| For the quarter ended June 30, 2010 | 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, 2009 and June 30, 2010 (unaudited)                                                                                                                         |  3       |
|                                                                                                                                                                                                                       |          |
| Condensed Consolidated Statements of Operations (unaudited)  – Three and six months ended June 30, 2009 and 2010                                                                                                |  5       |
|                                                                                                                                                                                                                       |          |
| Condensed Consolidated Statements of Cash Flows (unaudited) – Six months ended June 30, 2009 and 2010                                                                                                           |  6       |
|                                                                                                                                                                                                                       |          |
| Condensed Consolidated Statement of Equity and Comprehensive Income –  Six months ended  June 30, 2010 (unaudited)                                                                          |   8 |
|                                                                                                                                                                                                                       |          |
| Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                                                                                      |  9       |
|                                                                                                                                                                                                                       |          |
| Item 2.                   Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 29       |
|                                                                                                                                                                                                                       |          |
| Item 3.                   Quantitative and Qualitative Disclosures About Market Risk                                   | 50            |
|                                                                                                                                                                                                                       |          |
| Item 4.                   Controls and Procedures                                                                           | 51            |
|                                                                                                                                                                                                                       |          |
| Part II.                      OTHER INFORMATION                                                              |          |
|                                                                                                                                                                                                                       |          |
| Item 1.                   Legal Proceedings.                                                                                | 52            |
|                                                                                                                                                                                                                       |          |
| Item 1A.                              Risk Factors.                  | 53            |
|                                                                                                                                                                                                                       |          |
| Item 6.                   Exhibits.                                                                                         | 53            |
|                                                                                                                                                                                                                       |          |

----

|               ASSETS |   | December 31, 2009 |    |   | June 30, 2010   |   |
|--------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------------------|--------|
|                                                                                       |   |                   |    |   | (unaudited)               |   |
|                                                                                       |   |                   |    |   |                      |   |
| Current assets:                                                                       |   |                   |    |   |                      |   |
|   Cash and cash equivalents                                       |   | $                      | 68.7    |   |                      | $      | 46.2 |   |
|   Restricted cash equivalents                                          |   |                   | 8.9     |   |                      |   | 9.6 |   |
|   Marketable securities                                                     |   |                   | 6.1     |   |                      |   | 1.6 |   |
|   Accounts and other receivables, net                        |   |                   | 222.9   |   |                      |   | 269.6 |   |
|   Inventories, net                                                          |   |                   | 312.0   |   |                      |   | 258.3 |   |
|   Prepaid expenses and other                                           |   |                   | 17.7    |   |                      |   | 14.9 |   |
|   Deferred income taxes                                                |   |                   | 11.9    |   |                      |   | 11.9 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total current assets                         |   |                   | 648.2   |   |                      |   | 612.1 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
| Other assets:                                                                         |   |                   |    |   |                      |   |   |   |
|   Marketable securities                                                          |   |                   | 279.5   |   |                      |   | 295.3 |   |
|   Investment in affiliates                                             |   |                   | 116.1   |   |                      |   | 114.6 |   |
|   Goodwill                                                                       |   |                   | 396.9   |   |                      |   | 396.9 |   |
|   Deferred income taxes                                                |   |                   | 185.5   |   |                      |   | 183.6 |   |
|   Other assets                                                              |   |                   | 103.5   |   |                      |   | 102.2 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total other assets                           |   |                   | 1,081.5 |   |                      |   | 1,092.6 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
| Property and equipment:                                                          |   |                   |    |   |                      |   |   |   |
|   Land                                                                           |   |                   | 56.3    |   |                      |   | 51.4 |   |
|   Buildings                                                                      |   |                   | 293.8   |   |                      |   | 269.1 |   |
|   Equipment                                                                      |   |                   | 1,176.1 |   |                      |   | 1,085.4 |   |
|   Mining properties                                                         |   |                   | 68.4    |   |                      |   | 59.4 |   |
|   Construction in progress                                             |   |                   | 20.7    |   |                      |   | 21.4 |   |
|                                                                                       |   |                   | 1,615.3 |   |                      |   | 1,486.7 |   |
|   Less accumulated depreciation                                        |   |                   | 934.7   |   |                      |   | 878.4 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Net property and equipment              |   |                   | 680.6   |   |                      |   | 608.3 |   |
|                                                                                       |   |                   |    |   |                      |   |   |   |
|       Total assets                                      |   | $                      | 2,410.3 |   |                      | $      | 2,313.0 |   |

----

|    LIABILITIES AND EQUITY                                       |   | December 31, 2009 |    |   | June 30, 2010 |   |
|--------------------------------------------------------------------------------|--------|------------------------|---------|--------|--------------------|--------|
|                                                                           |   |                   |    |   | (unaudited)        |   |
|                                                                           |   |                   |    |   |               |   |
| Current liabilities:                                                      |   |                   |    |   |               |   |
|   Current maturities of long-term debt           |   | $                      | 2.5     |   |               | $      | 23.6 |   |
|   Accounts payable and accrued liabilities                      |   |                   | 288.1   |   |               |   | 240.5 |   |
|   Income taxes                                                  |   |                   | 3.9     |   |               |   | 3.9 |   |
|   Deferred income taxes                                    |   |                   | 4.7     |   |               |   | 3.8 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total current liabilities        |   |                   | 299.2   |   |               |   | 271.8 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Noncurrent liabilities:                                                   |   |                   |    |   |               |   |   |   |
|   Long-term debt                                                |   |                   | 988.4   |   |               |   | 953.8 |   |
|   Deferred income taxes                                    |   |                   | 360.7   |   |               |   | 363.8 |   |
|   Accrued pension costs                                    |   |                   | 130.5   |   |               |   | 111.8 |   |
|   Accrued environmental costs                              |   |                   | 37.9    |   |               |   | 37.2 |   |
|   Accrued postretirement benefits costs                         |   |                   | 25.5    |   |               |   | 25.7 |   |
|   Other liabilities                                             |   |                   | 69.7    |   |               |   | 62.6 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total noncurrent liabilities     |   |                   | 1,612.7 |   |               |   | 1,554.9 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Equity:                                                                        |   |                   |    |   |               |   |   |   |
|   Valhi stockholders’ equity:                                  |   |                   |    |   |               |   |   |   |
|     Preferred stock                                   |   |                   | 667.3   |   |               |   | 667.3 |   |
|     Common stock                                      |   |                   | 1.2     |   |               |   | 1.2 |   |
|     Additional paid-in capital                   |   |                   | -       |   |               |   | - |   |
|     Accumulated deficit                                    |   |                   | (197.7  | )      |               |   | (204.1 | ) |
|     Accumulated other comprehensive loss    |   |                   | (3.2    | )      |               |   | (8.3 | ) |
|     Treasury stock                                    |   |                   | (38.9   | )      |               |   | (38.9 | ) |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total Valhi stockholders' equity |   |                   | 428.7   |   |               |   | 417.2 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
| Noncontrolling interest in subsidiaries                                   |   |                   | 69.7    |   |               |   | 69.1 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total equity                          |   |                   | 498.4   |   |               |   | 486.3 |   |
|                                                                           |   |                   |    |   |               |   |   |   |
|       Total liabilities and equity     |   | $                      | 2,410.3 |   |               | $      | 2,313.0 |   |
|                                                                           |   |                   |    |   |               |   |   |   |

----

|                                                                                                       |   | Three months ended |        |   | Six months ended |   |
|------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|------------------|--------|
|                                                                                                       |   | June 30,           |        |   | June 30,         |   |
|                                                                                                       |   | 2009               |        |   | 2010             |   |   | 2009 |   |   | 2010 |   |
|                                                                                                       |   | (unaudited)        |        |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |
| Revenues and other income:                                                                                 |   |               |        |   |             |   |   |   |   |   |   |   |
|   Net sales                                                                                      |   | $                  | 312.1       |   |             | $      | 415.7 |   |   | $ | 589.4 |   |   | $ | 772.5 |   |
|   Other income, net                                                                              |   |               | 20.8        |   |             |   | 3.9 |   |   |   | 51.0 |   |   |   | 31.9 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Total revenues and other income                                                    |   |               | 332.9       |   |             |   | 419.6 |   |   |   | 640.4 |   |   |   | 804.4 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                                                        |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales                                                                                  |   |               | 295.9       |   |             |   | 326.3 |   |   |   | 568.6 |   |   |   | 617.0 |   |
|   Selling, general and administrative                                                            |   |               | 53.9        |   |             |   | 58.1 |   |   |   | 105.3 |   |   |   | 116.4 |   |
|   Litigation settlement and contract   termination                                |   |               |  -     |   |             |   |  - |   |   |   |  - |   |   |   |  33.3 |   |
|   Assets held for sale write-down                                                                |   |               | .7          |   |             |   | - |   |   |   | .7 |   |   |   | - |   |
|   Interest                                                                                       |   |               | 16.7        |   |             |   | 17.0 |   |   |   | 32.7 |   |   |   | 34.4 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|       Total costs and expenses                                               |   |               | 367.2       |   |             |   | 401.4 |   |   |   | 707.3 |   |   |   | 801.1 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Income (loss) before income taxes                                                  |   |               | (34.3       | )      |             |   | 18.2 |   |   |   | (66.9 | ) |   |   | 3.3 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes (benefit)                                                                       |   |               | (13.7       | )      |             |   | 11.8 |   |   |   | (22.9 | ) |   |   | (18.2 | ) |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Net income (loss)                                                                  |   |               | (20.6       | )      |             |   | 6.4 |   |   |   | (44.0 | ) |   |   | 21.5 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Noncontrolling interest in net income (loss) of subsidiaries                                          |   |               | (1.6        | )      |             |   |  1.9 |   |   |   | (5.0 | ) |   |   |  3.4 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Net income (loss) attributable to Valhi      stockholders |   | $                  | (19.0       | )      |             | $      | 4.5 |   |   | $ | (39.0 | ) |   | $ | 18.1 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Amounts attributable to Valhi stockholders:                                                                |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net income (loss) per share                                                              |   | $                  | (.16        | )      |             | $      | .04 |   |   | $ | (.34 | ) |   | $ | .14 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends per share                                                                                   |   | $                  | .10         |   |             | $      | .10 |   |   | $ | .20 |   |   | $ | .20 |   |
|                                                                                                       |   |               |        |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares Outstanding                                                 |   |               |  114.3 |   |             |   |  114.3 |   |   |   |  114.3 |   |   |   |  114.3 |   |

----

|                                                                                                                                                               |   | Six months ended June 30, |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|
|                                                                                                                                                               |   | 2009                           |       |   | 2010 |   |
|                                                                                                                                                               |   | (unaudited)                    |       |
|                                                                                                                                                               |   |                           |       |   |   |   |
| Cash flows from operating activities:                                                                                                          |   |                           |       |   |   |   |
|   Net income (loss)                                                                                                                                 |   | $                              | (44.0      | ) |   | $ | 21.5 |   |
|   Depreciation and amortization                                                                                                                |   |                           | 29.2       |   |   |   | 31.6 |   |
|   Gain on sale of business                                                                                                                               |   |                           | (6.3       | ) |   |   | - |   |
|   Gain on litigation settlement                                                                                                                          |   |                           | (11.1      | ) |   |   | - |   |
|   Accrued litigation settlement and contract termination                                                                                                 |   |                           | -          |   |   |   | 33.3 |   |
|   Litigation setttlment payments                                                                                                                         |   |                           | -          |   |   |   | (19.0 | ) |
|   Assets held for sale write-down                                                                                                                        |   |                           | .7         |   |   |   | - |   |
|   Benefit plan expense greater (less) than cash funding   requirements:                                                    |   |                           |       |   |   |   |   |   |
|     Defined benefit pension expense                                                                                                            |   |                           | (2.4       | ) |   |   | 1.1 |   |
|     Other postretirement benefit expense                                                                                                       |   |                           | .1         |   |   |   | .1 |   |
|   Deferred income taxes                                                                                                                        |   |                           | (30.6      | ) |   |   | (24.2 | ) |
|   Net distributions from Ti02 manufacturing joint venture                                                                                 |   |                           | 4.6        |   |   |   | 1.5 |   |
|   Other, net                                                                                                                                        |   |                           | 2.8        |   |   |   | 2.7 |   |
|   Change in assets and liabilities:                                                                                                  |   |                           |       |   |   |   |   |   |
|     Accounts and other receivables, net                                                                                    |   |                           | (23.6      | ) |   |   | (89.3 | ) |
|     Inventories, net                                                                                                                      |   |                           | 139.0      |   |   |   | 26.2 |   |
|     Accounts payable and accrued liabilities                                                                               |   |                           | (20.3      | ) |   |   | (21.7 | ) |
|     Accounts with affiliates                                                                                                         |   |                           | (2.5       | ) |   |   | 19.5 |   |
|     Income taxes                                                                                                                          |   |                           | 1.8        |   |   |   | 1.1 |   |
|     Other, net                                                                                                                            |   |                           | 5.3        |   |   |   | 4.5 |   |
|                                                                                                                                                               |   |                           |       |   |   |   |   |   |
|         Net cash provided by (used in)         operating activities |   |                           |  42.7 |   |   |   | (11.1 | ) |
|                                                                                                                                                               |   |                           |       |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                          |   |                           |       |   |   |   |   |   |
|   Capital expenditures                                                                                                                              |   |                           | (38.4      | ) |   |   | (18.6 | ) |
|   Capitalized permit costs                                                                                                                               |   |                           | (4.2       | ) |   |   | (1.2 | ) |
|   Purchases of marketable securities                                                                                                                     |   |                           | (4.1       | ) |   |   | (7.5 | ) |
|   Proceeds from:                                                                                                                                         |   |                           |       |   |   |   |   |   |
|     Disposal of marketable securities                                                                                                |   |                           | 3.5        |   |   |   | 2.6 |   |
|     Disposal of restricted marketable securities                                                                                               |   |                           | -          |   |   |   | 5.2 |   |
|     Sale of business                                                                                                                           |   |                           | 6.7        |   |   |   | .5 |   |
|     Real estate-related litigation settlement                                                                                                  |   |                           | 11.8       |   |   |   | - |   |
|   Change in restricted cash equivalents, net                                                                                    |   |                           | .4         |   |   |   | (.7 | ) |
|   Other, net                                                                                                                                        |   |                           | .3         |   |   |   | (.1 | ) |
|                                                                                                                                                               |   |                           |       |   |   |   |   |   |
|         Net cash used in investing activities                                                     |   |                           | (24.0      | ) |   |   | (19.8 | ) |
|                                                                                                                                                               |   |                           |       |   |   |   |   |   |

----

|                                                                                                                                                    |   | Six months ended June 30, |           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------------|
|                                                                                                                                                    |   | 2009                           |           |   | 2010 |   |
|                                                                                                                                                    |   | (unaudited)                    |           |
|                                                                                                                                                    |   |                           |           |   |   |   |
| Cash flows from financing activities:                                                                                                                   |   |                           |           |   |   |   |
|   Indebtedness:                                                                                                                               |   |                           |           |   |   |   |
|     Borrowings                                                                                                                      |   | $                              | 210.0          |   |   | $ | 251.1 |   |
|     Principal payments                                                                                                         |   |                           | (142.7         | ) |   |   | (207.6 | ) |
|     Deferred financing costs paid                                                                                                   |   |                           | (.1            | ) |   |   | - |   |
|   Purchases of Kronos common stock                                                                                                            |   |                           | (.1            | ) |   |   | - |   |
|   Valhi cash dividends paid                                                                                                              |   |                           | (22.7          | ) |   |   | (22.7 | ) |
|   Distributions to noncontrolling interest in   subsidiaries                                                         |   |                           | (2.5           | ) |   |   | (2.5 | ) |
|   Purchase of noncontrolling interest in subsidiary                                                                                           |   |                           | -              |   |   |   | (7.0 | ) |
|   Issuance of common stock and other                                                                                                          |   |                           | .1             |   |   |   | - |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
|       Net cash provided by financing activities                                                                 |   |                           | 42.0           |   |   |   | 11.3 |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
| Cash and cash equivalents – net change from:                                                                   |   |                           |           |   |   |   |   |   |
|   Operating, investing and financing activities                                                                           |   |                           | 60.7           |   |   |   | (19.6 | ) |
|   Currency translation                                                                                                                   |   |                           | 2.3            |   |   |   | (2.9 | ) |
| Cash and cash equivalents at beginning of period                                                                          |   |                           | 37.0           |   |   |   | 68.7 |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                                                |   | $                              | 100.0          |   |   | $ | 46.2 |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
| Supplemental disclosures:                                                                                                                          |   |                           |           |   |   |   |   |   |
|   Cash paid for:                                                                                                                    |   |                           |           |   |   |   |   |   |
|     Interest, net of amounts capitalized                                                                        |   | $                              | 32.4           |   |   | $ | 32.4 |   |
|     Income taxes paid (refunded), net                                                                                     |   |                           | 4.0            |   |   |   | (12.2 | ) |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
| Noncash investing activities:                                                                                                                           |   |                           |           |   |   |   |   |   |
|     Note receivable from sale of business                                                                                           |   |                           | .7             |   |   |   | - |   |
|     Accrual for capital expenditures                                                                                                |   |                           | 10.5           |   |   |   | 4.7 |   |
|     Accrual for capitalized permit costs                                                                                            |   |                           | 1.6            |   |   |   | 2.2 |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |
| Noncash financing activities:                                                                                                                           |   |                           |           |   |   |   |   |   |
|   Promissory notes payable incurred in   connection with litigation settlements and   contract termination |   |                           |    - |   |   |   |    30.0 |   |
|                                                                                                                                                    |   |                           |           |   |   |   |   |   |

----

|                                                 |   | 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, 2009                         |   | $                                | 667.3   |   |   | $      | 1.2     |       |   | $      | -           |   |   | $ | (197.7 | ) |   | $ | (3.2 | ) |   | $ | (38.9 | ) |   | $ | 69.7 |   |   | $ | 498.4 |   |   |   |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |                             | -       |   |   |   | -       |       |   |   | -           |   |   |   | 18.1 |   |   |   | - |   |   |   | - |   |   |   | 3.4 |   |   |   | 21.5 |   |   | $ | 21.5 |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net                        |   |                             | -       |   |   |   | -       |       |   |   | -           |   |   |   | - |   |   |   | (5.1 | ) |   |   | - |   |   |   | (1.1 | ) |   |   | (6.2 | ) |   |   | (6.2 | ) |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity transaction with noncontrolling interest |   |                             |  - |   |   |   |  - |       |   |   |  .2    |   |   |   |  - |   |   |   |  - |   |   |   |  - |   |   |   |  .1 |   |   |   |  .3 |   |   |   |  - |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends                                       |   |                             | -       |   |   |   | -       |       |   |   | (.3         | )      |   |   | (22.4 | ) |   |   | - |   |   |   | - |   |   |   | (2.5 | ) |   |   | (25.2 | ) |   |   | - |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                                                |   |                             | -       |   |   |   | -       |       |   |   | .1          |   |   |   | (2.1 | ) |   |   | - |   |   |   | - |   |   |   | (.5 | ) |   |   | (2.5 | ) |   |   | - |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at June 30, 2010                             |   | $                                | 667.3   |   |   | $      | 1.2     |       |   | $      | -           |   |   | $ | (204.1 | ) |   | $ | (8.3 | ) |   | $ | (38.9 | ) |   | $ | 69.1 |   |   | $ | 486.3 |   |   |   |   |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 15.3 |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |                             |    |   |   |   |    |       |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|   Business segment  |   |         Entity                                                                                                                                                                                                                                                                                                         |   | % controlled at June 30, 2010                                                                                                                                                                                                                                                                                                  |
|------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                     |
| Chemicals                          |   |                                                                 Kronos |   |                                                        95% |
| Component products                 |   |                                                                 CompX  |   |                                                        87% |
| Waste management                   |   |                                                                 WCS    |   |                                                      100%            |

|                                                                                   |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|----------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                                                                   |   | 2009                             |   |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                                                                   |   | (In millions)                    |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Net sales:                                                                        |   |                             |   |   |                           |   |   |   |   |   |   |   |
|   Chemicals                                                                  |   | $                                | 282.1  |   |                           | $      | 380.1 |   |   | $ | 530.1 |   |   | $ | 699.8 |   |
|   Component products                                                    |   |                             | 29.2   |   |                           |   | 34.4 |   |   |   | 57.7 |   |   |   | 67.2 |   |
|   Waste management                                                      |   |                             | .8     |   |                           |   | 1.2 |   |   |   | 1.6 |   |   |   | 5.5 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total net sales                                      |   | $                                | 312.1  |   |                           | $      | 415.7 |   |   | $ | 589.4 |   |   | $ | 772.5 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales:                                                               |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                  |   | $                                | 268.4  |   |                           | $      | 295.3 |   |   | $ | 512.8 |   |   | $ | 555.3 |   |
|   Component products                                                    |   |                             | 23.0   |   |                           |   | 25.5 |   |   |   | 46.7 |   |   |   | 49.2 |   |
|   Waste management                                                      |   |                             | 4.5    |   |                           |   | 5.5 |   |   |   | 9.1 |   |   |   | 12.5 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total cost of sales                             |   | $                                | 295.9  |   |                           | $      | 326.3 |   |   | $ | 568.6 |   |   | $ | 617.0 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin:                                                                     |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                  |   | $                                | 13.7   |   |                           | $      | 84.8 |   |   | $ | 17.3 |   |   | $ | 144.5 |   |
|   Component products                                                    |   |                             | 6.2    |   |                           |   | 8.9 |   |   |   | 11.0 |   |   |   | 18.0 |   |
|   Waste management                                                      |   |                             | (3.7   | )      |                           |   | (4.3 | ) |   |   | (7.5 | ) |   |   | (7.0 | ) |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total gross margin                                   |   | $                                | 16.2   |   |                           | $      | 89.4 |   |   | $ | 20.8 |   |   | $ | 155.5 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss):                                                     |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Chemicals                                                                  |   | $                                | (20.0  | )      |                           | $      | 40.4 |   |   | $ | (45.5 | ) |   | $ | 63.0 |   |
|   Component products                                                    |   |                             | (.9    | )      |                           |   | 3.0 |   |   |   | (1.9 | ) |   |   | 4.7 |   |
|   Waste management                                                      |   |                             | (6.7   | )      |                           |   | (8.0 | ) |   |   | (13.2 | ) |   |   | (14.7 | ) |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Total operating income (loss)                   |   |                             | (27.6  | )      |                           |   | 35.4 |   |   |   | (60.6 | ) |   |   | 53.0 |   |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Equity in loss of investee                                                             |   |                             | -      |   |                           |   | (.2 | ) |   |   | (.7 | ) |   |   | (.1 | ) |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| General corporate items:                                                     |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Securities earnings                                                        |   |                             | 6.6    |   |                           |   | 6.6 |   |   |   | 13.0 |   |   |   | 13.1 |   |
|   Insurance recoveries                                                  |   |                             | 2.0    |   |                           |   | .1 |   |   |   | 2.7 |   |   |   | 18.3 |   |
|   Litigation settlement gains                                                |   |                             | 11.1   |   |                           |   | - |   |   |   | 23.0 |   |   |   | - |   |
|   Litigation settlement expense                                              |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | (32.2 | ) |
|   Gain on sale of business                                                   |   |                             | (.1    | )      |                           |   | - |   |   |   | 6.3 |   |   |   | - |   |
|   General expenses, net                                            |   |                             | (9.6   | )      |                           |   | (6.7 | ) |   |   | (17.9 | ) |   |   | (14.4 | ) |
| Interest expense                                                                  |   |                             | (16.7  | )      |                           |   | (17.0 | ) |   |   | (32.7 | ) |   |   | (34.4 | ) |
|                                                                                   |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|     Income (loss) before income     taxes |   | $                                | (34.3  | )      |                           | $      | 18.2 |   |   | $ | (66.9 | ) |   | $ | 3.3 |   |

----

|                                              |   | December 31, 2009 |   |   | June 30, 2010   |   |
|---------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                              |   | (In millions)          |   |
|                                              |   |                   |   |   |                      |   |
| Accounts receivable                               |   | $                      | 204.0  |   |                      | $      | 267.0 |   |
| Notes receivable                                  |   |                   | 3.4    |   |                      |   | 3.1 |   |
| Refundable income taxes                           |   |                   | 2.6    |   |                      |   | 2.0 |   |
| Receivable from Contran – income taxes, net |   |                   | 16.2   |   |                      |   | - |   |
| Allowance for doubtful accounts                   |   |                   | (3.3   | )      |                      |   | (2.5 | ) |
|                                              |   |                   |   |   |                      |   |   |   |
|       Total         |   | $                      | 222.9  |   |                      | $      | 269.6 |   |

|                                                                    |   | December 31, 2009 |   |   | June 30, 2010   |   |
|-------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                                                    |   | (In millions)          |   |
|                                                                    |   |                   |   |   |                      |   |
| Raw materials:                                                     |   |                   |   |   |                      |   |
|   Chemicals                                                   |   | $                      | 56.4   |   |                      | $      | 44.5 |   |
|   Component products                                     |   |                   | 4.8    |   |                      |   | 6.4 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total raw materials       |   |                   | 61.2   |   |                      |   | 50.9 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Work in process:                                                        |   |                   |   |   |                      |   |   |   |
|   Chemicals                                                   |   |                   | 18.2   |   |                      |   | 13.6 |   |
|   Component products                                     |   |                   | 6.2    |   |                      |   | 6.8 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total in-process products |   |                   | 24.4   |   |                      |   | 20.4 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Finished products:                                                 |   |                   |   |   |                      |   |   |   |
|   Chemicals                                                   |   |                   | 161.8  |   |                      |   | 130.2 |   |
|   Component products                                     |   |                   | 5.3    |   |                      |   | 4.7 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total finished products   |   |                   | 167.1  |   |                      |   | 134.9 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
| Supplies (primarily chemicals)                                |   |                   | 59.3   |   |                      |   | 52.1 |   |
|                                                                    |   |                   |   |   |                      |   |   |   |
|       Total                          |   | $                      | 312.0  |   |                      | $      | 258.3 |   |

----

|                                                                                                                              |   | December 31, 2009   |   |   | June 30, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|--------------------|--------|
|                                                                                                                              |   | (In millions)                 |   |
|                                                                                                                              |   |                          |   |   |               |   |
| Marketable securities:                                                                                                            |   |                          |   |   |               |   |
|   The Amalgamated Sugar Company LLC                                                                                     |   | $                             | 250.0  |   |               | $      | 250.0 |   |
|   Titanium Metals Corporation (“TIMET”)                                                                     |   |                          | 28.5   |   |               |   | 40.0 |   |
|   Other                                                                                                            |   |                          | 1.0    |   |               |   | 5.3 |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
|       Total                                                                                         |   | $                             | 279.5  |   |               | $      | 295.3 |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
| Investment in affiliates:                                                                                                         |   |                          |   |   |               |   |   |   |
|   TiO2 manufacturing joint venture, Louisiana   Pigment Company, L.P. (“LPC”) |   | $                             | 98.7   |   |               | $      | 97.2 |   |
|   Other                                                                                                            |   |                          | 17.4   |   |               |   | 17.4 |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
|       Total                                                                                         |   | $                             | 116.1  |   |               | $      | 114.6 |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
| Other assets:                                                                                                                |   |                          |   |   |               |   |   |   |
|   Waste disposal site operating permits, net                                                   |   | $                             | 53.5   |   |               | $      | 56.1 |   |
|   Real-estate related note receivable                                                                                   |   |                          | 15.0   |   |               |   | 15.0 |   |
|   IBNR receivables                                                                                                      |   |                          | 7.5    |   |               |   | 7.7 |   |
|   Deferred financing costs                                                                                    |   |                          | 6.0    |   |               |   | 4.3 |   |
|   Other intangible assets                                                                                               |   |                          | 1.4    |   |               |   | 1.1 |   |
|   Pension asset                                                                                                         |   |                          | .3     |   |               |   | .3 |   |
|   Other                                                                                                                 |   |                          | 19.8   |   |               |   | 17.7 |   |
|                                                                                                                              |   |                          |   |   |               |   |   |   |
|       Total                                                                                         |   | $                             | 103.5  |   |               | $      | 102.2 |   |

----

|                                                     |   |                   |   |   |               |   |
|----------------------------------------------------------|--------|------------------------|--------|--------|--------------------|--------|
|                                                     |   | December 31, 2009 |   |   | June 30, 2010 |   |
|                                                     |   | (In millions)          |   |
|                                                     |   |                   |   |   |               |   |
| Current:                                                 |   |                   |   |   |               |   |
|   Accounts payable                             |   | $                      | 124.5  |   |               | $      | 105.8 |   |
|   Employee benefits                       |   |                   | 34.8   |   |               |   | 35.2 |   |
|   Payable to affiliates:                       |   |                   |   |   |               |   |   |   |
|     LPC                              |   |                   | 12.0   |   |               |   | 10.9 |   |
|     Contran – trade items      |   |                   | 14.1   |   |               |   | 15.6 |   |
|     TIMET                            |   |                   | -      |   |               |   | .7 |   |
|   Accrued sales discounts and rebates          |   |                   | 21.4   |   |               |   | 11.0 |   |
|   Environmental costs                     |   |                   | 11.0   |   |               |   | 7.5 |   |
|   Interest                                     |   |                   | 8.0    |   |               |   | 7.0 |   |
|   Deferred income                         |   |                   | 7.5    |   |               |   | .9 |   |
|   Other                                        |   |                   | 54.8   |   |               |   | 45.9 |   |
|                                                     |   |                   |   |   |               |   |   |   |
|       Total                |   | $                      | 288.1  |   |               | $      | 240.5 |   |
|                                                     |   |                   |   |   |               |   |   |   |
| Noncurrent:                                              |   |                   |   |   |               |   |   |   |
|   Reserve for uncertain tax positions          |   | $                      | 35.2   |   |               | $      | 36.1 |   |
|   Insurance claims and expenses |   |                   | 11.7   |   |               |   | 11.9 |   |
|   Employee benefits                       |   |                   | 9.2    |   |               |   | 7.9 |   |
|   Deferred income                              |   |                   | 8.5    |   |               |   | 1.1 |   |
|   Payable to affiliate – TIMET           |   |                   | .3     |   |               |   | - |   |
|   Other                                        |   |                   | 4.8    |   |               |   | 5.6 |   |
|                                                     |   |                   |   |   |               |   |   |   |
|       Total                |   | $                      | 69.7   |   |               | $      | 62.6 |   |

|                                                                                                   |   | December 31, 2009 |        |   | June 30, 2010   |   |
|--------------------------------------------------------------------------------------------------------|--------|------------------------|-------------|--------|---------------------------|--------|
|                                                                                                   |   | (In millions)          |        |
| Valhi:                                                                                                 |   |                   |        |   |                      |   |
|   Snake River Sugar Company                                                                  |   | $                      | 250.0       |   |                      | $      | 250.0 |   |
|   Contran credit facility                                                                    |   |                   | 54.9        |   |                      |   | 69.0 |   |
|   Promissory note payable to Contran                                                         |   |                   | 30.0        |   |                      |   | 30.0 |   |
|       Total Valhi debt                                                   |   |                   | 334.9       |   |                      |   | 349.0 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
| Subsidiary debt:                                                                                       |   |                   |        |   |                      |   |   |   |
|   Kronos International:    6.5% Senior Secured Notes |   |                   |  574.6 |   |                      |   |  493.3 |   |
|   European bank credit facility                                                              |   |                   | 13.0        |   |                      |   | 18.6 |   |
| CompX promissory note payable to TIMET                                                                 |   |                   | 42.2        |   |                      |   | 42.2 |   |
|   Kronos U.S. bank credit facility                                       |   |                   | 16.7        |   |                      |   | - |   |
|   Kronos Contran credit facility                                              |   |                   | -           |   |                      |   | 31.6 |   |
|   NL promissory note (see Note 12)                                                           |   |                   | -           |   |                      |   | 18.0 |   |
|   WCS 6% promissory note payable                                                             |   |                   | -           |   |                      |   | 12.0 |   |
|   CompX bank credit facility                                                                 |   |                   | -           |   |                      |   | 5.0 |   |
|   Other                                                                                      |   |                   | 9.5         |   |                      |   | 7.7 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total subsidiary debt                                    |   |                   | 656.0       |   |                      |   | 628.4 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total debt                                                    |   |                   | 990.9       |   |                      |   | 977.4 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Less current maturities                                  |   |                   | 2.5         |   |                      |   | 23.6 |   |
|                                                                                                   |   |                   |        |   |                      |   |   |   |
|       Total long-term debt                                     |   | $                      | 988.4       |   |                      | $      | 953.8 |   |

----

----

|                                               |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|----------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                               |   | 2009                             |   |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                               |   | (In millions)                    |   |
|                                               |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Service cost                             |   | $                                | 1.8    |   |                           | $      | 2.5 |   |   | $ | 3.6 |   |   | $ | 5.2 |   |
| Interest cost                            |   |                             | 6.8    |   |                           |   | 6.4 |   |   |   | 13.4 |   |   |   | 12.9 |   |
| Expected return on plan assets |   |                             | (5.5   | )      |                           |   | (5.2 | ) |   |   | (10.7 | ) |   |   | (10.5 | ) |
| Amortization of unrecognized:            |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|   Prior service cost           |   |                             | .3     |   |                           |   | .3 |   |   |   | .6 |   |   |   | .6 |   |
|   Net transition obligations   |   |                             | .1     |   |                           |   | .2 |   |   |   | .2 |   |   |   | .3 |   |
| Recognized actuarial losses              |   |                             | 1.9    |   |                           |   | 1.6 |   |   |   | 3.7 |   |   |   | 3.3 |   |
|                                               |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|       Total          |   | $                                | 5.4    |   |                           | $      | 5.8 |   |   | $ | 10.8 |   |   | $ | 11.8 |   |

|                                      |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|-------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                      |   | 2009                             |   |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                      |   | (In millions)                    |   |
|                                      |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Service cost                              |   | $                                | -      |   |                           | $      | .1 |   |   | $ | .1 |   |   | $ | .2 |   |
| Interest cost                             |   |                             | .6     |   |                           |   | .3 |   |   |   | 1.0 |   |   |   | .7 |   |
| Amortization of prior service credit      |   |                             | (.1    | )      |                           |   | - |   |   |   | (.2 | ) |   |   | (.2 | ) |
| Recognized actuarial gains                |   |                             | (.1    | )      |                           |   | (.1 | ) |   |   | (.1 | ) |   |   | (.1 | ) |
|                                      |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|       Total |   | $                                | .4     |   |                           | $      | .3 |   |   | $ | .8 |   |   | $ | .6 |   |
|                                      |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                    |   | Six months ended June 30, |   |
|-------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                    |   | 2009                           |   |   | 2010 |   |
|                                                                    |   | (In millions)                  |   |
|                                                                    |   |                           |   |   |   |   |
| Securities earnings:                                                    |   |                           |   |   |   |   |
|   Dividends and interest                            |   | $                              | 13.1   |   |   | $ | 13.0 |   |
|   Securities transactions, net                      |   |                           | (.1    | ) |   |   | .1 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
|       Total securities earnings |   |                           | 13.0   |   |   |   | 13.1 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| Equity in loss of investee                                              |   |                           | (.7    | ) |   |   | (.1 | ) |
| Currency transactions, net                                    |   |                           | 6.4    |   |   |   | (.4 | ) |
| Insurance recoveries                                               |   |                           | 2.7    |   |   |   | 18.3 |   |
| Gain on litigation settlements                                          |   |                           | 23.0   |   |   |   | - |   |
| Gain on sale of business                                                |   |                           | 6.3    |   |   |   | - |   |
| Other, net                                                         |   |                           | .3     |   |   |   | 1.0 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
|       Total                          |   | $                              | 51.0   |   |   | $ | 31.9 |   |

----

|                                                                             |   | Six months ended June 30,  |      |
|----------------------------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                                             |   | 2009                                 |      |   | 2010 |   |
|                                                                             |   | (In millions)                        |      |
|                                                                             |   |                                 |      |   |   |   |
| Expected tax benefit, at U.S. federal Statutory income tax rate of 35% |   | $                                    | (23.4     | ) |   | $ | 1.2 |   |
| Incremental U.S. tax and rate differences on equity in earnings             |   |                                 | (4.9      | ) |   |   |  15.5 |   |
| Non-U.S. tax rates                                                               |   |                                 |  1.8 |   |   |   | (1.3 | ) |
| German tax attribute adjustments                                                 |   |                                 | -         |   |   |   | (35.2 | ) |
| Nondeductible expenses                                                           |   |                                 |  2.2 |   |   |   | 1.0 |   |
| Nontaxable income                                                                |   |                                 | (.9       | ) |   |   | (.2 | ) |
| Prior year adjustments                                                           |   |                                 | -         |   |   |   | (.7 | ) |
| Change in reserve for uncertain tax positions                                    |   |                                 | 1.2       |   |   |   | .8 |   |
| U.S. state income taxes, net                                                     |   |                                 |  .8  |   |   |   | .4 |   |
| Other, net                                                                       |   |                                 | .3        |   |   |   | .3 |   |
|                                                                             |   |                                 |      |   |   |   |   |   |
|      Income tax benefit                                 |   | $                                    | (22.9     | ) |   | $ | (18.2 | ) |

----

|                                      |   | December 31, 2009 |   |   | June 30, 2010  |   |
|-------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|
|                                      |   | (In millions)          |   |
|                                      |   |                   |   |   |                     |   |
| Noncontrolling interest in subsidiaries:  |   |                   |   |   |                     |   |
|   NL                       |   | $                      | 43.6   |   |                     | $      | 41.0 |   |
|   Kronos                   |   |                   | 15.0   |   |                     |   | 17.4 |   |
|   CompX                    |   |                   | 11.1   |   |                     |   | 10.7 |   |
|                                      |   |                   |   |   |                     |   |   |   |
|       Total |   | $                      | 69.7   |   |                     | $      | 69.1 |   |

|                                                               |   | Six months ended June 30, |   |
|--------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                               |   | 2009                           |   |   | 2010 |   |
|                                                               |   | (In millions)                  |   |
|                                                               |   |                           |   |   |   |   |
| Noncontrolling interest in net income (loss) of subsidiaries: |   |                           |   |   |   |   |
|   NL                                                |   | $                              | (2.4   | ) |   | $ | .3 |   |
|   Kronos                                            |   |                           | (2.3   | ) |   |   | 3.0 |   |
|   CompX                                             |   |                           | (.3    | ) |   |   | .1 |   |
|                                                               |   |                           |   |   |   |   |   |   |
|       Total                          |   | $                              | (5.0   | ) |   | $ | 3.4 |   |
|                                                               |   |                           |   |   |   |   |   |   |

|                                                                                                         |   | Six months ended |     |
|--------------------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                                         |   | June 30,         |     |
|                                                                                                         |   | 2009             |     |   | 2010 |   |
|                                                                                                         |   | (In millions)    |     |
|                                                                                                         |   |             |     |   |   |   |
| Net income (loss) attributable to Valhi stockholders                                                         |   | $                | (39.0    | ) |   | $ | 18.1 |   |
|                                                                                                         |   |             |     |   |   |   |   |   |
| Transfers from noncontrolling interest:                                                                      |   |             |     |   |   |   |   |   |
| Increase in additional paid-in capital for purchase of 14,000 shares of Kronos common stock                  |   |             |  .2 |   |   |   |  - |   |
|                                                                                                         |   |             |     |   |   |   |   |   |
| Equity adjustment, Note 12                                                                                   |   |             | -        |   |   |   | .4 |   |
|                                                                                                         |   |             |     |   |   |   |   |   |
| Issuance of subsidiary common stock                                                                          |   |             | .1       |   |   |   | (.1 | ) |
|                                                                                                         |   |             |     |   |   |   |   |   |
| Transfers from noncontrolling interest                                                                       |   |             | .3       |   |   |   | .3 |   |
|                                                                                                         |   |             |     |   |   |   |   |   |
| Net income (loss) attributable to Valhi stockholders and change from noncontrolling interest in subsidiaries |   | $                | (38.7    | ) |   | $ |  18.4 |   |

----

| ·   | we have never settled any of the market share, risk contribution, intentional tort, fraud, nuisance, supplier negligence, strict liability, breach of warranty, conspiracy, misrepresentation, aiding and abetting, enterprise liability, or statutory 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; |
|--------|--------|-------------------------------------|

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

|                            ·   | number of years between former operations and notice of claims and lack of information and documents about the former operations. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                 |   | Amount        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                                                 |   | (In millions) |   |
|                                                                                                                                                 |   |          |   |
| Balance at the beginning of the period                                                                                                               |   | $             | 48.9   |   |
| Reductions charged against expense, net                                                                                                              |   |          | (.9    | ) |
| Changes in currency exchange rates                                                                                                                   |   |          | (.1    | ) |
| Payments, net                                                                                                                                        |   |          | (3.2   | ) |
|                                                                                                                                                 |   |          |   |   |
|       Balance at the end of the period                                                                                 |   | $             | 44.7   |   |
|                                                                                                                                                 |   |          |   |   |
| Amounts recognized in the Condensed Consolidated Balance Sheet at the end of the period: |   |          |   |   |
|   Current liability                                                                                                                   |   | $             | 7.5    |   |
|   Noncurrent liability                                                                                                                |   |          | 37.2   |   |
|                                                                                                                                                 |   |          |   |   |
|       Total                                                                                                            |   | $             | 44.7   |   |

----

----

| ·   | 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, 2009:                     |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Marketable securities:     |   |                    |   |   |   |   |   |   |   |   |   |   |
|     Current        |   | $                       | 6.1    |   |   | $ | - |   |   | $ | 6.1 |   |   | $ | - |   |
|     Noncurrent     |   |                    | 279.5  |   |   |   | 28.6 |   |   |   | .9 |   |   |   | 250.0 |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | 1.6    |   |   |   | 1.6 |   |   |   | - |   |   |   | - |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2010:                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Marketable securities:     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Current        |   |                    | 1.6    |   |   |   | - |   |   |   | 1.6 |   |   |   | - |   |
|     Noncurrent     |   |                    | 295.3  |   |   |   | 40.0 |   |   |   | 5.3 |   |   |   | 250.0 |   |
|                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Currency forward contracts |   |                    | (3.1   | ) |   |   | (3.1 | ) |   |   | - |   |   |   | - |   |

| ·   | an aggregate of $44.0 million for an equivalent value of Canadian dollars at exchange rates ranging from Cdn. $1.04 to Cdn. $1.08 per U.S. dollar.  These contracts with Wachovia Bank, National Association, mature from July 2010 through May 2011 at a rate of $4 million per month, subject to early redemption provisions at our option.  At June 30, 2010, the actual exchange rate was Cdn. $1.03 per U.S. dollar; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an aggregate $52.1 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 5.88 to kroner 6.60 per U.S. dollar.  These contracts with DnB Nor Bank ASA mature from July 2010 through July 2011 at a rate of $2.3 million to $5.5 million per month.  At June 30, 2010, the actual exchange rate was kroner 6.44 per U.S. dollar; and  |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an aggregate euro 10.6 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 8.47 to kroner 9.08 per euro.  These contracts with DnB Nor Bank ASA mature from July 2010 through December 2010 at a rate of euro 1.6 million to euro 1.8 million per month, subject to early redemption provisions at our option.  At June 30, 2010, the actual exchange rate was kroner 7.97 per euro. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                        |   |                   |   |   |               |   |
|-------------------------------------------------------------|--------|------------------------|--------|--------|--------------------|--------|
|                                                        |   | December 31, 2009 |   |   | June 30, 2010 |   |
|                                                        |   | Carrying amount   |   |   | Fairvalue          |   |   | Carrying amount |   |   | Fairvalue |   |
|                                                        |   | (In millions)          |   |
|                                                        |   |                   |   |   |               |   |   |   |   |   |   |   |
| Cash, cash equivalents and restricted cash equivalents |   | $                      | 78.0   |   |               | $      | 78.0 |   |   | $ | 56.1 |   |   | $ | 56.1 |   |
| Real-estate related 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            |   | $                      | 574.6  |   |               | $      | 466.2 |   |   | $ | 493.3 |   |   | $ | 422.0 |   |
|   Snake River Sugar Company fixed rate loans      |   |                   | 250.0  |   |               |   | 250.0 |   |   |   | 250.0 |   |   |   | 250.0 |   |
|   CompX variable rate promissory note             |   |                   | 42.2   |   |               |   | 42.2 |   |   |   | 42.2 |   |   |   | 42.2 |   |
|   Variable rate debt to Contran                   |   |                   | 84.9   |   |               |   | 84.9 |   |   |   | 130.6 |   |   |   | 130.6 |   |
|   Variable rate bank credit facilities            |   |                   | 29.1   |   |               |   | 29.1 |   |   |   | 23.6 |   |   |   | 23.6 |   |
|   Variable rate debt to former shareholders       |   |                   | -      |   |               |   | - |   |   |   | 18.0 |   |   |   | 18.0 |   |
|   Other fixed-rate debt                           |   |                   | .5     |   |               |   | .5 |   |   |   | 12.4 |   |   |   | 12.4 |   |
|                                                        |   |                   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Noncontrolling interest in:                                 |   |                   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|   NL common stock                                 |   | $                      | 43.6   |   |               | $      | 57.1 |   |   | $ | 41.0 |   |   | $ | 50.3 |   |
|   Kronos common stock                             |   |                   | 15.0   |   |               |   | 38.4 |   |   |   | 17.4 |   |   |   | 46.3 |   |
|   CompX common stock                              |   |                   | 11.1   |   |               |   | 12.2 |   |   |   | 10.7 |   |   |   | 16.0 |   |
|                                                        |   |                   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Valhi stockholders' equity                                  |   | $                      | 428.7  |   |               | $      | 1,597.3 |   |   | $ | 417.2 |   |   | $ | 1,411.0 |   |

----

|                                                               |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|--------------------------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                                               |   | 2009                             |   |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                                               |   | (In millions)                    |   |
|                                                               |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Net income (loss) attributable to Valhi stockholders          |   | $                                | (19.0  | )      |                           | $      | 4.5 |   |   | $ | (39.0 | ) |   | $ | 18.1 |   |
| Equity adjustment                                                  |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | (2.1 | ) |
| Adjusted net income (loss) attributable to Valhi stockholders |   | $                                | (19.0  | )      |                           | $      | 4.5 |   |   | $ | (39.0 | ) |   | $ | 16.0 |   |

----

|   | • | 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 is used 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.  CompX also manufactures stainless steel exhaust systems, gauges and throttle controls for the performance boat 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 began disposal operations in October 2009.  In January 2009 WCS received a low-level radioactive waste disposal license, which was signed in September 2009.  Construction of the low-level radioactive waste facility is currently expected to begin by the end of 2010, following the completion of some pre-construction licensing and administrative matters, and is expected to be operational in late 2011. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | 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 TiO2 in advance 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 prices, including increased completion from low-cost manufacturing sources (such as China); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | 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); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to complete, obtain approval of and comply with the conditions of our licenses and permits (such as approval by the Texas Commission on Environmental Quality (“TCEQ”) of license conditions of WCS’s low-level radioactive waste disposal license); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|-----------------------------|

----

|   | · | operating income from our Chemicals and Component Products Segment in 2010 as compared to operating losses in 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | a litigation settlement gain in 2009; and |
|--------|--------|-------------------------------------------|

|                                 ·   | higher insurance recoveries in 2009. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|

|   | · | operating income from our Chemicals and Component Products Segment in 2010 as compared to operating losses in 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | a non-cash deferred income tax benefit recognized in the first quarter of 2010; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | litigation settlement and contract termination expense in 2010 as compared to litigation settlement gains in 2009; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | higher insurance recoveries in 2010; and |
|--------|--------|------------------------------------------|

|                                 ·   | a gain on the sale of a business in 2009. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|

----

|   | · | a non-cash deferred income tax benefit of $.21 per diluted share recognized by Kronos related to a European Court ruling that resulted in the favorable resolution of certain German income tax issues; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | insurance recoveries of $.09 per diluted share; and |
|--------|--------|-----------------------------------------------------|

|   | · | a charge of $.16 per diluted share related to a litigation settlement and contract termination. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | higher than expected operating income from our Chemicals Segment due to increased sales volumes and lower anticipated per metric ton production costs; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | higher than expected operating income from our Component Products Segment due to higher sales and lower legal expenses; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | a non-cash income tax benefit of approximately $24.4 million ($.21 per diluted share) in the first quarter of 2010 as a result of a European Court ruling that resulted in a favorable resolution of certain income tax issues in Germany; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | litigation settlement and contract termination expense in 2010 as compared to recording  litigation settlement gains in 2009; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | higher operating losses at WCS as we expect more expenses associated with the limited operations of our byproduct disposal facility, which commenced operations in the fourth quarter of 2009. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

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

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

|                                                       |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                       |   | 2009                        |   |   | 2010                      |   |   | % Change |   |   | 2009 |   |   | 2010 |   |   | % Change |   |
|                                                       |   | (Dollars in millions)       |   |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                  |   | $                           | 282.1  |   |                      | $      | 380.1 |   |   |   | 35 | % |   | $ | 530.1 |   |   | $ | 699.8 |   |   |   | 32 | % |
| Cost of sales                                              |   |                        | 268.4  |   |                      |   | 295.3 |   |   |   | 10 |   |   |   | 512.8 |   |   |   | 555.3 |   |   |   | 8 |   |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                               |   | $                           | 13.7   |   |                      | $      | 84.8 |   |   |   | 521 | % |   | $ | 17.3 |   |   | $ | 144.5 |   |   |   | 739 | % |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                                    |   | $                           | (20.0  | )      |                      | $      | 40.4 |   |   |   | 302 | % |   | $ | (45.5 | ) |   | $ | 63.0 |   |   |   | 238 | % |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of net sales:                                      |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales                                  |   |                        | 95     | %      |                      |   | 78 | % |   |   |   |   |   |   | 97 | % |   |   | 79 | % |   |   |   |   |
|   Gross margin                                   |   |                        | 5      |   |                      |   | 22 |   |   |   |   |   |   |   | 3 |   |   |   | 21 |   |   |   |   |   |
|   Operating income (loss)                        |   |                        | (7     | )      |                      |   | 11 |   |   |   |   |   |   |   | (9 | ) |   |   | 9 |   |   |   |   |   |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ti02 operating statistics:                                 |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Sales volumes*                                 |   |                        | 114    |   |                      |   | 148 |   |   |   | 30 | % |   |   | 211 |   |   |   | 270 |   |   |   | 28 | % |
|   Production volumes*                            |   |                        | 87     |   |                      |   | 134 |   |   |   | 54 |   |   |   | 151 |   |   |   | 258 |   |   |   | 71 |   |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent change in net sales:                               |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Ti02 product pricing                           |   |                        |   |   |                      |   |   |   |   |   | 6 | % |   |   |   |   |   |   |   |   |   |   | 3 | % |
|   Ti02 sales volumes                             |   |                        |   |   |                      |   |   |   |   |   | 30 |   |   |   |   |   |   |   |   |   |   |   | 28 |   |
|   Ti02 product mix                               |   |                        |   |   |                      |   |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   | - |   |
|  Changes in currency    exchange rates |   |                        |   |   |                      |   |   |   |   |   | (2 | ) |   |   |   |   |   |   |   |   |   |   |  1 |   |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total                  |   |                        |   |   |                      |   |   |   |   |   | 35 | % |   |   |   |   |   |   |   |   |   |   | 32 | % |
|                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| Impact of changes in currency exchange ratesThree months ended June 30, 2010 vs June 30, 2009 |   |
|-----------------------------------------------------------------------------------------------|--------|
|                                                                                          |   | Transaction gains/(losses) recognized |   |   | Translation gain/loss-impact of rate changes |   |   | Total currency impact2009 vs 2010 |   |
|                                                                                          |   | 2009 |   |   | 2010 |   |   | Change |   |
|                                                                                          |   |                                                                                           (in millions) |   |
| Impact on:                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                                                     |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | (6 | ) |   | $ | (6 | ) |
| Operating income (loss)                                                                  |   |   |  1 |   |   |   |   (3 | ) |   |   | (4 | ) |   |   | (8 | ) |   |   | (12 | ) |

| Impact of changes in currency exchange ratesSix months ended June 30, 2010 vs June 30, 2009 |   |
|---------------------------------------------------------------------------------------------|--------|
|                                                                                        |   | Transaction gains/(losses) recognized |   |   | Translation gain/loss-impact of rate changes |   |   | Total currency impact2009 vs 2010 |   |
|                                                                                        |   | 2009 |   |   | 2010 |   |   | Change |   |
|                                                                                        |   |                                                                                            (in millions) |   |
| Impact on:                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                                                   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 4 |   |   | $ | 4 |   |
| Operatingincome (loss)                                                                      |   |   |  7 |   |   |   |   (1 | ) |   |   | (8 | ) |   |   | (12 | ) |   |   | (20 | ) |

----

|                                |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
|-------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                |   | 2009                             |   |   | 2010                           |   |   | % Change |   |   | 2009 |   |   | 2010 |   |   | % Change |   |
|                                |   | (Dollars in millions)            |   |
|                                |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                           |   | $                                | 29.2   |   |                           | $      | 34.4 |   |   |   | 18 | % |   | $ | 57.7 |   |   | $ | 67.2 |   |   |   | 16 | % |
| Cost of sales                       |   |                             | 23.0   |   |                           |   | 25.5 |   |   |   | 11 |   |   |   | 46.7 |   |   |   | 49.2 |   |   |   | 5 |   |
|                                |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                        |   | $                                | 6.2    |   |                           | $      | 8.9 |   |   |   | 42 | % |   | $ | 11.0 |   |   | $ | 18.0 |   |   |   | 63 | % |
|                                |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)             |   | $                                | (.9    | )      |                           | $      | 3.0 |   |   |   | 410 | % |   | $ | (1.9 | ) |   | $ | 4.7 |   |   |   | 348 | % |
|                                |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent of net sales:               |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of sales           |   |                             | 79     | %      |                           |   | 74 | % |   |   |   |   |   |   | 81 | % |   |   | 73 | % |   |   |   |   |
|   Gross margin            |   |                             | 21     |   |                           |   | 26 |   |   |   |   |   |   |   | 19 |   |   |   | 27 |   |   |   |   |   |
|   Operating income (loss) |   |                             | (3     | )      |                           |   | 9 |   |   |   |   |   |   |   | (3 | ) |   |   | 7 |   |   |   |   |   |

----

| Three months ended June 30, 2010 vs. 2009 (in millions) |   |
|---------------------------------------------------------|--------|
|                                                    |   |  Transaction gains/(losses) |   |   | Translation gain/loss-impact of rate |   |   | Total currency impact |   |
|                                                    |   | 2009 |   |   | 2010 |   |   | Change |   |   | changes |   |   | 2010 vs. 2009 |   |
| Impact on:                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                               |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | .3 |   |   | $ |  .3 |   |
| Operating income                                        |   |   | - |   |   |   | .1 |   |   |   | .1 |   |   |   | (.5 | ) |   |   | (.4 | ) |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Six months ended June 30, 2010 vs. 2009 (in millions)   |   |
|                                                    |   |  Transaction gains/(losses) |   |   | Translation gain/loss-impact of rate |   |   | Total currency impact |   |
|                                                    |   |   | 2009 |   |   |   | 2010 |   |   | Change |   |   | changes |   |   | 2010 vs. 2009 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impact on:                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                               |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | .7 |   |   | $ |  .7 |   |
| Operating income                                        |   |   | - |   |   |   | .1 |   |   |   | .1 |   |   |   | (1.1 | ) |   |   | (1.0 | ) |

----

|           |   | Three months ended |   |   | Six months ended |   |
|----------------|--------|--------------------|--------|--------|------------------|--------|
|           |   | June 30,           |   |   | June 30,         |   |
|           |   | 2009               |   |   | 2010             |   |   | 2009 |   |   | 2010 |   |
|           |   | (In millions)      |   |
|           |   |               |   |   |             |   |   |   |   |   |   |   |
| Net sales      |   | $                  | .8     |   |             | $      | 1.2 |   |   | $ | 1.6 |   |   | $ | 5.5 |   |
| Cost of sales  |   |               | 4.5    |   |             |   | 5.5 |   |   |   | 9.1 |   |   |   | 12.5 |   |
|           |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin   |   | $                  | (3.7   | )      |             | $      | (4.3 | ) |   | $ | (7.5 | ) |   | $ | (7.0 | ) |
|           |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss |   | $                  | (6.7   | )      |             | $      | (8.0 | ) |   | $ | (13.2 | ) |   | $ | (14.7 | ) |

----

----

| ·   | litigation and related costs at NL (exclusive of the litigation settlement discussed above) of $2.0 million and $4.9 million in the second quarter and first six months of 2010, respectively, compared to $2.8 million and $5.3 million in the same periods of 2009; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a decrease in the environmental accrual taken as a credit to income of $1.0 million and $.9 million in the second quarter and first six months of 2010, respectively, compared to environmental expense of $.3 million and $1.2 in the same periods of 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | · | higher consolidated operating income in 2010 of $113.6 million, due to operating income at Kronos and CompX in 2010 compared to operating losses at all of our segments in 2009; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | lower cash paid for taxes of $16.2 million in 2010 due to our lower earnings in 2009; |
|--------|--------|---------------------------------------------------------------------------------------|

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

|   | · | the $19.0 million paid in 2010 in relation to a litigation settlement expense; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | distributions from our Chemicals Segment’s joint venture of $1.5 million in 2010 compared to $4.6 million in 2009; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes in receivables, inventories, payables and accrued liabilities in 2010 used $44.4 million of net cash, a decline of $141.5 million compared to 2009, primarily due to increased sales and production volumes. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|         ·   | Kronos’ average days sales outstanding (“DSO”) increased from December 31, 2009 to June 30, 2010 due to the timing of collection on receivable balances; |
|---------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Kronos’ average days sales in inventory (“DSI”) decreased from December 31, 2009 to June 30, 2010; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s average DSO increased from December 31, 2009 to June 30, 2010.  Historically, CompX’s average December 31 DSO is low due to the timing of sales and collections in the fourth quarter.  Overall, CompX’s June 30, 2010 average DSO is comparable to June 30, 2009; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s average DSI was flat from December 31, 2009 to June 30, 2010 as a result of the increase in sales in the first quarter of 2010 and the related timing of inventory purchases. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                | December 31,  | June 30, | December 31,  | June 30, |
|-------------------------------------|---------------|----------|---------------|----------|
|                                | 2008          | 2009     | 2009          | 2010     |
|                                |          |     |          |     |
| Kronos:                             |          |     |          |     |
|   Days sales outstanding  |  64 days | 67 days  |  56 days | 59 days  |
|   Days sales in inventory | 113 days      | 42 days  |  58 days | 49 days  |
|                                |          |     |          |     |
| CompX:                              |          |     |          |     |
|   Days sales outstanding  |  41 days | 44 days  | 37 days       | 45 days  |
|   Days sales in inventory |  70 days | 74 days  | 64 days       | 64 days  |

|                                              |   | Six months ended June 30, |   |
|---------------------------------------------------|--------|--------------------------------|--------|
|                                              |   | 2009                           |   |   | 2010 |   |
|                                              |   | (In millions)                  |   |
|                                              |   |                           |   |   |   |   |
| Cash provided by (used in) operating activities:  |   |                           |   |   |   |   |
|   Valhi exclusive of subsidiaries       |   | $                              | 15.5   |   |   | $ | 21.3 |   |
|   CompX                                 |   |                           | 5.5    |   |   |   | 1.1 |   |
|   Kronos                                |   |                           | 44.5   |   |   |   | (3.5 | ) |
|   WCS                                   |   |                           | (7.8   | ) |   |   | (9.2 | ) |
|   NL exclusive of its subsidiaries |   |                           | (3.1   | ) |   |   | (6.3 | ) |
|   Tremont                               |   |                           | 8.8    |   |   |   | (1.9 | ) |
|   Other                                 |   |                           | 1.1    |   |   |   | .1 |   |
|   Eliminations                          |   |                           | (21.8  | ) |   |   | (12.8 | ) |
|                                              |   |                           |   |   |   |   |   |   |
|       Total    |   | $                              | 42.7   |   |   | $ | (11.2 | ) |

|   | · | $15.4 million in our Chemicals Segment; |
|--------|--------|-----------------------------------------|

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

|   | · | purchased marketable securities of $7.5 million; |
|--------|--------|--------------------------------------------------|

|   | · | sold marketable securities for proceeds of $2.6 million; and |
|--------|--------|--------------------------------------------------------------|

|   | · | reduced restricted cash and restricted marketable securities by a total of $5.2 million due to the release of funds to us from escrow related to a litigation settlement and due to the reduction of one of our letters of credit. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | KII’s euro 400 million aggregate principal amount of its 6.5% Senior Secured Notes ($493.3 million) due in 2013; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

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

|   | · | KII's European revolving credit facility euro 15 million ($18.6 million outstanding) which matures in May 2011; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s promissory note payable to TIMET ($42.2 million outstanding) which is due in 2014; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Kronos’ Contran revolving credit facility ($31.6 million outstanding) which matures in December 2011; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Valhi’s revolving credit facility with Contran ($69.0 million outstanding) due in 2012; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | A wholly-owned subsidiary of Valhi's promissory demand notes payable to Contran ($30.0 million outstanding) due in 2012; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | NL’s $18.0 million promissory note issued in connection with a litigation settlement due in 2011 and 2012; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | WCS’ $12.0 million promissory note issued in connection with the termination of a customer contract due in 2010 through 2014; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | CompX’s revolving credit facility ($5.0 million outstanding) due in January 2012; and |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | approximately $7.7 million of other indebtedness. |
|--------|--------|---------------------------------------------------|

----

|   | · | $145(1) million under Kronos’ various U.S. and non-U.S. credit facilities; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | $21 million under CompX’s bank credit facility, and |
|--------|--------|-----------------------------------------------------------|

|   | · | $31(2) million under Valhi’s Contran credit facility. |
|--------|--------|-------------------------------------------------------------|

|   | (1) As previously reported, in May 2010 Kronos satisfied certain specified financial covenants in its European revolving credit facility, and as a result the maximum borrowing availability under such facility returned      to the full euro 80 million facility size at that time.  The amount of unused credit availability under Kronos’ European credit facility indicated above reflects the full euro 80 million facility size. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) Amounts available under this facility are at the sole discretion of Contran. |
|--------|----------------------------------------------------------------------------------|

----

|                                                                                                                                 |   |          |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                                 |   | Amount        |   |
|                                                                                                                                 |   | (In millions) |   |
|                                                                                                                                 |   |          |   |
|   NL exclusive of its subsidiaries                                                                                    |   | $             | 35.0   |   |
|   Valhi exclusive of its subsidiaries                                                                                      |   |          | 16.1   |   |
|   Kronos                                                                                                                   |   |          | 35.3   |   |
|   CompX                                                                                                                    |   |          | 7.6    |   |
|   Tremont                                                                                                                  |   |          | 8.8    |   |
|   WCS                                                                                                                      |   |          | .1     |   |
|                                                                                                                                 |   |          |   |   |
|   Total cash and cash equivalents restricted cash   And marketable securities |   | $             | 102.9  |   |

|   | · | $43 million in our Chemicals Segment, including approximately $12 million in the area of environmental protection and compliance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | $4 million in our Component Products Segment; and |
|--------|--------|---------------------------------------------------|

|   | · | $23 million in our Waste Management Segment. |
|--------|--------|----------------------------------------------|

----

----

----

|   | · | 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 5, 2010             |   | /s/ Bobby D. O’Brien                                           |
|                                                                                                    |   | Bobby D. O’Brien(Vice President and Chief Financial Officer)                                                                         |
|                                                                                                    |   |                                                                                                                                            |
| Date   August 5, 2010             |   | /s/ Gregory M. Swalwell                                                             |
|                                                                                                    |   | Gregory M. Swalwell(Vice President and Controller, Principal Accounting Officer)                                                           |
|                                                                                                    |   |                                                                                                                                            |

----