Condensed Consolidated Guarantor Financial Statements

Libbey Glass is a direct, 100 percent owned subsidiary of Libbey Inc. and is the issuer of the Senior Secured Notes. The obligations of Libbey Glass under the Senior Secured 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 months and nine months ended September 30, 2011 and September 30, 2010.

At September 30, 2011, December 31, 2010 and September 30, 2010, 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., Dane Holding Co. (known as Traex Company prior to April 28, 2011), Libbey.com LLC, LGFS Inc., and LGAC LLC (collectively, Subsidiary Guarantors). The 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.

Libbey Inc.

Condensed Consolidating Statement of Operations

(dollars in thousands)

(unaudited)



	Three months ended September 30, 2011
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	104,363		$	17,393		$	106,831	$	(21,341	)	$	207,246
Freight billed to customers	—		137			174			200		—			511
Total revenues	—		104,500			17,567			107,031		(21,341		)	207,757
Cost of sales	—		85,442			12,783			85,989		(21,341		)	162,873
Gross profit	—		19,058			4,784			21,042		—			44,884
Selling, general and administrative expenses	—		15,587			1,704			9,448		—			26,739
Special charges	—		(232		)	—			—		—			(232		)
Income (loss) from operations	—		3,703			3,080			11,594		—			18,377
Other income (expense)	—		1,083			(101		)	1,255		—			2,237
Earnings (loss) before interest and income taxes	—		4,786			2,979			12,849		—			20,614
Interest expense	—		7,838			—			2,721		—			10,559
Income (loss) before income taxes	—		(3,052		)	2,979			10,128		—			10,055
Provision (benefit) for income taxes	—		134			—			2,794		—			2,928
Net income (loss)	—		(3,186		)	2,979			7,334		—			7,127
Equity in net income (loss) of subsidiaries	7,127		10,313			—			—		(17,440		)	—
Net income (loss)	$	7,127	$	7,127		$	2,979		$	7,334	$	(17,440	)	$	7,127

The following represents the total special items included in the above Condensed Consolidated Statement of Operations (see notes 5 and 14):



	Three months ended September 30, 2011
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cost of sales	$	—	$	154		$	—	$	—	$	—	$	154
Selling, general and administrative expenses	—		2,091			—		—		—		2,091
Special charges	—		(232		)	—		—		—		(232		)
Other (income) expense	—		—			81		—		—		81
Total pretax special items	$	—	$	2,013		$	81	$	—	$	—	$	2,094
Special items net of tax	$	—	$	2,013		$	81	$	—	$	—	$	2,094

Libbey Inc.

Condensed Consolidating Statement of Operations

(dollars in thousands)

(unaudited)



	Three months ended September 30, 2010
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—	$	97,576		$	20,768		$	99,919		$	(18,256	)	$	200,007
Freight billed to customers	—		146			212			99			—			457
Total revenues	—		97,722			20,980			100,018			(18,256		)	200,464
Cost of sales	—		80,221			15,739			81,075			(18,256		)	158,779
Gross profit	—		17,501			5,241			18,943			—			41,685
Selling, general and administrative expenses	—		15,118			2,424			7,793			—			25,335
Special charges	—		700			—			—			—			700
Income (loss) from operations	—		1,683			2,817			11,150			—			15,650
Other income (expense)	—		418			(16		)	(379		)	—			23
Earnings (loss) before interest and income taxes	—		2,101			2,801			10,771			—			15,673
Interest expense	—		10,542			—			1,313			—			11,855
Income (loss) before income taxes	—		(8,441		)	2,801			9,458			—			3,818
Provision (benefit) for income taxes	—		502			18			952			—			1,472
Net income (loss)	—		(8,943		)	2,783			8,506			—			2,346
Equity in net income (loss) of subsidiaries	2,346		11,289			—			—			(13,635		)	—
Net income (loss)	$	2,346	$	2,346		$	2,783		$	8,506		$	(13,635	)	$	2,346

The following represents the total special items included in the above Condensed Consolidated Statement of Operations (see notes 4 and 5):



	Three months ended September 30, 2010
	Libbey Inc. (Parent)		Libbey Glass (Issuer)		Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cost of sales	$	—	$	578	$	—	$	—	$	—	$	578
Selling, general, and administrative expenses	—		1,096		—		—		—		1,096
Special Charges	—		700		—		—		—		700
Total pretax special items	$	—	$	2,374	$	—	$	—	$	—	$	2,374
Special items net of tax	$	—	$	2,374	$	—	$	—	$	—	$	2,374

Libbey Inc.

Condensed Consolidating Statement of Operations

(dollars in thousands)

(unaudited)



	Nine months ended September 30, 2011
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	299,287		57,580		297,583		(52,176		)	$	602,274
Freight billed to customers	—		491			744		525		—			1,760
Total revenues	—		299,778			58,324		298,108		(52,176		)	604,034
Cost of sales	—		240,893			42,621		241,830		(52,176		)	473,168
Gross profit	—		58,885			15,703		56,278		—			130,866
Selling, general and administrative expenses	—		43,182			6,129		28,054		—			77,365
Special charges	—		(332		)	51		—		—			(281		)
Income (loss) from operations	—		16,035			9,523		28,224		—			53,782
Other income (expense)	—		(1,694		)	3,253		3,945		—			5,504
Earnings (loss) before interest and income taxes	—		14,341			12,776		32,169		—			59,286
Interest expense	—		24,528			—		8,401		—			32,929
Income (loss) before income taxes	—		(10,187		)	12,776		23,768		—			26,357
Provision (benefit) for income taxes	—		764			55		4,006		—			4,825
Net income (loss)	—		(10,951		)	12,721		19,762		—			21,532
Equity in net income (loss) of subsidiaries	21,532		32,483			—		—		(54,015		)	—
Net income (loss)	$	21,532	$	21,532		$	12,721	$	19,762	$	(54,015	)	$	21,532

The following represents the total special items included in the above Condensed Consolidated Statement of Operations (see notes 4, 5 and 14):



	Nine months ended September 30, 2011
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Cost of sales	$	—	$	197		$	—		$	—		$	—	$	197
Selling, general and administrative expenses	—		1,706			—			—			—		1,706
Special charges	—		(332		)	51			—			—		(281		)
Other expense (income)	—		2,803			(3,240		)	(3,661		)	—		(4,098		)
Total pretax special items	$	—	$	4,374		$	(3,189	)	$	(3,661	)	$	—	$	(2,476	)
Special items net of tax	$	—	$	4,374		$	(3,189	)	$	(3,661	)	$	—	$	(2,476	)

Libbey Inc.

Condensed Consolidating Statement of Operations

(dollars in thousands)

(unaudited)



	Nine months ended September 30, 2010
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	287,273		$	63,488		$	272,714	$	(46,528	)	$	576,947
Freight billed to customers	—		471			641			199		—			1,311
Total revenues	—		287,744			64,129			272,913		(46,528		)	578,258
Cost of sales	—		230,569			46,081			224,543		(46,528		)	454,665
Gross profit	—		57,175			18,048			48,370		—			123,593
Selling, general and administrative expenses	—		41,369			7,012			24,497		—			72,878
Special charges	—		729			359			—		—			1,088
Income (loss) from operations	—		15,077			10,677			23,873		—			49,627
Other income (expense)	—		56,809			(158		)	1,057		—			57,708
Earnings (loss) before interest and income taxes	—		71,886			10,519			24,930		—			107,335
Interest expense	—		29,676			(6		)	3,573		—			33,243
Income (loss) before income taxes	—		42,210			10,525			21,357		—			74,092
Provision (benefit) for income taxes	—		(241		)	76			6,934		—			6,769
Net income (loss)	—		42,451			10,449			14,423		—			67,323
Equity in net income (loss) of subsidiaries	67,323		24,872			—			—		(92,195		)	—
Net income (loss)	$	67,323	$	67,323		$	10,449		$	14,423	$	(92,195	)	$	67,323

The following represents the total special items included in the above Condensed Consolidated Statement of Operations (see note 4 and 5):



	Nine months ended September 30, 2010
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cost of sales	$	—	$	(367	)	$	—	$	2,687	$	—	$	2,320
Selling, general, and administrative expenses	—		1,096			—		—		—		1,096
Special charges	—		729			359		—		—		1,088
Other expense (income)	—		(56,792		)	130		—		—		(56,662		)
Total pretax special items	$	—	$	(55,334	)	$	489	$	2,687	$	—	$	(52,158	)
Special items net of tax	$	—	$	(55,334	)	$	489	$	2,687	$	—	$	(52,158	)

Libbey Inc.

Condensed Consolidating Balance Sheet

(dollars in thousands)




	September 30, 2011 (unaudited)
	Libbey Inc. (Parent)		Libbey Glass (Issuer)		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	2,182	$	357	$	22,044		$	—		$	24,583
Accounts receivable — net	—		43,761		4,644		45,042			—			93,447
Inventories — net	—		63,937		18,642		88,638			—			171,217
Other current assets	—		19,500		3,467		12,982			(22,049		)	13,900
Total current assets	—		129,380		27,110		168,706			(22,049		)	303,147
Other non-current assets	—		18,760		8		32,635			(17,919		)	33,484
Investments in and advances to subsidiaries	54,643		345,199		207,643		(24,818		)	(582,667		)	—
Goodwill and purchased intangible assets — net	—		26,833		12,347		149,079			—			188,259
Total other assets	54,643		390,792		219,998		156,896			(600,586		)	221,743
Property, plant and equipment — net	—		70,916		399		192,122			—			263,437
Total assets	$	54,643	$	591,088	$	247,507	$	517,724		$	(622,635	)	$	788,327
Accounts payable	$	—	$	12,612	$	1,357	$	38,348		$	—		$	52,317
Accrued and other current liabilities	—		59,011		25,126		38,762			(24,033		)	98,866
Notes payable and long-term debt due within one year	—		227		—		2,992			—			3,219
Total current liabilities	—		71,850		26,483		80,102			(24,033		)	154,402
Long-term debt	—		360,397		—		42,658			—			403,055
Other long-term liabilities	—		129,361		12,009		50,792			(15,935		)	176,227
Total liabilities	—		561,608		38,492		173,552			(39,968		)	733,684
Total shareholders’ equity (deficit)	54,643		29,480		209,015		344,172			(582,667		)	54,643
Total liabilities and shareholders’ equity (deficit)	$	54,643	$	591,088	$	247,507	$	517,724		$	(622,635	)	$	788,327

Libbey Inc.

Condensed Consolidating Balance Sheet

(dollars in thousands)



	December 31, 2010
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	58,277		$	293	$	17,688		$	—		$	76,258
Accounts receivable — net	—		37,099			5,360		49,642			—			92,101
Inventories — net	—		52,398			19,902		75,846			—			148,146
Other current assets	—		(2,634		)	10,960		10,518			(12,407		)	6,437
Total current assets	—		145,140			36,515		153,694			(12,407		)	322,942
Other non-current assets	—		8,344			2,779		41,169			(19,134		)	33,158
Investments in and advances to subsidiaries	11,266		360,784			189,171		(32,151		)	(529,070		)	—
Goodwill and purchased intangible assets — net	—		26,833			15,761		149,880			—			192,474
Total other assets	11,266		395,961			207,711		158,898			(548,204		)	225,632
Property, plant and equipment — net	—		72,892			4,862		192,643			—			270,397
Total assets	$	11,266	$	613,993		$	249,088	$	505,235		$	(560,611	)	$	818,971
Accounts payable	$	—	$	13,514		$	2,926	$	42,655		$	—		$	59,095
Accrued and other current liabilities	—		48,092			27,811		34,430			(12,407		)	97,926
Notes payable and long-term debt due within one year	—		227			—		2,915			—			3,142
Total current liabilities	—		61,833			30,737		80,000			(12,407		)	160,163
Long-term debt	—		398,039			—		45,944			—			443,983
Other long-term liabilities	—		131,100			21,964		69,629			(19,134		)	203,559
Total liabilities	—		590,972			52,701		195,573			(31,541		)	807,705
Total shareholders’ equity (deficit)	11,266		23,021			196,387		309,662			(529,070		)	11,266
Total liabilities and shareholders’ equity (deficit)	$	11,266	$	613,993		$	249,088	$	505,235		$	(560,611	)	$	818,971

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(dollars in thousands)

(unaudited)



	Three months ended September 30, 2011
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	7,127		$	7,127		$	2,979		$	7,334		$	(17,440	)	$	7,127
Depreciation and amortization	—			3,119			19			7,219			—			10,357
Other operating activities	(7,127		)	(28,646		)	(3,139		)	(702		)	17,440			(22,174		)
Net cash provided by (used in) operating activities	—			(18,400		)	(141		)	13,851			—			(4,690		)
Additions to property, plant & equipment	—			(5,122		)	(27		)	(2,910		)	—			(8,059		)
Other investing activities	—			—			158			65			—			223
Net cash (used in) investing activities	—			(5,122		)	131			(2,845		)	—			(7,836		)
Net borrowings (repayments)	—			(49		)	—			(6,729		)	—			(6,778		)
Other financing activities	—			(19		)	—			—			—			(19		)
Net cash provided by (used in) financing activities	—			(68		)	—			(6,729		)	—			(6,797		)
Exchange effect on cash	—			—			—			(403		)	—			(403		)
Increase (decrease) in cash	—			(23,590		)	(10		)	3,874			—			(19,726		)
Cash at beginning of period	—			25,772			367			18,170			—			44,309
Cash at end of period	$	—		$	2,182		$	357		$	22,044		$	—		$	24,583



	Three months ended September 30, 2010
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	2,346		$	2,346		$	2,783		$	8,506		$	(13,635	)	$	2,346
Depreciation and amortization	—			3,571			184			6,285			—			10,040
Other operating activities	(2,346		)	(16,818		)	(2,783		)	(6,854		)	13,635			(15,166		)
Net cash provided by (used in) operating activities	—			(10,901		)	184			7,937			—			(2,780		)
Additions to property, plant & equipment	—			(3,278		)	(62		)	(4,403		)	—			(7,743		)
Other investing activities	—			—			—			—			—			—
Net cash (used in) investing activities	—			(3,278		)	(62		)	(4,403		)	—			(7,743		)
Net borrowings (repayments)	—			160			—			(1,038		)	—			(878		)
Other financing activities	—			—			—			—			—			—
Net cash provided by (used in) financing activities	—			160			—			(1,038		)	—			(878		)
Exchange effect on cash	—			—			—			796			—			796
Increase (decrease) in cash	—			(14,019		)	122			3,292			—			(10,605		)
Cash at beginning of period	—			33,137			246			12,790			—			46,173
Cash at end of period	$	—		$	19,118		$	368		$	16,082		$	—		$	35,568

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(dollars in thousands)

(unaudited)



	Nine months ended September 30, 2011
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	21,532		$	21,532		$	12,721		$	19,762		$	(54,015	)	$	21,532
Depreciation and amortization	—			10,694			278			21,293			—			32,265
Other operating activities	(21,532		)	(37,814		)	(26,405		)	(19,917		)	54,015			(51,653		)
Net cash provided by (used in) operating activities	—			(5,588		)	(13,406		)	21,138			—			2,144
Additions to property, plant & equipment	—			(9,207		)	(30		)	(17,220		)	—			(26,457		)
Other investing activities	—			33			13,500			4,731			—			18,264
Net cash (used in) investing activities	—			(9,174		)	13,470			(12,489		)	—			(8,193		)
Net borrowings (repayments)	—			(40,146		)	—			(4,624		)	—			(44,770		)
Other financing activities	—			(1,187		)	—			—			—			(1,187		)
Net cash provided by (used in) financing activities	—			(41,333		)	—			(4,624		)	—			(45,957		)
Exchange effect on cash	—			—			—			331			—			331
Increase (decrease) in cash	—			(56,095		)	64			4,356			—			(51,675		)
Cash at beginning of period	—			58,277			293			17,688			—			76,258
Cash at end of period	$	—		$	2,182		$	357		$	22,044		$	—		$	24,583



	Nine months ended September 30, 2010
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	67,323		$	67,323		$	10,449		$	14,423		$	(92,195	)	$	67,323
Depreciation and amortization	—			11,282			570			19,142			—			30,994
Other operating activities	(67,323		)	(102,014		)	(10,994		)	(21,014		)	92,195			(109,150		)
Net cash provided by (used in) operating activities	—			(23,409		)	25			12,551			—			(10,833		)
Additions to property, plant & equipment	—			(6,322		)	(76		)	(12,724		)	—			(19,122		)
Other investing activities	—			—			—			—			—			—
Net cash (used in) investing activities	—			(6,322		)	(76		)	(12,724		)	—			(19,122		)
Net borrowings (repayments)	—			35,366			—			(823		)	—			34,543
Other financing activities	—			(23,903		)	—			—			—			(23,903		)
Net cash provided by (used in) financing activities	—			11,463			—			(823		)	—			10,640
Exchange effect on cash	—			—			—			(206		)	—			(206		)
Increase (decrease) in cash	—			(18,268		)	(51		)	(1,202		)	—			(19,521		)
Cash at beginning of period	—			37,386			419			17,284			—			55,089
Cash at end of period	$	—		$	19,118		$	368		$	16,082		$	—		$	35,568