| For the quarter ended June 30, 2009 | Commission file number 1-5467 |
|-------------------------------------|-------------------------------|

| VALHI, INC.                                            |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |

| Delaware                                                      |   | 87-0110150                       |
|---------------------------------------------------------------|--------|----------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (IRS EmployerIdentification No.) |

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

|   | * | The registrant has not yet been phased into the interactive data requirements. |
|--------|---|--------------------------------------------------------------------------------|

----

|                                                                                                                                                                       | Pagenumber    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
| Part I.                  FINANCIAL INFORMATION                                   |          |
|                                                                                                                                                                       |          |
| Item 1.                   Financial Statements.                             |          |
|                                                                                                                                                                       |          |
| Condensed Consolidated Balance Sheets – December 31, 2008 and June 30, 2009 (unaudited)                                                                         |  3       |
|                                                                                                                                                                       |          |
| Condensed Consolidated Statements of Operations (unaudited)  – Three and six months ended June 30, 2008 and 2009                                                |  5       |
|                                                                                                                                                                       |          |
| Condensed Consolidated Statements of Cash Flows (unaudited) –Six months ended June 30, 2008 and 2009                                                            |  6       |
|                                                                                                                                                                       |          |
| Condensed Consolidated Statement of Equity and Comprehensive Income (Loss) –  Six months ended  June 30, 2009 (unaudited)                   |   8 |
|                                                                                                                                                                       |          |
| Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                                      |  9       |
|                                                                                                                                                                       |          |
| Item 2.           Management’s Discussion and Analysis of Financial Condition and Results of Operations. |  32      |
|                                                                                                                                                                       |          |
| Item 3.           Quantitative and Qualitative Disclosures About Market Risk                                   | 53            |
|                                                                                                                                                                       |          |
| Item 4.           Controls and Procedures                                                                           | 54            |
|                                                                                                                                                                       |          |
| Part II.              OTHER INFORMATION                                                              |          |
|                                                                                                                                                                       |          |
| Item 1.           Legal Proceedings.                                                                                | 56            |
|                                                                                                                                                                       |          |
| Item 1A.        Risk Factors.                                                                                                      | 56            |
|                                                                                                                                                                       |          |
| Item 4.            Submission of Matters to a Vote of Security Holders                                         | 56            |
|                                                                                                                                                                       |          |
| Item 6.            Exhibits.                                                                                   | 57            |
|                                                                                                                                                                       |          |

----

|               ASSETS |   | December 31, 2008 |    |   | June 30, 2009   |   |
|--------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------------------|--------|
|                                                                                       |   |                   |    |   | (unaudited)               |   |
|                                                                                       |   |                   |    |   |                      |   |
| Current assets:                                                                       |   |                   |    |   |                      |   |
|   Cash and cash equivalents                                       |   | $                      | 37.0    |   |                      | $      | 100.0 |   |
|   Restricted cash equivalents                                          |   |                   | 9.4     |   |                      |   | 9.1 |   |
|   Marketable securities                                                     |   |                   | 8.8     |   |                      |   | 7.1 |   |
|   Accounts and other receivables, net                        |   |                   | 205.2   |   |                      |   | 231.9 |   |
|   Inventories, net                                                          |   |                   | 408.5   |   |                      |   | 267.7 |   |
|   Prepaid expenses and other                                           |   |                   | 15.4    |   |                      |   | 12.9 |   |
|   Deferred income taxes                                                |   |                   | 12.1    |   |                      |   | 12.0 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total current assets                         |   |                   | 696.4   |   |                      |   | 640.7 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
| Other assets:                                                                         |   |                   |    |   |                      |   |   |   |
|   Marketable securities                                                          |   |                   | 272.0   |   |                      |   | 275.3 |   |
|   Investment in affiliates                                             |   |                   | 124.0   |   |                      |   | 118.8 |   |
|   Goodwill                                                                       |   |                   | 396.8   |   |                      |   | 396.8 |   |
|   Other intangible assets                                              |   |                   | 2.0     |   |                      |   | 1.7 |   |
|   Deferred income taxes                                                |   |                   | 166.4   |   |                      |   | 195.8 |   |
|   Other assets                                                              |   |                   | 90.8    |   |                      |   | 92.3 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total other assets                           |   |                   | 1,052.0 |   |                      |   | 1,080.7 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
| Property and equipment:                                                          |   |                   |    |   |                      |   |   |   |
|   Land                                                                           |   |                   | 46.4    |   |                      |   | 51.5 |   |
|   Buildings                                                                      |   |                   | 268.5   |   |                      |   | 280.9 |   |
|   Equipment                                                                      |   |                   | 1,025.3 |   |                      |   | 1,079.6 |   |
|   Mining properties                                                         |   |                   | 30.3    |   |                      |   | 59.4 |   |
|   Construction in progress                                             |   |                   | 58.2    |   |                      |   | 61.9 |   |
|                                                                                       |   |                   | 1,428.7 |   |                      |   | 1,533.3 |   |
|   Less accumulated depreciation                                        |   |                   | 787.7   |   |                      |   | 864.2 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Net property and equipment              |   |                   | 641.0   |   |                      |   | 669.1 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total assets                                      |   | $                      | 2,389.4 |   |                      | $      | 2,390.5 |   |

----

|    LIABILITIES AND EQUITY                                       |   | December 31, 2008 |    |   | June 30, 2009 |   |
|--------------------------------------------------------------------------------|--------|------------------------|---------|--------|--------------------|--------|
|                                                                           |   |                   |    |   | (unaudited)        |   |
|                                                                           |   |                   |    |   |               |   |
| Current liabilities:                                                      |   |                   |    |   |               |   |
|   Current maturities of long-term debt           |   | $                      | 9.4     |   |               | $      | 120.1 |   |
|   Accounts payable and accrued liabilities                      |   |                   | 275.2   |   |               |   | 268.2 |   |
|   Income taxes                                                  |   |                   | 4.9     |   |               |   | 5.9 |   |
|   Deferred income taxes                                    |   |                   | 4.7     |   |               |   | 4.7 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total current liabilities        |   |                   | 294.2   |   |               |   | 398.9 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Noncurrent liabilities:                                                   |   |                   |    |   |               |   |   |   |
|   Long-term debt                                                |   |                   | 911.0   |   |               |   | 873.4 |   |
|   Deferred income taxes                                    |   |                   | 346.6   |   |               |   | 348.4 |   |
|   Accrued pension costs                                    |   |                   | 146.1   |   |               |   | 140.0 |   |
|   Accrued postretirement benefits costs                         |   |                   | 29.3    |   |               |   | 29.6 |   |
|   Accrued environmental costs                              |   |                   | 41.3    |   |               |   | 38.1 |   |
|   Other liabilities                                             |   |                   | 78.8    |   |               |   | 79.2 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total noncurrent liabilities     |   |                   | 1,553.1 |   |               |   | 1,508.7 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Equity:                                                                        |   |                   |    |   |               |   |   |   |
|   Preferred stock                                               |   |                   | 667.3   |   |               |   | 667.3 |   |
|   Common stock                                                  |   |                   | 1.2     |   |               |   | 1.2 |   |
|   Additional paid-in capital                               |   |                   | -       |   |               |   | - |   |
|   Accumulated deficit                                                |   |                   | (109.8  | )      |               |   | (171.2 | ) |
|   Accumulated other comprehensive loss                |   |                   | (51.0   | )      |               |   | (40.7 | ) |
|   Treasury stock                                                |   |                   | (38.9   | )      |               |   | (38.9 | ) |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total Valhi stockholders' equity |   |                   | 468.8   |   |               |   | 417.7 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Noncontrolling interest in subsidiaries                                   |   |                   | 73.3    |   |               |   | 65.2 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total equity                          |   |                   | 542.1   |   |               |   | 482.9 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total liabilities and equity     |   | $                      | 2,389.4 |   |               | $      | 2,390.5 |   |
|                                                                           |   |                   |    |   |               |   |   |   |

----

|                                                                |   | Three months ended |        |   | Six months ended |   |
|---------------------------------------------------------------------|--------|--------------------|-------------|--------|------------------|--------|
|                                                                |   | June 30,           |        |   | June 30,         |   |
|                                                                |   | 2008               |        |   | 2009             |   |   | 2008 |   |   | 2009 |   |
|                                                                |   | (unaudited)        |        |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |
| Revenues and other income:                                          |   |               |        |   |             |   |   |   |   |   |   |   |
|   Net sales                                               |   | $                  | 436.1       |   |             | $      | 312.1 |   |   | $ | 810.1 |   |   | $ | 589.4 |   |
|   Other income, net                                       |   |               | 12.5        |   |             |   | 20.8 |   |   |   | 17.5 |   |   |   | 51.0 |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Total revenues and other income             |   |               | 448.6       |   |             |   | 332.9 |   |   |   | 827.6 |   |   |   | 640.4 |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                 |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales                                           |   |               | 369.7       |   |             |   | 295.9 |   |   |   | 680.1 |   |   |   | 568.6 |   |
|   Selling, general and administrative                     |   |               | 65.7        |   |             |   | 53.9 |   |   |   | 124.0 |   |   |   | 105.3 |   |
|   Assets held for sale write-down                         |   |               | -           |   |             |   | .7 |   |   |   | - |   |   |   | .7 |   |
|   Interest                                                |   |               | 17.7        |   |             |   | 16.7 |   |   |   | 35.1 |   |   |   | 32.7 |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|       Total costs and expenses        |   |               | 453.1       |   |             |   | 367.2 |   |   |   | 839.2 |   |   |   | 707.3 |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Loss before income taxes                    |   |               | (4.5        | )      |             |   | (34.3 | ) |   |   | (11.6 | ) |   |   | (66.9 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                                  |   |               | (5.6        | )      |             |   | (13.7 | ) |   |   | (6.9 | ) |   |   | (22.9 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Net income (loss)                           |   |               | 1.1         |   |             |   | (20.6 | ) |   |   | (4.7 | ) |   |   | (44.0 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Noncontrolling interest in net income (loss) of subsidiaries   |   |               |  1.3   |   |             |   | (1.6 | ) |   |   |  1.4 |   |   |   | (5.0 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Net loss attributable to Valhi stockholders |   | $                  | (.2         | )      |             | $      | (19.0 | ) |   | $ | (6.1 | ) |   | $ | (39.0 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Amounts attributable to Valhi stockholders:                         |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per share                                |   | $                  | -           |   |             | $      | (.16 | ) |   | $ | (.05 | ) |   | $ | (.34 | ) |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends per share                                            |   | $                  | .10         |   |             | $      | .10 |   |   | $ | .20 |   |   | $ | .20 |   |
|                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding          |   |               |  114.4 |   |             |   |  114.3 |   |   |   |  114.4 |   |   |   |  114.3 |   |

----

|                                                                                                                                                               |   | Six months ended June 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                                               |   | 2008                           |   |   | 2009 |   |
|                                                                                                                                                               |   | (unaudited)                    |   |
|                                                                                                                                                               |   |                           |   |   |   |   |
| Cash flows from operating activities:                                                                                                          |   |                           |   |   |   |   |
|   Net loss                                                                                                                                          |   | $                              | (4.7   | ) |   | $ | (44.0 | ) |
|   Depreciation and amortization                                                                                                                |   |                           | 34.1   |   |   |   | 29.2 |   |
|   Gain on sale of business                                                                                                                               |   |                           | -      |   |   |   | (6.3 | ) |
|   Gain on litigation settlement                                                                                                                          |   |                           | -      |   |   |   | (11.1 | ) |
|   Assets held for sale write-down                                                                                                                        |   |                           | -      |   |   |   | .7 |   |
|   Benefit plan expense greater (less) than cash funding   requirements:                                                    |   |                           |   |   |   |   |  > |   |
|     Defined benefit pension expense                                                                                                            |   |                           | (7.0   | ) |   |   | (2.4 | ) |
|     Other postretirement benefit expense                                                                                                       |   |                           | .2     |   |   |   | .1 |   |
|   Deferred income taxes                                                                                                                        |   |                           | (13.5  | ) |   |   | (30.6 | ) |
|   Net distributions from Ti02 manufacturing joint venture                                                                                 |   |                           | 2.9    |   |   |   | 4.6 |   |
|   Other, net                                                                                                                                        |   |                           | 3.2    |   |   |   | 2.8 |   |
|   Change in assets and liabilities:                                                                                                  |   |                           |   |   |   |   |   |   |
|     Accounts and other receivables, net                                                                                    |   |                           | (73.0  | ) |   |   | (23.6 | ) |
|     Inventories, net                                                                                                                      |   |                           | 14.9   |   |   |   | 139.0 |   |
|     Accounts payable and accrued liabilities                                                                               |   |                           | 1.3    |   |   |   | (20.3 | ) |
|     Accounts with affiliates                                                                                                         |   |                           | 10.4   |   |   |   | (2.5 | ) |
|     Income taxes                                                                                                                          |   |                           | (6.8   | ) |   |   | 1.8 |   |
|     Other, net                                                                                                                            |   |                           | (2.0   | ) |   |   | 5.3 |   |
|                                                                                                                                                               |   |                           |   |   |   |   |   |   |
|         Net cash provided by (used in) operating         Activities |   |                           | (40.0  | ) |   |   |  42.7 |   |
|                                                                                                                                                               |   |                           |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                          |   |                           |   |   |   |   |   |   |
|   Capital expenditures                                                                                                                              |   |                           | (40.6  | ) |   |   | (38.4 | ) |
|   Capitalized permit costs                                                                                                                               |   |                           | (7.2   | ) |   |   | (4.2 | ) |
|   Purchases of CompX common stock                                                                                                         |   |                           | (1.0   | ) |   |   | - |   |
|   Purchases of marketable securities                                                                                                                |   |                           | (5.6   | ) |   |   | (4.1 | ) |
|   Proceeds from disposal of marketable securities                                                                                    |   |                           | 4.9    |   |   |   | 3.5 |   |
|   Proceeds from sale of business                                                                                                                         |   |                           | -      |   |   |   | 6.7 |   |
|   Proceeds from real estate-related litigation settlement                                                                                                |   |                           | -      |   |   |   | 11.8 |   |
|   Change in restricted cash equivalents, net                                                                                    |   |                           | (4.5   | ) |   |   | .4 |   |
|   Other, net                                                                                                                                        |   |                           | 1.7    |   |   |   | .3 |   |
|                                                                                                                                                               |   |                           |   |   |   |   |   |   |
|         Net cash used in investing activities                                                     |   |                           | (52.3  | ) |   |   | (24.0 | ) |
|                                                                                                                                                               |   |                           |   |   |   |   |   |   |

----

|                                                                                    |   | Six months ended June 30, |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                    |   | 2008                           |   |   | 2009 |   |
|                                                                                    |   | (unaudited)                    |   |
|                                                                                    |   |                           |   |   |   |   |
| Cash flows from financing activities:                                                   |   |                           |   |   |   |   |
|   Indebtedness:                                                               |   |                           |   |   |   |   |
|     Borrowings                                                      |   | $                              | 216.6  |   |   | $ | 210.0 |   |
|     Principal payments                                         |   |                           | (181.9 | ) |   |   | (142.7 | ) |
|     Deferred financing costs paid                                   |   |                           | (.9    | ) |   |   | (.1 | ) |
|   Purchases of Kronos common stock                                            |   |                           | -      |   |   |   | (.1 | ) |
|   Valhi cash dividends paid                                              |   |                           | (22.7  | ) |   |   | (22.7 | ) |
|   Distributions to noncontrolling interest in subsidiaries          |   |                           | (3.7   | ) |   |   | (2.5 | ) |
|   Issuance of common stock and other                                          |   |                           | -      |   |   |   | .1 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
|       Net cash provided by financing activities |   |                           | 7.4    |   |   |   | 42.0 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
| Cash and cash equivalents – net change from:   |   |                           |   |   |   |   |   |   |
|   Operating, investing and financing activities           |   |                           | (84.9  | ) |   |   | 60.7 |   |
|   Currency translation                                                   |   |                           | 2.0    |   |   |   | 2.3 |   |
| Cash and cash equivalents at beginning of period          |   |                           | 138.3  |   |   |   | 37.0 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                |   | $                              | 55.4   |   |   | $ | 100.0 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
| Supplemental disclosures:                                                          |   |                           |   |   |   |   |   |   |
|   Cash paid for:                                                    |   |                           |   |   |   |   |   |   |
|     Interest, net of amounts capitalized        |   | $                              | 35.4   |   |   | $ | 32.4 |   |
|     Income taxes, net                                     |   |                           | 3.8    |   |   |   | 4.0 |   |
|   Accrual for capital expenditures                                            |   |                           | 6.0    |   |   |   | 10.5 |   |
|   Accrual for capitalized permit costs                                        |   |                           | .9     |   |   |   | 1.6 |   |
|                                                                                    |   |                           |   |   |   |   |   |   |
| Noncash investing activities -                                                          |   |                           |   |   |   |   |   |   |
| Note receivable from sale of business                                                   |   |                           | -      |   |   |   | .8 |   |

----

|                                                       |   | Valhi Stockholders’ Equity |    |   |   |   |    |       |   |   |        |   |
|------------------------------------------------------------|--------|----------------------------------|---------|--------|--------|--------|---------|------------|--------|--------|-------------|--------|
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   | Accumulated |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   |                             |    |   |   |   |    | Additional |   |   |        |   |   | other |   |   |   |   |   | Non- |   |   |   |   |   |   |   |
|                                                       |   | Preferred                        |    |   | Common |   |    | paid-in    |   |   | Accumulated |   |   | comprehensive |   |   | Treasury |   |   | controlling |   |   | Total |   |   | Comprehensive |   |
|                                                       |   | stock                            |    |   | stock  |   |    | capital    |   |   | deficit     |   |   | loss |   |   | stock |   |   | interest |   |   | equity |   |   | income (loss) |   |
|                                                       |   |                             |    |
|                                                       |   | (unaudited)                      |    |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                               |   | $                                | 667.3   |   |   | $      | 1.2     |       |   | $      | -           |   |   | $ | (109.8 | ) |   | $ | (51.0 | ) |   | $ | (38.9 | ) |   | $ | 73.3 |   |   | $ | 542.1 |   |   |   |   |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                   |   |                             | -       |   |   |   | -       |       |   |   | -           |   |   |   | (39.0 | ) |   |   | - |   |   |   | - |   |   |   | (5.0 | ) |   |   | (44.0 | ) |   | $ | (44.0 | ) |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net                |   |                             |  - |   |   |   |  - |       |   |   |  -     |   |   |   |  - |   |   |   |  10.3 |   |   |   |  - |   |   |   | (.3 | ) |   |   |  10.0 |   |   |   |  10.0 |   |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity transactions with noncontrolling interest, net |   |                             |  - |   |   |   |  - |       |   |   |  .3    |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   | (.3 | ) |   |   |  - |   |   |   |  - |   |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends                                             |   |                             | -       |   |   |   | -       |       |   |   | (.3         | )      |   |   | (22.4 | ) |   |   | - |   |   |   | - |   |   |   | (2.5 | ) |   |   | (25.2 | ) |   |   | - |   |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at June 30, 2009                                   |   | $                                | 667.3   |   |   | $      | 1.2     |       |   | $      | -           |   |   | $ | (171.2 | ) |   | $ | (40.7 | ) |   | $ | (38.9 | ) |   | $ | 65.2 |   |   | $ | 482.9 |   |   |   |   |   |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                         |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | (34.0 | ) |
|                                                       |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|   Business segment  |   |         Entity        |   | % owned at June 30, 2009  |
|------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|-------------------------------------|
|                               |   |                                                                                             |   |                                |
| Chemicals                          |   | Kronos                                                                                           |   |  95%                           |
| Component products                 |   | CompX                                                                                            |   |  87%                           |
| Waste management                   |   | WCS                                                                                              |   |  100%                          |

|                                                                                         |   | Three months ended June 30, |      |   | Six months ended June 30, |   |
|----------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|--------|--------------------------------|--------|
|                                                                                         |   | 2008                             |      |   | 2009                           |   |   | 2008 |   |   | 2009 |   |
|                                                                                         |   | (In millions)                    |      |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |
| Net sales:                                                                              |   |                             |      |   |                           |   |   |   |   |   |   |   |
|   Chemicals                                                                        |   | $                                | 391.8     |   |                           | $      | 282.1 |   |   | $ | 724.4 |   |   | $ | 530.1 |   |
|   Component products                                                          |   |                             | 43.7      |   |                           |   | 29.2 |   |   |   | 84.2 |   |   |   | 57.7 |   |
|   Waste management                                                            |   |                             | .6        |   |                           |   | .8 |   |   |   | 1.5 |   |   |   | 1.6 |   |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total net sales                                            |   | $                                | 436.1     |   |                           | $      | 312.1 |   |   | $ | 810.1 |   |   | $ | 589.4 |   |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales:                                                                     |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                        |   | $                                | 333.3     |   |                           | $      | 268.4 |   |   | $ | 609.3 |   |   | $ | 512.8 |   |
|   Component products                                                          |   |                             | 32.7      |   |                           |   | 23.0 |   |   |   | 63.8 |   |   |   | 46.7 |   |
|   Waste management                                                            |   |                             | 3.7       |   |                           |   | 4.5 |   |   |   | 7.0 |   |   |   | 9.1 |   |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total cost of sales                                   |   | $                                | 369.7     |   |                           | $      | 295.9 |   |   | $ | 680.1 |   |   | $ | 568.6 |   |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin:                                                                           |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                        |   | $                                | 58.5      |   |                           | $      | 13.7 |   |   | $ | 115.1 |   |   | $ | 17.3 |   |
|   Component products                                                          |   |                             | 11.0      |   |                           |   | 6.2 |   |   |   | 20.4 |   |   |   | 11.0 |   |
|   Waste management                                                            |   |                             | (3.1      | )      |                           |   | (3.7 | ) |   |   | (5.5 | ) |   |   | (7.5 | ) |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total gross margin                                         |   | $                                | 66.4      |   |                           | $      | 16.2 |   |   | $ | 130.0 |   |   | $ | 20.8 |   |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss):                                                           |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                        |   | $                                | 10.8      |   |                           | $      | (20.0 | ) |   | $ | 21.8 |   |   | $ | (45.5 | ) |
|   Component products                                                          |   |                             | 4.5       |   |                           |   | (.9 | ) |   |   | 7.5 |   |   |   | (1.9 | ) |
|   Waste management                                                            |   |                             | (5.5      | )      |                           |   | (6.7 | ) |   |   | (9.9 | ) |   |   | (13.2 | ) |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total operating income     (loss) |   |                             |  9.8 |   |                           |   | (27.6 | ) |   |   |  19.4 |   |   |   | (60.6 | ) |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Equity in losses of investee                                                                 |   |                             | (.2       | )      |                           |   | - |   |   |   | (.6 | ) |   |   | (.7 | ) |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| General corporate items:                                                           |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Securities earnings                                                              |   |                             | 11.0      |   |                           |   | 6.6 |   |   |   | 17.6 |   |   |   | 13.0 |   |
|   Insurance recoveries                                                        |   |                             | 1.6       |   |                           |   | 2.0 |   |   |   | 1.7 |   |   |   | 2.7 |   |
|   Gain on litigation settlements                                                   |   |                             | -         |   |                           |   | 11.1 |   |   |   | - |   |   |   | 23.0 |   |
|   Gain on sale of business                                                         |   |                             | -         |   |                           |   | (.1 | ) |   |   | - |   |   |   | 6.3 |   |
|   General expenses, net                                                  |   |                             | (9.0      | )      |                           |   | (9.6 | ) |   |   | (14.6 | ) |   |   | (17.9 | ) |
| Interest expense                                                                        |   |                             | (17.7     | )      |                           |   | (16.7 | ) |   |   | (35.1 | ) |   |   | (32.7 | ) |
|                                                                                         |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Loss before income taxes                                   |   | $                                | (4.5      | )      |                           | $      | (34.3 | ) |   | $ | (11.6 | ) |   | $ | (66.9 | ) |

----

|                                      |   | December 31, 2008 |   |   | June 30, 2009   |   |
|-------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                      |   | (In millions)          |   |
|                                      |   |                   |   |   |                      |   |
| Accounts receivable                       |   | $                      | 194.9  |   |                      | $      | 230.3 |   |
| Refundable income taxes                   |   |                   | 1.6    |   |                      |   | .9 |   |
| Receivable from affiliates                |   |                   | .1     |   |                      |   | - |   |
| Other receivables                         |   |                   | 11.3   |   |                      |   | 3.5 |   |
| Allowance for doubtful accounts           |   |                   | (2.7   | )      |                      |   | (2.8 | ) |
|                                      |   |                   |   |   |                      |   |   |   |
|       Total |   | $                      | 205.2  |   |                      | $      | 231.9 |   |

|                                                                    |   | December 31, 2008 |   |   | June 30, 2009   |   |
|-------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                                                    |   | (In millions)          |   |
|                                                                    |   |                   |   |   |                      |   |
| Raw materials:                                                     |   |                   |   |   |                      |   |
|   Chemicals                                                   |   | $                      | 67.1   |   |                      | $      | 50.4 |   |
|   Component products                                     |   |                   | 7.5    |   |                      |   | 6.4 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total raw materials       |   |                   | 74.6   |   |                      |   | 56.8 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Work in process:                                                        |   |                   |   |   |                      |   |   |   |
|   Chemicals                                                   |   |                   | 19.8   |   |                      |   | 14.5 |   |
|   Component products                                     |   |                   | 8.2    |   |                      |   | 6.9 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total in-process products |   |                   | 28.0   |   |                      |   | 21.4 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Finished products:                                                 |   |                   |   |   |                      |   |   |   |
|   Chemicals                                                   |   |                   | 243.8  |   |                      |   | 126.3 |   |
|   Component products                                     |   |                   | 6.9    |   |                      |   | 5.4 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total finished products   |   |                   | 250.7  |   |                      |   | 131.7 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Supplies (primarily chemicals)                                |   |                   | 55.2   |   |                      |   | 57.8 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total                          |   | $                      | 408.5  |   |                      | $      | 267.7 |   |

----

|                                                                            |   | December 31, 2008   |   |   | June 30, 2009 |   |
|---------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|--------------------|--------|
|                                                                            |   | (In millions)                 |   |
|                                                                            |   |                          |   |   |               |   |
| Marketable securities:                                                          |   |                          |   |   |               |   |
|   The Amalgamated Sugar Company LLC                                   |   | $                             | 250.0  |   |               | $      | 250.0 |   |
|   Titanium Metals Corporation (“TIMET”)                   |   |                          | 20.1   |   |               |   | 20.9 |   |
|   Other                                                          |   |                          | 1.9    |   |               |   | 4.4 |   |
|                                                                            |   |                          |   |   |               |   |   |   |
|       Total                                       |   | $                             | 272.0  |   |               | $      | 275.3 |   |
|                                                                            |   |                          |   |   |               |   |   |   |
|                                                                            |   |                          |   |   |               |   |   |   |
| Investment in affiliates:                                                       |   |                          |   |   |               |   |   |   |
|   TiO2 manufacturing joint venture                     |   | $                             | 105.6  |   |               | $      | 101.0 |   |
|   Other                                                          |   |                          | 18.4   |   |               |   | 17.8 |   |
|                                                                            |   |                          |   |   |               |   |   |   |
|       Total                                       |   | $                             | 124.0  |   |               | $      | 118.8 |   |
|                                                                            |   |                          |   |   |               |   |   |   |
| Other assets:                                                              |   |                          |   |   |               |   |   |   |
|   Waste disposal site operating permits, net |   | $                             | 43.7   |   |               | $      | 49.2 |   |
|   NL note receivable                                                  |   |                          | 15.0   |   |               |   | 15.0 |   |
|   IBNR receivables                                                    |   |                          | 7.5    |   |               |   | 7.8 |   |
|   Deferred financing costs                                  |   |                          | 7.1    |   |               |   | 6.2 |   |
|   Other                                                               |   |                          | 17.5   |   |               |   | 14.1 |   |
|                                                                            |   |                          |   |   |               |   |   |   |
|       Total                                       |   | $                             | 90.8   |   |               | $      | 92.3 |   |

----

|                                                      |   |                   |   |   |               |   |
|-----------------------------------------------------------|--------|------------------------|--------|--------|--------------------|--------|
|                                                      |   | December 31, 2008 |   |   | June 30, 2009 |   |
|                                                      |   | (In millions)          |   |
|                                                      |   |                   |   |   |               |   |
| Current:                                                  |   |                   |   |   |               |   |
|   Accounts payable                              |   | $                      | 121.0  |   |               | $      | 99.7 |   |
|   Employee benefits                        |   |                   | 33.6   |   |               |   | 31.1 |   |
|   Payable to affiliates:                        |   |                   |   |   |               |   |   |   |
|     Louisiana Pigment Company         |   |                   | 14.3   |   |               |   | 10.7 |   |
|     Contran – trade items       |   |                   | 9.7    |   |               |   | 11.3 |   |
|     Contran – income taxes, net |   |                   | 1.3    |   |               |   | 1.5 |   |
|     TIMET                             |   |                   | .5     |   |               |   | .2 |   |
|   Accrued sales discounts and rebates           |   |                   | 14.9   |   |               |   | 13.6 |   |
|   Environmental costs                      |   |                   | 11.6   |   |               |   | 12.2 |   |
|   Deferred income                          |   |                   | 8.4    |   |               |   | 16.0 |   |
|   Interest                                      |   |                   | 7.9    |   |               |   | 8.3 |   |
|   Reserve for uncertain tax positions           |   |                   | .2     |   |               |   | .6 |   |
|   Other                                         |   |                   | 51.8   |   |               |   | 63.0 |   |
|                                                      |   |                   |   |   |               |   |   |   |
|       Total                 |   | $                      | 275.2  |   |               | $      | 268.2 |   |
|                                                      |   |                   |   |   |               |   |   |   |
| Noncurrent:                                               |   |                   |   |   |               |   |   |   |
|   Reserve for uncertain tax positions           |   | $                      | 50.4   |   |               | $      | 51.8 |   |
|   Insurance claims and expenses  |   |                   | 13.5   |   |               |   | 12.4 |   |
|   Employee benefits                        |   |                   | 9.1    |   |               |   | 9.1 |   |
|   Other                                         |   |                   | 5.8    |   |               |   | 5.9 |   |
|                                                      |   |                   |   |   |               |   |   |   |
|       Total                 |   | $                      | 78.8   |   |               | $      | 79.2 |   |

|                                                                                                   |   | December 31, 2008 |        |   | June 30, 2009   |   |
|--------------------------------------------------------------------------------------------------------|--------|------------------------|-------------|--------|---------------------------|--------|
|                                                                                                   |   | (In millions)          |        |
|                                                                                                   |   |                   |        |   |                      |   |
| Valhi:                                                                                                 |   |                   |        |   |                      |   |
|   Snake River Sugar Company                                                                  |   | $                      | 250.0       |   |                      | $      | 250.0 |   |
|   Revolving bank credit facility                                                             |   |                   | 7.3         |   |                      |   | 35.3 |   |
|   Promissory note payable to Contran                                                         |   |                   | -           |   |                      |   | 10.0 |   |
|       Total Valhi debt                                                   |   |                   | 257.3       |   |                      |   | 295.3 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
| Subsidiary debt:                                                                                       |   |                   |        |   |                      |   |   |   |
|   Kronos International:    6.5% Senior Secured Notes |   |                   |  560.0 |   |                      |   |  561.3 |   |
|   European bank credit facility                                                              |   |                   | 42.2        |   |                      |   | 71.8 |   |
| CompX promissory note payable to TIMET                                                                 |   |                   | 43.0        |   |                      |   | 42.2 |   |
|   Kronos U.S. bank credit facility                                       |   |                   | 13.7        |   |                      |   | 15.6 |   |
|   Other                                                                                      |   |                   | 4.2         |   |                      |   | 7.3 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total subsidiary debt                                    |   |                   | 663.1       |   |                      |   | 698.2 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total debt                                                    |   |                   | 920.4       |   |                      |   | 993.5 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Less current maturities                                  |   |                   | 9.4         |   |                      |   | 120.1 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total long-term debt                                     |   | $                      | 911.0       |   |                      | $      | 873.4 |   |

----

----

----

|                                                                       |   | Three months ended June 30, |     |   | Six months ended June 30, |   |
|----------------------------------------------------------------------------|--------|----------------------------------|----------|--------|--------------------------------|--------|
|                                                                       |   | 2008                             |     |   | 2009                           |   |   | 2008 |   |   | 2009 |   |
|                                                                       |   | (In millions)                    |     |
|                                                                       |   |                             |     |   |                           |   |   |   |   |   |   |   |
| Service cost                                                     |   | $                                | 1.8      |   |                           | $      | 1.8 |   |   | $ | 3.5 |   |   | $ | 3.6 |   |
| Interest cost                                                    |   |                             | 7.7      |   |                           |   | 6.8 |   |   |   | 15.0 |   |   |   | 13.4 |   |
| Expected return on plan assets                         |   |                             | (8.2     | )      |                           |   | (5.5 | ) |   |   | (16.2 | ) |   |   | (10.7 | ) |
| Amortization of prior service cost                     |   |                             | .3       |   |                           |   | .3 |   |   |   | .5 |   |   |   | .6 |   |
| Amortization of net transition   obligations |   |                             |  .1 |   |                           |   |  .1 |   |   |   |  .2 |   |   |   |  .2 |   |
| Recognized actuarial losses                                      |   |                             | 1.1      |   |                           |   | 1.9 |   |   |   | 2.3 |   |   |   | 3.7 |   |
|                                                                       |   |                             |     |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|       Total                                  |   | $                                | 2.8      |   |                           | $      | 5.4 |   |   | $ | 5.3 |   |   | $ | 10.8 |   |

|                                      |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|-------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                      |   | 2008                             |   |   | 2009                           |   |   | 2008 |   |   | 2009 |   |
|                                      |   | (In millions)                    |   |
|                                      |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Service cost                              |   | $                                | .1     |   |                           | $      | - |   |   | $ | .2 |   |   | $ | .1 |   |
| Interest cost                             |   |                             | .7     |   |                           |   | .6 |   |   |   | 1.1 |   |   |   | 1.0 |   |
| Amortization of prior service credit      |   |                             | (.1    | )      |                           |   | (.1 | ) |   |   | (.2 | ) |   |   | (.2 | ) |
| Recognized actuarial losses (gains)       |   |                             | -      |   |                           |   | (.1 | ) |   |   | .1 |   |   |   | (.1 | ) |
|                                      |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|       Total |   | $                                | .7     |   |                           | $      | .4 |   |   | $ | 1.2 |   |   | $ | .8 |   |

----

|                                                                    |   | Six months ended June 30, |   |
|-------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                    |   | 2008                           |   |   | 2009 |   |
|                                                                    |   | (In millions)                  |   |
|                                                                    |   |                           |   |   |   |   |
| Securities earnings:                                                    |   |                           |   |   |   |   |
|   Dividends and interest                            |   | $                              | 18.2   |   |   | $ | 13.1 |   |
|   Securities transactions, net                      |   |                           | (.6    | ) |   |   | (.1 | ) |
|                                                                    |   |                           |   |   |   |   |   |   |
|       Total securities earnings |   |                           | 17.6   |   |   |   | 13.0 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| Equity in losses of investee                                            |   |                           | (.6    | ) |   |   | (.7 | ) |
| Currency transactions, net                                    |   |                           | (2.9   | ) |   |   | 6.4 |   |
| Insurance recoveries                                               |   |                           | 1.7    |   |   |   | 2.7 |   |
| Gain on litigation settlements                                          |   |                           | -      |   |   |   | 23.0 |   |
| Gain on sale of business                                                |   |                           | -      |   |   |   | 6.3 |   |
| Other, net                                                         |   |                           | 1.7    |   |   |   | .3 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
|       Total                          |   | $                              | 17.5   |   |   | $ | 51.0 |   |

|                                                                             |   | Six months ended June 30,  |      |
|----------------------------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                                             |   | 2008                                 |      |   | 2009 |   |
|                                                                             |   | (In millions)                        |      |
|                                                                             |   |                                 |      |   |   |   |
| Expected tax benefit, at U.S. federal statutory income tax rate of 35% |   | $                                    | (4.0      | ) |   | $ | (23.4 | ) |
| Incremental U.S. tax and rate differences on Equity in earnings             |   |                                 |  2.8 |   |   |   | (4.9 | ) |
| Non-U.S. tax rates                                                               |   |                                 |  -   |   |   |   | 1.8 |   |
| Nondeductible expenses                                                           |   |                                 |  -   |   |   |   | 2.2 |   |
| Nontaxable income                                                                |   |                                 |  -   |   |   |   | (.9 | ) |
| German tax attribute adjustment                                                  |   |                                 | (7.2      | ) |   |   | - |   |
| Change in reserve for uncertain tax positions                                    |   |                                 | 1.0       |   |   |   | 1.2 |   |
| U.S. state income taxes, net                                                     |   |                                 |  .3  |   |   |   | .8 |   |
| Other, net                                                                       |   |                                 | .2        |   |   |   | .3 |   |
|                                                                             |   |                                 |      |   |   |   |   |   |
|      Income tax benefit                                 |   | $                                    | (6.9      | ) |   | $ | (22.9 | ) |

----

|                                      |   | December 31, 2008 |   |   | June 30, 2009  |   |
|-------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|
|                                      |   | (In millions)          |   |
|                                      |   |                   |   |   |                     |   |
| Noncontrolling interest in subsidiaries:  |   |                   |   |   |                     |   |
|   NL Industries            |   | $                      | 45.8   |   |                     | $      | 40.4 |   |
|   Kronos Worldwide         |   |                   | 15.6   |   |                     |   | 13.5 |   |
|   CompX International      |   |                   | 11.9   |   |                     |   | 11.3 |   |
|                                      |   |                   |   |   |                     |   |   |   |
|       Total |   | $                      | 73.3   |   |                     | $      | 65.2 |   |

|                                                               |   | Six months ended June 30, |   |
|--------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                               |   | 2008                           |   |   | 2009 |   |
|                                                               |   | (In millions)                  |   |
|                                                               |   |                           |   |   |   |   |
| Noncontrolling interest in net income (loss) of subsidiaries: |   |                           |   |   |   |   |
|   NL Industries                                     |   | $                              | .6     |   |   | $ | (2.4 | ) |
|   Kronos Worldwide                                  |   |                           | .3     |   |   |   | (2.3 | ) |
|   CompX International                               |   |                           | .5     |   |   |   | (.3 | ) |
|                                                               |   |                           |   |   |   |   |   |   |
|       Total                          |   | $                              | 1.4    |   |   | $ | (5.0 | ) |

|                                                                                                |   | Six months ended June 30, 2009 |     |
|-----------------------------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                                                |   | (In millions)                            |     |
|                                                                                                |   |                                     |     |
| Net loss attributable to Valhi stockholders                                                         |   | $                                        | (39.0    | ) |
|                                                                                                |   |                                     |     |   |
| Transfers (to) from noncontrolling interest:                                                        |   |                                     |     |   |
| Increase in additional paid-in capital for purchase of 14,000 shares of Kronos common stock         |   |                                     |  .2 |   |
| Issuance of subsidiary stock                                                                        |   |                                     | .1       |   |
|                                                                                                |   |                                     |     |   |
| Net transfers (to) from noncontrolling interest                                                     |   |                                     |  .3 |   |
|                                                                                                |   |                                     |     |   |
| Net loss attributable to Valhi stockholders and change from noncontrolling interest in subsidiaries |   | $                                        | (38.7    | ) |
|                                                                                                |   |                                     |     |   |

----

|   | · | we have never settled any of these cases; |
|--------|--------|-------------------------------------------|

|   | · | no final, non-appealable adverse verdicts have ever been entered against us; and |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | we have never ultimately been found liable with respect to any such litigation matters. |
|--------|--------|-----------------------------------------------------------------------------------------|

----

|   | · | complexity and differing interpretations of governmental regulations; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | number of PRPs and their ability or willingness to fund such allocation of costs; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | financial capabilities of the PRPs and the allocation of costs among them; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | solvency of other PRPs; |
|--------|--------|-------------------------|

|   | · | multiplicity of possible solutions; and |
|--------|--------|-----------------------------------------|

|   | · | number of years of investigatory, remedial and monitoring activity required. |
|--------|--------|------------------------------------------------------------------------------|

----

|                                                                                                                                                 |   | Amount        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                                                 |   | (In millions) |   |
|                                                                                                                                                 |   |          |   |
| Balance at the beginning of the period                                                                                                               |   | $             | 52.9   |   |
| Additions charged to expense, net                                                                                                                    |   |          | 1.2    |   |
| Payments, net                                                                                                                                        |   |          | (3.8   | ) |
|                                                                                                                                                 |   |          |   |   |
|       Balance at the end of the period                                                                                 |   | $             | 50.3   |   |
|                                                                                                                                                 |   |          |   |   |
| Amounts recognized in the Condensed Consolidated Balance Sheet at the end of the period: |   |          |   |   |
|   Current liability                                                                                                                   |   | $             | 12.2   |   |
|   Noncurrent liability                                                                                                                |   |          | 38.1   |   |
|                                                                                                                                                 |   |          |   |   |
|       Total                                                                                                            |   | $             | 50.3   |   |

----

----

|   | · | to recover response and remediation costs incurred at the site; |
|--------|--------|-----------------------------------------------------------------|

|   | · | a declaration of the parties’ liability for response and remediation costs incurred at the site; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | a declaration of the parties’ liability for response and remediation costs to be incurred in the future at the site; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | a declaration regarding the obligation of Tremont to indemnify Halliburton and DII for costs and expenses attributable to the site. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | facts concerning historical operations, |
|--------------------|-----------------------------------------|

| ·   | the rate of new claims, |
|--------------------|-------------------------|

| ·   | the number of claims from which we have been dismissed and |
|--------------------|------------------------------------------------------------|

| ·   | our prior experience in the defense of these matters, |
|--------------------|-------------------------------------------------------|

----

|                                   |   | 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, 2008:                     |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Marketable securities:     |   |                    |   |   |   |   |   |   |   |   |   |   |
|     Current        |   | $                       | 8.8    |   |   | $ | - |   |   | $ | 8.8 |   |   | $ | - |   |
|     Noncurrent     |   |                    | 272.0  |   |   |   | 21.6 |   |   |   | .4 |   |   |   | 250.0 |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | (1.6   | ) |   |   | (1.6 | ) |   |   | - |   |   |   | - |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2009:                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Marketable securities:     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current        |   | $                       | 7.1    |   |   | $ | - |   |   | $ | 7.1 |   |   | $ | - |   |
|     Noncurrent     |   |                    | 275.3  |   |   |   | 25.3 |   |   |   | - |   |   |   | 250.0 |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | .8     |   |   |   | .8 |   |   |   | - |   |   |   | - |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| ·   | An aggregate of $15.0 million for an equivalent value of Canadian dollars at exchange rates ranging from Cdn. $1.25 to Cdn. $1.26 per U.S. dollar.  These contracts with U.S. Bank mature from July 2009 through December 2009 at a rate of $2.5 million per month, subject to early redemption provisions at our option.  At June 30, 2009, the actualexchange rate was Cdn. $1.15 per U.S. dollar. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An aggregate euro 21.4 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 8.68 to kroner 9.23 per euro.  These contracts with DnB Nor Bank ASA mature from July 2009 through June 2010 at a rate of euro .5 million to euro 1.7 million per month, subject to early redemption provisions at our option.  AtJune 30, 2009, the actual exchange rate was kroner 9.02 per euro. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                        |   |                   |        |   |               |   |
|-------------------------------------------------------------|--------|------------------------|-------------|--------|--------------------|--------|
|                                                        |   | December 31, 2008 |        |   | June 30, 2009 |   |
|                                                        |   | Carrying amount   |        |   | Fairvalue          |   |   | Carrying amount |   |   | Fairvalue |   |
|                                                        |   | (In millions)          |        |
|                                                        |   |                   |        |   |               |   |   |   |   |   |   |   |
| Cash, cash equivalents and restricted cash equivalents |   | $                      |   46.4 |   |               | $      |  46.4 |   |   | $ |  109.1 |   |   | $ |  109.1 |   |
| Promissory note receivable                                  |   |                   | 15.0        |   |               |   | 15.0 |   |   |   | 15.0 |   |   |   | 15.0 |   |
|                                                        |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt (excluding capitalized leases):              |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
|   Publicly-traded fixed rate debt -               |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
|     KII Senior Secured Notes            |   | $                      | 560.0       |   |               | $      | 129.4 |   |   | $ | 561.3 |   |   | $ | 214.1 |   |
|   Snake River Sugar Company fixed rate loans      |   |                   | 250.0       |   |               |   | 250.0 |   |   |   | 250.0 |   |   |   | 250.0 |   |
|   CompX variable rate promissory note             |   |                   | 43.0        |   |               |   | 43.0 |   |   |   | 42.2 |   |   |   | 42.2 |   |
|   Variable rate debt                              |   |                   | 63.2        |   |               |   | 63.2 |   |   |   | 174.9 |   |   |   | 174.9 |   |
|   Other fixed-rate debt                           |   |                   | .9          |   |               |   | .9 |   |   |   | .7 |   |   |   | .7 |   |
|                                                        |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Noncontrolling interest in:                                 |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
|   NL common stock                                 |   | $                      | 45.8        |   |               | $      | 110.0 |   |   | $ | 40.4 |   |   | $ | 60.7 |   |
|   Kronos common stock                             |   |                   | 15.6        |   |               |   | 27.6 |   |   |   | 13.5 |   |   |   | 15.7 |   |
|   CompX common stock                              |   |                   | 11.9        |   |               |   | 8.5 |   |   |   | 11.3 |   |   |   | 10.0 |   |
|                                                        |   |                   |        |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Valhi common stockholders' equity                           |   | $                      | 468.8       |   |               | $      | 1,223.4 |   |   | $ | 417.7 |   |   | $ | 849.6 |   |

----

----

----

|   | • | Chemicals – Our chemicals segment is operated through our majority ownership of Kronos.  Kronos is a leading global producer and marketer of value-added titanium dioxide pigment products (“TiO2”).  TiO2 isused for a variety of manufacturing applications, including plastics, paints, paper and other industrial products. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Component Products – We operate in the component products industry through our majority ownership of CompX.  CompX is a leading global manufacturer of security products, precision ball bearing slides and ergonomic computer support systems used in the office furniture, transportation, tool storage and a variety of other industries.  CompXis also a leading manufacturer of stainless steel exhaust systems, gauges and throttle controls for the performance marine industry. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Waste Management – WCS is our wholly-owned subsidiary which owns and operates a West Texas facility for the processing, treatment, storage and disposal of hazardous, toxic and certain types of low-level radioactive waste.  WCS obtained a byproduct disposal license in 2008 and is in the process of constructing the byproduct disposal facility,which is expected to begin disposal operations in September 2009.  In January 2009 WCS received a low-level radioactive waste disposal permit, and construction of the low-level radioactive waste facility is currently expected to begin in the fourth quarter of 2009, following the completion of some pre-construction licensing and administrative matters, and is expected to be operational in the fourth quarter of 2010. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | · | The cyclicality of certain of our businesses (such as Kronos’ TiO2 operations); |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | Customer inventory levels (such as the extent to which Kronos’ customers may, from time to time, accelerate purchases of TiO2 in advance of anticipated price increases or defer purchases of TiO2inadvance of anticipated price decreases; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | 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, among other things, TiO2); |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Competitive products and substitute products; |
|--------|--------|-----------------------------------------------|

|   | · | Possible disruption of our business or increases in the cost of doing business resulting from terrorist activities or global conflicts; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | The impact of pricing and production decisions; |
|--------|--------|-------------------------------------------------|

|   | · | Competitive technology positions; |
|--------|--------|-----------------------------------|

|   | · | The introduction of trade barriers; |
|--------|--------|-------------------------------------|

|   | · | Restructuring transactions involving us and our affiliates; |
|--------|--------|-------------------------------------------------------------|

|   | · | Potential consolidation or solvency of our competitors; |
|--------|--------|---------------------------------------------------------|

|   | · | Demand for high performance marine components; |
|--------|--------|------------------------------------------------|

|   | · | The ability of our subsidiaries to pay us dividends (such as Kronos’ suspension of its dividend in 2009); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Uncertainties associated with new product development; |
|--------|--------|--------------------------------------------------------|

|   | · | Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone, the Canadian dollar and the New Taiwan dollar); |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime and transportation interruptions); |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The timing and amounts of insurance recoveries; |
|--------|--------|-------------------------------------------------|

|   | · | Our ability to renew, amend, refinance or establish credit facilities; |
|--------|--------|------------------------------------------------------------------------|

|   | · | Our ability to maintain sufficient liquidity; |
|--------|--------|-----------------------------------------------|

|   | · | The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | The ultimate ability to utilize income tax attributes or changes in income tax rates related to such attributes, the benefit of which has been recognized under the more likely than not recognition criteria (such as Kronos’ ability to utilize its German net operating loss carryforwards); |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities, or new developments regarding environmental remediation at sites related to our former operations); |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Government laws and regulations and possible changes therein (such as changes in government regulations which might impose various obligations on present and former manufacturers of lead pigment and lead-based paint, including NL, with respect to asserted health concerns associated with the use of such products); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The ultimate resolution of pending litigation (such as NL's lead pigment litigation, environmental and other litigation and CompX’s patent litigation); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to comply with covenants contained in our revolving bank credit facilities; and |
|--------|--------|---------------------------------------------------------------------------------------------|

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

----

|   |     · | lower operating income from each of our Chemicals, Component Products and Waste Management Segments in 2009; |
|--------|---------------------------|--------------------------------------------------------------------------------------------------------------|

|   |     · | a gain from the second closing of a litigation settlement in 2009; |
|--------|---------------------------|--------------------------------------------------------------------|

| ·   | interest income related to an escrow fund recognized by NL in 2008; and |
|--------------------|-------------------------------------------------------------------------|

|   |     · | an income tax benefit recognized by our Chemicals Segment in 2008. |
|--------|---------------------------|--------------------------------------------------------------------|

|   |     · | lower operating income from each of our Chemicals, Component Products and Waste Management Segments in 2009; |
|--------|---------------------------|--------------------------------------------------------------------------------------------------------------|

|   |     · | gain from a litigation settlements in 2009; |
|--------|---------------------------|---------------------------------------------|

|   |     · | a gain from a sale of a business in 2009; |
|--------|---------------------------|-------------------------------------------|

| ·   | interest income related to an escrow fund recognized by NL in 2008; and |
|--------------------|-------------------------------------------------------------------------|

|   |     · | an income tax benefit recognized by our Chemicals Segment in 2008. |
|--------|---------------------------|--------------------------------------------------------------------|

----

|   | · | lower expected operating income from our Chemicals Segment.   In late 2008, as a result of the decrease in global demand, our Chemicals Segment experienced a build up in inventory levels. In order to decrease inventory levels and improve liquidity, we implemented production curtailments.  Through these curtailments we have successfully reduced our Chemicals Segment’s inventory levelsand increased our liquidity, although the resulting curtailments led to a net loss due to the large amount of unabsorbed fixed production costs we charged to expense as incurred; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | recording a lower gain from litigation settlements. |
|--------|--------|-----------------------------------------------------|

----

|   | · | TiO2 average selling prices; |
|--------|--------|------------------------------|

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

|   | · | TiO2 sales and production volumes; and |
|--------|--------|----------------------------------------|

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

|                                                            |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|-----------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                            |   | 2008                        |   |   | 2009                      |   |   | % Change |   |   | 2008 |   |   | 2009 |   |   | % Change |   |
|                                                            |   | (Dollars in millions)       |   |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                       |   | $                           | 391.8  |   |                      | $      | 282.1 |   |   |   | (28 | )% |   | $ | 724.4 |   |   | $ | 530.1 |   |   |   | (27 | )% |
| Cost of sales                                                   |   |                        | 333.3  |   |                      |   | 268.4 |   |   |   | (19 | ) |   |   | 609.3 |   |   |   | 512.8 |   |   |   | (16 | ) |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                                    |   | $                           | 58.5   |   |                      | $      | 13.7 |   |   |   | (77 | ) |   | $ | 115.1 |   |   | $ | 17.3 |   |   |   | (85 | ) |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                                         |   | $                           | 10.8   |   |                      | $      | (20.0 | ) |   |   |   |   |   | $ | 21.8 |   |   | $ | (45.5 | ) |   |   |   |   |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of net sales:                                           |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales                                       |   |                        | 85     | %      |                      |   | 95 | % |   |   |   |   |   |   | 84 | % |   |   | 97 | % |   |   |   |   |
|   Gross margin                                        |   |                        | 15     |   |                      |   | 5 |   |   |   |   |   |   |   | 16 |   |   |   | 3 |   |   |   |   |   |
|   Operating income                                    |   |                        | 3      |   |                      |   | (7 | ) |   |   |   |   |   |   | 3 |   |   |   | (9 | ) |   |   |   |   |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ti02 operating statistics:                                      |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Sales volumes*                                      |   |                        | 141    |   |                      |   | 114 |   |   |   | (19 | )% |   |   | 269 |   |   |   | 211 |   |   |   | (22 | )% |
|   Production volumes*                                 |   |                        | 133    |   |                      |   | 87 |   |   |   | (34 | ) |   |   | 265 |   |   |   | 151 |   |   |   | (43 | ) |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent change in net sales:                                    |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Ti02 product pricing                                |   |                        |   |   |                      |   |   |   |   |   | 1 | % |   |   |   |   |   |   |   |   |   |   | 3 | % |
|   Ti02 sales volumes                                  |   |                        |   |   |                      |   |   |   |   |   | (19 | ) |   |   |   |   |   |   |   |   |   |   | (22 | ) |
|   Ti02 product mix                                    |   |                        |   |   |                      |   |   |   |   |   | (3 | ) |   |   |   |   |   |   |   |   |   |   | (3 | ) |
|   Changes in currency   exchange rates |   |                        |   |   |                      |   |   |   |   |   | (7 | ) |   |   |   |   |   |   |   |   |   |   | (5 | ) |
|                                                            |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total                       |   |                        |   |   |                      |   |   |   |   |   | (28 | )% |   |   |   |   |   |   |   |   |   |   | (27 | )% |

----

----

|                         |   | Three months endedJune 30, 2009 vs. 2008 |   |   | Six months endedJune 30, 2009 vs. 2008 |   |
|------------------------------|--------|-----------------------------------------------|--------|--------|---------------------------------------------|--------|
|                         |   | Increase (decrease) in millions               |   |
| Impact on:                   |   |                                          |   |   |                                        |   |
|   Net sales        |   | $                                             | (26    | )      |                                        | $      | (38 | ) |
|   Operating income |   |                                          | 20     |   |                                        |   | 48 |   |

----

|                         |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                         |   | 2008                             |   |   | 2009                           |   |   | % Change |   |   | 2008 |   |   | 2009 |   |   | % Change |   |
|                         |   | (Dollars in millions)            |   |
|                         |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                    |   | $                                | 43.7   |   |                           | $      | 29.2 |   |   |   | (33 | )% |   | $ | 84.2 |   |   | $ | 57.7 |   |   |   | (31 | )% |
| Cost of sales                |   |                             | 32.7   |   |                           |   | 23.0 |   |   |   | (30 | ) |   |   | 63.8 |   |   |   | 46.7 |   |   |   | (27 | ) |
|                         |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                 |   | $                                | 11.0   |   |                           | $      | 6.2 |   |   |   | (43 | )% |   | $ | 20.4 |   |   | $ | 11.0 |   |   |   | (46 | )% |
|                         |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)      |   | $                                | 4.5    |   |                           | $      | (.9 | ) |   |   |   |   |   | $ | 7.5 |   |   | $ | (1.9 | ) |   |   |   |   |
|                         |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of net sales:        |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales    |   |                             | 75     | %      |                           |   | 79 | % |   |   |   |   |   |   | 76 | % |   |   | 81 | % |   |   |   |   |
|   Gross margin     |   |                             | 25     |   |                           |   | 21 |   |   |   |   |   |   |   | 24 |   |   |   | 19 |   |   |   |   |   |
|   Operating income |   |                             | 10     |   |                           |   | (3 | ) |   |   |   |   |   |   | 9 |   |   |   | (3 | ) |   |   |   |   |

----

|                         |   | Three months endedJune 30, 2009 vs. 2008 |   |   | Six months endedJune 30, 2009 vs. 2008 |   |
|------------------------------|--------|-----------------------------------------------|--------|--------|---------------------------------------------|--------|
|                         |   | Increase (decrease) in millions               |   |
| Impact on:                   |   |                                          |   |   |                                        |   |
|   Net sales        |   | $                                             | (.4    | )      |                                        | $      | (.9 | ) |
|   Operating income |   |                                          | .6     |   |                                        |   | 1.3 |   |

----

|           |   | Three months ended |   |   | Six months ended |   |
|----------------|--------|--------------------|--------|--------|------------------|--------|
|           |   | June 30,           |   |   | June 30,         |   |
|           |   | 2008               |   |   | 2009             |   |   | 2008 |   |   | 2009 |   |
|           |   | (In millions)      |   |
|           |   |               |   |   |             |   |   |   |   |   |   |   |
| Net sales      |   | $                  | .6     |   |             | $      | .8 |   |   | $ | 1.5 |   |   | $ | 1.6 |   |
| Cost of sales  |   |               | 3.7    |   |             |   | 4.5 |   |   |   | 7.0 |   |   |   | 9.1 |   |
|           |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin   |   | $                  | (3.1   | )      |             | $      | (3.7 | ) |   | $ | (5.5 | ) |   | $ | (7.5 | ) |
|           |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss |   | $                  | (5.5   | )      |             | $      | (6.7 | ) |   | $ | (9.9 | ) |   | $ | (13.2 | ) |

----

----

| ·   | litigation and related costs at NL of $2.8 million in the second quarter of 2009 compared to $5.6 million in the same period in 2008 and $5.3 million in the first six months of 2009 compared to $8.7 million in the same period in 2008 and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | environmental expenses of $.3 million in the second quarter of 2009, compared to $.1 million in the same period of 2008 and $1.2 million in the first six months of 2009 compared to nil in the same period of 2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

|   | · | lower consolidated operating income in 2009 of $80.0 million, due to the operating losses at all of our segments in 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | lower cash paid for interest in 2009 of $3.0 million primarily due to favorable changes in currency exchange rates; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | proceeds from a litigation settlement of $11.8 million received in January 2009; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | lower general corporate dividend and interest income in 2009 of $5.1 million principally due to $4.3 million of interest received from certain escrow funds of NL in 2008; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased net distributions from our TiO2 joint venture in 2009 of $1.7 million; and |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Changes in receivables, inventories, payables and accrued liabilities in 2009 provided $97.1 million of net cash, an improvement of $150.1 million compared to 2008, primarily due to decreases in Kronos’ inventory levels. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kronos’ average days sales outstanding (“DSO”) increased from December 31, 2008 to June 30, 2009 due to the timing of collection on higher accounts receivable balances at the end of June; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kronos’ average days sales in inventory (“DSI”) decreased from December 31, 2008 to June 30, 2009 as our TiO2 sales volumes exceeded our TiO2 production volumes in the first six months of 2009; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s average DSO increased from December 31, 2008 to June 30, 2009 due to the timing of collection of lower accounts receivables balance at the end of June; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s average DSI increased from December 31, 2008 to June 30, 2009 primarily due to lower sales in the first six months of 2009. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                | December 31, | June 30, | December 31, | June 30, |
|-------------------------------------|--------------|---------------|--------------|---------------|
|                                | 2007         | 2008          | 2008         | 2009          |
|                                |         |          |         |          |
| Kronos:                             |         |          |         |          |
|   Days sales outstanding  | 63 days      | 70 days       | 64 days      | 67 days       |
|   Days sales in inventory | 59 days      | 49 days       | 113 days     | 42 days       |
|                                |         |          |         |          |
| CompX:                              |         |          |         |          |
|   Days sales outstanding  | 44 days      | 42 days       | 41 days      | 44 days       |
|   Days sales in inventory | 63 days      | 72 days       | 70 days      | 74 days       |

|                                             |   | Six months ended June 30, |   |
|--------------------------------------------------|--------|--------------------------------|--------|
|                                             |   | 2008                           |   |   | 2009 |   |
|                                             |   | (In millions)                  |   |
|                                             |   |                           |   |   |   |   |
| Cash provided by (used in) operating activities: |   |                           |   |   |   |   |
|   Kronos                               |   | $                              | (31.5  | ) |   | $ | 44.5 |   |
|   CompX                                |   |                           | 5.3    |   |   |   | 5.5 |   |
|   Waste Control Specialists  |   |                           | (5.3   | ) |   |   | (7.8 | ) |
|   NL Parent                       |   |                           | 5.7    |   |   |   | (3.1 | ) |
|   Tremont                              |   |                           | (.5    | ) |   |   | 8.8 |   |
|   Valhi exclusive of subsidiaries      |   |                           | 22.8   |   |   |   | 15.5 |   |
|   Other                                |   |                           | (.5    | ) |   |   | 1.1 |   |
|   Eliminations                         |   |                           | (36.0  | ) |   |   | (21.8 | ) |
|                                             |   |                           |   |   |   |   |   |   |
|       Total   |   | $                              | (40.0  | ) |   | $ | 42.7 |   |

|   | · | $22.4 million in our Waste Management Segment; |
|--------|--------|------------------------------------------------|

|   | · | $14.8 million in our Chemicals Segment; and |
|--------|--------|---------------------------------------------|

|   | · | $1.2 million in our Component Products Segment. |
|--------|--------|-------------------------------------------------|

|   | · | purchased Kronos common stock for $.1 million; |
|--------|--------|------------------------------------------------|

|   | · | purchased other marketable securities of $4.1 million; and |
|--------|--------|------------------------------------------------------------|

|   | · | sold other marketable securities for proceeds of $3.5 million. |
|--------|--------|----------------------------------------------------------------|

----

|   | · | KII’s euro 400 million aggregate principal amount of its 6.5% Senior Secured Notes ($561.3 million) due in 2013; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | our $250 million loan from Snake River Sugar Company due in 2027; |
|--------|--------|-------------------------------------------------------------------|

|   | · | KII's European revolving credit facility ($71.8 million outstanding) due in 2011; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | CompX’s promissory note payable to TIMET ($42.2 million outstanding) which has quarterly principal repayments of $250,000 and is due in 2014; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kronos’ U.S. revolving credit facility ($15.6 million outstanding) due in 2011; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | Valhi’s revolving bank credit facility ($35.3 million outstanding) due in 2009; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | A wholly-owned subsidiary of Valhi's promissory demand note payable to Contran ($10 million outstanding) due December 31, 2010; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | approximately $7.3 million of other indebtedness. |
|--------|--------|---------------------------------------------------|

----

----

----

|   | · | $82.3(1) million under Kronos’ various U.S. and non-U.S. credit facilities; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | $22.5 million under Valhi’s revolving bank credit facility; and |
|--------|--------|-----------------------------------------------------------------------|

|   | · | $37.5 million under CompX’s revolving credit facility. |
|--------|--------|--------------------------------------------------------------|

| (1) | Includes $40.8 million under the European Credit facility which cannot currently be drawn upon because we are not in compliance with a debt ratio as noted above. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                             |   |          |   |
|--------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                             |   | Amount        |   |
|                                                                                             |   | (In millions) |   |
|                                                                                             |   |          |   |
|   Kronos                                                                               |   | $             | 74.9   |   |
|   NL Parent                                                                       |   |          | 31.4   |   |
|   CompX                                                                                |   |          | 15.0   |   |
|   Tremont                                                                              |   |          | 8.1    |   |
|   Valhi exclusive of its subsidiaries                                                  |   |          | 10.3   |   |
|   Waste Control Specialists                                                  |   |          | 1.8    |   |
|                                                                                             |   |          |   |   |
|   Total cash, cash equivalents and marketable securities |   | $             | 141.5  |   |

----

----

|   | · | certain income tax examinations which are underway in various U.S. and non-U.S. jurisdictions; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | certain environmental remediation matters involving NL, Tremont and Valhi; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | certain litigation related to NL’s former involvement in the manufacture of lead pigment and lead-based paint; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | certain other litigation to which we are a party. |
|--------|--------|---------------------------------------------------|

----

----

|   | · | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our 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 our receipts and expenditures are made only in accordance with authorizations of our management and directors, and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

----

----

|   | Item No. |   | Exhibit Index |
|--------|----------|--------|---------------|
|   |     |   |          |
|   | 31.1     |   | Certification |
|   |     |   |          |
|   | 31.2     |   | Certification |
|   |     |   |          |
|   | 32.1     |   | Certification |

----

|                                                                                                    |   |           VALHI, INC.          (Registrant) |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                    |   |                                                                                                                                            |
|                                                                                                    |   |                                                                                                                                            |
|                                                                                                    |   |                                                                                                                                            |
| Date   August 6, 2009             |   | /s/ Bobby D. O’Brien                                           |
|                                                                                                    |   | Bobby D. O’Brien(Vice President and Chief Financial Officer)                                                                         |
|                                                                                                    |   |                                                                                                                                            |
| Date   August 6, 2009                  |   | /s/ Gregory M. Swalwell                                                             |
|                                                                                                    |   | Gregory M. Swalwell(Vice President and Controller, Principal Accounting Officer)                                                           |
|                                                                                                    |   |                                                                                                                                            |

----