Condensed Consolidated Guarantor Financial Statements

6 Months Ended

Jun. 30, 2011

Condensed Consolidated Guarantor Financial Statements [Abstract]

Condensed Consolidated Guarantor Financial Statements

11. Condensed Consolidated Guarantor Financial Statements

Libbey Glass is a direct, 100 percent owned subsidiary of Libbey Inc. and 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 month and six month periods ended June 30, 2011 and June 30, 2010.

At June 30, 2011, December 31, 2010 and June 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, the “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 June 30, 2011
	Libbey		Libbey						Non-
	Inc.		Glass			Subsidiary			Guarantor
	(Parent)		(Issuer)			Guarantors			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
Earnings (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

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

	Three months ended June 30, 2011
	Libbey		Libbey						Non-
	Inc.		Glass			Subsidiary			Guarantor
	(Parent)		(Issuer)			Guarantors			Subsidiaries			Eliminations		Consolidated
Cost of sales	$	—	$	43		$	—		$	—		$	—	$	43
Selling, general and administrative expenses		—		(385	)		—			—			—		(385	)
Special charges		—		(100	)		—			—			—		(100	)
Other (income) expense		—		—			(3,321	)		(216	)		—		(3,537	)
Total pretax special items		—		(442	)		(3,321	)		(216	)		—		(3,979	)
Provision for income taxes		—		—			—			(922	)		—		(922	)
Special items net of tax	$	—	$	(442	)	$	(3,321	)	$	(1,138	)	$	—	$	(4,901	)

Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)

	Three months ended June 30, 2010
	Libbey		Libbey						Non-
	Inc.		Glass			Subsidiary			Guarantor
	(Parent)		(Issuer)			Guarantors			Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	103,534		$	23,158		$	91,728	$	(15,384	)	$	203,036
Freight billed to customers		—		159			215			46		—			420
Total revenues		—		103,693			23,373			91,774		(15,384	)		203,456
Cost of sales		—		78,792			16,235			75,782		(15,384	)		155,425
Gross profit		—		24,901			7,138			15,992		—			48,031
Selling, general and administrative expenses		—		13,845			2,422			8,452		—			24,719
Special charges		—		—			156			—		—			156
Income (loss) from operations		—		11,056			4,560			7,540		—			23,156
Other income (expense)		—		399			6			1,251		—			1,656
Earnings (loss) before interest and income taxes		—		11,455			4,566			8,791		—			24,812
Interest expense		—		10,656			(6	)		1,118		—			11,768
Earnings (loss) before income taxes		—		799			4,572			7,673		—			13,044
Provision (benefit) for income taxes		—		(763	)		(86	)		4,326		—			3,477
Net income (loss)		—		1,562			4,658			3,347		—			9,567
Equity in net income (loss) of subsidiaries		9,567		8,005			—			—		(17,572	)		—
Net income (loss)	$	9,567	$	9,567		$	4,658		$	3,347	$	(17,572	)	$	9,567

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

	Three months ended June 30, 2010
	Libbey		Libbey					Non-
	Inc.		Glass			Subsidiary		Guarantor
	(Parent)		(Issuer)			Guarantors		Subsidiaries		Eliminations		Consolidated
Cost of sales	$	—	$	(945	)	$	—	$	2,687	$	—	$	1,742
Special charges		—		—			156		—		—		156
Other income (expense)		—		—			—		—		—		—
Total pretax special items	$	—	$	(945	)	$	156	$	2,687	$	—	$	1,898
Special items net of tax	$	—	$	(945	)	$	156	$	2,687	$	—	$	1,898

Condensed Consolidating Statement of Operations
(dollars in thousands)

	Six months ended June 30, 2011
	Libbey		Libbey					Non-
	Inc.		Glass			Subsidiary		Guarantor
	(Parent)		(Issuer)			Guarantors		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
Earnings (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

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

	Six months ended June 30, 2011
	Libbey		Libbey						Non-
	Inc.		Glass			Subsidiary			Guarantor
	(Parent)		(Issuer)			Guarantors			Subsidiaries			Eliminations		Consolidated
Cost of sales	$	—	$	43		$	—		$	—		$	—	$	43
Selling, general and administrative expenses		—		(385	)		—			—			—		(385	)
Special charges		—		(100	)		51			—			—		(49	)
Other expense (income)		—		2,803			(3,321	)		(3,661	)		—		(4,179	)
Total pretax special items		—		2,361			(3,270	)		(3,661	)		—		(4,570	)
Special items net of tax	$	—	$	2,361		$	(3,270	)	$	(3,661	)	$	—	$	(4,570	)

Condensed Consolidating Statement of Operations
(dollars in thousands)
(unaudited)

	Six months ended June 30, 2010
	Libbey		Libbey						Non-
	Inc.		Glass			Subsidiary			Guarantor
	(Parent)		(Issuer)			Guarantors			Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	189,697		$	42,720		$	172,795	$	(28,272	)	$	376,940
Freight billed to customers		—		325			429			100		—			854
Total revenues		—		190,022			43,149			172,895		(28,272	)		377,794
Cost of sales		—		150,348			30,342			143,468		(28,272	)		295,886
Gross profit		—		39,674			12,807			29,427		—			81,908
Selling, general and administrative expenses		—		26,251			4,588			16,704		—			47,543
Special charges		—		29			359			—		—			388
Income (loss) from operations		—		13,394			7,860			12,723		—			33,977
Other income (expense)		—		56,391			(142	)		1,436		—			57,685
Earnings (loss) before interest and income taxes		—		69,785			7,718			14,159		—			91,662
Interest expense		—		19,134			(6	)		2,260		—			21,388
Earnings (loss) before income taxes		—		50,651			7,724			11,899		—			70,274
Provision (benefit) for income taxes		—		(743	)		58			5,982		—			5,297
Net income (loss)		—		51,394			7,666			5,917		—			64,977
Equity in net income (loss) of subsidiaries		64,977		13,583			—			—		(78,560	)		—
Net income (loss)	$	64,977	$	64,977		$	7,666		$	5,917	$	(78,560	)	$	64,977

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

	Six months ended June 30, 2010
	Libbey		Libbey					Non-
	Inc.		Glass			Subsidiary		Guarantor
	(Parent)		(Issuer)			Guarantors		Subsidiaries		Eliminations		Consolidated
Cost of sales	$	—	$	(945	)	$	—	$	2,687	$	—	$	1,742
Special charges		—		29			359		—		—		388
Other expense (income)		—		(56,792	)		130		—		—		(56,662	)
Total pretax special items	$	—	$	(57,708	)	$	489	$	2,687	$	—	$	(54,532	)
Special items net of tax	$	—	$	(57,708	)	$	489	$	2,687	$	—	$	(54,532	)

Condensed Consolidating Balance Sheets
(dollars in thousands)

	June 30, 2011 (unaudited)
	Libbey		Libbey				Non-
	Inc.		Glass		Subsidiary		Guarantor
	(Parent)		(Issuer)		Guarantors		Subsidiaries			Eliminations			Consolidated
Cash and equivalents	$	—	$	25,772		367		18,170		$	—		$	44,309
Accounts receivable — net		—		36,961		4,998		55,728			—			97,687
Inventories — net		—		58,272		19,439		90,486			—			168,197
Other current assets		—		18,160		3,421		14,314			(22,347	)		13,548
Total current assets		—		139,165		28,225		178,698			(22,347	)		323,741
Other non-current assets		—		18,510		8		34,233			(19,139	)		33,612
Investments in and advances to subsidiaries		47,854		349,797		207,256		(34,749	)		(570,158	)		—
Goodwill and purchased intangible assets — net		—		26,833		12,347		149,621			—			188,801
Total other assets		47,854		395,140		219,611		149,105			(589,297	)		222,413
Property, plant and equipment — net		—		69,140		391		199,566			—			269,097
Total assets	$	47,854	$	603,445	$	248,227	$	527,369		$	(611,644	)	$	815,251
Accounts payable	$	—	$	13,182		2,350		46,080					$	61,612
Accrued and other current liabilities		—		64,188		25,566		36,031			(23,905	)		101,880
Notes payable and long-term debt due within one year		—		227		—		3,166			—			3,393
Total current liabilities		—		77,597		27,916		85,277			(23,905	)		166,885
Long-term debt		—		359,568		—		49,541			—			409,109
Other long-term liabilities		—		138,201		14,194		56,589			(17,581	)		191,403
Total liabilities		—		575,366		42,110		191,407			(41,486	)		767,397
Total shareholders’ equity (deficit)		47,854		28,079		206,117		335,962			(570,158	)		47,854
Total liabilities and shareholders’ equity (deficit)	$	47,854	$	603,445	$	248,227	$	527,369		$	(611,644	)	$	815,251

	December 31, 2010
	Libbey		Libbey					Non-
	Inc.		Glass			Subsidiary		Guarantor
	(Parent)		(Issuer)			Guarantors		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

Condensed Consolidating Statements of Cash Flows
(dollars in thousands)
(unaudited)

	Three months ended June 30, 2011
	Libbey			Libbey						Non-
	Inc.			Glass			Subsidiary			Guarantor
	(Parent)			(Issuer)			Guarantors			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		—			(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

	Three months ended June 30, 2010
	Libbey			Libbey						Non-
	Inc.			Glass			Subsidiary			Guarantor
	(Parent)			(Issuer)			Guarantors			Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	9,567		$	9,567		$	4,658		$	3,347		$	(17,572	)	$	9,567
Depreciation and amortization		—			3,862			192			6,514			—			10,568
Other operating activities		(9,567	)		11,514			(4,860	)		3,318			17,572			17,977
Net cash provided by (used in) operating activities		—			24,943			(10	)		13,179			—			38,112
Additions to property, plant & equipment		—			(1,945	)		(14	)		(5,272	)		—			(7,231	)
Other investing activities		—			—			—			—			—			—
Net cash (used in) investing activities		—			(1,945	)		(14	)		(5,272	)		—			(7,231	)
Net borrowings		—			(46	)		—			(586	)		—			(632	)
Other financing activities		—			(1,455	)		—			—			—			(1,455	)
Net cash provided by (used in) financing activities		—			(1,501	)		—			(586	)		—			(2,087	)
Exchange effect on cash		—			—			—			(648	)		—			(648	)
Increase (decrease) in cash		—			21,497			(24	)		6,673			—			28,146
Cash at beginning of period		—			11,640			270			6,117			—			18,027
Cash at end of period	$	—		$	33,137		$	246		$	12,790		$	—		$	46,173

Condensed Consolidating Statements of Cash Flows
(dollars in thousands)
(unaudited)

	Six months ended June 30, 2011
	Libbey			Libbey						Non-
	Inc.			Glass			Subsidiary			Guarantor
	(Parent)			(Issuer)			Guarantors			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		—			(1,170	)		13,342			4,666			—			16,838
Net cash (used in) investing activities		—			(5,255	)		13,339			(9,644	)		—			(1,560	)
Net borrowings		—			(40,097	)		—			2,105			—			(37,992	)
Other financing activities		—			35			—			—			—			35
Net cash provided by (used in) financing activities		—			(40,062	)		—			2,105			—			(37,957	)
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

	Six months ended June 30, 2010
	Libbey			Libbey						Non-
	Inc.			Glass			Subsidiary			Guarantor
	(Parent)			(Issuer)			Guarantors			Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	64,977		$	64,977		$	7,666		$	5,917		$	(78,560	)	$	64,977
Depreciation and amortization		—			7,711			386			12,857			—			20,954
Other operating activities		(64,977	)		(85,196	)		(8,211	)		(14,160	)		78,560			(93,984	)
Net cash provided by (used in) operating activities		—			(12,508	)		(159	)		4,614			—			(8,053	)
Additions to property, plant & equipment		—			(3,044	)		(14	)		(8,321	)		—			(11,379	)
Other investing activities		—			(8,415	)		—			—			—			(8,415	)
Net cash (used in) investing activities		—			(11,459	)		(14	)		(8,321	)		—			(19,794	)
Net borrowings		—			35,206			—			215			—			35,421
Other financing activities		—			(15,488	)		—			—			—			(15,488	)
Net cash provided by (used in) financing activities		—			19,718			—			215			—			19,933
Exchange effect on cash		—			—			—			(1,002	)		—			(1,002	)
Increase (decrease) in cash		—			(4,249	)		(173	)		(4,494	)		—			(8,916	)
Cash at beginning of period		—			37,386			419			17,284			—			55,089
Cash at end of period	$	—		$	33,137		$	246		$	12,790		$	—		$	46,173