##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-584
 FERRO CORPORATION
  Ohio
    
    34-0217820(State of Corporation)
    
    (IRS Employer Identification No.)1000 Lakeside AvenueCleveland, OH
    
    44114(Address of Principal executive offices)
    
    (Zip Code)
 216-641-8580
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Financial Statements (Unaudited)
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    34Item 4. Controls and Procedures
    
    
    35PART IIItem 1. Legal Proceedings
    
    
    36Item 1A. Risk Factors
    
    
    36Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    37Item 3. Defaults Upon Senior Securities
    
    
    37Item 4. (Removed and Reserved)
    
    
    37Item 5. Other Information
    
    
    37Item 6. Exhibits
    
    
    37Exhibit 3.4Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements (Unaudited)
 Ferro Corporation and Consolidated Subsidiaries  Condensed Consolidated Statements of Operations
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands, except per share amounts)Net sales
    
    $
    528,564
    
    
    $
    442,089
    
    
    $
    1,564,914
    
    
    $
    1,199,175Cost of sales
    
    
    408,268
    
    
    
    348,920
    
    
    
    1,215,354
    
    
    
    985,531Gross profit
    
    
    120,296
    
    
    
    93,169
    
    
    
    349,560
    
    
    
    213,644Selling, general and administrative expenses
    
    
    74,835
    
    
    
    65,918
    
    
    
    215,635
    
    
    
    196,526Restructuring and impairment charges
    
    
    9,570
    
    
    
    11,067
    
    
    
    44,107
    
    
    
    12,156Other expense (income):Interest expense
    
    
    10,519
    
    
    
    17,891
    
    
    
    37,196
    
    
    
    46,255Interest earned
    
    
    (78
    )
    
    
    (216
    )
    
    
    (542
    )
    
    
    (689
    )Losses on extinguishment of debt
    
    
    19,331
    
    
    
    
    
    
    
    19,331
    
    
    
    Foreign currency losses, net
    
    
    398
    
    
    
    104
    
    
    
    3,644
    
    
    
    3,033Miscellaneous expense (income), net
    
    
    7,345
    
    
    
    (655
    )
    
    
    2,523
    
    
    
    199(Loss) income before income taxes
    
    
    (1,624
    )
    
    
    (940
    )
    
    
    27,666
    
    
    
    (43,836
    )Income tax expense (benefit)
    
    
    738
    
    
    
    (3,749
    )
    
    
    23,246
    
    
    
    (15,844
    )(Loss) income from continuing operations
    
    
    (2,362
    )
    
    
    2,809
    
    
    
    4,420
    
    
    
    (27,992
    )Income (loss) on disposal of discontinued operations, net of income taxes
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    (322
    )Net (loss) income
    
    
    (2,362
    )
    
    
    2,845
    
    
    
    4,420
    
    
    
    (28,314
    )Less: Net income attributable to noncontrolling interests
    
    
    983
    
    
    
    728
    
    
    
    733
    
    
    
    1,712Net (loss) income attributable to Ferro Corporation
    
    
    (3,345
    )
    
    
    2,117
    
    
    
    3,687
    
    
    
    (30,026
    )Dividends on preferred stock
    
    
    (165
    )
    
    
    (168
    )
    
    
    (495
    )
    
    
    (538
    )Net (loss) income attributable to Ferro Corporation common shareholders
    
    $
    (3,510
    )
    
    $
    1,949
    
    
    $
    3,192
    
    
    $
    (30,564
    )Amounts attributable to Ferro Corporation:(Loss) income from continuing operations, net of tax
    
    $
    (3,345
    )
    
    $
    2,081
    
    
    $
    3,687
    
    
    $
    (29,704
    )Income (loss) from discontinued operations, net of tax
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    (322
    )$
    (3,345
    )
    
    $
    2,117
    
    
    $
    3,687
    
    
    $
    (30,026
    )Per common share dataBasic and diluted income (loss) attributable to Ferro Corporation common shareholders:From continuing operations
    
    $
    (0.04
    )
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    (0.68
    )From discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )$
    (0.04
    )
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    (0.69
    )Cash dividends declared
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.01
   3




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##### Table of Contents



Ferro Corporation and Consolidated Subsidiaries  Condensed Consolidated Balance Sheets
 September 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)ASSETSCurrent assetsCash and cash equivalents
    
    $
    65,356
    
    
    $
    18,507Accounts and trade notes receivable, net
    
    
    334,298
    
    
    
    285,638Inventories
    
    
    211,892
    
    
    
    180,700Deposits for precious metals
    
    
    
    
    
    
    112,434Deferred income taxes
    
    
    20,888
    
    
    
    19,618Other receivables
    
    
    29,583
    
    
    
    27,795Other current assets
    
    
    9,431
    
    
    
    7,180Total current assets
    
    
    671,448
    
    
    
    651,872Other assetsProperty, plant and equipment, net
    
    
    384,471
    
    
    
    432,405Goodwill
    
    
    216,701
    
    
    
    221,044Amortizable intangible assets, net
    
    
    12,883
    
    
    
    10,610Deferred income taxes
    
    
    135,749
    
    
    
    133,705Other non-current assets
    
    
    73,922
    
    
    
    76,719Total assets
    
    $
    1,495,174
    
    
    $
    1,526,355LIABILITIES AND EQUITYCurrent liabilitiesLoans payable and current portion of long-term debt
    
    $
    1,646
    
    
    $
    24,737Accounts payable
    
    
    225,774
    
    
    
    196,038Income taxes
    
    
    16,916
    
    
    
    7,241Accrued payrolls
    
    
    35,766
    
    
    
    20,894Accrued expenses and other current liabilities
    
    
    93,127
    
    
    
    72,039Total current liabilities
    
    
    373,229
    
    
    
    320,949Other liabilitiesLong-term debt, less current portion
    
    
    323,924
    
    
    
    398,720Postretirement and pension liabilities
    
    
    198,632
    
    
    
    203,743Deferred income taxes
    
    
    3,550
    
    
    
    1,124Other non-current liabilities
    
    
    22,028
    
    
    
    31,897Total liabilities
    
    
    921,363
    
    
    
    956,433Series A convertible preferred stock (approximates redemption value)
    
    
    9,427
    
    
    
    9,427EquityFerro Corporation shareholders equity:Common stock
    
    
    93,436
    
    
    
    93,436Paid-in capital
    
    
    326,333
    
    
    
    331,376Retained earnings
    
    
    360,320
    
    
    
    357,128Accumulated other comprehensive loss
    
    
    (59,619
    )
    
    
    (60,147
    )Common shares in treasury, at cost
    
    
    (166,662
    )
    
    
    (171,567
    )Total Ferro Corporation shareholders equity
    
    
    553,808
    
    
    
    550,226Noncontrolling interests
    
    
    10,576
    
    
    
    10,269Total equity
    
    
    564,384
    
    
    
    560,495Total liabilities and equity
    
    $
    1,495,174
    
    
    $
    1,526,355
   4




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##### Table of Contents



Ferro Corporation and Consolidated Subsidiaries  Condensed Consolidated Statements of Equity and Comprehensive Income (Loss)
 Ferro Corporation ShareholdersAccumulatedOtherCommon Shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive
    
    
    Non-in Treasury
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    Income
    
    
    controlling
    
    
    TotalShares
    
    
    Amount
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    Interests
    
    
    Equity(In thousands)Balances at December 31, 2008
    
    
    8,432
    
    
    $
    (197,524
    )
    
    $
    52,323
    
    
    $
    178,420
    
    
    $
    401,186
    
    
    $
    (98,436
    )
    
    $
    9,755
    
    
    $
    345,724Net (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,026
    )
    
    
    
    
    
    
    1,712
    
    
    
    (28,314
    )Other comprehensive income (loss), net of tax:Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,541
    
    
    
    (1
    )
    
    
    17,540Postretirement benefit liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    163Raw material commodity swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    577
    
    
    
    
    
    
    
    577Interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,527
    
    
    
    
    
    
    
    1,527Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,507
    )Cash dividends:Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (437
    )
    
    
    
    
    
    
    
    
    
    
    (437
    )Preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (199
    )
    
    
    
    
    
    
    
    
    
    
    (199
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Stock-based compensation transactions
    
    
    (1,038
    )
    
    
    25,610
    
    
    
    
    
    
    
    (21,916
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,694Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,036
    )
    
    
    (2,036
    )Balances at September 30, 2009
    
    
    7,394
    
    
    $
    (171,914
    )
    
    $
    52,323
    
    
    $
    156,505
    
    
    $
    370,524
    
    
    $
    (78,628
    )
    
    $
    9,430
    
    
    $
    338,240Balances at December 31, 2009
    
    
    7,375
    
    
    $
    (171,567
    )
    
    $
    93,436
    
    
    $
    331,376
    
    
    $
    357,128
    
    
    $
    (60,147
    )
    
    $
    10,269
    
    
    $
    560,495Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,687
    
    
    
    
    
    
    
    733
    
    
    
    4,420Other comprehensive income (loss), net of tax:Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,319
    )
    
    
    101
    
    
    
    (1,218
    )Postretirement benefit liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,167
    )
    
    
    
    
    
    
    (4,167
    )Raw material commodity swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (107
    )
    
    
    
    
    
    
    (107
    )Interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,121
    
    
    
    
    
    
    
    6,121Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,049Cash dividends:Preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (495
    )
    
    
    
    
    
    
    
    
    
    
    (495
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11Redemption of Convertible Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,025
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,025
    )Stock-based compensation transactions
    
    
    (122
    )
    
    
    4,905
    
    
    
    
    
    
    
    (2,029
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,876Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (527
    )
    
    
    (527
    )Balances at September 30, 2010
    
    
    7,253
    
    
    $
    (166,662
    )
    
    $
    93,436
    
    
    $
    326,333
    
    
    $
    360,320
    
    
    $
    (59,619
    )
    
    $
    10,576
    
    
    $
    564,384
   5




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##### Table of Contents



Ferro Corporation and Consolidated Subsidiaries  Condensed Consolidated Statements of Cash Flows
 Nine months endedSeptember 30,2010
    
    
    2009(Dollars in thousands)Cash flows from operating activitiesNet cash provided by (used for) operating activities
    
    $
    180,455
    
    
    $
    (5,769
    )Cash flows from investing activitiesCapital expenditures for property, plant and equipment
    
    
    (27,733
    )
    
    
    (30,704
    )Proceeds from business combination
    
    
    5,887
    
    
    
    Proceeds from sale of assets
    
    
    7,425
    
    
    
    104Dividends received from affiliates
    
    
    139
    
    
    
    169Net cash used for investing activities
    
    
    (14,282
    )
    
    
    (30,431
    )Cash flows from financing activitiesNet (repayments) borrowings under loans payable
    
    
    (22,500
    )
    
    
    29,128Proceeds from Senior Notes
    
    
    250,000
    
    
    
    Proceeds from revolving credit facility
    
    
    23,350
    
    
    
    Proceeds from former revolving credit facility
    
    
    303,390
    
    
    
    561,624Principal payments on revolving credit facility
    
    
    (23,350
    )
    
    
    Principal payments on former revolving credit facility
    
    
    (229,590
    )
    
    
    (542,027
    )Principal payments on term loan facility
    
    
    (83,562
    )
    
    
    (2,287
    )Extinguishment of debt
    
    
    (326,687
    )
    
    
    Debt issue costs
    
    
    (10,460
    )
    
    
    (9,367
    )Cash dividends paid
    
    
    (495
    )
    
    
    (636
    )Other financing activities
    
    
    (788
    )
    
    
    748Net cash (used for) provided by financing activities
    
    
    (120,692
    )
    
    
    37,183Effect of exchange rate changes on cash and cash equivalents
    
    
    1,368
    
    
    
    3,097Increase in cash and cash equivalents
    
    
    46,849
    
    
    
    4,080Cash and cash equivalents at beginning of period
    
    
    18,507
    
    
    
    10,191Cash and cash equivalents at end of period
    
    $
    65,356
    
    
    $
    14,271Cash paid during the period for:Interest
    
    $
    30,291
    
    
    $
    37,985Income taxes
    
    
    15,723
    
    
    
    8,221
   6




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##### Table of Contents



Ferro Corporation and Consolidated Subsidiaries  Notes to Condensed Consolidated Financial Statements
 1. Basis of Presentation
  2. Accounting Standards Adopted in the Nine Months Ended September 30, 2010
 Accounting for Transfers of Financial Assets FASB Accounting Standards Codification TM
 Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities
 Improving Disclosures
About Fair Value Measurements
 3. Newly Issued Accounting Pronouncements
 Multiple Deliverable Revenue Arrangements Revenue
RecognitionMilestone Method
  7




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##### Table of Contents



4. Inventories
  September 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)Raw materials
    
    $
    66,875
    
    
    $
    54,481Work in process
    
    
    43,362
    
    
    
    37,449Finished goods
    
    
    101,655
    
    
    
    88,770Total
    
    $
    211,892
    
    
    $
    180,700
  5. Property, Plant and Equipment
        8




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##### Table of Contents



6. Financing and Long-term Debt
  September 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)Loans payable to banks
    
    $
    693
    
    
    $
    5,891Accounts receivable asset securitization program
    
    
    
    
    
    
    17,762Current portion of long-term debt
    
    
    953
    
    
    
    1,084Total
    
    $
    1,646
    
    
    $
    24,737
  September 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)7.875% Senior Notes
    
    $
    250,000
    
    
    $
    6.50% Convertible Senior Notes, net of unamortized discounts
    
    
    66,426
    
    
    
    156,896Former revolving credit facility
    
    
    
    
    
    
    1,700Former term loan facility
    
    
    
    
    
    
    231,385Capitalized lease obligations
    
    
    4,902
    
    
    
    5,669Other notes
    
    
    3,549
    
    
    
    4,154324,877
    
    
    
    399,804Less current portion
    
    
    (953
    )
    
    
    (1,084
    )Total
    
    $
    323,924
    
    
    $
    398,720
 7.875% Senior Notes
     9




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##### Table of Contents



6.50% Convertible Senior Notes
  2009 Amended and Restated Credit Facility
  2010 Credit Facility
  Receivable Sales Programs
  7. Financial Instruments
  
    
    Cash and cash equivalents;
 
    
    Notes receivable;
 
    
    Deposits;
 
    
    Miscellaneous receivables; and
 
    
    Short-term loans payable to banks.
  10




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##### Table of Contents



Long-term Debt
  September 30, 2010
    
    
    December 31, 2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(Dollars in thousands)7.875% Senior Notes
    
    $
    250,000
    
    
    $
    260,000
    
    
    $
    
    
    
    $
    6.50% Convertible Senior Notes,
net of unamortized discounts
    
    
    66,426
    
    
    
    71,387
    
    
    
    156,896
    
    
    
    157,191Former revolving credit facility
    
    
    
    
    
    
    
    
    
    
    1,700
    
    
    
    1,747Former term loan facility
    
    
    
    
    
    
    
    
    
    
    231,385
    
    
    
    237,047Other notes
    
    
    3,549
    
    
    
    2,626
    
    
    
    4,154
    
    
    
    3,084
  Derivative Instruments
  Interest rate swaps.
 Foreign currency forward contracts.
  11




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009
    
    
    Balance Sheet Location(Dollars in thousands)Derivatives designated as hedging
instruments:Liability derivatives:Interest rate swaps
    
    $
    
    
    
    $
    (9,516
    )
    
    Other non-current liabilitiesDerivatives not designated as
hedging instruments:Asset derivatives:Foreign currency forward contracts
    
    $
    45
    
    
    $
    
    
    
    Accrued expenses and other current liabilities
    
    
    
    899
    
    
    Other receivablesTotal
    
    $
    45
    
    
    $
    899Liability derivatives:Foreign currency forward contracts
    
    $
    (4,800
    )
    
    $
    
    
    
    Accrued expenses and other current liabilities
    
    
    
    (176
    )
    
    Other receivablesTotal
    
    $
    (4,800
    )
    
    $
    (176
    )
      September 30, 2010
    
    
    December 31,Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    2009(Dollars in thousands)AssetsForeign currency forward contracts
    
    $
    
    
    
    $
    (4,755
    )
    
    $
    
    
    
    $
    (4,755
    )
    
    $
    723LiabilitiesInterest rate swaps
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (9,516
    )
  Amount of LossAmount of Loss
    
    
    Reclassified from AOCI
    
    
    Location of Gain (Loss)Recognized in OCI
    
    
    into Income
    
    
    Reclassified from2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    AOCI into Income(Dollars in thousands)Derivatives in Cash Flow Hedging Relationships:Interest rate swaps
    
    
    
    
    
    
    
    
    
    $
    (4,885
    )
    
    $
    (5,080
    )
    

    Interest expense(6,849
    )
    
    
    

        
    Miscellaneous expenseTotal
    
    $
    (2,218
    )
    
    $
    (2,708
    )
    
    $
    (11,734
    )
    
    $
    (5,080
    )
 Amount of Gain (Loss)Recognized in Income2010
    
    
    2009
    
    
    Location of Gain (Loss) in Income(Dollars in thousands)Derivatives Not Designated as Hedging Instruments:Foreign currency forward contracts
    
    $
    3,020
    
    
    $
    (12,970
    )
    
    Foreign currency losses, net
  12




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8. Income Taxes
  9. Contingent Liabilities
   10. Retirement Benefits
  U.S. Pension Plans
    
    
    Non-U.S. Pension Plans
    
    
    Other Benefit Plans2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Components of net periodic cost:Service cost
    
    $
    3
    
    
    $
    7
    
    
    $
    833
    
    
    $
    1,095
    
    
    $
    
    
    
    $
    4Interest cost
    
    
    5,098
    
    
    
    5,235
    
    
    
    2,387
    
    
    
    2,743
    
    
    
    607
    
    
    
    719Expected return on plan assets
    
    
    (4,622
    )
    
    
    (3,863
    )
    
    
    (1,587
    )
    
    
    (1,841
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    24
    
    
    
    24
    
    
    
    (35
    )
    
    
    (107
    )
    
    
    251
    
    
    
    (437
    )Net amortization and deferral
    
    
    2,561
    
    
    
    3,845
    
    
    
    189
    
    
    
    274
    
    
    
    (43
    )
    
    
    Curtailment and settlement effects
    
    
    
    
    
    
    
    
    
    
    (180
    )
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    3,064
    
    
    $
    5,248
    
    
    $
    1,607
    
    
    $
    2,164
    
    
    $
    815
    
    
    $
    286
  13




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U.S. Pension Plans
    
    
    Non-U.S. Pension Plans
    
    
    Other Benefit Plans2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Components of net periodic cost:Service cost
    
    $
    17
    
    
    $
    22
    
    
    $
    2,549
    
    
    $
    3,143
    
    
    $
    
    
    
    $
    11Interest cost
    
    
    15,410
    
    
    
    15,707
    
    
    
    7,639
    
    
    
    7,839
    
    
    
    1,821
    
    
    
    2,158Expected return on plan assets
    
    
    (13,604
    )
    
    
    (11,590
    )
    
    
    (5,245
    )
    
    
    (5,254
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    72
    
    
    
    73
    
    
    
    (288
    )
    
    
    (305
    )
    
    
    (547
    )
    
    
    (1,311
    )Net amortization and deferral
    
    
    9,473
    
    
    
    11,535
    
    
    
    529
    
    
    
    780
    
    
    
    (129
    )
    
    
    Curtailment and settlement effects
    
    
    
    
    
    
    
    
    
    
    (4,745
    )
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    11,368
    
    
    $
    15,747
    
    
    $
    439
    
    
    $
    6,203
    
    
    $
    1,145
    
    
    $
    858
  11. Stock-Based Compensation
    14




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Common Sharesin Treasury
    
    
    Paid-inShares
    
    
    Amount
    
    
    Capital(In thousands)Stock options
    
    
    (99
    )
    
    $
    2,438
    
    
    $
    (932
    )Deferred stock units
    
    
    (34
    )
    
    
    832
    
    
    
    (355
    )Restricted shares
    
    
    (107
    )
    
    
    3,284
    
    
    
    (2,579
    )Performance shares, net
    
    
    118
    
    
    
    (1,045
    )
    
    
    1,233Directors deferred compensation
    
    
    
    
    
    
    (604
    )
    
    
    604Preferred stock conversions
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    (122
    )
    
    $
    4,905
    
    
    $
    (2,029
    )
 12. Restructuring and Cost Reduction Programs
    Restructuring Program in Limoges, France
      15




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Restructuring Program in Castanheira do Ribatejo, Portugal
     Restructuring Program in Rotterdam, Netherlands
   Restructuring Program in Uden, Netherlands
    Restructuring Program in Toccoa, Georgia
   16




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##### Table of Contents



Employee
    
    
    Other
    
    
    AssetSeverance
    
    
    Costs
    
    
    Impairment
    
    
    Total(Dollars in thousands)Balance at December 31, 2009
    
    $
    3,081
    
    
    $
    1,518
    
    
    $
    
    
    
    $
    4,599Restructuring charges
    
    
    34,273
    
    
    
    (824
    )
    
    
    10,658
    
    
    
    44,107Cash payments
    
    
    (28,840
    )
    
    
    (4,293
    )
    
    
    
    
    
    
    (33,133
    )Currency translation adjustment
    
    
    529
    
    
    
    49
    
    
    
    
    
    
    
    578Non-cash items
    
    
    
    
    
    
    7,127
    
    
    
    (10,658
    )
    
    
    (3,531
    )Balance at September 30, 2010
    
    $
    9,043
    
    
    $
    3,577
    
    
    $
    
    
    
    $
    12,620
  13. Per Share Amounts from Continuing Operations
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share amounts)Basic income (loss) per share computationNet income (loss) attributable to Ferro Corporation common shareholders
    
    $
    (3,510
    )
    
    $
    1,949
    
    
    $
    3,192
    
    
    $
    (30,564
    )Adjustment
for (income) loss from discontinued operations
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    322$
    (3,510
    )
    
    $
    1,913
    
    
    $
    3,192
    
    
    $
    (30,242
    )Weighted-average common shares outstanding
    
    
    85,805
    
    
    
    44,711
    
    
    
    85,808
    
    
    
    44,593Basic (loss) income per share from continuing operations attributable to Ferro Corporation common shareholders
    
    $
    (0.04
    )
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    (0.68
    )Diluted income (loss) per share computationNet income (loss) attributable to Ferro Corporation common shareholders
    
    $
    (3,510
    )
    
    $
    1,949
    
    
    $
    3,192
    
    
    $
    (30,564
    )Adjustment
for (income) loss from discontinued operations
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    322Plus: Convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (3,510
    )
    
    $
    1,913
    
    
    $
    3,192
    
    
    $
    (30,242
    )Weighted-average common shares outstanding
    
    
    85,805
    
    
    
    44,711
    
    
    
    85,808
    
    
    
    44,593Assumed exercise of stock options
    
    
    
    
    
    
    265
    
    
    
    330
    
    
    
    Assumed satisfaction of deferred stock unit conditions
    
    
    
    
    
    
    20
    
    
    
    77
    
    
    
    Assumed satisfaction of restricted share conditions
    
    
    
    
    
    
    
    
    
    
    324
    
    
    
    Assumed conversion of convertible notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Assumed conversion of convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average diluted shares outstanding
    
    
    85,805
    
    
    
    44,996
    
    
    
    86,539
    
    
    
    44,593Diluted
(loss) income per share from continuing operations attributable to Ferro Corporation common shareholders
    
    $
    (0.04
    )
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    (0.68
    )
  17




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14. Comprehensive Income (Loss)
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Net (loss) income
    
    $
    (2,362
    )
    
    $
    2,845
    
    
    $
    4,420
    
    
    $
    (28,314
    )Other comprehensive income (loss), net of tax:Foreign currency translation
    
    
    24,477
    
    
    
    12,567
    
    
    
    (1,218
    )
    
    
    17,540Postretirement benefit liabilities
    
    
    (1,132
    )
    
    
    (498
    )
    
    
    (4,167
    )
    
    
    163Raw material commodity swaps
    
    
    
    
    
    
    18
    
    
    
    (107
    )
    
    
    577Interest rate swaps
    
    
    4,191
    
    
    
    (598
    )
    
    
    6,121
    
    
    
    1,527Total comprehensive income (loss)
    
    
    25,174
    
    
    
    14,334
    
    
    
    5,049
    
    
    
    (8,507
    )Less: Comprehensive income attributable to
noncontrolling interests
    
    
    1,053
    
    
    
    731
    
    
    
    834
    
    
    
    1,711Comprehensive income (loss) attributable to
Ferro Corporation
    
    $
    24,121
    
    
    $
    13,603
    
    
    $
    4,215
    
    
    $
    (10,218
    )
 15. Reporting for Segments
    Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Electronic Materials
    
    $
    166,953
    
    
    $
    113,210
    
    
    $
    488,714
    
    
    $
    296,269Performance Coatings
    
    
    144,218
    
    
    
    129,499
    
    
    
    414,546
    
    
    
    355,420Color and Glass Performance Materials
    
    
    91,167
    
    
    
    88,498
    
    
    
    288,196
    
    
    
    232,264Polymer Additives
    
    
    77,291
    
    
    
    67,660
    
    
    
    231,431
    
    
    
    190,105Specialty Plastics
    
    
    42,633
    
    
    
    39,040
    
    
    
    124,365
    
    
    
    110,833Pharmaceuticals
    
    
    6,302
    
    
    
    4,182
    
    
    
    17,662
    
    
    
    14,284Total net sales
    
    $
    528,564
    
    
    $
    442,089
    
    
    $
    1,564,914
    
    
    $
    1,199,175
  18




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Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(Dollars in thousands)Electronic Materials
    
    $
    31,394
    
    
    $
    13,129
    
    
    $
    97,273
    
    
    $
    21,933Performance Coatings
    
    
    11,322
    
    
    
    14,518
    
    
    
    35,226
    
    
    
    20,144Color and Glass Performance Materials
    
    
    9,192
    
    
    
    7,815
    
    
    
    26,457
    
    
    
    7,583Polymer Additives
    
    
    6,970
    
    
    
    4,386
    
    
    
    13,797
    
    
    
    7,863Specialty Plastics
    
    
    4,253
    
    
    
    2,977
    
    
    
    9,575
    
    
    
    7,148Pharmaceuticals
    
    
    534
    
    
    
    (1,316
    )
    
    
    388
    
    
    
    (989
    )Total segment income
    
    
    63,665
    
    
    
    41,509
    
    
    
    182,716
    
    
    
    63,682Unallocated corporate expenses
    
    
    18,204
    
    
    
    14,258
    
    
    
    48,791
    
    
    
    46,564Restructuring and impairment charges
    
    
    9,570
    
    
    
    11,067
    
    
    
    44,107
    
    
    
    12,156Interest expense
    
    
    10,519
    
    
    
    17,891
    
    
    
    37,196
    
    
    
    46,255Losses on extinguishment of debt
    
    
    19,331
    
    
    
    
    
    
    
    19,331
    
    
    
    Other expense (income), net
    
    
    7,665
    
    
    
    (767
    )
    
    
    5,625
    
    
    
    2,543(Loss) income before income taxes
from continuing operations
    
    $
    (1,624
    )
    
    $
    (940
    )
    
    $
    27,666
    
    
    $
    (43,836
    )
 16. Business Combination
   19




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(Dollars in thousands)Fair value of consideration transferredInventories
    
    $
    1,089Property, plant and equipment
    
    
    164Amortizable intangible assets
    
    
    5,417$
    6,670Recognized amounts of identifiable assets acquired and liabilities assumedCash
    
    $
    5,887Accounts receivable
    
    
    1,399Inventories
    
    
    3,676Property, plant and equipment
    
    
    700Amortizable intangible assets
    
    
    2,544Current liabilities
    
    
    (1,895
    )$
    12,311
   17. Miscellaneous Expense (Income), Net
   20




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
          Outlook
   21




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Results of Operations
 Comparison of the three months ended September 30, 2010 and 2009
 Three months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands, except per shareamounts)Net sales
    
    $
    528,564
    
    
    $
    442,089
    
    
    $
    86,475
    
    
    
    19.6
    %Cost of sales
    
    
    408,268
    
    
    
    348,920
    
    
    
    59,348
    
    
    
    17.0
    %Gross profit
    
    
    120,296
    
    
    
    93,169
    
    
    
    27,127
    
    
    
    29.1
    %Gross profit percentage
    
    
    22.8
    %
    
    
    21.1
    %Selling, general and administrative expenses
    
    
    74,835
    
    
    
    65,918
    
    
    
    8,917
    
    
    
    13.5
    %Restructuring and impairment charges
    
    
    9,570
    
    
    
    11,067
    
    
    
    (1,497
    )Other expense (income):Interest expense
    
    
    10,519
    
    
    
    17,891
    
    
    
    (7,372
    )Interest earned
    
    
    (78
    )
    
    
    (216
    )
    
    
    138Losses on extinguishment of debt
    
    
    19,331
    
    
    
    
    
    
    
    19,331Foreign currency losses, net
    
    
    398
    
    
    
    104
    
    
    
    294Miscellaneous expense (income), net
    
    
    7,345
    
    
    
    (655
    )
    
    
    8,000(Loss) income before income taxes
    
    
    (1,624
    )
    
    
    (940
    )
    
    
    (684
    )Income tax expense (benefit)
    
    
    738
    
    
    
    (3,749
    )
    
    
    4,487(Loss) income from continuing operations
    
    
    (2,362
    )
    
    
    2,809
    
    
    
    (5,171
    )Income on disposal of discontinued
operations, net of income taxes
    
    
    
    
    
    
    36
    
    
    
    (36
    )Net (loss) income
    
    $
    (2,362
    )
    
    $
    2,845
    
    
    $
    (5,207
    )Diluted (loss) income per share
    
    $
    (0.04
    )
    
    $
    0.04
    
    
    $
    (0.08
    )
   22




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23




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##### Table of Contents



Three months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands)Segment SalesElectronic Materials
    
    $
    166,953
    
    
    $
    113,210
    
    
    $
    53,743
    
    
    
    47.5
    %Performance Coatings
    
    
    144,218
    
    
    
    129,499
    
    
    
    14,719
    
    
    
    11.4
    %Color and Glass Performance Materials
    
    
    91,167
    
    
    
    88,498
    
    
    
    2,669
    
    
    
    3.0
    %Polymer Additives
    
    
    77,291
    
    
    
    67,660
    
    
    
    9,631
    
    
    
    14.2
    %Specialty Plastics
    
    
    42,633
    
    
    
    39,040
    
    
    
    3,593
    
    
    
    9.2
    %Pharmaceuticals
    
    
    6,302
    
    
    
    4,182
    
    
    
    2,120
    
    
    
    50.7
    %Total segment sales
    
    $
    528,564
    
    
    $
    442,089
    
    
    $
    86,475
    
    
    
    19.6
    %Segment Operating Income (Loss)Electronic Materials
    
    $
    31,394
    
    
    $
    13,129
    
    
    $
    18,265
    
    
    
    139.1
    %Performance Coatings
    
    
    11,322
    
    
    
    14,518
    
    
    
    (3,196
    )
    
    
    (22.0
    )%Color and Glass Performance Materials
    
    
    9,192
    
    
    
    7,815
    
    
    
    1,377
    
    
    
    17.6
    %Polymer Additives
    
    
    6,970
    
    
    
    4,386
    
    
    
    2,584
    
    
    
    58.9
    %Specialty Plastics
    
    
    4,253
    
    
    
    2,977
    
    
    
    1,276
    
    
    
    42.9
    %Pharmaceuticals
    
    
    534
    
    
    
    (1,316
    )
    
    
    1,850
    
    
    NMTotal segment operating income
    
    $
    63,665
    
    
    $
    41,509
    
    
    $
    22,156
    
    
    
    53.4
    %
 
 NM
    
     Not meaningful Electronic Materials Segment Results.
 Performance Coatings Segment Results.
 Color and Glass Performance Materials Segment Results.
  24




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##### Table of Contents



Polymer Additives Segment Results.
 Specialty Plastics Segment Results.
 Pharmaceuticals Segment Results.
 Three months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands)Geographic RevenuesUnited States
    
    $
    260,650
    
    
    $
    198,521
    
    
    $
    62,129
    
    
    
    31.3
    %International
    
    
    267,914
    
    
    
    243,568
    
    
    
    24,346
    
    
    
    10.0
    %Total
    
    $
    528,564
    
    
    $
    442,089
    
    
    $
    86,475
    
    
    
    19.6
    %
   25




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##### Table of Contents



Comparison of the nine months ended September 30, 2010 and 2009
 Nine months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands, except per shareamounts)Net sales
    
    $
    1,564,914
    
    
    $
    1,199,175
    
    
    $
    365,739
    
    
    
    30.5
    %Cost of sales
    
    
    1,215,354
    
    
    
    985,531
    
    
    
    229,823
    
    
    
    23.3
    %Gross profit
    
    
    349,560
    
    
    
    213,644
    
    
    
    135,916
    
    
    
    63.6
    %Gross profit percentage
    
    
    22.3
    %
    
    
    17.8
    %Selling, general and administrative expenses
    
    
    215,635
    
    
    
    196,526
    
    
    
    19,109
    
    
    
    9.7
    %Restructuring and impairment charges
    
    
    44,107
    
    
    
    12,156
    
    
    
    31,951Other expense (income):Interest expense
    
    
    37,196
    
    
    
    46,255
    
    
    
    (9,059
    )Interest earned
    
    
    (542
    )
    
    
    (689
    )
    
    
    147Losses on extinguishment of debt
    
    
    19,331
    
    
    
    
    
    
    
    19,331Foreign currency losses, net
    
    
    3,644
    
    
    
    3,033
    
    
    
    611Miscellaneous expense, net
    
    
    2,523
    
    
    
    199
    
    
    
    2,324Income (loss) before income taxes
    
    
    27,666
    
    
    
    (43,836
    )
    
    
    71,502Income tax expense (benefit)
    
    
    23,246
    
    
    
    (15,844
    )
    
    
    39,090Income (loss) from continuing operations
    
    
    4,420
    
    
    
    (27,992
    )
    
    
    32,412Loss on disposal of discontinued operations, net of income taxes
    
    
    
    
    
    
    (322
    )
    
    
    322Net income (loss)
    
    $
    4,420
    
    
    $
    (28,314
    )
    
    $
    32,734Diluted income (loss) per share
    
    $
    0.04
    
    
    $
    (0.69
    )
    
    $
    0.73
     26




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27




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Nine months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands)Segment SalesElectronic Materials
    
    $
    488,714
    
    
    $
    296,269
    
    
    $
    192,445
    
    
    
    65.0
    %Performance Coatings
    
    
    414,546
    
    
    
    355,420
    
    
    
    59,126
    
    
    
    16.6
    %Color and Glass Performance Materials
    
    
    288,196
    
    
    
    232,264
    
    
    
    55,932
    
    
    
    24.1
    %Polymer Additives
    
    
    231,431
    
    
    
    190,105
    
    
    
    41,326
    
    
    
    21.7
    %Specialty Plastics
    
    
    124,365
    
    
    
    110,833
    
    
    
    13,532
    
    
    
    12.2
    %Pharmaceuticals
    
    
    17,662
    
    
    
    14,284
    
    
    
    3,378
    
    
    
    23.6
    %Total segment sales
    
    $
    1,564,914
    
    
    $
    1,199,175
    
    
    $
    365,739
    
    
    
    30.5
    %Segment Operating Income (Loss)Electronic Materials
    
    $
    97,273
    
    
    $
    21,933
    
    
    $
    75,340
    
    
    
    343.5
    %Performance Coatings
    
    
    35,226
    
    
    
    20,144
    
    
    
    15,082
    
    
    
    74.9
    %Color and Glass Performance Materials
    
    
    26,457
    
    
    
    7,583
    
    
    
    18,874
    
    
    
    248.9
    %Polymer Additives
    
    
    13,797
    
    
    
    7,863
    
    
    
    5,934
    
    
    
    75.5
    %Specialty Plastics
    
    
    9,575
    
    
    
    7,148
    
    
    
    2,427
    
    
    
    34.0
    %Pharmaceuticals
    
    
    388
    
    
    
    (989
    )
    
    
    1,377
    
    
    NMTotal segment operating income
    
    $
    182,716
    
    
    $
    63,682
    
    
    $
    119,034
    
    
    
    186.9
    %
 
 NM
    
     Not meaningful Electronic Materials Segment Results.
 Performance Coatings Segment Results.
 Color and Glass Performance Materials Segment Results.
  28




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Polymer Additives Segment Results.
 Specialty Plastics Segment Results.
 Pharmaceuticals Segment Results.
 Nine months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change
    
    
    % Change(Dollars in thousands)Geographic RevenuesUnited States
    
    $
    778,140
    
    
    $
    549,538
    
    
    $
    228,602
    
    
    
    41.6
    %International
    
    
    786,774
    
    
    
    649,637
    
    
    
    137,137
    
    
    
    21.1
    %Total
    
    $
    1,564,914
    
    
    $
    1,199,175
    
    
    $
    365,739
    
    
    
    30.5
    %
   29




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##### Table of Contents



Summary of Cash Flows for the nine months ended September 30, 2010 and 2009
 Nine months endedSeptember 30,2010
    
    
    2009
    
    
    $ Change(Dollars in thousands)Net cash provided by (used for) operating activities
    
    $
    180,455
    
    
    $
    (5,769
    )
    
    $
    186,224Net cash used for investing activities
    
    
    (14,282
    )
    
    
    (30,431
    )
    
    
    16,149Net cash (used for) provided by financing activities
    
    
    (120,692
    )
    
    
    37,183
    
    
    
    (157,875
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,368
    
    
    
    3,097
    
    
    
    (1,729
    )Increase in cash and cash equivalents
    
    $
    46,849
    
    
    $
    4,080
    
    
    $
    42,769
  2010
    
    
    2009
    
    
    $ Change(Dollars in thousands)Cash flows from operating activitiesNet income (loss)
    
    $
    4,420
    
    
    $
    (28,314
    )
    
    $
    32,734Depreciation and amortization
    
    
    59,510
    
    
    
    63,501
    
    
    
    (3,991
    )Precious metals deposits
    
    
    112,434
    
    
    
    (92,330
    )
    
    
    204,764Accounts and trade notes receivable
    
    
    (51,864
    )
    
    
    (5,531
    )
    
    
    (46,333
    )Inventories
    
    
    (30,552
    )
    
    
    77,477
    
    
    
    (108,029
    )Accounts payable
    
    
    32,586
    
    
    
    (10,758
    )
    
    
    43,344Other changes in current assets and liabilities, net
    
    
    30,664
    
    
    
    8,774
    
    
    
    21,890Other adjustments, net
    
    
    23,257
    
    
    
    (18,263
    )
    
    
    41,520Net cash provided by (used for) continuing operations
    
    
    180,455
    
    
    
    (5,444
    )
    
    
    185,899Net cash used for discontinued operations
    
    
    
    
    
    
    (325
    )
    
    
    325Net cash provided by (used for) operating activities
    
    $
    180,455
    
    
    $
    (5,769
    )
    
    $
    186,224
     30




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##### Table of Contents



Capital Resources and Liquidity
 7.875% Senior Notes
    6.50% Convertible Senior Notes
  2009 Amended and Restated Credit Facility
  2010 Amended and Restated Credit Facility
  Off Balance Sheet Arrangements
 International Receivable Sales Programs.
 Consignment Arrangements for Precious Metals.
  31




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Liquidity Requirements
       32




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Critical Accounting Policies and Their Application
  Newly Issued Accounting Pronouncements
 Multiple Deliverable Revenue Arrangements Revenue
RecognitionMilestone Method
 Risk Factors
   33




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
     September 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)Variable-rate debt and utilization of accounts receivable sales programs:Change in annual interest expense from 1% change in interest rates
    
    $
    35
    
    
    $
    1,170Fixed-rate debt:Carrying amount
    
    
    319,975
    
    
    
    161,050Fair value
    
    
    334,013
    
    
    
    160,275Change in fair value from 1% increase in interest rate
    
    
    (16,477
    )
    
    
    (4,814
    )Change in fair value from 1% decrease in interest rate
    
    
    17,653
    
    
    
    5,000Foreign currency forward contracts:Notional amount
    
    
    192,254
    
    
    
    178,922Carrying amount and fair value
    
    
    (4,755
    )
    
    
    723Change in fair value from 10% appreciation of U.S. dollar
    
    
    7,257
    
    
    
    5,571Change in fair value from 10% depreciation of U.S. dollar
    
    
    (8,870
    )
    
    
    (6,809
    )Interest rate swaps:Notional amount
    
    
    
    
    
    
    150,000Carrying amount and fair value
    
    
    
    
    
    
    (9,516
    )Change in fair value from 1% increase in interest rate
    
    
    
    
    
    
    2,226Change in fair value from 1% decrease in interest rate
    
    
    
    
    
    
    (2,263
    )
  34




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   35




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
    
 Item 1A. Risk Factors
  We may not pay dividends on our common stock at any time in the foreseeable future.
   36




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. (Removed and Reserved)
 
 Item 5. Other Information
  
 Item 6. Exhibits
   37




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##### Table of Contents



SIGNATURES
  Date: October 25, 2010
    FERRO CORPORATION
(Registrant)/s/ James F. KirschJames F. KirschChairman, President and Chief Executive Officer
(Principal Executive Officer) Date: October 25, 2010/s/ Thomas R. MiklichThomas R. MiklichVice President and Chief Financial Officer
(Principal Financial Officer)  38




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##### Table of Contents



EXHIBIT INDEX
  Exhibit:3
    
    
    Articles of incorporation and by-laws3.1
    
    
    Eleventh Amended Articles of Incorporation. (Reference is made to Exhibit 4.1 to
Ferro Corporations Registration Statement on Form S-3, filed March 5, 2008,
which Exhibit is incorporated here by reference.)3.2
    
    
    Certificate of Amendment to the Eleventh Amended Articles of Incorporation of
Ferro Corporation filed with the Ohio Secretary of State on December 29, 1994.
(Reference is made to Exhibit 4.2 to Ferro Corporations Registration Statement
on Form S-3, filed March 5, 2008, which Exhibit is incorporated here by
reference.)3.3
    
    
    Certificate of Amendment to the Eleventh Amended Articles of Incorporation of
Ferro Corporation filed with the Ohio Secretary of State on June 23, 1998.
(Reference is made to Exhibit 4.3 to Ferro Corporations Registration Statement
on Form S-3, filed March 5, 2008, which Exhibit is incorporated here by
reference.)3.4
    
    
    Ferro Corporation Code of Regulations, as amended and restated on April 30, 2010.4
    
    
    Instruments defining rights of security holders, including indentures4.1
    
    
    Senior Indenture, dated as of March 5, 2008, by and between Ferro Corporation
and U.S. Bank National Association. (Reference is made to Exhibit 4.5 to Ferro
Corporations Registration Statement on Form S-3, filed March 5, 2008, which
Exhibit is incorporated here by reference.)4.2
    
    
    First Supplemental Indenture, dated August 19, 2008, by and between Ferro
Corporation and U.S. Bank National Association (with Form of 6.50% Convertible
Senior Note due 2013). (Reference is made to Exhibit 4.2 to Ferro Corporations
Current Report on Form 8-K, filed August 19, 2008, which Exhibit is incorporated
here by reference.)4.3
    
    
    Form of First Supplemental Indenture, by and between the Company and Wilmington
Trust FSB, governing the Companys 7.875% Senior Notes due 2018 (including form
of Note). (Reference is made to Exhibit 4.1 to Ferro Corporations Current
Report on Form 8-K, filed August 24, 2010, which Exhibit is incorporated here by
reference.)The Company agrees, upon request, to furnish to the U.S. Securities and Exchange
Commission a copy of any instrument authorizing long-term debt that does not
authorize debt in excess of 10% of the total assets of the Company and its
subsidiaries on a consolidated basis.
  39




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Exhibit:10.1
    
    
    Separation Agreement and Release, dated July 14, 2010, between Ferro Corporation
and Sallie B. Bailey. (Reference is made to Exhibit 10.1 to Ferro Corporations
Current Report on Form 8-K, filed July 20, 2010, which Exhibit is incorporated
here by reference.)10.2
    
    
    First Amendment to Second Amended and Restated Credit Agreement. (Reference is
made to Exhibit 10.1 to Ferro Corporations Current Report on Form 8-K, filed
July 27, 2010, which Exhibit is incorporated here by reference.)10.3
    
    
    Third Amended and Restated Credit Agreement, dated August 24, 2010, by and among
Ferro Corporation, the various financial institutions from time to time party
thereto and PNC Bank, National Association, JPMorgan Chase Bank, N.A. and Bank
of America, N.A. as agents. (Reference is made to Exhibit 10.1 to Ferro
Corporations Current Report on Form 8-K, filed August 24, 2010, which Exhibit
is incorporated here by reference.)31.1
    
    
    Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a).31.2
    
    
    Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a).32.1
    
    
    Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350.32.2
    
    
    Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350.
  40