $                  | 574.6  |   |   | $ | 532.8 |   |

----

| KRONOS TITAN GMBH                                       |
|---------------------------------------------------------|
|                                                    |
| Index of Financial Statements                           |
|                                                    |   |
|                                                    |   |
| Financial Statements                                    | Pages |
|                                                    |   |
| Report of Independent Registered Public Accounting Firm | FA-2 |
|                                                    |   |
| Balance Sheets –                                  |   |
| December 31, 2009 and 2010                              | FA-3 |
|                                                    |   |
| Statements of Operations –                        |   |
| Years ended December 31, 2008, 2009 and 2010            | FA-5 |
|                                                    |   |
| Statements of Comprehensive Income (Loss) -             |   |
| Years ended December 31, 2008, 2009 and 2010            | FA-6 |
|                                                    |   |
| Statements of Owner’s Equity –              |   |
| Years ended December 31, 2008, 2009 and 2010            | FA-7 |
|                                                    |   |
| Statements of Cash Flows –                        |   |
| Year ended December 31, 2008, 2009 and 2010             | FA-8 |
|                                                    |   |
| Notes to Financial Statements                           | FA-9 |

----

----

|                                                 |   | December 31, |   |
|------------------------------------------------------|--------|--------------|--------|
| ASSETS                                               |   | 2009         |   |   | 2010 |   |
|                                                 |   |         |   |   |   |   |
| Current assets:                                      |   |         |   |   |   |   |
| Cash and cash equivalents                            |   | $            | 17.6   |   |   | $ | 37.1 |   |
| Accounts and other receivables                       |   |         | 99.6   |   |   |   | 107.1 |   |
| Receivable from affiliates                           |   |         | 31.7   |   |   |   | 80.5 |   |
| Refundable income taxes                              |   |         | 24.7   |   |   |   | - |   |
| Inventories                                          |   |         | 117.5  |   |   |   | 128.2 |   |
| Prepaid expenses                                     |   |         | 2.3    |   |   |   | 1.7 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Total current assets                                 |   |         | 293.4  |   |   |   | 354.6 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Other assets                                         |   |         | .7     |   |   |   | 1.1 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Property and equipment:                              |   |         |   |   |   |   |   |   |
| Land                                                 |   |         | 16.8   |   |   |   | 15.6 |   |
| Buildings                                            |   |         | 133.3  |   |   |   | 124.8 |   |
| Machinery and equipment                              |   |         | 578.1  |   |   |   | 544.5 |   |
| Construction in progress                             |   |         | 7.2    |   |   |   | 6.3 |   |
|                                                 |   |         |   |   |   |   |   |   |
|     Total property and equipment |   |         | 735.4  |   |   |   | 691.2 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Less accumulated depreciation and amortization       |   |         | 480.1  |   |   |   | 463.3 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Net property and equipment                           |   |         | 255.3  |   |   |   | 227.9 |   |
|                                                 |   |         |   |   |   |   |   |   |
| Total assets                                         |   | $            | 549.4  |   |   | $ | 583.6 |   |

----

|                                           |   | December 31, |   |
|------------------------------------------------|--------|--------------|--------|
| LIABILITIES AND OWNER’S EQUITY           |   | 2009         |   |   | 2010 |   |
|                                           |   |         |   |   |   |   |
| Current liabilities:                           |   |         |   |   |   |   |
| Accounts payable and accrued liabilities       |   | $            | 68.1   |   |   | $ | 69.8 |   |
| Payables to affiliates                         |   |         | 71.6   |   |   |   | 83.6 |   |
| Deferred income taxes                          |   |         | 3.2    |   |   |   | 3.8 |   |
|                                           |   |         |   |   |   |   |   |   |
| Total current liabilities                      |   |         | 142.9  |   |   |   | 157.2 |   |
|                                           |   |         |   |   |   |   |   |   |
| Noncurrent liabilities:                        |   |         |   |   |   |   |   |   |
| Accrued pension cost                           |   |         | 101.0  |   |   |   | 93.9 |   |
| Deferred income taxes                          |   |         | 10.7   |   |   |   | 13.7 |   |
| Other                                          |   |         | 7.0    |   |   |   | 7.5 |   |
|                                           |   |         |   |   |   |   |   |   |
| Total noncurrent liabilities                   |   |         | 118.7  |   |   |   | 115.1 |   |
|                                           |   |         |   |   |   |   |   |   |
| Owner’s equity:                          |   |         |   |   |   |   |   |   |
| Subscribed capital                             |   |         | 12.5   |   |   |   | 12.5 |   |
| Paid in capital                                |   |         | 200.1  |   |   |   | 200.1 |   |
| Retained earnings (deficit)                    |   |         | (15.5  | ) |   |   | 28.7 |   |
| Accumulated other comprehensive income (loss): |   |         |   |   |   |   |   |   |
| Currency translation                           |   |         | 137.8  |   |   |   | 115.4 |   |
| Defined benefit pension plans                  |   |         | (47.1  | ) |   |   | (45.4 | ) |
|                                           |   |         |   |   |   |   |   |   |
| Total owner’s equity                     |   |         | 287.8  |   |   |   | 311.3 |   |
|                                           |   |         |   |   |   |   |   |   |
| Total liabilities and owner’s equity     |   | $            | 549.4  |   |   | $ | 583.6 |   |
|                                           |   |         |   |   |   |   |   |   |
| Commitments and contingencies (Notes 6 and 11) |   |         |   |   |   |   |   |   |

----

|                                        |   | Years ended December 31, |           |
|---------------------------------------------|--------|--------------------------|----------------|
|                                        |   | 2008                     |           |   | 2009 |   |   | 2010 |   |
|                                        |   |                     |           |   |   |   |   |   |   |
| Net sales                                   |   | $                        | 662.3          |   |   | $ | 583.8 |   |   | $ | 683.8 |   |
| Cost of sales                               |   |                     | 596.5          |   |   |   | 571.8 |   |   |   | 569.1 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Gross margin                                |   |                     | 65.8           |   |   |   | 12.0 |   |   |   | 114.7 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expense |   |                     | 56.8           |   |   |   | 52.6 |   |   |   | 55.9 |   |
| Other operating income (expense):           |   |                     |           |   |   |   |   |   |   |   |   |   |
| Currency transaction gains (losses), net    |   |                     | .5             |   |   |   | (2.5 | ) |   |   | 2.7 |   |
| Disposition of property and equipment       |   |                     | (.4            | ) |   |   | (.4 | ) |   |   | (.8 | ) |
| Other income                                |   |                     |    - |   |   |   | .5 |   |   |   | .4 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations               |   |                     | 9.1            |   |   |   | (43.0 | ) |   |   | 61.1 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Other income (expense):                     |   |                     |           |   |   |   |   |   |   |   |   |   |
| Trade interest income                       |   |                     | .6             |   |   |   | .1 |   |   |   | .1 |   |
| Interest and other income from affiliates   |   |                     | 5.4            |   |   |   | 5.2 |   |   |   | 8.8 |   |
| Interest and other expense to affiliates    |   |                     | (3.5           | ) |   |   | (3.2 | ) |   |   | (4.7 | ) |
| Interest expense                            |   |                     | (1.0           | ) |   |   | (1.0 | ) |   |   | (.5 | ) |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes           |   |                     | 10.6           |   |   |   | (41.9 | ) |   |   | 64.8 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)        |   |                     | 2.6            |   |   |   | (13.1 | ) |   |   | 20.6 |   |
|                                        |   |                     |           |   |   |   |   |   |   |   |   |   |
| Net income (loss)                           |   | $                        | 8.0            |   |   | $ | (28.8 | ) |   | $ | 44.2 |   |

----

|                                                                                |   | Years ended December 31, |   |
|-------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                |   |                     |   |   |   |   |   |   |   |
| Net income (loss)                                                                   |   | $                        | 8.0    |   |   | $ | (28.8 | ) |   | $ | 44.2 |   |
|                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Currency translation adjustment                                                     |   |                     | (14.6  | ) |   |   | 5.5 |   |   |   | (22.4 | ) |
|                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
| Pension plans:                                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost and net losses included in periodic pension cost |   |                     | (1.1   | ) |   |   | 2.6 |   |   |   | 3.0 |   |
| Net actuarial gain (loss) arising during year                                       |   |                     | 3.3    |   |   |   | .2 |   |   |   | (1.3 | ) |
|                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                     | 2.2    |   |   |   | 2.8 |   |   |   | 1.7 |   |
|                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total other comprehensive income (loss)                                             |   |                     | (12.4  | ) |   |   | 8.3 |   |   |   | (20.7 | ) |
|                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                         |   | $                        | (4.4   | ) |   | $ | (20.5 | ) |   | $ | 23.5 |   |

----

|                                          |   |                 |   |   |     |   |    |          |   |   | Accumulated other |   |   |    |        |
|-----------------------------------------------|--------|----------------------|--------|--------|----------|--------|---------|---------------|--------|--------|-------------------|--------|--------|---------|-------------|
|                                          |   |                 |   |   |     |   |    |          |   |   | comprehensive     |   |   |    |        |
|                                          |   | Owner’s Equity |   |   | Retained |   |    | income (loss) |   |   |              |   |
|                                          |   | Subscribed           |   |   | Paid-in  |   |    | earnings      |   |   | Currency          |   |   | Pension |        |   |   |   |
|                                          |   | capital              |   |   | capital  |   |    | (deficit)     |   |   | translation       |   |   | plans   |        |   | Total |   |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |
| Balance at December 31, 2007                  |   | $                    | 12.5   |   |     | $      | 196.0   |          |   | $      | 25.2              |   |   | $       | 146.9       |   |   | $ | (52.1 | ) |   | $ | 328.5 |   |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Net income                                    |   |                 | -      |   |     |   | -       |          |   |   | 8.0               |   |   |    | -           |   |   |   | - |   |   |   | 8.0 |   |
| Dividends paid                                |   |                 | -      |   |     |   | -       |          |   |   | (19.9             | )      |   |    | -           |   |   |   | - |   |   |   | (19.9 | ) |
| Noncash capital transaction                   |   |                 | -      |   |     |   | 4.1     |          |   |   | -                 |   |   |    | -           |   |   |   | - |   |   |   | 4.1 |   |
| Other comprehensive income (loss), net of tax |   |                 | -      |   |     |   |  - |          |   |   | -                 |   |   |    |  (14.6 | ) |   |   | 2.2 |   |   |   |  (12.4 | ) |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                  |   |                 | 12.5   |   |     |   | 200.1   |          |   |   | 13.3              |   |   |    | 132.3       |   |   |   | (49.9 | ) |   |   | 308.3 |   |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Net loss                                      |   |                 | -      |   |     |   | -       |          |   |   | (28.8             | )      |   |    | -           |   |   |   | - |   |   |   | (28.8 | ) |
| Other comprehensive income, net of tax        |   |                 | -      |   |     |   |  - |          |   |   |  -           |   |   |    |  5.5   |   |   |   | 2.8 |   |   |   |  8.3 |   |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                  |   |                 | 12.5   |   |     |   | 200.1   |          |   |   | (15.5             | )      |   |    | 137.8       |   |   |   | (47.1 | )  |   |   | 287.8 |   |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Net income                                    |   |                 | -      |   |     |   | -       |          |   |   | 44.2              |   |   |    | -           |   |   |   | - |   |   |   | 44.2 |   |
| Other comprehensive income (loss), net of tax |   |                 | -      |   |     |   |  - |          |   |   | -                 |   |   |    | (22.4       | ) |   |   | 1.7 |   |   |   | (20.7 | ) |
|                                          |   |                 |   |   |     |   |    |          |   |   |              |   |   |    |        |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010                  |   | $                    | 12.5   |   |     | $      | 200.1   |          |   | $      | 28.7              |   |   | $       | 115.4       |   |   | $ | (45.4 | ) |   | $ | 311.3 |   |

----

|                                                                |   | Years ended December 31, |        |
|---------------------------------------------------------------------|--------|--------------------------|-------------|
|                                                                |   | 2008                     |        |   | 2009 |   |   | 2010 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |
| Cash flows from operating activities:                               |   |                     |        |   |   |   |   |   |   |
| Net income (loss)                                                   |   | $                        | 8.0         |   |   | $ | (28.8 | ) |   | $ | 44.2 |   |
| Depreciation, depletion and amortization                            |   |                     | 24.7        |   |   |   | 22.8 |   |   |   | 21.4 |   |
| Deferred income taxes                                               |   |                     | 8.0         |   |   |   | 4.0 |   |   |   | 3.7 |   |
| Pension, net                                                        |   |                     | (8.2        | ) |   |   | (.8 | ) |   |   | .1 |   |
| Other, net                                                          |   |                     | .8          |   |   |   | 2.3 |   |   |   | 1.5 |   |
| Change in assets and liabilities:                                   |   |                     |        |   |   |   |   |   |   |   |   |   |
| Accounts and notes receivable                                       |   |                     | 17.8        |   |   |   | (10.1 | ) |   |   | (16.3 | ) |
| Inventories                                                         |   |                     | (65.5       | ) |   |   | 78.9 |   |   |   | (20.3 | ) |
| Prepaid expenses                                                    |   |                     | (.1         | ) |   |   | (.7 | ) |   |   | .3 |   |
| Accounts payable and accrued liabilities                            |   |                     | 10.4        |   |   |   | (4.1 | ) |   |   | (5.3 | ) |
| Income taxes                                                        |   |                     | 1.4         |   |   |   | (.6 | ) |   |   | 24.3 |   |
| Accounts with affiliates                                            |   |                     | (19.0       | ) |   |   | (19.6 | ) |   |   | (32.5 | ) |
| Other noncurrent assets                                             |   |                     | (.7         | ) |   |   | .5 |   |   |   | .1 |   |
| Other noncurrent liabilities                                        |   |                     | (1.4        | ) |   |   | (5.5 | ) |   |   | 10.6 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net cash (used in) provided by operating activities                 |   |                     | (23.8       | ) |   |   | 38.3 |   |   |   | 31.8 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Cash flows used in investing activities –capital expenditures |   |                     | (20.4       | ) |   |   | (8.7 | ) |   |   | (12.1 | ) |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                               |   |                     |        |   |   |   |   |   |   |   |   |   |
| Loans from affiliates:                                              |   |                     |        |   |   |   |   |   |   |   |   |   |
| Loans                                                               |   |                     | 27.2        |   |   |   | 16.9 |   |   |   | 25.1 |   |
| Repayments                                                          |   |                     | (8.6        | ) |   |   | (34.1 | ) |   |   | (23.7 | ) |
| Deferred financing fees                                             |   |                     | (.3         | ) |   |   | (.2 | ) |   |   | (.4 | ) |
| Dividends paid                                                      |   |                     |  (19.9 | ) |   |   |    - |   |   |   |  - |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net cash (used in) provided by financing activities                 |   |                     | (1.6        | ) |   |   | (17.4 | ) |   |   | 1.0 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents - net change from:                        |   |                     |        |   |   |   |   |   |   |   |   |   |
| Operating, investing and financing activities                       |   |                     | (45.8       | ) |   |   | 12.2 |   |   |   | 20.7 |   |
| Currency translation                                                |   |                     | (2.0        | ) |   |   | 2.6 |   |   |   | (1.2 | ) |
| Net change for year                                                 |   |                     | (47.8       | ) |   |   | 14.8 |   |   |   | 19.5 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                        |   |                     | 50.6        |   |   |   | 2.8 |   |   |   | 17.6 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                              |   | $                        | 2.8         |   |   | $ | 17.6 |   |   | $ | 37.1 |   |
|                                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
| Supplemental disclosures-                                           |   |                     |        |   |   |   |   |   |   |   |   |   |
| Cash paid for:                                                      |   |                     |        |   |   |   |   |   |   |   |   |   |
| Interest                                                            |   | $                        | .9          |   |   | $ | .8 |   |   | $ | .2 |   |
| Accrual for capital expenditures                                    |   |                     | 2.5         |   |   |   | 1.5 |   |   |   | 2.7 |   |

----

----

|   | · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the assets or liability; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

| Asset                      |   | Useful lives        |
|----------------------------|--------|---------------------|
|                       |   |                |
| Buildings and improvements |   | 10 to 40 years      |
| Machinery and equipment    |   |  3 to 20 years |

----

----

|                                  |   | December 31,  |   |
|---------------------------------------|--------|---------------|--------|
|                                  |   | 2009          |   |   | 2010 |   |
|                                  |   | (In millions) |   |
|                                  |   |          |   |   |   |   |
| Trade receivables                     |   | $             | 89.7   |   |   | $ | 93.4 |   |
| Recoverable VAT and other receivables |   |          | 12.0   |   |   |   | 15.2 |   |
| Allowance for doubtful accounts       |   |          | (2.1   | ) |   |   | (1.5 | ) |
|                                  |   |          |   |   |   |   |   |   |
| Total                                 |   | $             | 99.6   |   |   | $ | 107.1 |   |

|              |   | December 31,  |       |
|-------------------|--------|---------------|------------|
|              |   | 2009          |       |   | 2010 |   |
|              |   | (In millions) |       |
|              |   |          |       |   |   |   |
| Raw materials     |   | $             | 23.0       |   |   | $ | 24.3 |   |
| Work in process   |   |          | 10.9       |   |   |   | 6.9 |   |
| Finished products |   |          | 61.9       |   |   |   | 77.0 |   |
| Supplies          |   |          |  21.7 |   |   |   | 20.0 |   |
|              |   |          |       |   |   |   |   |   |
| Total             |   | $             | 117.5      |   |   | $ | 128.2 |   |

|                        |   | December 31,  |      |
|-----------------------------|--------|---------------|-----------|
|                        |   | 2009          |      |   | 2010 |   |
|                        |   | (In millions) |      |
|                        |   |          |      |   |   |   |
| Accounts payable            |   | $             | 41.2      |   |   | $ | 48.5 |   |
| Accrued liabilities:        |   |          |      |   |   |   |   |   |
| Employee benefits           |   |          | 6.8       |   |   |   | 10.3 |   |
| Sales discounts and rebates |   |          | 12.0      |   |   |   | 4.4 |   |
| Waste acid recovery         |   |          | 4.9       |   |   |   | 4.8 |   |
| Other                       |   |          |  3.2 |   |   |   | 1.8 |   |
|                        |   |          |      |   |   |   |   |   |
| Total                       |   | $             | 68.1      |   |   | $ | 69.8 |   |

----

----

|                                                             |   | __Years ended December 31,__ |   |
|------------------------------------------------------------------|--------|------------------------------|--------|
|                                                             |   | 2008                         |   |   | 2009 |   |   | 2010 |   |
|                                                             |   | (In millions)                |   |
|                                                             |   |                         |   |   |   |   |   |   |   |
| Pretax income (loss)                                             |   | $                            | 10.6   |   |   | $ | (41.9 | ) |   | $ | 64.8 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Expected tax expense (benefit)                                   |   | $                            | 1.7    |   |   | $ | (6.6 | ) |   |   | 10.2 |   |
| Trade income tax                                                 |   |                         | 1.6    |   |   |   | (6.2 | ) |   |   | 10.1 |   |
| Impact of rate change                                            |   |                         | -      |   |   |   | - |   |   |   | .9 |   |
| (Refund) assessment of prior year income taxes                   |   |                         | .3     |   |   |   | (.5 | ) |   |   | - |   |
| Tax contingency reserve adjustment, net                          |   |                         | (1.1   | ) |   |   | .1 |   |   |   | - |   |
| Prior year adjustment                                            |   |                         | -      |   |   |   | - |   |   |   | (.7 | ) |
| Other, net                                                       |   |                         | .1     |   |   |   | .1 |   |   |   |  .1 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                                     |   | $                            | 2.6    |   |   | $ | (13.1 | ) |   | $ | 20.6 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit):                            |   |                         |   |   |   |   |   |   |   |   |   |   |
| Current income tax expense (benefit)                             |   | $                            | (4.2   | ) |   | $ | (17.3 | ) |   |   | 16.9 |   |
| Deferred income tax expense                                      |   |                         | 6.8    |   |   |   | 4.2 |   |   |   | 3.7 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
|                                                             |   | $                            | 2.6    |   |   | $ | (13.1 | ) |   | $ | 20.6 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Comprehensive provision for income taxes (benefit) allocable to: |   |                         |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                                    |   | $                            | 2.6    |   |   | $ | (13.1 | ) |   | $ | 20.6 |   |
| Other comprehensive loss – Pension plans                   |   |                         | 1.0    |   |   |   | 1.4 |   |   |   | .6 |   |
|                                                             |   |                         |   |   |   |   |   |   |   |   |   |   |
|                                                             |   | $                            | 3.6    |   |   | $ | (11.7 | ) |   | $ | 21.2 |   |

----

|                                                      |   | December 31,  |   |
|-----------------------------------------------------------|--------|---------------|--------|
|                                                      |   | 2009          |   |   | 2010 |   |
|                                                      |   | Assets        |   |   | Liabilities |   |   | Assets |   |   | Liabilities |   |
|                                                      |   | (In millions) |   |
|                                                      |   |          |   |   |   |   |   |   |   |   |   |   |
| Tax effect of temporary differences relating to:     |   |          |   |   |   |   |   |   |   |   |   |   |
| Inventories                                               |   | $             | -      |   |   | $ | (1.9 | ) |   | $ | - |   |   | $ | (2.6 | ) |
| Property and equipment                                    |   |          | -      |   |   |   | (14.3 | ) |   |   | - |   |   |   | (18.5 | ) |
| Accrued pension cost                                      |   |          | 3.6    |   |   |   | - |   |   |   | 3.9 |   |   |   | - |   |
| Other deductible differences                              |   |          | -      |   |   |   | - |   |   |   | 2.8 |   |   |   | - |   |
| Other taxable differences                                 |   |          | -      |   |   |   | (1.3 | ) |   |   | - |   |   |   | (3.1 | ) |
|                                                      |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross deferred tax assets (liabilities)                   |   |          | 3.6    |   |   |   | (17.5 | ) |   |   | 6.7 |   |   |   | (24.2 | ) |
|                                                      |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification, principally netting by tax jurisdiction |   |          | (3.6   | ) |   |   | 3.6 |   |   |   | (6.7 | ) |   |   | 6.7 |   |
|                                                      |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net total deferred tax liabilities                        |   |          | -      |   |   |   | (13.9 | ) |   |   | - |   |   |   | (17.5 | ) |
| Net current deferred tax liabilities                      |   |          | -      |   |   |   | (3.2 | ) |   |   | - |   |   |   | (3.8 | ) |
|                                                      |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net noncurrent deferred tax liability                     |   | $             | -      |   |   | $ | (10.7 | ) |   | $ | - |   |   | $ | (13.7 | ) |

----

|                                                              |   | Year Ended December 31, |   |
|-------------------------------------------------------------------|--------|-------------------------|--------|
|                                                              |   | 2008                    |   |   | 2009 |   |   | 2010 |   |
|                                                              |   | (In millions)           |   |
| Changes in unrecognized tax benefits:                             |   |                    |   |   |   |   |   |   |   |
|   Unrecognized tax benefits at beginning of year        |   | $                       | 1.3    |   |   | $ | - |   |   | $ | .1 |   |
|   Net increase (decrease):                              |   |                    |   |   |   |   |   |   |   |   |   |   |
|     Tax positions taken in prior periods      |   |                    | (1.1   | ) |   |   | - |   |   |   | - |   |
|     Tax positions taken in current period     |   |                    | .1     |   |   |   | .1 |   |   |   | - |   |
|   Settlements with taxing authorities – cash paid |   |                    | (.1    | ) |   |   | - |   |   |   | - |   |
| Change in foreign currency exchange rates                         |   |                    | (.2    | ) |   |   |  - |   |   |   |  - |   |
|                                                              |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Unrecognized tax benefits at end of year              |   | $                       | -      |   |   | $ | .1 |   |   | $ | .1 |   |

| Years ending December 31, |   | Amount        |   |
|---------------------------|--------|---------------|--------|
|                      |   | (In millions) |   |
|                      |   |          |   |
| 2011                      |   | $             | 14.7   |   |
| 2012                      |   |          | 15.1   |   |
| 2013                      |   |          | 15.7   |   |
| 2014                      |   |          | 15.4   |   |
| 2015                      |   |          | 14.8   |   |
| Next 5 years              |   |          | 74.7   |   |

----

|                                                         |   | December 31,  |   |
|--------------------------------------------------------------|--------|---------------|--------|
|                                                         |   | 2009          |   |   | 2010 |   |
|                                                         |   | (In millions) |   |
| Change in projected benefit obligations (“PBO”): |   |          |   |   |   |   |
| Benefit obligations at beginning of year                     |   | $             | 254.0  |   |   | $ | 274.7 |   |
| Service cost                                                 |   |          | 5.0    |   |   |   | 6.2 |   |
| Interest cost                                                |   |          | 14.2   |   |   |   | 13.7 |   |
| Participant contributions                                    |   |          | 1.4    |   |   |   | 1.5 |   |
| Actuarial losses                                             |   |          | 9.7    |   |   |   | 10.7 |   |
| Change in currency exchange rates                            |   |          | 6.1    |   |   |   | (20.1 | ) |
| Benefits paid                                                |   |          | (15.7  | ) |   |   | (15.5 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Benefit obligations at end of year                           |   |          | 274.7  |   |   |   | 271.2 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Change in fair value of plan assets:                         |   |          |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year               |   |          | 150.4  |   |   |   | 172.3 |   |
| Actual return on plan assets                                 |   |          | 19.4   |   |   |   | 16.9 |   |
| Employer contributions                                       |   |          | 13.5   |   |   |   | 13.4 |   |
| Participant contributions                                    |   |          | 1.4    |   |   |   | 1.5 |   |
| Change in currency exchange rates                            |   |          | 3.3    |   |   |   | (12.5 | ) |
| Benefits paid                                                |   |          | (15.7  | ) |   |   | (15.5 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Fair value of plan assets at end of year                     |   |          | 172.3  |   |   |   | 176.1 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Funded status                                                |   | $             | (102.4 | ) |   | $ | (95.1 | ) |
|                                                         |   |          |   |   |   |   |   |   |
|                                                         |   | December 31,  |   |
|                                                         |   |          | 2009   |   |   |   | 2010 |   |
|                                                         |   | (In millions) |   |
| Amounts recognized in the balance sheet:                     |   |          |   |   |   |   |   |   |
| Accrued pension cost:                                        |   |          |   |   |   |   |   |   |
| Current                                                      |   | $             | (1.4   | ) |   | $ | (1.2 | ) |
| Noncurrent                                                   |   |          | (101.0 | ) |   |   | (93.9 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Total                                                        |   | $             | (102.4 | ) |   | $ | (95.1 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Accumulated other comprehensive loss:                        |   |          |   |   |   |   |   |   |
| Actuarial losses                                             |   | $             | 76.0   |   |   | $ | 74.3 |   |
| Prior service cost                                           |   |          | 2.4    |   |   |   | 2.2 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Total                                                        |   | $             | 78.4   |   |   | $ | 76.5 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Accumulated benefit obligations (“ABO”)          |   | $             | 254.8  |   |   | $ | 252.9 |   |

----

|                                    |   | Years ended December 31, |   |
|-----------------------------------------|--------|--------------------------|--------|
|                                    |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                    |   | (In millions)            |   |
|                                    |   |                     |   |   |   |   |   |   |   |
| Net periodic pension cost:              |   |                     |   |   |   |   |   |   |   |
| Service cost benefits                   |   | $                        | 5.2    |   |   | $ | 5.0 |   |   | $ | 6.1 |   |
|     Interest cost on PBO |   |                     | 9.9    |   |   |   | 14.2 |   |   |   | 13.7 |   |
| Expected return on plan assets          |   |                     | (9.7   | ) |   |   | (8.5 | ) |   |   | (8.6 | ) |
| Recognized actuarial losses (gain)      |   |                     | (1.9   | ) |   |   | 3.6 |   |   |   | 3.9 |   |
| Amortization of prior service cost      |   |                     | .2     |   |   |   | .2 |   |   |   | .2 |   |
|                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                   |   | $                        | 3.7    |   |   | $ | 14.5 |   |   | $ | 15.3 |   |

|                                   |   | December 31, |   |
|----------------------------------------|--------|--------------|--------|
| Rate                                   |   | 2009         |   |   | 2010 |   |
|                                   |   |         |   |   |   |   |
| Discount rate                          |   |         | 5.5    | % |   |   | 5.2 | % |
| Increase in future compensation levels |   |         | 3.0    | % |   |   | 3.0 | % |

|                                   |   | Years ended December 31, |   |
|----------------------------------------|--------|--------------------------|--------|
| Rate                                   |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                   |   |                     |   |   |   |   |   |   |   |
| Discount rate                          |   |                     | 5.5    | % |   |   | 5.8 | % |   |   | 5.5 | % |
| Increase in future compensation levels |   |                     | 3.0    | % |   |   | 3.0 | % |   |   | 3.0 | % |
| Long-term return on plan assets        |   |                     | 5.8    | % |   |   | 5.3 | % |   |   | 5.3 | % |

----

|                                                                                                 |   | Years Ended December 31, |   |
|------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                 |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                                 |   | (In millions)            |   |
| Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |   |                     |   |   |   |   |   |   |   |
| Current year:                                                                                        |   |                     |   |   |   |   |   |   |   |
| Net actuarial gain                                                                                   |   | $                        | 5.2    |   |   | $ | .7 |   |   | $ | (2.1 | ) |
| Amortization of unrecognized:                                                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
|             Net actuarial losses (gain)  |   |                     | (1.9   | ) |   |   | 3.5 |   |   |   | 3.8 |   |
|             Prior service cost      |   |                     | .2     |   |   |   | .2 |   |   |   | .2 |   |
|                                                                                                 |   |                     |   |   |   |   |   |   |   |   |   |   |
|     Total                                                                        |   | $                        | 3.5    |   |   | $ | 4.4 |   |   | $ | 1.9 |   |

|                                                                          |   | 2009          |   |   | 2010   |   |
|-------------------------------------------------------------------------------|--------|---------------|--------|--------|--------|--------|
|                                                                          |   | (In millions) |   |
|                                                                          |   |          |   |   |   |   |
| Fair value at beginning of period                                             |   | $             | 150.4  |   |   | $      | 172.3 |   |
| Gain on assets held at end of period                                          |   |          | 19.4   |   |   |   | 15.6 |   |
| Gain on assets sold during period                                             |   |          | -      |   |   |   | 1.5 |   |
|         Assets purchased                   |   |          | 13.4   |   |   |   | 13.4 |   |
|         Assets sold                        |   |          | (14.2  | )      |   |   | (14.0 | ) |
|         Currency exchange rate fluctuation |   |          | 3.3    |   |   |   | (12.7 | ) |
|                                                                          |   |          |   |   |   |   |   |   |
| Fair value at end of period                                                   |   | $             | 172.3  |   |   | $      | 176.1 |   |

|                                |   | December 31, |   |
|-------------------------------------|--------|-------------------|--------|
|                                |   | 2009              |   |   | 2010 |   |
|                                |   | (In millions)     |   |
|                                |   |              |   |   |   |   |
| Reserve for uncertain tax positions |   | $                 | .1     |   |   | $ | .1 |   |
| Employee benefits                   |   |              | 4.6    |   |   |   | 4.7 |   |
| Other                               |   |              | 2.3    |   |   |   | 2.7 |   |
|                                |   |              |   |   |   |   |   |   |
| Total                               |   | $                 | 7.0    |   |   | $ | 7.5 |   |

----

----

|                     |   | December 31, |   |
|--------------------------|--------|-------------------|--------|
|                     |   | 2009              |   |   | 2010 |   |
|                     |   | (In millions)     |   |
|                     |   |              |   |   |   |   |
| Current receivable from: |   |              |   |   |   |   |
| KII                      |   | $                 | 29.1   |   |   | $ | 80.4 |   |
| TAS                      |   |              | 1.9    |   |   |   | - |   |
| Other affiliates         |   |              | .7     |   |   |   | .1 |   |
|                     |   |              |   |   |   |   |   |   |
| Total                    |   | $                 | 31.7   |   |   | $ | 80.5 |   |
|                     |   |              |   |   |   |   |   |   |
| Current payable to:      |   |              |   |   |   |   |   |   |
| KII – income taxes |   | $                 | 27.0   |   |   | $ | 37.7 |   |
| KII                      |   |              | .3     |   |   |   | .3 |   |
| Other affiliates         |   |              | 44.3   |   |   |   | 45.6 |   |
|                     |   |              |   |   |   |   |   |   |
| Total                    |   | $                 | 71.6   |   |   | $ | 83.6 |   |

----

----

|                          |   | Amount        |   |
|-------------------------------|--------|---------------|--------|
|                          |   | (In millions) |   |
| Years ending December 31,     |   |          |   |
| 2011                          |   | $             | 2.6    |   |
| 2012                          |   |          | 1.9    |   |
| 2013                          |   |          | 1.9    |   |
| 2014                          |   |          | 1.3    |   |
| 2015                          |   |          | 1.1    |   |
| 2016 and thereafter           |   |          | 18.0   |   |
|                          |   |          |   |   |
|     Total |   | $             | 26.8   |   |

----

|                      |               December 31,                |
|---------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |       2009                                                                                                           |   |       2010        |
|                      | Carrying                                                                                                                                                                              |   | Fair |   | Carrying |   | Fair |
|                      | amount                                                                                                                                                                                |   | value |   | amount |   | value |
|                      | (In millions)                                                                                                                                                                         |
|                      |                                                                                                                                                                                  |   |   |   |   |   |   |
| Cash and cash equivalents | $ 17.6                                                                                                                                                                           |   | $ 17.6 |   | $ 37.1 |   | $ 37.1 |

----

| KRONOS DENMARK APS AND SUBSIDIARIES                           |
|---------------------------------------------------------------|
|                                                          |
| Index of Consolidated Financial Statements                    |
|                                                          |   |
|                                                          |   |
| Financial Statements                                          |   |
|                                                          |   |
| Report of Independent Registered Public Accounting Firm       | FB-2 |
|                                                          |   |
| Consolidated Balance Sheets –                           |   |
| December 31, 2009 and 2010                                    | FB-3 |
|                                                          |   |
| Consolidated Statements of Operations –                 |   |
| Year ended December 31, 2008, 2009 and 2010                   | FB-5 |
|                                                          |   |
| Consolidated Statements of Comprehensive Income (Loss) -      |   |
| Year ended December 31, 2008, 2009 and 2010                   | FB-6 |
|                                                          |   |
| Consolidated Statements of Stockholder’s Equity – |   |
| Year ended December 31, 2008, 2009 and 2010                   | FB-7 |
|                                                          |   |
| Consolidated Statements of Cash Flows –                 |   |
| Year ended December 31, 2008, 2009 and 2010                   | FB-8 |
|                                                          |   |
| Notes to Consolidated Financial Statements                    | FB-9 |

----

----

|                                           |   | December 31, |   |
|------------------------------------------------|--------|--------------|--------|
| ASSETS                                         |   | 2009         |   |   | 2010 |   |
|                                           |   |         |   |   |   |   |
| Current assets:                                |   |         |   |   |   |   |
| Cash and cash equivalents                      |   | $            | 7.4    |   |   | $ | 3.1 |   |
| Restricted cash                                |   |         | 1.7    |   |   |   | 1.9 |   |
| Accounts and notes receivable                  |   |         | 12.5   |   |   |   | 18.8 |   |
| Receivable from affiliates                     |   |         | 27.9   |   |   |   | 33.4 |   |
| Refundable income taxes                        |   |         | .2     |   |   |   | .9 |   |
| Deferred income taxes                          |   |         | -      |   |   |   | .3 |   |
| Inventories                                    |   |         | 87.2   |   |   |   | 71.6 |   |
| Prepaid expenses                               |   |         | 3.8    |   |   |   | 2.0 |   |
|                                           |   |         |   |   |   |   |   |   |
| Total current assets                           |   |         | 140.7  |   |   |   | 132.0 |   |
|                                           |   |         |   |   |   |   |   |   |
| Other assets                                   |   |         | 5.2    |   |   |   | 5.3 |   |
|                                           |   |         |   |   |   |   |   |   |
| Property and equipment:                        |   |         |   |   |   |   |   |   |
| Land                                           |   |         | 28.3   |   |   |   | 26.9 |   |
| Buildings                                      |   |         | 48.3   |   |   |   | 46.1 |   |
| Machinery and equipment                        |   |         | 242.8  |   |   |   | 243.2 |   |
| Mining properties                              |   |         | 115.6  |   |   |   | 115.9 |   |
| Construction in progress                       |   |         | .2     |   |   |   | 1.5 |   |
|                                           |   |         |   |   |   |   |   |   |
|                                           |   |         | 435.2  |   |   |   | 433.6 |   |
| Less accumulated depreciation and amortization |   |         | 271.2  |   |   |   | 272.1 |   |
|                                           |   |         |   |   |   |   |   |   |
| Net property and equipment                     |   |         | 164.0  |   |   |   | 161.5 |   |
|                                           |   |         |   |   |   |   |   |   |
| Total assets                                   |   | $            | 309.9  |   |   | $ | 298.8 |   |

----

|                                                                                                             |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| LIABILITIES AND STOCKHOLDER’S EQUITY                                                                       |   | 2009         |   |   | 2010 |   |
|                                                                                                             |   |         |   |   |   |   |
|                                                                                                             |   |         |   |   |   |   |
| Current liabilities:                                                                                             |   |         |   |   |   |   |
| Current maturities of long-term debt                                                                             |   | $            | 2.1    |   |   | $ | 2.2 |   |
| Accounts payable and accrued liabilities                                                                         |   |         | 47.2   |   |   |   | 47.1 |   |
| Payable to affiliates                                                                                            |   |         | 17.9   |   |   |   | 9.5 |   |
| Income taxes                                                                                                     |   |         | 2.3    |   |   |   | 3.4 |   |
| Deferred income taxes                                                                                            |   |         | 1.7    |   |   |   | 1.1 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Total current liabilities                                                                                        |   |         | 71.2   |   |   |   | 63.3 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Noncurrent liabilities:                                                                                          |   |         |   |   |   |   |   |   |
| Long-term debt                                                                                                   |   |         | 19.8   |   |   |   | 4.6 |   |
| Deferred income taxes                                                                                            |   |         | 11.6   |   |   |   | 14.9 |   |
| Accrued pension costs                                                                                            |   |         | 7.0    |   |   |   | 6.4 |   |
| Other                                                                                                            |   |         | 3.8    |   |   |   | 4.5 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Total noncurrent liabilities                                                                                     |   |         | 42.2   |   |   |   | 30.4 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Stockholder's equity:                                                                                            |   |         |   |   |   |   |   |   |
| Common stock – 100 Danish kroner par value; 10,000 shares authorized; 10,000 shares issued and outstanding |   |         | .1     |   |   |   | .1 |   |
| Additional paid-in capital                                                                                       |   |         | 217.0  |   |   |   | 217.0 |   |
| Retained deficit                                                                                                 |   |         | (34.3  | ) |   |   | (16.5 | ) |
| Accumulated other comprehensive income (loss):                                                                   |   |         |   |   |   |   |   |   |
| Currency translation                                                                                             |   |         | 23.7   |   |   |   | 15.5 |   |
| Defined benefit pension plans                                                                                    |   |         | (10.0  | ) |   |   | (11.0 | ) |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Total stockholder's equity                                                                                       |   |         | 196.5  |   |   |   | 205.1 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Total liabilities and stockholder’s equity                                                                 |   | $            | 309.9  |   |   | $ | 298.8 |   |
|                                                                                                             |   |         |   |   |   |   |   |   |
| Commitments and contingencies (Notes 7 and 11)                                                                   |   |         |   |   |   |   |   |   |

----

|                                        |   | Years ended December 31, |   |
|---------------------------------------------|--------|--------------------------|--------|
|                                        |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                        |   |                     |   |   |   |   |   |   |   |
| Net sales                                   |   | $                        | 415.5  |   |   | $ | 315.0 |   |   | $ | 411.2 |   |
| Cost of sales                               |   |                     | 361.6  |   |   |   | 303.5 |   |   |   | 356.7 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                |   |                     | 53.9   |   |   |   | 11.5 |   |   |   | 54.5 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expense |   |                     | 27.5   |   |   |   | 22.3 |   |   |   | 26.6 |   |
| Other operating income (expense):           |   |                     |   |   |   |   |   |   |   |   |   |   |
| Currency transaction gains (losses), net    |   |                     | (1.4   | ) |   |   | 10.8 |   |   |   | 2.0 |   |
| Disposition of property and equipment       |   |                     | (.5    | ) |   |   | (.4 | ) |   |   | (.9 | ) |
| Other, net                                  |   |                     | .2     |   |   |   | .1 |   |   |   | .1 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations               |   |                     | 24.7   |   |   |   | (.3 | ) |   |   | 29.1 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                     |   |                     |   |   |   |   |   |   |   |   |   |   |
| Trade interest income                       |   |                     | .1     |   |   |   | .1 |   |   |   | .1 |   |
| Other income from affiliates                |   |                     | .7     |   |   |   | .1 |   |   |   | - |   |
| Interest and other expense to affiliates    |   |                     | (3.4   | ) |   |   | (1.8 | ) |   |   | (2.4 | ) |
| Interest expense                            |   |                     | (1.3   | ) |   |   | (1.8 | ) |   |   | (1.6 | ) |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes           |   |                     | 20.8   |   |   |   | (3.7 | ) |   |   | 25.2 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)        |   |                     | 5.6    |   |   |   | (2.5 | ) |   |   | 7.4 |   |
|                                        |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                           |   | $                        | 15.2   |   |   | $ | (1.2 | ) |   | $ | 17.8 |   |

----

|                                                                                |   | Years ended December 31, |     |
|-------------------------------------------------------------------------------------|--------|--------------------------|----------|
|                                                                                |   | 2008                     |     |   | 2009 |   |   | 2010 |   |
|                                                                                |   |                     |     |   |   |   |   |   |   |
| Net income (loss)                                                                   |   | $                        | 15.2     |   |   | $ | (1.2 | ) |   | $ | 17.8 |   |
|                                                                                |   |                     |     |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                                      |   |                     |     |   |   |   |   |   |   |   |   |   |
| Currency translation                                                                |   |                     | (25.8    | ) |   |   | 18.5 |   |   |   | (8.2 | ) |
|                                                                                |   |                     |     |   |   |   |   |   |   |   |   |   |
|     Pension plans:                                                   |   |                     |     |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost and net losses included in periodic pension cost |   |                     | .6       |   |   |   | 1.0 |   |   |   | .8 |   |
| Net actuarial gain (loss) arising during year                                       |   |                     | (3.9     | ) |   |   | 1.0 |   |   |   | (1.1 | ) |
|     Plan amendment                                                   |   |                     |   - |   |   |   |  - |   |   |   | (.7 | ) |
|                                                                                |   |                     |     |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                     | (3.3     | ) |   |   | 2.0 |   |   |   | (1.0 | ) |
|                                                                                |   |                     |     |   |   |   |   |   |   |   |   |   |
| Total other comprehensive income (loss)                                             |   |                     | (29.1    | ) |   |   | 20.5 |   |   |   | (9.2 | ) |
|                                                                                |   |                     |     |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss)                                                         |   | $                        | (13.9    | ) |   | $ | 19.3 |   |   | $ | 8.6 |   |

----

|                                   |   |   |   |   |       |   |   |     |   |   | Accumulated other           |   |   |    |   |
|----------------------------------------|--------|--------|--------|--------|------------|--------|--------|----------|--------|--------|-----------------------------|--------|--------|---------|--------|
|                                   |   |   |   |   |       |   |   |     |   |   | comprehensive income (loss) |   |   |    |   |
|                                   |   |   |   |   | Additional |   |   |     |   |   |                        |   |   |    |   |   |   |   |
|                                   |   | Common |   |   | paid-in    |   |   | Retained |   |   | Currency                    |   |   | Pension |   |   |   |   |
|                                   |   | stock  |   |   | capital    |   |   | deficit  |   |   | translation                 |   |   | plans   |   |   | Total |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |
| Balance at December 31, 2007           |   | $      | .1     |   |       | $      | 217.0  |     |   | $      | (31.3                       | )      |   | $       | 31.0   |   |   | $ | (8.7 | ) |   | $ | 208.1 |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Net income                             |   |   | -      |   |       |   | -      |     |   |   | 15.2                        |   |   |    | -      |   |   |   | - |   |   |   | 15.2 |   |
| Other comprehensive loss, net of tax   |   |   | -      |   |       |   | -      |     |   |   | -                           |   |   |    | (25.8  | ) |   |   | (3.3 | ) |   |   | (29.1 | ) |
| Dividends paid                         |   |   | -      |   |       |   | -      |     |   |   | (17.0                       | )      |   |    | -      |   |   |   |  -  |   |   |   | (17.0 | ) |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008           |   |   | .1     |   |       |   | 217.0  |     |   |   | (33.1                       | )      |   |    | 5.2    |   |   |   | (12.0 | ) |   |   | 177.2 |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Net loss                               |   |   | -      |   |       |   | -      |     |   |   | (1.2                        | )      |   |    | -      |   |   |   | - |   |   |   | (1.2 | ) |
| Other comprehensive income, net of tax |   |   | -      |   |       |   | -      |     |   |   | -                           |   |   |    | 18.5   |   |   |   | 2.0 |   |   |   | 20.5 |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009           |   |   | .1     |   |       |   | 217.0  |     |   |   | (34.3                       | )      |   |    | 23.7   |   |   |   | (10.0 | ) |   |   | 196.5 |   |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Net income                             |   |   | -      |   |       |   | -      |     |   |   | 17.8                        |   |   |    | -      |   |   |   | - |   |   |   | 17.8 |   |
| Other comprehensive loss, net of tax   |   |   | -      |   |       |   | -      |     |   |   | -                           |   |   |    | (8.2   | ) |   |   | (1.0 | ) |   |   | (9.2 | ) |
|                                   |   |   |   |   |       |   |   |     |   |   |                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010           |   | $      | .1     |   |       | $      | 217.0  |     |   | $      | (16.5                       | )      |   | $       | 15.5   |   |   | $ | (11.0 | ) |   | $ | 205.1 |   |

----

|                                                                                               |   | Years ended December 31, |    |
|----------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                               |   | 2008                     |    |   | 2009 |   |   | 2010 |   |
| Cash flows from operating activities:                                                              |   |                     |    |   |   |   |   |   |   |
| Net income (loss)                                                                                  |   | $                        | 15.2    |   |   | $ | (1.2 | ) |   | $ | 17.8 |   |
| Depreciation and amortization                                                                      |   |                     | 18.8    |   |   |   | 16.8 |   |   |   | 15.1 |   |
| Deferred income taxes                                                                              |   |                     | (.1     | ) |   |   | (3.7 | ) |   |   | (.5 | ) |
| Pension, net                                                                                       |   |                     | (3.0    | ) |   |   | (1.6 | ) |   |   | (1.7 | ) |
| Other                                                                                              |   |                     | .9      |   |   |   | (1.0 | ) |   |   | 1.3 |   |
| Change in assets and liabilities:                                                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Accounts and other receivables                                                                     |   |                     | (1.1    | ) |   |   | 3.6 |   |   |   | (6.7 | ) |
| Inventories                                                                                        |   |                     | (23.8   | ) |   |   | 22.8 |   |   |   | 11.5 |   |
| Prepaid expenses                                                                                   |   |                     | .1      |   |   |   | (2.2 | ) |   |   | 1.5 |   |
| Accounts payable and accrued liabilities                                                           |   |                     | 2.1     |   |   |   | (.4 | ) |   |   | (.8 | ) |
| Income taxes                                                                                       |   |                     | (3.4    | ) |   |   | (1.2 | ) |   |   | 4.3 |   |
| Accounts with affiliates                                                                           |   |                     | 20.0    |   |   |   | (1.3 | ) |   |   | (17.0 | ) |
| Other noncurrent assets                                                                            |   |                     | (1.6    | )  |   |   | - |   |   |   | (.3 | ) |
| Other noncurrent liabilities                                                                       |   |                     | 3.2     |   |   |   | .7 |   |   |   |    - |   |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities                                                          |   |                     | 27.3    |   |   |   | 31.3 |   |   |   | 24.5 |   |
|  Cash flows from investing activities:                                                        |   |                     |    |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                                               |   |                     | (37.4   | ) |   |   | (9.2 | ) |   |   | (16.3 | ) |
| Change in restricted cash                                                                          |   |                     |  - |   |   |   | - |   |   |   | (.1 | ) |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
|     Net cash used in investing activities                                      |   |                     | (37.4   | ) |   |   | (9.2 | ) |   |   | (16.4 | ) |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                              |   |                     |    |   |   |   |   |   |   |   |   |   |
| Indebtedness:                                                                                      |   |                     |    |   |   |   |   |   |   |   |   |   |
|     Borrowings                                                                 |   |                     | 30.4    |   |   |   | 12.2 |   |   |   | 16.7 |   |
|     Principal payments                                                         |   |                     | (6.0    | ) |   |   | (28.0 | ) |   |   | (28.6 | ) |
| Deferred financing fees                                                                            |   |                     | (.6     | ) |   |   | (.4 | ) |   |   | (.4 | ) |
| Dividends paid                                                                                     |   |                     | (17.0   | ) |   |   | - |   |   |   | - |   |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) financing activities                                           |   |                     | 6.8     |   |   |   | (16.2 | ) |   |   | (12.3 | ) |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents:                                                                         |   |                     |    |   |   |   |   |   |   |   |   |   |
|   Net change during the year from:                                                       |   |                     |    |   |   |   |   |   |   |   |   |   |
|     Operating, investing and financing     activities |   |                     | (3.3    | ) |   |   | 5.9 |   |   |   | (4.2 | ) |
|     Currency translation                                                       |   |                     | (.3     | ) |   |   | .4 |   |   |   | (.1 | ) |
|   Balance at beginning of period                                                         |   |                     | 4.7     |   |   |   | 1.1 |   |   |   | 7.4 |   |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
|   Balance at end of period                                                               |   | $                        | 1.1     |   |   | $ | 7.4 |   |   | $ | 3.1 |   |
|                                                                                               |   |                     |    |   |   |   |   |   |   |   |   |   |
| Supplemental disclosures -                                                                         |   |                     |    |   |   |   |   |   |   |   |   |   |
|   Cash paid for:                                                                         |   |                     |    |   |   |   |   |   |   |   |   |   |
|     Interest                                                                   |   | $                        | 1.2     |   |   | $ | 1.6 |   |   | $ | 1.0 |   |
|     Income taxes                                                               |   |                     | 9.1     |   |   |   | 2.4 |   |   |   | 3.5 |   |
|   Accrual for capital expenditures                                                       |   |                     | 3.4     |   |   |   | 2.2 |   |   |   | 5.7 |   |
|   Capital lease obligation incurred                                                      |   |                     | -       |   |   |   | 5.9 |   |   |   | - |   |

----

----

|   | · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the assets or liability; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

----

| Asset                      | Useful lives        |
|----------------------------|---------------------|
|                       |                |
| Buildings and improvements | 10 to 40 years      |
| Machinery and equipment    | 3 to 20 years       |
| Mine development costs     | Units-of-production |

----

|                                  |   | December 31,  |   |
|---------------------------------------|--------|---------------|--------|
|                                  |   | 2009          |   |   | 2010 |   |
|                                  |   | (In millions) |   |
|                                  |   |          |   |   |   |   |
| Trade receivables                     |   | $             | 9.4    |   |   | $ | 13.3 |   |
| Recoverable VAT and other receivables |   |          | 3.2    |   |   |   | 5.5 |   |
| Allowance for doubtful accounts       |   |          | (.1    | ) |   |   |  - |   |
|                                  |   |          |   |   |   |   |   |   |
| Total                                 |   | $             | 12.5   |   |   | $ | 18.8 |   |

|              |   | December 31,  |   |
|-------------------|--------|---------------|--------|
|              |   | 2009          |   |   | 2010 |   |
|              |   | (In millions) |   |
|              |   |          |   |   |   |   |
| Raw materials     |   | $             | 23.8   |   |   | $ | 17.2 |   |
| Work in process   |   |          | 2.4    |   |   |   | 3.0 |   |
| Finished products |   |          | 34.0   |   |   |   | 26.9 |   |
| Supplies          |   |          | 27.0   |   |   |   | 24.5 |   |
|              |   |          |   |   |   |   |   |   |
| Total             |   | $             | 87.2   |   |   | $ | 71.6 |   |

----

|                          |   | December 31,  |   |
|-------------------------------|--------|---------------|--------|
|                          |   | 2009          |   |   | 2010 |   |
|                          |   | (In millions) |   |
|                          |   |          |   |   |   |   |
| Deferred financing costs, net |   | $             | .6     |   |   | $ | .8 |   |
| Pension asset                 |   |          | .3     |   |   |   | .3 |   |
| Other                         |   |          | 4.3    |   |   |   | 4.2 |   |
|                          |   |          |   |   |   |   |   |   |
| Total                         |   | $             | 5.2    |   |   | $ | 5.3 |   |

|                        |   | December 31,  |      |
|-----------------------------|--------|---------------|-----------|
|                        |   | 2009          |      |   | 2010 |   |
|                        |   | (In millions) |      |
|                        |   |          |      |   |   |   |
| Accounts payable            |   | $             | 24.3      |   |   | $ | 26.0 |   |
| Accrued liabilities:        |   |          |      |   |   |   |   |   |
| Employee benefits           |   |          | 9.5       |   |   |   | 10.7 |   |
| Sales discounts and rebates |   |          | 6.2       |   |   |   | 3.8 |   |
| Other                       |   |          |  7.2 |   |   |   | 6.6 |   |
|                        |   |          |      |   |   |   |   |   |
| Total                       |   | $             | 47.2      |   |   | $ | 47.1 |   |

|                                   |   | December 31,  |      |
|----------------------------------------|--------|---------------|-----------|
|                                   |   | 2009          |      | 2010 |   |
|                                   |   | (In millions) |      |
|                                   |   |          |      |   |   |   |
| Revolving credit facility              |   | $             | 13.0      |   |   | $ | - |   |
| Other                                  |   |          |  8.9 |   |   |   | 6.8 |   |
|                                   |   |          |      |   |   |   |   |   |
| Total debt                             |   |          | 21.9      |   |   |   | 6.8 |   |
| Less current maturities                |   |          |  2.1 |   |   |   | 2.2 |   |
|                                   |   |          |      |   |   |   |   |   |
|    Total long-term debt |   | $             | 19.8      |   |   | $ | 4.6 |   |

----

| Years ending December 31, |   | Amount        |   |
|---------------------------|--------|---------------|--------|
|                      |   | (In millions) |   |
|                      |   |          |   |
| 2011                      |   | $             | 2.2    |   |
| 2012                      |   |          | 2.2    |   |
| 2013                      |   |          | 1.2    |   |
| 2014                      |   |          | .5     |   |
| 2015                      |   |          | .4     |   |
| 2016 and thereafter       |   |          | .3     |   |
|                      |   |          |   |   |
| Total                     |   | $             | 6.8    |   |

----

|                                                             |   | Years ended December 31, |   |
|------------------------------------------------------------------|--------|--------------------------|--------|
|                                                             |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                             |   | (In millions)            |   |
| Pretax income (loss):                                            |   |                     |   |   |   |   |   |   |   |
| Denmark                                                          |   | $                        | (.1    | ) |   | $ | (.1 | ) |   | $ | (.2 | ) |
| Non-Denmark                                                      |   |                     | 20.9   |   |   |   | (3.6 | ) |   |   | 25.4 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |   | $                        | 20.8   |   |   | $ | (3.7 | ) |   | $ | 25.2 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Expected tax expense (benefit)                                   |   | $                        | 5.2    |   |   | $ | (.9 | ) |   | $ | 6.3 |   |
| Non-Denmark tax rates                                            |   |                     | .9     |   |   |   | (1.1 | ) |   |   | 1.6 |   |
| Nondeductible expenses                                           |   |                     | .4     |   |   |   | .3 |   |   |   | .3 |   |
| Nontaxable income                                                |   |                     | (.9    | ) |   |   | (.9 | ) |   |   | (.9 | ) |
| Other, net                                                       |   |                     | -      |   |   |   | .1 |   |   |   | .1 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total income tax expense (benefit)                               |   | $                        | 5.6    |   |   | $ | (2.5 | ) |   | $ | 7.4 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit):                            |   |                     |   |   |   |   |   |   |   |   |   |   |
| Current income tax expense:                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Denmark                                                          |   | $                        | -      |   |   | $ | - |   |   | $ | - |   |
| Non-Denmark                                                      |   |                     | 5.7    |   |   |   | 1.2 |   |   |   | 7.9 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                     | 5.7    |   |   |   | 1.2 |   |   |   | 7.9 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Deferred income tax expense (benefit):                           |   |                     |   |   |   |   |   |   |   |   |   |   |
| Denmark                                                          |   |                     | -      |   |   |   | - |   |   |   | - |   |
| Non-Denmark                                                      |   |                     | (.1    | ) |   |   | (3.7 | ) |   |   | (.5 | ) |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                     | (.1    | ) |   |   | (3.7 | ) |   |   | (.5 | ) |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total income tax expense  (benefit)                    |   | $                        | 5.6    |   |   | $ | (2.5 | ) |   | $ | 7.4 |   |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Comprehensive provision for income taxes (benefit) allocable to: |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                                    |   | $                        | 5.6    |   |   | $ | (2.5 | ) |   | $ | 7.4 |   |
| Other comprehensive loss – Pension plans                   |   |                     | (1.3   | ) |   |   | .8 |   |   |   | (.5 | ) |
|                                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |   | $                        | 4.3    |   |   | $ | (1.7 | ) |   | $ | 6.9 |   |

----

|                                                      |   | _________________December 31, ___________ |           |
|-----------------------------------------------------------|--------|------------------------------------------------|----------------|
|                                                      |   | ________2009__ _____                           |           |   | _______2010_______ |   |
|                                                      |   | Assets                                         |           |   | Liabilities |   |   | Assets |   |   | Liabilities |   |
|                                                      |   | (In millions)                                  |           |
|                                                      |   |                                           |           |   |   |   |   |   |   |   |   |   |
| Tax effect of temporary differences relating to:          |   |                                           |           |   |   |   |   |   |   |   |   |   |
| Inventories                                               |   | $                                              | -              |   |   | $ | (2.1 | ) |   | $ | - |   |   | $ | (1.7 | ) |
| Property and equipment                                    |   |                                           | -              |   |   |   | (19.4 | ) |   |   | - |   |   |   | (17.6 | ) |
| Accrued pension cost                                      |   |                                           | 1.5            |   |   |   | - |   |   |   | 1.8 |   |   |   | - |   |
| Accrued liabilities and other deductible differences      |   |                                           | 3.2            |   |   |   | - |   |   |   | 2.7 |   |   |   | - |   |
| Other taxable differences                                 |   |                                           | -              |   |   |   | (.6 | ) |   |   | - |   |   |   | (.9 | ) |
| Tax loss and tax credit carryforwards                     |   |                                           | 4.1            |   |   |   | - |   |   |   | .1 |   |   |   | - |   |
| Valuation allowance                                       |   |                                           |    - |   |   |   |  - |   |   |   | (.1 | ) |   |   |  - |   |
|                                                      |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross deferred tax assets (liabilities)                   |   |                                           | 8.8            |   |   |   | (22.1 | ) |   |   | 4.5 |   |   |   | (20.2 | ) |
|                                                      |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification, principally netting by tax jurisdiction |   |                                           | (8.8           | ) |   |   | 8.8 |   |   |   | (4.2 | ) |   |   | 4.2 |   |
|                                                      |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net total deferred tax liabilities                        |   |                                           | -              |   |   |   | (13.3 | ) |   |   | .3 |   |   |   | (16.0 | ) |
| Net current deferred tax liabilities                      |   |                                           |  -        |   |   |   | (1.7 | ) |   |   | .3 |   |   |   | (1.1 | ) |
|                                                      |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net noncurrent deferred tax liabilities                   |   | $                                              | -              |   |   | $ | (11.6 | ) |   | $ | - |   |   | $ | (14.9 | ) |

----

| Years ending December 31, |   | Amount        |   |
|---------------------------|--------|---------------|--------|
|                      |   | (In millions) |   |
|                      |   |          |   |
| 2011                      |   | $             | 3.4    |   |
| 2012                      |   |          | 5.4    |   |
| 2013                      |   |          | 3.3    |   |
| 2014                      |   |          | 3.6    |   |
| 2015                      |   |          | 3.4    |   |
| Next five years           |   |          | 18.9   |   |

----

|                                                         |   | December 31,  |   |
|--------------------------------------------------------------|--------|---------------|--------|
|                                                         |   | 2009          |   |   | 2010 |   |
|                                                         |   | (In millions) |   |
|                                                         |   |          |   |   |   |   |
| Change in projected benefit obligations (“PBO”): |   |          |   |   |   |   |
| Benefit obligations at beginning of year                     |   | $             | 60.9   |   |   | $ | 70.3 |   |
| Service cost                                                 |   |          | 1.8    |   |   |   | 1.8 |   |
| Interest cost                                                |   |          | 3.7    |   |   |   | 3.4 |   |
| Participant contributions                                    |   |          | .1     |   |   |   | .1 |   |
| Actuarial (gains) losses                                     |   |          | (2.5   | ) |   |   | 2.0 |   |
| Plan amendment                                               |   |          | -      |   |   |   | 1.0 |   |
| Change in currency exchange rates                            |   |          | 10.7   |   |   |   | (1.8 | ) |
| Benefits paid                                                |   |          | (4.4   | ) |   |   | (3.2 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Benefit obligations at end of year                           |   |          | 70.3   |   |   |   | 73.6 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Change in fair value of plan assets:                         |   |          |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year               |   |          | 50.8   |   |   |   | 63.5 |   |
| Actual return on plan assets                                 |   |          | 2.7    |   |   |   | 3.9 |   |
| Employer contributions                                       |   |          | 4.5    |   |   |   | 4.3 |   |
| Participant contributions                                    |   |          | .1     |   |   |   | .1 |   |
| Change in currency exchange rates                            |   |          | 9.8    |   |   |   | (1.2 | ) |
| Benefits paid                                                |   |          | (4.4   | ) |   |   | (3.2 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Fair value of plan assets at end of year                     |   |          | 63.5   |   |   |   | 67.4 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Funded status                                                |   | $             | (6.8   | ) |   | $ | (6.2 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Amounts recognized in the balance sheet:                     |   |          |   |   |   |   |   |   |
| Noncurrent pension asset                                     |   | $             | .3     |   |   | $ | .3 |   |
| Accrued pension cost:                                        |   |          |   |   |   |   |   |   |
| Current                                                      |   |          | (.1    | ) |   |   | (.1 | ) |
| Non current                                                  |   |          | (7.0   | ) |   |   | (6.4 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Total                                                        |   | $             | (6.8   | ) |   | $ | (6.2 | ) |
|                                                         |   |          |   |   |   |   |   |   |
| Accumulated other comprehensive loss-                        |   |          |   |   |   |   |   |   |
| Actuarial loss                                               |   | $             | 12.8   |   |   | $ | 13.6 |   |
| Prior service cost                                           |   |          | 1.5    |   |   |   | 2.2 |   |
| Net transition obligation                                    |   |          | .2     |   |   |   | .1 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Total                                                        |   | $             | 14.5   |   |   | $ | 15.9 |   |
|                                                         |   |          |   |   |   |   |   |   |
| Accumulated benefit obligations (“ABO”)          |   | $             | 57.8   |   |   | $ | 62.1 |   |

----

|                                       |   | Years ended December 31, |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                       |   | (In millions)            |   |
|                                       |   |                     |   |   |   |   |   |   |   |
| Net periodic pension cost:                 |   |                     |   |   |   |   |   |   |   |
| Service cost benefits                      |   | $                        | 1.7    |   |   | $ | 1.8 |   |   | $ | 1.8 |   |
| Interest cost on PBO                       |   |                     | 3.8    |   |   |   | 3.7 |   |   |   | 3.4 |   |
| Expected return on plan assets             |   |                     | (3.6   | ) |   |   | (3.4 | ) |   |   | (3.5 | ) |
| Amortization of prior service cost         |   |                     | .3     |   |   |   | .3 |   |   |   | .3 |   |
| Amortization of net transition obligations |   |                     | .1     |   |   |   | .1 |   |   |   | .1 |   |
| Recognized actuarial losses                |   |                     | .5     |   |   |   | 1.1 |   |   |   | .7 |   |
|                                       |   |                     |   |   |   |   |   |   |   |   |   |   |
| Total                                      |   | $                        | 2.8    |   |   | $ | 3.6 |   |   | $ | 2.8 |   |

|                                         |   | December 31,  |   |
|----------------------------------------------|--------|---------------|--------|
|                                         |   | 2009          |   |   | 2010 |   |
|                                         |   | (In millions) |   |
|                                         |   |          |   |   |   |   |
| Plans for which the ABO exceeds plan assets: |   |          |   |   |   |   |
| PBO                                          |   | $             | 12.4   |   |   | $ | 13.8 |   |
| ABO                                          |   |          | 8.6    |   |   |   | 9.5 |   |
| Fair value of plan assets                    |   |          | 6.8    |   |   |   | 8.6 |   |

| Rate                                   |   | 2009   |   |   | 2010   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
|                                   |   |   |   |   |   |   |
| Discount rate                          |   |   | 5.3    | %      |   |   | 4.8 | % |
| Increase in future compensation levels |   |   | 3.8    | %      |   |   | 3.4 | % |

|                                   |   | Years ended December 31, |   |
|----------------------------------------|--------|--------------------------|--------|
| Rate                                   |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                   |   |                     |   |   |   |   |   |   |   |
| Discount rate                          |   |                     | 5.5    | % |   |   | 5.8 | % |   |   | 5.3 | % |
| Increase in future compensation levels |   |                     | 3.0    | % |   |   | 3.0 | % |   |   | 3.8 | % |
| Long-term return on plan assets        |   |                     | 5.5    | % |   |   | 5.5 | % |   |   | 5.7 | % |

----

|                                                                                           |   | Years Ended December 31, |   |
|------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                           |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|                                                                                           |   | (In millions)            |   |
| Changes in plan assets and benefit obligationsrecognized in other comprehensive income (loss): |   |                     |   |   |   |   |   |   |   |
| Current year:                                                                                  |   |                     |   |   |   |   |   |   |   |
| Net actuarial gain (loss)                                                                      |   | $                        | (5.6   | ) |   | $ | 1.4 |   |   | $ | (1.5 | ) |
|     Plan amendment                                                              |   |                     | -      |   |   |   | - |   |   |   | (1.0 | ) |
| Amortization of unrecognized:                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net actuarial losses                                                                      |   |                     | .5     |   |   |   | 1.1 |   |   |   | .6 |   |
| Prior service cost                                                                   |   |                     | .3     |   |   |   | .3 |   |   |   | .3 |   |
| Net transition obligations                                                                     |   |                     | .1     |   |   |   | .1 |   |   |   | .1 |   |
|                                                                                           |   |                     |   |   |   |   |   |   |   |   |   |   |
|     Total                                                                  |   | $                        | (4.7   | ) |   | $ | 2.9 |   |   | $ | (1.5 | ) |

| ·   | In Norway, we currently have a plan asset target allocation of 14% to equity securities, 72% to fixed income securities and the remainder primarily to liquid investments such as money markets.  The expected long-term rate of return for such investments is approximately 9.0%, 5.0% and 4.0%, respectively.  The majority of Norwegian plan assets are Level 1 inputs because they are traded in active markets; however a portion of our Norwegian plan assets are invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In Belgium, we currently have plan assets invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                    |   | Fair Value Measurements at December 31, 2009 |   |
|-----------------------------------------|--------|----------------------------------------------|--------|
|                                    |   | Total                                        |   |   | Quoted Prices in Active Markets  (Level 1) |   |   | Significant Other Observable Inputs  (Level 2) |   |   | Significant Unobservable Inputs  (Level 3) |   |
|                                    |   | (In millions)                                |   |
| Norway:                                 |   |                                         |   |   |   |   |   |   |   |   |   |   |
|   Local currency equities     |   | $                                            | 3.6    |   |   | $ | 3.6 |   |   | $ | - |   |   | $ | - |   |
|   Non local equities          |   |                                         | 6.4    |   |   |   | 6.4 |   |   |   | - |   |   |   | - |   |
|   Local currency fixed income |   |                                         | 31.9   |   |   |   | 7.7 |   |   |   | - |   |   |   | 24.2 |   |
|   Non local fixed income      |   |                                         | 4.4    |   |   |   | 1.3 |   |   |   | - |   |   |   | 3.1 |   |
|   Cash and other              |   |                                         | 10.4   |   |   |   | 9.7 |   |   |   | - |   |   |   | .7 |   |
| Belgium:                                |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Insurance Contracts         |   |                                         | 6.8    |   |   |   |  - |   |   |   |  - |   |   |   | 6.8 |   |
|                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total           |   | $                                            | 63.5   |   |   | $ | 28.7 |   |   | $ | - |   |   | $ | 34.8 |   |

|                                    |   | Fair Value Measurements at December 31, 2010 |   |
|-----------------------------------------|--------|----------------------------------------------|--------|
|                                    |   | Total                                        |   |   | Quoted Prices in Active Markets  (Level 1) |   |   | Significant Other Observable Inputs  (Level 2) |   |   | Significant Unobservable Inputs  (Level 3) |   |
|                                    |   | (In millions)                                |   |
| Norway:                                 |   |                                         |   |   |   |   |   |   |   |   |   |   |
|   Local currency equities     |   | $                                            | 11.5   |   |   | $ | 11.5 |   |   | $ | - |   |   | $ | - |   |
|   Non local equities          |   |                                         | .2     |   |   |   | .2 |   |   |   | - |   |   |   | - |   |
|   Local currency fixed income |   |                                         | 42.3   |   |   |   | 15.9 |   |   |   | - |   |   |   | 26.4 |   |
|   Non local fixed income      |   |                                         | 3.5    |   |   |   | .5 |   |   |   | - |   |   |   | 3.0 |   |
|   Cash and other              |   |                                         | 1.2    |   |   |   | .6 |   |   |   | - |   |   |   | .6 |   |
| Belgium:                                |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Insurance Contracts         |   |                                         | 8.7    |   |   |   |  - |   |   |   |  - |   |   |   | 8.7 |   |
|                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total           |   | $                                            | 67.4   |   |   | $ | 28.7 |   |   | $ | - |   |   | $ | 38.7 |   |

|                                            |   | 2009          |   |   | 2010   |   |
|-------------------------------------------------|--------|---------------|--------|--------|--------|--------|
|                                            |   | (In millions) |   |   |   |   |
|                                            |   |          |   |   |   |   |
| Fair value at beginning of year                 |   | $             | 28.5   |   |   | $      | 34.8 |   |
|   Gain on assets held at end of year  |   |          | .5     |   |   |   | .3 |   |
|   Loss on assets sold during the year |   |          | (1.4   | )      |   |   | - |   |
|   Assets purchased                    |   |          | 6.7    |   |   |   | 6.6 |   |
|   Assets sold                         |   |          | (4.7   | )      |   |   | (1.9 | ) |
|   Currency exchange rate fluctuations |   |          | 5.2    |   |   |   | (1.1 | ) |
|                                            |   |          |   |   |   |   |   |   |
| Fair value at end of year                       |   | $             | 34.8   |   |   | $      | 38.7 |   |
|                                            |   |          |   |   |   |   |   |   |

----

----

----

| Years ending December 31,                       |   | Amount        |          |
|-------------------------------------------------|--------|---------------|---------------|
|                                            |   | (in millions) |          |
|                                            |   |          |          |
|        2011  |   | $             | 1.1           |   |
|        2012  |   |          | 1.0           |   |
|        2013  |   |          | .9            |   |
|        2014  |   |          | .4            |   |
|        2015  |   |          | .2            |   |
| 2016 and thereafter                             |   |          |   - |   |
|                                            |   |          |          |   |
|        Total |   | $             | 3.6           |   |

|                                   |   | Fair Value Measurements |   |
|----------------------------------------|--------|-------------------------|--------|
|                                   |   | Total                   |   |   | Quoted Prices in Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                                   |   | (in millions)           |   |
| December 31, 2009:                     |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   | $                       | 1.6    |   |   | $ | 1.6 |   |   |   | - |   |   |   | - |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | 2.6    |   |   |   | 2.6 |   |   |   | - |   |   |   | - |   |

----

| ·   | an aggregate $20.1 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 5.94 to kroner 6.60 per U.S. dollar.  These contracts with DnB Nor Bank ASA mature from January 2011 through July 2011 at a rate of $2.3 million to $5.5 million per month. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an aggregate euro 17.8 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 8.16 to kroner 8.28 per euro.  These contracts with DnB Nor Bank ASA mature from January 2011 through August 2011 at a rate of euro 1.8 million to euro 2.5 million per month, subject to early redemption provisions at our option. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   | December 31,  |   |
|-----------------------------------------------------|--------|---------------|--------|
|                                                |   | 2009          |   |   | 2010 |   |
|                                                |   | Carrying      |   |   | Fair |   |   | Carrying |   |   | Fair |   |
|                                                |   | Amount        |   |   | Value |   |   | Amount |   |   | Value |   |
|                                                |   | (In millions) |   |
|                                                |   |          |   |   |   |   |   |   |   |   |   |   |
| Cash, cash equivalents and restricted cash          |   | $             | 9.1    |   |   | $ | 9.1 |   |   | $ | 5.0 |   |   | $ | 5.0 |   |
|                                                |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt:                                     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revolving credit facility                           |   | $             | 13.0   |   |   | $ | 13.0 |   |   |   | - |   |   |   | - |   |
|     Other - primarily capital leases |   |          | 8.9    |   |   |   | 8.9 |   |   |   | 6.8 |   |   |   | 6.8 |   |

----