EX-99.2
6
valhipr.htm
VALHI PRESS RELEASE EXHIBIT 99.2
Valhi Press Release Exhibit 99.2
EXHIBIT
99.2
VALHI
COMPLETES SPECIAL DIVIDEND OF TIMET COMMON STOCK
DALLAS,
TEXAS... March 26, 2007... Valhi, Inc. (NYSE: VHI) announced today
that it
has completed the special dividend to its stockholders of shares of Titanium
Metals Corporation ("TIMET")
common
stock (NYSE: TIE) owned by Valhi. This special dividend was paid on
March 26, 2007 to Valhi's stockholders of record at the close of business
on March 12, 2007. As a result of the special dividend, each Valhi
stockholder received 0.4776 of a share of TIMET common stock for each share
of
Valhi common stock held and cash in lieu of any resulting fractional share
of
TIMET common stock.
As
previously disclosed, immediately after the payment of the special dividend,
Contran Corporation and its subsidiaries and related parties continue to
own
approximately 51.9% of the outstanding TIMET common stock compared to the
approximately 53.8% held prior to the special dividend, in each case assuming
the full conversion of any TIMET 6¾% series A preferred stock held by such
entities or parties.
Tax
Matters
As
previously disclosed, subject to the determination of Valhi's 2007 year-end
earnings and profits, the federal income tax treatment to a Valhi stockholder
of
the special dividend and regular quarterly cash dividends (the "distributions")
will
be as follows:
·
The
amount of the distributions will be the value on the payment date
of the
TIMET shares (including any fractional share) of $36.90 per share
and the
cash received by a Valhi stockholder for regular quarterly
dividends;
·
The
distributions will be taxable as dividend income to the extent of
Valhi's
current or accumulated earnings and profits;
·
If
the distributions exceed Valhi's current or accumulated earnings and
profits, they will be treated as a non-taxable return of capital
to the
extent of a stockholder's basis in such stockholder's Valhi stock;
·
Any
remaining portion of the distributions will be treated as a capital
gain;
and
·
If
a stockholder receives cash in lieu of a fractional share of TIMET
common
stock, such holder may recognize short-term capital gain or loss
equal to
the difference between the cash received and the portion of the value
of
TIMET common stock that is allocable to the fractional
share.
Valhi
currently believes that a majority, if not all, of the distributions will
likely
be considered either a non-taxable return of capital and/or a capital gain.
However, if any or all of the distributions were to be treated as a dividend
for
federal income tax purposes, such dividend could be considered an "extraordinary
dividend" for Valhi stockholders that are corporations, which could result in a
reduction to such corporate stockholders' tax basis in their Valhi stock.
The
specific tax treatment of the distributions will
not be determined until after December 31, 2007.
Each
stockholder should receive a Form 1099 or a letter from Valhi reporting the
appropriate tax treatment. Holders
of Valhi common stock are urged to consult with their tax advisor as to their
specific tax treatment of the distributions.
Valhi
is
a member of the consolidated U.S. federal tax group of which Contran Corporation
is the parent company. As a member of the Contran consolidated tax group
and
pursuant to a pre-existing tax policy between Valhi and Contran, Valhi computes
its provision for U.S. income taxes on a separate company basis using tax
elections made by Contran and makes payments to Contran or receives payments
from Contran in amounts it would have paid to or received from the U.S. Internal
Revenue Service had it not been a member of the Contran tax group but instead
had been a separate taxpayer.
Upon
the
payment of the special dividend and pursuant to the tax policy between Valhi
and
Contran, Valhi incurred a tax obligation to Contran. The amount of the
obligation is a function of the difference between the aggregate value of
the
TIMET common stock shares distributed based on the closing market price of
the
distributed shares of TIMET common stock on the date of distribution ($36.90
per
share) less Valhi's tax basis in such shares. This obligation is approximately
$667.3 million. In order to discharge this obligation to Contran, Valhi has
issued to Contran 5,000 shares of a new issue of Valhi 6% series A preferred
stock having an aggregate liquidation preference equal to the actual tax
obligation created by the special dividend.
Valhi
is
engaged in the titanium dioxide pigments, component products (security products,
furniture components and performance marine components) and waste management
industries.
The
statements in this release relating to matters that are not historical facts
are
forward-looking statements that represent management's beliefs and assumptions
based on currently available information. Forward-looking statements can
be
identified by the use of words such as "believes", "intends", "may", "will,"
"should", "could", "anticipates", "expects", or comparable terminology or by
discussions of strategy or trends. Although Valhi believes that the expectations
reflected in such forward-looking statements are reasonable, it cannot give
any
assurances that these expectations will prove to be correct. Such statements
by
their nature involve risks and uncertainties, including, but not limited
to, the
cyclicality of the titanium dioxide industry, global economic and political
conditions, changes in global productive capacity, changes in customer inventory
levels, changes in product pricing, changes in product costing, changes in
foreign currency exchange rates, competitive technology positions, operating
interruptions (including, but not limited to, labor disputes, leaks, fires,
explosions, unscheduled downtime, transportation interruptions, war and
terrorist activities), the ultimate resolution of pending or possible future
lead pigment litigation and legislative developments related to the lead
paint
litigation, the outcome of other litigation, and other risks and uncertainties
detailed in the Valhi's U.S. Securities and Exchange Commission filings. Should
one or more of these risks materialize (or the consequences of such a
development worsen), or should the underlying assumptions prove incorrect,
actual results could differ materially from those forecasted or expected.
Valhi
disclaims any intention or obligation to update publicly or revise such
statements, whether as a result of new information, future events or
otherwise.
*
* * *
*

EX - 99 . 2 6 valhipr . htm VALHI PRESS RELEASE EXHIBIT 99 . 2 Valhi Press Release Exhibit 99 . 2 EXHIBIT 99 . 2 VALHI COMPLETES SPECIAL DIVIDEND OF TIMET COMMON STOCK DALLAS , TEXAS ... March 26 , 2007 ... Valhi , Inc . ( NYSE : VHI ) announced today that it has completed the special dividend to its stockholders of shares of Titanium Metals Corporation ( " TIMET " ) common stock ( NYSE : TIE ) owned by Valhi . This special dividend was paid on March 26 , 2007 to Valhi 's stockholders of record at the close of business on March 12 , 2007 . As a result of the special dividend , each Valhi stockholder received 0 . 4776 of a share of TIMET common stock for each share of Valhi common stock held and cash in lieu of any resulting fractional share of TIMET common stock . As previously disclosed , immediately after the payment of the special dividend , Contran Corporation and its subsidiaries and related parties continue to own approximately 51 . 9 % of the outstanding TIMET common stock compared to the approximately 53 . 8 % held prior to the special dividend , in each case assuming the full conversion of any TIMET 6 ¾ % series A preferred stock held by such entities or parties . Tax Matters As previously disclosed , subject to the determination of Valhi 's 2007 year - end earnings and profits , the federal income tax treatment to a Valhi stockholder of the special dividend and regular quarterly cash dividends ( the " distributions " ) will be as follows : · The amount of the distributions will be the value on the payment date of the TIMET shares ( including any fractional share ) of $ 36.90 per share and the cash received by a Valhi stockholder for regular quarterly dividends ; · The distributions will be taxable as dividend income to the extent of Valhi 's current or accumulated earnings and profits ; · If the distributions exceed Valhi ' s current or accumulated earnings and profits , they will be treated as a non - taxable return of capital to the extent of a stockholder 's basis in such stockholder 's Valhi stock ; · Any remaining portion of the distributions will be treated as a capital gain ; and · If a stockholder receives cash in lieu of a fractional share of TIMET common stock , such holder may recognize short - term capital gain or loss equal to the difference between the cash received and the portion of the value of TIMET common stock that is allocable to the fractional share . Valhi currently believes that a majority , if not all , of the distributions will likely be considered either a non - taxable return of capital and / or a capital gain . However , if any or all of the distributions were to be treated as a dividend for federal income tax purposes , such dividend could be considered an " extraordinary dividend " for Valhi stockholders that are corporations , which could result in a reduction to such corporate stockholders ' tax basis in their Valhi stock . The specific tax treatment of the distributions will not be determined until after December 31 , 2007 . Each stockholder should receive a Form 1099 or a letter from Valhi reporting the appropriate tax treatment . Holders of Valhi common stock are urged to consult with their tax advisor as to their specific tax treatment of the distributions . Valhi is a member of the consolidated U . S . federal tax group of which Contran Corporation is the parent company . As a member of the Contran consolidated tax group and pursuant to a pre - existing tax policy between Valhi and Contran , Valhi computes its provision for U . S . income taxes on a separate company basis using tax elections made by Contran and makes payments to Contran or receives payments from Contran in amounts it would have paid to or received from the U . S . Internal Revenue Service had it not been a member of the Contran tax group but instead had been a separate taxpayer . Upon the payment of the special dividend and pursuant to the tax policy between Valhi and Contran , Valhi incurred a tax obligation to Contran . The amount of the obligation is a function of the difference between the aggregate value of the TIMET common stock shares distributed based on the closing market price of the distributed shares of TIMET common stock on the date of distribution ( $ 36.90 per share ) less Valhi 's tax basis in such shares . This obligation is approximately $ 667.3 million . In order to discharge this obligation to Contran , Valhi has issued to Contran 5,000 shares of a new issue of Valhi 6 % series A preferred stock having an aggregate liquidation preference equal to the actual tax obligation created by the special dividend . Valhi is engaged in the titanium dioxide pigments , component products ( security products , furniture components and performance marine components ) and waste management industries . The statements in this release relating to matters that are not historical facts are forward - looking statements that represent management 's beliefs and assumptions based on currently available information . Forward - looking statements can be identified by the use of words such as " believes " , " intends " , " may " , " will , " " should " , " could " , " anticipates " , " expects " , or comparable terminology or by discussions of strategy or trends . Although Valhi believes that the expectations reflected in such forward - looking statements are reasonable , it can not give any assurances that these expectations will prove to be correct . Such statements by their nature involve risks and uncertainties , including , but not limited to , the cyclicality of the titanium dioxide industry , global economic and political conditions , changes in global productive capacity , changes in customer inventory levels , changes in product pricing , changes in product costing , changes in foreign currency exchange rates , competitive technology positions , operating interruptions ( including , but not limited to , labor disputes , leaks , fires , explosions , unscheduled downtime , transportation interruptions , war and terrorist activities ) , the ultimate resolution of pending or possible future lead pigment litigation and legislative developments related to the lead paint litigation , the outcome of other litigation , and other risks and uncertainties detailed in the Valhi 's U . S . Securities and Exchange Commission filings . Should one or more of these risks materialize ( or the consequences of such a development worsen ) , or should the underlying assumptions prove incorrect , actual results could differ materially from those forecasted or expected . Valhi disclaims any intention or obligation to update publicly or revise such statements , whether as a result of new information , future events or otherwise . * * * * *
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