##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

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(Address of Principal
    Executive Offices)

43604(Zip
    Code)    (419) 325-2100
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value

NYSE AMEX   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K
  Form 10-K




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##### 





TABLE OF
    CONTENTS
   
 PART IITEM 1.


BUSINESS


3ITEM 1A.


RISK FACTORS


10ITEM 1B.


UNRESOLVED STAFF COMMENTS


20ITEM 2.


PROPERTIES


21ITEM 3.


LEGAL PROCEEDINGS


22ITEM 4.


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


22EXECUTIVE OFFICERS OF THE REGISTRANT


22PART IIITEM 5.


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY
    SECURITIES


25ITEM 6.


SELECTED FINANCIAL DATA


27ITEM 7.


MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


27ITEM 7A.


QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT
    MARKET RISK


52ITEM 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


54ITEM 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


121ITEM 9A.


CONTROLS AND PROCEDURES


121ITEM 9B.


OTHER INFORMATION


122PART IIIITEM 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


122ITEM 11.


EXECUTIVE COMPENSATION


122ITEM 12.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


122ITEM 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


123ITEM 14.


PRINCIPAL ACCOUNTING FEES AND SERVICES


123PART IVITEM 15.


EXHIBITS, FINANCIAL STATEMENT SCHEDULES


123SIGNATURES


124INDEX TO FINANCIAL STATEMENT SCHEDULE


S-1CERTIFICATIONS


C-1EX-10.39EX-10.40EX-13.1EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2   2




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This Annual Report on
    Form 10-K,
    including Managements Discussion and Analysis of
    Financial Condition and Results of Operations, contains
    forward-looking statements regarding future events and future
    results that are subject to the safe harbors created under the
    Securities Act of 1933 and the Securities Exchange Act of 1934.
    Libbey desires to take advantage of the safe harbor
    provisions of the Private Securities Litigation Reform Act of
    1995. These statements are based on current expectations,
    estimates, forecasts and projections, and the beliefs and
    assumptions of our management. Words such as expect,
    anticipate, target, believe,
    intend, may, planned,
    potential, should, will,
    would, variations of such words, and similar
    expressions are intended to identify these forward-looking
    statements. In addition, any statements that refer to
    projections of our future financial performance, our anticipated
    growth and trends in our businesses, and other characterizations
    of future events or circumstances, are forward-looking
    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.
 PART I  ITEM 1.
    BUSINESS  General
  ® ® ® ® ® ® business-to-business ® ® ® ® state-of-the-art
    www.libbey.com Form 10-K, Form 10-Q Form 8-K,
  Growth
    Strategy
   3




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business-to-business
      Products
      Customers
  business-to-business business-to-business
 4




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Sales,
    Marketing and Distribution
        ® ® ®
  business-to-business
  Foodservice
  ® ® ®
  Retail
  www.libbey.com
  Business-to-Business
  business-to-business business-to-business business-to-business
 5




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Seasonality
    Backlog
  and/or
  Manufacturing
    and Sourcing
           6




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Materials
    Research
    and Development
    and/or
  Patents,
    Trademarks and Licenses
  ® ® ® ® ® ® ®
    Competitors
      
    Arc International (a French company), which manufactures and
    distributes glass tableware worldwide;
    Paşabahçe (a unit of Şişecam, a Turkish
    company), which manufactures glass tableware at various sites
    throughout the world and sells to retail, foodservice and
    business-to-business
    customers worldwide;  
    Anchor Hocking Company (a U.S. company), which manufactures
    and distributes glass beverageware, industrial products and
    bakeware primarily to retail, industrial and foodservice markets
    in the U.S. and Canada;  
    Bormioli Rocco Group (an Italian company), which manufactures
    glass tableware in Europe, where the majority of its sales are
    to retail and foodservice customers;
    various manufacturers in China; and
    various sourcing companies. 7




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
    Homer Laughlin;
    Oneida Ltd.;
    Steelite; and
    various sourcing companies.    
    Oneida Ltd.;
    Walco, Inc.; and
    various sourcing companies.    
    Cambro Manufacturing Company;
    Carlisle Companies Incorporated; and
    various sourcing companies.  Environmental
    Matters
         8




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##### Table of Contents



sub-site sub-site sub-site,
  clean-up sub-site
    No. CGC-003-418025
    Employees
     9




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  year-to-year
  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.
    and/or
  
    the financial stability of our customers or suppliers may be
    compromised, which could result in additional bad debts for us
    or non-performance by suppliers;
    it may become more costly or difficult to obtain financing or
    refinance our debt in the future;
    the value of our assets held in pension plans may decline; and/or
    our assets may be impaired or subject to write-down or write-off.  and/or and/or
  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.
    
    we had no debt outstanding under our ABL Facility, which was
    secured by a first-priority lien on our assets, although we had
    $9.9 million of letters of credit issued under that
    facility;
    approximately $304.3 million consisted of the Floating Rate
    Senior Secured Notes, which were secured by a second-priority
    lien on our collateral;
    approximately $150.6 million consisted of the PIK Notes,
    which were secured by a third-priority lien on our collateral.
    (Under U.S. GAAP, we are required to record the New PIK
    Notes at their carrying value of approximately
    $150.6 million instead of their face value of
    $80.4 million); 10




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
    RMB 250 million (approximately $36.7 million at
    December 31, 2009) consisted of a loan made by China
    Construction Bank Corporation Langfang Economic Development Area
    Sub-branch,
    which we refer to as CCBC. We used the proceeds of this loan to
    finance the construction of our manufacturing facility in China
    that began operations in early 2007;
    RMB 50 million (approximately $7.3 million at
    December 31, 2009) consisted of a loan, which is fully
    drawn, made by CCBC to finance the working capital needs of our
    China facility;
    9.9 million (approximately $14.2 million at
    December 31, 2009) consisted of a loan made by Banco
    Espirito Santo, S.A., which we refer to as the BES Euro Line, to
    finance operational improvements associated with our Portuguese
    operations;
    $1.5 million consisted of amounts we owed under a
    promissory note related to the purchase of our Laredo, Texas
    warehouse; and
    $0.7 million consisted of amounts drawn on the overdraft
    lines of credit extended to our European operations.          
    making it more difficult for us to satisfy our financial
    obligations;
    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;
    limiting our ability to withstand business and economic
    downturns
    and/or
    placing 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; and
    limiting our ability to pay dividends.   11




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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.
    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.
  and/or
  Fluctuation of the currencies in which we conduct
    operations could adversely affect our financial condition and
    results of operations or reduce the cost competitiveness of our
    products or those of our subsidiaries.
  non-U.S. subsidiaries.
  non-U.S. subsidiaries
   12




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U.S.-manufactured
  Our business requires us to maintain a large fixed cost
    base that can affect our profitability.
    We may not be able to achieve the international growth
    contemplated by our strategy.
    We face intense competition and competitive pressures,
    which could adversely affect our results of operations and
    financial condition.
      
    Arc International (a French company), which manufactures and
    distributes glass tableware worldwide;
    Paşabahçe (a unit of Şişecam, a Turkish
    company), which manufactures glass tableware at various sites
    throughout the world and sells to retail, foodservice and
    business-to-business
    customers worldwide;
    Anchor Hocking Company (a U.S. company), which manufactures
    and distributes glass beverageware, industrial products and
    bakeware primarily to retail, industrial and foodservice
    channels in the United States and Canada;
    Bormioli Rocco Group (an Italian company), which manufactures
    glass tableware in Europe, where the majority of its sales are
    to retail and foodservice customers;
    various manufacturers in China; and
    various sourcing companies.     13




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We may not be able to renegotiate collective bargaining
    agreements successfully when they expire; organized strikes or
    work stoppages by unionized employees may have an adverse effect
    on our operating performance.
        The inability to extend or refinance debt of our foreign
    subsidiaries, or the calling of that debt before scheduled
    maturity, could adversely impact our liquidity and financial
    condition.
  and/or
   14




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Our cost-reduction projects may not result in anticipated
    savings in operating costs.
    We are subject to risks associated with operating in
    foreign countries. These risks could adversely affect our
    results of operations and financial condition.
    
    political, social and economic instability;
    war, civil disturbance or acts of terrorism;
    taking of property by nationalization or expropriation without
    fair compensation;
    changes in government policies and regulations;
    devaluations and fluctuations in currency exchange rates;
    imposition of limitations on conversions of foreign currencies
    into dollars or remittance of dividends and other payments by
    foreign subsidiaries;
    imposition or increase of withholding and other taxes on
    remittances and other payments by foreign subsidiaries;
    ineffective intellectual property protection;
    hyperinflation in certain foreign countries; and
    impositions or increase of investment and other restrictions or
    requirements by foreign governments.    If we have a fair value impairment in a business segment,
    our net earnings and net worth could be materially and adversely
    affected by a write-down of goodwill, intangible assets or fixed
    assets.
     15




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A severe outbreak, epidemic or pandemic of the H1N1 virus
    or other contagious disease in a location where we have a
    facility could adversely impact our results of operations and
    financial condition.
    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.
  clean-up
    If we are unable to obtain sourced products or materials
    at favorable prices, our operating performance may be adversely
    affected.
   16




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Unexpected equipment failures may lead to production
    curtailments or shutdowns.
  force majeure
  High levels of inflation and high interest rates in Mexico
    could adversely affect the operating results and cash flows of
    Crisa.
  ,
  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.
  non-U.S. plans non-U.S. plans
  
    A change of 1 percent in the discount rate would change our
    total pension and postretirement welfare expense by
    approximately $3.6 million.
    A change of 1 percent in the expected long-term rate of
    return on plan assets would change total pension expense by
    approximately $2.4 million.    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.
  tm
 17




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Our business may suffer if we do not retain our senior
    management.
    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.
    
    earthquake, fire, flood, hurricane and other natural disasters;
    power loss, computer systems failure, internet and
    telecommunications or data network failure; and
    hackers, computer viruses, software bugs or glitches.    We may not be able to effectively integrate future
    businesses we acquire or joint ventures we enter into.
    
    the inability to integrate effectively the operations, products,
    technologies and personnel of the acquired companies (some of
    which may be spread out in different geographic regions) and to
    achieve expected synergies;
    the potential disruption of existing business and diversion of
    managements attention from
    day-to-day
    operations;
    the inability to maintain uniform standards, controls,
    procedures and policies or correct deficient standards,
    controls, procedures and policies, including internal controls
    and procedures sufficient to satisfy regulatory requirements of
    a public company in the United States;
    the incurrence of contingent obligations that were not
    anticipated at the time of the acquisitions;
    the failure to obtain necessary transition services such as
    management services, information technology services and others;
    the need or obligation to divest portions of the acquired
    companies; and 18




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
    the potential impairment of relationships with customers.    Our
    business requires significant capital investment and maintenance
    expenditures that we may be unable to fulfill.
      If our
    investments in new technology and other capital expenditures do
    not yield expected returns, our results of operations could be
    reduced.
    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.
  and/or
  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.
     19




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Payment of severance or retirement benefits earlier than
    anticipated could strain our cash flow.
    We are involved in litigation from time to time in the
    ordinary course of business.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   20




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ITEM 2.
    PROPERTIES    North American Glass


North American Other


InternationalLocation

Owned


Leased


Owned


Leased


Owned


LeasedToledo, Ohio:Manufacturing


974,000



Warehousing/Distribution


988,000



591,000Shreveport, Louisiana:Manufacturing


525,000



Warehousing/Distribution


166,000



646,000Syracuse, New York(1):Manufacturing










549,000



Warehousing/Distribution










104,000



Dane, Wisconsin:Manufacturing










56,000



Warehousing/Distribution










61,000



Monterrey, Mexico:Manufacturing


534,000



395,000Warehousing/Distribution


228,000



580,000Tultitlán, Mexico:Warehousing/Distribution






76,000Leerdam, Netherlands:Manufacturing


















141,000



Warehousing/Distribution


















127,000



442,000Laredo, Texas:Warehousing/Distribution


149,000



117,000West Chicago, Illinois:Warehousing/Distribution














249,000Marinha Grande, Portugal:Manufacturing


















217,000



Warehousing/Distribution


















193,000



13,000Langfang, China:Manufacturing


















195,000



Warehousing/Distribution


















232,000



     (1)
    
    We ceased production at our Syracuse China ceramic dinnerware
    manufacturing facility in April 2009.  month-to-month
   21




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ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    RESERVED  EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Name and Title

Professional BackgroundJohn F. Meier
     Chairman and Chief
     Executive Officer

Mr. Meier, 62, has been Chairman of the Board and Chief
    Executive Officer of Libbey Inc. since the Company went public
    in June 1993. Since joining the Company in 1970, Mr. Meier has
    served in various marketing positions, including a five-year
    assignment with Durobor, S.A., Belgium. In 1990, Mr. Meier was
    named General Manager of Libbey and a corporate Vice President
    of Owens-Illinois, Inc., Libbeys former parent company.
    Mr. Meier is a member of the Board of Directors of Cooper Tire
    & Rubber Company (NYSE: CTB) and Applied Industrial
    Technologies (NYSE: AIT). Mr. Meier has been a director of
    the Company since 1987.Richard I. Reynolds
     Executive Vice President
     and Chief Operating Officer

Mr. Reynolds, 63, has served as Libbeys Executive Vice
    President and Chief Operating Officer since 1995.
    Mr. Reynolds was Libbeys Vice President and Chief
    Financial Officer from June 1993 to 1995.  From 1989 to June
    1993, Mr. Reynolds was Director of Finance and Administration.
    Mr. Reynolds has been with Libbey since 1970 and has been a
    director of the Company since 1993.Gregory T. Geswein
     Vice President and
     Chief Financial Officer

Mr. Geswein, 55, joined Libbey Inc. as Vice President, Chief
    Financial Officer on May 23, 2007. Prior to joining Libbey, Mr.
    Geswein was Senior Vice President, Chief Financial Officer of
    Reynolds & Reynolds Company in Dayton, Ohio, from 2005
    through April 2007. Before joining Reynolds & Reynolds, Mr.
    Geswein was Senior Vice President, Chief Financial Officer for
    Diebold, Inc. from 2000 to August 12, 2005 and Senior Vice
    President, Chief Financial Officer of Pioneer-Standard
    Electronics Inc. from 1999 to 2000. Prior to joining
    Pioneer-Standard Electronics, Mr. Geswein spent 14 years at
    Mead Corporation (now MeadWestvaco) in successive financial
    management positions, including Vice President and Controller,
    and Treasurer.  In Spring 2009, Mr. Geswein received Wells
    Notices from the Staff of the SEC indicating that the Staff
    intended to recommend to the SEC that the SEC bring a civil
    enforcement action against Mr. Geswein for violating certain
    provisions of the federal securities laws related to accounting
    matters at Diebold, Inc.  In June 2009, Mr. Geswein
    received a letter from the Office of the U.S. Attorney for
    the Northern District of Ohio notifying him that he is a target
    of a criminal investigation.  We understand that these matters
    relate to Mr. Gesweins prior employment as Chief Financial
    Officer of Diebold, Inc. and none of the allegations involve
    Libbey or Libbey Inc. 22




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Name and Title

Professional BackgroundKenneth A. Boerger
     Vice President
     and Treasurer

Mr. Boerger, 51, has been Vice President and Treasurer of Libbey
    Inc. since July 1999. From 1994 to July 1999, Mr. Boerger was
    Corporate Controller and Assistant Treasurer.  Since joining the
    Company in 1984, Mr. Boerger has held various financial and
    accounting positions. He has been involved in the Companys
    financial matters since 1980, when he joined Owens-Illinois,
    Inc., Libbeys former parent company.Jonathan S. Freeman
     Vice President, Global Supply 
     Chain

Mr. Freeman, 48, joined Libbey Inc. as Vice President, Global
    Supply Chain on May 7, 2007.  Prior to joining Libbey, Mr.
    Freeman was with Delphi Corporation and Packard Electric
    Systems, a division of General Motors (the former parent of
    Delphi), since 1985, serving most recently as Director of Global
    Logistics.  Mr. Freeman has worked in a wide range of operations
    and supply chain assignments in the United States, Mexico and
    Europe.Daniel P. Ibele
     Vice President, 
     General Sales Manager, North America

Mr. Ibele, 49, has served as Libbey Inc.s Vice President,
    General Sales Manager, North America since June 2006. From March
    2002 to June 2006 he was Vice President, General Sales Manager
    of the Company. Previously, Mr. Ibele had been Vice
    President, Marketing and Specialty Operations since September
    1997. Mr. Ibele was Vice President and Director of Marketing at
    Libbey from 1995 to September 1997. From the time he joined
    Libbey in 1983 until 1995, Mr. Ibele held various marketing and
    sales positions.Susan A. Kovach
     Vice President,
     General Counsel and Secretary

Ms. Kovach, 50, has been Vice President, General Counsel and
    Secretary of Libbey Inc. since July 2004. She joined Libbey in
    December 2003 as Vice President, Associate General Counsel and
    Assistant Secretary. Prior to joining Libbey, Ms. Kovach was Of
    Counsel to Dykema Gossett PLLC from 2001 through November 2003.
    She served from 1997 to 2001 as Vice President, General Counsel
    and Corporate Secretary of Omega Healthcare Investors, Inc.
    (NYSE: OHI).  From 1998 to 2000 she held the same position for
    Omega Worldwide, Inc., a NASDAQ-listed firm providing management
    services and financing to the aged care industry in the United
    Kingdom and Australia.  Prior to joining Omega Healthcare
    Investors, Inc., Ms. Kovach was a partner in Dykema Gossett PLLC
    from 1995 through November 1997 and an associate in Dykema
    Gossett PLLC from 1985 to 1995.Timothy T. Paige
     Vice President, 
     Administration

Mr. Paige, 52, has been Vice President-Administration of Libbey
    Inc. since December 2002. From January 1997 until December 2002,
    Mr. Paige was Vice President and Director of Human
    Resources of the Company.  From May 1995 to January 1997,
    Mr. Paige was Director of Human Resources of the Company.
    Prior to joining the Company, Mr. Paige was employed by
    Frito-Lay, Inc. in human resources management positions.Scott M. Sellick
     Vice President and
     Chief Accounting Officer

Mr. Sellick, 47, has served as Vice President, Chief Accounting
    Officer of Libbey Inc. since May 2007.  From May 2003 to May
    2007, Mr. Sellick served as Vice President, Chief Financial
    Officer of the Company, and from May 2002 to May 2003, Mr.
    Sellick was Libbeys Director of Tax and Accounting. From
    August 1997 to May 2002, he served as Director of Taxation.
    Before joining the Company 23




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Name and Title

Professional Backgroundin August 1997, Mr. Sellick was Tax Director for Stant
    Corporation and worked in public accounting for Deloitte &
    Touche in the audit and tax areas.Roberto B. Rubio
     Vice President, General Manager, 
     International Operations

Mr. Rubio, 54, has served as Vice President, General Manager,
    International Operations of Libbey Inc. since November 2009. He
    joined the Company in July 2009 as Vice President, Managing
    Director, Libbey Mexico. Prior to joining Libbey, Mr. Rubio was
    employed by Vitro S.A.B. de C.V., which he joined in 1980. While
    employed by Vitro, Mr. Rubio progressed through numerous
    positions of increasing scope and responsibility. In 1996, Mr.
    Rubio was named President of Vitrocrisa, the glass tableware
    division of Vitro that is now wholly owned by Libbey. In 1999,
    Mr. Rubio was named President of the glass container
    division of Vitro, and in 2001 Mr. Rubio was named
    President of Vitros flat glass division. In 2003,
    Mr. Rubio assumed operations responsibility for both the
    glass container division and the glass tableware division,
    including Vitrocrisa. From the time of Libbeys acquisition
    in 2006 of the remaining 51 percent interest in Vitrocrisa
    (which Libbey renamed Crisa) that it did not previously own
    until July 2009, Mr. Rubio led Crisa, while at the same time
    carrying out other senior management responsibilities for Vitro.
    At the time of his retirement from Vitro in June 2009, Mr. Rubio
    was serving as President of Vitros flat glass division.  24




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Common
    Stock and Dividends
  LBY.
  2009


2008Cash








CashPrice Range


Dividend


Price Range


DividendHigh


Low


Declared


High


Low


DeclaredFirst Quarter

$
2.05


$
0.73


$



$
17.60


$
12.96


$
0.025Second Quarter

$
2.75


$
0.47


$



$
17.81


$
7.43


$
0.025Third Quarter

$
4.27


$
1.30


$



$
11.25


$
6.44


$
0.025Fourth Quarter

$
7.99


$
3.75


$



$
8.63


$
1.04


$
0.025       Comparison
    of Cumulative Total Returns
   25




---



##### Table of Contents



TOTAL
    SHAREHOLDER RETURN
  
  Annual Return Percentage Years EndingCompany/Index

Dec 05

Dec 06

Dec 07

Dec 08

Dec 09Libbey Inc.


(52.89
)


21.97



29.12



(92.00
)


512.00Russell 2000 Index


4.55



18.37



(1.57
)


(33.79
)


27.17S&P 600 Housewares & Specialties


(37.48
)


10.07



8.57



(40.75
)


52.97   Indexed Returns Years EndingBasePeriodCompany/Index

Dec 04

Dec 05

Dec 06

Dec 07

Dec 08

Dec 09Libbey Inc.


100



47.11



57.46



74.19



5.93



36.31Russell 2000 Index


100



104.55



123.76



121.82



80.66



102.58S&P 600 Housewares & Specialties


100



62.52



68.81



74.71



44.27



67.71  26




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##### Table of Contents



Equity
    Compensation Plan Information
    Number ofSecurities to be





Number ofIssued Upon


Weighted Average


SecuritiesExercise of


Exercise Price of


Remaining AvailableOutstanding


Outstanding


for Future IssuanceOptions, Warrants


Options, Warrants


Under EquityPlan Category

and Rights


and Rights


Compensation PlansEquity compensation plans approved by security holders


1,652,867


$
17.15



303,743Equity compensation plans not approved by security holders










Total


1,652,867


$
17.15



303,743   Issuer
    Purchases of Equity Securities
    Total Number of


Maximum NumberShares Purchased


of Shares that Mayas Part of Publicly


Yet Be PurchasedTotal Number of


Average Price Paid


Announced Plans


Under the Plans orPeriod

Shares Purchased


per Share


or Programs


Programs(1)October 1 to October 31, 2009














1,000,000November 1 to November 30, 2009














1,000,000December 1 to December 31, 2009














1,000,000Total














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 2009,
    2008, 2007, 2006, 2005 or 2004. Our ABL Facility and the
    indentures governing the Floating Rate Senior Secured Notes and
    the PIK Notes significantly restrict our ability to repurchase
    additional shares.  ITEM 6.
    SELECTED
    FINANCIAL DATA    ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  FORWARD
    LOOKING STATEMENTS
     27




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##### Table of Contents



OVERVIEW
  GENERAL
  business-to-business
    
    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.  EXECUTIVE
    OVERVIEW
      
    We reduced most U.S. salaries by 5.0 percent to
    7.5 percent, and we suspended the Company matching
    contributions to our salaried employees 401(k) accounts.
    (After significantly reducing costs, improving our liquidity and
    completing our debt exchange in October 2009, we rescinded the
    salary cuts and reinstated the 401(k) matching contributions for
    pay periods beginning December 1, 2009.)
    We tightened our capital spending.
    We implemented aggressive inventory and working capital
    reduction plans.
    We completed the closing of our Syracuse China ceramic
    dinnerware factory, in Syracuse, New York in April, and the
    closing of our Mira Loma, California distribution center in June.
    We increased the pace of our LEAN initiatives worldwide.    
    We increased our leading U.S. retail market share for the
    fourth year in a row. According to NPD Group Retail Tracking
    Services, we now have 42.1 percent of the casual
    beverageware market.
    Net sales in our U.S. and Canadian retail business grew by
    more than 7.0 percent.
    Net sales in our U.S. and Canadian foodservice business
    grew by approximately 6.0 percent in the fourth quarter
    2009 compared to the fourth quarter 2008.
    Our Crisa business in Mexico had a strong 2009 fourth quarter,
    with net sales up 15.2 percent compared to the fourth
    quarter 2008. 28




---



##### Table of Contents




    We repositioned the
    Syracuse®

    China brand, reducing the product offering from over 5,000 items
    to just over 500 items that are imported from the Far East.
    Net sales at our newest business, Libbey China, continued to
    grow, increasing by 15.6 percent compared to 2008.    
    In October 2009, we restructured a portion of our debt by
    exchanging our Old PIK Notes, in the face amount of
    $160.9 million for New PIK Notes in the face amount of
    $80.4 million and additional common stock and warrants of
    Libbey Inc. Interest on the New PIK Notes was to accrue at zero
    percent until December 2010 if we were unable to refinance our
    $306.0 million Senior Notes before that date.
    On February 8, 2010, we used the proceeds of a
    $400.0 million debt offering and cash on hand to redeem the
    New PIK Notes and repurchase the $306.0 million senior
    secured notes due 2011. We also amended our ABL Facility.    RESULTS
    OF OPERATIONS
    Variance








VarianceIn


In








In


InYear End December 31,

2009


2008


Dollars


Percent


2008


2007


Dollars


PercentDollars in thousands, except percentages and per-share
    amountsNet sales

$
748,635


$
810,207


$
(61,572
)


(7.6
)%

$
810,207


$
814,160


$
(3,953
)


(0.5
)%Gross profit(2)(3)

$
133,145


$
109,337


$
23,808



21.8
%

$
109,337


$
157,669


$
(48,332
)


(30.7
)%Gross profit margin


17.8
%


13.5
%










13.5
%


19.4
%Income (loss) from operations (IFO)(2)(3)

$
36,614


$
(5,548
)

$
42,162



759.9
%

$
(5,548
)

$
66,101


$
(71,649
)


(108.4
)%IFO margin


4.9
%


(0.7
)%










(0.7
)%


8.1
%Earnings (loss) before interest and income taxes (EBIT)(1)(2)(3)

$
40,667


$
(4,429
)

$
45,096



NM


$
(4,429
)

$
74,879


$
(79,308
)


(105.9
)%EBIT margin


5.4
%


(0.5
)%










(0.5
)%


9.2
%Earnings before interest, taxes, depreciation and amortization
    (EBITDA)(1)(2)(3)

$
83,833


$
40,001


$
43,832



109.6
%

$
40,001


$
116,451


$
(76,450
)


(65.6
)%EBITDA margin


11.2
%


4.9
%










4.9
%


14.3
%Adjusted earnings before interest, taxes, depreciation and
    amortization (Adjusted EBITDA)(1)

$
90,141


$
85,238


$
4,903



5.8
%

$
85,238


$
116,451


$
(31,213
)


(26.8
)%Adjusted EBITDA margin


12.0
%


10.5
%










10.5
%


14.3
%Net loss(2)(3)

$
(28,788
)

$
(80,463
)

$
51,675



64.2
%

$
(80,463
)

$
(2,307
)

$
(78,156
)


NMNet loss margin


(3.8
)%


(9.9
)%










(9.9
)%


(0.3
)%Diluted net loss per share

$
(1.90
)

$
(5.48
)

$
3.58



65.3
%

$
(5.48
)

$
(0.16
)

$
(5.32
)


NM  29




---



##### Table of Contents



(1)
    
    We believe that EBIT, EBITDA and Adjusted 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. For reconciliation from
    net loss to EBIT, EBITDA and Adjusted EBITDA, see the
    Reconciliation of Non-GAAP Financial Measures
    section below.(2)
    
    Includes pre-tax special charges of $6.5 million related to
    the closing of our Syracuse China manufacturing facility, the
    closing of our Mira Loma distribution center and the write-off
    of finance fees related to the debt exchange (see note 7 to
    the Consolidated Financial Statements).(3)
    
    Includes pre-tax special charges of $45.5 million related
    to the closing of our Syracuse China manufacturing facility, the
    closing of our Mira Loma distribution center, fixed asset
    impairments related to the North American segment and impairment
    of goodwill and other intangibles in the International segment
    (see note 7 to the Consolidated Financial Statements ).  Discussion
    of 2009 vs. 2008 Results of Operations
  Net
    Sales
  ®
  Gross
    Profit
    Income
    (loss) from operations
   30




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##### Table of Contents



Earnings
    (loss) before interest and income taxes (EBIT)
    Earnings
    before interest, taxes, depreciation and amortization
    (EBITDA)
    Adjusted
    Earnings before interest, taxes, depreciation and amortization
    (Adjusted EBITDA)
    Net
    loss and diluted loss per share
   31




---



##### Table of Contents



Discussion
    of 2008 vs. 2007 Results of Operations
  Net
    Sales
    Gross
    Profit
    (Loss)
    Income from operations
    (Loss)
    earnings before interest and income taxes (EBIT)
    Earnings
    before interest, taxes, depreciation and amortization
    (EBITDA)
   32




---



##### Table of Contents



Adjusted
    Earnings before interest, taxes, depreciation and amortization
    (Adjusted EBITDA)
    Net
    loss and diluted loss per share
   33




---



##### Table of Contents



SEGMENT
    RESULTS OF OPERATIONS
    
    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.  Variance








VarianceIn


In








In


InYear End December 31,

2009


2008


Dollars


Percent


2008


2007


Dollars


PercentAmounts in thousands, except percentages and per-share
    amountsNet Sales:North American Glass

$
522,575


$
554,128


$
(31,553
)


(5.7
)%

$
554,128


$
568,495


$
(14,367
)


(2.5
)%North American Other


87,041



111,029



(23,988
)


(21.6
)%


111,029



121,217



(10,188
)


(8.4
)%International


145,023



153,532



(8,509
)


(5.5
)%


153,532



136,727



16,805



12.3
%Eliminations


(6,004
)


(8,482
)










(8,482
)


(12,279
)Consolidated

$
748,635


$
810,207


$
(61,572
)


(7.6
)%

$
810,207


$
814,160


$
(3,953
)


(0.5
)%Earnings (loss) before interest and taxes (EBIT):North American Glass

$
33,727


$
25,495


$
8,232



32.3
%

$
25,495


$
54,492


$
(28,997
)


(53.2
)%North American Other


9,802



(17,696
)


27,498



155.4
%


(17,696
)


15,670



(33,366
)


(212.9
)%International


(2,862
)


(12,228
)


9,366



76.6
%


(12,228
)


4,717



(16,945
)


(359.2
)%Consolidated

$
40,667


$
(4,429
)

$
45,096



NM


$
(4,429
)

$
74,879


$
(79,308
)


(105.9
)%EBIT Margin:North American Glass


6.5
%


4.6
%










4.6
%


9.6
%North American Other


11.3
%


(15.9
)%










(15.9
)%


12.9
%International


(2.0
)%


(8.0
)%










(8.0
)%


3.4
%Consolidated


5.4
%


(0.5
)%










(0.5
)%


9.2
%Special Charges (excluding write-off of financing fees):North American Glass

$
14


$
5,356


$
(5,342
)


99.7
%

$
5,356


$



$
5,356



100.0
%North American Other


3,809



28,252



(24,443
)


86.5
%


28,252







28,252



100.0
%International






11,890



(11,890
)


100.0
%


11,890







11,890



100.0
%Consolidated

$
3,823


$
45,498


$
(41,675
)


91.6
%

$
45,498


$



$
45,498



100.0
%      Discussion
    of 2009 vs. 2008 Segment Results of Operations
  North
    American Glass
   34




---



##### Table of Contents



North
    American Other
      International
     35




---



##### Table of Contents



Discussion
    of 2008 vs. 2007 Segment Results of Operations
  North
    American Glass
  business-to-business
    North
    American Other
      International
     36




---



##### Table of Contents



CAPITAL
    RESOURCES AND LIQUIDITY
        Balance
    Sheet and Cash flows
  Cash and
    Equivalents
    Working
    Capital
    VarianceDecember 31,

2009


2008


In Dollars


In PercentAmounts in thousands, except percentages, DSO, DIO, DPO and
    DWCAccounts receivable  net

$
82,424


$
76,072


$
6,352



8.3
%DSO(1)


40.2



34.3Inventories  net

$
144,015


$
185,242


$
(41,227
)


(22.3
)%DIO(2)


70.2



83.5Accounts payable

$
58,838


$
54,428


$
4,410



8.1
%DPO(3)


28.7



24.5Working capital(4)

$
167,601


$
206,886


$
(39,285
)


(19.0
)%DWC(5)


81.7



93.3Percentage of net sales


22.4
%


25.5
%   365-day
  (1)
    
    Days sales outstanding (DSO) measures the number of days it
    takes to turn receivables into cash. 37




---



##### Table of Contents



(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 Reconciliation of
    Non-GAAP Financial Measures below 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.    Borrowings
    Interest




December 31,


December 31,Rate


Maturity Date

2009


2008(Dollars in thousands)Borrowings under ABL facility


floating


December 16, 2010

$



$
34,538Senior notes


floating
(1)

June 1, 2011


306,000



306,000PIK notes prior to October, 2009 exchange (Old PIK Notes)(2)(3)


16.00
%

December 1, 2011






148,946PIK notes after October, 2009 exchange (New PIK Notes)(3)


0.00
%(7)

June 1, 2021


80,431



Promissory note


6.00
%

January, 2010 to September, 2016


1,492



1,666Notes payable


floating


January 2010


672



3,284RMB loan contract


floating


July 2012 to January 2014


36,675



36,675RMB working capital loan


floating


March, 2010(4)


7,335



7,335Obligations under capital leases


floating


May, 2009






302BES Euro line


floating


December, 2010 to December, 2013


14,190



15,507Other debt


floating


September, 2009






630Total borrowings








446,795



554,883Less  unamortized discounts and warrants








1,749



4,626Plus  Carrying value in excess of principal on New
    PIK Notes(3)








70,193



Total borrowings  net(5)(6)







$
515,239


$
550,257  38




---



##### Table of Contents



(1)
    
    See Derivatives below and Note 6 to the
    Consolidated Financial Statements.(2)
    
    Additional PIK notes were issued each June 1 and
    December 1, commencing December 1, 2006, to pay the
    semi-annual interest. During the first three years, ending
    June 1, 2009, interest was payable by the issuance of
    additional PIK notes.(3)
    
    On October 28, 2009, we exchanged approximately
    $160.9 million of Old PIK Notes for approximately
    $80.4 million of New PIK Notes and additional common stock
    and warrants to purchase common stock of Libbey Inc. Under U.S.
    GAAP, we are required to record the New PIK Notes at their
    carrying value of approximately $150.6 million instead of
    their face value of $80.4 million. See note 6 to the
    Consolidated Financial Statements for a discussion of accounting
    treatment of the New PIK Notes.(4)
    
    We extended the terms on our RMB working capital loan, effective
    February 25, 2010. This loan was originally due in March,
    2010. Under the new terms, the loan matures in January, 2011.(5)
    
    Total borrowings include notes payable, long-term debt due
    within one year and long-term debt as stated in our Consolidated
    Balance Sheets.(6)
    
    See Contractual Obligations below for scheduled
    payments by period.(7)
    
    Interest due under the New PIK Notes accrues at zero percent
    until the date (FRN Redemption Date) that is the first to occur
    of (a) December 10, 2010 or (b) the date on which
    the Senior Notes due 2011 are redeemed or paid in full. If the
    New PIK Notes have not been repaid in full on or before the FRN
    Redemption Date, interest under the New PIK Notes will
    accrue at the rate of 16.0 percent per annum and be payable
    semi-annually in cash or in additional New PIK Notes, at the
    option of Libbey Glass.       39




---



##### Table of Contents



Cash
    Flow
    Variance








VarianceYear Ended December 31,

2009


2008


In Dollars


In Percent


2008


2007


In Dollars


In Percent(Dollars in thousands, except percentages)Net cash provided by (used in) operating activities

$
102,148


$
(1,040
)

$
103,188



NM


$
(1,040
)

$
51,457


$
(52,497
)


(102.0
)%Capital expenditures


(17,005
)


(45,717
)


(28,712
)


(62.8
)%


(45,717
)


(43,121
)


2,596



6.0
%Proceeds from asset sales and other


265



117



148



126.5
%


117



8,213



(8,096
)


(98.6
)%Free cash flow(1)

$
85,408


$
(46,640
)

$
132,048



283.1
%

$
(46,640
)

$
16,549


$
(63,189
)


(381.8
)%       (1)
    
    We believe that free cash flow (which we define as net cash
    provided by (used in) operating activities, less capital
    expenditures, plus proceeds from asset sales and other) is a
    useful metric for evaluating our financial performance, as it is
    a measure we use internally to assess performance. See
    Reconciliation of Non-GAAP Financial Measures
    below 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.  Discussion
    of 2009 vs. 2008 Cash Flow
          Discussion
    of 2008 vs. 2007 Cash Flow
     40




---



##### Table of Contents



Derivatives
      Derivatives and Hedging Accounting for Derivative Instrument
    and Hedging Activities
    Share
    Repurchase Program
     41




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess than








More thanContractual Obligations(1)

Total


1 Year


1-3 Years


3-5 Years


5 YearsDollars in thousandsBorrowings(2)

$
446,795


$
10,515


$
323,814


$
31,574


$
80,892Interest payments(2)(3)


178,664



25,674



42,075



27,247



83,668Long term operating leases


117,751



17,370



26,927



20,107



53,347Pension and nonpension(4)


17,285



17,285Total obligations

$
760,495


$
70,844


$
392,816


$
78,928


$
217,907     (1)
    
    Amounts reported in local currencies have been translated at
    2009 exchange rates.(2)
    
    On February 8, 2010, we used the proceeds of a
    $400.0 million debt offering to repurchase the Senior Notes
    and redeem the New PIK Notes. We also amended and restated the
    ABL Facility to, among other things, extend its maturity.
    Subsequent to December 31, 2009, the terms of the RMB
    working capital loan were extended. Under the new terms, the
    loan matures in January, 2011. For further discussion of these
    transactions, see note 20 to the Consolidated Financial
    Statements. Giving effect for these transactions, the proforma
    borrowings and interest payments in the above table would be:  Less than





More thanTotal

1 Year

1-3 Years

3-5 Years

5 YearsProforma borrowings

$
460,364


$
3,180


$
25,149


$
31,574


$
400,461Proforma interest payments

$
213,577


$
27,162


$
84,886


$
81,510


$
20,019    (3)
    
    The obligations for interest payments are based on
    December 31, 2009 debt levels and interest rates.(4)
    
    It is difficult to estimate future cash contributions as they
    are a function of actual investment returns, withdrawals from
    the plan, changes in interest rates, and other factors uncertain
    at this time.      Reconciliation
    of Non-GAAP Financial Measures
   42




---



##### Table of Contents



Reconciliation
    of net loss to EBIT, EBITDA and Adjusted EBITDA
  Year Ended December 31,

2009


2008


2007Dollars in thousandsNet loss

$
(28,788
)

$
(80,463
)

$
(2,307
)Add: Interest expense


66,705



69,720



65,888Add: Provision for income taxes


2,750



6,314



11,298Earnings (loss) before interest and income taxes (EBIT)


40,667



(4,429
)


74,879Add: Depreciation and amortization


43,166



44,430



41,572Earnings before interest, taxes, deprecation and amortization
    (EBITDA)


83,833



40,001



116,451Add: Facility closure charges (see note 7)(1)


3,823



29,127



Add: Fixed asset impairment charges (see note 7)(2)






4,481



Add: Goodwill impairment charges (see notes 4 and 7)(3)






9,434



Add: Intangible impairment charges (see notes 4 and 7)(3)






2,456



Add: Pension settlement charges (see note 9)(4)


3,190







Less: Depreciation expense included in special charges and also
    in depreciation and amortization above


(705
)


(261
)


Adjusted earnings before interest, taxes, deprecation and
    amortization (Adjusted EBITDA)

$
90,141


$
85,238


$
116,451     (1)
    
    Facility closure charges are related to the closure of our
    Syracuse, New York ceramic dinnerware manufacturing facility and
    our Mira Loma, California distribution center.(2)
    
    Fixed asset impairment charges are related to unutilized fixed
    assets at our North American Glass segment.(3)
    
    Goodwill and intangible asset impairment charges are related to
    goodwill and intangible assets at our Crisal and Royal Leerdam
    locations.(4)
    
    Pension settlement charges were triggered by excess lump sum
    distributions taken by employees.           43




---



##### Table of Contents




    Adjusted EBITDA does not reflect our cash expenditures or future
    requirements for capital expenditures or contractual commitments;
    Adjusted EBITDA does not reflect changes in, or cash
    requirements for, our working capital needs;
    Adjusted EBITDA does not reflect the significant interest
    expense, or the cash requirements necessary to service interest
    or principal payments, on our debts;
    although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will often have to be
    replaced in the future, and Adjusted EBITDA does not reflect any
    cash requirements for such replacements;
    Adjusted EBITDA does not reflect the impact of certain cash
    charges resulting from matters we consider not to be indicative
    of our ongoing operations; and
    other companies in our industry may calculate Adjusted EBITDA
    differently than we do, limiting its usefulness as a comparative
    measure.    Reconciliation
    of net cash provided by (used in) operating activities to free
    cash flow
  Year Ended December 31,

2009


2008


2007Dollars in thousandsNet cash provided by (used in) operating activities

$
102,148


$
(1,040
)

$
51,457Less: Capital expenditures


(17,005
)


(45,717
)


(43,121
)Plus: Proceeds from asset sales and other


265



117



8,213Free cash flow

$
85,408


$
(46,640
)

$
16,549        44




---



##### Table of Contents



Reconciliation
    of Working Capital
  December 31,

2009


2008Dollars in thousandsAccounts receivable -net

$
82,424


$
76,072Plus: Inventories -net


144,015



185,242Less: Accounts payable


58,838



54,428Working Capital

$
167,601


$
206,886         CRITICAL
    ACCOUNTING ESTIMATES
    Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Allowance
    for Slow-Moving and Obsolete Inventory
   45




---



##### Table of Contents



Asset
    Impairment
  Fixed
    Assets
        Goodwill
    and Indefinite Life Intangible Assets
     46




---



##### Table of Contents



Self-Insurance
    Reserves
     47




---



##### Table of Contents



Pension
    Assumptions
    U.S. Plans


Non-U.S. Plans2009


2008


2009


2008Discount rate


5.62% to 5.96%



6.41% to 6.48%



5.50% to 8.50%



5.70% to 8.50%Rate of compensation increase


2.25% to 4.50%



2.63% to 5.25%



2.00% to 4.30%



2.00% to 4.30%     U.S. Plans


Non-U.S. Plans2009


2008


2007


2009


2008


2007Discount rate


6.41% to 6.48%



6.16% to 6.32%



5.82% to 5.91%



5.70% to 8.50%



5.50% to 8.50%



4.50% to 8.75%Expected long-term rate of return on plan assets


8.25%



8.50%



8.75%



6.00%



6.50%



6.50%Rate of compensation increase


2.63% to 5.25%



3.00% to 6.00%



3.00% to 6.00%



2.00% to 4.30%



2.00% to 4.30%



2.00% to 3.50%           
    A change of 1.0 percent in the discount rate would change
    our total pension expense by approximately $3.2 million.
    A change of 1.0 percent in the expected long-term rate of
    return on plan assets would change total pension expense by
    approximately $2.4 million.  Nonpension
    Postretirement Assumptions
    U.S. Plans

Non-U.S. Plans2009

2008

2009

2008Discount rate


5.54%



6.36%



5.42%



5.89%  48




---



##### Table of Contents



U.S. Plans

Non-U.S. Plans2009

2008

2007

2009

2008

2007Discount rate


6.36
%


6.16
%


5.77
%


5.89
%


5.14
%


4.87
%     U.S. Plans


Non-U.S. Plans2009


2008


2009


2008Initial health care trend


8.00
%


7.50
%


8.00
%


7.50
%Ultimate health care trend


5.00
%


5.00
%


5.00
%


5.00
%Years to reach ultimate trend rate


6



5



6



5     
    A change of 1.0 percent in the discount rate would change
    the nonpension postretirement expense by $0.4 million.
    A change of 1.0 percent in the health care trend rate would
    not have a material impact upon the nonpension postretirement
    expense.  Income
    Taxes
      Derivatives
    and Hedging
     49




---



##### Table of Contents



Stock-Based
    Compensation Expense
  505-50, SFAS No. 123-R, 050-50
    New
    Accounting Standards
  tm
  157-2, 157-3, (FSP 157-3), FSP 157-3 (FSP 157-2 FSP 157-3)
   50




---



##### Table of Contents



No. FAS 142-3, (FSP 142-3), FSP 142-3 FSP 142-3 FSP 142-3 350-30,
  No. 07-5, (EITF 07-5). EITF 07-5 EITF 07-5 EITF 07-5 EITF 07-5 815-40,
  No. EITF 03-6-1, (FSP 03-6-1). FSP 03-6-1 FSP 03-6-1 FSP 03-6-1 FSP 03-6-1
  715-20,
  Form 8-K
 51




---



##### Table of Contents



2010-09 
  tm tm 2009-01, 2009-01
  2009-5 2009-5.) 2009-5 2009-5 2009-5
  2010-06 2010-06). 2010-06 2010-06 2010-06 2010-06
  ITEM 7A.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK  Currency
    Interest
    Rates
   52




---



##### Table of Contents



Natural
    Gas
    Retirement
    Plans
    
    A change of 1.0 percent in the discount rate would change
    our total pension and nonpension postretirement expense by
    approximately $3.6 million.
    A change of 1.0 percent in the expected long-term rate of
    return on plan assets would change total pension expense by
    approximately $2.4 million. 53




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  PageReports of Independent Registered Public
    Accounting Firm


55Consolidated Balance Sheets at December 31,
    2009 and 2008


57For the years ended December 31, 2009, 2008 and 2007:Consolidated Statements of Operations


58Consolidated Statements of Shareholders
    Deficit


59Consolidated Statements of Cash Flows


60Notes to Consolidated Financial Statements:


61Note 1 Description of the Business


61Note 2 Significant Accounting Policies


61Note 3 Balance Sheet Details


67Note 4 Purchased Intangible Assets and
    Goodwill


68Note 5 Property, Plant and Equipment


69Note 6 Borrowings


70Note 7 Special Charges


76Note 8 Income Taxes


79Note 9 Pension


83Note 10 Nonpension Postretirement
    Benefits


89Note 11 Net Income per Share of Common
    Stock


92Note 12 Employee Stock Benefit Plans


93Note 13 Derivatives


99Note 14 Comprehensive Income (Loss)


102Note 15 Fair Value


103Note 16 Operating Leases


104Note 17 Other Income


104Note 18 Segments


104Note 19 Condensed Consolidated Guarantor
    Financial Statements


106Note 20 Subsequent Events


114Selected Quarterly Financial Data (unaudited)


119   54




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm            
    55




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                
    56




---



##### Table of Contents



Libbey
    Inc.
  Consolidated
    Balance Sheets
  December 31,

Footnote Reference


2009


2008Dollars in thousands, except per-share amountsASSETSCurrent assets:Cash & cash equivalents





$
55,089


$
13,304Accounts receivable  net


(note 3
)


82,424



76,072Inventories  net


(note 3
)


144,015



185,242Prepaid and other current assets


(notes 3 & 8
)


11,783



17,167Total current assets






293,311



291,785Other assets:Pension asset


(note 9
)


9,454



9,351Purchased intangible assets  net


(notes 4 & 7
)


24,861



26,121Goodwill


(notes 4 & 7
)


168,320



166,736Other assets


(note 3
)


8,854



12,714Total other assets






211,489



214,922Property, plant, and equipment  net


(notes 5 & 7
)


290,013



314,847Total assets





$
794,813


$
821,554LIABILITIES AND SHAREHOLDERS DEFICITCurrent Liabilities:Notes payable


(note 6
)

$
672


$
3,284Accounts payable






58,838



54,428Salaries and wages






34,064



22,597Accrued liabilities


(note 3
)


35,699



39,675Accrued special charges


(note 7
)


1,016



4,248Pension liability (current portion)


(note 9
)


1,984



1,778Nonpension postretirement benefits (current portion)


(note 10
)


4,363



4,684Derivative liability


(notes 13 & 15
)


3,346



17,936Deferred income taxes


(note 8
)


3,559



1,279Long-term debt due within one year


(note 6
)


9,843



1,117Total current liabilities






153,384



151,026Long-term debt


(note 6
)


504,724



545,856Pension liability


(note 9
)


119,727



109,505Nonpension postretirement benefits


(note 10
)


64,780



57,197Deferred income taxes


(note 8
)


6,226



3,648Other long-term liabilities


(notes 3, 13 & 15
)


12,879



12,211Total liabilities






861,720



879,443Stockholders deficit:Common stock, par value $.01 per share, 50,000,000 shares
    authorized, 18,697,630 shares issued in
    2009(18,697,630 shares issued in 2008)






187



187Capital in excess of par value (includes warrants of $15,560 and
    $1,034 in 2009 and 2008, and 3,952,165 shares and
    485,309 shares in 2009 and 2008, respectively)






324,272



309,275Treasury stock, at cost, 2,599,769 shares in 2009
    (3,967,486 shares in 2008)






(70,298
)


(106,411
)Retained deficit






(205,344
)


(145,154
)Accumulated other comprehensive loss


(note 14
)


(115,724
)


(115,786
)Total shareholders deficit






(66,907
)


(57,889
)Total liabilities and shareholders deficit





$
794,813


$
821,554    57




---



##### Table of Contents



Libbey
    Inc.
  Consolidated
    Statements of Operations
  Year Ended December 31,

Footnote Reference


2009


2008


2007Dollars in thousands, except per-share amountsNet sales


(note 2
)

$
748,635


$
810,207


$
814,160Freight billed to customers






1,605



2,422



2,207Total revenues






750,240



812,629



816,367Cost of sales


(notes 2 & 7
)


617,095



703,292



658,698Gross profit






133,145



109,337



157,669Selling, general and administrative expenses






94,900



88,451



91,568Impairment of goodwill


(note 7
)






9,434



Special charges


(note 7
)


1,631



17,000



Income (loss) from operations






36,614



(5,548
)


66,101Other income


(notes 7 & 17
)


4,053



1,119



8,778Earnings (loss) before interest and income taxes






40,667



(4,429
)


74,879Interest expense


(note 6
)


66,705



69,720



65,888(Loss) income before income taxes






(26,038
)


(74,149
)


8,991Provision for income taxes


(note 8
)


2,750



6,314



11,298Net loss





$
(28,788
)

$
(80,463
)

$
(2,307
)Net loss per share:Basic


(note 11
)

$
(1.90
)

$
(5.48
)

$
(0.16
)Diluted


(note 11
)

$
(1.90
)

$
(5.48
)

$
(0.16
)Weighted average shares:Outstanding


(note 11
)


15,149



14,672



14,472Diluted


(note 11
)


15,149



14,672



14,472    58




---



##### Table of Contents



Libbey
    Inc.
  Consolidated
    Statements of Shareholders Deficit
  AccumulatedOtherCommon


Capital in


Treasury





ComprehensiveStock


Excess of


Stock


Retained


LossAmount(1)


Par Value


Amount(1)


Deficit


(note 14)


TotalDollars in thousands, except per-share amountsBalance December 31, 2006

$
187


$
303,381


$
(129,427
)

$
(40,282
)

$
(46,009
)

$
87,850Comprehensive income:Net loss














(2,307
)






(2,307
)Effect of derivatives  net of tax


















(3,224
)


(3,224
)Pension and other postretirement benefit adjustments 
    net of tax (notes 9 and 10)


















(2,956
)


(2,956
)Effect of exchange rate fluctuation


















9,712



9,712Total comprehensive income (note 14)






















1,225Stock options exercised






88















88Income tax benefit on stock options






20















20Stock compensation expense (note 12)






3,385















3,385Stock issued from treasury










18,647



(16,654
)






1,993Dividends  $0.10 per share














(1,446
)






(1,446
)Balance December 31, 2007


187



306,874



(110,780
)


(60,689
)


(42,477
)


93,115Comprehensive loss:Net loss














(80,463
)






(80,463
)Effect of derivatives  net of tax


















(10,300
)


(10,300
)Pension and other postretirement benefit adjustments 
    net of tax (notes 9 and 10)


















(58,607
)


(58,607
)Effect of exchange rate fluctuation


















(4,402
)


(4,402
)Total comprehensive loss (note 14)






















(153,772
)Stock compensation expense (note 12)






3,466















3,466Stock issued from treasury






(1,065
)


4,369



(2,536
)






768Dividends  $0.10 per share














(1,466
)






(1,466
)Balance December 31, 2008


187



309,275



(106,411
)


(145,154
)


(115,786
)


(57,889
)Comprehensive loss:Net loss














(28,788
)






(28,788
)Effect of derivatives  net of tax


















12,440



12,440Pension and other postretirement benefit
    adjustments  net of tax (notes 9 and
    10)


















(13,479
)


(13,479
)Effect of exchange rate fluctuation


















1,101



1,101Total comprehensive loss (note 14)






















(28,726
)Stock compensation expense (note 12)






2,419















2,419Equity issuance costs (note 6)






(1,800
)














(1,800
)Stock issued from treasury






(148
)


36,113



(31,402
)






4,563Issuance of warrants (note 6)






14,526















14,526Balance December 31, 2009

$
187


$
324,272


$
(70,298
)

$
(205,344
)

$
(115,724
)

$
(66,907
)     (1)
    
    Share amounts are as follows:  Common Stock


TreasuryShares


Stock Shares


TotalBalance December 31, 2006


18,689,710



4,358,175



14,331,535Stock options exercised


7,920







7,920Stock issued from treasury






(225,101
)


225,101Balance December 31, 2007


18,697,630



4,133,074



14,564,556Stock issued from treasury






(165,588
)


165,588Balance December 31, 2008


18,697,630



3,967,486



14,730,144Stock issued from treasury






(1,367,717
)


1,367,717Balance December 31, 2009


18,697,630



2,599,769



16,097,861    59




---



##### Table of Contents



Libbey
    Inc.
  Consolidated
    Statements of Cash Flows
  Year Ended December 31,

Footnote Reference


2009


2008


2007Dollars in thousandsOperating activities:Net loss





$
(28,788
)

$
(80,463
)

$
(2,307
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


(notes 4 & 5
)


43,166



44,430



41,572Loss (gain) on sale of assets






323



101



(4,923
)Change in accounts receivable






(6,430
)


16,518



3,951Change in inventories






40,834



(2,027
)


(22,949
)Change in accounts payable






3,980



(19,460
)


5,726PIK interest


(note 6
)


11,916



21,249



18,217Income taxes


(note 8
)


(93
)


9,275



10,271Special charges


(note 7
)


(1,728
)


46,326



(920
)Change in Vitro payable


(note 4
)






(19,575
)


Pension and postretirement


(notes 9 & 10
)


5,331



(18,604
)


(3,061
)Accrued interest and amortization of discounts, warrants and
    financing fees






12,945



4,165



4,578Accrued liabilities and prepaid expenses






14,768



(6,634
)


(2,004
)Other operating activities






5,924



3,659



3,306Net cash provided by (used in) operating activities






102,148



(1,040
)


51,457Investing activities:Additions to property, plant and equipment






(17,005
)


(45,717
)


(43,121
)Proceeds from asset sales and other






265



117



8,213Net cash used in investing activities






(16,740
)


(45,600
)


(34,908
)Financing activities:Net borrowings/(repayments) on ABL credit facility


(note 6
)


(34,169
)


28,693



(41,122
)Other repayments


(note 6
)


(5,225
)


(1,399
)


(155
)Other borrowings


(note 6
)










20,427Debt financing fees


(note 6
)


(4,171
)






(219
)Stock options exercised


(note 12
)










108Dividends paid










(1,466
)


(1,446
)Net cash (used in) provided by financing activities






(43,565
)


25,828



(22,407
)Effect of exchange rate fluctuations on cash






(58
)


(2,423
)


631Increase (decrease) in cash






41,785



(23,235
)


(5,227
)Cash & equivalents at beginning of year






13,304



36,539



41,766Cash & equivalents at end of year





$
55,089


$
13,304


$
36,539Supplemental disclosure of cash flows information:Cash paid during the year for interest





$
39,221


$
42,888


$
43,340Cash paid (refunded) during the year for income taxes





$
3,133


$
(2,276
)

$
(6,128
)   Supplemental disclosure of non-cash financing activities:
      60




---



##### Table of Contents



LIBBEY
    INC.


Notes
    to Consolidated Financial Statements  1.
    Description
    of the Business  business-to-business
  2.
    Significant
    Accounting Policies  Basis of Presentation
  Consolidated Statements of
    Operations and/or
  Revenue Recognition
  Cash and cash equivalents
  Accounts Receivable and Allowance for Doubtful
    Accounts
  Inventory Valuation last-in, first-in,
 61




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Purchased Intangible Assets and
    Goodwill
  Software 98-1, and/or
  Property, Plant and Equipment
    Self-Insurance Reserves
  Pension and Nonpension Postretirement
    Benefits
  U.S.-based U.S.-based non-U.S. pension
   62




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Income Taxes
    Derivatives
  Foreign Currency Translation non-U.S. subsidiaries
  Stock-Based Compensation Expense 505-50 505-50) (SFAS No. 123-R)), 505-50 505-50
  Research and Development
 63




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Advertising Costs
  Computation of Income Per Share of Common
    Stock
  Treasury Stock
  Reclassifications
  New Accounting Standards
  tm
  157-2, 157-3, (FSP 157-3), FSP 157-3 (FSP 157-2 FSP 157-3)
   64




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    No. FAS 142-3, (FSP 142-3), FSP 142-3 FSP 142-3 FSP 142-3 350-30,
  No. 07-5, (EITF 07-5). EITF 07-5 EITF 07-5 EITF 07-5 EITF 07-5 815-40,
  No. EITF 03-6-1, (FSP 03-6-1). FSP 03-6-1 FSP 03-6-1 FSP 03-6-1 FSP 03-6-1
  715-20,
  Form 8-K
 65




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2010-09 
  tm tm 2009-01, 2009-01
  2009-5 2009-5.) 2009-5 2009-5
  2010-06 2010-06). 2010-06 2010-06 2010-06 2010-06
 66




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   3.
    Balance
    Sheet Details    December 31,2009


2008Accounts receivable:Trade receivables

$
81,032


$
74,393Other receivables


1,392



1,679Total accounts receivable, less allowances of $7,457 and $10,479

$
82,424


$
76,072Inventories:Finished goods

$
126,651


$
163,817Work in process


1,255



2,805Raw materials


4,408



5,748Repair parts


9,933



10,271Operating supplies


1,768



2,601Total inventories, less allowances of $4,528 and $6,582

$
144,015


$
185,242Prepaid and other current assets:Value added tax

$
4,946


$
8,883Other prepaid expenses


6,362



5,982Refundable and prepaid income taxes


475



2,302Total prepaid and other current assets

$
11,783


$
17,167Other assets:Deposits

$
583


$
43Finance fees  net of amortization


4,056



8,183Other


4,215



4,488Total other assets

$
8,854


$
12,714Accrued liabilities:Accrued incentives

$
13,790


$
12,760Workers compensation


8,834



9,384Medical liabilities


2,948



2,736Interest


1,998



4,575Commissions payable


1,134



1,135Other accrued liabilities


6,995



9,085Total accrued liabilities

$
35,699


$
39,675Other long-term liabilities:Derivative liability

$
2,061


$
3,693Deferred liability


3,350



1,566Other


7,468



6,952Total other long-term liabilities

$
12,879


$
12,211  67




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   4.
    Purchased
    Intangible Assets and Goodwill  Purchased
    Intangibles
    2009


2008Beginning balance

$
26,121


$
30,731Impairment






(2,756
)Amortization


(1,367
)


(1,344
)Foreign currency impact


107



(510
)Ending balance

$
24,861


$
26,121     December 31,

2009


2008Indefinite life intangible assets

$
13,094


$
13,056Definite life intangible assets, net of accumulated amortization
    of $10,988 and $9,600


11,767



13,065Total

$
24,861


$
26,121           2010

2011

2012

2013

2014$1,344

$1,206

$1,089

$1,089

$1,089  68




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Goodwill
    2009


2008North


North








North


NorthAmerican


American








American


AmericanGlass


Other


International


Total


Glass


Other


International


TotalBeginning balance

$
152,419


$
14,317


$



$
166,736


$
153,239


$
14,317


$
9,804


$
177,360Impairment


























(9,434
)


(9,434
)Other


1,584











1,584



(820
)










(820
)Foreign currency impact


























(370
)


(370
)Ending balance

$
154,003


$
14,317


$



$
168,320


$
152,419


$
14,317


$



$
166,736       5.
    Property,
    Plant and Equipment    December 31,

2009


2008Land

$
22,632


$
23,748Buildings


89,863



88,965Machinery and equipment


438,541



444,136Furniture and fixtures


13,696



16,691Software


20,240



21,241Construction in progress


8,587



20,705Gross property, plant and equipment


593,559



615,486Less accumulated depreciation


303,546



300,639Net property, plant and equipment

$
290,013


$
314,847  69




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  and/or
      6.
    Borrowings  pay-in-kind
 70




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Interest




December 31,


December 31,Rate


Maturity Date

2009


2008Borrowings under ABL facility


Floating


December 16, 2010

$



$
34,538Senior notes


Floating(1
)

June 1, 2011


306,000



306,000PIK notes prior to October, 2009 exchange (Old PIK Notes)(2)(3)


16.00
%

December 1, 2011






148,946PIK notes after October, 2009 exchange (New PIK Notes)(3)


0.00
%

June 1, 2021


80,431



Promissory note


6.00
%

January 2010 to September 2016


1,492



1,666Notes payable


Floating


January 2010


672



3,284RMB loan contract


Floating


July 2012 to January 2014


36,675



36,675RMB working capital loan


Floating


March 2010(4)


7,335



7,335Obligations under capital leases


Floating


May 2009






302BES Euro line


Floating


December 2010 to December 2013


14,190



15,507Other debt


Floating


September 2009






630Total borrowings








446,795



554,883Less  unamortized discounts and warrants








1,749



4,626Plus  Carrying value in excess of principal on New
    PIK Notes(3)








70,193



Total borrowings  net








515,239



550,257Less  current portion of borrowings








10,515



4,401Total long-term portion of borrowings  net







$
504,724


$
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 the
    semi-annual interest. During the first three years, ending on
    June 1, 2009, interest was payable by the issuance of
    additional PIK notes.(3)
    
    On October 28, 2009, we exchanged approximately
    $160.9 million of Old PIK Notes for approximately
    $80.4 million of New PIK Notes and additional common stock
    and warrants to purchase common stock of Libbey Inc. We recorded
    the New PIK Notes at their carrying value of approximately
    $150.6 million instead of their face value of
    $80.4 million.(4)
    
    Subsequent to December 31, 2009, the terms of the RMB
    working capital loan were extended. Under the new terms, the
    loan matures in January, 2011. 71




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##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     2010

2011

2012

2013

2014

Thereafter$10,515

$309,375

$14,439

$22,552

$9,022

$80,892   ABL
    Facility
        mark-to-market
 72




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Senior
    Notes
          PIK
    Notes
  pay-in-kind
   73




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
            
    The New PIK Notes remain outstanding on the FRN
    Redemption Date, in which case we will issue to the
    Investor warrants (Series II Warrants) conveying the right
    to purchase, for $0.01 per share, an additional 10 percent
    of the Companys common stock then outstanding (on a fully
    diluted basis, subject to certain exceptions).
    The New PIK Notes remain outstanding on the 180th day, 210th day
    and/or 240th
    day after the date of issuance of the Series II Warrant
    (Series II Date), in which case we will issue to the
    Investor on the 180th, 210th
    and/or 240th
    day after the Series II Date, as applicable, additional
    warrants (Series III Warrants) conveying the right to
    purchase, for $0.01 per share, an additional 3.33 percent
    of the Companys common stock outstanding (on a fully
    diluted basis, subject to certain exception) on the
    Series II Date.   74




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  470-50, 470-60, 470-60,
    Promissory
    Note
    Notes
    Payable
    RMB
    Loan Contract
  Sub-Branch
  RMB
    Working Capital Loan
  3-year
 75




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  BES
    Euro Line
    Other
    Debt
    Fair
    Value of Borrowings
    Capital
    Resources and Liquidity
        7.
    Special
    Charges  Facility
    Closures
   76




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
              work-in-process
 77




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31, 2009


December 31, 2008North


North





North


NorthAmerican


American





American


AmericanGlass


Other


Total


Glass


Other


TotalInventory write-down

$



$
977


$
977


$
192


$
9,576


$
9,768Pension & postretirement welfare






278



278







4,170



4,170Fixed asset depreciation






705



705







261



261Included in cost of sales






1,960



1,960



192



14,007



14,199Fixed asset write-down


112



(138
)


(26
)


65



9,660



9,725Employee termination cost & other


(98
)


1,755



1,657



618



4,202



4,820Included in special charges


14



1,617



1,631



683



13,862



14,545Ineffectiveness of natural gas hedge






232



232







383



383Included in other income






232



232







383



383Total pretax charge

$
14


$
3,809


$
3,823


$
875


$
28,252


$
29,127     Reserve














ReserveBalances


Total


Cash


Inventory &





Balances atat January 1,


Charge to


(Payments)


Fixed Asset


Non-Cash


December 31,2009


Earnings


Receipts


Write Downs


Utilization


2009Inventory write-down

$



$
977


$
137


$
(1,114
)

$



$
Pension & postretirement welfare






278











(278
)


Fixed asset depreciation






705











(705
)


Fixed asset write-down






(26
)


444



(112
)






306Employee termination cost & other


4,248



1,657



(5,683
)






488



710Ineffectiveness of natural gas hedges






232











(232
)


Total

$
4,248


$
3,823


$
(5,102
)

$
(1,226
)

$
(727
)

$
1,016     Reserve














ReserveBalances


Total





Inventory &





Balances atat January 1,


Charge to


Cash


Fixed Asset


Non-Cash


December 31,2008


Earnings


Payments


Write Downs


Utilization


2008Inventory write-down

$



$
9,768


$



$
(9,768
)

$



$
Pension & postretirement welfare






4,170











(4,170
)


Fixed asset depreciation






261











(261
)


Fixed asset write-down






9,725







(9,725
)






Employee termination cost & other






4,820



(8
)






(564
)


4,248Ineffectiveness of natural gas hedges






383











(383
)


Total

$



$
29,127


$
(8
)

$
(19,493
)

$
(5,378
)

$
4,248  78




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Write-off
    of Finance Fees
    Intangible
    Asset Impairment
    Fixed
    Asset Impairment
    Summary
    of Total Special Charges
    December 31,


December 31,2009


2008Cost of sales

$
1,960


$
18,681Impairment of goodwill






9,434Special charges


1,631



17,000Other income


232



383Interest expense


2,700



Total special charges

$
6,523


$
45,498     8.
    Income
    Taxes    Year Ended December 31,

2009


2008


2007United States

$
(25,385
)

$
(79,496
)

$
(11,871
)Non-U.S.


(653
)


5,347



20,862Total (loss) earnings before tax

$
(26,038
)

$
(74,149
)

$
8,991  79




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,

2009


2008


2007Current:U.S. federal

$
11,436


$
(724
)

$
(6,768
)Non-U.S.


10,782



2,798



3,207U.S. state and local


170



181



132Total current income tax provision (benefit)


22,388



2,255



(3,429
)Deferred:U.S. federal


(16,053
)


1,855



16,752Non-U.S.


(3,570
)


2,204



(2,183
)U.S. state and local


(15
)






158Total deferred income tax (benefit) provision


(19,638
)


4,059



14,727Total:U.S. federal


(4,617
)


1,131



9,984Non-U.S.


7,212



5,002



1,024U.S. state and local


155



181



290Total income tax provision

$
2,750


$
6,314


$
11,298     December 31,

2009


2008Deferred income tax assets:Pension

$
38,558


$
31,305Nonpension postretirement benefits


24,820



22,244Other accrued liabilities


16,843



30,733Receivables


2,201



2,414Cancellation of indebtedness income


27,300



Net operating loss carry forwards


15,969



30,379Tax credits


10,143



8,862Total deferred income tax assets


135,834



125,937Deferred income tax liabilities:Property, plant and equipment


26,248



23,102Inventories


8,210



7,400Intangibles and other assets


12,172



12,920Total deferred income tax liabilities


46,630



43,422Net deferred income tax asset before valuation allowance


89,204



82,515Valuation allowance


(98,989
)


(87,442
)Net deferred income tax liability

$
(9,785
)

$
(4,927
)  80




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,

2009


2008Current deferred income tax liability

$
(3,560
)

$
(1,279
)Noncurrent deferred income tax liability


(6,225
)


(3,648
)Net deferred income tax liability

$
(9,785
)

$
(4,927
)       Non-U.S. credits. Non-U.S. credits Non-U.S. credits.
      Year Ended December 31,

2009


2008


2007Beginning balance

$
87,442


$
28,855


$
6,575Charged to provision for income taxes


8,140



37,247



18,917Charged to other comprehensive income


3,407



21,340



3,363Ending balance

$
98,989


$
87,442


$
28,855  81




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Non-U.S. entities.
    Year Ended December 31,

2009


2008


2007Statutory U.S. federal income tax rate


35.0
%


35.0
%


35.0
%Increase (decrease) in rate due to:Non-U.S.
    income tax differential


9.9



4.7



(73.2
)U.S. state and local income taxes, net of related U.S. federal
    income taxes


(0.6
)


(0.2
)


6.2U.S. federal credits






1.0



(5.9
)Permanent adjustments


(14.8
)


(2.6
)


32.1Non-U.S.
    federal credits






4.8



(69.2
)Valuation allowance


(31.3
)


(50.3
)


210.5Income tax impact pursuant to Crisa acquisition


(12.1
)






Other


3.3



(0.9
)


(9.8
)Consolidated effective income tax rate


(10.6
)%


(8.5
)%


125.7
%       December 31,

2009


2008U.S. federal

$
3,077


$
1,102Non-U.S.


(2,486
)


1,276U.S. state and local


(116
)


(76
)Total prepaid income taxes

$
475


$
2,302   non-U.S. withholding non-U.S. subsidiaries. non-U.S. operations.
   82




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2009


2008


2007Beginning balance

$
2,301


$
2,729


$
7,162Additions based on tax positions related to the current year


1,180



29



143Additions for tax positions of prior years






1,567



1,090Reductions for tax positions of prior years


(229
)


(1,020
)


(2,754
)Reductions due to lapse of statute of limitations


137



(1,004
)


(2,201
)Reductions due to settlements with tax authorities


(2,360
)






(711
)Ending balance

$
1,029


$
2,301


$
2,729       Jurisdiction

Open YearsCanada


2006-2009China


2006-2009Mexico


2004-2009Netherlands


2008-2009Portugal


2006-2009United States


2008-2009   9.
    Pension  U.S.-based U.S.-based U.S.-based non-U.S. pension
 83




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Effect
    on Operations
    U.S. Plans


Non-U.S. Plans


TotalYear Ended December 31,

2009


2008


2007


2009


2008


2007


2009


2008


2007Service cost (benefits earned during the period)

$
5,050


$
5,388


$
5,923


$
1,354


$
1,669


$
1,849


$
6,404


$
7,057


$
7,772Interest cost on projected benefit obligation


15,623



15,634



14,606



4,147



4,729



4,013



19,770



20,363



18,619Expected return on plan assets


(17,573
)


(17,567
)


(16,039
)


(2,530
)


(3,265
)


(2,750
)


(20,103
)


(20,832
)


(18,789
)Amortization of unrecognized:Prior service cost (credit)


2,242



2,381



2,086



(207
)


(212
)


(187
)


2,035



2,169



1,899Actuarial loss


960



1,308



2,140



375



293



347



1,335



1,601



2,487Transition obligations














113



142



143



113



142



143Curtailment charge






1,070























1,070



Settlement charge


3,661























3,661







Pension expense

$
9,963


$
8,214


$
8,716


$
3,252


$
3,356


$
3,415


$
13,215


$
11,570


$
12,131       Actuarial
    Assumptions
    U.S. Plans

Non-U.S. Plans2009

2008

2009

2008Discount rate


5.62% to 5.96%



6.41% to 6.48%



5.50% to 8.50%



5.70% to 8.50%Rate of compensation increase


2.25% to 4.50%



2.63% to 5.25%



2.00% to 4.30%



2.00% to 4.30%     U.S. Plans


Non-U.S. Plans2009


2008


2007


2009


2008


2007Discount rate


6.41% to 6.48%



6.16% to 6.32%



5.82% to 5.91%



5.70% to 8.50%



5.50% to 8.50%



4.50% to 8.75%Expected long-term rate of return on plan assets


8.25%



8.50%



8.75%



6.00%



6.50%



6.50%Rate of compensation increase


2.63% to 5.25%



3.00% to 6.00%



3.00% to 6.00%



2.00% to 4.30%



2.00% to 4.30%



2.00% to 3.50%      84




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          EstimatedPercentage

Effect on Annual Expense:Assumption

Point Change

2009

2010(In thousands)Discount rate


1.0 percent change


$
1,600


$
3,200Long-term rate of return on assets


1.0 percent change


$
2,200


$
2,400  85




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Projected
    Benefit Obligation (PBO) and Fair Value of Assets
    U.S. Plans


Non-U.S. Plans


TotalDecember 31,

2009


2008


2009


2008


2009


2008Change in projected benefit obligation:Projected benefit obligation, beginning of year

$
256,871


$
253,814


$
60,897


$
72,772


$
317,768


$
326,586Service cost


5,050



5,388



1,354



1,669



6,404



7,057Interest cost


15,623



15,634



4,147



4,729



19,770



20,363Plan amendments






688















688Exchange rate fluctuations










2,833



(7,897
)


2,833



(7,897
)Actuarial loss (gains)


27,910



(5,040
)


1,239



(7,089
)


29,149



(12,129
)Plan participants contributions










1,079



1,090



1,079



1,090Curtailments






(258
)














(258
)Settlements


(6,445
)














(6,445
)


Benefits paid


(20,208
)


(13,355
)


(2,348
)


(4,377
)


(22,556
)


(17,732
)Projected benefit obligation, end of year

$
278,801


$
256,871


$
69,201


$
60,897


$
348,002


$
317,768Change in fair value of plan assets:Fair value of plan assets, beginning of year

$
170,354


$
206,943


$
45,482


$
49,304


$
215,836


$
256,247Actual return on plan assets


26,540



(44,671
)


1,944



(3,362
)


28,484



(48,033
)Exchange rate fluctuations










820



(2,039
)


820



(2,039
)Employer contributions


9,244



21,437



2,838



4,866



12,082



26,303Plan participants contributions










1,079



1,090



1,079



1,090Benefits paid


(20,208
)


(13,355
)


(2,348
)


(4,377
)


(22,556
)


(17,732
)Fair value of plan assets, end of year

$
185,930


$
170,354


$
49,815


$
45,482


$
235,745


$
215,836Funded ratio


66.7
%


66.3
%


72.0
%


74.7
%


67.7
%


67.9
%Funded status and net accrued pension benefit cost

$
(92,871
)

$
(86,517
)

$
(19,386
)

$
(15,415
)

$
(112,257
)

$
(101,932
)   plan-by-plan
    U.S. Plans


Non-U.S. Plans


TotalDecember 31,

2009


2008


2009


2008


2009


2008Net actuarial loss

$
95,648


$
87,771


$
9,215


$
6,483


$
104,863


$
94,254Prior service cost


10,064



12,306



2,151



1,905



12,215



14,211Transition obligation










483



574



483



574Total cost

$
105,712


$
100,077


$
11,849


$
8,962


$
117,561


$
109,039  86




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    U.S. Plans


Non-U.S. Plans


TotalNet actuarial loss

$
3,912


$
404


$
4,316Prior service cost (credit)


2,328



(1
)


2,327Transition obligation






118



118Total cost

$
6,240


$
521


$
6,761   non-U.S. pension non-U.S. pension
    Year

U.S. Plans

Non-U.S. Plans

Total2010

$
16,735


$
2,684


$
19,4192011

$
17,358


$
2,935


$
20,2932012

$
18,151


$
2,754


$
20,9052013

$
19,120


$
3,026


$
22,1462014

$
19,684


$
3,612


$
23,2962015-2019

$
106,955


$
25,296


$
132,251   Accumulated
    Benefit Obligation in Excess of Plan Assets
    December 31, 2009

U.S. Plans

Non-U.S. Plans

TotalProjected benefit obligation

$
278,801


$
28,839


$
307,640Accumulated benefit obligation

$
274,266


$
22,531


$
296,797Fair value of plan assets

$
185,930


$



$
185,930   December 31, 2008

U.S. Plans

Non-U.S. Plans

TotalProjected benefit obligation

$
256,871


$
24,767


$
281,638Accumulated benefit obligation

$
252,228


$
20,832


$
273,060Fair value of plan assets

$
170,354


$



$
170,354  87




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Plan
    Asset Allocation
    TargetAllocation


Percentage of Plan Assets at Year EndU.S. Plans Asset Category

2010


2009


2008Equity securities


45
%


48
%


44
%Debt securities


35
%


34
%


37
%Real estate


5
%


5
%


4
%Other


15
%


13
%


15
%Total


100
%


100
%


100
%     TargetAllocation


Percentage of Plan Assets at Year EndNon-U.S. Plans Asset Category

2010


2009


2008Equity securities


19
%


19
%


24
%Debt securities


65
%


64
%


58
%Real estate


11
%


11
%


12
%Other


5
%


6
%


6
%Total


100
%


100
%


100
%      88




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Investments

Level One


Level Two


Level Three


TotalCash & cash equivalents

$



$
957


$



$
957Real Estate






232



5,401



5,633Equities






109,290







109,290Fixed income






94,179







94,179Hedge funds










25,686



25,686Total

$



$
204,658


$
31,087


$
235,745     Beginning balance of assets classified as Level 3 as of
    December 31, 2008

$
34,056Change in unrealized appreciation (depreciation)


3,721Net purchases (sales)


(6,690
)Ending balance of assets classified as Level 3 as of
    December 31, 2009

$
31,087   10.
    Nonpension
    Postretirement Benefits  U.S.-based non-U.S. nonpension
 89




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Effect
    on Operations
    U.S. Plans


Non- U.S. Plans


TotalYear Ended December 31,

2009


2008


2007


2009


2008


2007


2009


2008


2007Service cost (benefits earned during the period)

$
1,333


$
1,099


$
795


$
1


$
1


$
1


$
1,334


$
1,100


$
796Interest cost on projected benefit obligation


3,783



2,979



2,245



112



129



94



3,895



3,108



2,339Amortization of unrecognized:Prior service cost (credit)


(418
)


2,967



(884
)














(418
)


2,967



(884
)(Gain) loss


764



239



79



(34
)


(33
)


(51
)


730



206



28Curtailment (credit) charge


(94
)






















(94
)






Nonpension postretirement benefit expense

$
5,368


$
7,284


$
2,235


$
79


$
97


$
44


$
5,447


$
7,381


$
2,279     Actuarial
    Assumptions
    U.S. Plans

Non-U.S. Plans2009

2008

2009

2008Discount rate


5.54
%


6.36
%


5.42
%


5.89
%     U.S. Plans

Non-U.S. Plans2009

2008

2007

2009

2008

2007Discount rate


6.36
%


6.16
%


5.77
%


5.89
%


5.14
%


4.87
%     U.S. Plans

Non-U.S. Plans2009

2008

2009

2008Initial health care trend


8.00
%


7.50
%


8.00
%


7.50
%Ultimate health care trend


5.00
%


5.00
%


5.00
%


5.00
%Years to reach ultimate trend rate


6



5



6



5    90




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      
    A 1.0 percent change in the health care trend rate would
    not have a material impact upon the nonpension postretirement
    expense.
    A 1.0 percent change in the discount rate would change the
    nonpension postretirement expense by $0.4 million.  Accumulated
    Postretirement Benefit Obligation
    U.S. Plans


Non-U.S. Plans


TotalDecember 31,

2009


2008


2009


2008


2009


2008Change in accumulated nonpension postretirement benefit
    obligation:Benefit obligation, beginning of year

$
59,854


$
46,878


$
2,027


$
2,317


$
61,881


$
49,195Service cost


1,333



1,099



1



1



1,334



1,100Interest cost


3,783



2,979



112



129



3,895



3,108Plan participants contributions


1,416



1,092







70



1,416



1,162Plan amendments






3,429















3,429Actuarial loss


4,958



8,292



76



240



5,034



8,532Exchange rate fluctuations










333



(560
)


333



(560
)Curtailments


(7
)














(7
)


Benefits paid


(4,545
)


(3,915
)


(198
)


(170
)


(4,743
)


(4,085
)Benefit obligation, end of year

$
66,792


$
59,854


$
2,351


$
2,027


$
69,143


$
61,881Funded status and accrued benefit cost

$
(66,792
)

$
(59,854
)

$
(2,351
)

$
(2,027
)

$
(69,143
)

$
(61,881
)       U.S. Plans


Non-U.S. Plans


TotalDecember 31,

2009


2008


2009


2008


2009


2008Net actuarial loss (gain)

$
19,534


$
15,347


$
(566
)

$
(597
)

$
18,968


$
14,750Prior service cost


2,602



2,091











2,602



2,091Total cost (credit)

$
22,136


$
17,438


$
(566
)

$
(597
)

$
21,570


$
16,841  91




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    U.S. Plans


Non U.S. Plans


TotalNet actuarial loss (gain)

$
944


$
(22
)

$
922Prior service credit


(10
)






(10
)Total cost (credit )

$
934


$
(22
)

$
912     Fiscal Year

U.S. Plans

Non U.S. Plans

Total2010

$
4,198


$
165


$
4,3632011

$
4,679


$
168


$
4,8472012

$
5,142


$
168


$
5,3102013

$
5,505


$
169


$
5,6742014

$
5,826


$
168


$
5,9942015-2019

$
28,518


$
791


$
29,309     11.
    Net
    Income per Share of Common Stock    Year Ended December 31,

2009


2008


2007Numerator for earnings per share  net (loss) income
    that is available to common shareholders

$
(28,788
)

$
(80,463
)

$
(2,307
)Denominator for basic earnings per share 
    weighted-average shares outstanding


15,149,013



14,671,500



14,472,011Effect of dilutive securities(1)










Denominator for diluted earnings per share  adjusted
    weighted-average shares and assumed conversions


15,149,013



14,671,500



14,472,011Basic loss per share

$
(1.90
)

$
(5.48
)

$
(0.16
)Diluted loss per share

$
(1.90
)

$
(5.48
)

$
(0.16
)     (1)
    
    The effect of employee stock options, warrants, restricted stock
    units and performance shares, 733,908 shares for the year
    ended December 31, 2009, were anti-dilutive and thus not
    included in the earnings per share calculation. The effect of
    employee stock options, warrants, restricted stock units,
    performance shares and the employee stock purchase plan, (ESPP),
    237,802 and 283,009 shares for the years ended
    December 31, 2008 and 2007, respectively, were
    anti-dilutive and thus not included in the earnings per share
    calculation. These amounts would have been dilutive if not for
    the net loss. 92




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   in-the-money in-the-money
  12.
    Employee
    Stock Benefit Plans    505-50, SFAS No. 123-R, 505-50
  Equity
    Participation Plan Program Description
  SFAS No. 123-R)
  Non-Qualified
    Stock Option and Employee Stock Purchase Plan (ESPP)
    Information
     93




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        2009


2008


2007Stock option grants:Risk-free interest


2.78
%


3.30
%


4.64
%Expected term


6.3 years



6.3 years



6.1 yearsExpected volatility


74.00
%


48.20
%


47.40
%Dividend yield


0.00
%


0.65
%


0.71
%Employee Stock Purchase Plan:Risk-free interest


Not Applicable



2.18
%


4.91
%Expected term


Not Applicable



12 months



12 monthsExpected volatility


Not Applicable



57.30
%


60.04
%Dividend yield


Not Applicable



0.89
%


0.43
%   
    The risk-free interest rate is based on the U.S. Treasury
    yield curve at the time of grant and has a term equal to the
    expected life.
    The expected term represents the period of time the options are
    expected to be outstanding. Additionally, we use historical data
    to estimate option exercises and employee forfeitures. The
    Company uses the Simplified Method defined by the SEC Staff
    Accounting Bulletin No. 107, Share-Based
    Payment (SAB 107), to estimate the expected term of
    the option, representing the period of time that options granted
    are expected to be outstanding.
    The expected volatility was developed based on historic stock
    prices commensurate with the expected term of the option. We use
    projected data for expected volatility of our stock options
    based on the average of daily, weekly and monthly historical
    volatilities of our stock price over the expected term of the
    option and other economic data trended into future years.
    The dividend yield is calculated as the ratio based on our most
    recent historical dividend payments per share of common stock at
    the grant date to the stock price on the date of grant. 94




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Weighted-AverageWeighted-Average


Remaining


AggregateExercise Price per


Contractual Life


IntrinsicOptions

Shares


Share


(In years)


ValueOutstanding balance at December 31, 2006


1,411,626


$
27.43



5


$
100Granted


284,132



14.60Exercised


(7,920
)


11.11Canceled


(167,542
)


31.26Outstanding balance at December 31, 2007


1,520,296



24.67



5


$
1,181Granted


147,976



15.08Exercised






Canceled


(194,295
)


34.98Outstanding balance at December 31, 2008


1,473,977



22.37



5


$
Granted


346,021



1.09Exercised






Canceled


(175,831
)


29.05Outstanding balance at December 31, 2009


1,644,167


$
17.18



6


$
2,258Exercisable at December 31, 2009


1,070,798


$
22.48






$
112   SFAS No. 123-R)
     95




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted-AverageShares


Value (per Share)Nonvested at January 1, 2007


95,836


$
3.82Granted


284,132


$
7.22Vested


(34,172
)

$
3.75Canceled


(8,786
)

$
4.57Nonvested at December 31, 2007


337,010


$
6.67Granted


147,976


$
7.34Vested


(87,536
)

$
5.54Canceled





$
Nonvested at December 31, 2008


397,450


$
7.17Granted


346,021


$
0.74Vested


(159,221
)

$
5.70Canceled


(10,881
)

$
5.13Nonvested at December 31, 2009


573,369


$
3.74   Performance
    Share Information
       96




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Performance Shares

SharesOutstanding balance at January 1, 2007


71,139Granted


71,644Issued


(29,185
)Canceled


Outstanding balance at December 31, 2007


113,598Granted


80,368Issued


(14,626
)Canceled


Outstanding balance at December 31, 2008


179,340Granted


8,717Issued


(13,896
)Canceled


(2,300
)Outstanding balance at December 31, 2009


171,861       Stock
    and Restricted Stock Unit Information
     97




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Restricted Stock Units

SharesOutstanding balance at January 1, 2007


Granted


190,304Awarded


(20,146
)Canceled


Outstanding balance at January 1, 2008


170,158Granted


100,725Awarded


(67,972
)Canceled


(300
)Outstanding balance at December 31, 2008


202,611Granted


260,271Awarded


(170,154
)Canceled


Outstanding balance at December 31, 2009


292,728     Employee
    401(k) Plan Retirement Fund and Non-Qualified Deferred Executive
    Compensation Plans
      catch-up catch-up
 98




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        13.
    Derivatives         99




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Notional
    Amounts
    Fair
    Values
    Liability Derivatives:December 31, 2009


December 31, 2008Derivatives Designated as

Balance




BalanceHedging Instruments

Sheet

Fair


Sheet

FairUnder FASB ASC 815:

Location

Value


Location

ValueInterest rate contracts

Derivative liability

$



Derivative liability

$
6,761Natural gas contracts

Derivative liability


3,129


Derivative liability


10,908Natural gas contracts

Other long-term liabilities


1,982


Other long-term liabilities


3,500Total designated




5,111





21,169Derivatives undesignated as hedging instruments
    under FASB ASC 815:Natural gas contracts

Derivative liability


217


Derivative liability


267Natural gas contracts

Other long-term liabilities


79


Other long-term liabilities


193Total undesignated




296





460Total



$
5,407




$
21,629   Change
    in value of derivatives
   100




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Amount of Derivative Gain/(loss)Recognized in OCI (Effective Portion)Year Ended December 31,

2009


2008


2007Derivatives in Cash Flow Hedging relationships:Interest rate contracts

$
6,322


$
(790
)

$
(6,501
)Natural gas contracts


(8,976
)


(15,447
)


(3,656
)Total


(2,654
)


(16,237
)


(10,157
)   Gain/(Loss) Reclassified from Accumulated OtherYear Ended December 31,

Comprehensive Income (Loss) to Consolidated Statement of
    Operations (Effective Portion)Derivative:

Location:

2009


2008


2007Interest rate contracts

Interest expense

$
6,316


$
3,263


$
22Natural gas contracts

Cost of sales


(18,269
)


(2,431
)


(6,027
)Total impact on net income (loss)



$
(11,953
)

$
832


$
(6,005
)       Year Ended December 31,

Gain (Loss) Recognized in Income (Ineffective Portion and
    Amount Excluded from Effectiveness Testing)Derivative:

Location:

2009

2008

2007Natural gas contracts

Other income

$
(155
)

$
(461
)

$
423Total



$
(155
)

$
(461
)

$
423    101




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,Derivative:

Location:

2009


2008


2007Currency contracts

Other income

$



$
(359
)

$
369Total



$



$
(359
)

$
369     14.
    Comprehensive
    Income (Loss)    Year Ended December 31,

2009


2008


2007Net loss

$
(28,788
)

$
(80,463
)

$
(2,307
)Effect of derivatives, net of tax (below)


12,440



(10,300
)


(3,224
)Minimum pension liability and intangible pension asset, net of
    tax provision of $227, $282 and $0


(13,479
)


(58,607
)


(2,956
)Effect of exchange rate fluctuation


1,101



(4,402
)


9,712Total comprehensive (loss) income

$
(28,726
)

$
(153,772
)

$
1,225     December 31,

2009


2008


2007Minimum pension liability and intangible pension asset

$
(116,886
)

$
(103,407
)

$
(44,800
)Derivatives


(4,170
)


(16,610
)


(6,310
)Exchange rate fluctuation


5,332



4,231



8,633Total

$
(115,724
)

$
(115,786
)

$
(42,477
)     Year Ended December 31,

2009


2008


2007Change in fair value of derivative instruments

$
15,613


$
(13,690
)

$
(3,224
)Less: Income tax provision (benefit)


(3,173
)


3,390



Other comprehensive loss related to derivatives

$
12,440


$
(10,300
)

$
(3,224
)     December 31,

2009


2008


2007Balance at beginning of year

$
(16,610
)

$
(6,310
)

$
(3,086
)Current year impact of changes in value (net of tax):Rate agreements


6,322



(1,077
)


(6,423
)Natural gas


6,118



(9,223
)


3,199Subtotal


12,440



(10,300
)


(3,224
)Balance at end of year

$
(4,170
)

$
(16,610
)

$
(6,310
)  102




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   15.
    Fair
    Value    
    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 December 31, 2009Level 1

Level 2

Level 3

TotalCommodity futures natural gas contracts

$



$
(5,407
)

$



$
(5,407
)Total derivative liability

$



$
(5,407
)

$



$
(5,407
)   Fair Value at December 31, 2008Level 1


Level 2


Level 3


TotalCommodity futures natural gas contracts

$



$
(14,868
)

$



$
(14,868
)Interest rate protection agreements

$



$
(6,761
)

$



$
(6,761
)Total derivative liability

$



$
(21,629
)

$



$
(21,629
)      103




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   16.
    Operating
    Leases      2015 and2010

2011

2012

2013

2014

Thereafter$17,370

$14,920

$12,007

$10,587

$9,520

$53,347   17.
    Other
    Income    Year Ended December 31,

2009


2008


2007Gain on sales of land at Syracuse and Royal Leerdam

$



$



$
5,457Gain on currency translation


2,766



668



1,962Hedge ineffectiveness(1)


(155
)


(461
)


423Other non-operating income


1,442



912



936Total other income

$
4,053


$
1,119


$
8,778    (1)
    
    Includes expense of $0.2 million and $0.4 million related to gas
    hedges at Syracuse China in 2009 and 2008, respectively. See
    Note 7.  18.
    Segments    
    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. 104




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     December 31,

2009


2008


2007Net sales:North American Glass

$
522,575


$
554,128


$
568,495North American Other


87,041



111,029



121,217International


145,023



153,532



136,727Eliminations


(6,004
)


(8,482
)


(12,279
)Consolidated

$
748,635


$
810,207


$
814,160EBIT:North American Glass

$
33,727


$
25,495


$
54,492North American Other


9,802



(17,696
)


15,670International


(2,862
)


(12,228
)


4,717Consolidated

$
40,667


$
(4,429
)

$
74,879Special charges (excluding write-off of financing fees) (see
    note 7):North American Glass

$
14


$
5,356


$
North American Other


3,809



28,252



International






11,890



Consolidated

$
3,823


$
45,498


$
Depreciation & amortization:North American Glass

$
24,806


$
26,004


$
25,558North American Other


2,052



3,123



3,328International


16,308



15,303



12,686Consolidated

$
43,166


$
44,430


$
41,572Capital expenditures:North American Glass

$
10,317


$
21,170


$
25,711North American Other


339



611



1,474International


6,349



23,936



15,936Consolidated

$
17,005


$
45,717


$
43,121Total assets:North American Glass

$
856,711


$
840,403


$
927,431North American Other


53,029



54,089



83,064International


436,594



429,749



443,132Eliminations


(551,521
)


(502,687
)


(554,156
)Consolidated

$
794,813


$
821,554


$
899,471Reconciliation of EBIT to net loss:Segment EBIT

$
40,667


$
(4,429
)

$
74,879Interest expense


(66,705
)


(69,720
)


(65,888
)Income taxes


(2,750
)


(6,314
)


(11,298
)Net loss

$
(28,788
)

$
(80,463
)

$
(2,307
)    105




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    United States


Mexico


All Other


Eliminations


Consolidated2009Net sales:Customers

$
435,500


$
104,254


$
208,881






$
748,635Intercompany


42,832



6,958



7,927


$
(57,717
)


Total net sales

$
478,332


$
111,212


$
216,808


$
(57,717
)

$
748,635Long-lived assets

$
126,371


$
195,648


$
136,314


$



$
458,3332008Net sales:Customers

$
451,794


$
131,383


$
227,030






$
810,207Intercompany


50,825



9,402



3,555


$
(63,782
)


Total net sales

$
502,619


$
140,785


$
230,585


$
(63,782
)

$
810,207Long-lived assets

$
136,934


$
199,583


$
145,066


$



$
481,5832007Net sales:Customers

$
459,294


$
123,966


$
230,900






$
814,160Intercompany


52,617



8,774



2,925


$
(64,316
)


Total net sales

$
511,911


$
132,740


$
233,825


$
(64,316
)

$
814,160Long-lived assets

$
158,187


$
202,924


$
143,551


$



$
504,662   19.
    Condensed
    Consolidated Guarantor Financial Statements     106




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Operations
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2009

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net sales

$



$
385,467


$
87,041


$
325,175


$
(49,048
)

$
748,635Freight billed to customers






601



839



165







1,605Total revenues






386,068



87,880



325,340



(49,048
)


750,240Cost of sales






310,031



68,505



287,607



(49,048
)


617,095Gross profit






76,037



19,375



37,733







133,145Selling, general and administrative expenses






53,906



7,954



33,040







94,900Special charges






14



1,617











1,631Income (loss) from operations






22,117



9,804



4,693







36,614Other income (expense)






3,533



(138
)


658







4,053Earnings (loss) before interest and income taxes






25,650



9,666



5,351







40,667Interest expense






60,798



1



5,906







66,705Earnings (loss) before income taxes






(35,148
)


9,665



(555
)






(26,038
)Provision (benefit) for income taxes






(7,275
)


1,666



8,359







2,750Net income (loss)






(27,873
)


7,999



(8,914
)






(28,788
)Equity in net income (loss) of subsidiaries


(28,788
)


(915
)










29,703



Net income (loss)

$
(28,788
)

$
(28,788
)

$
7,999


$
(8,914
)

$
29,703


$
(28,788
)The following represents the total
    special charges included in the above Statement of Operations
    (see note 7):Special charges included in:Cost of sales

$



$



$
1,960


$



$



$
1,960Special charges






14



1,617











1,631Other income (expense)










(232
)










(232
)Interest expense






2,700















2,700Total pretax special charges

$



$
2,714


$
3,809


$



$



$
6,523Special charges net of tax

$



$
2,714


$
3,809


$



$



$
6,523  107




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Operations
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2008

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net sales

$



$
392,738


$
111,029


$
363,625


$
(57,185
)

$
810,207Freight billed to customers






743



1,220



459







2,422Total revenues






393,481



112,249



364,084



(57,185
)


812,629Cost of sales






345,669



104,683



310,125



(57,185
)


703,292Gross profit






47,812



7,566



53,959







109,337Selling, general and administrative expenses






44,269



11,265



32,917







88,451Special charges






683



13,861



11,890







26,434Income (loss) from operations






2,860



(17,560
)


9,152







(5,548
)Other income (expense)






(2,332
)


(504
)


3,955







1,119Earnings (loss) before interest and income taxes






528



(18,064
)


13,107







(4,429
)Interest expense






62,730



1



6,989







69,720Earnings (loss) before income taxes






(62,202
)


(18,065
)


6,118







(74,149
)Provision (benefit) for income taxes






(7,380
)


9,284



4,410







6,314Net income (loss)






(54,822
)


(27,349
)


1,708







(80,463
)Equity in net income (loss) of subsidiaries


(80,463
)


(25,641
)










106,104



Net income (loss)

$
(80,463
)

$
(80,463
)

$
(27,349
)

$
1,708


$
106,104


$
(80,463
)The following represents the total
    special charges included in the above Statement of Operations
    (see note 7):Special charges included in:Cost of sales

$



$
3,795


$
14,007


$
879


$



$
18,681Special charges






683



13,861



11,890







26,434Other income (expense)










(383
)










(383
)Total pretax special charges

$



$
4,478


$
28,251


$
12,769


$



$
45,498Special charges net of tax

$



$
4,478


$
28,251


$
12,523


$



$
45,252  108




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Operations
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2007

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net sales

$



$
409,788


$
121,217


$
341,799


$
(58,644
)

$
814,160Freight billed to customers






566



1,341



300







2,207Total revenues






410,354



122,558



342,099



(58,644
)


816,367Cost of sales






335,575



96,934



284,833



(58,644
)


658,698Gross profit






74,779



25,624



57,266







157,669Selling, general and administrative expenses






46,551



11,442



33,575







91,568Income (loss) from operations






28,228



14,182



23,691







66,101Other income (expense)






4,284



1,334



3,160







8,778Earnings (loss) before interest and income taxes






32,512



15,516



26,851







74,879Interest expense






60,090







5,798







65,888Earnings (loss) before income taxes






(27,578
)


15,516



21,053







8,991Provision (benefit) for income taxes






(34,654
)


19,497



26,455







11,298Net income (loss)






7,076



(3,981
)


(5,402
)






(2,307
)Equity in net income (loss) of subsidiaries


(2,307
)


(9,383
)










11,690



Net income (loss)

$
(2,307
)

$
(2,307
)

$
(3,981
)

$
(5,402
)

$
11,690


$
(2,307
)  109




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Balance Sheet
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorDecember 31, 2009

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Cash and equivalents

$



$
37,386


$
419


$
17,284


$



$
55,089Accounts receivable  net






36,173



5,125



41,126







82,424Inventories  net






48,493



18,024



77,498







144,015Other current assets






13,840



946



12,382



(15,385
)


11,783Total current assets






135,892



24,514



148,290



(15,385
)


293,311Other non-current assets






(4,912
)


3,535



38,819



(19,134
)


18,308Investments in and advances to subsidiaries


(66,907
)


403,403



276,755



140,289



(753,540
)


Goodwill and purchased intangible assets  net






26,833



15,771



150,577







193,181Total other assets


(66,907
)


425,324



296,061



329,685



(772,674
)


211,489Property, plant and equipment  net






79,773



5,990



204,250







290,013Total assets

$
(66,907
)

$
640,989


$
326,565


$
682,225


$
(788,059
)

$
794,813Accounts payable

$



$
13,503


$
3,289


$
42,046


$



$
58,838Accrued and other current liabilities






48,440



9,375



35,064



(8,848
)


84,031Notes payable and long-term debt due within one year






215







10,300







10,515Total current liabilities






62,158



12,664



87,410



(8,848
)


153,384Long-term debt






456,152







48,572







504,724Other long-term liabilities






151,754



15,618



61,911



(25,671
)


203,612Total liabilities






670,064



28,282



197,893



(34,519
)


861,720Total shareholders equity


(66,907
)


(29,075
)


298,283



484,332



(753,540
)


(66,907
)Total liabilities and shareholders equity

$
(66,907
)

$
640,989


$
326,565


$
682,225


$
(788,059
)

$
794,813  110




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Balance Sheet
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorDecember 31, 2008

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Cash and equivalents

$



$
6,453


$
413


$
6,438


$



$
13,304Accounts receivable  net






32,789



6,076



37,207







76,072Inventories  net






58,924



26,892



99,426







185,242Other current assets






4,731



316



12,120







17,167Total current assets






102,897



33,697



155,191







291,785Other non-current assets






9,462



43



12,560







22,065Investments 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







192,857Total other assets


(57,889
)


444,490



288,584



304,880



(765,143
)


214,922Property, plant and equipment  net






88,628



7,697



218,522







314,847Total assets

$
(57,889
)

$
636,015


$
329,978


$
678,593


$
(765,143
)

$
821,554Accounts payable

$



$
9,370


$
2,794


$
42,264


$



$
54,428Accrued and other current liabilities






36,589



19,700



35,908







92,197Notes payable and long-term debt due within one year






215







4,186







4,401Total current liabilities






46,174



22,494



82,358







151,026Long-term debt






451,772







94,084







545,856Other long-term liabilities






140,936



14,185



27,440







182,561Total liabilities






638,882



36,679



203,882







879,443Total 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  111




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2009

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net income (loss)

$
(28,788
)

$
(28,788
)

$
7,999


$
(8,914
)

$
29,703


$
(28,788
)Depreciation and amortization






14,678



2,052



26,436







43,166Other operating activities


28,788



55,517



(9,711
)


42,879



(29,703
)


87,770Net cash provided by (used in) operating activities






41,407



340



60,401







102,148Additions to property, plant & equipment






(6,189
)


(339
)


(10,477
)






(17,005
)Other investing activities






60



5



200







265Net cash provided by (used in) investing activities






(6,129
)


(334
)


(10,277
)






(16,740
)Net borrowings






(174
)






(39,220
)






(39,394
)Other financing activities






(4,171
)














(4,171
)Net cash provided by (used in) financing activities






(4,345
)






(39,220
)






(43,565
)Exchange effect on cash














(58
)






(58
)Increase (decrease) in cash






30,933



6



10,846







41,785Cash at beginning of period






6,453



413



6,438







13,304Cash at end of period

$



$
37,386


$
419


$
17,284


$



$
55,089  112




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2008

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net income (loss)

$
(80,463
)

$
(80,463
)

$
(27,349
)

$
1,708


$
106,104


$
(80,463
)Depreciation and amortization






14,904



3,123



26,403







44,430Other operating activities


80,463



65,694



24,718



(29,778
)


(106,104
)


34,993Net cash provided by (used in) operating activities






135



492



(1,667
)






(1,040
)Additions to property, plant & equipment






(13,003
)


(611
)


(32,103
)






(45,717
)Other investing activities






117















117Net cash provided by (used in) investing activities






(12,886
)


(611
)


(32,103
)






(45,600
)Net borrowings (repayments)






(164
)






27,458







27,294Other financing activities






(1,466
)














(1,466
)Net cash provided by (used in) financing activities






(1,630
)






27,458







25,828Exchange effect on cash














(2,423
)






(2,423
)Increase (decrease) in cash






(14,381
)


(119
)


(8,735
)






(23,235
)Cash at beginning of period






20,834



532



15,173







36,539Cash at end of period

$



$
6,453


$
413


$
6,438


$



$
13,304  113




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Libbey
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
  Libbey


Libbey





Non-Inc.


Glass


Subsidiary


GuarantorYear Ended December 31, 2007

(Parent)


(Issuer)


Guarantors


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Net income (loss)

$
(2,307
)

$
(2,307
)

$
(3,981
)

$
(5,402
)

$
11,690


$
(2,307
)Depreciation and amortization






15,144



3,328



23,100







41,572Other operating activities


2,307



605



649



20,321



(11,690
)


12,192Net cash provided by (used in) operating activities






13,442



(4
)


38,019







51,457Additions to property, plant & equipment






(10,508
)


(1,474
)


(31,139
)






(43,121
)Other investing activities






(3,237
)


1,501



9,949







8,213Net cash (used in) investing activities






(13,745
)


27



(21,190
)






(34,908
)Net borrowings






(155
)






(20,695
)






(20,850
)Other financing activities






(1,557
)














(1,557
)Net cash provided by (used in) financing activities






(1,712
)






(20,695
)






(22,407
)Exchange effect on cash














631







631Increase (decrease) in cash






(2,015
)


23



(3,235
)






(5,227
)Cash at beginning of period






22,849



509



18,408







41,766Cash at end of period

$



$
20,834


$
532


$
15,173


$



$
36,539   20.
    Subsequent
    Events    
    the entry into an amended and restated credit agreement with
    respect to our Old ABL Facility;
    the issuance of $400.0 million in aggregate principal
    amount of 10 percent Senior Secured Notes of Libbey Glass
    due 2015 (New Notes);
    the repurchase and cancellation of all of Libbey Glasss
    then outstanding $306.0 million in aggregate principal
    amount of Senior Notes; and
    the redemption of all of Libbey Glasss then outstanding
    $80.4 million in aggregate principal amount 16 percent
    New PIK Notes.     114




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Actual


ProformaDecember 31,


December 31,Interest Rate


Maturity Date

2009


2009Borrowings under Old ABL Facility


Floating


December 16, 2010

$



$
Borrowings under the New ABL Facility


Floating


April 8, 2014






Senior Notes


Floating


December 1, 2011


306,000



New Notes


10.0
%

February 15, 2015






400,000New PIK Notes(1)


0.0
%

June 1, 2021


80,431



Promissory note


6.0
%

January 2010 to September 2016


1,492



1,492Notes payable


Floating


January 2010


672



672RMB loan contract


Floating


July 2012 to January 2014


36,675



36,675RMB working capital loan


Floating


March 2010(2)


7,335



7,335BES Euro line


Floating


December 2010 to December 2013


14,190



14,190Total borrowings








446,795



460,364Less  unamortized discounts and warrants








1,749



7,672Plus  carrying value in excess of principalon New PIK Notes(1)








70,193



Total borrowings  net








515,239



452,692Less  current portion of borrowings








10,515



10,515Total long-term portion of borrowings  net







$
504,724


$
442,177     (1)
    
    On October 28, 2009, we exchanged approximately
    $160.9 million of Old PIK Notes for approximately
    $80.4 million of New PIK Notes and additional common stock
    and warrants to purchase common stock of Libbey Inc. Under U.S.
    GAAP, we are required to record the New PIK Notes at their
    carrying value of approximately $150.6 million instead of
    their face value of $80.4 million.(2)
    
    On February 25, 2010, the terms of the RMB working capital
    loan were extended. Under the new terms, the loan matures in
    January, 2011.    2010

2011

2012

2013

2014

Thereafter$10,515

$309,375

$14,439

$22,552

$9,022

$80,892     2010

2011

2012

2013

2014

Thereafter$3,180

$10,710

$14,439

$22,552

$9,022

$400,461   Amended
    and Restated Credit Agreement
   115




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      
    a first-priority security interest in substantially all of the
    existing and future real and personal property (including
    without limitation tangible and intangible assets) of Libbey
    Glass and its domestic subsidiaries (other than certain real
    property and equipment located in the United States and certain
    general intangibles, instruments, books and records and
    supporting obligations related to such real property and
    equipment, and certain proceeds of the foregoing) (the
    Credit Agreement Priority Collateral);
    a first-priority security interest in:  
    100 percent of the stock of Libbey Glass and
    100 percent of the stock of substantially all of Libbey
    Glass present and future direct and indirect domestic
    subsidiaries;
    100 percent of the non-voting stock of substantially all of
    Libbey Glass first-tier present and future foreign
    subsidiaries; and
    65 percent of the voting stock of substantially all of
    Libbey Glass first-tier present and future foreign
    subsidiaries;  
    a first priority security interest in substantially all proceeds
    and products of the property and assets described above; and
    a second-priority security interest in substantially all of the
    owned real property, equipment and fixtures in the United States
    of Libbey Glass and its domestic subsidiaries, subject to
    certain exceptions and permitted liens (the New Notes
    Priority Collateral).    
    a first-priority lien on substantially all of the existing and
    future real and personal property (including without limitation
    all of the tangible and intangible property) of Libbey Europe
    and its Dutch subsidiaries; and
    a first-priority security interest in:  
    100 percent of the stock of Libbey Europe and
    100 percent of the stock of substantially all of the Dutch
    subsidiaries; and
    100 percent (or a lesser percentage to the extent a
    security interest in such shares would cause a material tax
    cost, but in no case less than 65 percent) of the
    outstanding stock issued by the first tier foreign subsidiaries
    of Libbey Europe and its Dutch subsidiaries.   116




---



##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  New
    Notes
      
    incur or guarantee additional indebtedness;
    pay dividends, make certain investments or other restricted
    payments;
    create liens;
    enter into affiliate transactions;
    merge or consolidate, or otherwise dispose of all or
    substantially all the assets of Libbey Glass and the
    Guarantors; and
    transfer or sell assets.        Intercreditor
    Agreement
    Termination
    of Indenture Governing the Senior Notes
   117




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##### Table of Contents



LIBBEY
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Termination
    of Indenture Governing the New PIK Notes
   118




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##### Table of Contents



Selected
    Quarterly Financial Data (unaudited)    First Quarter


Second Quarter


Third Quarter


Fourth Quarter2009


2008


2009


2008


2009


2008


2009


2008(Dollars in thousands)Net sales

$
157,853


$
187,276


$
195,826


$
224,828


$
186,878


$
211,536


$
208,078


$
186,567Gross profit

$
10,716


$
30,337


$
34,283


$
42,168


$
42,960


$
37,934


$
45,186


$
(1,102
)Gross profit margin


6.8
%


16.2
%


17.5
%


18.8
%


23.0
%


17.9
%


21.7
%


(0.6
)%Selling, general & administrative expenses

$
22,374


$
20,859


$
22,514


$
23,451


$
24,811


$
23,377


$
25,201


$
20,764Special charges

$
396


$



$
278


$



$
300


$



$
657


$
26,434Income (loss) from operations (IFO)

$
(12,054
)

$
9,478


$
11,491


$
18,717


$
17,849


$
14,557


$
19,328


$
(48,300
)IFO margin


(7.6
)%


5.1
%


5.9
%


8.3
%


9.6
%


6.9
%


9.3
%


(25.9
)%Earnings (loss) before interest and income taxes (EBIT)

$
(12,091
)

$
10,231


$
14,249


$
19,303


$
20,552


$
13,557


$
17,957


$
(47,520
)EBIT margin


(7.7
)%


5.5
%


7.3
%


8.6
%


11.0
%


6.4
%


8.6
%


(25.5
)%Earnings before interest, taxes, depreciation and amortization
    (EBITDA)

$
(363
)

$
21,527


$
24,767


$
30,541


$
31,181


$
24,456


$
28,248


$
(36,523
)EBITDA margin


(0.2
)%


11.5
%


12.6
%


13.6
%


16.7
%


11.6
%


13.6
%


(19.6
)%Net income (loss)

$
(27,893
)

$
(3,477
)

$
2,664


$
(2,119
)

$
3,533


$
(5,958
)

$
(7,092
)

$
(68,909
)Net income margin


(17.7
)%


(1.9
)%


1.4
%


(0.9
)%


1.9
%


(2.8
)%


(3.4
)%


(36.9
)%Diluted earnings (loss) per share

$
(1.89
)

$
(0.24
)

$
0.18


$
(0.14
)

$
0.23


$
(0.40
)

$
(0.45
)

$
(4.70
)Accounts receivable - net

$
74,555


$
95,096


$
91,252


$
111,849


$
91,119


$
102,781


$
82,424


$
76,072DSO


34.9



42.2



44.3



48.6



45.7



44.2



40.2



34.3Inventories  net

$
169,426


$
208,180


$
145,798


$
202,464


$
153,523


$
204,485


$
144,015


$
185,242DIO


79.2



92.5



70.8



88.0



77.1



87.9



70.2



83.5Accounts payable

$
50,896


$
66,080


$
54,485


$
70,246


$
52,087


$
58,468


$
58,838


$
54,428DPO


23.8



29.4



26.5



30.5



26.1



25.1



28.7



24.5Working capital

$
193,085


$
237,196


$
182,565


$
244,067


$
192,555


$
248,798


$
167,601


$
206,886DWC


90.3



105.3



88.6



106.1



96.7



107.0



81.7



93.3Percent of net sales


24.7
%


28.9
%


24.3
%


29.1
%


26.5
%


29.3
%


22.4
%


25.5
%Net cash provided by (used in) operating activities

$
14,384


$
(28,139
)

$
24,706


$
5,080


$
26,639


$
13,309


$
36,419


$
8,710Free cash flow

$
9,511


$
(37,450
)

$
20,117


$
(3,175
)

$
24,074


$
990


$
31,706


$
(7,005
)Total borrowings  net

$
540,856


$
511,060


$
543,032


$
536,701


$
526,669


$
525,702


$
515,239


$
550,257  119




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##### Table of Contents



First Quarter


Second Quarter


Third Quarter


Fourth Quarter2009


2008


2009


2008


2009


2008


2009


2008Special charges included in:Cost of sales

$
1,823


$



$
(2
)

$



$
162


$



$
(23
)

$
18,681Special charges


396







278







300







657



26,434Other income (expense)


(229
)






43







(27
)






(19
)


(383
)Interest expense


























2,700



Total pre-tax special charges

$
2,448


$



$
233


$



$
489


$



$
3,353


$
45,498Special charges  net of tax

$
2,448


$



$
233


$



$
489


$



$
3,353


$
45,252   Stock
    Market Information
  LBY.
  2009


2008Cash








CashPrice Range


Dividend


Price Range


DividendHigh


Low


Declared


High


Low


DeclaredFirst Quarter

$
2.05


$
0.73


$



$
17.60


$
12.96


$
0.025Second Quarter

$
2.75


$
0.47


$



$
17.81


$
7.43


$
0.025Third Quarter

$
4.27


$
1.30


$



$
11.25


$
6.44


$
0.025Fourth Quarter

$
7.99


$
3.75


$



$
8.63


$
1.04


$
0.025  120




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    Rule 13a-15(b),
  Report of
    Management
           121




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##### Table of Contents



Changes
    in Internal Control
    ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    www.libbey.com 43699-0060.
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   122




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##### Table of Contents



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES    PageReports of Independent Registered Public Accounting Firm


55Consolidated Balance Sheets at December 31, 2009 and 2008


57For the years ended December 31, 2009, 2008 and 2007:


58Consolidated Statements of Operations


59Consolidated Statements of Shareholders Deficit


60Consolidated Statements of Cash Flows


61Notes to Consolidated Financial Statements


61Selected Quarterly Financial Data (Unaudited)


119Financial Statement Schedule of Libbey Inc. for the years ended
    December 31, 2009, 2008 and 2007 for Schedule II
    Valuation and Qualifying Accounts (Consolidated)


S-1      123




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##### Table of Contents



SIGNATURES      by:
    /s/  Gregory
    T. Geswein      124




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##### Table of Contents



SIGNATURES
    Signature

TitleWilliam A. Foley

DirectorPeter C. McC. Howell

DirectorCarol B. Moerdyk

DirectorJean-René Gougelet

DirectorTerence P. Stewart

DirectorCarlos V. Duno

DirectorDeborah G. Miller

DirectorJohn C. Orr

DirectorRichard I. Reynolds

Director, Executive Vice President, Chief Operating OfficerJohn F. Meier

Chairman of the Board of Directors, Chief Executive Officer    By:
    /s/  Gregory
    T. Geswein   Attorney-In-Fact
     
       125




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##### Table of Contents



EXHIBIT INDEX
  S-K Item601 No.



Document2
.0



Asset Purchase Agreement dated as of September 22, 1995 by
    and among The Pfaltzgraff Co., The Pfaltzgraff Outlet Co.,
    Syracuse China Company of Canada Ltd., LG Acquisition Corp. and
    Libbey Canada Inc., Acquisition of Syracuse China Company (filed
    as Exhibit 2.0 to Libbey Inc.s Current Report on
    Form 8-K
    dated September 22, 1995 and incorporated herein by
    reference).2
.1



Asset Purchase Agreement dated as of December 2, 2002 by
    and between Menasha Corporation and Libbey Inc. (filed as
    Exhibit 2.2 to Libbey Inc.s Annual Report on
    Form 10-K
    for the year-ended December 31, 2002, and incorporated
    herein by reference).2
.2



Stock Purchase Agreement dated as of December 31, 2002
    between BSN Glasspack N.V. and Saxophone B.V. (filed as
    Exhibit 2.3 to Libbey Inc.s Annual Report on
    Form 10-K
    for the year-ended December 31, 2002, and incorporated
    herein by reference).3
.1



Restated Certificate of Incorporation of Libbey Inc. (filed as
    Exhibit 3.1 to Libbey Inc.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 3.2 to Libbey Inc.s Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 1993, as amended as set
    forth in Exhibit 3.01 to Libbey Incs
    Form 8-K
    filed on February 7, 2005, both of which filings are
    incorporated herein by reference).3
.3



Certificate of Incorporation of Libbey Glass Inc. (incorporated
    by reference to Exhibit 3.3 to Libbey Glass Inc.s
    Registration Statement on
    Form S-4;
    File
    No. 333-139358).3
.4



Amended and Restated By-Laws of Libbey Glass Inc. (incorporated
    by reference to Exhibit 3.4 to Libbey Glass Inc.s
    Registration Statement on
    Form S-4;
    File
    No. 333-139358).4
.1



Certificate of Incorporation of Libbey Glass Inc. (incorporated
    by reference to Exhibit 3.3).4
.2



Amended and Restated By-Laws of Libbey Glass Inc. (incorporated
    by reference to Exhibit 3.4).4
.3



Indenture, dated as of June 16, 2006, by and among Libbey
    Glass Inc., Libbey Inc., and all of the Libbey Glass Inc.s
    direct and indirect Domestic Subsidiaries existing on the
    Issuance Date and The Bank of New York Trust Company, N.A.,
    with respect to $306.0 million aggregate principal amount
    of Floating Rate Senior Secured Notes due 2011 (filed as
    Exhibit 4.2 to Libbey Inc.s Current Report on
    Form 8-K
    filed on June 21, 2006 and incorporated herein by
    reference).4
.4



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
.5



Registration Rights Agreement, dated June 16, 2006, by and
    among Libbey Glass Inc., as issuer, Libbey Inc., as Parent
    Guarantor, and the Guarantors named in Schedule 1 thereto
    and J.P. Morgan Securities Inc., Bear, Stearns &
    Co. Inc., and BNY Capital Markets, Inc., as initial purchasers
    (filed as Exhibit 4.4 to Libbey Inc.s Current Report
    on
    Form 8-K
    filed on June 21, 2006 and incorporated herein by
    reference).4
.6



Credit Agreement, dated June 16, 2006, among Libbey Glass
    Inc. and Libbey Europe B.V., Libbey Inc., the other loan parties
    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 Libbey Inc.s
    Current Report on
    Form 8-K
    filed on June 21, 2006 and incorporated herein by reference
    The schedules to such Credit Agreement were filed as
    Exhibit 4.1 to Registrants
    Form 10-Q
    filed August 7, 2009 and incorporated herein by reference.
    The exhibits to such Credit Agreement were filed as
    Exhibit 4.1 to Registrants
    Form 10-Q
    filed on November 9, 2009 and incorporated herein by
    reference).4
.7



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 Libbey Inc.s
    Current Report on
    Form 8-K
    filed June 21, 2006 and incorporated herein by reference).4
.8



Form of 16 percent Senior Subordinated Secured
    Pay-in-Kind
    Note due 2011 (filed as Exhibit 4.6 to Libbey Inc.s
    Current Report on
    Form 8-K
    filed June 21, 2006 and incorporated herein by reference).4
.9



Warrant, issued June 16, 2006 (filed as Exhibit 4.7 to
    Libbey Inc.s Current Report on
    Form 8-K
    filed June 21, 2006 and incorporated herein by reference). 126




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##### Table of Contents



S-K Item601 No.



Document4
.10



Registration Rights Agreement, dated June 16, 2006, among
    Libbey Inc. and Merrill Lynch PCG, Inc. (filed as
    Exhibit 4.8 to Libbey Inc.s Current Report on
    Form 8-K
    filed June 21, 2006 and incorporated herein by reference).4
.11



Intercreditor Agreement, dated June 16, 2006, among Libbey
    Glass Inc., JP Morgan 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 Libbey
    Inc.s Current Report on
    Form 8-K
    filed on June 21, 2006 and incorporated herein by
    reference).4
.12



Amendment and Waiver, dated as of November 7, 2008, to the
    Credit Agreement, dated as of June 16, 2006, among Libbey
    Glass Inc. and Libbey Europe B.V., each as a Borrower and
    together, the Borrowers, Libbey Inc., as a Loan Guarantor, the
    other Loan Parties party thereto, the Lenders party thereto,
    JPMorgan Chase Bank, N.A., as Administrative Agent with respect
    to the US Loans, J.P. Morgan Europe Limited, as
    Administrative Agent with respect to the Netherlands Loans, Bank
    of America, N.A. (f/k/a LaSalle Bank Midwest National
    Association), as Syndication Agent, Wells Fargo Foothill, LLC
    and Fifth Third Bank, as Co-Documentation Agents 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 this reference).4
.13



Amended and Restated Indenture, dated October 28, 2009,
    among Libbey Glass Inc., the guarantors party thereto and
    Merrill Lynch PCG, Inc. (filed as Exhibit 4.1 to Libbey
    Inc.s Current Report on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).4
.14



Reaffirmation Agreement, dated October 28, 2009, among
    Libbey Glass Inc., the domestic subsidiaries of Libbey Glass
    Inc. listed therein and Merrill Lynch PCG, Inc. (filed as
    Exhibit 4.2 to Libbey Inc.s Current Report on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).4
.15



Series I Warrant, issued October 28, 2009 (filed as
    Exhibit 4.3 to Libbey Inc.s Current Report on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).4
.16



Amended and Restated Registration Rights Agreement, dated
    October 28, 2009, between Libbey Inc. and Merrill Lynch
    PCG, Inc. (filed as Exhibit 4.4 to Libbey Inc.s
    Current Report on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).4
.17



Form of New Note (included in Exhibit 4.13).4
.18



Amendment and Restated Credit Agreement, dated February 8,
    2010, among Libbey Glass Inc. and Libbey Europe B.V., as
    borrowers, Libbey Inc., as a loan guarantor, the other loan
    parties party thereto as guarantors, JPMorgan Chase Bank, N.A.,
    as administrative agent with respect to the U.S. loans,
    J.P. Morgan Europe Limited, as administrative agent with
    respect to the Netherlands loans, Bank of America, N.A. and
    Barclays Capital, as Co-Syndication Agents, Wells Fargo Capital
    Finance, LLC, as Documentation Agent and the other lenders and
    agents party thereto (filed as Exhibit 4.1 to Libbey
    Inc.s Current Report on
    Form 8-K
    filed on February 12, 2010 and incorporated herein by
    reference).4
.19



New Notes Indenture, dated February 8, 2010, among Libbey
    Glass Inc., Libbey Inc., the domestic subsidiaries of Libbey
    Glass Inc. listed as guarantors therein, and The Bank of New
    York Mellon Trust Company, N.A., as trustee and collateral
    agent (filed as Exhibit 4.2 to Libbey Inc.s Current
    Report on
    Form 8-K
    filed on February 12, 2010 and incorporated herein by
    reference).4
.20



Form of New Note (included in Exhibit 4.14).4
.21



Registration Rights Agreement, dated February 8, 2010,
    among Libbey Glass Inc., Libbey Inc., and the domestic
    subsidiaries of Libbey Glass Inc. listed as guarantors (filed as
    Exhibit 4.4 to Libbey Inc.s Current Report on
    Form 8-K
    filed on February 12, 2010 and incorporated herein by
    reference).4
.22



Intercreditor Agreement, dated February 8, 2010, among
    Libbey Glass Inc., Libbey Inc., and the domestic subsidiaries of
    Libbey Glass Inc. listed as guarantors (filed as
    Exhibit 4.5 to Libbey Inc.s Current Report on
    Form 8-K
    filed on February 12, 2010 and incorporated herein by
    reference).10
.1



Management Services Agreement dated as of June 24, 1993
    between Owens-Illinois General Inc. and Libbey Glass Inc. (filed
    as Exhibit 10.2 to Libbey Inc.s Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 1993 and incorporated herein
    by reference). 127




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##### Table of Contents



S-K Item601 No.



Document10
.2



Tax Allocation and Indemnification Agreement dated as of
    May 18, 1993 by and among Owens-Illinois, Inc.,
    Owens-Illinois Group, Inc. and Libbey Inc. (filed as
    Exhibit 10.3 to Libbey Inc.s Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 1993 and incorporated herein
    by reference).10
.3



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
.4



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
.5



Form of Non-Qualified Stock Option Agreement between Libbey Inc.
    and certain key employees participating in the Libbey Inc. Stock
    Option Plan for Key Employees (filed as Exhibit 10.8 to
    Libbey Inc.s Annual Report on
    Form 10-K
    for the year ended December 31, 1993 and incorporated
    herein by reference).10
.6



Description of Libbey Inc. Senior Executive Life Insurance Plan
    (filed as Exhibit 10.9 to Libbey Inc.s Annual Report
    on
    Form 10-K
    for the year ended December 31, 1993 and incorporated
    herein by reference).10
.7



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
.8



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
.9



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 incorporated herein by
    reference).10
.10



Letter Agreement dated as of October 10, 1995 by and
    between The Pfaltzgraff Co., The Pfaltzgraff Outlet Co.,
    Syracuse China Company of Canada Ltd., LG Acquisition Corp. and
    Libbey Canada Inc., amending the Letter Agreement dated
    September 22, 1995 filed as part of the Asset Purchase
    Agreement for the Acquisition of Syracuse China
    (Exhibit 2.0) (filed as Exhibit 10.19 to Libbey
    Inc.s Current Report on
    Form 8-K
    dated October 10, 1995 and incorporated herein by
    reference).10
.11



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
.12



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
.13



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
.14



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
.15



Libbey Inc. 2006 Deferred Compensation Plan for Outside
    Directors (filed as Exhibit 99.1 to the Libbey Inc.s
    Current Report on
    Form 8-K
    filed December 12, 2005, and as exhibit 10.74 to
    Libbey Inc.s Annual Report on
    Form 10-K
    for the year ended December 31, 2005 and incorporated
    herein by reference). 128




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##### Table of Contents



S-K Item601 No.



Document10
.16



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
.17



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
.18



Limited Waiver and Second Amendment to Purchase Agreement, dated
    June 16, 2006, among Vitro, S.A. de C.V., Crisa
    Corporation, Crisa Libbey S.A. de C.V., Vitrocrisa Holdings, 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., Libbey
    Mexico, S. de R.L. de C.V., Libbey Europe B.V., and LGA3 Corp.
    (filed as exhibit 10.1 to Libbey Inc.s Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2006 and incorporated herein
    by reference).10
.19



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
.20



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
.21



2006 Omnibus Incentive Plan of Libbey Inc. (filed as
    Exhibit 10.1 to Libbey Inc.s Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006 and incorporated
    herein by reference).10
.22



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
.23



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
.24



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 this reference).10
.25



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 this reference).10
.26



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
.27



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
.28



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
.29



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
.30



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
.31



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). 129




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##### Table of Contents



S-K Item601 No.



Document10
.32



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-K
    for the year ended December 31, 2008 and incorporated
    herein by reference).10
.33



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
.34



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
.35



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
.36



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).10
.37



Debt Exchange Agreement, dated October 28, 2009, among
    Libbey Inc., Libbey Glass Inc. and Merrill Lynch PCG, Inc.
    (filed as Exhibit 10.1 to Libbey Inc.s Current Report
    on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).10
.38



Amendment and Waiver No. 2 to the Credit Agreement, dated
    October 28, 2009, among Libbey Glass Inc. and Libbey Europe
    B.V., each as a borrower, Libbey Inc., as a loan guarantor, the
    other loan parties thereto, the lenders party thereto, JPMorgan
    Chase Bank, N.A., as administrative agent with respect to the
    U.S. loans, and the other agents party thereto (filed as
    Exhibit 10.2 to Libbey Inc.s Current Report on
    Form 8-K
    filed on October 29, 2009 and incorporated herein by
    reference).10
.39



Employment Agreement dated as of January 1, 2010 between
    Libbey Inc. and Roberto B. Rubio.10
.40



Change in control agreement dated as of January 1, 2010
    between Libbey Inc. and Roberto B. Rubio.12
.1



Statement Regarding Computation of Ratios (incorporated by
    reference to Exhibit 12.1 to Libbey Glass Inc.s
    Registration Statement on
    Form S-4;
    File
    No. 333-139358).13
.1



Selected Financial Information included in Registrants
    2008 Annual Report to Shareholders (filed herein).21




Subsidiaries of the Registrant (filed herein).23




Consent of Ernst & Young LLP (filed herein).24




Power of Attorney (filed herein).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).  130




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##### Table of Contents



INDEX TO
    FINANCIAL STATEMENT SCHEDULE
  PageFinancial Statement Schedule of Libbey Inc. for the years ended
    December 31, 2009, 2008, and 2007 for Schedule II
    Valuation and Qualifying Accounts (Consolidated)


S-1  131




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##### Table of Contents



LIBBEY
    INC.
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS (Consolidated)
 Years
    ended December 31, 2008, 2007 and 2006
  Allowance for


ValuationSlow Moving


AllowanceAllowance for


and Obsolete


for DeferredDoubtful Accounts


Inventory


Tax Asset(Dollars in thousands)Balance at December 31, 2006

$
11,507


$
6,139


$
6,575Charged to expense or other accounts


1,760



2,285



22,280Deductions


(1,556
)


(1,989
)


Balance at December 31, 2007


11,711



6,435



28,855Charged to expense or other accounts


181



2,391



58,587Deductions


(1,413
)


(2,244
)


Balance at December 31, 2008


10,479



6,582



87,442Charged to expense or other accounts


2,049



1,431



11,547Deductions


(5,071
)


(3,485
)


Balance at December 31, 2009

$
7,457


$
4,528


$
98,989  S-1