Condensed Consolidated Guarantor Financial Statements

6 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Guarantor Financial Statements

Condensed Consolidated Guarantor Financial Statements

Libbey Glass is a direct, 100 percent owned subsidiary of Libbey Inc. and is the issuer of the New Senior Secured Notes. The obligations of Libbey Glass under the New 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 six months ended June 30, 2012 and June 30, 2011.

At June 30, 2012, December 31, 2011 and June 30, 2011, 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. (dissolved in June of 2012 and 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 Statements of Comprehensive Income (Loss)

(unaudited)

	Three months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	109,697		$	19,765		$	96,850	$	(17,065	)	$	209,247
Freight billed to customers	—			130			191			438		—			759
Total revenues	—			109,827			19,956			97,288		(17,065		)	210,006
Cost of sales	—			75,608			14,342			80,774		(17,065		)	153,659
Gross profit	—			34,219			5,614			16,514		—			56,347
Selling, general and administrative expenses	—			17,482			1,886			8,010		—			27,378
Special charges	—			—			—			—		—			—
Income (loss) from operations	—			16,737			3,728			8,504		—			28,969
Other income (expense)	—			(31,259		)	(19		)	630		—			(30,648		)
Earnings (loss) before interest and income taxes	—			(14,522		)	3,709			9,134		—			(1,679		)
Interest expense	—			7,681			—			2,276		—			9,957
Income (loss) before income taxes	—			(22,203		)	3,709			6,858		—			(11,636		)
Provision (benefit) for income taxes	—			(2,661		)	131			1,037		—			(1,493		)
Net income (loss)	—			(19,542		)	3,578			5,821		—			(10,143		)
Equity in net income (loss) of subsidiaries	(10,143		)	9,399			—			—		744			—
Net income (loss)	$	(10,143	)	$	(10,143	)	$	3,578		$	5,821	$	744		$	(10,143	)
Comprehensive income (loss)	$	(9,620	)	$	(9,620	)	$	3,818		$	832	$	4,970		$	(9,620	)

	Three months ended June 30, 2011
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—	$	104,355		$	20,431		$	107,408		$	(18,181	)	$	214,013
Freight billed to customers	—		203			376			259			—			838
Total revenues	—		104,558			20,807			107,667			(18,181		)	214,851
Cost of sales	—		80,588			14,968			87,640			(18,181		)	165,015
Gross profit	—		23,970			5,839			20,027			—			49,836
Selling, general and administrative expenses	—		13,655			2,143			9,426			—			25,224
Special charges	—		(100		)	—			—			—			(100		)
Income (loss) from operations	—		10,415			3,696			10,601			—			24,712
Other income (expense)	—		(222		)	3,320			(34		)	—			3,064
Earnings (loss) before interest and income taxes	—		10,193			7,016			10,567			—			27,776
Interest expense	—		7,897			—			2,890			—			10,787
Income (loss) before income taxes	—		2,296			7,016			7,677			—			16,989
Provision (benefit) for income taxes	—		1,252			(17		)	348			—			1,583
Net income (loss)	—		1,044			7,033			7,329			—			15,406
Equity in net income (loss) of subsidiaries	15,406		14,362			—			—			(29,768		)	—
Net income (loss)	$	15,406	$	15,406		$	7,033		$	7,329		$	(29,768	)	$	15,406
Comprehensive income (loss)	$	26,432	$	26,432		$	9,311		$	7,883		$	(43,626	)	$	26,432

Libbey Inc.

Condensed Consolidating Statements of Comprehensive Income (Loss)

(dollars in thousands)

(unaudited)

	Six months ended June 30, 2012
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	203,177		37,210			190,009			(33,320		)	$	397,076
Freight billed to customers	—			296			374			797			—			1,467
Total revenues	—			203,473			37,584			190,806			(33,320		)	398,543
Cost of sales	—			149,919			27,355			155,186			(33,320		)	299,140
Gross profit	—			53,554			10,229			35,620			—			99,403
Selling, general and administrative expenses	—			35,424			3,402			16,678			—			55,504
Special charges	—			—			—			—			—			—
Income (loss) from operations	—			18,130			6,827			18,942			—			43,899
Other income (expense)	—			(30,962		)	(7		)	(270		)	—			(31,239		)
Earnings (loss) before interest and income taxes	—			(12,832		)	6,820			18,672			—			12,660
Interest expense	—			15,874			—			4,491			—			20,365
Income (loss) before income taxes	—			(28,706		)	6,820			14,181			—			(7,705		)
Provision (benefit) for income taxes	—			(2,436		)	131			4,102			—			1,797
Net income (loss)	—			(26,270		)	6,689			10,079			—			(9,502		)
Equity in net income (loss) of subsidiaries	(9,502		)	16,768			—			—			(7,266		)	—
Net income (loss)	$	(9,502	)	$	(9,502	)	$	6,689		$	10,079		$	(7,266	)	$	(9,502	)
Comprehensive income (loss)	$	(3,867	)	$	(3,867	)	$	7,053		$	7,876		$	(11,062	)	$	(3,867	)

	Six months ended June 30, 2011
	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	194,924		$	40,187	$	190,752	$	(30,835	)	$	395,028
Freight billed to customers	—		354			570		325		—			1,249
Total revenues	—		195,278			40,757		191,077		(30,835		)	396,277
Cost of sales	—		155,451			29,838		155,841		(30,835		)	310,295
Gross profit	—		39,827			10,919		35,236		—			85,982
Selling, general and administrative expenses	—		27,595			4,425		18,606		—			50,626
Special charges	—		(100		)	51		—		—			(49		)
Income (loss) from operations	—		12,332			6,443		16,630		—			35,405
Other income (expense)	—		(2,777		)	3,354		2,690		—			3,267
Earnings (loss) before interest and income taxes	—		9,555			9,797		19,320		—			38,672
Interest expense	—		16,690			—		5,680		—			22,370
Income (loss) before income taxes	—		(7,135		)	9,797		13,640		—			16,302
Provision (benefit) for income taxes	—		630			55		1,212		—			1,897
Net income (loss)	—		(7,765		)	9,742		12,428		—			14,405
Equity in net income (loss) of subsidiaries	14,405		22,170			—		—		(36,575		)	—
Net income (loss)	$	14,405	$	14,405		$	9,742	$	12,428	$	(36,575	)	$	14,405
Comprehensive income (loss)	$	34,753	$	34,753		$	9,781	$	22,038	$	(66,572	)	$	34,753

Libbey Inc.

Condensed Consolidating Balance Sheet

	June 30, 2012 (unaudited)
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	(211	)	$	66	$	19,722		$	—		$	19,577
Accounts receivable — net	—		38,267			5,033		44,350			—			87,650
Inventories — net	—		59,858			17,227		89,952			—			167,037
Other current assets	—		11,676			132		9,476			(14,038		)	7,246
Total current assets	—		109,590			22,458		163,500			(14,038		)	281,510
Other non-current assets	—		25,751			433		25,645			(6,987		)	44,842
Investments in and advances to subsidiaries	23,982		350,559			212,051		(18,409		)	(568,183		)	—
Goodwill and purchased intangible assets — net	—		26,833			12,347		147,937			—			187,117
Total other assets	23,982		403,143			224,831		155,173			(575,170		)	231,959
Property, plant and equipment — net	—		73,204			330		181,146			—			254,680
Total assets	$	23,982	$	585,937		$	247,619	$	499,819		$	(589,208	)	$	768,149
Accounts payable	$	—	$	11,573		$	3,141	$	39,351		$	—		$	54,065
Accrued and other current liabilities	—		54,325			18,345		32,190			(11,501		)	93,359
Notes payable and long-term debt due within one year	—		215			—		3,522			—			3,737
Total current liabilities	—		66,113			21,486		75,063			(11,501		)	151,161
Long-term debt	—		450,750			—		23,108			—			473,858
Other long-term liabilities	—		78,407			6,476		43,789			(9,524		)	119,148
Total liabilities	—		595,270			27,962		141,960			(21,025		)	744,167
Total shareholders’ equity (deficit)	23,982		(9,333		)	219,657		357,859			(568,183		)	23,982
Total liabilities and shareholders’ equity (deficit)	$	23,982	$	585,937		$	247,619	$	499,819		$	(589,208	)	$	768,149

Libbey Inc.

Condensed Consolidating Balance Sheet

	December 31, 2011
(dollars in thousands)	Libbey Inc. (Parent)		Libbey Glass (Issuer)		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	39,249	$	155	$	18,887		$	—		$	58,291
Accounts receivable — net	—		39,707		3,223		45,115			—			88,045
Inventories — net	—		48,077		17,009		80,773			—			145,859
Other current assets	—		16,913		747		7,432			(15,391		)	9,701
Total current assets	—		143,946		21,134		152,207			(15,391		)	301,896
Other non-current assets	—		25,138		8		18,380			(7,761		)	35,765
Investments in and advances to subsidiaries	27,780		336,596		210,876		(10,116		)	(565,136		)	—
Goodwill and purchased intangible assets — net	—		26,833		12,347		148,592			—			187,772
Total other assets	27,780		388,567		223,231		156,856			(572,897		)	223,537
Property, plant and equipment — net	—		75,951		416		188,351			—			264,718
Total assets	$	27,780	$	608,464	$	244,781	$	497,414		$	(588,288	)	$	790,151
Accounts payable	$	—	$	14,290	$	1,840	$	42,629		$	—		$	58,759
Accrued and other current liabilities	—		67,665		20,860		33,068			(15,391		)	106,202
Notes payable and long-term debt due within one year	—		227		—		3,965			—			4,192
Total current liabilities	—		82,182		22,700		79,662			(15,391		)	169,153
Long-term debt	—		360,626		—		32,542			—			393,168
Other long-term liabilities	—		156,232		17,156		34,423			(7,761		)	200,050
Total liabilities	—		599,040		39,856		146,627			(23,152		)	762,371
Total shareholders’ equity (deficit)	27,780		9,424		204,925		350,787			(565,136		)	27,780
Total liabilities and shareholders’ equity (deficit)	$	27,780	$	608,464	$	244,781	$	497,414		$	(588,288	)	$	790,151

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(unaudited)

	Three months ended June 30, 2012
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(10,143	)	$	(10,143	)	$	3,578		$	5,821		$	744		$	(10,143	)
Depreciation and amortization	—			3,469			18			6,801			—			10,288
Other operating activities	10,143			(56,501		)	(3,687		)	(1,777		)	(744		)	(52,566		)
Net cash provided by (used in) operating activities	—			(63,175		)	(91		)	10,845			—			(52,421		)
Additions to property, plant & equipment	—			(1,133		)	—			(4,253		)	—			(5,386		)
Other investing activities	—			—			—			239			—			239
Net cash (used in) investing activities	—			(1,133		)	—			(4,014		)	—			(5,147		)
Net borrowings (repayments)	—			89,949			—			(9,517		)	—			80,432
Other financing activities	—			(35,744		)	—			—			—			(35,744		)
Net cash provided by (used in) financing activities	—			54,205			—			(9,517		)	—			44,688
Exchange effect on cash	—			—			—			(361		)	—			(361		)
Increase (decrease) in cash	—			(10,103		)	(91		)	(3,047		)	—			(13,241		)
Cash at beginning of period	—			9,892			157			22,769			—			32,818
Cash at end of period	$	—		$	(211	)	$	66		$	19,722		$	—		$	19,577

	Three months ended June 30, 2011
(dollars in thousands)	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	15,406		$	15,406		$	7,033		$	7,329		$	(29,768	)	$	15,406
Depreciation and amortization	—			3,767			61			7,199			—			11,027
Other operating activities	(15,406		)	13,791			(19,756		)	(4,916		)	29,768			3,481
Net cash provided by (used in) operating activities	—			32,964			(12,662		)	9,612			—			29,914
Additions to property, plant & equipment	—			(2,273		)	—			(7,619		)	—			(9,892		)
Other investing activities	—			33			12,842			564			—			13,439
Net cash (used in) investing activities	—			(2,240		)	12,842			(7,055		)	—			3,547
Net borrowings (repayments)	—			(4,399		)	—			2,105			—			(2,294		)
Other financing activities	—			(324		)	—			—			—			(324		)
Net cash provided by (used in) financing activities	—			(4,723		)	—			2,105			—			(2,618		)
Exchange effect on cash	—			—			—			354			—			354
Increase (decrease) in cash	—			26,001			180			5,016			—			31,197
Cash at beginning of period	—			(229		)	187			13,154			—			13,112
Cash at end of period	$	—		$	25,772		$	367		$	18,170		$	—		$	44,309

Libbey Inc.

Condensed Consolidating Statements of Cash Flows

(dollars in thousands)

(unaudited)

	Six months ended June 30, 2012
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(9,502	)	$	(9,502	)	$	6,689		$	10,079		$	(7,266	)	$	(9,502	)
Depreciation and amortization	—			7,007			37			13,780			—			20,824
Other operating activities	9,502			(86,833		)	(6,815		)	(5,961		)	7,266			(82,841		)
Net cash provided by (used in) operating activities	—			(89,328		)	(89		)	17,898			—			(71,519		)
Additions to property, plant & equipment	—			(4,314		)	—			(7,518		)	—			(11,832		)
Other investing activities	—			—			—			419			—			419
Net cash (used in) investing activities	—			(4,314		)	—			(7,099		)	—			(11,413		)
Net borrowings (repayments)	—			89,898			—			(9,860		)	—			80,038
Other financing activities	—			(35,716		)	—			—			—			(35,716		)
Net cash provided by (used in) financing activities	—			54,182			—			(9,860		)	—			44,322
Exchange effect on cash	—			—			—			(104		)	—			(104		)
Increase (decrease) in cash	—			(39,460		)	(89		)	835			—			(38,714		)
Cash at beginning of period	—			39,249			155			18,887			—			58,291
Cash at end of period	$	—		$	(211	)	$	66		$	19,722		$	—		$	19,577

	Six months ended June 30, 2011
	Libbey Inc. (Parent)			Libbey Glass (Issuer)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	14,405		$	14,405		$	9,742		$	12,428		$	(36,575	)	$	14,405
Depreciation and amortization	—			7,575			259			14,074			—			21,908
Other operating activities	(14,405		)	(9,168		)	(23,266		)	(19,215		)	36,575			(29,479		)
Net cash provided by (used in) operating activities	—			12,812			(13,265		)	7,287			—			6,834
Additions to property, plant & equipment	—			(4,085		)	(3		)	(14,310		)	—			(18,398		)
Other investing activities	—			33			13,342			4,666			—			18,041
Net cash (used in) investing activities	—			(4,052		)	13,339			(9,644		)	—			(357		)
Net borrowings (repayments)	—			(40,097		)	—			2,105			—			(37,992		)
Other financing activities	—			(1,168		)	—			—			—			(1,168		)
Net cash provided by (used in) financing activities	—			(41,265		)	—			2,105			—			(39,160		)
Exchange effect on cash	—			—			—			734			—			734
Increase (decrease) in cash	—			(32,505		)	74			482			—			(31,949		)
Cash at beginning of period	—			58,277			293			17,688			—			76,258
Cash at end of period	$	—		$	25,772		$	367		$	18,170		$	—		$	44,309