Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 	 	 	
þ	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended June 30, 2009
OR
 	 	 	
o	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
Commission file number 1-12084
Libbey Inc.
 
(Exact name of registrant as specified in its charter)
 	 	 	
Delaware	 	34-1559357	
 	 	 	
(State or other jurisdiction of incorporation or organization)	 	(IRS Employer Identification No.)	
300 Madison Avenue, Toledo, Ohio 43604
 
(Address of principal executive offices) (Zip Code)
419-325-2100
 
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ      No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  o      No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer  o	Accelerated Filer  þ  	Non-Accelerated Filer  o
(Do not check if a smaller reporting company)	Smaller reporting company  o	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o      No  þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value 15,152,473 shares at July 31, 2009.

   

 

TABLE OF CONTENTS
 	 	 	 	 	
Item 1. Financial Statements	 	 	3	 	
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	 	 	4	 	
CONDENSED CONSOLIDATED BALANCE SHEETS	 	 	6	 	
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	 	 	7	 	
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	 	 	9	 	
1. Description of the Business	 	 	9	 	
2. Significant Accounting Policies	 	 	9	 	
3. Balance Sheet Details	 	 	13	 	
4. Borrowings	 	 	14	 	
5. Special Charges	 	 	17	 	
6. Income Taxes	 	 	19	 	
7. Pension and Non-pension Postretirement Benefits	 	 	19	 	
8. Net Income (Loss) per Share of Common Stock	 	 	21	 	
9. Derivatives	 	 	21	 	
10. Comprehensive Income (Loss)	 	 	24	 	
11. Condensed Consolidated Guarantor Financial Statements	 	 	24	 	
12. Segments	 	 	33	 	
13. Fair Value	 	 	34	 	
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	 	 	35	 	
Item 3. Qualitative and Quantitative Disclosures about Market Risk	 	 	46	 	
Item 4. Controls and Procedures	 	 	47	 	
PART II — OTHER INFORMATION	 	 	48	 	
Item 1A. Risk Factors	 	 	48	 	
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	 	 	52	 	
Item 4. Submission of Matters to a Vote of Security Holders	 	 	52	 	
Item 5. Other Information	 	 	52	 	
Item 6. Exhibits	 	 	53	 	
EXHIBIT INDEX	 	 	53	 	
SIGNATURES	 	 	56	 	
Certification	 	 	 	 	
Certification	 	 	 	 	
Certification	 	 	 	 	
Certification	 	 	 	 	
EX-31.1	 	 	 	 	
EX-31.2	 	 	 	 	
EX-32.1	 	 	 	 	
EX-32.2	 	 	 	 	
  EX-4.1	
  EX-31.1	
  EX-31.2	
  EX-32.1	
  EX-32.2	
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited Condensed Consolidated Financial Statements of Libbey Inc. and all majority-owned subsidiaries (collectively, Libbey or the Company) have been prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Item 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and six-month periods ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.
The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per-share amounts)
(unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	
 	 	2009	 	 	2008	 	
Net sales	 	$	195,826	 	 	$	224,828	 	
Freight billed to customers	 	 	399	 	 	 	615	 	
 	 	 	 	 	 	 	
Total revenues	 	 	196,225	 	 	 	225,443	 	
Cost of sales	 	 	161,942	 	 	 	183,275	 	
 	 	 	 	 	 	 	
Gross profit	 	 	34,283	 	 	 	42,168	 	
Selling, general and administrative expenses	 	 	22,514	 	 	 	23,451	 	
Special charges	 	 	278	 	 	 	—	 	
 	 	 	 	 	 	 	
Income from operations	 	 	11,491	 	 	 	18,717	 	
Other income	 	 	2,758	 	 	 	586	 	
 	 	 	 	 	 	 	
Earnings before interest and income taxes	 	 	14,249	 	 	 	19,303	 	
Interest expense	 	 	17,532	 	 	 	17,620	 	
 	 	 	 	 	 	 	
(Loss) income before income taxes	 	 	(3,283	)	 	 	1,683	 	
(Benefit from) provison for income taxes	 	 	(5,947	)	 	 	3,802	 	
 	 	 	 	 	 	 	
Net income (loss)	 	$	2,664	 	 	$	(2,119	)	

Net income (loss) per share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.18	 	 	$	(0.14	)	
 	 	 	 	 	 	 	
Diluted	 	$	0.18	 	 	$	(0.14	)	
 	 	 	 	 	 	 	
Dividends per share	 	$	—	 	 	$	0.025	 	
 	 	 	 	 	 	 	
See accompanying notes
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per-share amounts)
(unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Six months ended June 30,	 	
 	 	2009	 	 	2008	 	
Net sales	 	$	353,679	 	 	$	412,104	 	
Freight billed to customers	 	 	744	 	 	 	1,283	 	
 	 	 	 	 	 	 	
Total revenues	 	 	354,423	 	 	 	413,387	 	
Cost of sales	 	 	309,424	 	 	 	340,882	 	
 	 	 	 	 	 	 	
Gross profit	 	 	44,999	 	 	 	72,505	 	
Selling, general and administrative expenses	 	 	44,888	 	 	 	44,310	 	
Special charges	 	 	674	 	 	 	—	 	
 	 	 	 	 	 	 	
(Loss) income from operations	 	 	(563	)	 	 	28,195	 	
Other income	 	 	2,721	 	 	 	1,339	 	
 	 	 	 	 	 	 	
Earnings before interest and income taxes	 	 	2,158	 	 	 	29,534	 	
Interest expense	 	 	34,711	 	 	 	34,771	 	
 	 	 	 	 	 	 	
Loss before income taxes	 	 	(32,553	)	 	 	(5,237	)	
(Benefit from) provision for income taxes	 	 	(7,324	)	 	 	359	 	
 	 	 	 	 	 	 	
Net loss	 	$	(25,229	)	 	$	(5,596	)	

Net loss per share:	 	 	 	 	 	 	 	 	
Basic	 	$	(1.70	)	 	$	(0.38	)	
 	 	 	 	 	 	 	
Diluted	 	$	(1.70	)	 	$	(0.38	)	
 	 	 	 	 	 	 	
Dividends per share	 	$	—	 	 	$	0.05	 	
 	 	 	 	 	 	 	
See accompanying notes
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LIBBEY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share amounts)
 	 	 	 	 	 	 	 	 	
 	 	June 30, 2009	 	 	December 31, 2008	 	
 	 	(unaudited)	 	 	 	 	 	
Assets:	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Cash and equivalents	 	$	24,082	 	 	$	13,304	 	
Accounts receivable — net	 	 	91,252	 	 	 	76,072	 	
Inventories — net	 	 	145,798	 	 	 	185,242	 	
Prepaid and other current assets	 	 	12,397	 	 	 	17,167	 	
 	 	 	 	 	 	 	
Total current assets	 	 	273,529	 	 	 	291,785	 	
 	 	 	 	 	 	 	 	 	
Pension asset	 	 	9,640	 	 	 	9,351	 	
Purchased intangible assets — net	 	 	25,430	 	 	 	26,121	 	
Goodwill	 	 	164,795	 	 	 	166,736	 	
Other assets	 	 	11,896	 	 	 	12,714	 	
 	 	 	 	 	 	 	
Total other assets	 	 	211,761	 	 	 	214,922	 	
Property, plant and equipment — net	 	 	302,116	 	 	 	314,847	 	
 	 	 	 	 	 	 	
Total assets	 	$	787,406	 	 	$	821,554	 	

Liabilities and Shareholders’ Equity:	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Notes payable	 	$	1,336	 	 	$	3,284	 	
Accounts payable	 	 	54,485	 	 	 	54,428	 	
Salaries and wages	 	 	24,952	 	 	 	22,597	 	
Accrued liabilities	 	 	43,474	 	 	 	39,675	 	
Accrued special charges	 	 	2,140	 	 	 	4,248	 	
Pension liability (current portion)	 	 	1,778	 	 	 	1,778	 	
Non-pension postretirement benefits (current portion)	 	 	4,684	 	 	 	4,684	 	
Derivative liability	 	 	14,008	 	 	 	17,936	 	
Deferred income taxes	 	 	1,010	 	 	 	1,279	 	
Long-term debt due within one year	 	 	9,987	 	 	 	1,117	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	157,854	 	 	 	151,026	 	
Long-term debt	 	 	531,709	 	 	 	545,856	 	
Pension liability	 	 	100,830	 	 	 	109,505	 	
Non-pension postretirement benefits	 	 	58,537	 	 	 	57,197	 	
Deferred income taxes	 	 	3,775	 	 	 	3,648	 	
Other long-term liabilities	 	 	9,176	 	 	 	12,211	 	
 	 	 	 	 	 	 	
Total liabilities	 	 	861,881	 	 	 	879,443	 	
Shareholders’ deficit:	 	 	 	 	 	 	 	 	
Common stock, par value $.01 per share, 50,000,000 shares authorized, 18,697,630 shares issued at June 30, 2009 and at December 31, 2008	 	 	187	 	 	 	187	 	
Capital in excess of par value (includes warrants of $1,034, based on 485,309 shares at June 30, 2009 and at December 31, 2008)	 	 	310,249	 	 	 	309,275	 	
Treasury stock, at cost, 3,552,997 shares (3,967,486 shares in 2008)	 	 	(95,472	)	 	 	(106,411	)	
Retained deficit	 	 	(180,606	)	 	 	(145,154	)	
Accumulated other comprehensive loss	 	 	(108,833	)	 	 	(115,786	)	
 	 	 	 	 	 	 	
Total shareholders’ deficit	 	 	(74,475	)	 	 	(57,889	)	
 	 	 	 	 	 	 	
Total liabilities and shareholders’ deficit	 	$	787,406	 	 	$	821,554	 	
 	 	 	 	 	 	 	
See accompanying notes
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	
 	 	2009	 	 	2008	 	
Operating activities:	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	2,664	 	 	$	(2,119	)	
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	10,518	 	 	 	11,238	 	
Loss (gain) on asset sales	 	 	23	 	 	 	(117	)	
Change in accounts receivable	 	 	(16,007	)	 	 	(17,230	)	
Change in inventories	 	 	26,962	 	 	 	5,976	 	
Change in accounts payable	 	 	2,156	 	 	 	3,986	 	
Accrued interest and amortization of discounts, warrants and finance fees	 	 	(13,129	)	 	 	(13,785	)	
Pay-in-kind note interest	 	 	11,916	 	 	 	10,216	 	
Pension & non-pension postretirement benefits	 	 	194	 	 	 	(1,008	)	
Restructuring charges	 	 	(2,301	)	 	 	—	 	
Accrued liabilities & prepaid expenses	 	 	10,104	 	 	 	2,509	 	
Accrued income taxes	 	 	(6,674	)	 	 	6,347	 	
Other operating activities	 	 	(1,720	)	 	 	(933	)	
 	 	 	 	 	 	 	
Net cash provided by operating activities	 	 	24,706	 	 	 	5,080	 	
 	 	 	 	 	 	 	 	 	
Investing activities:	 	 	 	 	 	 	 	 	
Additions to property, plant and equipment	 	 	(4,610	)	 	 	(8,260	)	
Proceeds from asset sales and other	 	 	21	 	 	 	5	 	
 	 	 	 	 	 	 	
Net cash used in investing activities	 	 	(4,589	)	 	 	(8,255	)	
 	 	 	 	 	 	 	 	 	
Financing activities:	 	 	 	 	 	 	 	 	
Net (repayments) borrowings on ABL credit facility activity	 	 	(10,803	)	 	 	14,314	 	
Other repayments	 	 	(2,006	)	 	 	(400	)	
Dividends	 	 	—	 	 	 	(365	)	
 	 	 	 	 	 	 	
Net cash (used in) provided by financing activities	 	 	(12,809	)	 	 	13,549	 	
 	 	 	 	 	 	 	 	 	
Effect of exchange rate fluctuations on cash	 	 	311	 	 	 	(93	)	
 	 	 	 	 	 	 	
Increase in cash	 	 	7,619	 	 	 	10,281	 	
Cash at beginning of period	 	 	16,463	 	 	 	7,602	 	
 	 	 	 	 	 	 	
Cash at end of period	 	$	24,082	 	 	$	17,883	 	

Supplemental disclosure of cash flows information:	 	 	 	 	 	 	 	 	
Cash paid during the period for interest	 	$	18,867	 	 	$	20,249	 	
Cash paid (refunded) during the period for income taxes	 	$	106	 	 	$	(376	)	
See accompanying notes
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LIBBEY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Six months ended June 30,	 	
 	 	2009	 	 	2008	 	
Operating activities:	 	 	 	 	 	 	 	 	
Net loss	 	$	(25,229	)	 	$	(5,596	)	
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	22,246	 	 	 	22,534	 	
Loss (gain) on asset sales	 	 	32	 	 	 	(124	)	
Change in accounts receivable	 	 	(15,597	)	 	 	(17,460	)	
Change in inventories	 	 	38,246	 	 	 	(5,044	)	
Change in accounts payable	 	 	113	 	 	 	(5,912	)	
Accrued interest and amortization of discounts, warrants and finance fees	 	 	1,551	 	 	 	1,960	 	
Pay-in-kind note interest	 	 	11,916	 	 	 	10,216	 	
Pension & non-pension postretirement benefits	 	 	3,165	 	 	 	(730	)	
Restructuring charges	 	 	(751	)	 	 	—	 	
Payable to Vitro	 	 	—	 	 	 	(19,575	)	
Accrued liabilities & prepaid expenses	 	 	12,784	 	 	 	(2,565	)	
Accrued income taxes	 	 	(8,637	)	 	 	761	 	
Other operating activities	 	 	(749	)	 	 	(1,524	)	
 	 	 	 	 	 	 	
Net cash provided by (used in) operating activities	 	 	39,090	 	 	 	(23,059	)	
 	 	 	 	 	 	 	 	 	
Investing activities:	 	 	 	 	 	 	 	 	
Additions to property, plant and equipment	 	 	(9,550	)	 	 	(17,612	)	
Proceeds from asset sales and other	 	 	88	 	 	 	46	 	
 	 	 	 	 	 	 	
Net cash used in investing activities	 	 	(9,462	)	 	 	(17,566	)	
 	 	 	 	 	 	 	 	 	
Financing activities:	 	 	 	 	 	 	 	 	
Net (repayments) borrowings on ABL credit facility activity	 	 	(16,689	)	 	 	23,382	 	
Other repayments	 	 	(2,123	)	 	 	(873	)	
Dividends	 	 	—	 	 	 	(729	)	
 	 	 	 	 	 	 	
Net cash (used in) provided by financing activities	 	 	(18,812	)	 	 	21,780	 	
 	 	 	 	 	 	 	 	 	
Effect of exchange rate fluctuations on cash	 	 	(38	)	 	 	189	 	
 	 	 	 	 	 	 	
Increase (decrease) in cash	 	 	10,778	 	 	 	(18,656	)	
Cash at beginning of period	 	 	13,304	 	 	 	36,539	 	
 	 	 	 	 	 	 	
Cash at end of period	 	$	24,082	 	 	$	17,883	 	

Supplemental disclosure of cash flows information:	 	 	 	 	 	 	 	 	
Cash paid during the period for interest	 	$	20,003	 	 	$	21,290	 	
Cash paid (refunded) during the period for income taxes	 	$	1,307	 	 	$	(395	)	
See accompanying notes
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LIBBEY INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollars in thousands, except per share data
(unaudited)
1. Description of the Business
Libbey is the leading producer of glass tableware products in the Western Hemisphere, in addition to supplying to key markets throughout the world. We produce glass tableware in five countries and sell to customers in over 100 countries. We have the largest manufacturing, distribution and service network among glass tableware manufacturers in the Western Hemisphere and are one of the largest glass tableware manufacturers in the world. We design and market an extensive line of high-quality glass tableware, ceramic dinnerware, metal flatware, hollowware and serveware, and plastic items to a broad group of customers in the foodservice, retail and business-to-business markets. We own and operate two glass tableware manufacturing plants in the United States as well as glass tableware manufacturing plants in the Netherlands, Portugal, China and Mexico. We also own and operate a plastics plant in Wisconsin. Until April 9, 2009, we operated a ceramic dinnerware manufacturing facility in Syracuse, New York. In addition, we import products from overseas in order to complement our line of manufactured items. The combination of manufacturing and procurement allows us to compete in the global tableware market by offering an extensive product line at competitive prices.
Our website can be found at www.libbey.com . We make available, free of charge, at this website all of our reports filed or furnished pursuant to Section 13(a) or 15(d) of Securities Exchange Act of 1934, including our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, as well as amendments to those reports. These reports are made available on our website as soon as reasonably practicable after their filing with, or furnishing to, the Securities and Exchange Commission and can also be found at www.sec.gov .
Our shares are traded on the Over the Counter Bulletin Board (OTC BB) under the ticker symbol LYBI.OB.
2. Significant Accounting Policies
See our Form 10-K for the year ended December 31, 2008 for a description of significant accounting policies not listed below.
Basis of Presentation
The Condensed Consolidated Financial Statements include Libbey Inc. and its majority-owned subsidiaries (collectively, Libbey or the Company). Our fiscal year end is December 31 st . All material intercompany accounts and transactions have been eliminated. The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ materially from management’s estimates.
Condensed Consolidated Statements of Operations
Net sales in our Condensed Consolidated Statements of Operations include revenue earned when products are shipped and title and risk of loss have passed to the customer. Revenue is recorded net of returns, discounts and incentives offered to customers. Cost of sales includes cost to manufacture and/or purchase products, warehouse, shipping and delivery costs and other costs.
Foreign Currency Translation
Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. The effect of exchange rate changes on transactions denominated in currencies other than the functional currency is recorded in other (expense) income.
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Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax attribute carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. FAS No. 109, “Accounting for Income Taxes,” requires that a valuation allowance be recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are determined separately for each tax jurisdiction in which we conduct our operations or otherwise incur taxable income or losses. In the United States and China, we have recorded a full valuation allowance against our deferred income tax assets. In addition, partial valuation allowances have been recorded in the Netherlands, Portugal and Mexico.
Stock-Based Compensation Expense
We account for stock-based compensation in accordance with SFAS No. 123-R, “Accounting for Stock-Based Compensation” (“SFAS No. 123-R”). Stock-based compensation cost is measured based on the fair value of the equity instruments issued. SFAS No. 123-R applies to all of our outstanding unvested stock-based payment awards as of January 1, 2006, and all prospective awards using the modified prospective transition method without restatement of prior periods. Stock-based compensation expense charged to the Condensed Consolidated Statement of Operations for the three months and six months ended June 30, 2009 was $0.3 million and $1.1 million, respectively. The stock-based compensation expense charged to the Condensed Consolidated Statement of Operations for the three months and six months ended June 30, 2008 was $1.1 million and $2.1 million, respectively.
New Accounting Standards
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) . SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This statement clarifies how to measure fair value as permitted under other accounting pronouncements but does not require any new fair value measurements. In February 2008, the FASB issued FASB Staff Position 157-2, “Effective Date of FASB Statement No. 157” (“FSP157-2”), which delayed until January 1, 2009 the effective date of SFAS 157 for nonfinancial assets and liabilities, except for those that are recognized or disclosed at fair value in the financial statements on a recurring basis. In October 2008, the FASB issued FASB Staff Position 157-3, “Determining the Fair Value of a Financial Asset when the Market for That Asset is Not Active” (“FSP 157-3”), which clarifies the application of SFAS 157 as it relates to the valuation of financial assets in a market that is not active for those financial assets. FSP 157-3 was effective upon issuance. In April 2009, the FASB issued FASB Staff Position 157-4 “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that are not Orderly” (“FSP 157-4”). This FSP provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 was effective for financial periods ending after June 15, 2009. We adopted SFAS 157 as of January 1, 2008, but had not applied it to non-recurring, nonfinancial assets and liabilities. The adoption of SFAS 157 and its related FSPs (FSP 157-2, FSP 157-3 and FSP 157-4) had no impact on our consolidated results of operations and financial condition. We adopted SFAS 157 for nonfinancial assets and liabilities as of January 1, 2009. The adoption of SFAS 157 for nonfinancial assets and liabilities did not have a material impact on our consolidated financial statements. See notes 4, 9 and 13 of the Condensed Consolidated Financial Statements for additional information.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”), which changes the accounting and reporting standards for the noncontrolling interests in a subsidiary in consolidated financial statements. SFAS 160 re-characterizes minority interests as noncontrolling interests and requires noncontrolling interests to be classified as a component of shareholders equity. We adopted SFAS 160 as of January 1, 2009. The adoption of SFAS 160 did not have any impact on our consolidated financial statements as we currently do not have any noncontrolling interests.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS 161”), which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. SFAS 161 was effective for Libbey on January 1, 2009. Since SFAS 161 only requires additional disclosures, adoption of this statement did not have a
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material impact on our consolidated financial statements. See note 9 of the Condensed Consolidated Financial Statements for additional information.
In April 2008, the FASB issued Staff Position No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”), which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets.” FSP 142-3 was effective for Libbey on January 1, 2009. The adoption of FSP 142-3 did not have a material impact on our consolidated financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”), which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements. The hierarchical guidance provided by SFAS 162 did not have a significant impact on our consolidated financial statements.
In June 2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 was effective for Libbey on January 1, 2009. The adoption of EITF 07-5 did not have any impact on our consolidated financial statements.
      In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“FSP 03-6-1”). FSP 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of SFAS No. 128, “Earnings per Share.” FSP 03-6-1 was effective for Libbey on January 1, 2009, and requires that all prior period EPS data is adjusted retrospectively. The adoption of FSP 03-6-1 did not have a material impact on our consolidated financial statements.
      In December 2008, the FASB issued FASB Staff Position 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP 132(R)-1”). FSP 132(R)-1 amends FASB Statement No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP 132(R)-1 is effective for financial statements issued for fiscal years ending after December 15, 2009. We are currently evaluating the potential impact of the adoption of FSP 132(R)-1.
     In April 2009, the FASB issued FASB Staff Position FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP 107-1”). FSP 107-1 amends FASB statement 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. FSP 107-1 is effective for interim reporting periods ending after June 15, 2009. Since FSP 107-1 only requires additional disclosures, adoption of this statement did not have a material impact on our consolidated financial statements. See note 4 of the Condensed Consolidated Financial Statements for additional information.
      In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. In accordance with SFAS 165, we have evaluated and, as necessary, made changes to these unaudited condensed financial statements for the events through August 7, 2009, the date that the financial statements were issued. There were no subsequent events that provided evidence about the conditions existing at the balance sheet date.
      In June 2009 the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification ™ and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (“SFAS 168”). The objective of SFAS 168 is to replace SFAS 162 and to establish the FASB Accounting Standards Codification™ (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All previous existing accounting standards are superseded by the Codification as described in SFAS 168. All other accounting literature not included in the Codification is non-authoritative.
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SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We do not expect the adoption of SFAS 168 to have a significant impact on our consolidated financial statements.
Reclassifications
Certain amounts in the prior year’s financial statements may have been reclassified to conform to the presentation used in the current year financial statements.
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3. Balance Sheet Details
The following table provides detail of selected balance sheet items:
 	 	 	 	 	 	 	 	 	
(Dollars in thousands)	 	June 30, 2009	 	December 31, 2008	
 	
Accounts receivable:	 	 	 	 	 	 	 	 	
Trade receivables	 	$	90,349	 	 	$	74,393	 	
Other receivables	 	 	903	 	 	 	1,679	 	
 	
Total accounts receivable, less allowances of $8,397 and $10,479	 	$	91,252	 	 	$	76,072	 	
 	
Inventories:	 	 	 	 	 	 	 	 	
Finished goods	 	$	128,336	 	 	$	163,817	 	
Work in process	 	 	1,249	 	 	 	2,805	 	
Raw materials	 	 	4,106	 	 	 	5,748	 	
Repair parts	 	 	10,493	 	 	 	10,271	 	
Operating supplies	 	 	1,614	 	 	 	2,601	 	
 	
Total inventories, less allowances of $4,040 and $6,582	 	$	145,798	 	 	$	185,242	 	
 	
Prepaid and other current assets:	 	 	 	 	 	 	 	 	
Prepaid expenses	 	$	10,102	 	 	$	14,865	 	
Refundable and prepaid income taxes	 	 	2,295	 	 	 	2,302	 	
 	
Total prepaid and other current assets	 	$	12,397	 	 	$	17,167	 	
 	
Other assets:	 	 	 	 	 	 	 	 	
Finance fees — net of amortization	 	$	7,252	 	 	$	8,183	 	
Other	 	 	4,644	 	 	 	4,531	 	
 	
Total other assets	 	$	11,896	 	 	$	12,714	 	
 	
Accrued liabilities:	 	 	 	 	 	 	 	 	
Accrued incentives	 	$	19,357	 	 	$	12,760	 	
Workers compensation	 	 	9,624	 	 	 	9,384	 	
Medical liabilities	 	 	2,881	 	 	 	2,736	 	
Interest	 	 	4,307	 	 	 	4,575	 	
Commissions payable	 	 	981	 	 	 	1,135	 	
Other	 	 	6,324	 	 	 	9,085	 	
 	
Total accrued liabilities	 	$	43,474	 	 	$	39,675	 	
 	
Other long-term liabilities:	 	 	 	 	 	 	 	 	
Derivative liability	 	$	2,917	 	 	$	3,693	 	
Deferred liability	 	 	1,269	 	 	 	1,566	 	
Other	 	 	4,990	 	 	 	6,952	 	
 	
Total other long-term liabilities	 	$	9,176	 	 	$	12,211	 	
 	
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4. Borrowings
On June 16, 2006, Libbey Glass Inc. issued $306.0 million aggregate principal amount of floating rate senior secured notes (Senior Notes) due June 1, 2011, and $102.0 million aggregate principal amount of senior subordinated secured pay-in-kind notes (PIK Notes), due December 1, 2011. Concurrently, Libbey Glass Inc. entered into a $150.0 million Asset Based Loan facility (ABL Facility) expiring December 16, 2010.
Borrowings consist of the following:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	June 30,	 	 	December 31,	
(Dollars in thousands)	 	Interest Rate	 	 	Maturity Date	 	 	2009	 	 	2008	
 	
Borrowings under ABL facility	 	floating	 	December 16, 2010	 	$	16,858	 	 	$	34,538	 	
Senior notes	 	floating (1)	 	June 1, 2011	 	 	306,000	 	 	 	306,000	 	
PIK notes (2)	 	 	16.00	%	 	December 1, 2011	 	 	160,862	 	 	 	148,946	 	
Promissory note	 	 	6.00	%	 	July, 2009 to September, 2016	 	 	1,580	 	 	 	1,666	 	
Notes payable	 	floating	 	July, 2009	 	 	1,336	 	 	 	3,284	 	
RMB loan contract	 	floating	 	July, 2012 to January, 2014	 	 	36,625	 	 	 	36,675	 	
RMB working capital loan	 	floating	 	March, 2010	 	 	7,325	 	 	 	7,335	 	
Obligations under capital leases	 	floating	 	May, 2009	 	 	—	 	 	 	302	 	
BES Euro line	 	floating	 	January, 2010 to January, 2014	 	 	15,453	 	 	 	15,507	 	
Other debt	 	floating	 	September, 2009	 	 	720	 	 	 	630	 	
 	
Total borrowings	 	 	 	 	 	 	 	 	 	 	546,759	 	 	 	554,883	 	
Less — unamortized discounts and warrants	 	 	 	 	 	 	 	 	 	 	3,727	 	 	 	4,626	 	
 	
Total borrowings — net	 	 	 	 	 	 	 	 	 	 	543,032	 	 	 	550,257	 	
Less — long term debt due within one year and notes payable	 	 	 	 	 	 	 	 	 	 	11,323	 	 	 	4,401	 	
 	
Total long-term portion of borrowings — net	 	 	 	 	 	 	 	 	 	$	531,709	 	 	$	545,856	 	

			
(1)	 	See Interest Rate Protection Agreements below.	
 		
(2)	 	Additional PIK Notes were issued each June 1 and December 1, commencing on December 1, 2006, to pay semi-annual interest. During the first three years, interest was payable by the issuance of additional PIK Notes.	
ABL Facility
The ABL Facility is with a group of six banks and provides for a revolving credit and swing line facility permitting borrowings for Libbey Glass and Libbey Europe up to an aggregate of $150.0 million, with Libbey Europe’s borrowings being limited to $75.0 million. Borrowings under the ABL Facility mature December 16, 2010. Swing line borrowings are limited to $15.0 million, with swing line borrowings for Libbey Europe being limited to € 7.5 million. Loans comprising each CBFR (CB Floating Rate) Borrowing, including each Swingline Loan, bear interest at the CB Floating Rate plus the Applicable Rate, and euro-denominated swing line borrowings (Eurocurrency Loans) bear interest calculated at the Netherlands swing line rate, as defined in the ABL Facility. The Applicable Rates for CBFR Loans and Eurocurrency Loans vary depending on our aggregate remaining availability. The Applicable Rates for CBFR Loans and Eurocurrency Loans were 0.0 percent and 1.75 percent, respectively, at June 30, 2009. There were no Libbey Glass borrowings under the facility at June 30, 2009, while Libbey Europe had outstanding borrowings of $16.9 million at June 30, 2009, at an interest rate of 3.57 percent. Interest is payable on the last day of the interest period, which can range from one month to six months.
All borrowings under the ABL Facility are secured by a first priority security interest in (i) substantially all assets of (a) Libbey Glass and (b) substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries, (ii) (a) 100 percent of the stock of Libbey Glass, (b) 100 percent of the stock of substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries, (c) 100 percent of the non-voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries and (d) 65 percent of the voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries, and (iii) substantially all proceeds and products of the property and assets described in clauses (i) and (ii) of this sentence.
Additionally, borrowings by Libbey Europe under the ABL Facility are secured by a first priority security interest in (i) substantially all of the assets of Libbey Europe, the parent of Libbey Europe and certain of its subsidiaries, (ii) 100 percent of the stock of Libbey
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Europe and certain subsidiaries of Libbey Europe, and (iii) substantially all proceeds and products of the property and assets described in clauses (i) and (ii) of this sentence.
Libbey pays a quarterly Commitment Fee, as defined by the ABL Facility, on the total credit provided under the Facility. The Commitment Fee varies depending on our aggregate availability. The Commitment Fee was 0.25 percent at June 30, 2009. No compensating balances are required by the Agreement. The Agreement does not require compliance with a fixed charge coverage ratio covenant, unless aggregate unused availability falls below $15.0 million. If our aggregate unused ABL availability were to fall below $15.0 million, the fixed charge coverage ratio requirement would be 1:10 to 1:00. The fixed charge coverage ratio is defined as the ratio of earnings before interest, taxes, depreciation, amortization and minority interest (EBITDA) minus capital expenditures to fixed charges (EBITDA minus capital expenditures / fixed charges). Among the items included in the calculation of fixed charges are cash interest expense, scheduled principal payments on outstanding debt and capital lease obligations, taxes paid in cash, dividends paid in cash and required cash contributions to our pension plans in excess of expense.
The borrowing base under the ABL Facility is determined by a monthly analysis of the eligible accounts receivable, inventory and fixed assets. The borrowing base is the sum of (a) 85 percent of eligible accounts receivable, (b) the lesser of (i) 85 percent of the net orderly liquidation value (NOLV) of eligible inventory, (ii) 65 percent of eligible inventory, or (iii) $75.0 million, and (c) the lesser of $25.0 million and the aggregate of (i) 75 percent of the NOLV of eligible equipment and (ii) 50 percent of the fair market value of eligible real property.
The available total borrowing base is offset by real estate and ERISA reserves totaling $8.2 million and mark-to-market reserves for natural gas and interest rate swaps of $11.9 million. The ABL Facility also provides for the issuance of $30.0 million of letters of credit, which are applied against the $150.0 million limit. At June 30, 2009, we had $8.4 million in letters of credit outstanding under the ABL Facility. Remaining unused availability on the ABL Facility was $44.6 million at December 31, 2008, and $56.6 million at June 30, 2009.
Senior Notes
Libbey Glass and Libbey Inc. entered into a purchase agreement pursuant to which Libbey Glass agreed to sell $306.0 million aggregate principal amount of floating rate senior secured notes due June 1, 2011 to the initial purchasers named in a private placement. The net proceeds of these notes, after deducting a discount and the estimated expenses and fees, were approximately $289.8 million. On February 15, 2007, we exchanged $306.0 million aggregate principal amount of our floating rate senior secured notes due June 1, 2011, which have been registered under the Securities Act of 1933, as amended (Senior Notes), for the notes sold in the private placement. The Senior Notes bear interest at a rate equal to six-month LIBOR plus 7.0 percent and were offered at a discount of 2 percent of face value. Interest with respect to the Senior Notes is payable semiannually on June 1 and December 1. The interest rate was 8.26 percent at June 30, 2009. Neither the Senior Notes nor the indenture governing them contain financial covenants.
We have Interest Rate Protection Agreements (Rate Agreements) with respect to $200.0 million of debt as a means to manage our exposure to fluctuating interest rates. The Rate Agreements effectively convert this portion of our long-term borrowings from variable rate debt to fixed-rate debt, thus reducing the impact of interest rate changes on future income. The fixed interest rate for our borrowings related to the Rate Agreements at June 30, 2009, excluding applicable fees, is 5.24 percent per year and the total interest rate, including applicable fees, is 12.24 percent per year. These Rate Agreements expire on December 1, 2009. Total remaining Senior Notes not covered by the Rate Agreements have fluctuating interest rates with a weighted average rate of 8.26 percent per year at June 30, 2009. If the counterparties to these Rate Agreements were to fail to perform, these Rate Agreements would no longer protect us from interest rate fluctuations. However, we do not anticipate nonperformance by the counterparties. All interest rate swap counterparties were rated A+ or better, as of June 30, 2009, by Standard and Poor’s.
The fair market value for the Rate Agreements at June 30, 2009 was a $4.0 million liability. The fair values of the Rate Agreements are based on the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. We do not expect to cancel these agreements and expect them to expire as originally contracted.
The Senior Notes are guaranteed by Libbey Inc. and all of Libbey Glass’s existing and future domestic subsidiaries that guarantee any of Libbey Glass’s debt or debt of any subsidiary guarantor (see Note 11). The Senior Notes and related guarantees have the benefit of a second-priority lien, subject to permitted liens, on collateral consisting of substantially all the tangible and intangible assets of Libbey Glass and its domestic subsidiary guarantors that secure all of the indebtedness under Libbey Glass’s ABL Facility. The
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Collateral does not include the assets of non-guarantor subsidiaries that secure the ABL Facility.
PIK Notes
Concurrently with the execution of the purchase agreement with respect to the Senior Notes, Libbey Glass and Libbey Inc. entered into a purchase agreement (Unit Purchase Agreement) pursuant to which Libbey Glass agreed to sell, to a purchaser named in the private placement, units consisting of $102.0 million aggregate principal amount 16 percent senior subordinated secured pay-in-kind notes due December 1, 2011 (PIK Notes) and detachable warrants to purchase 485,309 shares of Libbey Inc. common stock (Warrants) exercisable on or after June 16, 2006 and expiring on December 1, 2011. The warrant holders do not have voting rights. The net proceeds, after deducting a discount and estimated expenses and fees, were approximately $97.0 million. The proceeds were allocated between the Warrants and the underlying debt based on their respective fair values at the time of issuance. The amount allocated to the Warrants has been recorded in equity, with the offset recorded as a discount on the underlying debt. Each Warrant is exercisable at $11.25. The PIK Notes were offered at a discount of 2 percent of face value. Interest is payable semiannually on June 1 and December 1, but during the first three years interest was payable by issuance of additional PIK Notes. Interest on our PIK Notes will be payable in cash beginning December 1, 2009. At June 30, 2009, the total principal amount of PIK Notes was $160.9 million. Neither the PIK Notes nor the indenture governing them contain financial covenants.
The obligations of Libbey Glass under the PIK Notes are guaranteed by Libbey Inc. and all of Libbey Glass’s existing and future domestic subsidiaries that guarantee any of Libbey Glass’s debt or debt of any subsidiary guarantor (see Note 11). The PIK Notes and related guarantees are senior subordinated obligations of Libbey Glass and the guarantors of the PIK Notes and are entitled to the benefit of a third-priority lien, subject to permitted liens, on the collateral that secures the Senior Notes.
Promissory Note
In September 2001, we issued a $2.7 million promissory note in connection with the purchase of our Laredo, Texas warehouse facility. At June 30, 2009, we had $1.6 million outstanding on the promissory note. Interest with respect to the promissory note is paid monthly.
Notes Payable
We have overdraft lines of credit for a maximum of € 2.3 million. The $1.3 million outstanding at June 30, 2009 was the U.S. dollar equivalent under the euro-based overdraft line, and the interest rate was 4.36 percent. Interest with respect to the note payable is paid monthly.
RMB Loan Contract
On January 23, 2006, Libbey Glassware (China) Co., Ltd. (Libbey China), an indirect wholly owned subsidiary of Libbey Inc., entered into an RMB Loan Contract (RMB Loan Contract) with China Construction Bank Corporation Langfang Economic Development Area Sub-Branch (CCB). Pursuant to the RMB Loan Contract, CCB agreed to lend to Libbey China RMB 250.0 million, or the current equivalent of approximately $36.6 million, for the construction of our production facility in China and the purchase of related equipment, materials and services. The loan has a term of eight years and bears interest at a variable rate as announced by the People’s Bank of China. As of the date of the initial advance under the Loan Contract, the annual interest rate was 5.51 percent, and as of June 30, 2009, the annual interest rate was 6.19 percent. As of June 30, 2009, the outstanding balance was RMB 250.0 million (approximately $36.6 million). Interest is payable quarterly. Payments of principal in the amount of RMB 30.0 million (approximately $4.4 million) and RMB 40.0 million (approximately $5.8 million) must be made on July 20, 2012, and December 20, 2012, respectively, and three payments of principal in the amount of RMB 60.0 million (approximately $8.8 million) each must be made on July 20, 2013, December 20, 2013, and January 20, 2014, respectively. The obligations of Libbey China are secured by a guarantee executed by Libbey Inc. for the benefit of CCB.
RMB Working Capital Loan
In March 2007, Libbey China entered into a RMB 50.0 million working capital loan with China Construction Bank. The 3-year term loan has a principal payment at maturity on March 14, 2010, has a current interest rate of 5.40 percent, and is secured by a Libbey Inc. guarantee. At June 30, 2009, the U.S. dollar equivalent on the line was $7.3 million. Interest is payable quarterly.
Obligations Under Capital Leases
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In prior periods, we had leased certain machinery and equipment under agreements that were classified as capital leases. These leases were assumed in the Crisal acquisition. The cost of the equipment under capital leases was included in the Condensed Consolidated Balance Sheet as property, plant and equipment, and the related depreciation expense was included in the Condensed Consolidated Statements of Operations.
There are no future minimum lease payments required under the capital leases as of June 30, 2009.
BES Euro Line
In January 2007, Crisal entered into a seven year, € 11.0 million line of credit (approximately $15.5 million) with BANCO ESPÍRITO SANTO, S.A. (BES). The $15.5 million outstanding at June 30, 2009 was the U.S. dollar equivalent under the line at an interest rate of 3.77 percent. Payment of principal in the amount of € 1.1 million (approximately $1.6 million) is due in January 2010, payment of € 1.6 million (approximately $2.3 million) is due in January 2011, payment of € 2.2 million (approximately $3.1 million) is due in January 2012, payment of € 2.8 million (approximately $3.9 million) is due in January 2013 and payment of € 3.3 million (approximately $4.6 million) is due in January 2014. Interest with respect to the line is paid every six months.
Other Debt
The other debt of $0.7 million primarily consists of government-subsidized loans for equipment purchases at Crisal.
Fair Value of Borrowings
The fair value of the Company’s debt has been calculated based on quoted market prices for the same or similar issues. Our floating rate $306.0 million Senior Notes due June, 2011 had an estimated fair value of $192.8 million at June 30, 2009. The $160.9 million PIK Notes have been held by a single holder since inception, and there is no active market from which a fair value could be derived. The value of the remainder of our debt approximates carrying value at June 30, 2009.
Capital Resources and Liquidity
Historically, cash flows generated from operations and our borrowing capacity under our ABL facility have allowed us to meet our cash requirements, including capital expenditures and working capital needs. Remaining unused availability on the ABL Facility was $56.6 million at June 30, 2009 and $44.6 million at December 31, 2008. In addition, our cash and cash equivalents balance of $24.1 million at June 30, 2009 is available for our short term operating needs. We were impacted by recessionary pressures in 2008, especially during the fourth quarter of the year, and the first half of 2009, and we anticipate that the global economic recession will continue throughout 2009 and perhaps beyond. In addition, interest on our PIK Notes will be payable in cash beginning December 1, 2009. We began taking a number of steps to enhance our liquidity in 2008, have continued with further steps in 2009 (including those announced in February, 2009), and have begun to see the benefits of these measures in our positive cash flow from operations for the first half of 2009. However, if cash generated from operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or arrange additional debt financing. Global financial markets and economic conditions have been, and continue to be volatile. The credit and capital markets remain challenging. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made it difficult, and will likely continue to make it difficult, to obtain funding in future periods. If cash from operations and cash available from our ABL Facility are not sufficient to meet our needs, we cannot provide assurance that we will be able to obtain additional financing in sufficient amounts and/or on acceptable terms in the near future or when our debt obligations reach maturity. Our ABL Facility expires in December 2010, the Senior Notes expire in June 2011, and the PIK Notes expire in December 2011. Furthermore, because of the current price of our stock, we cannot anticipate that it would be desirable to sell additional equity, even if we were able to do so. However, based upon our operating plans and current forecast expectations (including expectations that the global economy will not deteriorate further) we anticipate that we will generate positive cash flow from operations and, if necessary, have sufficient cash availability from our ABL Facility to meet our ongoing liquidity needs.
5. Special Charges
In December 2008, we announced that our Syracuse China manufacturing facility and our Mira Loma, California distribution center would be shut down in early to mid-2009 in order to reduce costs. See Form 10-K for the year ended December 31, 2008 for further
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discussion. We incurred additional charges of approximately $0.2 million and $2.7 million in the three months and six months ended June 30, 2009, respectively, related to these planned closures. The Syracuse China facility was closed on April 9, 2009 and the Mira Loma distribution center was closed on May 31, 2009.
A charge of $1.1 million was incurred in the first quarter of 2009 to write down certain raw materials and work in process inventory that could not be converted to finished product. An immaterial amount of this inventory was subsequently sold in the second quarter of 2009, resulting in a reversal of this portion of the write-down. These amounts were included in cost of sales on the Condensed Consolidated Statement of Operations in the North American Other segment.
Additional depreciation expense of $0.7 million was recorded in the first quarter of 2009 to reflect the shorter remaining useful life of the assets. These amounts were included in cost of sales on the Condensed Consolidated Statement of Operations in the North American Other segment.
Special charges of $0.3 million and $0.7 million in the three months and six months ended June 30, 2009, respectively, included various legal, consulting and employee related costs. These amounts were included in special charges on the Condensed Consolidated Statement of Operations in the North American Other and North American Glass segments.
Other (expense) income on the Condensed Consolidated Statement of Operations included charges of $0.2 million in the six months ended June 30, 2009 for the change in fair value of ineffective natural gas hedges related to our Syracuse China operation. These amounts were included in the North American Other segment.
The following table summarizes the facility closure charges in the second quarter and first half of 2009:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30, 2009	 	 	Six months ended June 30, 2009	 	
 	 	North	 	 	North	 	 	 	 	 	 	North	 	 	North	 	 	 	 	
 	 	American	 	 	American	 	 	 	 	 	 	American	 	 	American	 	 	 	 	
(Dollars in thousands)	 	Glass	 	 	Other	 	 	Total	 	 	Glass	 	 	Other	 	 	Total	 	
Inventory write-down	 	$	1	 	 	$	(3	)	 	$	(2	)	 	$	1	 	 	$	1,115	 	 	$	1,116	 	
Fixed asset depreciation	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	705	 	 	 	705	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Included in cost of sales	 	 	1	 	 	 	(3	)	 	 	(2	)	 	 	1	 	 	 	1,820	 	 	 	1,821	 	
Employee termination cost & other	 	 	(29	)	 	 	307	 	 	 	278	 	 	 	(27	)	 	 	658	 	 	 	631	 	
Fixed asset write-down	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	43	 	 	 	43	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Included in special charges	 	 	(29	)	 	 	307	 	 	 	278	 	 	 	(27	)	 	 	701	 	 	 	674	 	
Ineffectiveness of natural gas hedge	 	 	—	 	 	 	43	 	 	 	43	 	 	 	—	 	 	 	(186	)	 	 	(186	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Included in other (expense) income	 	 	—	 	 	 	43	 	 	 	43	 	 	 	—	 	 	 	(186	)	 	 	(186	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total pretax charge	 	$	(28	)	 	$	261	 	 	$	233	 	 	$	(26	)	 	$	2,707	 	 	$	2,681	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The following reflects the balance sheet activity related to the facility closure charge for the six months ended June 30, 2009:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Reserve	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Reserve	 	
 	 	Balances	 	 	Total	 	 	Cash	 	 	Inventory &	 	 	 	 	 	 	Balances	 	
 	 	at December 31,	 	 	Charge to	 	 	Receipts	 	 	Fixed asset	 	 	Non-cash	 	 	at June 30,	 	
(Dollars in thousands)	 	2008	 	 	Earnings	 	 	(Payments)	 	 	Write Downs	 	 	Utilization	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory write-down	 	$	—	 	 	$	1,116	 	 	$	3	 	 	$	(1,119	)	 	$	—	 	 	$	—	 	
Fixed asset depreciation	 	 	—	 	 	 	705	 	 	 	—	 	 	 	—	 	 	 	(705	)	 	 	—	 	
Fixed asset write-down	 	 	—	 	 	 	43	 	 	 	—	 	 	 	(43	)	 	 	—	 	 	 	—	 	
Employee termination cost & other	 	 	4,248	 	 	 	631	 	 	 	(2,739	)	 	 	—	 	 	 	—	 	 	 	2,140	 	
Ineffectiveness of natural gas hedges	 	 	—	 	 	 	186	 	 	 	—	 	 	 	—	 	 	 	(186	)	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	4,248	 	 	$	2,681	 	 	$	(2,736	)	 	$	(1,162	)	 	$	(891	)	 	$	2,140	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The ending balance of $2.1 million at June 30, 2009 was included in accrued special charges on the Condensed Consolidated Balance
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Sheets and we expect this to result in cash payments in 2009. The carrying value of this balance approximates its fair value.
The following reflects the total cumulative charges to date related to the facility closure activity:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	North	 	 	North	 	 	Total	 	
 	 	American	 	 	American	 	 	Charges	 	
(Dollars in thousands)	 	Glass	 	 	Other	 	 	To Date	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory write-down	 	$	193	 	 	$	10,691	 	 	$	10,884	 	
Pension & postretirement welfare	 	 	—	 	 	 	4,170	 	 	 	4,170	 	
Fixed asset depreciation	 	 	—	 	 	 	966	 	 	 	966	 	
 	 	 	 	 	 	 	 	 	 	
Included in cost of sales	 	 	193	 	 	 	15,827	 	 	 	16,020	 	
Employee termination cost & other	 	 	591	 	 	 	4,860	 	 	 	5,451	 	
Fixed asset write-down	 	 	65	 	 	 	9,703	 	 	 	9,768	 	
 	 	 	 	 	 	 	 	 	 	
Included in special charges	 	 	656	 	 	 	14,563	 	 	 	15,219	 	
Ineffectiveness of natural gas hedge	 	 	—	 	 	 	(569	)	 	 	(569	)	
 	 	 	 	 	 	 	 	 	 	
Included in other (expense) income	 	 	—	 	 	 	(569	)	 	 	(569	)	
 	 	 	 	 	 	 	 	 	 	
Total pretax charge	 	$	849	 	 	$	30,959	 	 	$	31,808	 	
 	 	 	 	 	 	 	 	 	 	
We expect the total charges for each of these activities to approximate the charges incurred to date.
6. Income Taxes
The Company’s effective tax rate differs from the United States statutory tax rate primarily due to changes in the mix of earnings in countries with differing statutory tax rates, changes in accruals related to uncertain tax positions, tax planning structures and changes in tax laws. At June 30, 2009 and December 31, 2008 we had $1.2 million and $2.3 million, respectively, of gross unrecognized tax benefits, exclusive of interest and penalties. The decrease of $1.1 million was primarily attributable to an income tax settlement during the second quarter, offset by additions based on tax positions related to the current year.
In addition, SFAS No. 109, Accounting for Income Taxes requires that the provision for/(benefit from) income taxes be allocated between continuing operations and other categories of earnings (such as discontinued operations or other comprehensive income) for each tax jurisdiction. In periods in which there is a year-to-date pre-tax loss from continuing operations and pre-tax income in other categories of earnings, the tax provision is first allocated to the other categories of earnings. A related tax benefit is then recorded in continuing operations. Included in our income tax provision are tax benefits of $3.6 million for the second quarter of 2009 and $3.9 million for the first six months of 2009 related to these intra-period allocations. Depending upon the level of our future earnings and losses and their impact on other comprehensive income, it is possible that these tax adjustments may change or even reverse in future periods.
Further, our current and future provision for (benefit from) income taxes for 2009 is significantly impacted by valuation allowances. In the United States and China, we have recorded a full valuation allowance against our deferred income tax assets. In addition, partial valuation allowances have been recorded in the Netherlands, Portugal and Mexico. In assessing the need for recording a valuation allowance we weigh all available positive and negative evidence. Examples of the evidence we consider are cumulative losses in recent years, losses expected in early future years, a history of potential tax benefits expiring unused, whether there was an unusual, infrequent, or extraordinary item to be considered. We intend to maintain these allowances until it is more likely than not that the deferred income tax assets will be realized.
7. Pension and Non-pension Postretirement Benefits
We have pension plans covering the majority of our employees. Benefits generally are based on compensation for salaried employees and job grade and length of service for hourly employees. Our policy is to fund pension plans such that sufficient assets will be available to meet future benefit requirements. In addition, we have an unfunded supplemental employee retirement plan (SERP) that covers salaried U.S.-based employees of Libbey hired before January 1, 2006. The U.S. pension plans cover the salaried U.S.-based
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employees of Libbey hired before January 1, 2006 and most hourly U.S.-based employees. The non-U.S. pension plans cover the employees of our wholly owned subsidiaries Royal Leerdam and Crisa. The Crisa plan is not funded.
The components of our net pension expense, including the SERP, are as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	U.S. Plans	 	Non-U.S. Plans	 	Total	
Three months ended June 30,	 	2009	 	2008	 	2009	 	2008	 	2009	 	2008	
 	
Service cost	 	$	1,216	 	 	$	1,223	 	 	$	338	 	 	$	434	 	 	$	1,554	 	 	$	1,657	 	
Interest cost	 	 	3,799	 	 	 	3,885	 	 	 	1,037	 	 	 	1,139	 	 	 	4,836	 	 	 	5,024	 	
Expected return on plan assets	 	 	(4,275	)	 	 	(4,412	)	 	 	(633	)	 	 	(798	)	 	 	(4,908	)	 	 	(5,210	)	
Amortization of unrecognized:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prior service cost (gain)	 	 	561	 	 	 	610	 	 	 	(23	)	 	 	(17	)	 	 	538	 	 	 	593	 	
Loss	 	 	118	 	 	 	305	 	 	 	94	 	 	 	56	 	 	 	212	 	 	 	361	 	
Settlement charge	 	 	200	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	200	 	 	 	—	 	
 	
Pension expense	 	$	1,619	 	 	$	1,611	 	 	$	813	 	 	$	814	 	 	$	2,432	 	 	$	2,425	 	

 	 	U.S. Plans	 	Non-U.S. Plans	 	Total	
Six months ended June 30,	 	2009	 	2008	 	2009	 	2008	 	2009	 	2008	
 	
Service cost	 	$	2,490	 	 	$	2,696	 	 	$	676	 	 	$	876	 	 	$	3,166	 	 	$	3,572	 	
Interest cost	 	 	7,896	 	 	 	7,815	 	 	 	2,074	 	 	 	2,365	 	 	 	9,970	 	 	 	10,180	 	
Expected return on plan assets	 	 	(8,801	)	 	 	(8,787	)	 	 	(1,265	)	 	 	(1,628	)	 	 	(10,066	)	 	 	(10,415	)	
Amortization of unrecognized:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prior service cost (gain)	 	 	1,121	 	 	 	1,195	 	 	 	(47	)	 	 	(35	)	 	 	1,074	 	 	 	1,160	 	
Loss	 	 	435	 	 	 	659	 	 	 	188	 	 	 	147	 	 	 	623	 	 	 	806	 	
Settlement	 	 	2,700	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,700	 	 	 	—	 	
 	
Pension expense	 	$	5,841	 	 	$	3,578	 	 	$	1,626	 	 	$	1,725	 	 	$	7,467	 	 	$	5,303	 	
 	
We incurred pension settlement charges of $0.2 million and $2.7 million during the three months and six months ended June 30, 2009, respectively. The pension settlement charges were triggered by excess lump sum distributions to retirees.
We provide certain retiree health care and life insurance benefits covering our U.S and Canadian salaried and non-union hourly employees hired before January 1, 2004 and a majority of our union hourly employees. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. Benefits for most hourly retirees are determined by collective bargaining. The U.S. non-pension postretirement plans cover the hourly and salaried U.S.-based employees of Libbey. During the second quarter of 2008, we amended our U.S. non-pension postretirement plans to cover employees and retirees of Syracuse China previously covered under a multi-employer plan. This plan amendment was effective September 1, 2008. The non-U.S. non-pension postretirement plans cover the retirees and active employees of Libbey who are located in Canada. The postretirement benefit plans are not funded.
The provision for our non-pension postretirement benefit expense consists of the following:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	U.S. Plans	 	Non-U.S. Plans	 	Total	
Three months ended June 30,	 	2009	 	2008	 	2009	 	2008	 	2009	 	2008	
 	
Service cost	 	$	341	 	 	$	254	 	 	$	1	 	 	$	1	 	 	$	342	 	 	$	255	 	
Interest cost	 	 	955	 	 	 	714	 	 	 	26	 	 	 	36	 	 	 	981	 	 	 	750	 	
Amortization of unrecognized:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prior service gain	 	 	(81	)	 	 	(95	)	 	 	—	 	 	 	—	 	 	 	(81	)	 	 	(95	)	
Loss / (Gain)	 	 	177	 	 	 	71	 	 	 	(9	)	 	 	(1	)	 	 	168	 	 	 	70	 	
 	
Non-pension postretirement benefit expense	 	$	1,392	 	 	$	944	 	 	$	18	 	 	$	36	 	 	$	1,410	 	 	$	980	 	
 	
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 	 	U.S. Plans	 	Non-U.S. Plans	 	Total	
Six months ended June 30,	 	2009	 	2008	 	2009	 	2008	 	2009	 	2008	
 	
Service cost	 	$	666	 	 	$	550	 	 	$	1	 	 	$	1	 	 	$	667	 	 	$	551	 	
Interest cost	 	 	1,892	 	 	 	1,427	 	 	 	55	 	 	 	64	 	 	 	1,947	 	 	 	1,491	 	
Amortization of unrecognized:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prior service cost (gain)	 	 	(209	)	 	 	(231	)	 	 	—	 	 	 	—	 	 	 	(209	)	 	 	(231	)	
Loss / (Gain)	 	 	382	 	 	 	119	 	 	 	(17	)	 	 	(16	)	 	 	365	 	 	 	103	 	
 	
Non-pension postretirement benefit expense	 	$	2,731	 	 	$	1,865	 	 	$	39	 	 	$	49	 	 	$	2,770	 	 	$	1,914	 	
 	
In 2009, we expect to utilize approximately $18.0 million to fund our pension plans and pay for non-pension postretirement benefits. Of that amount, $4.0 million and $8.1 million was utilized in the three months and six months ended June 30, 2009.
8. Net Income (Loss) per Share of Common Stock
The following table sets forth the computation of basic and diluted earnings per share:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended June 30,	 	Six months Ended June 30,	
 	 	2009	 	2008	 	2009	 	2008	
 	
Numerator for earnings per share — net income (loss ) that is available to common shareholders	 	$	2,664	 	 	$	(2,119	)	 	$	(25,229	)	 	$	(5,596	)	
 	
Denominator for basic earnings per share — weighted average shares outstanding	 	 	14,881,521	 	 	 	14,645,105	 	 	 	14,811,592	 	 	 	14,612,306	 	
 	
Effect of dilutive securities (1)	 	 	269,147	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Denominator for diluted earnings per share — adjusted weighted average shares and assumed conversions	 	 	15,150,668	 	 	 	14,645,105	 	 	 	14,811,592	 	 	 	14,612,306	 	
 	
Basic earnings (loss) per share	 	$	0.18	 	 	$	(0.14	)	 	$	(1.70	)	 	$	(0.38	)	
 	
Diluted earnings (loss) per share	 	$	0.18	 	 	$	(0.14	)	 	$	(1.70	)	 	$	(0.38	)	

			
(1)	 	The effect of employee stock options, warrants, restricted stock units and the employee stock purchase plan (ESPP) (243,236 shares for the six months ended June 30, 2009, and 285,799 and 330,641 shares for the three months and six months ended June 30, 2008, respectively), was anti-dilutive and thus not included in the earnings per share calculation. These amounts would have been dilutive if not for the net loss.	
When applicable, diluted shares outstanding include the dilutive impact of in-the-money employee stock options, which are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the tax-effected proceeds that hypothetically would be received from the exercise of all in-the-money options are assumed to be used to repurchase shares.
9. Derivatives
We utilize derivative financial instruments to hedge certain interest rate risks associated with our long-term debt, commodity price risks associated with forecasted future natural gas requirements and foreign exchange rate risks associated with transactions denominated in a currency other than the U.S. dollar. Most of these derivatives, except for certain natural gas contracts originally designated to expected purchases at Syracuse China and the foreign currency contracts, qualify for hedge accounting since the hedges are highly effective, and we have designated and documented contemporaneously the hedging relationships involving these derivative instruments. Changes in fair value of these hedges are recorded in Other Comprehensive Income (OCI). While we intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective or if we do not believe that the forecasted transactions will occur, the changes in the fair value of the derivatives used as hedges will be reflected in our earnings. All of these contracts were accounted for under FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133).
We use Interest Rate Protection Agreements (Rate Agreements) to manage our exposure to variable interest rates. These Rate Agreements effectively convert a portion of our borrowings from variable rate debt to fixed-rate debt, thus reducing the impact of
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interest rate changes on future results. These instruments are valued using the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves.
We also use commodity futures contracts related to forecasted future North American natural gas requirements. The objective of these futures contracts and other derivatives is to limit the fluctuations in prices paid due to adverse price movements in the underlying commodity. We consider our forecasted natural gas requirements in determining the quantity of natural gas to hedge. We combine the forecasts with historical observations to establish the percentage of forecast eligible to be hedged, typically ranging from 40 percent to 70 percent of our anticipated requirements, up to eighteen months in the future. The fair values of these instruments are determined from market quotes. Certain of our natural gas futures contracts are now classified as ineffective, as the forecasted transactions are not probable of occurring due to the closure of our Syracuse China facility in April 2009.
Our foreign currency exposure arises from transactions denominated in a currency other than the U.S. dollar, primarily associated with anticipated purchases of new equipment or net investment in a foreign operation. The fair values of these instruments are determined from market quotes. The values of these derivatives will change over time as cash receipts and payments are made and as market conditions change.
Notional Amounts
As of June 30, 2009, we had commodity contracts for 3,810,000 million British Thermal Units (BTUs) of natural gas. We also had Interest Rate Protection Agreements for $200.0 million of our variable rate debt, as discussed in Note 4. At December 31, 2008, we had Interest Rate Protection Agreements for $200.0 million of variable rate debt and commodity contracts for 5,280,000 million BTUs of natural gas. In January 2008, we entered into a series of foreign currency contracts to sell Canadian dollars. As of June 30, 2008, we had contracts for 4.5 million Canadian dollars. During April 2007, we entered into a foreign currency contract for 212.0 million pesos for a contractual payment due to Vitro in January 2008. As of December 31, 2008, all of these currency contracts had expired.
Fair Values
The following table provides the fair values of our derivative financial instruments for the periods presented:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Liability Derivatives:	 	
 	 	June 30, 2009	 	 	December 31, 2008	 	
 	 	Balance	 	 	 	 	 	Balance	 	 	 	
 	 	Sheet	 	Fair	 	 	Sheet	 	Fair	 	
 	 	Location	 	Value	 	 	Location	 	Value	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives designated as hedging instruments under SFAS 133:	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate contracts	 	Derivative liability	 	$	4,030	 	 	Derivative liability	 	$	6,761	 	
Natural gas contracts	 	Derivative liability	 	 	9,607	 	 	Derivative liability	 	 	10,908	 	
Natural gas contracts	 	Other long term liability	 	 	2,817	 	 	Other long term liability	 	 	3,500	 	
 	 	 	 	 	 	 	 	 	 	 	
Total designated	 	 	 	 	16,454	 	 	 	 	 	21,169	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives undesignated as hedging instruments under SFAS 133:	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate contracts	 	Derivative liability	 	 	—	 	 	Derivative liability	 	 	—	 	
Natural gas contracts	 	Derivative liability	 	 	371	 	 	Derivative liability	 	 	267	 	
Natural gas contracts	 	Other long term liability	 	 	100	 	 	Other long term liability	 	 	193	 	
 	 	 	 	 	 	 	 	 	 	 	
Total undesignated	 	 	 	 	471	 	 	 	 	 	460	 	
 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	$	16,925	 	 	 	 	$	21,629	 	
 	 	 	 	 	 	 	 	 	 	 	
Change in value of derivatives
Most of our derivatives qualify and are designated as cash flow hedges (except certain natural gas contracts originally designated to expected purchases at Syracuse China) at June 30, 2009. Hedge accounting is applied only when the derivative is deemed to be highly
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effective at offsetting changes in fair values or anticipated cash flows of the hedged item or transaction. For hedged forecasted transactions, hedge accounting is discontinued if the forecasted transaction is no longer probable to occur, and any previously deferred gains or losses would be recorded to earnings immediately. The ineffective portion of the change in the fair value of a derivative designated as a cash flow hedge is recognized in current earnings.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Amount of derivative gain/(loss) recognized in OCI (effective portion)	 	
 	 	Three months ended June 30,	 	 	Six months ended June 30,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives in Cash Flow Hedging relationships:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate contracts	 	$	1,433	 	 	$	3,745	 	 	$	2,929	 	 	$	(174	)	
Natural gas contracts	 	 	(340	)	 	 	3,724	 	 	 	(6,761	)	 	 	7,986	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	1,093	 	 	$	7,469	 	 	$	(3,832	)	 	$	7,812	 	

 	 	 	 	Gain / (loss) reclassified from Accumulated Other	 	
 	 	 	 	Comprehensive Income (loss) to income (effective portion)	 	
 	 	 	 	Three months ended June 30,	 	 	Six months ended June 30,	 	
 	 	 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 		
Derivative:	 	Location:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural gas contracts	 	Cost of sales	 	$	(4,970	)	 	$	1,585	 	 	$	(8,744	)	 	$	453	 	
Interest rate contracts	 	Interest expense	 	 	1,583	 	 	 	720	 	 	 	2,903	 	 	 	951	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Total impact on net income (loss)	 	$	(3,387	)	 	$	2,305	 	 	$	(5,841	)	 	$	1,404	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Certain of our natural gas futures contracts are now classified as ineffective, as the forecasted transactions are not probable of occurring due to the closure of our Syracuse China facility in April 2009 as well as decreased production at some of our plants. As a result, we recorded a credit of $0.3 million in the three months ended June 30, 2009 and expense of $0.1 million in the six months ended June 30, 2009. Expenses reclassified from Accumulated Other Comprehensive Income to earnings during the three and six months ended June 30, 2009 were immaterial.
The following table provides the impact on the Condensed Consolidated Statement of Operations from derivatives no longer designated as cash flow hedges:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Gain (loss) recognized in income (ineffective portion)	 	
 	 	 	 	Three months ended June 30,	 	 	Six months ended June 30,	 	
 	 	 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 		
Derivative:	 	Location:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural gas contracts	 	Other (expense) income	 	$	290	 	 	$	—	 	 	$	(109	)	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	$	290	 	 	$	—	 	 	$	(109	)	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As the natural gas contracts mature, the accumulated gains (losses) for the respective contracts are reclassified from accumulated other comprehensive income to current expense in cost of sales in our Condensed Consolidated Statement of Operations. Similarly, as fixed interest payments are made pursuant to the interest rate protection agreements, they are recorded together with the related receipt of variable interest receipts, the payment of contractual interest expense to the banks and the reclassification of accumulated gains (losses) from accumulated other comprehensive income related to the interest rate agreements. Based on our current valuation, we estimate that accumulated losses currently carried in accumulated other comprehensive income that will be reclassified into earnings over the next twelve months will result in $14.0 million of expense in our Condensed Consolidated Statement of Operations.
Gains and losses for derivatives which were not designated as hedging instruments are recorded in current earnings as follows:
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 	 	 	 	Three months ended June 30,	 	 	Six months ended June 30,	 	
 	 	 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 		
Derivative:	 	Location:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency contracts	 	Other (expense) income	 	$	—	 	 	$	(113	)	 	$	—	 	 	$	(283	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	$	—	 	 	$	(113	)	 	$	—	 	 	$	(283	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
We do not believe we are exposed to more than a nominal amount of credit risk in our interest rate and natural gas hedges, as the counterparties are established financial institutions. The counterparties are rated A+ or better for the Interest Rate Protection Agreements and BBB or better for the other derivative agreements as of June 30, 2009, by Standard and Poor’s.
10. Comprehensive Income (Loss)
Components of comprehensive income (loss) (net of tax) are as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	 	Six months ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	2,664	 	 	$	(2,119	)	 	$	(25,229	)	 	$	(5,596	)	
Change in pension and nonpension postretirement liability (1)	 	 	5,436	 	 	 	(2,074	)	 	 	4,481	 	 	 	(3,131	)	
Change in fair value of derivatives (2)	 	 	4,431	 	 	 	3,991	 	 	 	2,642	 	 	 	4,943	 	
Exchange rate fluctuations	 	 	3,900	 	 	 	(95	)	 	 	(170	)	 	 	6,932	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income (loss)	 	$	16,431	 	 	$	(297	)	 	$	(18,276	)	 	$	3,148	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) Net of the following tax amounts for the respective periods	 	$	(3,741	)	 	$	1,155	 	 	$	(6,316	)	 	$	1,561	 	
(2) Net of the following tax amounts for the respective periods	 	$	(1,633	)	 	$	(1,893	)	 	$	(2,271	)	 	$	(2,416	)	
Accumulated other comprehensive loss (net of tax) is as follows:
 	 	 	 	 	 	 	 	 	
 	 	June 30,	 	 	December 31,	 	
 	 	2009	 	 	2008	 	
 	 	 	 	 	 	 	 	 	
Minimum pension liability and intangible pension asset	 	$	(98,926	)	 	$	(103,407	)	
Derivatives	 	 	(13,968	)	 	 	(16,610	)	
Exchange rate fluctuations	 	 	4,061	 	 	 	4,231	 	
 	 	 	 	 	 	 	
Balance at end of period	 	$	(108,833	)	 	$	(115,786	)	
 	 	 	 	 	 	 	
11. Condensed Consolidated Guarantor Financial Statements
Libbey Glass is a direct, 100 percent owned subsidiary of Libbey Inc. and the issuer of the Senior Notes and the PIK Notes. The obligations of Libbey Glass under the Senior Notes and the PIK Notes are fully and unconditionally and jointly and severally guaranteed by Libbey Inc. and by certain indirect, 100 percent owned domestic subsidiaries of Libbey Inc., as described below. All are related parties that are included in the Condensed Consolidated Financial Statements for the three month and six months periods ended June 30, 2009 and June 30, 2008.
At June 30, 2009, December 31, 2008 and June 30, 2008, Libbey Inc.’s indirect, 100 percent owned domestic subsidiaries were Syracuse China Company, World Tableware Inc., LGA4 Corp., LGA3 Corp., The Drummond Glass Company, LGC Corp., Traex Company, Libbey.com LLC, LGFS Inc., LGAC LLC and Crisa Industrial LLC (collectively, the “Subsidiary Guarantors”). The
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following tables contain Condensed Consolidating Financial Statements of (a) the parent, Libbey Inc., (b) the issuer, Libbey Glass, (c) the Subsidiary Guarantors, (d) the indirect subsidiaries of Libbey Inc. that are not Subsidiary Guarantors (collectively, “Non-Guarantor Subsidiaries”), (e) the consolidating elimination entries, and (f) the consolidated totals.
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Libbey Inc.
Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Three months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net sales	 	$	—	 	 	$	102,180	 	 	$	24,341	 	 	$	77,707	 	 	$	(8,402	)	 	$	195,826	 	
Freight billed to customers	 	 	—	 	 	 	141	 	 	 	222	 	 	 	36	 	 	 	—	 	 	 	399	 	
 	
Total revenues	 	 	—	 	 	 	102,321	 	 	 	24,563	 	 	 	77,743	 	 	 	(8,402	)	 	 	196,225	 	
Cost of sales	 	 	—	 	 	 	77,641	 	 	 	18,823	 	 	 	73,880	 	 	 	(8,402	)	 	 	161,942	 	
 	
Gross profit	 	 	—	 	 	 	24,680	 	 	 	5,740	 	 	 	3,863	 	 	 	—	 	 	 	34,283	 	
Selling, general and administrative expenses	 	 	—	 	 	 	12,353	 	 	 	2,158	 	 	 	8,003	 	 	 	—	 	 	 	22,514	 	
Special charges	 	 	—	 	 	 	(29	)	 	 	307	 	 	 	—	 	 	 	—	 	 	 	278	 	
 	
Income (loss) from operations	 	 	—	 	 	 	12,356	 	 	 	3,275	 	 	 	(4,140	)	 	 	—	 	 	 	11,491	 	
Other income (expense)	 	 	—	 	 	 	2,248	 	 	 	129	 	 	 	381	 	 	 	—	 	 	 	2,758	 	
 	
Earnings (loss) before interest and income taxes	 	 	—	 	 	 	14,604	 	 	 	3,404	 	 	 	(3,759	)	 	 	—	 	 	 	14,249	 	
Interest expense	 	 	—	 	 	 	16,017	 	 	 	—	 	 	 	1,515	 	 	 	—	 	 	 	17,532	 	
 	
Earnings (loss) before income taxes	 	 	—	 	 	 	(1,413	)	 	 	3,404	 	 	 	(5,274	)	 	 	—	 	 	 	(3,283	)	
Provision (benefit) for income taxes	 	 	—	 	 	 	(4,623	)	 	 	(82	)	 	 	(1,242	)	 	 	—	 	 	 	(5,947	)	
 	
Net income (loss)	 	 	—	 	 	 	3,210	 	 	 	3,486	 	 	 	(4,032	)	 	 	—	 	 	 	2,664	 	
Equity in net income (loss) of subsidiaries	 	 	2,664	 	 	 	(546	)	 	 	—	 	 	 	—	 	 	 	(2,118	)	 	 	—	 	
 	
Net income (loss)	 	$	2,664	 	 	$	2,664	 	 	$	3,486	 	 	$	(4,032	)	 	$	(2,118	)	 	$	2,664	 	
 	
The following represents the total special charges included in the above Condensed Consolidated Statement of Operations (see note 5):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Three months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	

Cost of sales	 	$	—	 	 	$	1	 	 	$	(3	)	 	$	—	 	 	$	—	 	 	$	(2	)	
Special charges	 	 	—	 	 	 	(29	)	 	 	307	 	 	 	—	 	 	 	—	 	 	 	278	 	
Other income (expense)	 	 	—	 	 	 	—	 	 	 	43	 	 	 	—	 	 	 	—	 	 	 	43	 	
 	
Total pretax special charges	 	$	—	 	 	$	(28	)	 	$	261	 	 	$	—	 	 	$	—	 	 	$	233	 	
 	
Special charges net of tax	 	$	—	 	 	$	(28	)	 	$	261	 	 	$	—	 	 	$	—	 	 	$	233	 	
 	
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Libbey Inc.
Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Three months ended June 30, 2008	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net sales	 	$	—	 	 	$	107,328	 	 	$	30,120	 	 	$	100,728	 	 	$	(13,348	)	 	$	224,828	 	
Freight billed to customers	 	 	—	 	 	 	195	 	 	 	308	 	 	 	112	 	 	 	—	 	 	 	615	 	
 	
Total revenues	 	 	—	 	 	 	107,523	 	 	 	30,428	 	 	 	100,840	 	 	 	(13,348	)	 	 	225,443	 	
Cost of sales	 	 	—	 	 	 	85,313	 	 	 	23,769	 	 	 	87,541	 	 	 	(13,348	)	 	 	183,275	 	
 	
Gross profit	 	 	—	 	 	 	22,210	 	 	 	6,659	 	 	 	13,299	 	 	 	—	 	 	 	42,168	 	
Selling, general and administrative expenses	 	 	—	 	 	 	12,466	 	 	 	3,099	 	 	 	7,886	 	 	 	—	 	 	 	23,451	 	
 	
Income (loss) from operations	 	 	—	 	 	 	9,744	 	 	 	3,560	 	 	 	5,413	 	 	 	—	 	 	 	18,717	 	
Other income (expense)	 	 	—	 	 	 	(91	)	 	 	3	 	 	 	674	 	 	 	—	 	 	 	586	 	
 	
Earnings (loss) before interest and income taxes	 	 	—	 	 	 	9,653	 	 	 	3,563	 	 	 	6,087	 	 	 	—	 	 	 	19,303	 	
Interest expense	 	 	—	 	 	 	15,834	 	 	 	1	 	 	 	1,785	 	 	 	—	 	 	 	17,620	 	
 	
Earnings (loss) before income taxes	 	 	—	 	 	 	(6,181	)	 	 	3,562	 	 	 	4,302	 	 	 	—	 	 	 	1,683	 	
Provision (benefit) for income taxes	 	 	—	 	 	 	(26	)	 	 	—	 	 	 	3,828	 	 	 	—	 	 	 	3,802	 	
 	
Net income (loss)	 	 	—	 	 	 	(6,155	)	 	 	3,562	 	 	 	474	 	 	 	—	 	 	 	(2,119	)	
Equity in net income (loss) of subsidiaries	 	 	(2,119	)	 	 	4,036	 	 	 	—	 	 	 	—	 	 	 	(1,917	)	 	 	—	 	
 	
Net income (loss)	 	$	(2,119	)	 	$	(2,119	)	 	$	3,562	 	 	$	474	 	 	$	(1,917	)	 	$	(2,119	)	
 	
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Libbey Inc.
Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net sales	 	$	—	 	 	$	184,946	 	 	$	45,718	 	 	$	140,816	 	 	$	(17,801	)	 	$	353,679	 	
Freight billed to customers	 	 	—	 	 	 	252	 	 	 	427	 	 	 	65	 	 	 	—	 	 	 	744	 	
 	
Total revenues	 	 	—	 	 	 	185,198	 	 	 	46,145	 	 	 	140,881	 	 	 	(17,801	)	 	 	354,423	 	
Cost of sales	 	 	—	 	 	 	154,564	 	 	 	38,719	 	 	 	133,942	 	 	 	(17,801	)	 	 	309,424	 	
 	
Gross profit	 	 	—	 	 	 	30,634	 	 	 	7,426	 	 	 	6,939	 	 	 	—	 	 	 	44,999	 	
Selling, general and administrative expenses	 	 	—	 	 	 	24,853	 	 	 	4,334	 	 	 	15,701	 	 	 	—	 	 	 	44,888	 	
Special charges	 	 	—	 	 	 	(27	)	 	 	701	 	 	 	—	 	 	 	—	 	 	 	674	 	
 	
Income (loss) from operations	 	 	—	 	 	 	5,808	 	 	 	2,391	 	 	 	(8,762	)	 	 	—	 	 	 	(563	)	
Other income (expense)	 	 	—	 	 	 	2,194	 	 	 	(133	)	 	 	660	 	 	 	—	 	 	 	2,721	 	
 	
Earnings (loss) before interest and income taxes	 	 	—	 	 	 	8,002	 	 	 	2,258	 	 	 	(8,102	)	 	 	—	 	 	 	2,158	 	
Interest expense	 	 	—	 	 	 	31,905	 	 	 	—	 	 	 	2,806	 	 	 	—	 	 	 	34,711	 	
 	
Earnings (loss) before income taxes	 	 	—	 	 	 	(23,903	)	 	 	2,258	 	 	 	(10,908	)	 	 	—	 	 	 	(32,553	)	
Provision (benefit) for income taxes	 	 	—	 	 	 	(5,710	)	 	 	254	 	 	 	(1,868	)	 	 	—	 	 	 	(7,324	)	
 	
Net income (loss)	 	 	—	 	 	 	(18,193	)	 	 	2,004	 	 	 	(9,040	)	 	 	—	 	 	 	(25,229	)	
Equity in net income (loss) of subsidiaries	 	 	(25,229	)	 	 	(7,036	)	 	 	—	 	 	 	—	 	 	 	32,265	 	 	 	—	 	
 	
Net income (loss)	 	$	(25,229	)	 	$	(25,229	)	 	$	2,004	 	 	$	(9,040	)	 	$	32,265	 	 	$	(25,229	)	
 	
The following represents the total special charges included in the above Condensed Consolidated Statement of Operations (see note 5):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Cost of sales	 	$	—	 	 	$	1	 	 	$	1,820	 	 	$	—	 	 	$	—	 	 	$	1,821	 	
Special charges	 	 	—	 	 	 	(27	)	 	 	701	 	 	 	—	 	 	 	—	 	 	 	674	 	
Other income (expense)	 	 	—	 	 	 	—	 	 	 	(186	)	 	 	—	 	 	 	—	 	 	 	(186	)	
 	
Total pretax special charges	 	$	—	 	 	$	(26	)	 	$	2,707	 	 	$	—	 	 	$	—	 	 	$	2,681	 	
 	
Special charges net of tax	 	$	—	 	 	$	(26	)	 	$	2,707	 	 	$	—	 	 	$	—	 	 	$	2,681	 	
 	
 28 

Table of Contents

Libbey Inc.
Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended June 30, 2008	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net sales	 	$	—	 	 	$	197,315	 	 	$	56,703	 	 	$	184,783	 	 	$	(26,697	)	 	$	412,104	 	
Freight billed to customers	 	 	—	 	 	 	367	 	 	 	611	 	 	 	305	 	 	 	—	 	 	 	1,283	 	
 	
Total revenues	 	 	—	 	 	 	197,682	 	 	 	57,314	 	 	 	185,088	 	 	 	(26,697	)	 	 	413,387	 	
Cost of sales	 	 	—	 	 	 	165,088	 	 	 	44,419	 	 	 	158,072	 	 	 	(26,697	)	 	 	340,882	 	
 	
Gross profit	 	 	—	 	 	 	32,594	 	 	 	12,895	 	 	 	27,016	 	 	 	—	 	 	 	72,505	 	
Selling, general and administrative expenses	 	 	—	 	 	 	23,309	 	 	 	5,708	 	 	 	15,293	 	 	 	—	 	 	 	44,310	 	
 	
Income (loss) from operations	 	 	—	 	 	 	9,285	 	 	 	7,187	 	 	 	11,723	 	 	 	—	 	 	 	28,195	 	
Other income (expense)	 	 	—	 	 	 	242	 	 	 	41	 	 	 	1,056	 	 	 	—	 	 	 	1,339	 	
 	
Earnings (loss) before interest and income taxes	 	 	—	 	 	 	9,527	 	 	 	7,228	 	 	 	12,779	 	 	 	—	 	 	 	29,534	 	
Interest expense	 	 	—	 	 	 	31,527	 	 	 	1	 	 	 	3,243	 	 	 	—	 	 	 	34,771	 	
 	
Earnings (loss) before income taxes	 	 	—	 	 	 	(22,000	)	 	 	7,227	 	 	 	9,536	 	 	 	—	 	 	 	(5,237	)	
Provision (benefit) for income taxes	 	 	—	 	 	 	(346	)	 	 	563	 	 	 	142	 	 	 	—	 	 	 	359	 	
 	
Net income (loss)	 	 	—	 	 	 	(21,654	)	 	 	6,664	 	 	 	9,394	 	 	 	—	 	 	 	(5,596	)	
Equity in net income (loss) of subsidiaries	 	 	(5,596	)	 	 	16,058	 	 	 	—	 	 	 	—	 	 	 	(10,462	)	 	 	—	 	
 	
Net income (loss)	 	$	(5,596	)	 	$	(5,596	)	 	$	6,664	 	 	$	9,394	 	 	$	(10,462	)	 	$	(5,596	)	
 	
 29 

Table of Contents

Libbey Inc.
Condensed Consolidating Balance Sheet
(dollars in thousands)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
June 30, 2009 (unaudited)	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Cash and equivalents	 	$	—	 	 	$	11,784	 	 	$	261	 	 	$	12,037	 	 	$	—	 	 	$	24,082	 	
Accounts receivable — net	 	 	—	 	 	 	37,735	 	 	 	6,697	 	 	 	46,820	 	 	 	—	 	 	 	91,252	 	
Inventories — net	 	 	—	 	 	 	40,187	 	 	 	20,761	 	 	 	84,850	 	 	 	—	 	 	 	145,798	 	
Other current assets	 	 	—	 	 	 	12,316	 	 	 	10,758	 	 	 	9,385	 	 	 	(20,062	)	 	 	12,397	 	
 	
Total current assets	 	 	—	 	 	 	102,022	 	 	 	38,477	 	 	 	153,092	 	 	 	(20,062	)	 	 	273,529	 	
Other non-current assets	 	 	—	 	 	 	11,162	 	 	 	—	 	 	 	10,374	 	 	 	—	 	 	 	21,536	 	
Investments in and advances to subsidiaries	 	 	(74,475	)	 	 	422,233	 	 	 	269,516	 	 	 	128,545	 	 	 	(745,819	)	 	 	—	 	
Goodwill and purchased intangible assets — net	 	 	—	 	 	 	26,833	 	 	 	15,775	 	 	 	147,617	 	 	 	—	 	 	 	190,225	 	
 	
Total other assets	 	 	(74,475	)	 	 	460,228	 	 	 	285,291	 	 	 	286,536	 	 	 	(745,819	)	 	 	211,761	 	
Property, plant and equipment — net	 	 	—	 	 	 	84,067	 	 	 	6,301	 	 	 	211,748	 	 	 	—	 	 	 	302,116	 	
 	
Total assets	 	$	(74,475	)	 	$	646,317	 	 	$	330,069	 	 	$	651,376	 	 	$	(765,881	)	 	$	787,406	 	
 	
Accounts payable	 	$	—	 	 	$	11,012	 	 	$	2,688	 	 	$	40,785	 	 	$	—	 	 	$	54,485	 	
Accrued and other current liabilities	 	 	—	 	 	 	69,302	 	 	 	23,226	 	 	 	19,580	 	 	 	(20,062	)	 	 	92,046	 	
Notes payable and long-term debt due within one year	 	 	—	 	 	 	215	 	 	 	—	 	 	 	11,108	 	 	 	—	 	 	 	11,323	 	
 	
Total current liabilities	 	 	—	 	 	 	80,529	 	 	 	25,914	 	 	 	71,473	 	 	 	(20,062	)	 	 	157,854	 	
Long-term debt	 	 	—	 	 	 	464,501	 	 	 	—	 	 	 	67,208	 	 	 	—	 	 	 	531,709	 	
Other long-term liabilities	 	 	—	 	 	 	130,726	 	 	 	11,651	 	 	 	29,941	 	 	 	—	 	 	 	172,318	 	
 	
Total liabilities	 	 	—	 	 	 	675,756	 	 	 	37,565	 	 	 	168,622	 	 	 	(20,062	)	 	 	861,881	 	
Total shareholders’ equity	 	 	(74,475	)	 	 	(29,439	)	 	 	292,504	 	 	 	482,754	 	 	 	(745,819	)	 	 	(74,475	)	
 	
Total liabilities and shareholders’ equity	 	$	(74,475	)	 	$	646,317	 	 	$	330,069	 	 	$	651,376	 	 	$	(765,881	)	 	$	787,406	 	

December 31, 2008	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Cash and equivalents	 	$	—	 	 	$	6,453	 	 	$	413	 	 	$	6,438	 	 	$	—	 	 	$	13,304	 	
Accounts receivable — net	 	 	—	 	 	 	32,789	 	 	 	6,076	 	 	 	37,207	 	 	 	—	 	 	 	76,072	 	
Inventories — net	 	 	—	 	 	 	58,924	 	 	 	26,892	 	 	 	99,426	 	 	 	—	 	 	 	185,242	 	
Other current assets	 	 	—	 	 	 	4,731	 	 	 	316	 	 	 	12,120	 	 	 	—	 	 	 	17,167	 	
 	
Total current assets	 	 	—	 	 	 	102,897	 	 	 	33,697	 	 	 	155,191	 	 	 	—	 	 	 	291,785	 	
Other non-current assets	 	 	—	 	 	 	9,462	 	 	 	43	 	 	 	12,560	 	 	 	—	 	 	 	22,065	 	
Investments in and advances to subsidiaries	 	 	(57,889	)	 	 	406,812	 	 	 	272,761	 	 	 	143,459	 	 	 	(765,143	)	 	 	—	 	
Goodwill and purchased intangible assets — net	 	 	—	 	 	 	28,216	 	 	 	15,780	 	 	 	148,861	 	 	 	—	 	 	 	192,857	 	
 	
Total other assets	 	 	(57,889	)	 	 	444,490	 	 	 	288,584	 	 	 	304,880	 	 	 	(765,143	)	 	 	214,922	 	
Property, plant and equipment — net	 	 	—	 	 	 	88,628	 	 	 	7,697	 	 	 	218,522	 	 	 	—	 	 	 	314,847	 	
 	
Total assets	 	$	(57,889	)	 	$	636,015	 	 	$	329,978	 	 	$	678,593	 	 	$	(765,143	)	 	$	821,554	 	
 	
Accounts payable	 	$	—	 	 	$	9,370	 	 	$	2,794	 	 	$	42,264	 	 	$	—	 	 	$	54,428	 	
Accrued and other current liabilities	 	 	—	 	 	 	36,589	 	 	 	19,700	 	 	 	35,908	 	 	 	—	 	 	 	92,197	 	
Notes payable and long-term debt due within one year	 	 	—	 	 	 	215	 	 	 	—	 	 	 	4,186	 	 	 	—	 	 	 	4,401	 	
 	
Total current liabilities	 	 	—	 	 	 	46,174	 	 	 	22,494	 	 	 	82,358	 	 	 	—	 	 	 	151,026	 	
Long-term debt	 	 	—	 	 	 	451,772	 	 	 	—	 	 	 	94,084	 	 	 	—	 	 	 	545,856	 	
Other long-term liabilities	 	 	—	 	 	 	140,936	 	 	 	14,185	 	 	 	27,440	 	 	 	—	 	 	 	182,561	 	
 	
Total liabilities	 	 	—	 	 	 	638,882	 	 	 	36,679	 	 	 	203,882	 	 	 	—	 	 	 	879,443	 	
Total shareholders’ equity	 	 	(57,889	)	 	 	(2,867	)	 	 	293,299	 	 	 	474,711	 	 	 	(765,143	)	 	 	(57,889	)	
 	
Total liabilities and shareholders’ equity	 	$	(57,889	)	 	$	636,015	 	 	$	329,978	 	 	$	678,593	 	 	$	(765,143	)	 	$	821,554	 	
 	
 30 

Table of Contents

Libbey Inc.
Condensed Consolidating Statement of Cash Flows
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Three months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net income (loss)	 	$	2,664	 	 	$	2,664	 	 	$	3,486	 	 	$	(4,032	)	 	$	(2,118	)	 	$	2,664	 	
Depreciation and amortization	 	 	—	 	 	 	3,848	 	 	 	243	 	 	 	6,427	 	 	 	—	 	 	 	10,518	 	
Other operating activities	 	 	(2,664	)	 	 	(1,880	)	 	 	(3,707	)	 	 	17,657	 	 	 	2,118	 	 	 	11,524	 	
 	
Net cash provided by (used in)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
operating activities	 	 	—	 	 	 	4,632	 	 	 	22	 	 	 	20,052	 	 	 	—	 	 	 	24,706	 	
Additions to property, plant & equipment	 	 	—	 	 	 	(1,997	)	 	 	(54	)	 	 	(2,559	)	 	 	—	 	 	 	(4,610	)	
Other investing activities	 	 	—	 	 	 	21	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	21	 	

Net cash (used in) investing activities	 	 	—	 	 	 	(1,976	)	 	 	(54	)	 	 	(2,559	)	 	 	—	 	 	 	(4,589	)	
Net borrowings	 	 	—	 	 	 	(79	)	 	 	—	 	 	 	(12,730	)	 	 	—	 	 	 	(12,809	)	
Other financing activities	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Net cash provided by (used in) financing activities	 	 	—	 	 	 	(79	)	 	 	—	 	 	 	(12,730	)	 	 	—	 	 	 	(12,809	)	
Exchange effect on cash	 	 	—	 	 	 	—	 	 	 	—	 	 	 	311	 	 	 	—	 	 	 	311	 	
 	
Increase (decrease) in cash	 	 	—	 	 	 	2,577	 	 	 	(32	)	 	 	5,074	 	 	 	—	 	 	 	7,619	 	
Cash at beginning of period	 	 	—	 	 	 	9,207	 	 	 	293	 	 	 	6,963	 	 	 	—	 	 	 	16,463	 	
 	
Cash at end of period	 	$	—	 	 	$	11,784	 	 	$	261	 	 	$	12,037	 	 	$	—	 	 	$	24,082	 	

Three months ended June 30, 2008	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net income (loss)	 	$	(2,119	)	 	$	(2,119	)	 	$	3,562	 	 	$	474	 	 	$	(1,917	)	 	$	(2,119	)	
Depreciation and amortization	 	 	—	 	 	 	3,638	 	 	 	754	 	 	 	6,846	 	 	 	—	 	 	 	11,238	 	
Other operating activities	 	 	2,119	 	 	 	6,347	 	 	 	(3,801	)	 	 	(10,621	)	 	 	1,917	 	 	 	(4,039	)	
 	
Net cash provided by (used in)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
operating activities	 	 	—	 	 	 	7,866	 	 	 	515	 	 	 	(3,301	)	 	 	—	 	 	 	5,080	 	
Additions to property, plant & equipment	 	 	—	 	 	 	(2,670	)	 	 	(240	)	 	 	(5,350	)	 	 	—	 	 	 	(8,260	)	
Other investing activities	 	 	—	 	 	 	5	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5	 	

Net cash (used in) investing activities	 	 	—	 	 	 	(2,665	)	 	 	(240	)	 	 	(5,350	)	 	 	—	 	 	 	(8,255	)	
Net borrowings	 	 	—	 	 	 	4,221	 	 	 	—	 	 	 	9,693	 	 	 	—	 	 	 	13,914	 	
Other financing activities	 	 	—	 	 	 	(365	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(365	)	
 	
Net cash provided by (used in) financing activities	 	 	—	 	 	 	3,856	 	 	 	—	 	 	 	9,693	 	 	 	—	 	 	 	13,549	 	
Exchange effect on cash	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(93	)	 	 	—	 	 	 	(93	)	
 	
Increase (decrease) in cash	 	 	—	 	 	 	9,057	 	 	 	275	 	 	 	949	 	 	 	—	 	 	 	10,281	 	
Cash at beginning of period	 	 	—	 	 	 	363	 	 	 	1,041	 	 	 	6,198	 	 	 	—	 	 	 	7,602	 	
 	
Cash at end of period	 	$	—	 	 	$	9,420	 	 	$	1,316	 	 	$	7,147	 	 	$	—	 	 	$	17,883	 	
 	
 31 

Table of Contents

Libbey Inc.
Condensed Consolidating Statement of Cash Flows
(dollars in thousands)
(unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended June 30, 2009	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net income (loss)	 	$	(25,229	)	 	$	(25,229	)	 	$	2,004	 	 	$	(9,040	)	 	$	32,265	 	 	$	(25,229	)	
Depreciation and amortization	 	 	—	 	 	 	7,776	 	 	 	1,586	 	 	 	12,884	 	 	 	—	 	 	 	22,246	 	
Other operating activities	 	 	25,229	 	 	 	26,139	 	 	 	(3,528	)	 	 	26,498	 	 	 	(32,265	)	 	 	42,073	 	
 	
Net cash provided by (used in) operating activities	 	 	—	 	 	 	8,686	 	 	 	62	 	 	 	30,342	 	 	 	—	 	 	 	39,090	 	
Additions to property, plant & equipment	 	 	—	 	 	 	(3,361	)	 	 	(214	)	 	 	(5,975	)	 	 	—	 	 	 	(9,550	)	
Other investing activities	 	 	—	 	 	 	88	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	88	 	

Net cash (used in) investing activities	 	 	—	 	 	 	(3,273	)	 	 	(214	)	 	 	(5,975	)	 	 	—	 	 	 	(9,462	)	
Net borrowings	 	 	—	 	 	 	(82	)	 	 	—	 	 	 	(18,730	)	 	 	—	 	 	 	(18,812	)	
Other financing activities	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Net cash provided by (used in) financing activities	 	 	—	 	 	 	(82	)	 	 	—	 	 	 	(18,730	)	 	 	—	 	 	 	(18,812	)	
Exchange effect on cash	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(38	)	 	 	—	 	 	 	(38	)	
 	
Increase (decrease) in cash	 	 	—	 	 	 	5,331	 	 	 	(152	)	 	 	5,599	 	 	 	—	 	 	 	10,778	 	
Cash at beginning of period	 	 	—	 	 	 	6,453	 	 	 	413	 	 	 	6,438	 	 	 	—	 	 	 	13,304	 	
 	
Cash at end of period	 	$	—	 	 	$	11,784	 	 	$	261	 	 	$	12,037	 	 	$	—	 	 	$	24,082	 	

Six months ended June 30, 2008	
 	 	Libbey	 	Libbey	 	 	 	 	 	Non-	 	 	 	 	
 	 	Inc.	 	Glass	 	Subsidiary	 	Guarantor	 	 	 	 	
 	 	(Parent)	 	(Issuer)	 	Guarantors	 	Subsidiaries	 	Eliminations	 	Consolidated	
 	
Net income (loss)	 	$	(5,596	)	 	$	(5,596	)	 	$	6,664	 	 	$	9,394	 	 	$	(10,462	)	 	$	(5,596	)	
Depreciation and amortization	 	 	—	 	 	 	7,520	 	 	 	1,510	 	 	 	13,504	 	 	 	—	 	 	 	22,534	 	
Other operating activities	 	 	5,596	 	 	 	(10,800	)	 	 	(7,035	)	 	 	(38,220	)	 	 	10,462	 	 	 	(39,997	)	
 	
Net cash provided by (used in) operating activities	 	 	—	 	 	 	(8,876	)	 	 	1,139	 	 	 	(15,322	)	 	 	—	 	 	 	(23,059	)	
Additions to property, plant & equipment	 	 	—	 	 	 	(5,990	)	 	 	(355	)	 	 	(11,267	)	 	 	—	 	 	 	(17,612	)	
Other investing activities	 	 	—	 	 	 	46	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	46	 	

Net cash (used in) investing activities	 	 	—	 	 	 	(5,944	)	 	 	(355	)	 	 	(11,267	)	 	 	—	 	 	 	(17,566	)	
Net borrowings	 	 	—	 	 	 	4,135	 	 	 	—	 	 	 	18,374	 	 	 	—	 	 	 	22,509	 	
Other financing activities	 	 	—	 	 	 	(729	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(729	)	
 	
Net cash provided by (used in) financing activities	 	 	—	 	 	 	3,406	 	 	 	—	 	 	 	18,374	 	 	 	—	 	 	 	21,780	 	
Exchange effect on cash	 	 	—	 	 	 	—	 	 	 	—	 	 	 	189	 	 	 	—	 	 	 	189	 	
 	
Increase (decrease) in cash	 	 	—	 	 	 	(11,414	)	 	 	784	 	 	 	(8,026	)	 	 	—	 	 	 	(18,656	)	
Cash at beginning of period	 	 	—	 	 	 	20,834	 	 	 	532	 	 	 	15,173	 	 	 	—	 	 	 	36,539	 	
 	
Cash at end of period	 	$	—	 	 	$	9,420	 	 	$	1,316	 	 	$	7,147	 	 	$	—	 	 	$	17,883	 	
 	
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12. Segments
Our segments are described as follows:

•	 	North American Glass—includes sales of glass tableware from subsidiaries throughout the United States, Canada and Mexico.	
 		
•	 	North American Other—includes sales of ceramic dinnerware; metal tableware, hollowware and serveware; and plastic items from subsidiaries in the United States.	
 		
•	 	International—includes worldwide sales of glass tableware from subsidiaries outside the United States, Canada and Mexico.	
Some operating segments were aggregated to arrive at the disclosed reportable segments. The accounting policies of the segments are the same as those described in Note 2 of the Notes to Condensed Consolidated Financial Statements. We do not have any customers who represent 10 percent or more of total net sales. We evaluate the performance of our segments based upon net sales and Earnings Before Interest and Taxes (EBIT). Intersegment sales are consummated at arm’s length and are reflected in eliminations in the table below.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	Six months ended June 30,	
 	 	2009	 	2008	 	2009	 	2008	
 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	137,744	 	 	$	155,013	 	 	$	246,487	 	 	$	282,490	 	
North American Other	 	 	24,341	 	 	 	30,120	 	 	 	45,718	 	 	 	56,703	 	
International	 	 	34,533	 	 	 	41,765	 	 	 	63,384	 	 	 	78,152	 	
Eliminations	 	 	(792	)	 	 	(2,070	)	 	 	(1,910	)	 	 	(5,241	)	
 	
Consolidated	 	$	195,826	 	 	$	224,828	 	 	$	353,679	 	 	$	412,104	 	
 	
EBIT:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	11,758	 	 	$	14,938	 	 	$	3,133	 	 	$	22,010	 	
North American Other	 	 	3,430	 	 	 	3,641	 	 	 	2,310	 	 	 	7,459	 	
International	 	 	(939	)	 	 	724	 	 	 	(3,285	)	 	 	65	 	
 	
Consolidated	 	$	14,249	 	 	$	19,303	 	 	$	2,158	 	 	$	29,534	 	
 	
Special Charges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	(28	)	 	$	—	 	 	$	(26	)	 	$	—	 	
North American Other	 	 	261	 	 	 	—	 	 	 	2,707	 	 	 	—	 	
International	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Consolidated	 	$	233	 	 	$	—	 	 	$	2,681	 	 	$	—	 	
 	
Depreciation & Amortization:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	6,336	 	 	$	6,425	 	 	$	12,783	 	 	$	12,978	 	
North American Other	 	 	243	 	 	 	755	 	 	 	1,586	 	 	 	1,511	 	
International	 	 	3,939	 	 	 	4,058	 	 	 	7,877	 	 	 	8,045	 	
 	
Consolidated	 	$	10,518	 	 	$	11,238	 	 	$	22,246	 	 	$	22,534	 	
 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	2,622	 	 	$	4,983	 	 	$	5,141	 	 	$	10,692	 	
North American Other	 	 	54	 	 	 	241	 	 	 	214	 	 	 	356	 	
International	 	 	1,934	 	 	 	3,036	 	 	 	4,195	 	 	 	6,564	 	
 	
Consolidated	 	$	4,610	 	 	$	8,260	 	 	$	9,550	 	 	$	17,612	 	
 	
Reconciliation of EBIT to Net Income (Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment EBIT	 	$	14,249	 	 	$	19,303	 	 	$	2,158	 	 	$	29,534	 	
Interest Expense	 	 	(17,532	)	 	 	(17,620	)	 	 	(34,711	)	 	 	(34,771	)	
Benefit from (provision for) Income Taxes	 	 	5,947	 	 	 	(3,802	)	 	 	7,324	 	 	 	(359	)	
 	
Net Income (Loss)	 	$	2,664	 	 	$	(2,119	)	 	$	(25,229	)	 	$	(5,596	)	
 	
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13. Fair Value
We adopted SFAS 157 as of January 1, 2008, but we had not applied the statement to non-recurring, nonfinancial assets and liabilities. We adopted SFAS 157 for nonrecurring, nonfinancial assets and liabilities as of January 1, 2009. The adoption of SFAS 157 had no impact on our fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

 	•	 	Level 1 — Quoted prices in active markets for identical assets or liabilities.	
 		
 	•	 	Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.	
 		
 	•	 	Level 3 — Unobservable inputs based on our own assumptions.	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Fair Value at June 30, 2009	 	Fair Value at December 31, 2008	
 	 	Level 1	 	Level 2	 	Level 3	 	Total	 	Level 1	 	Level 2	 	Level 3	 	Total	

Commodity futures natural gas contracts	 	$	 —	 	 	$	(12,895	)	 	$	 —	 	 	$	(12,895	)	 	$	 —	 	 	$	(14,868	)	 	$	 —	 	 	$	(14,868	)	
Interest rate protection agreements	 	 	—	 	 	 	(4,030	)	 	 	—	 	 	 	(4,030	)	 	 	—	 	 	 	(6,761	)	 	 	—	 	 	 	(6,761	)	
 	 	 	
Total derivative liability	 	$	—	 	 	$	(16,925	)	 	$	—	 	 	$	(16,925	)	 	$	—	 	 	$	(21,629	)	 	$	—	 	 	$	(21,629	)	
 	 	 	
The fair values of our interest rate protection agreements are based on the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. The fair values of our commodity futures natural gas contracts are determined using observable market inputs. Since these inputs are observable in active markets over the terms that the instruments are held, the derivatives are classified as Level 2 in the hierarchy. We also evaluate Company and counterparty risk in determining fair values. The total derivative liability is recorded on the Condensed Consolidated Balance Sheets with $14.0 million in derivative liability and $2.9 million in other long-term liabilities as of June 30, 2009. As of December 31, 2008 $17.9 million was recorded in derivative liability and $3.7 million in other long-term liabilities.
The commodity futures natural gas contracts and interest rate protection agreements are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the above table.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes thereto appearing elsewhere in this report and in our Annual Report filed with the Securities and Exchange Commission. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ from those anticipated in these forward-looking statements as a result of many factors. These factors are discussed in “Risk Factors” under Item 1A of “Part II — Other Information”.
Overview
Market conditions continue to be challenging. While comparisons to the record setting sales performance of the second quarter and first half of 2008 are dramatic, we have begun to see the results of our cash flow enhancements outlined on February 11, 2009. We have reduced capital spending, reduced production levels in response to the reduced demand in our markets, reduced our overall costs and reduced our investment in inventories during the first half of the year, a period which historically has seen a buildup of inventories in anticipation of normally higher sales in the second half of the year. The decreased production levels have caused pressure on our margins as certain fixed costs could not be reduced to the same extent as sales, but we have placed a higher priority on liquidity in the near term. We continue to see improvements in the trend of our retail business; however, at this time we expect that the eventual recovery of our other markets will occur slowly. We will continue to monitor our customer markets, and as the economy stabilizes we are prepared to adjust production levels accordingly, which should lead to improved profitability as the margin pressures described above begin to reverse.
Results of Operations — Second Quarter 2009 Compared with Second Quarter 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	Variance	
(Dollars in thousands, except percentages and per-share amounts)	 	2009(2)	 	2008	 	In dollars	 	In percent	
 	
Net sales	 	$	195,826	 	 	$	224,828	 	 	$	(29,002	)	 	 	(12.9	)%	
Gross profit	 	$	34,283	 	 	$	42,168	 	 	$	(7,885	)	 	 	(18.7	)%	
Gross profit margin	 	 	17.5	%	 	 	18.8	%	 	 	 	 	 	 	 	 	
Income from operations (IFO)	 	$	11,491	 	 	$	18,717	 	 	$	(7,226	)	 	 	(38.6	)%	
IFO margin	 	 	5.9	%	 	 	8.3	%	 	 	 	 	 	 	 	 	
Earnings before interest and income taxes (EBIT) (1)	 	$	14,249	 	 	$	19,303	 	 	$	(5,054	)	 	 	(26.2	)%	
EBIT margin	 	 	7.3	%	 	 	8.6	%	 	 	 	 	 	 	 	 	
Earnings before interest, taxes, depreciation and	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
amortization (EBITDA) (1)	 	$	24,767	 	 	$	30,541	 	 	$	(5,774	)	 	 	(18.9	)%	
EBITDA margin	 	 	12.6	%	 	 	13.6	%	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	2,664	 	 	$	(2,119	)	 	$	4,783	 	 	 	225.7	%	
Net income (loss) margin	 	 	1.4	%	 	 	(0.9	)%	 	 	 	 	 	 	 	 	
Diluted net income (loss) per share	 	$	0.18	 	 	$	(0.14	)	 	$	0.32	 	 	 	228.6	%	

			
(1)	 	We believe that EBIT and EBITDA, non-GAAP financial measures, are useful metrics for evaluating our financial performance, as they are measures that we use internally to assess our performance. See Table 1 for a reconciliation of net loss to EBIT and EBITDA and a further discussion as to the reasons we believe these non-GAAP financial measures are useful.	
 		
(2)	 	Includes pre-tax special charges of $0.2 million related to the closing of our Syracuse China manufacturing facility and our Mira Loma distribution center. (See note 5 to the Condensed Consolidated Financial Statements).	
Net Sales
For the quarter ended June 30, 2009, net sales decreased 12.9 percent to $195.8 million from record second quarter sales of $224.8 million in the year-ago quarter. North American Glass net shipments decreased 11.1 percent to $137.7 million from $155.0 million in the year-ago quarter. The decrease in sales was primarily attributable to a 27.9 percent decrease in shipments to Crisa customers (15.1 percent excluding the currency impact of the Mexican peso.) In addition, a 7.1 percent decline in shipments to U.S and Canadian foodservice customers was offset by a 6.9 percent increase in shipments to U.S. retail glassware customers. North American Other net
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sales decreased 19.2 percent due to a decline in shipments of World Tableware, Syracuse China and Traex products. International net sales decreased 17.3 percent compared to the year-ago quarter as a 4.6% increase in shipments to Libbey China customers was offset by unfavorable currency impact in Europe, which caused slightly more than half of the overall decline due to the weaker euro when compared to the U.S. dollar. Excluding the currency impact, International sales decreased 7.9 percent, as shipments to Royal Leerdam and Crisal glassware customers declined when compared to the prior year period.
Gross Profit
For the quarter ended June 30, 2009, gross profit decreased by $7.9 million, or 18.7 percent, to $34.3 million, compared to $42.2 million in the year-ago quarter. Gross profit as a percentage of net sales decreased to 17.5 percent, compared to 18.8 percent in the year-ago quarter. The unfavorable mix and lower level of net sales, particularly in Mexico, resulted in $3.7 million of the decline in gross profit, and lower production activity offset by reduced manufacturing costs contributed another $3.3 million to the decrease as a significant portion of these expenses are fixed, and could not be reduced to the same extent as net sales. Also, an unfavorable currency impact resulted in $6.8 million of the decline in gross profit. These unfavorable items were offset by a reduction of $5.0 million in our distribution costs.
Income From Operations
Income from operations for the quarter ended June 30, 2009 decreased $7.2 million, to $11.5 million, compared to $18.7 million in the year-ago quarter. Income from operations as a percentage of net sales decreased to 5.9 percent in the second quarter 2009, compared to 8.3 percent in the year-ago quarter. The decline in income from operations is a result of lower gross profit and gross profit margin (discussed above), and a $0.3 million special charge related to the Syracuse China shutdown, offset by a decrease of $1.4 million in selling, general and administrative expenses. The $1.4 million decrease in selling, general and administrative expenses was caused primarily by a favorable currency impact of $1.2 million.
Earnings Before Interest and Income Taxes (EBIT)
Earnings before Interest and Income Taxes (EBIT) decreased by $5.1 million, from $19.3 million in 2008, to $14.2 million in 2009. EBIT as a percentage of net sales decreased to 7.3 percent in the second quarter 2009, compared to 8.6 percent in the year-ago quarter. Key contributors to the decrease in EBIT compared to the year-ago quarter are the same as those discussed above under Income From Operations, offset by a favorable swing in foreign currency translation versus the prior year quarter of approximately $1.6 million.
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)
EBITDA decreased by 18.9 percent to $24.8 million in the second quarter of 2009 from $30.5 million in the year-ago quarter. As a percentage of net sales, EBITDA was 12.6 percent for the second quarter 2009, compared to 13.6 percent in the year-ago quarter. The key contributors to the decrease in EBITDA were those factors discussed above under Earnings before Interest and Income Taxes (EBIT). In addition, EBITDA does not include the benefit of a $0.7 million decrease in depreciation and amortization expenses, approximately half of which is due to the shutdown of our Syracuse China operations, with the remainder being due to our lower rate of capital spending.
Net Income (Loss) and Diluted Net Income (Loss) Per Share
We recorded net income of $2.7 million, or $0.18 per diluted share, in the second quarter 2009, compared to a net loss of $(2.1) million, or $(0.14) per diluted share, in the year-ago quarter. Net income (loss) as a percentage of net sales was 1.4 percent in the second quarter 2009, compared to (0.9) percent in the year-ago quarter. The effective tax rate provided a 181.1 percent benefit for the quarter compared to a 225.9 percent expense in the year-ago quarter, due primarily to a $3.6 million tax benefit related to the required intra-period tax allocation between loss from operations and other comprehensive income in the U.S. in the current quarter and a $1.5 million benefit related to adjustments in tax reserves due to the completion of a U.S. federal income tax examination, both recorded in the current quarter. The Company’s effective tax rate also changed from the year-ago quarter as a result of valuation allowances in the United States, the Netherlands, and Portugal. Further, changes in the mix of earnings in countries with differing statutory tax rates, changes in accruals related to uncertain tax positions, tax planning structures and changes in tax laws have also impacted the effective tax rate, and could cause more volatility in the future.
Results of Operations — First Six Months 2009 Compared with First Six Months 2008
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 	 	Six months ended June 30,	 	Variance	
(Dollars in thousands, except percentages and per-share amounts)	 	2009(2)	 	2008	 	In dollars	 	In percent	
 	
Net sales	 	$	353,679	 	 	$	412,104	 	 	$	(58,425	)	 	 	(14.2	)%	
Gross profit	 	$	44,999	 	 	$	72,505	 	 	$	(27,506	)	 	 	(37.9	)%	
Gross profit margin	 	 	12.7	%	 	 	17.6	%	 	 	 	 	 	 	 	 	
(Loss) income from operations (IFO)	 	$	(563	)	 	$	28,195	 	 	$	(28,758	)	 	 	(102.0	)%	
IFO margin	 	 	(0.2	)%	 	 	6.8	%	 	 	 	 	 	 	 	 	
Earnings before interest and income taxes (EBIT) (1)	 	$	2,158	 	 	$	29,534	 	 	$	(27,376	)	 	 	(92.7	)%	
EBIT margin	 	 	0.6	%	 	 	7.2	%	 	 	 	 	 	 	 	 	
Earnings before interest, taxes, depreciation and	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
amortization (EBITDA) (1)	 	$	24,404	 	 	$	52,068	 	 	$	(27,664	)	 	 	(53.1	)%	
EBITDA margin	 	 	6.9	%	 	 	12.6	%	 	 	 	 	 	 	 	 	
Net loss	 	$	(25,229	)	 	$	(5,596	)	 	$	(19,633	)	 	 	(350.8	)%	
Net income margin	 	 	(7.1	)%	 	 	(1.4	)%	 	 	 	 	 	 	 	 	
Diluted net loss per share	 	$	(1.70	)	 	$	(0.38	)	 	$	(1.32	)	 	 	(347.4	)%	

			
(1)	 	We believe that EBIT and EBITDA, non-GAAP financial measures, are useful metrics for evaluating our financial performance, as they are measures that we use internally to assess our performance. See Table 1 for a reconciliation of net loss to EBIT and EBITDA and a further discussion as to the reasons we believe these non-GAAP financial measures are useful.	
 		
(2)	 	Includes pre-tax special charges of $2.7 million related to the closing of our Syracuse China manufacturing facility and our Mira Loma distribution center. (See note 5 to the Condensed Consolidated Financial Statements).	
Net Sales
For the six months ended June 30, 2009, net sales decreased 14.2 percent to $353.7 million from sales of $412.1 million in the year-ago period. North American Glass net sales decreased 12.7 percent, due primarily to a decrease of 28.5 percent in shipments to Crisa customers and a decline of 5.9 percent in shipments to U.S. and Canadian foodservice glassware customers. Approximately 13.0 percent, or nearly half of the 28.5 percent reduction at Crisa, was related to the devaluation of the Mexican peso. Due in part to a strong second quarter, our U.S. Retail sales were nearly equal to the record sales levels of the first half of last year. North American Other net sales decreased 19.4 percent due to a decline in shipments of World Tableware, Syracuse China and Traex products. International net sales decreased 18.9 percent compared to the year-ago period, including 9.5 percent due to unfavorable currency impact which resulted primarily from the declining strength of the euro when compared to the U.S. dollar. Excluding the currency impact, International sales decreased 9.4 percent, as shipments to Royal Leerdam and Crisal glassware customers declined when compared to the prior year period.
Gross Profit
For the six months ended June 30, 2009, gross profit decreased by $27.5 million, or 37.9 percent, to $45.0 million, compared to $72.5 million in the year-ago period. Gross profit as a percentage of net sales decreased to 12.7 percent, compared to 17.6 percent in the year-ago period. The unfavorable mix and lower level of net sales, particularly in the U.S., resulted in $9.2 million of the decline in gross profit, and lower production activity offset by reduced manufacturing costs contributed another $14.0 million to the decrease, as a significant portion of these expenses are fixed and could not be reduced to the same extent as net sales. Also, an unfavorable currency impact resulted in $11.8 million of the decline in gross profit. Additional depreciation expense of $0.7 million was recorded to reflect the shorter remaining useful life of the assets and an additional $1.1 million of manufacturing cost was recorded for an inventory write-down related to the closure of our Syracuse China facility. See note 5 for more discussion about these charges. These unfavorable items were offset by a reduction of $7.9 million in our distribution costs.
(Loss) Income From Operations
(Loss) Income from operations for the six months ended June 30, 2009 decreased $28.8 million, to a loss of $(0.6) million, compared to income of $28.2 million in the year-ago period. (Loss) Income from operations as a percentage of net sales decreased to (0.2) percent in the first half of 2009, compared to 6.8 percent in the year-ago period. The decline in income from operations is a result of lower gross profit (discussed above), combined with slightly higher selling, general and administrative expenses and a $0.7 million special charge related to the Syracuse China shutdown. The $0.6 million increase in selling, general and administrative expenses was caused by a $2.7 million pension settlement charge arising from lump sum payments to retirees during the first six months of 2009 and
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the 2008 reversal of $1.3 million related to favorable rulings in connection with an outstanding dispute regarding a warehouse lease in Mexico. These increases in selling general and administrative expenses were offset by favorable currency impact of $2.1 million and a decrease in commission expense of $1.3 million.
Earnings Before Interest and Income Taxes (EBIT)
Earnings before Interest and Income Taxes (EBIT) decreased by $27.4 million, from $29.5 million in 2008 to $2.2 million in 2009. EBIT as a percentage of net sales decreased to 0.6 percent in the first half of 2009, compared to 7.2 percent in the year-ago period. Key contributors to the decrease in EBIT compared to the year-ago period are the same as those discussed above under (Loss) Income From Operations offset by a favorable swing in foreign currency translation versus the prior year period of approximately $0.9 million.
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)
EBITDA decreased by 53.1 percent to $24.4 million in the first half of 2009 from income of $52.1 million in the year-ago period. As a percentage of net sales, EBITDA was 6.9 percent for the first half of 2009, compared to 12.6 percent in the year-ago period. The key contributors to the decrease in EBITDA were those factors discussed above under Earnings before Interest and Income Taxes (EBIT). In addition, EBITDA does not include the benefit of a $0.3 million decrease in depreciation and amortization expenses.
Net Loss and Diluted Net Loss Per Share
We recorded a net loss of $(25.2) million, or $(1.70) per diluted share, in the first six months of 2009, compared to a net loss of $(5.6) million, or $(0.38) per diluted share, in the year-ago period. Net loss as a percentage of net sales was (7.1) percent in the first half of 2009, compared to (1.4) percent in the year-ago period. In addition, the effective tax rate was 22.5 percent for the period compared to negative 6.9 percent in the year-ago period, due primarily to a $3.9 million tax benefit related to the required intra-period tax allocation between loss from operations and other comprehensive income in the U.S. in the first six months of 2009 and a $1.5 million benefit related to adjustments in tax reserves due to the completion of a U.S. federal income tax examination. The Company’s effective tax rate changed from the year-ago quarter also as a result of valuation allowances in the United States, the Netherlands, and Portugal. Further, changes in the mix of earnings in countries with differing statutory tax rates, changes in accruals related to uncertain tax positions, tax planning structures and changes in tax laws have also impacted the effective tax rate.
Segment Results of Operations
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 	 	Three months ended	 	 	 	 	 	 	 	 	 	Six months ended	 	 	
 	 	June 30,	 	Variance	 	June 30,	 	Variance	
 	
(Dollars in thousands)	 	2009	 	2008	 	In dollars	 	In percent	 	2009	 	2008	 	In dollars	 	In percent	
 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	137,744	 	 	$	155,013	 	 	$	(17,269	)	 	 	(11.1	)%	 	$	246,487	 	 	$	282,490	 	 	$	(36,003	)	 	 	(12.7	)%	
North American Other	 	 	24,341	 	 	 	30,120	 	 	 	(5,779	)	 	 	(19.2	)%	 	 	45,718	 	 	 	56,703	 	 	 	(10,985	)	 	 	(19.4	)%	
International	 	 	34,533	 	 	 	41,765	 	 	 	(7,232	)	 	 	(17.3	)%	 	 	63,384	 	 	 	78,152	 	 	 	(14,768	)	 	 	(18.9	)%	
Eliminations	 	 	(792	)	 	 	(2,070	)	 	 	 	 	 	 	 	 	 	 	(1,910	)	 	 	(5,241	)	 	 	 	 	 	 	 	 	
 	
Consolidated	 	$	195,826	 	 	$	224,828	 	 	$	(29,002	)	 	 	(12.9	)%	 	$	353,679	 	 	$	412,104	 	 	$	(58,425	)	 	 	(14.2	)%	
 	
EBIT:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	11,758	 	 	$	14,938	 	 	$	(3,180	)	 	 	(21.3	)%	 	$	3,133	 	 	$	22,010	 	 	$	(18,877	)	 	 	(85.8	)%	
North American Other	 	 	3,430	 	 	 	3,641	 	 	 	(211	)	 	 	(5.8	)%	 	 	2,310	 	 	 	7,459	 	 	 	(5,149	)	 	 	(69.0	)%	
International	 	 	(939	)	 	 	724	 	 	 	(1,663	)	 	 	(229.7	)%	 	 	(3,285	)	 	 	65	 	 	 	(3,350	)	 	NM	
 	
Consolidated	 	$	14,249	 	 	$	19,303	 	 	$	(5,054	)	 	 	(26.2	)%	 	$	2,158	 	 	$	29,534	 	 	$	(27,376	)	 	 	(92.7	)%	
 	
EBIT Margin:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	 	8.5	%	 	 	9.6	%	 	 	 	 	 	 	 	 	 	 	1.3	%	 	 	7.8	%	 	 	 	 	 	 	 	 	
North American Other	 	 	14.1	%	 	 	12.1	%	 	 	 	 	 	 	 	 	 	 	5.1	%	 	 	13.2	%	 	 	 	 	 	 	 	 	
International	 	 	(2.7	)%	 	 	1.7	%	 	 	 	 	 	 	 	 	 	 	(5.2	)%	 	 	0.1	%	 	 	 	 	 	 	 	 	
Consolidated	 	 	7.3	%	 	 	8.6	%	 	 	 	 	 	 	 	 	 	 	0.6	%	 	 	7.2	%	 	 	 	 	 	 	 	 	
 	
Special charges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American Glass	 	$	(28	)	 	$	—	 	 	$	(28	)	 	 	100.0	%	 	$	(26	)	 	$	—	 	 	$	(26	)	 	 	100.0	%	
North American Other	 	 	261	 	 	 	—	 	 	 	261	 	 	 	100.0	%	 	 	2,707	 	 	 	—	 	 	 	2,707	 	 	 	100.0	%	
International	 	 	—	 	 	 	—	 	 	 	—	 	 	NM	 	 	—	 	 	 	—	 	 	 	—	 	 	NM	
 	
Consolidated	 	$	233	 	 	$	—	 	 	$	233	 	 	 	100.0	%	 	$	2,681	 	 	$	—	 	 	$	2,681	 	 	 	100.0	%	
 	
Segment Results of Operations — Second Quarter 2009 Compared to Second Quarter 2008
North American Glass
For the quarter ended June 30, 2009, net sales decreased 11.1 percent to $137.7 million from $155.0 million in the year-ago quarter. Of the decrease in net sales, approximately 10.8 percent was attributable to decreased shipments to Crisa’s customers and 4.3 percent was attributable to decreased shipments to U.S. and Canadian foodservice glassware customers offset by a 1.3 percent increase in sales to U.S. and Canadian retail glassware customers. Of the 10.8 percent attributable to decreased shipments of Crisa product, 5.0 percent is related to an unfavorable currency impact.
EBIT decreased to $11.8 million for the second quarter 2009, compared to $14.9 million for the year-ago quarter. EBIT as a percentage of net sales decreased to 8.5 percent in the second quarter 2009, compared to 9.6 percent in the year-ago quarter. The key factors in the decline in EBIT compared to the year-ago quarter were $1.2 million due to the decreased production activity offset by lower manufacturing costs, $1.7 million due to an unfavorable sales mix and an unfavorable currency impact from the devaluation of the Mexican peso of $5.4 million. The factors contributing to the decrease in EBIT were partially offset by decreases of $3.9 million in distribution costs, an improvement of $1.4 million primarily due to favorable foreign currency translation gains.
North American Other
For the quarter ended June 30, 2009, net sales declined 19.2 percent to $24.3 million from $30.1 million in the year-ago quarter. Components of the total decrease in net sales were declines of approximately 11.3 percent in shipments of Syracuse China products, approximately 5.5 percent in shipments of Traex products and approximately 4.0 percent in shipments of World Tableware products.
EBIT declined by $0.2 million for the second quarter of 2009, compared to the year-ago quarter. EBIT as a percentage of net sales increased to 14.1 percent in the second quarter of 2009, compared to 12.1 percent in the year-ago quarter due to lower production and purchasing levels in the segment. The key contributors to the decreased EBIT were decreased sales, which caused an unfavorable $3.8
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million impact. This was offset by decreases of $1.2 million in manufacturing costs, $1.1 million in distribution costs and $0.9 million in SG&A expenses. These reductions in costs were primarily the result of the April 2009 closure of our Syracuse China facility.
International
For the quarter ended June 30, 2009, net sales decreased 17.3 percent to $34.5 million from $41.8 million in the year-ago quarter. Of the total decrease in net sales, 10.6 percent was related to the currency impact of a weaker euro. The majority of the remaining decrease in net sales was related to decreased shipments to Royal Leerdam and Crisal customers, while sales to customers of Libbey China were essentially flat as a component of the total International comparison.
EBIT declined by $1.7 million for the second quarter of 2009, to $(0.9) million from $0.7 million in the year-ago quarter. EBIT as a percentage of net sales decreased to (2.7) percent in the second quarter 2009, compared to 1.7 percent in the year-ago quarter. Decreased net sales and production activity offset by lower manufacturing costs were responsible for $0.5 million and $1.2 million of the EBIT decline, respectively. In addition, EBIT was negatively affected by an unfavorable currency impact from the euro of $0.4 million. These factors were offset by a $0.4 million increase in other income related to a government grant.
Segment Results of Operations — First Six Months 2009 Compared to First Six Months 2008
North American Glass
For the six months ended June 30, 2009, net sales decreased 12.7 percent to $246.5 million from $282.5 million in the year-ago period. Of the total decrease in net sales, approximately 11.0 percent was attributable to decreased shipments to Crisa’s customers and 3.8 percent was attributable to decreased shipments to U.S. and Canadian foodservice glassware customers. The U.S. retail channel delivered sales essentially equal to the all-time record retail sales performance during the first six months of 2008. Of the 11.0 percent attributable to decreased shipments of Crisa product, 5.0 percent is related to an unfavorable currency impact.
EBIT decreased to $3.1 million for the first half of 2009, compared to $22.0 million for the year-ago period. EBIT as a percentage of net sales decreased to 1.3 percent in the first half of 2009, compared to 7.8 percent in the year-ago period. The key factors in the decline in EBIT compared to the year-ago period were $9.0 million due to the decreased production activity offset by lower manufacturing costs, $5.7 million due to an unfavorable sales mix and an unfavorable currency impact on EBIT from the devaluation of the Mexican peso of $9.1 million. In addition, EBIT was negatively impacted by a $3.3 million increase in selling, general and administrative expense, which in turn was caused primarily by a $2.7 million pension settlement charge arising from lump sum payments to retirees during the first six months of 2009 and a one-time reversal of $1.3 million in the first quarter of 2008 related to favorable rulings in connection with an outstanding dispute regarding a warehouse lease in Mexico, offset by decreases of $0.9 million in commission expense. The factors contributing to the decrease in EBIT were partially offset by decreases of $6.5 million in distribution costs and favorable currency translation gains of $1.5 million in other income when compared to the prior year period.
North American Other
For the six months ended June 30, 2009, net sales declined 19.4 percent to $45.7 million from $56.7 million in the year-ago period. Components of the total decrease in net sales were declines of approximately 8.1 percent in shipments of Syracuse China products, approximately 6.9 percent in shipments of World Tableware products and approximately 4.8 percent in shipments of Traex products.
EBIT declined by $5.1 million for the first half of 2009, compared to the year-ago period. EBIT as a percentage of net sales decreased to 5.1 percent in the first half of 2009, compared to 13.2 percent in the year-ago period. The key contributor to the decreased EBIT was decreased sales, which had an unfavorable $8.1 million impact. Production costs included a $0.7 million special charge due to additional depreciation expenses recorded to reflect the shorter remaining useful life of the assets at our Syracuse China facility and a $1.1 million write-down of raw materials and work in process inventory also related to the shut down of our Syracuse China facility. This was offset by decreases of $1.2 million in other production costs and purchased product, $1.4 million in distribution costs, and a decrease of $1.2 million in SG&A expenses, driven by lower selling and marketing expenses.
International
For the six months ended June 30, 2009, net sales decreased 18.9 percent to $63.4 million from $78.2 million in the year-ago period. Of the total decrease in net sales, 10.6 percent was related to the currency impact of a weaker euro. The majority of the remaining decrease in net sales was related to decreased shipments to Royal Leerdam and Crisal customers, while sales to customers of Libbey
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China were essentially flat as a component of the total International comparison.
EBIT declined by $3.4 million for the first half of 2009 to $(3.3) million, compared to $0.1 million in the year-ago period. EBIT as a percentage of net sales decreased to (5.2) percent in the first half of 2009, compared to 0.1 percent in the year-ago period. Decreased net sales and production activity offset by lower manufacturing costs were responsible for $0.3 million and $2.3 million of the EBIT decline, respectively, as we lowered production levels in response to lower sales and to manage inventory levels. In addition, EBIT was negatively impacted by an unfavorable currency impact from the euro of $0.6 million.
Capital Resources and Liquidity
Balance Sheet and Cash Flows
Cash and Equivalents
At June 30, 2009, our cash balance was $24.1 million, an increase of $10.8 million from $13.3 million at December 31, 2008. The increase was primarily due to an increase in our free cash flow offset by payments on our ABL facility.
Working Capital
The following table presents our working capital components:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Dollars in thousands, except percentages	 	 	 	 	 	 	 	 	 	Variance	
and DSO, DIO, DPO and DWC)	 	June 30, 2009	 	December 31, 2008	 	In dollars	 	In percent	

Accounts receivable — net	 	$	91,252	 	 	$	76,072	 	 	$	15,180	 	 	 	20.0	%	
DSO (1)	 	 	44.3	 	 	 	34.3	 	 	 	 	 	 	 	 	 	
Inventories — net	 	$	145,798	 	 	$	185,242	 	 	$	(39,444	)	 	 	(21.3	)%	
DIO (2)	 	 	70.8	 	 	 	83.5	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	54,485	 	 	$	54,428	 	 	$	57	 	 	 	0.1	%	
DPO (3)	 	 	26.5	 	 	 	24.5	 	 	 	 	 	 	 	 	 	
Working capital (4)	 	$	182,565	 	 	$	206,886	 	 	$	(24,321	)	 	 	(11.8	)%	
DWC (5)	 	 	88.6	 	 	 	93.3	 	 	 	 	 	 	 	 	 	
Percentage of net sales	 	 	24.3	%	 	 	25.5	%	 	 	 	 	 	 	 	 	

			
 	 	DSO, DIO, DPO and DWC are calculated using net sales as the denominator and are based on a 365-day calendar year.	
 		
(1)	 	Days sales outstanding (DSO) measures the number of days it takes to turn receivables into cash.	
 		
(2)	 	Days inventory outstanding (DIO) measures the number of days it takes to turn inventory into cash.	
 		
(3)	 	Days payable outstanding (DPO) measures the number of days it takes to pay the balances of our accounts payable.	
 		
(4)	 	Working capital is defined as net accounts receivable plus net inventories less accounts payable. See Table 3 for the calculation of this non-GAAP financial measure and for further discussion as to the reasons we believe this non-GAAP financial measure is useful.	
 		
(5)	 	Days working capital (DWC) measures the number of days it takes to turn our working capital into cash.	
Working capital (as defined above) was $182.6 million at June 30, 2009, a decrease of $24.3 million from December 31, 2008. This decrease is due primarily to lower inventories, which resulted from our continued focus on our cash management efforts to increase cash flow through reductions in working capital, and lower production activity. Partially offsetting our lower inventories is an increase in accounts receivable, resulting from our second quarter sales increase. Working capital as a percentage of net sales decreased from 25.5 percent from December 31, 2008 to 24.3 percent at June 30, 2009.
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Borrowings
The following table presents our total borrowings:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	June 30,	 	December 31,	
(Dollars in thousands)	 	Interest Rate	 	Maturity Date	 	2009	 	2008	
 	
Borrowings under ABL facility	 	floating	 	December 16, 2010	 	$	16,858	 	 	$	34,538	 	
Senior notes	 	floating (1)	 	June 1, 2011	 	 	306,000	 	 	 	306,000	 	
PIK notes (2)	 	 	16.00	%	 	December 1, 2011	 	 	160,862	 	 	 	148,946	 	
Promissory note	 	 	6.00	%	 	July, 2009 to September, 2016	 	 	1,580	 	 	 	1,666	 	
Notes payable	 	floating	 	July, 2009	 	 	1,336	 	 	 	3,284	 	
RMB loan contract	 	floating	 	July, 2012 to January, 2014	 	 	36,625	 	 	 	36,675	 	
RMB working capital loan	 	floating	 	March, 2010	 	 	7,325	 	 	 	7,335	 	
Obligations under capital leases	 	floating	 	May, 2009	 	 	—	 	 	 	302	 	
BES Euro line	 	floating	 	January, 2010 to January, 2014	 	 	15,453	 	 	 	15,507	 	
Other debt	 	floating	 	September, 2009	 	 	720	 	 	 	630	 	
 	
Total borrowings	 	 	 	 	 	 	 	 	 	 	546,759	 	 	 	554,883	 	
Less — unamortized discounts and warrants	 	 	 	 	 	 	 	 	 	 	3,727	 	 	 	4,626	 	
 	
Total borrowings — net (3)	 	 	 	 	 	 	 	 	 	$	543,032	 	 	$	550,257	 	

			
(1)	 	See “Derivatives” below and note 9 to the Condensed Consolidated Financial Statements.	
 		
(2)	 	Additional PIK Notes were issued each June 1 and December 1, commencing on December 1, 2006, to pay semi-annual interest. During the first three years, interest was payable by the issuance of additional PIK Notes.	
 		
(3)	 	The total borrowings — net include notes payable, long-term debt due within one year and long-term debt as stated in our Condensed Consolidated Balance Sheets.	
We had total borrowings of $546.8 million at June 30, 2009, compared to total borrowings of $554.9 million at December 31, 2008. The $8.1 million decrease in borrowings was primarily the result of the repayment of borrowings under our ABL facility, offset by an increase in our PIK Notes.
Of our total indebtedness, $184.3 million, approximately 33.7 percent, is subject to fluctuating interest rates at June 30, 2009. A change of one percentage point in such rates would result in a change in interest expense of approximately $1.8 million on an annual basis.
Included in interest expense is the amortization of discounts, warrants and financing fees. These items amounted to $1.2 million and $2.5 million for the three months and six months ended June 30, 2009, respectively, and $1.3 million and $2.6 million for the three months and six months ended June 30, respectively.
Cash Flow
The following table presents key drivers to our free cash flow for the second quarter.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	Variance	
(Dollars in thousands, except percentages)	 	2009	 	2008	 	In dollars	 	In percent	
 	
Net cash provided by operating activities	 	$	24,706	 	 	$	5,080	 	 	$	19,626	 	 	 	386.3	%	
Capital expenditures	 	 	(4,610	)	 	 	(8,260	)	 	 	3,650	 	 	 	44.2	%	
Proceeds from asset sales and other	 	 	21	 	 	 	5	 	 	 	16	 	 	 	320.0	%	
 	
Free cash flow (1)	 	$	20,117	 	 	$	(3,175	)	 	$	23,292	 	 	 	733.6	%	

			
(1)	 	We believe that Free Cash Flow [net cash provided by (used in) operating activities, less capital expenditures, plus proceeds from assets sales and other] is a useful metric for evaluating our financial performance, as it is a measure we use internally to assess performance. See Table 2 for a reconciliation of net cash provided by (used in) operating activities to free cash flow and a further	
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 	 	discussion as to the reasons we believe this non-GAAP financial measure is useful.	
Our net cash provided by operating activities was $24.7 million in the second quarter of 2009, compared to net cash provided by operating activities of $5.1 million in the year-ago quarter, or an improvement of $19.6 million. The major factors impacting cash flow from operations were a $20.4 million improvement in working capital performance compared to the prior year quarter, as cash flow improvements of $21.0 million from inventory and $1.2 million from accounts receivable were more than enough to offset the unfavorable swing of $1.8 million in cash flow from accounts payable, reflecting our efforts to improve liquidity during the current economic downturn. The cash generated from these cash flow improvements was utilized to pay down debt and increase our cash balance.
Our net cash used in investing activities decreased to $4.6 million in the second quarter of 2009, compared to $8.3 million in the year-ago period, primarily as a result of decreased capital expenditures in our North American Glass and International segments.
Net cash used in financing activities was $12.8 million in the second quarter of 2009, compared to net cash provided by financing activities of $13.5 million in the year-ago quarter, or a swing of $26.4 million. During the second quarter of 2008, we utilized $14.3 million more of our capacity on the ABL Facility to fund our operating needs, while we made $10.8 million of repayments on that facility in the second quarter of 2009.
Our free cash flow was $20.1 million during the second quarter 2009, compared to a use of cash of $3.2 million in the year-ago quarter, an improvement of $23.3 million. The primary contributor to this change was the improvement in cash flow from operations and reduced capital expenditures in the current period, as discussed above.
The following table presents key drivers to our free cash flow for the first six months.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Six months ended June 30,	 	Variance	
(Dollars in thousands, except percentages)	 	2009	 	2008	 	In dollars	 	In percent	
 	
Net cash provided by (used in) operating activities	 	$	39,090	 	 	$	(23,059	)	 	$	62,149	 	 	 	269.5	%	
Capital expenditures	 	 	(9,550	)	 	 	(17,612	)	 	 	8,062	 	 	 	45.8	%	
Proceeds from asset sales and other	 	 	88	 	 	 	46	 	 	 	42	 	 	 	91.3	%	
 	
Free cash flow (1)	 	$	29,628	 	 	$	(40,625	)	 	$	70,253	 	 	 	172.9	%	

			
(1)	 	We believe that Free Cash Flow [net cash provided by (used in) operating activities, less capital expenditures, plus proceeds from assets sales and other] is a useful metric for evaluating our financial performance, as it is a measure we use internally to assess performance. See Table 2 for a reconciliation of net cash provided by (used in) operating activities to free cash flow and a further discussion as to the reasons we believe this non-GAAP financial measure is useful.	
Our net cash provided by operating activities was $39.1 million in the first half of 2009, compared to net cash used by operating activities of $23.1 million in the year-ago period, or an improvement of $62.2 million. The major factors impacting cash flow from operations were a $51.2 million improvement in working capital performance compared to the prior year period as cash flow improvements of $43.3 million from inventory, $6.0 million from accounts payable and $1.9 million from accounts receivable reflected our efforts to improve liquidity during the current economic downturn. Further improvement in net cash provided by operating activities is the result of the final $19.6 million payment to Vitro made in 2008 related to the 2006 Crisa acquisition. These improvements were offset by cash required to fund our losses in the current period and pay down debt.
Our net cash used in investing activities decreased to $9.5 million in the first half of 2009, compared to $17.6 million in the year-ago period, primarily as a result of decreased capital expenditures in our North American Glass and International segments.
Net cash used in financing activities was $18.8 million in the first half of 2009, compared to net cash provided by financing activities of $21.8 million in the year-ago period, or a swing of $40.6 million. During the first half of 2008, we utilized $23.4 million more of our capacity on the ABL Facility to fund our operating needs, while we made $16.7 million of repayments on that facility in the first half of 2009.
Our free cash flow was $29.6 million during the first half 2009, compared to a use of cash of $40.6 million in the year-ago period, an improvement of $70.3 million. The primary contributor to this change was the improvement in cash flow from operations and reduced capital expenditures in the current period.
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Derivatives
We have Interest Rate Protection Agreements (Rate Agreements) with respect to $200.0 million of debt as a means to manage our exposure to fluctuating interest rates. The Rate Agreements effectively convert this portion of our long-term borrowings from variable rate debt to fixed-rate debt, thus reducing the impact of interest rate changes on future income. The fixed interest rate for our borrowings related to the Rate Agreements at June 30, 2009, excluding applicable fees, is 5.24 percent per year and the total interest rate, including applicable fees, is 12.24 percent per year. These Rate Agreements expire on December 1, 2009. Total remaining Senior Notes not covered by the Rate Agreements have fluctuating interest rates with a weighted average rate of 8.26 percent per year at June 30, 2009. If the counterparties to these Rate Agreements were to fail to perform, these Rate Agreements would no longer protect us from interest rate fluctuations. However, we do not anticipate nonperformance by the counterparties. All counterparties were rated A+ or better as of June 30, 2009, by Standard and Poor’s.
The fair market value for the Rate Agreements at June 30, 2009, was a $(4.0) million liability. At December 31, 2008, the fair market value of these Rate Agreements was a $(6.8) million liability. The fair value of the Rate Agreements is based on the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. We do not expect to cancel these agreements and expect them to mature as originally contracted.
We also use commodity futures contracts related to forecasted future North American natural gas requirements. The objective of these futures contracts is to reduce the effects of fluctuations and adverse price movements in the underlying commodity. We consider our forecasted natural gas requirements in determining the quantity of natural gas to hedge. We combine the forecasts with historical observations to establish the percentage of forecast eligible to be hedged, typically ranging from 40 percent to 70 percent of our anticipated requirements up to eighteen months in the future. The fair values of these instruments is determined from market quotes. At June 30, 2009, we had commodity futures contracts for 3,810,000 million British Thermal Units (BTUs) of natural gas with a fair market value of a $(12.9) million liability. We have hedged approximately 40 percent of forecasted transactions through December 2010. At December 31, 2008, we had commodity futures contracts for 5,280,000 million BTUs of natural gas with a fair market value of a $(14.9) million liability. The counterparties for these derivatives were rated BBB or better as of June 30, 2009, by Standard & Poor’s.
Capital Resources and Liquidity
Historically, cash flows generated from operations and our borrowing capacity under our ABL facility have allowed us to meet our cash requirements, including capital expenditures and working capital needs. Remaining unused availability on the ABL Facility was $56.6 million at June 30, 2009 and $44.6 million at December 31, 2008. In addition, our cash and cash equivalents balance of $24.1 million at June 30, 2009 is available for our short term financing needs. We were impacted by recessionary pressures in 2008, especially during the fourth quarter of the year, and the first half of 2009, and we anticipate that the global economic recession will continue throughout 2009 and perhaps beyond. In addition, interest on our PIK Notes will be payable in cash beginning December 1, 2009. We began taking a number of steps to enhance our liquidity in 2008 and have continued with further steps in 2009 (including those announced in February, 2009). These initiatives were expected to result in cash flow improvements in the range of $46 million to $50 million for 2009. These initiatives have been implemented, and we are beginning to see the results in our cash flow. These amounts included a reduction of $22 million to $24 million in capital expenditures. We are on course to achieve the higher end of that range, as our capital expenditures are currently expected to reach $20 million for the year, compared to the $45.7 million spent in 2008. However, if cash generated from operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or arrange additional debt financing. Global financial markets and economic conditions have been, and continue to be volatile. The credit and capital markets remain challenging. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made it difficult, and will likely continue to make it difficult, to obtain funding in future periods. If cash from operations and cash available from our ABL Facility are not sufficient to meet our needs, we cannot provide assurance that we will be able to obtain additional financing in sufficient amounts and/or on acceptable terms in the near future or when our debt obligations reach maturity. Our ABL Facility expires in December 2010, the Senior Notes expire in June 2011, and the PIK Notes expire in December 2011. Furthermore, because of the current price of our stock, we cannot anticipate that it would be desirable to sell additional equity, even if we were able to do so. However, based upon our operating plans and current forecast expectations (including expectations that the global economy will not deteriorate further) we anticipate that we will generate positive cash flow from operations and, if necessary, have sufficient cash availability from our ABL Facility to meet our ongoing liquidity needs.
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Reconciliation of Non-GAAP Financial Measures
We sometimes refer to data derived from condensed consolidated financial information but not required by GAAP to be presented in financial statements. Certain of these data are considered “non-GAAP financial measures” under Securities and Exchange Commission (SEC) Regulation G. We believe that non-GAAP data provide investors with a more complete understanding of underlying results in our core business and trends. In addition, we use non-GAAP data internally to assess performance. Although we believe that the non-GAAP financial measures presented enhance investors’ understanding of our business and performance, these non-GAAP measures should not be considered an alternative to GAAP.
Table 1
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	Six months ended	
Reconciliation of net income (loss) to EBIT and EBITDA	 	June 30,	 	June 30,	
(Dollars in thousands)	 	2009	 	2008	 	2009	 	2008	
 	
Net income (loss)	 	$	2,664	 	 	$	(2,119	)	 	$	(25,229	)	 	$	(5,596	)	
Add: Interest expense	 	 	17,532	 	 	 	17,620	 	 	 	34,711	 	 	 	34,771	 	
Add: (Benefit from) provision for income taxes	 	 	(5,947	)	 	 	3,802	 	 	 	(7,324	)	 	 	359	 	
 	
Earnings before interest and income taxes (EBIT)	 	 	14,249	 	 	 	19,303	 	 	 	2,158	 	 	 	29,534	 	
Add: Depreciation and amortization	 	 	10,518	 	 	 	11,238	 	 	 	22,246	 	 	 	22,534	 	
 	
Earnings before interest, taxes, deprecation and amortization (EBITDA)	 	$	24,767	 	 	$	30,541	 	 	$	24,404	 	 	$	52,068	 	
 	
We define EBIT as net income (loss) before interest expense and income taxes. The most directly comparable U.S. GAAP financial measure is net income.
We believe that EBIT is an important supplemental measure for investors in evaluating operating performance in that it provides insight into company profitability. Libbey’s senior management uses this measure internally to measure profitability. EBIT also allows for a measure of comparability to other companies with different capital and legal structures, which accordingly may be subject to different interest rates and effective tax rates.
The non-GAAP measure of EBIT does have certain limitations. It does not include interest expense, which is a necessary and ongoing part of our cost structure resulting from debt incurred to expand operations. Because this is a material and recurring item, any measure that excludes it has a material limitation. EBIT may not be comparable to similarly titled measures reported by other companies.
We define EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization. The most directly comparable U.S. GAAP financial measure is net income.
We believe that EBITDA is an important supplemental measure for investors in evaluating operating performance in that it provides insight into company profitability and cash flow. Libbey’s senior management uses this measure internally to measure profitability and to set performance targets for managers. It also has been used regularly as one of the means of publicly providing guidance on possible future results. EBITDA also allows for a measure of comparability to other companies with different capital and legal structures, which accordingly may be subject to different interest rates and effective tax rates, and to companies that may incur different depreciation and amortization expenses or impairment charges.
The non-GAAP measure of EBITDA does have certain limitations. It does not include interest expense, which is a necessary and ongoing part of our cost structure resulting from debt incurred to expand operations. EBITDA also excludes depreciation and amortization expenses. Because these are material and recurring items, any measure that excludes them has a material limitation. EBITDA may not be comparable to similarly titled measures reported by other companies.
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Table 2
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of net cash provided by	 	 	 	 	
(used in) operating	 	Three months ended	 	Six months ended	
activities to free cash flow	 	June 30,	 	June 30,	
(Dollars in thousands)	 	2009	 	2008	 	2009	 	2008	
 	
Net cash provided by (used in) operating activities	 	$	24,706	 	 	$	5,080	 	 	$	39,090	 	 	$	(23,059	)	
Capital expenditures	 	 	(4,610	)	 	 	(8,260	)	 	 	(9,550	)	 	 	(17,612	)	
Proceeds from asset sales and other	 	 	21	 	 	 	5	 	 	 	88	 	 	 	46	 	
 	
Free cash flow	 	$	20,117	 	 	$	(3,175	)	 	$	29,628	 	 	$	(40,625	)	
 	
We define free cash flow as net cash provided by (used in) operating activities less capital expenditures adjusted for proceeds from asset sales and other. The most directly comparable U.S. GAAP financial measure is net cash provided by (used in) operating activities.
We believe that free cash flow is important supplemental information for investors in evaluating cash flow performance in that it provides insight into the cash flow available to fund such things as discretionary debt service, acquisitions and other strategic investment opportunities. It is a measure of performance we use to internally evaluate the overall performance of the business.
Free cash flow is used in conjunction with and in addition to results presented in accordance with U.S. GAAP. Free cash flow is neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities recorded under U.S. GAAP. Free cash flow may not be comparable to similarly titled measures reported by other companies.
Table 3
 	 	 	 	 	 	 	 	 	
Reconciliation of working capital	 	June 30,	 	December 31,	
(Dollars in thousands)	 	2009	 	2008	
 	
Accounts receivable (net)	 	$	91,252	 	 	$	76,072	 	
Plus: Inventories (net)	 	 	145,798	 	 	 	185,242	 	
Less: Accounts payable	 	 	54,485	 	 	 	54,428	 	
 	
Working capital	 	$	182,565	 	 	$	206,886	 	
 	
We define working capital as net accounts receivable plus net inventories less accounts payable.
We believe that working capital is important supplemental information for investors in evaluating liquidity in that it provides insight into the availability of net current resources to fund our ongoing operations. Working capital is a measure used by management in internal evaluations of cash availability and operational performance.
Working capital is used in conjunction with and in addition to results presented in accordance with U.S. GAAP. Working capital is neither intended to represent nor be an alternative to any measure of liquidity and operational performance recorded under U.S. GAAP. Working capital may not be comparable to similarly titled measures reported by other companies.
Item 3. Qualitative and Quantitative Disclosures about Market Risk
Currency
We are exposed to market risks due to changes in currency values, although the majority of our revenues and expenses are denominated in U.S. dollars. The currency market risks include devaluations and other major currency fluctuations relative to the U.S. dollar, euro, RMB or Mexican peso that could reduce the cost competitiveness of our products compared to foreign competition.
Interest Rates
We are exposed to market risks associated with changes in interest rates on our floating debt and have entered into Interest Rate Protection Agreements (Rate Agreements) with respect to $200.0 million of debt as a means to manage our exposure to fluctuating interest rates. The Rate Agreements effectively convert this portion of our long-term borrowings from variable rate debt to fixed-rate
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debt, thus reducing the impact of interest rate changes on future income. We had $184.3 million of debt subject to fluctuating interest rates at June 30, 2009. A change of one percentage point in such rates would result in a change in interest expense of approximately $1.8 million on an annual basis. If the counterparties to these Rate Agreements were to fail to perform, we would no longer be protected from interest rate fluctuations by these Rate Agreements. However, we do not anticipate nonperformance by the counterparties. All interest rate swap counterparties were rated A+ or better as of June 30, 2009, by Standard and Poor’s.
Natural Gas
We are also exposed to market risks associated with changes in the price of natural gas. We use commodity futures contracts related to forecasted future North American natural gas requirements of our manufacturing operations. The objective of these futures contracts is to limit the fluctuations in prices paid and potential losses in earnings or cash flows from adverse price movements in the underlying natural gas commodity. We consider the forecasted natural gas requirements of our manufacturing operations in determining the quantity of natural gas to hedge. We combine the forecasts with historical observations to establish the percentage of forecast eligible to be hedged, typically ranging from 40 percent to 70 percent of our anticipated requirements up to eighteen months in the future. For our natural gas requirements that are not hedged, we are subject to changes in the price of natural gas, which affect our earnings. If the counterparties to these futures contracts were to fail to perform, we would no longer be protected from natural gas fluctuations by the futures contracts. However, we do not anticipate nonperformance by these counterparties. All counterparties were rated BBB or better by Standard and Poor’s as of June 30, 2009.
Retirement Plans
We are exposed to market risks associated with changes in the various capital markets. Changes in long-term interest rates affect the discount rate that is used to measure our benefit obligations and related expense. Changes in the equity and debt securities markets affect the performance of our pension plans asset performance and related pension expense. Sensitivity to these key market risk factors is as follows:

 	•	 	A change of 1 percent in the discount rate would change our total annual expense by approximately $1.9 million.	
 		
 	•	 	A change of 1 percent in the expected long-term rate of return on plan assets would change annual pension expense by approximately $2.2 million.	
Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934 (the “Exchange Act”) reports are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
There has been no change in our controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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PART II — OTHER INFORMATION
This document and supporting schedules contain statements that are not historical facts and constitute projections, forecasts or forward-looking statements. These forward-looking statements reflect only our best assessment at this time, and may be identified by the use of words or phrases such as “anticipate,” “believe,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” “would” or similar phrases. Such forward-looking statements involve risks and uncertainty; actual results may differ materially from such statements, and undue reliance should not be placed on such statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
Item 1A. Risk Factors
The following factors are the most significant factors that can impact period-to-period comparisons and may affect the future performance of our businesses. New risks may emerge, and management cannot predict those risks or estimate the extent to which they may affect our financial performance.

 	•	 	Our cost-reduction projects may not result in anticipated savings in operating costs.	
 		
 	•	 	Slowdowns in the retail, travel, restaurant and bar, or entertainment industries, such as those caused by general economic downturns, terrorism, health concerns or strikes or bankruptcies within those industries, could reduce our revenues and production activity levels.	
 		
 	•	 	If we have a fair value impairment in a business segment, net earnings and net worth could be materially adversely affected by a write down of goodwill or intangible assets.	
 		
 	•	 	We face intense competition and competitive pressures that could adversely affect our results of operations and financial condition.	
 		
 	•	 	International economic and political factors could affect demand for imports and exports, and our financial condition and results of operations could be adversely impacted as a result.	
 		
 	•	 	We may not be able to effectively integrate future businesses we acquire.	
 		
 	•	 	We may not be able to achieve the international growth contemplated by our strategic plan.	
 		
 	•	 	Natural gas, the principal fuel we use to manufacture our products, is subject to fluctuating prices; fluctuations in natural gas prices could adversely affect our results of operations and financial condition.	
 		
 	•	 	If we are unable to obtain sourced products or materials at favorable prices, our operating performance may be adversely affected.	
 		
 	•	 	Charges related to our employee pension and postretirement welfare plans resulting from market risk and headcount realignment may adversely affect our results of operations and financial condition.	
 		
 	•	 	Our business requires significant capital investment and maintenance expenditures that we may be unable to fulfill.	
 		
 	•	 	Our business requires us to maintain a large fixed cost base that can affect our profitability.	
 		
 	•	 	Unexpected equipment failures may lead to production curtailments or shutdowns.	
 		
 	•	 	If our investments in new technology and other capital expenditures do not yield expected returns, our results of operations could be reduced.	
 		
 	•	 	We rely on increasingly complex information systems for management of our manufacturing, distribution, sales and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in their operation, our business and results of operations could suffer.	
 		
 	•	 	We may not be able to renegotiate collective bargaining agreements successfully when they expire; organized strikes or work	
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 	 	 	stoppages by unionized employees may have an adverse effect on our operating performance.	

 	•	 	We are subject to risks associated with operating in foreign countries. These risks could adversely affect our results of operations and financial condition.	
 		
 	•	 	High levels of inflation and high interest rates in Mexico could adversely affect the operating results and cash flows of Crisa.	
 		
 	•	 	Fluctuation of the currencies in which we conduct operations could adversely affect our financial condition and results of operations.	
 		
 	•	 	Fluctuations in the value of the foreign currencies in which we operate relative to the U.S. dollar could reduce the cost competitiveness of our products or those of our subsidiaries.	
 		
 	•	 	Devaluation or depreciation of, or governmental conversion controls over, the foreign currencies in which we operate could affect our ability to convert the earnings of our foreign subsidiaries into U.S. dollars.	
 		
 	•	 	If our hedges do not qualify as highly effective or if we do not believe that forecasted transactions would occur, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings.	
 		
 	•	 	We are subject to various environmental legal requirements and may be subject to new legal requirements in the future; these requirements could have a material adverse effect on our operations.	
 		
 	•	 	We received notice from the New York Stock Exchange (NYSE) that our stock was delisted before the start of trading on April 20, 2009. Our shares are now traded on the Over the Counter Bulletin Board (OTC BB). There can be no assurance that we may be able to regain our listing on the NYSE or any other exchange.	
 		
 	•	 	Our failure to protect our intellectual property or prevail in any intellectual property litigation could materially and adversely affect our competitive position, reduce revenue or otherwise harm our business.	
 		
 	•	 	Our business may suffer if we do not retain our senior management.	
 		
 	•	 	Payment of severance or retirement benefits earlier than anticipated could strain our cash flow.	
 		
 	•	 	We may face a risk when we return to the market to refinance our debt as a result of the February, 2009 downgrade of the Company’s debt by Moody’s Investor Service.	
The following risk factor has been modified in response to an SEC comment:

 	•	 	Our high level of debt, as well as incurrence of additional debt, may limit our operating flexibility, which could adversely affect our results of operations and financial condition and prevent us from fulfilling our obligations.	
 		
 	 	 	We have a high degree of financial leverage. As of June 30, 2009, we had $543.0 million of debt outstanding, net of discounts and warrants. Of that amount:	

 	•	 	approximately $16.9 million consisted of debt under our ABL Facility, which is secured by a first-priority lien on our assets;	
 		
 	•	 	approximately $306.0 million consisted of the Senior Secured Notes, which are secured by a second-priority lien on our collateral;	
 		
 	•	 	approximately $160.9 million consisted of the PIK Notes, which are secured by a third-priority lien on our collateral;	
 		
 	•	 	RMB 250 million (approximately $36.6 million) consisted of a loan made by China Construction Bank Corporation Langfang Economic Development Area Sub-Branch (“CCBC”), the entire proceeds of which we used to finance the construction of our Greenfield manufacturing facility in China that began operations in early 2007;	
 		
 	•	 	RMB 50 million (approximately $7.3 million) consisted of a loan, which is fully drawn, made by	
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 	 	 	CCBC to finance the working capital needs of our China facility; and	

 	•	 	11 million euro (approximately $15.5 million) consisted of a loan, which is fully drawn, made by Banco Espirito Santo, S.A. (“BES Euro Line”) to finance operational improvements associated with our Portuguese operations.	
Our ABL Facility provides for borrowings up to $150.0 million by Libbey Glass and Libbey Europe B.V. (a non-guarantor subsidiary). As a result of borrowing base limitations, the remaining unused availability under the ABL Facility at June 30, 2009 was $56.6 million.
Since we issued the PIK Notes in 2006, interest has been payable semi-annually through the issuance of additional PIK Notes. Commencing December 1, 2009, interest on the PIK Notes will be payable semi-annually in cash. The semi-annual cash interest payment that we are obligated to make on the PIK Notes on December 1, 2009 is approximately $12.9 million.
Our loan agreements, including our agreements governing the ABL Facility, the indenture governing the Senior Secured Notes and the indenture governing the PIK Notes, require us to comply with certain covenants. For example, our ABL Facility requires us to maintain a minimum fixed charge coverage ratio if the remaining unused availability under our ABL Facility is less than $15.0 million.
Although the respective indentures governing the Senior Secured Notes and the PIK Notes do not contain financial covenants, they do contain other covenants that limit our operational and financial flexibility, such as by limiting the additional indebtedness that we may incur, limiting certain business activities, investments and payments, and limiting our ability to dispose of certain assets.
Our agreements governing the ABL Facility, the Senior Secured Notes and the PIK Notes limit the additional indebtedness that we may incur, but we are permitted, subject to certain limitations, to incur additional debt in the future.
Our high degree of leverage, as well as the incurrence of additional debt, could have important consequences for our business, such as:

 	•	 	making it more difficult for us to satisfy our financial obligations, including with respect to the Senior Secured Notes and the PIK Notes;	
 		
 	•	 	limiting our ability to make capital investments in order to expand our business;	
 		
 	•	 	limiting our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, debt service requirements, acquisitions or other purposes;	
 		
 	•	 	limiting our ability to invest operating cash flow in our business and future business opportunities, because we use a substantial portion of these funds to service debt and because our covenants restrict the amount of our investments; and	
 		
 	•	 	limiting our ability to withstand business and economic downturns and/or place us at a competitive disadvantage compared to our competitors that have less debt, because of the high percentage of our operating cash flow that is dedicated to servicing our debt.	
Although we have taken a number of steps to enhance our liquidity to date in 2009 (including those announced in February 2009), if cash generated from operations is insufficient to satisfy our liquidity requirements, if we cannot service our debt or if we fail to meet our covenants, we could have substantial liquidity problems. In those circumstances, we might have to sell assets, delay planned investments, obtain additional equity capital or restructure our debt. Global financial markets and economic conditions have been, and continue to be volatile. The credit and capital markets remain challenging. These issues may make it difficult to obtain funding in future periods. If cash from operations and cash available from our ABL Facility are not sufficient to meet our needs, including our obligation to pay the cash interest on the PIK Notes that is payable on December 1, 2009, we cannot assure you that we will be able to obtain additional financing in sufficient amounts and/or on acceptable terms in the future or when our ABL Facility matures in December 2010. Furthermore, because of the current price of our stock, we cannot anticipate that it would be desirable to sell additional equity, even if we were able to do so.
In addition, our failure to comply with the covenants contained in our loan agreements could result in an event of default that, if not cured or waived, could result in the acceleration of all of our indebtedness.
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For further information concerning our borrowings, see “Management’s Discussion and Analysis; Capital Resources and Liquidity — Borrowings” and Note 4 to our Consolidated Financial Statements.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuers Purchases of Equity Securities
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Total Number of	 	 	
 	 	 	 	 	 	 	 	 	 	Shares Purchased as	 	Maximum Number of	
 	 	 	 	 	 	 	 	 	 	Part of Publicly	 	Shares that May Yet Be	
 	 	Total Number of	 	Average Price	 	Announced Plans or	 	Purchased Under the	
Period	 	Shares Purchased	 	Paid per Share	 	Programs	 	Plans or Programs (1)	
 	
April 1 to April 30, 2009	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,000,000	 	
May 1 to May 31, 2009	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,000,000	 	
June 1 to June 30, 2009	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,000,000	 	
 	
Total	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,000,000	 	

			
(1)	 	We announced on December 10, 2002, that our Board of Directors authorized the purchase of up to 2,500,000 shares of our common stock in the open market and negotiated purchases. There is no expiration date for this plan. In 2003, 1,500,000 shares of our common stock were purchased for $38.9 million. No additional shares were purchased in 2008, 2007, 2006, 2005 or 2004. Our ABL Facility and the indentures governing the Senior Secured Notes and the PIK Notes significantly restrict our ability to repurchase additional shares.	
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Company was held on May 7, 2009. At the meeting, action was taken with respect to the following matters:
(a) Jean-René Gougelet, John F. Meier and Carol B. Moerdyk were reelected as directors of the Company. Each will serve for a term of 3 years or until his successor is elected. The terms of office of William A. Foley, Deborah G. Miller, Terence P. Stewart, Carlos V. Duno, Peter C. McC. Howell, Richard I. Reynolds and John C. Orr continued after the meeting.
(b) The appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2009 was ratified.
The following table sets forth the tabulation of votes with respect to each of the matters described above:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Shares	 	Shares	 	Shares	 	Abstentions /	
 	 	Voted For	 	Voted Against	 	Withheld	 	Broker Non-Votes	
 	
a. Election of Directors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Jean-René Gougelet	 	 	10,612,791	 	 	 	—	 	 	 	577,120	 	 	 	—	 	
John F. Meier	 	 	10,238,979	 	 	 	—	 	 	 	950,932	 	 	 	—	 	
Carol B. Moerdyk	 	 	10,587,160	 	 	 	—	 	 	 	602,751	 	 	 	—	 	
b. Ratification of auditors	 	 	10,882,675	 	 	 	251,503	 	 	 	 	 	 	 	55,733	 	
 	
Item 5. Other Information

(b)	 	There has been no material change to the procedures by which security holders may recommend nominees to the Company’s board of directors.	
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Item 6. Exhibits
Exhibits: The exhibits listed in the accompanying “Exhibit Index” are filed as part of this report.
EXHIBIT INDEX
 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	3.1	 	 	Restated Certificate of Incorporation of Libbey Inc. (filed as Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 and incorporated herein by reference).	
 	3.2	 	 	Amended and Restated By-Laws of Libbey Inc. (filed as Exhibit 3.01 to Registrant’s Form 8-K filed February 7, 2005 and incorporated herein by reference).	
 	4.1	 	 	Credit Agreement, dated June 16, 2006, among Libbey Glass Inc. and Libbey Europe B.V., Libbey Inc., the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., J.P. Morgan Europe Limited, LaSalle Bank Midwest National Association, Wells Fargo Foothill, LLC, Fifth Third Bank, and J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger. (filed as Exhibit 4.1 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference. The schedules to such Credit Agreement are filed herein).	
 	4.2	 	 	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee. (filed as Exhibit 4.5 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.3	 	 	Form of Floating Rate Senior Secured Note due 2011. (filed as Exhibit 4.4 to Libbey Glass Inc.’s Registration Statement on Form S-4; File No. 333-139358).	
 	4.4	 	 	Registration Rights Agreement, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and the Initial Purchasers named therein. (filed as Exhibit 4.4 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.5	 	 	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and Merrill Lynch PCG, Inc. (filed as Exhibit 4.5 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.6	 	 	Form of 16% Senior Subordinated Secured Pay-in-Kind Note due 2011. (filed as Exhibit 4.6 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.7	 	 	Warrant, issued June 16, 2006. (filed as Exhibit 4.7 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.8	 	 	Registration Rights Agreement, dated June 16, 2006, among Libbey Inc. and Merrill Lynch PCG, Inc. (filed as Exhibit 4.8 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.9	 	 	Intercreditor Agreement, dated June 16, 2006, among Libbey Glass Inc., JPMorgan Chase Bank, N.A., The Bank of New York Trust Company, N.A., Merrill Lynch PCG, Inc. and the Loan Parties party thereto. (filed as Exhibit 4.9 to Registrant’s Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	4.10	 	 	Amendment and Waiver, dated November 7, 2008, among Libbey Glass Inc. and Libbey Europe B.V., Libbey Inc., the other loan parties thereto, JPMorgan Chase Bank, N.A., J.P. Morgan Europe Limited, Bank of America, N.A. (f/k/a LaSalle Bank Midwest National Association), Wells Fargo Foothill, LLC, Fifth Third Bank, and J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger (filed as Exhibit 4.10 to Libbey Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference).	
 	10.1	 	 	Pension and Savings Plan Agreement dated as of June 17, 1993 between Owens-Illinois, Inc. and Libbey Inc. (filed as Exhibit 10.4 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 and incorporated herein by reference).	
 	10.2	 	 	Cross-Indemnity Agreement dated as of June 24, 1993 between Owens-Illinois, Inc. and Libbey Inc. (filed as Exhibit 10.5 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 and incorporated herein by reference).	
 	10.3	 	 	The Amended and Restated Libbey Inc. Stock Option Plan for Key Employees (filed as Exhibit 10.14 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 and incorporated herein by reference).	
 	10.4	 	 	Libbey Inc. Guarantee dated as of October 10, 1995 in favor of The Pfaltzgraff Co., The Pfaltzgraff Outlet Co. and Syracuse China Company of Canada Ltd. guaranteeing certain obligations of LG Acquisition Corp. and Libbey Canada Inc. under the Asset Purchase Agreement for the Acquisition of Syracuse China (Exhibit 2.0) in the event certain contingencies occur (filed as Exhibit 10.17 to Libbey Inc.’s Current Report on Form 8-K dated October 10, 1995 and incorporated herein by reference).	
 	10.5	 	 	Susquehanna Pfaltzgraff Co. Guarantee dated as of October 10, 1995 in favor of LG Acquisition Corp. and Libbey Canada Inc. guaranteeing certain obligations of The Pfaltzgraff Co., The Pfaltzgraff Outlet Co. and Syracuse China Company of Canada, Ltd. under the Asset Purchase Agreement for the Acquisition of Syracuse China (Exhibit 2.0) in the event certain contingencies occur (filed as Exhibit 10.18 to Libbey Inc.’s Current Report on Form 8-K dated October 10, 1995 and	
 53 

Table of Contents

 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	 	 	 	incorporated herein by reference).	
 	10.6	 	 	First Amended and Restated Libbey Inc. Executive Savings Plan (filed as Exhibit 10.23 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference).	
 	10.7	 	 	Form of Non-Qualified Stock Option Agreement between Libbey Inc. and certain key employees participating in The 1999 Equity Participation Plan of Libbey Inc. (filed as Exhibit 10.69 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference).	
 	10.8	 	 	The 1999 Equity Participation Plan of Libbey Inc. (filed as Exhibit 10.67 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference).	
 	10.9	 	 	Stock Promissory Sale and Purchase Agreement between VAA — Vista Alegre Atlantis SGPS, SA and Libbey Europe B.V. dated January 10, 2005 (filed as Exhibit 10.76 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference).	
 	10.10	 	 	RMB Loan Contract between Libbey Glassware (China) Company Limited and China Construction Bank Corporation Langfang Economic Development Area Sub-branch entered into January 23, 2006 (filed as exhibit 10.75 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005 and incorporated herein by reference).	
 	10.11	 	 	Guarantee Contract executed by Libbey Inc. for the benefit of China Construction Bank Corporation Langfang Economic Development Area Sub-branch (filed as exhibit 10.76 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005 and incorporated herein by reference).	
 	10.12	 	 	Guaranty, dated May 31, 2006, executed by Libbey Inc. in favor of Fondo Stiva S.A. de C.V. (filed as exhibit 10.2 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and incorporated herein by reference).	
 	10.13	 	 	Guaranty Agreement, dated June 16, 2006, executed by Libbey Inc. in favor of Vitro, S.A. de C.V. (filed as exhibit 10.3 to Libbey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and incorporated herein by reference).	
 	10.14	 	 	Transition Services Agreement, dated June 16, 2006, among Crisa Libbey S.A. de C.V., Vitrocrisa Holding, S. de R.L. de C.V., Vitrocrisa S. de R.L. de C.V., Vitrocrisa Comercial, S. de R.L. de C.V., Crisa Industrial, L.L.C. and Vitro S.A. de C.V. (filed as exhibit 10.1 to Libbey Inc.’s Current Report on Form 8-K filed June 21, 2006 and incorporated herein by reference).	
 	10.15	 	 	2006 Omnibus Incentive Plan of Libbey Inc. (filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and incorporated herein by reference).	
 	10.16	 	 	Libbey Inc. Amended and Restated Deferred Compensation Plan for Outside Directors (incorporated by reference to Exhibit 10.61 to Libbey Glass Inc.’s Registration Statement on Form S-4; File No. 333-139358).	
 	10.17	 	 	Form of Registered Global Floating Rate Senior Secured Note, Series B, due 2011 (filed as exhibit 10.55 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference).	
 	10.18	 	 	2009 Director Deferred Compensation Plan (filed as Exhibit 10.51 to Libbey Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference).	
 	10.19	 	 	Executive Deferred Compensation Plan (filed as Exhibit 10.52 to Libbey Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference).	
 	10.20	 	 	Amended and Restated Employment Agreement dated as of December 31, 2008 between Libbey Inc. and John F. Meier (filed as exhibit 10.29 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.21	 	 	Amended and Restated Employment Agreement dated as of December 31, 2008 between Libbey Inc. and Richard I. Reynolds (filed as exhibit 10.30 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.22	 	 	Amended and Restated Employment Agreement dated as of December 31, 2008 between Libbey Inc. and Gregory T. Geswein (filed as exhibit 10.31 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.23	 	 	Form of Amended and Restated Employment Agreement dated as of December 31, 2008 between Libbey Inc. and the respective executive officers identified on Appendix 1 thereto (filed as exhibit 10.32 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.24	 	 	Amended and restated change in control agreement dated as of December 31, 2008 between Libbey Inc. and John F. Meier (filed as exhibit 10.33 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.25	 	 	Form of amended and restated change in control agreement dated as of December 31, 2008 between Libbey Inc. and the respective executive officers identified on Appendix 1 thereto (filed as exhibit 10.34 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.26	 	 	Form of amended and restated change in control agreement dated as of December 31, 2008 between Libbey Inc. and the respective individuals identified on Appendix 1 thereto (filed as exhibit 10.35 to Libbey Inc.’s Annual Report on Form 10-	
 54 

Table of Contents

 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	 	 	 	K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.27	 	 	Form of Amended and Restated Indemnity Agreement dated as of December 31, 2008 between Libbey Inc. and the respective officers identified on Appendix 1 thereto (filed as exhibit 10.36 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.28	 	 	Form of Amended and Restated Indemnity Agreement dated as of December 31, 2008 between Libbey Inc. and the respective outside directors identified on Appendix 1 thereto (filed as exhibit 10.37 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.29	 	 	Amended and Restated Libbey Inc. Supplemental Retirement Benefit Plan effective December 31, 2008 (filed as exhibit 10.38 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	10.30	 	 	Amendment to the First Amended and Restated Libbey Inc. Executive Savings Plan effective December 31, 2008 (filed as exhibit 10.39 to Libbey Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).	
 	31.1	 	 	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) (filed herein).	
 	31.2	 	 	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) (filed herein).	
 	32.1	 	 	Chief Executive Officer Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (filed herein).	
 	32.2	 	 	Chief Financial Officer Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (filed herein).	
 55 

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 	 	 	 	 	
 	LIBBEY INC.
 	 	
Date: August 7, 2009 	By 	/s/ Gregory T. Geswein  	 	
 	 	Gregory T. Geswein, 	 	
 	 	Vice President, Chief Financial Officer 	 	
 	
 56 

EXHIBIT 4.1
Schedules to Credit Agreement dated June 16, 2006.
Commitment Schedule
 	 	 	 	 	 	 	 	 	
 	 	Total	 	 	Euro	 	
Lender	 	Commitment	 	 	Commitment	 	
JPMorgan Chase Bank, N.A.	 	US$	30,000,000	 	 	US$	15,000,000	 	
Fifth Third Bank	 	US$	24,500,000	 	 	US$	12,250,000	 	
Wells Fargo Foothill LLC	 	US$	24,500,000	 	 	US$	12,250,000	 	
LaSalle Bank Midwest National Association	 	US$	24,500,000	 	 	US$	12,250,000	 	
Merrill Lynch Capital	 	US$	24,500,000	 	 	US$	12,250,000	 	
UBS Loan Finance LLC	 	US$	22,000,000	 	 	US$	11,000,000	 	

Total	 	US$	150,000,000	 	 	US$	75,000,000	 	

 
Schedule 3.05
Properties

I.	 	Owned and Leased Real Property	
 	 	 	 	 	
Loan Party	 	Addresses of Owned Properties	 	Non-Mortgaged Property	
Libbey Glass Inc.	 	940 Ash Street
Toledo, OH 43611	 	No	
 	 	 	 	 	
Libbey Glass Inc.	 	1600 Justo Penn Road
Laredo, TX 78041	 	Yes	
 	 	 	 	 	
Libbey Glass Inc.	 	4302 Jewella Road
Shreveport, LA 71109	 	No	
 	 	 	 	 	
Syracuse China Company	 	2900 Court Street
Syracuse, NY 13208	 	No	
 	 	 	 	 	
Traex Company	 	101 Traex Plaza
Dane, WI 53529	 	Yes	
 	 	 	 	 	
B.V. Koninklijke
Nederlandsche Glasfabriek Leerdam	 	Lingedijk 8, 4142 LD
Leerdam, the Netherlands	 	Yes	
 	 	 	
Loan Party	 	Addresses of Leased Properties	
Libbey Glass Inc.	 	300 Madison Avenue
Toledo, OH 43604	
 	 	 	
Libbey Glass Inc.	 	930 Dearborn Avenue
Oregon, OH 43616	
 	 	 	
Libbey Glass Inc.	 	1401 Champlain Street
Toledo, OH 43604	
 	 	 	
Libbey Glass Inc.	 	706 Kennie Road
Shreveport, LA 71103	
 	 	 	
Libbey Glass Inc.	 	3401 Etiwanda Avenue
Bldgs. 711 and 721
Mira Loma, CA 91752	
 	 	 	
Libbey Glass Inc.	 	1038 Matzinger Road
Toledo, OH 43612	
 	 	 	
Libbey Glass Inc.	 	8900 San Mateo Drive
Laredo, TX 78042	
 	 	 	
Libbey Glass Inc.	 	2709 S.E. “I” Street
Bentonville, AR	
 	 	 	
Libbey Glass Inc.	 	2295-A Renaissance Drive
Las Vegas, NV 89119	
 	 	 	
The Drummond Glass Company	 	205 S. Erie Street
Toledo, OH 43602	
 	 	 	
World Tableware Inc.	 	1850 Blackhawk Dr.
W. Chicago, IL 60185	
 	 	 	
B.V. Koninklijke Nederlandsche Glasfabriek Leerdam	 	Lingedijk 8, 4142 LD Leerdam
The Netherlands	

 

II.	 	Intellectual Property	
A. Trademarks and Trademark Applications
 	 	 	 	 	 	 	 	 	 	 	 	 	
Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
      Loan Party: Libbey Glass Inc.	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
FUNDAMENTALS	 	 	2,034,784	 	 	REGISTERED	 	2/4/97	 	2/4/07	 	USA	
JEWEL	 	 	2,004,783	 	 	REGISTERED	 	10/1/96	 	10/1/06	 	USA	
PERCEPTION	 	 	2,663,143	 	 	REGISTERED	 	12/17/02	 	12/17/12	 	USA	
NOB HILL	 	 	2,663,144	 	 	REGISTERED	 	12/17/02	 	12/17/12	 	USA	
GOVERNOR CLINTON	 	 	2,704,223	 	 	REGISTERED	 	4/8/03	 	4/8/13	 	USA	
DAKOTA	 	 	2,025,945	 	 	REGISTERED	 	12/24/96	 	12/24/06	 	USA	
STATUS	 	 	2,044,121	 	 	REGISTERED	 	3/11/97	 	3/11/07	 	USA	
PRISM (GLASSWARE)	 	 	2,330,497	 	 	REGISTERED	 	3/21/00	 	3/21/10	 	USA	
SYMMETRY	 	 	1,372,622	 	 	REGISTERED	 	11/26/85	 	11/26/05	 	USA	
QUANTUM (FLATWARE)	 	 	2,669,104	 	 	REGISTERED	 	12/31/02	 	12/31/12	 	USA	
GIBRALTAR (FLATWARE)	 	 	2,709,190	 	 	REGISTERED	 	4/22/03	 	4/22/13	 	USA	
CATALINA	 	 	2,669,061	 	 	REGISTERED	 	12/31/02	 	12/31/12	 	USA	
E-SERIES	 	 	78/741,473	 	 	APPLN FILED	 	 	 	 	 	USA	
RESTAURANT BASICS (DINNERWARE)	 	 	2,502,645	 	 	REGISTERED	 	10/30/01	 	10/30/11	 	USA	
RESTAURANT BASICS (FLATWARE)	 	 	2,502,646	 	 	REGISTERED	 	10/30/01	 	10/30/11	 	USA	
RESTAURANT BASICS (GLASSWARE)	 	 	2,764,560	 	 	REGISTERED	 	9/16/03	 	9/16/13	 	USA	
EVERY DAY. EVERY WAY.	 	 	2,414,453	 	 	REGISTERED	 	12/19/00	 	12/19/10	 	USA	
LIFESTYLES	 	 	1,998,419	 	 	REGISTERED	 	9/3/96	 	9/3/06	 	USA	
LIBBEY.COM	 	 	2,286,310	 	 	REGISTERED	 	10/12/99	 	10/12/09	 	USA	
GIBRALTAR	 	 	1,224,292	 	 	REGISTERED	 	1/18/83	 	1/18/13	 	USA	
CLUBHOUSE COLLECTION	 	 	2,859,370	 	 	REGISTERED	 	7/6/04	 	7/6/14	 	USA	
MAIN STREET	 	 	2,416,702	 	 	REGISTERED	 	1/2/01	 	1/2/11	 	USA	
VILLAGE PINES COLLECTION	 	 	2,114,155	 	 	REGISTERED	 	11/18/97	 	11/18/07	 	USA	
FACETS	 	 	2,443,873	 	 	REGISTERED	 	4/17/01	 	4/17/11	 	USA	
CREATIVE ACCENTS	 	 	2,194,064	 	 	REGISTERED	 	10/6/98	 	10/6/08	 	USA	
GENUINE LIBBEY	 	 	2,522,992	 	 	REGISTERED	 	12/25/01	 	12/25/11	 	USA	
CHIVALRY	 	 	1,173,311	 	 	REGISTERED	 	10/13/81	 	10/13/11	 	USA	
WHAT’S COOKIN’? (BAKEWARE)	 	 	2,602,220	 	 	REGISTERED	 	7/30/02	 	7/30/12	 	USA	
QUANTUM (GLASSWARE)	 	 	2,525,778	 	 	REGISTERED	 	1/1/02	 	1/1/12	 	USA	
MALIBU	 	 	1,445,212	 	 	REGISTERED	 	6/30/87	 	6/30/07	 	USA	
GIBRALTAR (DINNERWARE)	 	 	2,355,388	 	 	REGISTERED	 	6/6/00	 	6/6/10	 	USA	
SHEER RIM AND DESIGN	 	 	849,814	 	 	REGISTERED	 	5/28/68	 	5/28/08	 	USA	
BRAVURA	 	 	2,884,004	 	 	REGISTERED	 	9/14/04	 	9/14/14	 	USA	
SAFEDGE	 	 	522,529	 	 	REGISTERED	 	3/21/50	 	3/21/10	 	USA	
L IN CIRCLE	 	 	651,483	 	 	REGISTERED	 	9/10/97	 	9/10/07	 	USA	
LIBBEY	 	 	834,728	 	 	REGISTERED	 	9/5/67	 	9/5/07	 	USA	
2000 (GLASSWARE)	 	 	2,366,307	 	 	REGISTERED	 	7/11/00	 	7/11/10	 	USA	
DURATUFF	 	 	1,131,831	 	 	REGISTERED	 	3/11/80	 	3/11/10	 	USA	
EMBASSY	 	 	1,178,202	 	 	REGISTERED	 	11/17/81	 	11/17/11	 	USA	
BOLLA GRANDE	 	 	1,248,379	 	 	REGISTERED	 	8/16/83	 	8/16/13	 	USA	
VIVA GRANDE	 	 	1,564,590	 	 	REGISTERED	 	11/7/89	 	11/7/09	 	USA	

 

Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
TIKIWARE	 	 	2,889,973	 	 	REGISTERED	 	9/28/04	 	9/28/14	 	USA	
OMEGA	 	 	2,809,251	 	 	REGISTERED	 	1/27/04	 	1/27/14	 	USA	
KEGGER (GLASSWARE)	 	 	78/532158	 	 	APPLN FILED	 	 	 	 	 	USA	
MARGARINI	 	 	2,875 403	 	 	REGISTERED	 	8/17/04	 	8/17/14	 	USA	
E-COLLECTION	 	 	78/741449	 	 	APPLN FILED	 	 	 	 	 	USA	
VENUS	 	 	2,815,596	 	 	REGISTERED	 	2/17/04	 	2/17/14	 	USA	
FINEDGE	 	 	1,193,209	 	 	REGISTERED	 	4/6/82	 	4/6/12	 	USA	
FIESTA GRANDE	 	 	1,093,807	 	 	REGISTERED	 	6/20/78	 	6/20/08	 	USA	
QUANTUM (DINNERWARE)	 	 	2,677,813	 	 	REGISTERED	 	1/21/03	 	1/21/13	 	USA	
PRISM (DINNERWARE)	 	 	2,738,740	 	 	REGISTERED	 	7/15/03	 	7/15/13	 	USA	
POLYTUFF	 	 	3,077,591	 	 	REGISTERED	 	4/4/06	 	4/4/16	 	USA	
RESTAURANT SUPPLIES TO GO	 	 	78/586,296	 	 	APPLN FILED	 	 	 	 	 	USA	
SATIN GIBRALTAR	 	 	3,069,269	 	 	REGISTERED	 	3/14/06	 	3/14/16	 	USA	
WINE MASTER	 	 	78/805,067	 	 	APPLN FILED	 	 	 	 	 	USA	
ENDEAVOR	 	 	78/572,284	 	 	APPLN FILED	 	 	 	 	 	USA	
SPIRIT MASTER	 	 	78/861,587	 	 	APPLN FILED	 	 	 	 	 	USA	
America’s Glassmaker	 	Service Mark	 	 	 	 	 	 	 	USA	
Vina the Right Glass for the Restaurateur	 	Service Mark	 	 	 	 	 	 	 	USA	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	3/20/06	 	 	 	INDA	
LIBBEY	 	 	2000/17374	 	 	REGISTERED	 	7/30/00	 	5/18/12	 	TURK	
LIBBEY	 	 	21048	 	 	REGISTERED	 	1/12/01	 	1/11/11	 	ARUB	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	12/7/00	 	 	 	BERM	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	12/7/00	 	 	 	INDN	
LIBBEY	 	 	00017334	 	 	REGISTERED	 	10/21/03	 	11/30/10	 	MASA	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	12/7/00	 	 	 	PAKI	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	12/7/00	 	 	 	EGYP	
LIBBEY	 	TM148315	 	REGISTERED	 	12/7/00	 	2/5/11	 	THAI	
LIBBEY	 	 	00926016	 	 	REGISTERED	 	4/19/01	 	4/15/10	 	TAIW	
LIBBEY	 	 	00930398	 	 	REGISTERED	 	4/19/01	 	9/30/08	 	TAIW	
LIBBEY	 	 	00819919	 	 	REGISTERED	 	4/19/01	 	9/30/08	 	TAIW	
LIBBEY	 	 	00889777	 	 	REGISTERED	 	4/19/01	 	4/15/10	 	TAIW	
LIBBEY	 	 	669/74	 	 	REGISTERED	 	9/26/03	 	9/26/11	 	SAUD	
LIBBEY	 	 	1.631.920	 	 	REGISTERED	 	1/2/86	 	5/7/07	 	ARGT	
LIBBEY	 	 	41243	 	 	REGISTERED	 	10/31/72	 	7/5/15	 	BENL	
LIBBEY	 	 	593616	 	 	REGISTERED	 	5/12/89	 	5/12/19	 	CAND	
LIBBEY	 	 	59110	 	 	REGISTERED	 	10/3/85	 	12/13/05	 	CHIL	
LIBBEY	 	 	223024	 	 	REGISTERED	 	2/10/03	 	2/24/13	 	CHIL	
LIBBEY	 	 	223025	 	 	REGISTERED	 	2/24/03	 	2/24/13	 	CHIL	
LIBBEY	 	 	265556	 	 	REGISTERED	 	3/23/90	 	3/22/15	 	COLO	
LIBBEY	 	 	91,278	 	 	REGISTERED	 	5/15/95	 	5/15/05	 	CORI	
LIBBEY	 	 	864/1972	 	 	REGISTERED	 	3/17/72	 	3/17/12	 	DENM	
LIBBEY	 	 	14226	 	 	REGISTERED	 	7/22/65	 	7/22/05	 	DORE	
LIBBEY	 	 	00012-99	 	 	REGISTERED	 	5/16/99	 	7/9/14	 	ECUD	
LIBBEY	 	 	12972	 	 	REGISTERED	 	12/13/05	 	12/13/05	 	ELSA	
LIBBEY	 	 	1718720	 	 	REGISTERED	 	12/19/89	 	12/19/09	 	FRAN	
LIBBEY	 	 	2470	 	 	REGISTERED	 	4/15/99	 	5/31/09	 	GUAT	
LIBBEY	 	 	14041	 	 	REGISTERED	 	4/12/67	 	4/12/07	 	HOND	
LIBBEY	 	 	721511-1995	 	 	REGISTERED	 	7/6/95	 	7/6/05	 	JAPN	
LIBBEY	 	 	4355	 	 	REGISTERED	 	4/10/95	 	10/21/14	 	MEXO	
LIBBEY	 	 	42/1119	 	 	REGISTERED	 	11/28/00	 	11/28/00	 	SOAF	

 

Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
LIBBEY	 	 	B64/2502	 	 	REGISTERED	 	5/14/65	 	7/20/04	 	SOAF	
LIBBEY	 	 	452.599	 	 	REGISTERED	 	5/13/95	 	7/27/14	 	SPAN	
LIBBEY	 	 	8800324	 	 	REGISTERED	 	3/4/02	 	1/31/12	 	SWED	
LIBBEY	 	 	209.444	 	 	REGISTERED	 	3/4/85	 	4/9/05	 	SWIT	
LIBBEY	 	 	210231	 	 	REGISTERED	 	7/9/87	 	7/9/97	 	URUG	
LIBBEY	 	 	64.468-F	 	 	REGISTERED	 	4/13/71	 	4/13/06	 	VENZ	
LIBBEY	 	 	51.646	 	 	REGISTERED	 	7/20/66	 	7/20/06	 	VENZ	
LIBBEY	 	 	51.649	 	 	REGISTERED	 	7/21/66	 	7/21/06	 	VENZ	
LIBBEY	 	 	0B76337	 	 	REGISTERED	 	2/23/66	 	7/21/13	 	ZEAL	
HT IN A STAR	 	 	240955	 	 	REGISTERED	 	8/6/85	 	12/6/17	 	CAND	
HI IN A STAR	 	 	754652	 	 	REGISTERED	 	8/6/85	 	8/6/05	 	FRAN	
E-COLLECTION	 	UNKNOWN	 	APPLN FILED	 	3/1/06	 	 	 	CHIN	
E-COLLECTION	 	UNKNOWN	 	APPLN FILED	 	3/1/06	 	 	 	TURK	
E-SERIES	 	UNKNOWN	 	APPLN FILED	 	3/1/06	 	 	 	CHIN	
E-SERIES	 	UNKNOWN	 	APPLN FILED	 	3/1/06	 	 	 	TURK	
SAFEDGE	 	 	5724	 	 	REGISTERED	 	9/22/67	 	9/22/09	 	BERM	
SAFEDGE	 	 	163307	 	 	REGISTERED	 	11/18/33	 	11/18/08	 	CAND	
SAFEDGE	 	 	593615	 	 	REGISTERED	 	6/9/89	 	5/12/19	 	CAND	
SAFEDGE	 	 	754651	 	 	REGISTERED	 	8/6/85	 	8/6/05	 	FRAN	
SAFEDGE	 	 	852,076	 	 	REGISTERED	 	11/21/68	 	9/6/07	 	GERM	
SAFEDGE	 	 	726902-1995	 	 	REGISTERED	 	10/25/95	 	10/25/05	 	JAPN	
SAFEDGE	 	 	37210	 	 	REGISTERED	 	11/12/85	 	11/12/05	 	PANA	
SAFEDGE	 	 	67/3844	 	 	REGISTERED	 	5/5/97	 	9/5/07	 	SOAF	
SAFEDGE	 	 	162126	 	 	REGISTERED	 	7/21/96	 	7/21/06	 	SWIT	
SAFEDGE	 	 	B4443	 	 	REGISTERED	 	3/7/69	 	10/5/09	 	TRIN	
L IN CIRCLE	 	 	110378	 	 	REGISTERED	 	5/30/88	 	5/30/18	 	CAND	
L IN CIRCLE	 	 	1234565	 	 	REGISTERED	 	12/28/98	 	12/27/08	 	CHIN	
L IN CIRCLE	 	 	30287	 	 	REGISTERED	 	9/9/91	 	11/22/09	 	CYPR	
L IN CIRCLE	 	 	1450534	 	 	REGISTERED	 	5/29/69	 	2/18/08	 	FRAN	
L IN CIRCLE	 	 	60663	 	 	REGISTERED	 	11/23/89	 	11/23/09	 	PHIL	
L IN CIRCLE	 	 	1077	 	 	REGISTERED	 	11/9/70	 	11/9/05	 	VENZ	
LIBBEY	 	 	548984	 	 	REGISTERED	 	11/10/92	 	1/16/08	 	AUST	
LIBBEY	 	 	816624984	 	 	REGISTERED	 	11/3/93	 	11/3/03	 	BRAZ	
LIBBEY	 	 	2000352	 	 	REGISTERED	 	10/24/04	 	11/1/14	 	BRIT	
LIBBEY	 	 	960817	 	 	REGISTERED	 	3/14/97	 	3/13/07	 	CHIN	
LIBBEY	 	 	30286	 	 	REGISTERED	 	11/22/88	 	11/22/09	 	CYPR	
LIBBEY	 	 	139852	 	 	REGISTERED	 	11/8/95	 	9/5/05	 	FINL	
LIBBEY	 	 	123463	 	 	REGISTERED	 	5/16/92	 	3/17/05	 	GREC	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	6/20/04	 	 	 	GUYA	
LIBBEY	 	 	533/91	 	 	REGISTERED	 	9/10/92	 	1/25/12	 	HOKO	
LIBBEY	 	 	78996	 	 	REGISTERED	 	12/20/93	 	2/13/12	 	ISRA	
LIBBEY	 	 	21/267	 	 	REGISTERED	 	3/21/91	 	3/21/12	 	JAMA	
LIBBEY	 	 	54663	 	 	REGISTERED	 	11/27/91	 	11/27/11	 	PANA	
LIBBEY	 	 	182.345	 	 	REGISTERED	 	1/25/96	 	11/21/05	 	PARA	
LIBBEY	 	 	12657	 	 	REGISTERED	 	3/20/95	 	1/20/15	 	PERU	
LIBBEY	 	 	S/871/91	 	 	REGISTERED	 	2/14/98	 	2/14/08	 	SING	
LIBBEY	 	 	15467/1992	 	 	REGISTERED	 	12/12/03	 	9/13/13	 	SOKO	
LIBBEY	 	UNKNOWN	 	APPLN FILED	 	6/10/04	 	 	 	SURI	
LIBBEY IN CHINESE	 	 	970100060	 	 	APPLN FILED	 	10/12/04	 	 	 	CHIN	
LIBBEY	 	 	6768	 	 	REGISTERED	 	6/11/59	 	2/11/12	 	VIR	

 

Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
LIBBEY	 	 	33134	 	 	REGISTERED	 	9/2/02	 	4/14/11	 	UAE	
SAFEDGE	 	 	8710	 	 	REGISTERED	 	5/8/02	 	5/8/12	 	NETH	
LIBBEY	 	 	158196	 	 	REGISTERED	 	10/31/72	 	5/8/12	 	NETH	
LIBBEY GLASS INC.	 	 	970100060	 	 	REGISTERED	 	4/21/03	 	4/20/13	 	CHIN	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: Syracuse China Company	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
ARDEN	 	 	1,395,741	 	 	REGISTERED	 	6/3/86	 	6/3/06	 	USA	
CRESTVIEW	 	 	828,539	 	 	REGISTERED	 	5/9/67	 	5/9/07	 	USA	
KING’S INN	 	 	1,026,786	 	 	REGISTERED	 	12/9/75	 	12/9/05	 	USA	
CORDOVA	 	 	827,539	 	 	REGISTERED	 	4/18/67	 	4/18/07	 	USA	
CINNAMON	 	 	1,336,722	 	 	REGISTERED	 	5/21/85	 	5/21/05	 	USA	
CHANSON	 	 	1,452,199	 	 	REGISTERED	 	8/11/87	 	8/11/07	 	USA	
CHABLIS (CHINA DINNERWARE)	 	 	2,775,359	 	 	REGISTERED	 	10/21/03	 	10/21/13	 	USA	
BROOKLINE	 	 	1,472,331	 	 	REGISTERED	 	1/12/88	 	1/12/08	 	USA	
AMY	 	 	833,680	 	 	REGISTERED	 	8/15/67	 	8/15/07	 	USA	
COOL ‘N ARTS	 	 	2678670	 	 	REGISTERED	 	1/21/03	 	1/21/13	 	USA	
CRIMSON BLOSSOM	 	 	1,354,101	 	 	REGISTERED	 	8/13/85	 	8/13/05	 	USA	
CASABLANCA	 	 	1,292,327	 	 	REGISTERED	 	8/28/84	 	8/28/14	 	USA	
WEXFORD	 	 	834,330	 	 	REGISTERED	 	8/29/67	 	8/29/07	 	USA	
PALOMINO	 	 	1,175,252	 	 	REGISTERED	 	10/27/81	 	10/27/11	 	USA	
PATRICIAN	 	 	1,394,111	 	 	REGISTERED	 	5/20/86	 	5/20/06	 	USA	
PONTCHARTRAIN	 	 	833,330	 	 	REGISTERED	 	8/8/67	 	8/8/07	 	USA	
RICHLAND	 	 	1,394,907	 	 	REGISTERED	 	5/27/86	 	5/27/06	 	USA	
ROUEN	 	 	833,682	 	 	REGISTERED	 	8/15/67	 	8/15/07	 	USA	
SHENANGO	 	 	555,636	 	 	REGISTERED	 	3/4/52	 	3/4/12	 	USA	
SUTTON	 	 	834,715	 	 	REGISTERED	 	9/5/67	 	9/5/07	 	USA	
SYRACUSE	 	 	104,744	 	 	REGISTERED	 	6/15/15	 	6/15/15	 	USA	
SYRALITE	 	 	798,393	 	 	REGISTERED	 	11/2/65	 	11/2/05	 	USA	
OYSTER BAY	 	 	1,394,908	 	 	REGISTERED	 	5/27/86	 	5/27/06	 	USA	
DEEPMEADOW	 	 	1,394,110	 	 	REGISTERED	 	5/20/86	 	5/20/06	 	USA	
TUXEDO GOLD	 	 	761,336	 	 	REGISTERED	 	12/10/63	 	12/10/13	 	USA	
ESQUIRE	 	 	793,642	 	 	REGISTERED	 	8/3/65	 	8/3/05	 	USA	
CANTINA	 	 	2,137,547	 	 	REGISTERED	 	2/17/98	 	2/17/08	 	USA	
CAFÉ ROYAL	 	 	2,669,056	 	 	REGISTERED	 	12/31/02	 	12/31/12	 	USA	
QUADRA	 	 	2,669,057	 	 	REGISTERED	 	12/31/02	 	12/31/12	 	USA	
REPETITION	 	 	2,826,208	 	 	REGISTERED	 	3/23/04	 	3/23/14	 	USA	
OCTET	 	 	3,062,978	 	 	REGISTERED	 	2/28/06	 	2/28/16	 	USA	
TUO	 	 	827,857	 	 	REGISTERED	 	4/25/67	 	4/25/07	 	USA	
MOON STONE	 	 	1,070,265	 	 	REGISTERED	 	7/26/77	 	7/26/07	 	USA	
WOODSPRITE	 	 	833,681	 	 	REGISTERED	 	8/15/67	 	8/15/07	 	USA	
LEMONT	 	 	828,537	 	 	REGISTERED	 	5/9/67	 	5/9/07	 	USA	
MAYER	 	 	1,444,195	 	 	REGISTERED	 	6/23/87	 	6/23/07	 	USA	
ME TOO	 	 	833,329	 	 	REGISTERED	 	8/8/67	 	8/8/07	 	USA	
MESA GRANDE	 	 	1,055,595	 	 	REGISTERED	 	1/4/77	 	1/4/07	 	USA	
GILD	 	 	833,328	 	 	REGISTERED	 	8/8/67	 	8/8/07	 	USA	
MONTLYNN	 	 	1,395,740	 	 	REGISTERED	 	6/3/86	 	6/3/06	 	USA	
OAKTON	 	 	1,395,739	 	 	REGISTERED	 	6/3/86	 	6/3/06	 	USA	
EMINENCE	 	 	2,698,247	 	 	REGISTERED	 	3/18/03	 	3/18/13	 	USA	
THE MINI GREAT PLATE	 	 	1,448,544	 	 	REGISTERED	 	7/21/87	 	7/21/07	 	USA	

 

Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
CANTINA (FLATWARE)	 	 	2,881,207	 	 	REGISTERED	 	9/7/04	 	9/7/14	 	USA	
DURAFOOT	 	 	78/725,423	 	 	APPLN FILED	 	 	 	 	 	USA	
ESQUIRE	 	 	78/299,758	 	 	APPLN FILED	 	 	 	 	 	USA	
SERRANO	 	 	2,982,235	 	 	REGISTERED	 	8/2/05	 	8/2/15	 	USA	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: World Tableware Inc.	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
GLENBROOK	 	 	2,776,703	 	 	REGISTERED	 	10/21/03	 	10/21/13	 	USA	
BRANDWARE	 	 	1,173,950	 	 	REGISTERED	 	10/20/81	 	10/20/11	 	USA	
AMERICAN SILVER CO.	 	 	1,534,875	 	 	REGISTERED	 	4/11/89	 	4/11/09	 	USA	
WORLD (STAINLESS STEEL FLATWARE)	 	 	994,264	 	 	REGISTERED	 	4/25/96	 	10/1/14	 	USA	
AMSILCO	 	 	1,559,578	 	 	REGISTERED	 	10/10/87	 	10/10/09	 	USA	
WORLD (SILVER & PLATED TABLEWARE)	 	 	0,040,724	 	 	REGISTERED	 	7/7/03	 	7/7/13	 	USA	
BB LOGO AND DESIGN	 	 	1,262,229	 	 	REGISTERED	 	12/27/83	 	12/27/13	 	USA	
ULTIMA	 	 	1,180,217	 	 	REGISTERED	 	12/1/81	 	12/1/11	 	USA	
VARESE	 	 	2,704,466	 	 	REGISTERED	 	4/8/03	 	4/8/13	 	USA	
SKOAL	 	 	2,721,149	 	 	REGISTERED	 	6/3/03	 	6/3/13	 	USA	
PESCE	 	 	2,889,974	 	 	REGISTERED	 	5/14/03	 	9/28/14	 	USA	
THE MILLENNIUM COLLECTION	 	 	75/590,343	 	 	APLN FILED	 	11/16/98	 	 	 	USA	
CONTEMPRA	 	 	2,430,409	 	 	REGISTERED	 	2/20/01	 	2/20/11	 	USA	
EVEREST	 	 	2,784,832	 	 	REGISTERED	 	11/18/03	 	11/18/13	 	USA	
AMULET	 	 	2,663,154	 	 	REGISTERED	 	12/17/02	 	12/17/12	 	USA	
WORLD (PORCELAIN DINNERWARE)	 	 	2,074,231	 	 	REGISTERED	 	6/24/97	 	6/24/07	 	USA	
SLATE	 	 	2,704,467	 	 	REGISTERED	 	4/8/03	 	4/8/13	 	USA	
VERONA (FLATWARE)	 	 	2,704,465	 	 	REGISTERED	 	4/8/03	 	4/8/13	 	USA	
WTI GLOBE AND DESIGN	 	 	1,073,075	 	 	REGISTERED	 	9/13/77	 	9/13/07	 	USA	
CONTEMPRA	 	 	2,760,370	 	 	REGISTERED	 	9/2/03	 	9/2/13	 	USA	
SAN MARINO	 	 	78/858,430	 	 	APPLN FILED	 	 	 	 	 	USA	
PORTO	 	 	78/858,427	 	 	APPLN FILED	 	 	 	 	 	USA	
PRAGUE	 	 	78/858,411	 	 	APPLN FILED	 	 	 	 	 	USA	
BB LOGO & DESIGN	 	 	281,790	 	 	REGISTERED	 	7/29/03	 	7/29/13	 	CAND	
BRANDWARE	 	 	255,597	 	 	REGISTERED	 	2/6/81	 	2/6/11	 	CAND	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: Traex Company	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
LIDPRO	 	 	2,559,646	 	 	REGISTERED	 	4/9/02	 	4/9/12	 	USA	
BATTER BOSS	 	 	1,657,443	 	 	REGISTERED	 	5/7/98	 	9/17/11	 	USA	
CUPRO	 	 	2,327,318	 	 	REGISTERED	 	3/7/00	 	3/7/10	 	USA	
DRIPCUT	 	 	373,123	 	 	REGISTERED	 	11/28/39	 	11/28/09	 	USA	
CHOICE CUT	 	 	2,286,711	 	 	REGISTERED	 	10/12/99	 	10/12/09	 	USA	
TUFFEX	 	 	1,706,831	 	 	REGISTERED	 	8/11/92	 	8/11/12	 	USA	
CLEAN CUT	 	 	2,785,074	 	 	REGISTERED	 	11/18/03	 	11/18/13	 	USA	
KONDI-KEEPER	 	 	1,673,006	 	 	REGISTERED	 	1/21/92	 	1/21/12	 	USA	
STRAW BOSS	 	 	1,651,525	 	 	REGISTERED	 	8/24/90	 	7/23/11	 	USA	
RACK MAX	 	 	2,664,502	 	 	REGISTERED	 	12/17/92	 	12/17/12	 	USA	
SAUCE BOSS	 	 	1,642,449	 	 	REGISTERED	 	4/23/91	 	4/23/11	 	USA	
SPICE BOSS	 	 	2,849,301	 	 	REGISTERED	 	6/1/04	 	6/1/14	 	USA	
SANALITE	 	 	1,053,797	 	 	REGISTERED	 	11/30/76	 	11/30/06	 	USA	
RACK-MASTER	 	 	1,605,589	 	 	REGISTERED	 	7/10/00	 	7/10/10	 	USA	

 

 	 	 	 	 	 	 	 	 	 	 	 	 	
Trademarks, Trade Names and Service	 	Registration	 	 	 	Date of	 	Expiration	 	 	
Marks	 	Number	 	Status	 	Registration	 	Date	 	Country	
MAKING THE ORDINARY EXTRAORDINARY	 	 	2,789,726	 	 	REGISTERED	 	12/2/03	 	12/2/13	 	USA	
PLATE CRATE	 	 	2,007,086	 	 	REGISTERED	 	2/3/95	 	10/8/06	 	USA	
QUIK-PIK	 	 	2,158,897	 	 	REGISTERED	 	5/8/97	 	5/19/08	 	USA	
TRAEX	 	 	1,700,599	 	 	REGISTERED	 	7/14/92	 	7/14/12	 	USA	
TWISTER	 	 	78/568,690	 	 	APPLN FILED	 	2/16/05	 	 	 	USA	
CUPPRO	 	 	78/556,108	 	 	APPLN FILED	 	1/28/05	 	 	 	USA	
SAFETY MATE ICE PORTER	 	 	78/604,828	 	 	APPLN FILED	 	 	 	 	 	USA	
SAFETY MATE	 	 	78/604,865	 	 	APPLN FILED	 	 	 	 	 	USA	
QUIK-KOOL	 	 	78/747,143	 	 	APPLN FILED	 	 	 	 	 	USA	
DRIPCUT	 	UCA12026	 	REGISTERED	 	2/22/99	 	2/13/14	 	CAND	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: B.V. Koninklijke Nederlandsche Glasfabriek Leerdam	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
ROYAL LEERDAM	 	 	2,604,930	 	 	REGISTERED	 	8/6/02	 	8/6/12	 	USA	
ROYAL LEERDAM (AND DESIGN)	 	 	2,937,638	 	 	REGISTERED	 	4/5/05	 	4/5/15	 	USA	
MAGNUM	 	 	1,238,413	 	 	REGISTERED	 	5/17/83	 	5/17/13	 	USA	
ROYAL LEERDAM	 	1978 462 VR	 	REGISTERED	 	2/3/78	 	2/3/08	 	EUROPE	
ROYAL LEERDAM	 	TMA263032	 	REGISTERED	 	10/16/81	 	10/16/06	 	CANADA	
ROYAL LEERDAM (AND DESIGN)	 	TMA467227	 	REGISTERED	 	12/5/96	 	12/5/06	 	CANADA	
MAGNUM	 	TMA342483	 	REGISTERED	 	7/8/88	 	7/8/13	 	CANADA	
B. Patents and Patent Applications
 	 	 	 	 	 	 	 	 	 	 	 	 	
Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
Loan Party: Libbey Glass Inc.	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
JAVA (FLATWARE)	 	ISSUED	 	12/14/00	 	 	D434,274	 	 	11/28/14	 	USA	
VENUS STEM	 	ISSUED	 	3/4/03	 	 	D471,061	 	 	3/4/17	 	USA	
2000 STEM, ITEM 3699	 	ISSUED	 	5/2/00	 	 	D423,874	 	 	5/2/14	 	USA	
OLYMPIA ITEM 2436	 	ISSUED	 	7/9/96	 	 	D371,490	 	 	7/9/10	 	USA	
MODERNE GLASS MUG	 	ISSUED	 	9/2/97	 	 	D383,039	 	 	9/2/11	 	USA	
DOMAINE ITEM 8957, 8995	 	ISSUED	 	6/11/96	 	 	D370,597	 	 	6/11/10	 	USA	
OLYMPIA ITEM 2437	 	ISSUED	 	1/24/95	 	 	D371,935	 	 	7/23/10	 	USA	
DAKOTA ITEMS 15603-15604	 	ISSUED	 	5/7/96	 	 	D369,519	 	 	5/7/10	 	USA	
SYSCO ITEMS 15613-15614	 	ISSUED	 	6/4/96	 	 	D370,389	 	 	6/4/10	 	USA	
DAKOTA TUMBLER, ITEM 15605	 	ISSUED	 	5/7/96	 	 	D369,518	 	 	5/7/10	 	USA	
JACKPOT MUG, ITEM 97336	 	ISSUED	 	11/19/96	 	 	D375,656	 	 	11/19/10	 	USA	
SYSCO ROCKS — ITEMS 15611, 15612	 	ISSUED	 	6/18/96	 	 	D370,830	 	 	6/18/10	 	USA	
MARTELLO STEMWARE	 	ISSUED	 	3/30/04	 	 	D487,861	 	 	3/30/18	 	USA	
TRION (COOLER)	 	ISSUED	 	12/4/01	 	 	D451,346	 	 	12/4/15	 	USA	
VENUS MARGARITA	 	ISSUED	 	3/4/03	 	 	D471,065	 	 	3/4/17	 	USA	
STEM (SHAZAM DESIGN)	 	ISSUED	 	5/6/03	 	 	D474,069	 	 	5/6/17	 	USA	
BAKEWARE (BOWL WITH HANDLES) #70974	 	ISSUED	 	5/7/02	 	 	D456,673	 	 	5/7/16	 	USA	
NAUTILUS (COOLER)	 	ISSUED	 	11/8/00	 	 	D444,675	 	 	7/10/15	 	USA	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
BANGLES (GOBLET)	 	ISSUED	 	7/16/02	 	 	D460,323	 	 	7/16/16	 	USA	
SMOOTHIE GLASS	 	ISSUED	 	10/28/03	 	 	D481,259	 	 	10/28/17	 	USA	
DOLLAR SIGN, ITEM 3635	 	ISSUED	 	12/16/01	 	 	D387,611	 	 	12/16/11	 	USA	
GIBRALTAR (FLATWARE)	 	ISSUED	 	8/29/00	 	 	D429,951	 	 	8/29/14	 	USA	
WATER GLASS, ITEM 15639	 	ISSUED	 	8/29/00	 	 	D429,958	 	 	8/29/14	 	USA	
PARKSIDE STEMWARE	 	ISSUED	 	9/23/98	 	 	D418,370	 	 	1/4/14	 	USA	
CLARION	 	ISSUED	 	10/26/99	 	 	D415,655	 	 	10/26/13	 	USA	
CANTINA ITEM 5687	 	ISSUED	 	3/30/99	 	 	D407,270	 	 	3/30/13	 	USA	
TENNIS BALL STEM	 	ISSUED	 	11/3/98	 	 	D400,395	 	 	12/16/11	 	USA	
CACTUS GLASS ITEM 3619JS, 3620JS	 	ISSUED	 	7/8/98	 	 	D380,646	 	 	7/8/11	 	USA	
SQUIRE ITEM 5630	 	ISSUED	 	9/15/98	 	 	D398,189	 	 	9/15/12	 	USA	
QUANTUM (GLASS)	 	ISSUED	 	5/9/00	 	 	D424,377	 	 	5/9/14	 	USA	
GUITAR STEM, ITEM 3637	 	ISSUED	 	1/13/98	 	 	D389,013	 	 	1/13/12	 	USA	
DICE STEM, ITEM 3634	 	ISSUED	 	12/16/97	 	 	D387,612	 	 	12/16/11	 	USA	
GOLF BALL STEM, ITEM 3633	 	ISSUED	 	12/16/97	 	 	D387,616	 	 	12/16/11	 	USA	
BASEBALL STEM, ITEM 3632	 	ISSUED	 	12/16/97	 	 	D387,613	 	 	12/16/11	 	USA	
FOOTBALL STEM, ITEM 3631	 	ISSUED	 	12/16/97	 	 	D387,614	 	 	12/16/11	 	USA	
SOCCER BALL STEM, ITEM 3630	 	ISSUED	 	12/16/97	 	 	D387,615	 	 	12/16/11	 	USA	
BASKETBALL STEM, ITEM 3636	 	ISSUED	 	3/24/98	 	 	D392,507	 	 	3/24/12	 	USA	
SQUIRE COOLER, ITEM 5631	 	ISSUED	 	1/20/98	 	 	D398,189	 	 	1/20/12	 	USA	
HOCKEY STEM	 	ISSUED	 	10/20/98	 	 	D399,700	 	 	10/20/12	 	USA	
VIBE	 	ISSUED	 	4/18/02	 	 	D483,610	 	 	12/16/17	 	USA	
COLONNA	 	ISSUED	 	7/1/03	 	 	D476,526	 	 	7/1/17	 	USA	
NAUTILUS MARTINI	 	ISSUED	 	7/2/02	 	 	D459,633	 	 	7/2/16	 	USA	
INFUSION (FLATWARE)	 	ISSUED	 	2/27/01	 	 	D438,057	 	 	2/27/15	 	USA	
ELLIPTIC (FLATWARE)	 	ISSUED	 	2/27/01	 	 	D438,058	S	 	2/27/15	 	USA	
FLAME COOLER	 	ISSUED	 	11/15/05	 	 	D511,436	S	 	11/15/19	 	USA	
CANDLE POT W/LID	 	ISSUED	 	2/22/05	 	 	D502,101	S	 	2/22/19	 	USA	
OMEGA STEMWARE	 	ISSUED	 	4/22/03	 	 	D473,424	 	 	4/22/17	 	USA	
HOLIDAY TREE GOBLET	 	ISSUED	 	4/22/03	 	 	D473,425	 	 	4/22/17	 	USA	
TAPERED SQUARE VOTIVE	 	ISSUED	 	12/30/03	 	 	D484,365	S	 	12/30/17	 	USA	
VERVE STEMWARE	 	ISSUED	 	7/22/03	 	 	D477,499	 	 	7/22/17	 	USA	
QUANTUM (FLATWARE)	 	ISSUED	 	12/14/00	 	 	D434,281	 	 	11/28/14	 	USA	
STRATUS (GLASS)	 	ISSUED	 	8/29/00	 	 	D429,960	 	 	8/29/14	 	USA	
2001 STEMWARE	 	ISSUED	 	2/5/02	 	 	D453,282	S	 	2/5/16	 	USA	
PERCEPTION (GLASSES)	 	ISSUED	 	3/12/02	 	 	D454,278	 	 	3/12/16	 	USA	
USA GOBLET (STARS)	 	ISSUED	 	7/9/02	 	 	D459,944	 	 	7/9/16	 	USA	
STARS GOBLET	 	ISSUED	 	7/2/02	 	 	D459,631	 	 	7/2/16	 	USA	
USA GOBLET (NO STARS)	 	ISSUED	 	7/2/02	 	 	D459,632	 	 	7/2/16	 	USA	
BAKEWARE (MEASURING CUP)	 	ISSUED	 	8/13/02	 	 	D461,420	 	 	8/13/16	 	USA	
GIBRALTAR (FOOTED PILSNER)	 	ISSUED	 	8/20/02	 	 	D461,684	 	 	8/20/16	 	USA	
BANGLES (TUMBLER)	 	ISSUED	 	4/30/02	 	 	D456,214	 	 	4/30/16	 	USA	
BANGLES (DOF)	 	ISSUED	 	9/3/02	 	 	D462,238	 	 	9/3/16	 	USA	
BAKEWARE (LONG PAN)	 	ISSUED	 	5/8/01	 	 	D441,597	 	 	5/8/15	 	USA	
BAKEWARE (SQUARE PAN)	 	ISSUED	 	5/8/01	 	 	D441,598	 	 	5/8/15	 	USA	
BAKEWARE (PAN)	 	ISSUED	 	5/22/01	 	 	D442,425	 	 	8/1/14	 	USA	
BAKEWARE (BOWL)	 	ISSUED	 	5/15/01	 	 	D442,019	 	 	5/15/15	 	USA	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
GIBRALTAR PITCHER	 	ISSUED	 	2/14/06	 	 	D514,868	S	 	2/14/20	 	USA	
GLASS	 	ISSUED	 	5/9/06	 	 	D520,301	S	 	5/9/20	 	USA	
GIBRALTAR (BOWL)	 	ISSUED	 	11/20/01	 	 	D450,538	 	 	11/20/15	 	USA	
GIBRALTAR (PLATE)	 	ISSUED	 	11/20/01	 	 	D450,539	 	 	11/20/15	 	USA	
GIBRALTAR (PLATTER)	 	ISSUED	 	12/18/01	 	 	D452,118	 	 	12/18/15	 	USA	
GIBRALTAR (MUG)	 	ISSUED	 	11/6/01	 	 	D449,964	 	 	11/6/15	 	USA	
GIBRALTAR (CUP)	 	ISSUED	 	12/5/00	 	 	D434,603	 	 	12/5/14	 	USA	
GIBRALTAR (DISH)	 	ISSUED	 	12/4/01	 	 	D451,348	 	 	12/4/15	 	USA	
STEM FOR AN ARTICLE OF STEMWARE	 	ISSUED	 	8/20/05	 	 	D507,935	 	 	8/20/19	 	USA	
GLASS	 	ISSUED	 	1/20/98	 	 	D389,375	 	 	 	 	USA	
VENUS MARTINI	 	ISSUED	 	6/4/02	 	 	D458,083	 	 	6/4/16	 	USA	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	8/11/98	 	 	5,791,452	 	 	10/15/16	 	USA	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	12/22/98	 	 	5,851,257	 	 	6/26/16	 	USA	
VALVE HAMPER ASSEMBLY	 	ISSUED	 	7/3/01	 	 	6,253,579	 	 	3/24/19	 	USA	
COMMON CAGE ASSEMBLY	 	ISSUED	 	5/22/01	 	 	6,233,975	 	 	3/24/19	 	USA	
COOLING SYSTEM FOR A GLASSWARE MACHINE	 	ISSUED	 	3/21/00	 	 	6,038,889	 	 	4/14/19	 	USA	
GLASSWARE MACHINE (ROTARY TABLE)	 	ISSUED	 	3/9/04	 	 	6,701,748	B1	 	8/13/21	 	USA	
VACUUM PICK-UP OF SQUARE HOT GLASS ARTICLES	 	ISSUED	 	10/12/93	 	 	5,251,919	 	 	10/12/10	 	USA	
VALVE HAMPER ASSEMBLY	 	ISSUED	 	8/8/02	 	 	2001/6588	 	 	2/23/20	 	SOAF	
COMMON CAGE ASSEMBLY	 	ISSUED	 	8/8/02	 	 	2001/6587	 	 	2/23/20	 	SOAF	
VENUS MARTINI	 	ISSUED	 	5/29/02	 	 	322409	 	 	4/7/18	 	SOKO	
IMPROVED LOW MELTING GLASSES	 	ISSUED	 	9/23/87	 	 	2158062	B	 	4/24/05	 	BRIT	
VACUUM PICK-UP OF SQUARE HOT
GLASS ARTICLES	 	ISSUED	 	6/28/93	 	 	2,099,292	 	 	6/28/07	 	CAND	
VACUUM PICK-UP OF SQUARE HOT
GLASS ARTICLES	 	ISSUED	 	3/16/99	 	 	577032	 	 	6/26/13	 	EPC	
VACUUM PICK-UP OF SQUARE HOT
GLASS ARTICLES	 	ISSUED	 	9/27/95	 	 	1972814	 	 	7/2/13	 	JAPN	
VACUUM PICK-UP OF SQUARE HOT
GLASS ARTICLES	 	ISSUED	 	7/26/96	 	 	182231	 	 	6/30/13	 	MEXO	
VENUS MARTINI	 	ISSUED	 	11/6/02	 	 	149781	 	 	5/14/08	 	AUST	
VENUS MARTINI	 	ISSUED	 	3/1/04	 	 	36502	 	 	5/14/17	 	ISRA	
COMMON CAGE ASSEMBLY	 	ISSUED	 	2/23/03	 	ZL 00805385.5	 	 	2/23/20	 	CHIN	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	ISSUED	 	7/17/03	 	 	E226873	 	 	8/27/17	 	ARIA	
VENUS MARTINI	 	ISSUED	 	5/29/03	 	 	2002 01273	 	 	5/29/07	 	TURK	
VENUS MARTINI	 	ISSUED	 	3/4/04	 	 	16,090	 	 	5/29/17	 	MEXO	
COMMON CAGE ASSEMBLY	 	ISSUED	 	7/29/02	 	TR20010243	1B	 	2/23/20	 	TURK	
COOLING SYSTEM FOR A
GLASSWARE MACHINE	 	ISSUED	 	3/16/02	 	 	2001/7717	 	 	3/16/20	 	SOAF	
VENUS MARTINI STEMWARE	 	ISSUED	 	3/4/04	 	 	40204604.8	 	 	5/29/22	 	GERM	
OLYMPIA ITEM 2437	 	ISSUED	 	11/16/95	 	 	77573	 	 	11/16/00	 	CAND	
OLYMPIA ITEM 2437	 	ISSUED	 	2/9/96	 	 	418676-683	 	 	7/21/21	 	FRAN	
OLYMPIA ITEM 2437	 	ISSUED	 	1/13/97	 	 	8587	 	 	6/22/10	 	MEXO	
DOMAINE ITEM 8957,8995	 	ISSUED	 	2/7/97	 	 	79906	 	 	2/7/07	 	CAND	
DOMAINE ITEM 8957, 8995	 	ISSUED	 	4/5/96	 	 	955929	 	 	10/30/20	 	FRAN	
VENUS MARTINI STEMWARE	 	ISSUED	 	5/27/02	 	 	300 3949	 	 	5/25/27	 	UNK	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
DOMAINE ITEM 8957, 8995	 	ISSUED	 	6/5/00	 	 	11457	 	 	11/17/10	 	MEXO	
OLYMPIA ITEM 2436	 	ISSUED	 	6/22/95	 	 	8597	 	 	6/22/10	 	MEXO	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/25/97	 	AR 007484 B1	 	6/25/17	 	ARGT	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	12/1/04	 	ZL97195899.8	 	6/10/17	 	CHIN	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/97	 	 	207133	 	 	6/10/17	 	MEXO	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/97	 	US97/09830	 	6/10/17	 	PCT	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	2/24/99	 	 	97/4686	 	 	5/28/17	 	SOAF	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/97	 	 	14109	 	 	6/10/17	 	THAI	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	5/3/97	 	 	1998 01874	 	 	5/3/17	 	TURK	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	8/20/02	 	PI 9712313-7	 	8/27/17	 	BRAZ	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	11/21/01	 	 	97/15076	 	 	8/27/17	 	CHIN	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	5/26/99	 	 	97/7968	 	 	9/4/17	 	SOAF	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	5/21/01	 	TR 1999 00744B	 	8/27/17	 	TURK	
GLASS	 	ISSUED	 	10/2/85	 	 	854593	 	 	10/2/10	 	FRAN	
SYMMETRY TUMBLER	 	ISSUED	 	2/13/89	 	 	761514	 	 	2/13/04	 	JAPN	
SYMMETRY TUMBLER	 	ISSUED	 	2/13/89	 	 	1/761514	 	 	2/13/04	 	JAPN	
SPOUT FORMING ASSEMBLY AND METHOD THEREFOR	 	ISSUED	 	1/13/97	 	 	0 007 351	 	 	1/13/17	 	INDN	
VENUS MARTINI STEMWARE	 	ISSUED	 	12/4/02	 	 	02 3266	 	 	5/27/07	 	FRAN	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	10/30/02	 	EP 0939689	 	8/27/17	 	EPC	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	2/10/03	 	 	27340	 	 	10/3/17	 	COLO	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	ARIA	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	BELG	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	97928003.9	 	 	6/10/17	 	IREL	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	ITLY	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	LUXM	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	MONA	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	NETH	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	PORT	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	SWED	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	SWIT	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	P	69721767.1	 	 	6/10/17	 	GERM	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	DENM	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	SPAN	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	FINL	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	FRAN	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	UNK	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/10/03	 	 	0907616	 	 	6/10/17	 	GREC	
GLASSWARE MACHINE (ROTARY TABLE)	 	ISSUED	 	11/26/03	 	 	2003/1678	 	 	9/8/21	 	SOAF	
APPARATUS & METHOD FOR FORMING A DECORATIVE PATTERN ON GLASSWARE	 	ISSUED	 	3/5/97	 	 	207122	 	 	3/5/17	 	MEXO	
HIGH CAVITY RATE PRESS MACHINE	 	ISSUED	 	6/26/97	 	 	0 008 338	 	 	6/26/17	 	INDN	
BAKEWARE (BOWL W/HANDLES)	 	ISSUED	 	8/25/03	 	 	14714	 	 	4/2/16	 	MEXO	
VENUS MARTINI	 	ISSUED	 	7/27/03	 	 	99403	 	 	7/27/08	 	CAND	
VENUS MARTINI	 	ISSUED	 	3/5/03	 	DI6201458-7	 	5/31/12	 	BRAZ	
HIGH CAVITY RATE MACHINE	 	ISSUED	 	6/23/04	 	 	27702	 	 	6/23/17	 	COLO	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	3/31/98	 	MY-115110-A	 	3/31/18	 	MASA	
COMMON CAGE ASSEMBLY	 	ISSUED	 	2/23/00	 	DE 660 10 065.0-08	 	2/23/20	 	GERM	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	ISSUED	 	4/15/04	 	ID 0 010 439	 	10/15/17	 	INDN	
HIGH CAVITY RATE MACHINE	 	ISSUED	 	6/10/04	 	TR 1998 02674 B	 	6/10/17	 	TURK	
APPARATUS AND METHOD FOR PUTTING DECORATION ON GLASSWARE	 	ISSUED	 	3/19/97	 	 	27790	 	 	3/19/17	 	COLO	
HIGH CAVITY RATE MACHINE	 	ISSUED	 	7/16/04	 	 	3576173	 	 	7/10/17	 	JAPN	
VALVE HAMPER ASSEMBLY	 	ISSUED	 	1/14/05	 	 	225,587	 	 	2/23/20	 	MEXO	
COMMON CAGE ASSEMBLY	 	ISSUED	 	11/22/02	 	 	1171278	 	 	2/23/20	 	CYPR	
COOLING SYSTEM FOR GLASSWARE MACHINE	 	ISSUED	 	11/22/02	 	 	230542	 	 	3/16/20	 	MEXO	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: Syracuse China Company	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
CHABLIS PLATE	 	ISSUED	 	4/8/2003	 	 	D472,770	 	 	4/8/2017	 	USA	
ANTHEM PLATE	 	ISSUED	 	6/3/2003	 	 	D475,247	 	 	6/3/2017	 	USA	
PLATE (COLUMBIA DESIGN)	 	ISSUED	 	8/12/2003	 	 	D478,252	 	 	8/12/2017	 	USA	
JUSTINE PLATE	 	ISSUED	 	12/10/1996	 	 	D376,292	 	 	12/10/2010	 	USA	
CASTLETON CUP	 	ISSUED	 	6/10/1997	 	 	D379,737	 	 	6/10/2011	 	USA	
CASTLETON PLATE	 	ISSUED	 	12/10/1996	 	 	D376,293	 	 	12/10/2010	 	USA	
PLATE	 	ISSUED	 	11/25/1986	 	 	D286,843	 	 	11/25/2000	 	USA	
MUG	 	ISSUED	 	12/18/1994	 	 	D276,782	 	 	12/18/2008	 	USA	
BELMONT CONDIMENT BOWL W/LID	 	ISSUED	 	8/25/1992	 	 	D328,836	 	 	8/25/2006	 	USA	
BELMONT COFFEE POT W/LID	 	ISSUED	 	8/11/1992	 	 	D328,546	 	 	8/11/2006	 	USA	
BELMONT TEAPOT W/LID	 	ISSUED	 	8/4/1992	 	 	D328,403	 	 	8/4/2006	 	USA	
BELMONT CUP	 	ISSUED	 	7/21/1992	 	 	D328,006	 	 	7/21/2006	 	USA	
BERKSHIRE DECAL	 	ISSUED	 	7/7/1992	 	 	D327,611	 	 	7/7/2006	 	USA	
LAFAYETTE DECAL	 	ISSUED	 	7/14/1992	 	 	D327,811	 	 	7/14/2006	 	USA	
PARK AVENUE DECAL	 	ISSUED	 	7/7/1992	 	 	D327,612	 	 	7/7/2006	 	USA	
TAPESTRY DECAL	 	ISSUED	 	7/7/1992	 	 	D327,613	 	 	7/7/2006	 	USA	
SCOTTSDALE DECAL	 	ISSUED	 	7/14/1992	 	 	D327,810	 	 	7/14/2006	 	USA	
JUDSON DECAL	 	ISSUED	 	11/10/1992	 	 	D330,828	 	 	11/10/2006	 	USA	
COLLETTE DECAL	 	ISSUED	 	12/31/1992	 	 	D337,482	 	 	7/20/2007	 	USA	
STAFFORDSHIRE DINNER PLATE	 	ISSUED	 	7/20/1993	 	 	D337,485	 	 	7/20/2007	 	USA	
FANFARE DINNER PLATE	 	ISSUED	 	7/6/1993	 	 	D337,025	 	 	7/6/2007	 	USA	
QUANTUM (PLATE)	 	ISSUED	 	7/31/2001	 	 	D445,648	 	 	7/31/2015	 	USA	
DUMONT DECAL	 	ISSUED	 	9/30/1992	 	 	D333,406	 	 	2/23/2007	 	USA	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
STYLUS BOWL	 	ISSUED	 	11/8/1994	 	 	D352,207	 	 	11/8/2008	 	USA	
STYLUS DECAL — RAVENNA	 	ISSUED	 	4/19/1994	 	 	D346,089	 	 	4/19/2008	 	USA	
STYLUS PLATE	 	ISSUED	 	4/12/1994	 	 	D345,893	 	 	4/12/2008	 	USA	
STYLUS CUP	 	ISSUED	 	10/4/1994	 	 	D351,086	 	 	1/4/2008	 	USA	
PLATE	 	ISSUED	 	3/21/1995	 	 	D356,472	 	 	3/21/2009	 	USA	
STYLUS BOUILLON CUP	 	ISSUED	 	4/12/1994	 	 	D345,895	 	 	4/12/2008	 	USA	
TREVAL DECAL	 	ISSUED	 	8/1/1994	 	 	D349,210	 	 	8/2/2008	 	USA	
QUADRA PLATE, ITEM 903333 033	 	ISSUED	 	12/22/1998	 	 	D402,854	 	 	12/22/2012	 	USA	
QUADRA BOWL, ITEM 903333 002	 	ISSUED	 	12/22/1998	 	 	D402,852	 	 	12/22/2012	 	USA	
QUADRA CUP, ITEM 903333 001	 	ISSUED	 	8/4/1998	 	 	D396,605	 	 	8/4/2012	 	USA	
TRIUMPH PLATE	 	ISSUED	 	8/1/2000	 	 	D428,770	 	 	8/1/2014	 	USA	
STUDIO BOWL	 	ISSUED	 	12/19/2000	 	 	D435,197	 	 	12/19/2014	 	USA	
QUARTET PLATE	 	ISSUED	 	12/12/2000	 	 	D434,947	 	 	12/12/2014	 	USA	
TOON PLATE	 	ISSUED	 	1/25/2000	 	 	D419,383	 	 	1/25/2014	 	USA	
ANTHEM BOWL	 	ISSUED	 	6/24/2003	 	 	D476,195	 	 	6/24/2017	 	USA	
CHABLIS BOWL	 	ISSUED	 	6/17/2003	 	 	D475,894	 	 	6/17/2017	 	USA	
FANTASY BOWL	 	ISSUED	 	3/11/2003	 	 	D471,406	 	 	3/11/2017	 	USA	
PLATTER (QUADRA)	 	ISSUED	 	3/11/2003	 	 	D471,405	 	 	3/11/2017	 	USA	
PLATE (ANTHEM)	 	ISSUED	 	5/27/2003	 	 	D474,941	 	 	5/27/2017	 	USA	
SKILLET (CANTINA)	 	ISSUED	 	2/18/2003	 	 	D470,358	 	 	2/18/2017	 	USA	
CUP (ANTHEM)	 	ISSUED	 	3/5/2002	 	 	D482,237	 	 	11/18/2017	 	USA	
CUP (ANTHEM W/BAND DESIGN)	 	ISSUED	 	10/8/2002	 	 	D463,954	 	 	10/8/2016	 	USA	
PLATE (QUADRA TRIANGLE
DESIGN)	 	ISSUED	 	8/19/2003	 	 	D478,476	 	 	8/19/2017	 	USA	
PLATE (EDGE DESIGN)	 	ISSUED	 	4/8/2003	 	 	D472,768	 	 	4/8/2017	 	USA	
PLATE (ORBIT)	 	ISSUED	 	5/27/2003	 	 	D474,940	 	 	5/27/2017	 	USA	
TRAY (CHI-FU YING YANG)	 	ISSUED	 	3/18/2003	 	 	D471,765	 	 	3/18/2017	 	USA	
TRAY (CHI-FU SUSHI)	 	ISSUED	 	6/24/2003	 	 	D476,194	 	 	6/24/2017	 	USA	
MAJESTY HARMONY BOWL	 	ISSUED	 	8/17/2004	 	 	D494,420	S	 	8/17/2018	 	USA	
CHABLIS PASTA BOWL	 	ISSUED	 	12/7/2004	 	 	D499,307	S	 	12/7/2018	 	USA	
ANTHEM (PLATTER)	 	ISSUED	 	11/16/2004	 	 	D498,391	 	 	11/16/2018	 	USA	
TAPAS PLATE	 	ISSUED	 	2/22/2005	 	 	D502,058	S	 	2/22/2019	 	USA	
ANTHEM SQUARE PLATE	 	ISSUED	 	5/4/2004	 	 	D489,227	S	 	5/4/2018	 	USA	
PLATE	 	ISSUED	 	1/31/2006	 	 	D513,935	 	 	 	 	USA	
PLATE	 	ISSUED	 	1/31/2006	 	 	D513,934	 	 	 	 	USA	
BOWL	 	ISSUED	 	11/29/2005	 	 	D511,939	 	 	 	 	USA	
PROCESS FOR GLAZING
CHINAWARE ARTICLE	 	ISSUED	 	11/11/2003	 	 	6,645,561	 	 	2/25/2022	 	USA	
CHABLIS UTOPIA PLATE	 	ISSUED	 	12/20/05	 	 	D512,876	 	 	12/20/19	 	USA	
SASSY PLATE	 	ISSUED	 	6/7/05	 	 	D505,834	S	 	6/7/19	 	USA	
VESUVIUS PLATE	 	ISSUED	 	10/13/04	 	 	D514,889	S	 	2/14/20	 	USA	
GIBRALTAR (PLATE)	 	ISSUED	 	9/29/00	 	 	2,094,798	 	 	 	 	BRIT	
GIBRALTAR (BOWL)	 	ISSUED	 	9/29/00	 	 	2,094,799	 	 	 	 	BRIT	
GIBRALTAR (MUG)	 	ISSUED	 	9/29/00	 	 	2,094,801	 	 	 	 	BRIT	
GIBRALTAR (PLATTER)	 	ISSUED	 	9/29/00	 	 	2,094,800	 	 	 	 	BRIT	
GIBRALTAR (CUP)	 	ISSUED	 	9/29/00	 	 	2,094,802	 	 	 	 	BRIT	
GIBRALTAR (DISH)	 	ISSUED	 	9/29/00	 	 	2,094,803	 	 	 	 	BRIT	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: World Tableware Inc.	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
FISH FLATWARE SPOON	 	ISSUED	 	5/20/03	 	 	D474,945	 	 	5/20/17	 	USA	

 

Patent	 	Status	 	Issue Date	 	Patent Number	 	Expiration Date	 	Country	
FISH FLATWARE FORK	 	ISSUED	 	5/20/03	 	 	D474,657	 	 	5/20/17	 	USA	
FISH FLATWARE KNIFE	 	ISSUED	 	5/20/03	 	 	D474,656	 	 	5/20/17	 	USA	
SEAFOOD SHAKER HOLDER	 	ISSUED	 	1/13/04	 	 	D485,130	S	 	1/13/18	 	USA	
AMULET FLATWARE KNIFE	 	ISSUED	 	2/18/03	 	 	D470,367	 	 	2/18/17	 	USA	
AMULET FLATWARE SPOON	 	ISSUED	 	11/19/02	 	 	D465,702	 	 	11/19/16	 	USA	
KNIFE	 	ISSUED	 	9/28/04	 	 	D496,562	 	 	 	 	USA	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loan Party: Traex Company	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
BAR CONDIMENT TRAY	 	ISSUED	 	2/2/93	 	 	D332,895	 	 	2/2/07	 	USA	
OVENABLE FOOD TRAY	 	ISSUED	 	7/15/97	 	 	D380,937	 	 	7/15/11	 	USA	
DISHWASHER RACK CONSTRUCTION	 	ISSUED	 	4/27/04	 	 	6,726,031	B2	 	2/23/22	 	USA	
DISHWASHER RACK EXTENDER HAVING CONNECTOR PINS	 	ISSUED	 	3/25/02	 	 	6,634,510	 	 	3/25/22	 	USA	
BOTTLE HAVING MULTIPLE OUTLETS	 	ISSUED	 	5/11/04	 	 	6,732,888	B1	 	 	 	USA	
ADJUSTABLE CUP DISPENSER	 	ISSUED	 	9/14/04	 	 	6,789,697	 	 	9/14/24	 	USA	
FOOD TRAY	 	ISSUED	 	12/4/98	 	 	85,265	 	 	 	 	CAND	
 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Application Filing	 	Application Serial	 	 	
Patent Application	 	Status	 	Date	 	Number	 	Country	
Loan Party: Libbey Glass Inc.	 	 	 	 	 	 	 	 	 	 	
 		
GIBRALTAR PLASTIC TUMBLER	 	APPLN FILED	 	4/28/04	 	 	29/204,323	 	 	USA	
BIG MOUTH JAR	 	APPLN FILED	 	11/4/04	 	 	29/219,121	 	 	USA	
VALVE HAMPER ASSEMBLY	 	APPLN FILED	 	2/23/00	 	PCT/US00/04539	 	PCT	
TEMPERATURE CONTROL SYSTEM	 	APPLN FILED	 	3/14/00	 	PCT/US 00/04531	 	PCT	
APPARATUS & METHOD FOR FORMING
A DECORATIVE PATTERN	 	APPLN FILED	 	3/15/97	 	PCT/US97/03432	 	TURK	
COOLING SYSTEM FOR A GLASSWARE MACHIN	 	APPLN FILED	 	7/3/02	 	 	00806201.3	 	 	CHIN	
VALVE HAMPER ASSEMBLY	 	APPLN FILED	 	2/28/00	 	UNKNOWN	 	CHIN	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	8/5/02	 	 	97940642.8	 	 	NETH	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	SWIT	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	SWED	
COMMON CAGE ASSEMBLY	 	APPLN FILED	 	3/14/00	 	PCT/US 00/04544	 	PCT	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	SPAN	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	PORT	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	BELG	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	LUXM	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	FINL	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	GREC	
TRANSFER MECHANISM FOR GLASS ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	IREL	

 

 	 	 	 	Application Filing	 	Application Serial	 	 	
Patent Application	 	Status	 	Date	 	Number	 	Country	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	ITLY	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/25/97	 	PI9710039-0	 	BRAZ	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	COLO	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	INDA	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	INDN	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	JAPN	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	MALA	
HIGH CAVITY RATE PRESS MACHINE	 	APPLN FILED	 	6/10/97	 	 	08/670,973	 	 	VENZ	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	5/26/99	 	 	08/730,071	 	 	JAPN	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	5/26/99	 	 	08/730,071	 	 	MEXO	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	5/26/99	 	 	97940642.8	 	 	PCT	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	5/7/04	 	 	191998	 	 	INDA	
GLASSWARE MACHINE (ROTARY TABLE)	 	APPLN FILED	 	11/14/02	 	PCT/US01/42045	 	PCT	
TRANSFER MECHANISM FOR GLASS
ARTICLES	 	APPLN FILED	 	7/17/02	 	 	97940642.8	 	 	MONA	
 	 	 	 	 	 	 	 	 	 	 	
Loan Party: Syracuse China Company	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
PLATE (HEART DESIGN)	 	APPLN FILED	 	5/17/2002	 	 	29/159,718	 	 	USA	
PLATE (CASCADE DESIGN)	 	APPLN FILED	 	4/18/2002	 	 	29/159,073	 	 	USA	
BOWTIE & OVAL COUPE PLATES	 	APPLN FILED	 	12/6/2004	 	 	29/222,467	 	 	USA	
CRESCENT COUPE PLATE	 	APPLN FILED	 	1/26/2005	 	 	29/222,129	 	 	USA	
PROCESS FOR GLAZING CHINAWARE
ARTICLE	 	APPLN FILED	 	11/22/02	 	UNKNOWN	 	PCT	
PROCESS FOR GLAZING CHINAWARE
ARTICLE	 	APPLN FILED	 	1/23/03	 	UNKNOWN	 	THAI	
PROCESS FOR GLAZING CHINA
DINNERWARE	 	APPLN FILED	 	1/10/03	 	 	02828300.7	 	 	CHIN	
 		
Loan Party: World Tableware Inc.	 	 	 	 	 	 	 	 	 	 	
 		
CASCADE SPOON	 	APPLN FILED	 	11/14/05	 	 	29/242,663	 	 	USA	
CASCADE KNIFE	 	APPLN FILED	 	11/14/05	 	 	29/242,699	 	 	USA	
EUROPEAN STEAK KNIFE	 	APPLN FILED	 	9/29/2003	 	 	29/190,911	 	 	USA	
C. Copyrights
 	 	 	 	 	 	 	
Copyright	 	Date Issued	 	Serial Number	 	Country	
Loan Party: Syracuse China Company	 	 	 	 	 	 	
 		
FRIENDLYS I	 	04/02/93	 	VA 996-589	 	USA	
FRIENDLYS II	 	04/02/93	 	VA 996-590	 	USA	
TREVAL	 	12/16/91	 	VA482052	 	USA	

 

Copyright	 	Date Issued	 	Serial Number	 	Country	
RAVENNA	 	12/16/91	 	VA482051	 	USA	
THE STYLUS COLLECTION	 	12/16/91	 	TX3200044	 	USA	
SCOTTSDALE	 	09/17/90	 	VA425366	 	USA	
BERKSHIRE PATTERN/TREMONT SHAPE	 	09/17/90	 	VA424701	 	USA	
COMPTON, TURINA SHAPE	 	01/09/91	 	VA435465	 	USA	
COLLETTE	 	03/27/90	 	VA393501	 	USA	
JUDSON	 	03/09/90	 	VA391832	 	USA	
SYRALITE BODY FROM SYRACUSE CHINA MATCHES BRILLIANT BEAUTY WITH LASTING STRENGTH	 	05/03/90	 	TX2789984	 	USA	
CHANTELLE	 	10/13/89	 	VA370690	 	USA	
TAPESTRY	 	10/13/89	 	VA370683	 	USA	
LENORE	 	09/26/89	 	VA364209	 	USA	
MAYMONT	 	09/26/89	 	VA364208	 	USA	
MARISA	 	05/01/89	 	VA346512	 	USA	
HYATT ORLANDO	 	05/01/89	 	VA346511	 	USA	
PONTE VERDE	 	05/01/89	 	VA346510	 	USA	
KEY BISCAYNE GREAT PLATE	 	09/21/82	 	VA211078	 	USA	
BEAUVAL FLORAL DESIGN	 	09/21/82	 	VA139016	 	USA	
BEAUVAL FLORAL DESIGN	 	09/21/82	 	VA139015	 	USA	
BEAUVAL FLORAL DESIGN	 	09/21/82	 	VA139014	 	USA	
BEAUVAL FLORAL DESIGN	 	09/21/82	 	VA139013	 	USA	
THE PERCEIVED VALUE OF TABLETOP ARCHITECTURE	 	UNKNOWN	 	TX1127211	 	USA	
CUSTOM BY SYRACUSE CHINA	 	09/21/82	 	TX1127210	 	USA	
GIBRALTAR COOK N’SERVE CHINA: A HOSPITALITY GROUP BY SYRACUSE CHINA: LET OVEN LOV	 	09/21/82	 	TX1127209	 	USA	
303 MENU IDEAS	 	09/21/82	 	TX1127208	 	USA	
THE PERCEIVED VALUE OF TABLETOP ARCHITECTURE	 	09/21/82	 	TX1127207	 	USA	
THE FEATURE PLATE	 	09/21/82	 	TX1116893	 	USA	
HOSPITALITY PORTFOLIO/BY SYRACUSE CHINA	 	12/18/81	 	TX842460	 	USA	
MESA GRANDE	 	12/18/81	 	TX842454	 	USA	
KING’S INN	 	12/18/81	 	TX842453	 	USA	
OPERATION COST CONTAINMENT: ARE MANAGER
ACTION PROGRAM MANUAL	 	08/25/78	 	TX94376	 	USA	
CARLTON NARROW RIM DINNERWARE	 	UNKNOWN	 	VA245549	 	USA	
HOTEL DUPONT	 	UNKNOWN	 	VA346513	 	USA	
ARTIFACTS	 	08/12/92	 	VA 991-653	 	USA	
COMBO	 	08/12/92	 	VA 991-654	 	USA	
ISLAND	 	08/12/92	 	VA 991-652	 	USA	

 

Schedule 3.06
Disclosed Matters

1.	 	Owens-Illinois has been named as a potentially responsible party or other participant in connection with certain waste disposal sites to which we also may have shipped wastes prior to June 24, 1993, the date of Libbey’s initial public offering and separation from Owens-Illinois, Inc. (Owens-Illinois). We may bear some responsibility in connection with those shipments. Pursuant to an indemnification agreement between Owens-Illinois and Libbey, Owens-Illinois has agreed to defend and hold us harmless against any costs or liabilities we may incur in connection with any such matters identified and pending as of June 24, 1993, and to indemnify us for any liability that results from these matters in excess of $3 million. We believe that if it is necessary to draw upon this indemnification, collection is probable.	
 		
2.	 	Pursuant to the indemnification agreement referred to above, Owens-Illinois is defending us with respect to the King Road landfill. In January 1999, the Board of Commissioners of Lucas County, Ohio instituted a lawsuit against Owens-Illinois, Libbey and numerous other defendants. (Fifty-nine companies were named in the complaint as potentially responsible parties.) In the lawsuit, which was filed in the United States District Court for the Northern District of Ohio, the Board of commissioners sought to recover contribution for past and future costs incurred by the County in response to the release or threatened release of hazardous substances at the King Road landfill formerly operated and closed by the County. The Board of Commissioners dismissed the lawsuit without prejudice in October 2000. At the time of the dismissal, the parties to the lawsuit anticipated that the Board of Commissioners would refile the lawsuit after obtaining more information as to the appropriate environmental remedy. As of this date, it does not appear that refiling of the lawsuit is imminent. In view of the uncertainty as to refiling of the suit, the numerous defenses that may be available against the County on the merits of its claim for contribution, the uncertainty as to the environmental remedy, and the uncertainty as to the number of potentially responsible parties, it currently is not possible to quantify any exposure that Libbey may have with respect to the King Road landfill.	

 

Schedule 3.14
Insurance
 	 	 	 	 	 	 	 	 	
POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Property and Business Interruption	 	FM Global
NC059	 	All Risk including Fire, Extended Coverage, Boiler & Machinery and Difference-In-Conditions (DIC) Perils	 	Policy Limit : $965,617,000 Except:	
	 	 	 		 	(A)	 	$500,000,000 for Time Element	
	 	25050 Country Club Blvd	 		 	(B)	 	Flood — Sublimit $100,000,000	
 	 	North Olmstead, OH	 		 	 	 	Except — $1,000,000 Miscellaneous Unnamed	
 	 	44070 	 		 	 	 	                  Locations and Errors and Omissions	
 	 	 	 		 	(C)	 	Earth Movement — Sublimit $100,000,000	
 	 	 			 	 	 	Except California $5,000,000; and other sub-limits apply	
 	 	 			 	(D)	 	Various Coverage Extensions are subject to Sublimits ranging from	
 	 	 	 		 	 	 	$250,000 to $25,000,000	
 	 	 	 		 	(E)	 	$5,000,000 Certified Terrorism *	
 	 	 	 		 	(F)	 	$250,000,000 Non-Certified Terrorism w/various sub-limits *	
 	 	 	 	 	 	 	
 	 	Deductibles :
	 	 	 	 	
 	 	(A) Glass Furnaces	 	-	 	$250,000/PD; 5 Days’
Equiv. Time
Element/Min. $500,000	
 	 	(B) Boiler & Machinery	 	-	 	$250,000 PD/BI	
 	 	(C) Property in Transit	 	-	 	$100,000	
 	 	(D) CA Earth Movement
       $500,000	 	-	 	5% of Values/Min	
 	 	(E) Flood — Location 2	 	-	 	$500,000 combined PD/BI	
 	 	(F) Wind — High Hazard        Zones	 	-	 	3% of Values/Min $500,000	
 	 	(G) Railroad Rolling        Stock	 	-	 	$50,000	
 	 	(H) All Other Losses	 	-	 	$250,000 combined PD/BI	

*Certified Terrorism:	 	internationally instigated terrorism acts on U.S. soil that are certified by the secretary of treasury of the United States as covered events (under the federal Terrorism Risk Insurance Act of 2002.	
 		
*Non-Certified Terrorism:	 	an act that is not certified as a terrorist act pursuant to the federal Terrorism Risk Insurance Act of 2002-see Supplemental United States Non Certified Act of Terrorism Endorsement made part of the policy.	

 

POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
3 rd Party
Liability under
Construction All-
Risk Coverage

8/1/05-12/31/06	 	Ping An Property & Casualty Insurance Company of China, Ltd. #105380011305000012

International Marine & Finance Center Pudong Dadao Shanghai 200120 P.R. China	 	Indemnify the insured against all sums which the Insured shall become liable to pay including: Accidental death, bodily injury, or industrial illness. Accidental loss or damage to property in connection with the Insured Contracts.	 	Bodily injury, per person — $200,000 RMB
Bodily injury, per accident — $1,500,000 RMB
Property damage, per accident — $1,500,000 RMB
Aggregate — $5,000,000 RMB	
 	 	 	 	 	 	 	
Insured	 	Travelers Property	 	Covers fully insured statutory	 	Policy Limits :	
 		
Workers’ Compensation	 	Casualty Company YJ-UB-930K5177-05

300 Windsor St.
Hartford, CT 06120	 	benefits such as compensation, medical benefits and rehabilitation costs incurred as a result of work- related injuries or diseases as defined by state compensation laws. (All states except CA, LA, OH, NY, ND and the monopolistic fund states of WA, WV & WY)	 	   Workers’ Compensation — Statutory

   Employers’ Liability — $1,000,00	
 	 	 	 	 	 	 	
Self-Insured	 	Safety National	 	Covers self-insured benefits	 	Policy Limit :	
 		
Excess Workers’ Compensation	 	Casualty Corp.

SP-9852-OH

2043 Woodland Pkwy. St. Louis, MO 63146	 	such as compensation, medical benefits and rehabilitation costs incurred as a result of work- related injuries or diseases as defined by state compensation laws. (Ohio, California, New York and Louisiana)	 	   Statutory — Workers’ Compensation

   Employers’ Liability — $1,000,000

Self-Insured Retention : $500,000 (State of NY)
                                      $1,000,000 (CA, LA, OH)	
 	 	 	 	 	 	 	
Comprehensive	 	Landmark American	 	Covers liability for damage	 	Policy Limit :	
 		
General Liability
Including Products	 	Ins. Co. LHA103355 945 E. Paces Ferry Rd. Atlanta, GA 30326	 	because of personal injury or property damage caused by an occurrence.	 	$800,000 Per Occurrence
$2,000,000 General Aggregate Per Location $800,000 Products Aggregate	

 

POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
 	 	 	 	 	 	Self-Insured Retention : $200,000 Occurrence/ $700,000 Aggregate Indemnity and Allocated Claims Expenses	
 		
 	 	 	 	 	 	Policy Limit :	
 		
Business Auto - U.S.	 	Travelers Property Casualty Company
Y-810-930K5177-
TIL-05

One Tower Square
Hartford, CT 06183	 	Covers liability arising out of the ownership, maintenance or use of Libbey Inc. vehicles in the U.S. (does not include physical damage for owned or leased vehicles)	 	$1,000,000
$   500,000
$     25,000	 	BI/PD per Occurrence
UM/UIM Each Accident -
All States Except Ohio
UM/UIM Each Accident -
Ohio Autos	

 	 	TX Auto Policy
Charter Oak Fire Ins.
YO-CAP-9.0K5177-TIL-05	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
 	 	One Tower Square
Hartford, CT 06183	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Business Auto - Canadian	 	ING Insurance Company of Canada 730500294 and 564929547 	 	Libbey Canada Inc.	 	 $2,000,000 (Canadian) Per Occurrence 

$2,000,000 (Canadian) 3 rd Party Liability	
 	 	 	 	 	 	 	
 	 	75 Eglinton Ave. E
Toronto, Ontario
Canada M4P 3A4	 	 	 	 	
 	 	 	 	 	 	 	
Exporter’s Package:	 	 	 	 	 	 	
Foreign Property	 	Great Northern Ins. Co.	 	All Risk of Physical Loss to Property situated at:	 	Policy Limit :	
 	 	73207715 	 	Frankfurt, Germany
Monterrey, Mexico	 	     $200,000 

     $  40,000  	
 	 	15 Mountain View Rd.
Warren, NJ 07059	 	 	 	Deductible :
     $    1,000 	

 

POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Foreign Coml.	 	Great Northern	 	Covers liability for damage	 	Policy Limit :		
General Liability
Including Products,
Automobile Liability
& Voluntary
Compensation	 	Ins. Co.
73207715

15 Mountain View Rd.
Warren, NJ 07059	 	because of personal injury or property damage caused by an occurrence outside of the United States, including Excess & D.I.C. coverage for Royal Leerdam	 	Statutory Per State of Hire — Voluntary Compensation Liability — $1,000,000 per Occurrence and Aggregate		
 	 	 	 	 	 	 		
Umbrella	 	Continental Casualty #CUP2057315977 

CAN Plaza
Chicago, IL 60685

Federal Ins. Co.
#79090414 	 	Covers liability for damages because of personal injury, property damage or advertising offense in excess of coverage provided by scheduled underlying policies.	 	Policy Limit : $100,000,000		
 	 	 	 	 	 	 		
 	 	15 Mountain View Rd.
Warren, NJ 07059	 	 	 	 		
 	 	 	 	 	 	 		
 	 	Fireman’s Fund
#XTM00087062139 	 	 	 	 		
 	 	 	 	 	 	 		
 	 	P.O. Box 777
Novato, CA 94998	 	 	 	 		
 	 	 	 	 	 	 		
Worldwide
Transportation	 	Hartford Fire
#45CTPCN7688

Hartford Plaza
Hartford, CT 06115	 	Covers goods in transit between Continental U.S. and points outside the Continental U.S. for which the insured has an interest Subject to Annual Audit	 	Policy Limit : $3,000,000

- Mail/Parcel Post
  Sublimit $500,000
- Land Shipments to/from
  Mexico Sublimit $100,000		
 	 	 	 	 	 	
Deductible : $1,000, except

          $2,500 Mexico		

 

 	 	 	 	 	 	 	 	 	
 POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Directors & Officers’ Liability	 	AIG
492-62-49

175 Water St.
New York, NY 10038	 	(A) Pays the loss of Directors and Officers
(D & O) arising from a claim made against the D & O for any wrongful act.
(B)(i) Pays the loss of Libbey arising from a securities claim made against Libbey for a wrongful act (Entity Coverage). (B)(ii) Pays the loss of Libbey arising from a claim made against a D & O for any wrongful act, but only to the extent that Libbey has indemnified the D & O.
(C) Pays the loss of any D & O serving at the direction of Libbey on any not-for-profit organization board or any endorsed for profit organization board, but only excess of any coverage offered or indemnification provided.	 	Policy Limit :
$15,000,000,
Inclusive of
Defense
costs

Deductibles :		
 	 		 		 	$750,000 Securities Claims
$500,000 Employment
      Practices Claims
$500,000 all other claims		

Directors & Officers’ Liability Excess	 	Twin City Fire Insurance Co.
00 DA 0225278 05
15 Mountain View
Warren, NJ 0059	 	Covers liability of primary D & O policy.	 	Policy Limit: $10,000,000
excess $15,000,000	
 	 	 	 	 	 	 	
Pension Trust
Liability	 	AIG
492-62-59

175 Water Street
New York, NY 10038	 	Pays loss of an insured arising from a claim against the insured for any actual or alleged breach of fiduciary duty arising solely out of the insured’s capacity as a a fiduciary as defined by ERISA.	 	Policy Limit : $10,000,000 Inclusive of
   Defense costs

Deductible : $100,000 Each Loss except
   $500,000 each loss in Connection with
   Libbey securities	

 

POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Pension Trust
Excess Policy	 	Twin City Fire Insurance Co.
6801-1054	 	Covers liability for loss or damage excess of underlying Fiduciary Policy.	 	Policy Limit : $10,000,000
excess of $10,000,000	
 	 	 	 	 	 	 	
 	 	15 Mountain View
Warren, NJ 07059	 	 	 	 	
 	 	 	 	 	 	 	
Crime	 	National Union
004926184	 	Indemnifies Libbey for loss of Assets	 	Policy Limit : $10,000,000	
 	 	 	 	 	 	 	
 	 	70 Pine Street
New York,
NY 10270	 	 	 	Deductible : $100,000	
 	 	 	 	 	 	 	
Special Crime 7/1/05 — 7/1/08	 	AIG
647-5922
2704 Commerce Drive

Harrisburg, PA 17110	 	Ransom Monies — Annual Aggregate
In-Transit/Delivery Expenses

Judgments, Settlements & Defense Cost
Death or Dismemberment — Per Person
Death or Dismemberment — Per Incident
Recall Expenses
Business Interruption — Each Loss & Aggregate	 	$10,000,000
$10,000,000
$10,000,000
$10,000,000
$     250,000
$  1,000,000
$  5,000,000
$  5,000,000	
 	 	 	 	 	 	 	
 	 	 	 	Deductible	 	 	
 	 	 	 	Kidnap and Ransom/Extortion Business Interruption	 	None
6 Hours	
 	 	 	 	 	 	 	
Employment Practices Liability	 	National Union Fire Ins. Co.
492-62-78	 	Protects company from claims resulting from wrongful acts arising from employment practices such as	 	     Deductible: $150,000

      Policy Limit : $5,000,000	

 

POLICY	 	INSURER/POLICY #	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Insurance	 	175 Water Street
New York,
NY 10038	 	termination, discrimination, sexual Harassment, failure to employ or promote.	 	 	
 	 	 	 	 	 	 	
1 st Flex Excess
Liability	 	Executive Risk Indemnity Inc.
8166-5050	 	Covers Liability for loss or damage excess of underlying Director’s and Officer’s Liability, Fiduciary Liability, Crime, EPLI and Kidnap and Ransom policies	 	Policy Limit : $15,000,000	
 	 	
82 Hopmeadow Street
Simsbury, CT 06070	 	 	 	 	
 	 	 	 	 	 	 	
2 nd Flex Excess
Liability	 	St. Paul Mercury Insurance Co. 534CM0350

One Tower Square Hartford, CT 06183	 	Covers Liability for loss or damage excess of underlying Director’s and Officer’s Liability, Fiduciary Liability, Crime, EPLI and Kidnap and Ransom and 1 st Flex Excess policies	 	Policy Limit : $15,000,000	
 	 	 	 	 	 	 	
Group Travel Accident
4-30-05 to
4-30-06	 	Hartford
One Tower Square
Hartford, CT 06183	 	Provides scheduled benefits to Officers, Salaried and Non-Union Hourly employees for accidents while traveling on company business: excluding every day travel to and from work.	 	Policy Limit : $10,000,000

Benefit Schedules :	
 	 	 	 	 	 	 	
 	 	 	 	 	 	(a)   $500,000 for all active, full time Officers and Salaried employees with a job level over 10.	
 	 	 	 	 	 	 	
 	 	 	 	 	 	(b)   $350,000 for all active, full time Salaried employees with a job level between 7 and 10.	
 	 	 	 	 	 	 	
 	 	 	 	 	 	(c)   $200,000 for all active, full time Salaried and Non-Union Hourly employees and U.S. employees of foreign subsidiaries or affiliates with job level of 6 or less.	
 	 	 	 	 	 	 	
 	 	 	 	 	 	Deductible : None	
 		
 	 	 	 	 	 	Basis : Accidental Death or Dismemberment Schedule	

 

Note: The above policies cover all Domestic Loan Parties.
Local coverages for B.V. Koninklijke Nederlandsche Glasfabriek Leerdam shown below:
 	 	 	 	 	 	 	 	 	
Coverage:	 	INSURER/POLICY#	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
Primary Liability —	 	ACE	 	Territory — World	 	Limits: Third Party Liability:	
Claims Made
Renewal Date:
1/1/07	 	621578804	 	 	3 Months Cancellation Requirement
Terrorism
Asbestos
Retroactive Clause	 	€ 1,000,000 Bodily Injury — per Claim
€ 2,000,000 Bodily Injury — Annual Aggregate
€ 1,000,000 Material Damage — per Claim
€ 2,000,000 Material Damage — Annual Aggregate
25,000 Deductible
Products Liability:	
 	 	 	 	 	 	 	 	€ 1,000,000 Bodily Injury — per Claim
€ 2,000,000 Bodily Injury — Annual Aggregate
€ 1,000,000 Material Damage — per Claim
€ 2,000,000 Material Damage — Annual Aggregate
25,000 Deductible
Employer’s Liability
€ 1,000,000 per Claim, per Person
€ 2,000,000 Annual Limit 25,000 Deductible
Environmental Impairment Liability
€ 1,000,000 per Claim
€ 2,000,000 Annual Limit	

 

Coverage:	 	INSURER/POLICY#	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
WAO — Gap Insurance	 	Amersfoortse	 	Coverage: In case of sickness	 	Conditions:	
Renewal Date:
1/1/07	 	22-0115957	 	 	the employee receives payment according to the disablement act. This means for the first year they will receive 70% of their latest salary, even if the average minimum wage is less then 70%. This insurance will fill the gap.	 	36 month policy term 2 month cancellation requirement In some cases agreements have been made between employers and employees that the sick employee receives 100% of the salary last earned.
 
The second year of sickness the maximum amount paid is 70% of the last earned salary.	
 	 	 	 	 	 	 	 	 	
WAO — Excess Insurance Renewal Date: 1/1/09	 	Amersfoortse
22-0024307	 	Income in case of disablement	 	Conditions: 60 month policy term 3 month cancellation requirement Age of cancellation is 65 years First two years are deductible	
 	 	 	 	 	 	 	 	 	
Transit Marine Insurance
Renewal Date:
1/1/07	 	Fortis
36104922	 	Glass — Including Machinery & Equipment; Raw Materials	 	3 month cancellation requirement Territory — Worldwide Advance Premium based on total estimated turnover	
 	 	 	 	 	 	 	 	 	
Group Accident Insurance
Renewal Date:
2/28/07	 	W.A. Hienfeld 525,403	 	All employees on the payroll of the insured not older than 70 years, provided that they are living in the Netherlands Sum Insured:	 	3 month cancellation
Territory — Netherlands	
 	 	 	 	 	 	€ 125,000 Death due to Accident € 250,000 Permanent Disablement	 	 	
 	 	 	 	 	 	 	 	 	
Travel Insurance
Renewal Date:
1/1/07	 	W.A. Hienfeld
525815	 	Coverage:
€ 15,000 Death, except for:
€ 3,000 Death, persons younger than
14 or older than 69
€ 60,000 Disability, except for:	 	3 month cancellation requirement
Territory — World	
 	 	 	 	 	 	€ 75,000 Disability, persons younger than 14 years
€ 7,500 Disability, person older than 69 years
€ Actual Cost Medical costs, except US & Canada	 	 	

 

Coverage:	 	INSURER/POLICY#	 	COVERAGE	 	LIMITS/DEDUCTIBLES	
 	 	 	 	 	 	€ 250,000 Medical costs; US & Canada	 	 	
 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	€ Actual Cost Extra costs, including Replacement Transportation — nil SOS Assistance
€ Actual Cost Repatriation
€ 3,000 Theft — loss or damage to luggage € 750 Money	 	 	
 	 	 	 	 	 	 	 	 	
Group Survivor’s Pension Scheme
Renewal Date:
1/1/07	 	Goudes 7064	 	Group Survivor’s Pension Scheme	 	3 month cancellation requirement
Every Employee has their own policy	

 
Schedule 3.15
Capitalization and Subsidiaries
     Part A:
 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Ownership by	
 	 	Jurisdiction of	 	 	 	 	 	Holdings	
Entity	 	Incorporation	 	Type of Entity	 	Direct Parent(s)	 	(Direct/Indirect)	
Libbey Glass Inc. (“Libbey Glass”)	 	Delaware	 	Corporation	 	Libbey Inc.	 	Direct 100%	
The Drummond Glass Company	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
World Tableware Inc.	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
LGA3 Corp.	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
LGA4 Corp.	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
Libbey Canada Inc.	 	Ontario, Canada	 	Corporation	 	Libbey Glass	 	Indirect 100%	
Syracuse China Company	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
Libbey.com LLC	 	Delaware	 	Limited Liability Company	 	Libbey Glass	 	Indirect 100%	
LGFS Inc.	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
LGAC LLC	 	Delaware	 	Limited Liability Company	 	Libbey Glass	 	Indirect 100%	
Traex Company	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
LGC Corp	 	Delaware	 	Corporation	 	Libbey Glass	 	Indirect 100%	
Libbey International C.V.	 	The Netherlands	 	Limited Partnership	 	Libbey Glass LGA3 Corp.	 	Indirect 100%	
Libbey Europe B.V.	 	The Netherlands	 	Private Company	 	Libbey International C.V.	 	Indirect 100%	
B.V. Koninklijke Nederlandsche Glasfabriek Leerdam (“Royal Leerdam”)	 	The Netherlands	 	Private Company	 	Libbey Europe B.V.	 	Indirect 100%	
B.V. Leerdam Crystal	 	The Netherlands	 	Private Company	 	Royal Leerdam	 	Indirect 100%	
Libbey Europe Finance Company B.V.	 	The Netherlands	 	Private Company	 	Libbey International C.V.	 	Indirect 100%	
Libbey Mexico Holdings B.V.	 	The Netherlands	 	Private Company	 	Libbey Europe B.V.	 	Indirect 100%	
Libbey Mexico S de R.L. de C.V.	 	Mexico	 	Limited Liability Company	 	Libbey Mexico Holdings B.V.	 	Indirect 100%	
Vitocrisa Holding S. de R.L. de C.V.	 	Mexico	 	Limited Liability Company	 	Libbey Mexico S de R.L. de C.V. Royal Leerdam	 	Indirect 100%	

 

 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Ownership by	
 	 	Jurisdiction of	 	 	 	 	 	Holdings	
Entity	 	Incorporation	 	Type of Entity	 	Direct Parent(s)	 	(Direct/Indirect)	
Vitocrisa S. de R.L. de C.V.	 	Mexico	 	Limited Liability Company	 	Vitocrisa Holding S. de R.L. de C.V. Libbey Europe B.V.	 	Indirect 100%	
Vitrocrisa Comercial S. de R.L. de C.V.	 	Mexico	 	Limited Liability Company	 	Vitocrisa Holding S. de R.L. de C.V. Libbey Europe B.V.	 	Indirect 100%	
Crisa Libbey S.A. de C.V.	 	Mexico	 	Corporation	 	LGA4 Corp. LGA3 Corp.	 	Indirect 100%	
Crisa Industrial LLC	 	Delaware	 	Limited Liability Company	 	LGA4 Corp. LGA3 Corp.	 	Indirect 100%	
Crisal-Cristalaria Automática, S.A.	 	Portugal	 	Corporation	 	Libbey Europe B.V.	 	Indirect 95%	
Libbey Asia Limited	 	Hong Kong	 	Private Company	 	Libbey Glass Inc.	 	Indirect 100%	
Libbey Glassware (China) Co., Ltd.	 	China	 	Wholly Owned Foreign Entity	 	Libbey Asia Limited	 	Indirect 100%	
Part B:
1.
 	 	 	
Borrower	 	Outstanding Equity Interests	
Libbey Glass Inc.	 	100 shares of common stock	
The Drummond Glass Company	 	1,000 shares of comon stock	
World Tableware Inc.	 	100 shares of common stock	
LGC Corp.	 	100 shares of common stock	
LGA4 Corp.	 	100 shares of common stock	
Syracuse China Company	 	100 shares of common stock	
Traex Company	 	100 shares of common stock	
LGFS Inc.	 	100 shares of common stock	
LGA3 Corp.	 	100 shares of common stock	
Liberty Canada Inc.	 	100 shares of common stock	
Libbey Europe B.V.	 	5,711 shares of common stock	
B.V. Koninklijke Nederlandsche Glasfabriek Leerdam (“Royal Leerdam”)	 	4,100 shares of common stock	
B.V. Leerdam Crystal	 	35,000 shares of common stock	
Libbey Europe Finance Company B.V.	 	900 shares of common stock	
Libbey Mexico Holdings B.V.	 	900 shares of common stock	

 

2.	 	The warrants issued in connection the Senior Subordinated Secured Pay-in-Kind Notes due 2011 issued on the Effective Date pursuant to the Third Lien Senior Notes Indenture.	

 

Schedule 5.17
Post-Closing Matters
None.

 

Schedule 6.01
Existing Indebtedness

1.	 	Loan from Libbey International C.V. to Libbey Europe Finance Company B.V. in an original principal amount of $38,801,963.	
 		
2.	 	Loan from Libbey International C.V. to Libbey Europe Finance Company B.V. in an original principal amount of $112,747,132.	
 		
3.	 	Loan from Libbey Europe Finance Company B.V. to Libbey Europe B.V. in an original principal amount of $35,282,257.	
 		
4.	 	Loan from Libbey Europe Finance Company B.V. to Libbey Europe B.V. in an original principal amount of $112,747,132.	
 		
5.	 	Loan from Libbey Mexico Holdings B.V. to Libbey Mexico S de R.L. de C.V. in an original principal amount of $112,747,132.	
 		
6.	 	Indebtedness of Crisal-Cristalaria Automática, S.A. including: (a) Capital Lease Obligations; (b) a line of credit with Fortis Bank; (c) a non-interest bearing API loan and (d) an intercompany loan from Libbey Europe B.V. in an aggregate principal amount of approximately (as of December 31, 2005):	
 	 	 	 	 	
DESCRIPTION	 	BALANCE 12/31/2005	 	
Fortis bank line of credit	 	€	(1,427,646.75	)	
Capital Leases	 	€	(1,860,707.19	)	
API loan non-interest bearing	 	€	(1,785,324.24	)	
Libbey Europe intercompany note	 	€	(10,762,678.35	)	
 	 	 	 	
Balance before considering any repayment	 	€	(15,836,356.53	)	

7.	 	Indebtedness in respect of the obligation to purchase the remaining 5% of the outstanding equity interests of Crisal-Cristalaria Automática, S.A. and obligations relating to the earn-out relating thereto in 2008 for approximately $6,050,000.	
 		
8.	 	Indebtedness in respect of the promissory note issued in connection with the purchase of the warehouse facility located in Laredo, Texas (outstanding principal amount as of December 31, 2005 approximately $2,131,000).	
 		
9.	 	Guarantees of Libbey Inc. in respect of certain obligations under: (a) the Amended and Restated Agreement for Provision of Electrical Power Generation Capacity and Associated Electrical Energy, dated December 15, 1999, between Vitro Corporativo, S.A. de C.V., Enron Energía Industrial de Mexico, S. de R.L. de C.V., and the capacity users named therein; (b) the Electric Energy Supply Agreement, dated March 28, 2003, between Iberdrola Energía Monterrey, S.A. de C.V., Vitrocrisa and Vidriera Monterrey, S.A. de C.V. and (c) the Lease Agreement, dated February 17, 2004, between Constructora de Naves Industriales, S.A. de C.V., as lessor, and Fomento Inmobiliario y de la Construcción, S.A. de C.V., as lessee, in respect of the plant, warehouse (47,288 sq. meters), distribution center and offices located the land located at Av. San Nicolas No. 2121, Colonia Primero de Mayo, Monterrey, State of Nuevo Leon, Mexico.	

 

10.	 	The following letters of credit of Libbey Glass Inc. (amounts current as of May 22, 2006):	
 	 	 	 	 	 	 	 	 		
Balance	 	 	Beneficiary	 	Reference Number	 		
$	1,000,000.00	 	 	Louisiana Department of Labor	 	3048310 Bank of America		
 	 	 	 	Office of Workers’ Compensation	 	 	 	 		
 	 	 		
$	7,381,298.00	 	 	State of New York	 	3048312 Bank of America		
 	 	 	 	Workers’ Compensation Board	 	 	 	 		
 	 	 		
$	30,000.00	 	 	State of New York	 	3048313 Bank of America		
 	 	 	 	Workers’ Compensation Board Self-Insurance Office	 	 	 	 		
 	 	 		
$	32,198.00	 	 	41 Madison LP	 	3055241 Bank of America		
 	 	 	 	c/o Rudin Management Company	 	 	 	 		

$	8,443,496.00	 	 	Total Existing LC’s	 	 	 	 		

 

Schedule 6.02
Existing Liens

1.	 	Liens in respect of the Indebtedness described in #’s 4, 6 and 8 on Schedule 6.01.	
 		
2.	 	The liens with respect to warrants issued in connection the Senior Subordinated Secured Pay-in-Kind Notes due 2011 issued on the Effective Date pursuant to the Third Lien Senior Notes Indenture.	

 
I. LIBBEY, INC.
 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	FILING NO. &	 	 	
DEBTOR	 	SECURED PARTY	 	JURISDICTION	 	DATE	 	COLLATERAL	
Libbey Inc.	 	Computer Sales International, Inc.	 	Delaware	 	11390793
10/15/2001	 	Items Listed on Exhibit A of Equipment Schedule One to Master Lease No. 186392 (Exhibit A — Not Attached)	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	Deutsche Financial Services	 	Delaware	 	20222632
12/28/2001	 	Items Listed on Exhibit A of Equipment Schedule Two to Master Lease No. 186392 (IBM 9406-830)	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	General Electric Capital Corporation	 	Delaware	 	22427197
9/24/2002	 	Cessna Citation S550	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	Computer Sales International, Inc.	 	Delaware	 	40455529
1/30/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Three to Master Lease No. 186392	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	Bank Financial F.S.B.	 	Delaware	 	41153172
4/8/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Four to Master Lease No. 186392; Amended to include items listed in Exhibit A of 42426585	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	Bank Financial F.S.B.	 	Delaware	 	41818543
9/23/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Five to Master Lease No. 186392; Amended to include items listed in Exhibit A of 43441534	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	CSI Leasing, Inc.	 	Delaware	 	42777326
10/4/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Six to Master Lease No. 186392; Amended to include items listed in Exhibit A of 51585463	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	Bank Financial F.S.B.	 	Delaware	 	50971045
3/30/2005	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Seven to Master Lease No. 186392; Amended to include items listed in Exhibit A of 53375525	

 

 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	FILING NO. &		 	
DEBTOR	 	SECURED PARTY	 	JURISDICTION	 	DATE	 	COLLATERAL	
Libbey Inc.	 	Air Liquide Industrial US LP	 	Delaware	 	51963389
6/27/2005	 	Vertical Vessel 11000 Gallon Serial #A129	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	General Electric Capital Corporation	 	Delaware	 	52980028
9/27/2005	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Eight to Master Lease No. 186392; Amended to include items listed in Exhibit A of 61586767	
 	 	 	 	 	 	 	 	 	
Libbey Inc.	 	CSI Leasing, Inc.	 	Delaware	 	61103134
4/3/2006	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Nine to Master Lease 186392	
II. LIBBEY GLASS, INC.
 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	FILING NO. &		 	
DEBTOR	 	SECURED PARTY	 	JURISDICTION	 	DATE	 	COLLATERAL	
Libbey Glass, Inc.	 	O/E Systems, Inc.	 	Delaware	 	33020602
11/12/2003	 	All present and future Goods. . .leased by O/E Systems dba M/C Leasing pursuant to the Master Lease Agreement dated October 30, 2003.	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	Computer Sales International, Inc.	 	Delaware	 	40454878
1/30/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Three to Master Lease No. 186392.	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	Bank Financial F.S.B.	 	Delaware	 	41153180
4/8/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Four of Master Lease No. 186392; Amended to include items listed in Exhibit A of 42427617	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	Bank Financial F.S.B.	 	Delaware	 	41818584
6/22/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Five to Master Lease No. 186392; Amended to include items listed in Exhibit A of 43441476	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	IBM Credit LLC	 	Delaware	 	41767856
6/25/2004	 	The following equipment (together with all related software) fully described on IBM Credit LLC Supplement(s) # B61081: IBM Equipment Type Q48438 9SSR.	

 

 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	FILING NO. &		 	
DEBTOR	 	SECURED PARTY	 	JURISDICTION	 	DATE	 	COLLATERAL	
Libbey Glass, Inc.	 	CSI Leasing, Inc.	 	Delaware	 	42777649
10/4/2004	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Six to Master Lease No. 186392; Amended to include items listed in Exhibit A of 51585422	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	IBM Credit LLC	 	Delaware	 	43629187
12/23/2004	 	The following equipment (together with all related software) fully described on IBM Credit LLC Supplement(s) # B99323: IBM Equipment Type 9406 9SSR.	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	IBM Credit LLC	 	Delaware	 	50002346
1/3/2005	 	The following equipment (together with all related software) fully described on IBM Credit LLC Supplement(s) # B99779: IBM Equipment Type BBK792 9SSR	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	General Electric Capital Corporation	 	Delaware	 	52980028
9/27/2005	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Eight to Master Lease No. 186392; Amended to include items listed in Exhibit A of 61586767	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	Bank Financial F.S.B.	 	Delaware	 	53375475
10/25/2005	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Seven to Master Lease No. 186392 as amended to include items listed in Exhibit A of this Filing	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	IBM Credit LLC	 	Delaware	 	54038437
12/28/2005	 	The following equipment (together with all related software) fully described on IBM Credit LLC Supplement(s) # C71819: IBM Equipment Type 9992 BBK792 GYF000 Q48438 9SSR U66848	
 	 	 	 	 	 	 	 	 	
Libbey Glass, Inc.	 	CSI Leasing, Inc.	 	Delaware	 	61103134
4/3/2006	 	Various computer equipment (together with all repairs, accessions, accessories, and replacements) pursuant to Equipment Schedule Nine to Master Lease 186392	
III. THE DRUMMOND GLASS COMPANY
None.
IV. SYRACUSE CHINA COMPANY
None.
V. WORLD TABLEWARE, INC.

 

None.
VI. TRAEX COMPANY
 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	FILING NO. &		 	
DEBTOR	 	SECURED PARTY	 	JURISDICTION	 	DATE	 	COLLATERAL	
Traex Company	 	General Electric Capital Corporation	 	Wisconsin	 	20009691025
5/15/2002	 	Milacron model: MM725-179 plastic injection molding machine S/N: H44A0100004 and Milacron model: MM725-116 plastic injection molding machine S/N: H44A0100002	
VII. LGC CORP.
None.
VIII. LGFS INC.
None.
IX. LGA3 CORP.
None.
X. LGA4 CORP.
None.
XI. LGAC LLC
None.
XII. LIBBEY.COM LLC
None.
XIII. CRISA INDUSTRIAL LLC
None.

 

Schedule 6.04
Existing Investments

1.	 	The Intercompany Indebtedness described in #’s 1, 2, 3, 7, and 8 on Schedule 6.01 and investments in respect of the Guarantees of the Indebtedness relating to Crisal-Cristataria Automática, S.A. described in #4 on Schedule 6.01.	
 		
2.	 	Investments in respect of the Guarantees of Indebtedness by Holdings and/or the US Borrower permitted by Section 6.01(q).	
 		
3.	 	Investments in Printgalss-Transformação de Vidro LDA by Crisal-Cristataria Automática, S.A. representing approximately 19% of the outstanding sociedade por quotas of Printgalss-Transformação de Vidro LDA.	
 		
4.	 	The warrants issued in connection the Senior Subordinated Secured Pay-in-Kind Notes due 2011 issued on the Effective Date pursuant to the Third Lien Senior Notes Indenture.	

 

Schedule 6.10
Existing Restrictions

1.	 	Restrictions with respect to the Indebtedness described in #’s 4, 5, 6, 8 and 9 on Schedule 6.01.	

EXHIBIT 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John F. Meier, certify that:

1.	 	I have reviewed this quarterly report on Form 10-Q of Libbey Inc.;	
 		
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 		
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 		
4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 		
 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 		
 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 		
 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 		
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

Date: August 7, 2009 	By  	/s/ John F. Meier  	 	
 	 	John F. Meier, 	 	
 	 	Chief Executive Officer 	 	

EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Gregory T. Geswein, certify that:

1.	 	I have reviewed this quarterly report on Form 10-Q of Libbey Inc.;	
 		
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 		
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 		
4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 		
 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 		
 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 		
 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 		
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

Date: August 7, 2009 	By  	/s/ Gregory T. Geswein  	 	
 	 	Gregory T. Geswein, 	 	
 	 	Chief Financial Officer 	 	

   

EXHIBIT 32.1
Certification of Chief Executive Officer
     Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Libbey Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
     (i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2009 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
     (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 7, 2009 	/s/ John F. Meier  	 	
 	John F. Meier 	 	
 	Chief Executive Officer 	 	

EXHIBIT 32.2
Certification of Chief Financial Officer
     Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Libbey Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
     (i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2009 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
     (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 7, 2009 	/s/ Gregory T. Geswein  	 	
 	Gregory T. Geswein 	 	
 	Chief Financial Officer