##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C. 20549
      Form 10-K
  (Mark One)x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    1-584
  FERRO CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Ohio

34-0217820(State of Corporation)

(IRS Employer Identification
    No.)1000 Lakeside Avenue
    Cleveland, OH(Address of principal
    executive offices)

44114(Zip
    Code)   Registrants telephone
    number, including area code:
    216-641-8580
  Securities Registered Pursuant
    to section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $1.00

New York Stock Exchange   Securities Registered Pursuant
    to Section 12(g) of the Act:
 6.50% Convertible Senior
    Notes due August 15, 2013
 7.875% Senior Notes due
    August 15, 2018
 Series A ESOP Convertible
    Preferred Stock, without Par Value
  x o
  o x
  x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer x

Non-accelerated
    filer o(Do not check if a smaller
    reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
  PART IItem 1

Business


Page 3Item 1A

Risk Factors


Page 8Item 1B

Unresolved Staff Comments


Page 16Item 2

Properties


Page 16Item 3

Legal Proceedings


Page 17Item 4

(Removed and Reserved)PART IIItem 5

Market for Registrants Common Equity,
    Related Stockholder Matters, and Issuer Purchases of Equity
    Securities


Page 18Item 6

Selected Financial Data


Page 19Item 7

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


Page 19Item 7A

Quantitative and Qualitative Disclosures about
    Market Risk


Page 40Item 8

Financial Statements and Supplementary Data


Page 42Item 9

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


Page 98Item 9A

Controls and Procedures


Page 98Item 9B

Other Information


Page 100PART IIIItem 10

Directors, Executive Officers and Corporate
    Governance


Page 101Item 11

Executive Compensation


Page 101Item 12

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


Page 101Item 13

Certain Relationships and Related Transactions,
    and Director Independence


Page 102Item 14

Principal Accountant Fees and Services


Page 102PART IVItem 15

Exhibits and Financial Statement Schedules


Page 103EX-10.38EX-12EX-21EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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PART I  Item 1 
    Business  History,
    Organization and Products
    
    Electronic, Color and Glass Materials  Conductive
    metal pastes and powders, polishing materials, glazes, enamels,
    pigments, decoration colors, and other performance
    materials; and
    Polymer and Ceramic Engineered Materials  Polymer
    additives, engineered plastic compounds, pigment dispersions,
    glazes, frits, porcelain enamel, pigments, and high-potency
    pharmaceutical active ingredients.    
    Particle Engineering  Our ability to design and
    produce very small particles made of a broad variety of
    materials, with precisely controlled characteristics of shape,
    size and size distribution. We understand how to disperse these
    particles within liquid, paste and gel formulations.
    Color and Glass Science  Our understanding of the
    chemistry required to develop and produce pigments that provide
    color characteristics ideally suited to customers
    applications. We have a demonstrated ability to provide
    glass-based coatings with properties that precisely meet
    customers needs in a broad variety of applications.
    Surface Chemistry and Surface Application Technology 
    Our understanding of chemicals and materials used to develop
    products and processes that involve the interface between layers
    and the surface properties of materials.
    Product Formulation  Our ability to develop and
    manufacture combinations of materials that deliver specific
    performance characteristics designed to work within
    customers particular manufacturing processes.   3




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Polymer and Ceramic Engineered
    Materials

Electronic, Color and Glass
    Materials  Polymer Additives

  Electronic Materials  Specialty Plastics

  Color and Glass Performance Materials  Pharmaceuticals  Tile Coating Systems(1)  Porcelain Enamel(1)     (1)
    
    Tile Coating Systems and Porcelain Enamel are combined into one
    reportable segment, Performance Coatings, for financial
    reporting purposes.  Form 10-K.
  Markets
    and Customers
      Appliances

  Industrial products  Automobiles

  Packaging  Building and renovation

  Pharmaceuticals  Electronics

  Photovoltaic products  Household furnishings         Backlog
    of Orders and Seasonality
   4




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Competition
      Raw
    Materials and Supplier Relations
    Metal Oxides:(1)(2)

Other Inorganic Materials: Aluminum oxide(3)

 Boric acid(1)(2) Cerium oxide(3)

 Feldspar(1)(2) Cobalt oxide

 Fiberglass(4) Nickel oxide

 Lithium (1)(2) Titanium dioxide(4)

 Silica(1)(2) Zinc oxide

 Zircon(1)(2)Precious and Non-precious Metals:(1)(3)

Other Organic Materials:(5) Aluminum

 Butanol Bismuth

 Phthalic anhydride Copper

 Soybean oil Gold

 Tallow Palladium

 Toluene Platinum Silver

Energy: ElectricityPolymers:(4)

 Natural gas Polyethylene Polypropylene Polystyrene Unsaturated polyester    (1)
    
    Primarily used by Color and Glass Performance Materials.(2)
    
    Primarily used by Tile Coating Systems and Porcelain Enamel.(3)
    
    Primarily used by Electronic Materials.(4)
    
    Primarily used by Specialty Plastics.(5)
    
    Primarily used by Polymer Additives.   5




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Environmental
    Matters
        Research
    and Development
     6




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Patents,
    Trademarks and Licenses
    Employees
        Domestic
    and Foreign Operations
    Consolidated Subsidiaries: Argentina

 Egypt

 Mexico

 Thailand Australia

 France

 Netherlands

 United Kingdom Austria

 Germany

 Portugal

 United States Belgium

 Indonesia

 Russia

 Venezuela Brazil

 Italy

 Spain China

 Japan

 TaiwanUnconsolidated Affiliates: Italy

 Spain

 South Korea

 Thailand   Form 10-K.
  and/or
 7




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Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, 44114-1147.
  Forward-looking
    Statements
    Item 1A.
    Risk
    Factors    We sell our products into industries where demand has been
    unpredictable, cyclical or heavily influenced by consumer
    spending, and such demand and our results of operations may be
    further impacted by macro-economic circumstances and uncertainty
    in credit markets.
    and/or
 8




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Uncertainty in the development of the solar energy market
    could reduce the revenue we generate from product sales to this
    market
    We strive to improve operating margins through sales
    growth, price increases, productivity gains, and improved
    purchasing techniques, but we may not achieve the desired
    improvements.
    Our implementation of new business information systems and
    processes could adversely affect our results of operations and
    cash flow.
    We depend on reliable sources of energy and raw materials,
    including petroleum-based materials, minerals and other
    supplies, at a reasonable cost, but the availability of these
    materials and supplies could be interrupted
    and/or their
    prices could escalate and adversely affect our sales and
    profitability.
   9




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The global scope of our operations exposes us to risks
    related to currency conversion rates, new and different
    regulatory schemes and changing economic, regulatory, social and
    political conditions around the world.
    
    New and different legal and regulatory requirements and
    enforcement mechanisms in local jurisdictions;
    U.S. and other export licenses may be difficult to obtain
    and we may be subject to export duties or import quotas or other
    trade restrictions or barriers;
    Increased costs of, and decreased availability of,
    transportation or shipping;
    Credit risk and financial conditions of local customers and
    distributors;
    Risk of nationalization of private enterprises by foreign
    governments or restrictions on investments;
    Potentially adverse tax consequences, including imposition or
    increase of withholding and other taxes on remittances and other
    payments by subsidiaries; and
    Local political, economic and social conditions, including the
    possibility of hyperinflationary conditions, deflation, and
    political instability in certain countries.      We have a growing presence in the Asia-Pacific region
    where it can be difficult for a multi-national company, such as
    Ferro, to compete lawfully with local competitors, which may
    cause us to lose business opportunities.
   10




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Regulatory authorities in the U.S., European Union and
    elsewhere are taking a much more aggressive approach to
    regulating hazardous materials and other substances, and those
    regulations could affect sales of our products.
  and/or
  Our businesses depend on a continuous stream of new
    products, and failure to introduce new products could affect our
    sales, profitability and liquidity.
  and/or
  We have limited or no redundancy for certain of our
    manufacturing facilities, and damage to those facilities could
    interrupt our operations, increase our costs of doing business
    and impair our ability to deliver our products on a timely
    basis.
    We may not be able to complete future acquisitions or
    successfully integrate future acquisitions into our business,
    which could adversely affect our business or results of
    operations.
   11




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We have significant deferred tax assets, and if we are
    unable to utilize these assets, our results of operations may be
    adversely affected.
  Form 10-K.
  The markets for our products are highly competitive and
    subject to intense price competition, which could adversely
    affect our sales and earnings performance.
    If we are unable to protect our intellectual property
    rights or to successfully resolve claims of infringement brought
    against us, our product sales and financial performance could be
    affected adversely.
    Our operations are subject to operating hazards and, as a
    result, to stringent environmental, health and safety
    regulations, and compliance with those regulations could require
    us to make significant investments.
     12




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We are subject to stringent labor and employment laws in
    certain jurisdictions in which we operate, we are party to
    various collective bargaining arrangements, and our relationship
    with our employees could deteriorate, which could adversely
    impact our operations.
  and/or
  and/or
  Employee benefit costs, especially postretirement costs,
    constitute a significant element of our annual expenses, and
    funding these costs could adversely affect our financial
    condition.
  Form 10-K.
  We depend on external financial resources, and the
    economic environment and credit market uncertainty could
    interrupt our access to capital markets, borrowings, or
    financial transactions to hedge certain risks, which could
    adversely affect our financial condition.
  Form 10-K.
 13




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We have undertaken several restructuring programs to
    improve our operating performance and achieve cost savings, but
    we may not be able to implement
    and/or
    administer these programs in the manner contemplated and these
    restructuring programs may not produce the desired
    results.
  and/or and/or
  We are exposed to lawsuits in the normal course of
    business, which could harm our business.
    We are exposed to intangible asset risk, and a write down
    of our intangible assets could have an adverse impact to our
    operating results and financial position.
    Interest rates on some of our borrowings are variable, and
    our borrowing costs could be adversely affected by interest rate
    increases.
  Form 10-K.
 14




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Many of our assets are encumbered by liens that have been
    granted to lenders, and those liens affect our flexibility to
    dispose of property and businesses.
  and/or Form 10-K.
  We are subject to a number of restrictive covenants under
    our credit facilities and the indenture governing our senior
    notes, which could affect our flexibility to fund ongoing
    operations and strategic initiatives, and, if we are unable to
    maintain compliance with such covenants, could lead to
    significant challenges in meeting our liquidity
    requirements.
  Form 10-K. Form 10-K.
    We may not pay dividends on our common stock at any time
    in the foreseeable future.
    We are exposed to risks associated with acts of God,
    terrorists and others, as well as fires, explosions, wars,
    riots, accidents, embargoes, natural disasters, strikes and
    other work stoppages, quarantines and other governmental
    actions, and other events or circumstances that are beyond our
    control.
   15




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and/or
    Item 1B 
    Unresolved
    Staff Comments    Item 2 
    Properties                   16




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Item 3 
    Legal
    Proceedings        Executive
    Officers of the Registrant
    James F. Kirsch  53Chairman, President and Chief Executive Officer, 2006Mark H. Duesenberg  49Vice President, General Counsel and Secretary, 2008Executive Director, Legal and Government Affairs, Lenovo Group
    Ltd., a global manufacturer of personal computers and electronic
    devices, 2008Legal Director  Europe, Middle East and Africa,
    Lenovo Group Ltd., 2005Ann E. Killian  56Vice President, Human Resources, 2005Thomas R. Miklich  63Vice President and Chief Financial Officer, 2010Independent Consultant, 2007Chief Financial Officer, Titan Technology Partners, an
    information technology consulting firm, 2005Michael J. Murry  59Vice President, Electronic, Color and Glass Materials, 2009Vice President, Inorganic Specialties, 2006Peter T. Thomas  55Vice President, Polymer and Ceramic Engineered Materials, 2009Vice President, Organic Specialties, 2006  17




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PART II  Item 5 
    Market
    for Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity Securities      COMPARISON
    OF FIVE-YEAR
    CUMULATIVE TOTAL RETURNS
  
  intra-day
  2010


2009High


Low


Dividends


High


Low


DividendsFirst Quarter

$
9.16


$
6.93


$



$
7.77


$
0.81


$
0.01Second Quarter


11.62



6.91







6.00



1.33



Third Quarter


13.77



6.68







10.46



1.95



Fourth Quarter


15.53



12.44







8.98



5.40



    18




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Form 10-K.
    Item 6 
    Selected
    Financial Data    2010


2009


2008


2007


2006(Dollars in thousands, except per share data)Net sales

$
2,101,865


$
1,657,569


$
2,245,152


$
2,147,904


$
1,987,606Income (loss) from continuing operations


7,273



(40,040
)


(52,882
)


(97,502
)


17,181Basic earnings (loss) per share from continuing operations
    attributable to Ferro Corporation common shareholders


0.06



(0.85
)


(1.28
)


(2.34
)


0.33Diluted earnings (loss) per share from continuing operations
    attributable to Ferro Corporation common shareholders


0.06



(0.85
)


(1.28
)


(2.34
)


0.33Cash dividends declared per common share






0.01



0.58



0.58



0.58Total assets


1,434,355



1,526,355



1,544,117



1,638,260



1,741,602Long-term debt, including current portion, and redeemable
    preferred stock


303,269



409,231



577,290



538,758



601,765   Form 10-K.
  Item 7 
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
       19




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Outlook
      clean-up.
   20




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Results
    of Operations
  Comparison
    of the years ended December 31, 2010 and 2009
  2010


2009


$ Change


% Change(Dollars in thousands, except per share data)Net sales

$
2,101,865


$
1,657,569


$
444,296



26.8%Cost of sales


1,643,200



1,343,297



299,903



22.3%Gross profit


458,665



314,272



144,393



45.9%Gross margin percentage


21.8
%


19.0
%Selling, general and administrative expenses


293,736



272,259



21,477



7.9%Restructuring and impairment charges


63,732



19,337



44,395Other expense (income):Interest expense


44,568



63,918



(19,350
)Interest earned


(651
)


(896
)


245Losses on extinguishment of debt


23,001







23,001Foreign currency losses, net


4,724



3,827



897Miscellaneous expense (income), net


5,814



(618
)


6,432Income (loss) before income taxes


23,741



(43,555
)


67,296Income tax expense (benefit)


16,468



(3,515
)


19,983Income (loss) from continuing operations


7,273



(40,040
)


47,313Loss on disposal of discontinued operations, net of income taxes






(325
)


325Net income (loss)

$
7,273


$
(40,365
)

$
47,638Diluted earnings (loss) per share attributable to
    Ferro Corporation common shareholders

$
0.06


$
(0.86
)

$
0.92        21




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non-U.S. and
 22




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##### Table of Contents



2010


2009


$ Change


% Change(Dollars in thousands)Segment SalesElectronic Materials

$
675,401


$
426,896


$
248,505



58.2%Performance Coatings


555,023



487,891



67,132



13.8%Color and Glass Performance Materials


382,155



321,750



60,405



18.8%Polymer Additives


302,352



249,510



52,842



21.2%Specialty Plastics


163,058



149,524



13,534



9.1%Pharmaceuticals


23,876



21,998



1,878



8.5%Total segment sales

$
2,101,865


$
1,657,569


$
444,296



26.8%Segment Operating IncomeElectronic Materials

$
132,585


$
45,344


$
87,241



192.4%Performance Coatings


39,416



29,551



9,865



33.4%Color and Glass Performance Materials


31,514



13,123



18,391



140.1%Polymer Additives


18,387



6,708



11,679



174.1%Specialty Plastics


11,348



10,164



1,184



11.6%Pharmaceuticals


814



438



376



85.8%Total segment operating income

$
234,064


$
105,328


$
128,736



122.2%   Electronic Materials Segment Results.
  Performance Coatings Segment Results.
 23




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Color and Glass Performance Materials Segment
    Results.
  Polymer Additives Segment Results.
  Specialty Plastics Segment Results.
  Pharmaceutical Segment Results.
  2010


2009


$ Change


% Change(Dollars in thousands)Geographic RevenuesUnited States

$
1,039,457


$
758,048


$
281,409



37.1%International


1,062,408



899,521



162,887



18.1%Total geographic revenues

$
2,101,865


$
1,657,569


$
444,296



26.8%    24




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Comparison
    of the years ended December 31, 2009 and 2008
  2009


2008


$ Change


% Change(Dollars in thousands, except per share data)Net sales

$
1,657,569


$
2,245,152


$
(587,583
)


(26.2)%Cost of sales


1,343,297



1,841,485



(498,188
)


(27.1)%Gross profit


314,272



403,667



(89,395
)


(22.1)%Gross margin percentage


19.0
%


18.0
%Selling, general and administrative expenses


272,259



297,119



(24,860
)


(8.4)%Restructuring and impairment charges


19,337



106,142



(86,805
)Other expense (income):Interest expense


63,918



51,290



12,628Interest earned


(896
)


(714
)


(182
)Losses on extinguishment of debt






5,531



(5,531
)Foreign currency losses, net


3,827



742



3,085Miscellaneous income, net


(618
)


(357
)


(261
)Loss before income taxes


(43,555
)


(56,086
)


12,531Income tax benefit


(3,515
)


(3,204
)


(311
)Loss from continuing operations


(40,040
)


(52,882
)


12,842Income from discontinued operations, net of income  taxes






5,014



(5,014
)(Loss) gain on disposal of discontinued operations, net  of
    income taxes


(325
)


9,034



(9,359
)Net loss

$
(40,365
)

$
(38,834
)

$
(1,531
)Diluted loss per share attributable to 
    Ferro Corporation common shareholders

$
(0.86
)

$
(0.95
)

$
0.09        25




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1 8
    non-U.S. and non-U.S. and
   26




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2009


2008


$ Change


% Change(Dollars in thousands)Segment SalesElectronic Materials

$
426,896


$
558,313


$
(131,417
)


(23.5)%Performance Coatings


487,891



627,918



(140,027
)


(22.3)%Color and Glass Performance Materials


321,750



456,644



(134,894
)


(29.5)%Polymer Additives


249,510



349,902



(100,392
)


(28.7)%Specialty Plastics


149,524



225,856



(76,332
)


(33.8)%Pharmaceuticals


21,998



26,519



(4,521
)


(17.0)%Total segment sales

$
1,657,569


$
2,245,152


$
(587,583
)


(26.2)%Segment Operating IncomeElectronic Materials

$
45,344


$
52,868


$
(7,524
)


(14.2)%Performance Coatings


29,551



36,935



(7,384
)


(20.0)%Color and Glass Performance Materials


13,123



39,112



(25,989
)


(66.4)%Polymer Additives


6,708



6,086



622



10.2%Specialty Plastics


10,164



5,385



4,779



88.7%Pharmaceuticals


438



3,524



(3,086
)


(87.6)%Total segment operating income

$
105,328


$
143,910


$
(38,582
)


(26.8)%   Electronic Materials Segment Results.
  Performance Coatings Segment Results.
  Color and Glass Performance Materials Segment
    Results.
 27




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Polymer Additives Segment Results.
  Specialty Plastics Segment Results.
  Pharmaceuticals Segment Results.
  2009


2008


$ Change


% Change(Dollars in thousands)Geographic RevenuesUnited States

$
758,048


$
973,717


$
(215,669
)


(22.1)%International


899,521



1,271,435



(371,914
)


(29.3)%Total geographic revenues

$
1,657,569


$
2,245,152


$
(587,583
)


(26.2)%    28




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Summary
    of Cash Flows for the years ended December 31, 2010, 2009
    and 2008
  2010


2009


2008(Dollars in thousands)Net cash provided by (used for) operating activities

$
198,865


$
2,151


$
(9,096
)Net cash used for investing activities


(33,322
)


(42,654
)


(17,050
)Net cash (used for) provided by financing activities


(157,264
)


46,625



23,854Effect of exchange rate changes on cash


2,249



2,194



458Increase (decrease) in cash and cash equivalents

$
10,528


$
8,316


$
(1,834
)   Operating activities.
    Investing activities.
  Financing activities. 1 8
   29




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1 8
    Capital
    Resources and Liquidity
  2010 Debt
    Refinancing
    
    Issued $250 million of 7.875% Senior Notes in a high
    yield bond offering,
    Entered into a new $350 million revolving credit agreement,
    the 2010 Credit Facility,
    Repurchased $100.5 million of our 6.50% Convertible
    Senior Notes, which were tendered pursuant to a tender offer
    initiated in conjunction with the debt refinancing,
    Repaid all outstanding term loans associated with the 2009
    Amended and Restated Credit Facility,
    Repaid all amounts outstanding under the revolving credit line
    associated with the 2009 Amended and Restated Credit
    Facility, and
    Terminated the interest rate swap agreements that effectively
    fixed the interest rate on a portion of the term loans then
    outstanding under the 2009 Amended and Restated Credit Facility.      7.875% Senior
    Notes
   30




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6.50% Convertible
    Senior Notes
    2009
    Amended and Restated Credit Facility
    2010
    Credit Facility
       31




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Domestic
    Receivable Sales Program
        Off
    Balance Sheet Arrangements
  International Receivable Sales Programs.
 32




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Consignment and Customer Arrangements for Precious
    Metals.
    Bank Guarantees and Standby Letters of Credit.
  Other
    Financing Arrangements
    Liquidity
    Requirements
       33




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2011


2012


2013


2014


2015


Thereafter


Totals(Dollars in thousands)Loans payable

$
709


$



$



$



$



$



$
709Long-term debt(1)


3,349



2,111



36,968



1,092



1,101



254,514



299,135Interest(2)


22,017



22,017



22,017



19,688



19,688



59,062



164,489Operating lease obligations


13,345



8,990



6,080



5,205



4,967



13,087



51,674Purchase commitments(3)


19,136



3,008



1,920



1,788



1,341







27,193Taxes(4)


8,823























8,823Retirement and other postemployment benefits(5)


40,800



46,300



















87,100$
108,179


$
82,426


$
66,985


$
27,773


$
27,097


$
326,663


$
639,123     (1)
    
    Long-term debt excludes unamortized discounts on the Convertible
    Notes and imputed interest and executory costs on capitalized
    lease obligations.(2)
    
    Interest represents only contractual payments for fixed-rate
    debt.(3)
    
    Purchased commitments are non-cancelable contractual obligations
    for raw materials and energy.(4)
    
    We have not projected payments past 2011 due to uncertainties in
    estimating the amount and period of any payments.(5)
    
    The funding amounts are based on the minimum contributions
    required under our various plans and applicable regulations in
    each respective country plus a planned one-time payment of
    $4.9 million in 2011 to improve the funding of a
    non-U.S.
    pension plan. We have not projected contributions past 2012 due
    to uncertainties regarding the assumptions involved in
    estimating future required contributions.  Critical
    Accounting Policies
   34




---



##### Table of Contents



Revenue
    Recognition
    
    Persuasive evidence of an arrangement exists;
    The selling price is fixed and determinable;
    Collection is reasonably assured; and
    Title and risk of loss has passed to our customers.    Restructuring
    and Cost Reduction Programs
      Goodwill
   35




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##### Table of Contents



Significant Assumptions

2010

2009Weighted-average cost of capital

12.0% - 13.0%

13.5% - 14.0%Residual growth rate

3.0% - 5.0%

3.0% - 5.0%       Income
    Taxes
     36




---



##### Table of Contents



non-U.S. tax non-U.S. jurisdictions,
      Derivative
    Financial Instruments
     37




---



##### Table of Contents



Pension
    and Other Postretirement Benefits
      non-U.S. plans
  non-U.S. plans. non-U.S. plans.
 38




---



##### Table of Contents



25- Basis-Point Decrease in


25-Basis-Point Decrease inDiscount Rate


Asset Return Assumption(Dollars in thousands)U.S. pension plans


$  1,241



$  645U.S. retiree medical plan


4



Non-U.S.
    pension plans


252



141Total


$  1,497



$  786     2010

2009

ChangeDiscount rate used to measure benefit cost:U.S. pension plans


6.20%


6.74%


(0.54)%U.S. retiree medical plan


5.85%


6.45%


(0.60)%Non-U.S.
    pension plans


5.88%


5.85%


0.03%Discount rate used to measure benefit obligations:U.S. pension plans


5.85%


6.20%


(0.35)%U.S. retiree medical plan


5.45%


5.85%


(0.40)%Non-U.S.
    pension plans


5.51%


5.88%


(0.37)%Expected return on plan assets:U.S. pension plans


8.50%


8.50%


%Non-U.S.
    pension plans


5.28%


5.24%


0.04%     non-U.S. plans non-U.S. plans
 39




---



##### Table of Contents



Inventories
  first-in,
  Environmental
    Liabilities
      Impact
    of Newly Issued Accounting Pronouncements
  Form 10-K
  Item 7A 
    Quantitative
    and Qualitative Disclosures about Market Risk         40




---



##### Table of Contents



2010


2009(Dollars in thousands)Variable-rate debt and utilization of asset securitization
    program:Change in annual interest expense from 1% change in interest
    rates

$
41


$
1,170Fixed-rate debt:Carrying amount


283,368



161,050Fair value


302,942



160,275Change in fair value from 1% increase in interest rate


(15,635
)


(4,814
)Change in fair value from 1% decrease in interest rate


16,759



5,000Foreign currency forward contracts:Notional amount


187,291



178,922Carrying amount and fair value


(240
)


723Change in fair value from 10% appreciation of U.S. dollar


7,735



5,571Change in fair value from 10% depreciation of U.S. dollar


(9,454
)


(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
)  41




---



##### Table of Contents



Item 8 
    Financial
    Statements and Supplementary Data   REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Internal Control - Integrated Framework
      42




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2010


2009


2008(In thousands, except per share amounts)Net sales

$
2,101,865


$
1,657,569


$
2,245,152Cost of sales


1,643,200



1,343,297



1,841,485Gross profit


458,665



314,272



403,667Selling, general and administrative expenses


293,736



272,259



297,119Restructuring and impairment charges


63,732



19,337



106,142Other expense (income):Interest expense


44,568



63,918



51,290Interest earned


(651
)


(896
)


(714
)Losses on extinguishment of debt


23,001







5,531Foreign currency losses, net


4,724



3,827



742Miscellaneous expense (income), net


5,814



(618
)


(357
)Income (loss) before income taxes


23,741



(43,555
)


(56,086
)Income tax expense (benefit)


16,468



(3,515
)


(3,204
)Income (loss) from continuing operations


7,273



(40,040
)


(52,882
)Income from discontinued operations, net of income taxes










5,014(Loss) gain on disposal of discontinued operations, net of
    income taxes






(325
)


9,034Net income (loss)


7,273



(40,365
)


(38,834
)Less: Net income attributable to noncontrolling interests


1,577



2,551



1,596Net income (loss) attributable to Ferro Corporation


5,696



(42,916
)


(40,430
)Dividends on preferred stock


(660
)


(705
)


(877
)Net income (loss) attributable to Ferro Corporation common
    shareholders

$
5,036


$
(43,621
)

$
(41,307
)Amounts attributable to Ferro Corporation:Income (loss) from continuing operations, net of income tax

$
5,696


$
(42,591
)

$
(54,478
)(Loss) income from discontinued operations, net of income tax






(325
)


14,048Net income (loss) attributable to Ferro Corporation

$
5,696


$
(42,916
)

$
(40,430
)Weighted-average common shares outstanding


85,823



50,935



43,261Incremental common shares attributable to convertible preferred
    stock, performance shares, deferred stock units, and stock
    options


716







Weighted-average diluted shares outstanding


86,539



50,935



43,261Per common share dataBasic earnings (loss) attributable to Ferro Corporation common
    shareholders:From continuing operations

$
0.06


$
(0.85
)

$
(1.28
)From discontinued operations






(0.01
)


0.33$
0.06


$
(0.86
)

$
(0.95
)Diluted earnings (loss) attributable to Ferro Corporation common
    shareholders:From continuing operations

$
0.06


$
(0.85
)

$
(1.28
)From discontinued operations






(0.01
)


0.33$
0.06


$
(0.86
)

$
(0.95
)    43




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2010


2009(Dollars in thousands)ASSETSCurrent assetsCash and cash equivalents

$
29,035


$
18,507Accounts receivable, net


302,448



285,638Inventories


202,067



180,700Deposits for precious metals


28,086



112,434Deferred income taxes


24,924



19,618Other receivables


27,762



27,795Other current assets


7,432



7,180Total current assets


621,754



651,872Other assetsProperty, plant and equipment, net


391,496



432,405Goodwill


219,716



221,044Amortizable intangible assets, net


11,869



10,610Deferred income taxes


121,640



133,705Other non-current assets


67,880



76,719Total assets

$
1,434,355


$
1,526,355LIABILITIES and EQUITYCurrent liabilitiesLoans payable and current portion of long-term debt

$
3,580


$
24,737Accounts payable


207,770



196,038Income taxes


8,823



7,241Accrued payrolls


49,590



33,346Accrued expenses and other current liabilities


75,912



59,587Total current liabilities


345,675



320,949Other liabilitiesLong-term debt, less current portion


290,971



398,720Postretirement and pension liabilities


189,058



203,743Deferred income taxes


2,211



1,124Other non-current liabilities


22,833



31,897Total liabilities


850,748



956,433Series A convertible preferred stock (approximates
    redemption value)


9,427



9,427EquityFerro Corporation shareholders equity:Common stock


93,436



93,436Paid-in capital


323,015



331,376Retained earnings


362,164



357,128Accumulated other comprehensive loss


(50,949
)


(60,147
)Common shares in treasury, at cost


(164,257
)


(171,567
)Total Ferro Corporation shareholders equity


563,409



550,226Noncontrolling interests


10,771



10,269Total equity


574,180



560,495Total liabilities and equity

$
1,434,355


$
1,526,355    44




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF EQUITY
  Ferro Corporation ShareholdersAccumulatedCommon Shares In











Other


Non-Treasury


Common


Paid-in


Retained


Comprehensive


controlling


TotalShares


Amount


Stock


Capital


Earnings


Income (Loss)(a)


Interests


Equity(In thousands, except per share data)Balances at December 31, 2007


8,753


$
(202,855
)

$
52,323


$
166,391


$
468,190


$
(7,765
)

$
9,896


$
486,180Net (loss) income


















(40,430
)






1,596



(38,834
)Other comprehensive income (loss), net of tax:Foreign currency translation






















(23,490
)


300



(23,190
)Postretirement benefit liabilities






















(65,235
)


20



(65,215
)Raw material commodity swaps






















713







713Interest rate swaps






















(2,973
)






(2,973
)Other






















(52
)






(52
)Total comprehensive loss






























(129,551
)Cash dividends(b):Common


















(25,192
)










(25,192
)Preferred


















(877
)










(877
)Issuance of Convertible Notes














12,409















12,409Stock-based compensation transactions


(321
)


5,331







(423
)














4,908Income tax benefits














43















43Distributions to noncontrolling interests


























(2,057
)


(2,057
)Adjustment to apply FAS No. 158
    as of January 1, 2008, net of tax


















(505
)


366







(139
)Balances at December 31, 2008


8,432



(197,524
)


52,323



178,420



401,186



(98,436
)


9,755



345,724Net (loss) income


















(42,916
)






2,551



(40,365
)Other comprehensive income (loss), net of tax:Foreign currency translation






















14,250



(2
)


14,248Postretirement benefit liabilities






















21,387







21,387Raw material commodity swaps






















579







579Interest rate swaps






















2,073







2,073Total comprehensive loss






























(2,078
)Issuance of common stock










41,113



174,542















215,655Cash dividends(b):Common


















(437
)










(437
)Preferred


















(705
)










(705
)Stock-based compensation transactions


(1,057
)


25,957







(21,586
)














4,371Distributions to noncontrolling interests


























(2,035
)


(2,035
)Balances at December 31, 2009


7,375



(171,567
)


93,436



331,376



357,128



(60,147
)


10,269



560,495Net income


















5,696







1,577



7,273Other comprehensive income (loss), net of tax:Foreign currency translation






















(2,141
)


170



(1,971
)Postretirement benefit liabilities






















5,325



(7
)


5,318Raw material commodity swaps






















(107
)






(107
)Interest rate swaps






















6,121







6,121Total comprehensive income






























16,634Cash dividends(b):Preferred


















(660
)










(660
)Redemption of Convertible Notes














(4,925
)














(4,925
)Stock-based compensation transactions


(133
)


7,310







(3,436
)














3,874Distributions to noncontrolling interests


























(1,238
)


(1,238
)Balances at December 31, 2010


7,242


$
(164,257
)

$
93,436


$
323,015


$
362,164


$
(50,949
)

$
10,771


$
574,180     (a)
    
    Accumulated translation adjustments
    were $24,129, $26,270, and $12,020, accumulated postretirement
    benefit liability adjustments were $(75,026), $(80,351), and
    $(101,738), accumulated raw material commodity swap adjustments
    were $-0-, $108, and $(471), and accumulated interest rate swap
    adjustments were $-0-, $(6,122), and $(8,195), at
    December 31, 2010, 2009, and 2008, respectively, all net of
    tax.(b)
    
    Dividends per share of common stock
    were $-0- in 2010, $0.01 in 2009, and $0.58 in 2008. Dividends
    per share of convertible preferred stock were $3.25 in 2010,
    2009, and 2008.   45




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2010


2009


2008(Dollars in thousands)Cash flows from operating activitiesNet income (loss)

$
7,273


$
(40,365
)

$
(38,834
)Adjustments to reconcile net income (loss) to net cash provided
    by (used for) operating activities:Loss (gain) from discontinued operations, net of tax






325



(14,048
)(Gain) loss on sale of assets and businesses


(2,330
)


28



2,598Depreciation and amortization


76,936



88,138



74,595Restructuring and impairment charges


3,174



6,486



80,556Losses on extinguishment of debt


23,001







5,531Provision for allowance for doubtful accounts


2,935



2,676



5,843Retirement benefits


(1,630
)


8,890



(15,254
)Deferred income taxes


(5,258
)


(12,747
)


(14,105
)Changes in current assets and liabilities, net of effects of
    acquisitions:Accounts and trade notes receivable


(24,697
)


12,351



30,455Note receivable from Ferro Finance Corporation










(46,344
)Inventories


(22,654
)


76,254



(6,462
)Deposits for precious metals


84,348



(112,434
)


Other receivables and other current assets


(890
)


31,566



(23,137
)Accounts payable


12,618



(29,230
)


(27,185
)Accrued expenses and other current liabilities


36,750



(17,367
)


(23,898
)Other operating activities


9,289



(12,091
)


(2,692
)Net cash provided by (used for) continuing operations


198,865



2,480



(12,381
)Net cash (used for) provided by discontinued operations






(329
)


3,285Net cash provided by (used for) operating activities


198,865



2,151



(9,096
)Cash flows from investing activitiesCapital expenditures for plant and equipment of continuing
    operations


(44,737
)


(43,260
)


(70,751
)Capital expenditures for plant and equipment of discontinued
    operations










(2,317
)Expenditures for other assets










(3,400
)Expenditures for acquisitions, net of cash acquired


(6,938
)






Proceeds from sale of assets and businesses


18,214



483



2,360Net proceeds from sale of discontinued operations










56,484Other investing activities


139



123



574Net cash used for investing activities


(33,322
)


(42,654
)


(17,050
)Cash flows from financing activitiesNet (repayments) borrowings under loans payable


(21,495
)


15,462



3,687Proceeds from long-term debt


632,299



903,886



1,196,674Net proceeds from sale of common stock






215,655



Principal payments on long-term debt


(392,061
)


(1,075,102
)


(935,680
)Extinguishment of debt


(362,997
)






(205,269
)Debt issue costs


(9,848
)


(16,863
)


(5,570
)Cash dividends


(660
)


(1,142
)


(26,069
)Proceeds from exercise of stock options


137







58Other financing activities


(2,639
)


4,729



(3,977
)Net cash (used for) provided by financing activities


(157,264
)


46,625



23,854Effect of exchange rate changes on cash and cash equivalents


2,249



2,194



458Increase (decrease) in cash and cash equivalents


10,528



8,316



(1,834
)Cash and cash equivalents at beginning of period


18,507



10,191



12,025Cash and cash equivalents at end of period

$
29,035


$
18,507


$
10,191Cash paid during the period for:Interest

$
31,881


$
51,505


$
52,670Income taxes


20,379



10,145



10,308    46




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and 2008
  1.
    Our
    Business    Polymer and Ceramic Engineered
    Materials

Electronic, Color and Glass
    Materials  Polymer Additives

  Electronic Materials  Specialty Plastics

  Color and Glass Performance Materials  Pharmaceuticals  Tile Coating Systems  Porcelain Enamel       2.
    Significant
    Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates and Assumptions in the Preparation of Financial
    Statements
   47




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Foreign
    Currency Translation
      Revenue
    Recognition
    
    Persuasive evidence of an arrangement exists;
    The selling price is fixed and determinable;
    Collection is reasonably assured; and
    Title and risk of loss has passed to our customers.        Cost
    of Sales
   48




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Selling,
    General and Administrative Expenses
      Restructuring
    Programs
      Asset
    Impairment
    
    An adverse change in the business climate or market price of a
    long-lived asset or asset group;
    An adverse change in the extent or manner in which a long-lived
    asset or asset group is used or in its physical condition;
    Current operating losses for a long-lived asset or asset group
    combined with a history of such losses or projected or
    forecasted losses that demonstrate that the losses will be
    continuing; or 49




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
   
    A current expectation that, more likely than not, a long-lived
    asset or asset group will be sold or otherwise disposed of
    significantly before the end of its previously estimated useful
    life.      Derivative
    Financial Instruments
      Postretirement
    and Other Employee Benefits
   50




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Contingencies
    Income
    Taxes
          Comprehensive
    Income (Loss)
    Cash
    Equivalents
    Accounts
    Receivable and the Allowance for Doubtful Accounts
   51




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009


2008(Dollars in thousands)Allowance for doubtful accounts

$
11,156


$
10,685


$
11,668Bad debt expense


2,935



2,676



4,472   Inventories
  first-in,
      Property,
    Plant and Equipment
    Buildings

20 to 40 yearsMachinery and equipment

5 to 15 years  52




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Environmental
    Liabilities
      
    Remediation requirements at the contaminated site;
    The nature of the remedy;
    Existing technology;
    The outcome of discussions with regulatory agencies;
    Other potentially responsible parties at multi-party
    sites; and
    The number and financial viability of other potentially
    responsible parties.      Reclassifications
   53




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Recently
    Adopted Accounting Pronouncements
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R) FASB Accounting Standards
    Codificationtm
  2009-16, Accounting for Transfers of Financial Assets 2009-16), 2009-16
  2009-17, Improvements to Financial Reporting by Enterprises Involved
    with Variable Interest Entities 2009-17), 2009-17
  2010-06, Improving Disclosures About Fair Value Measurements 2010-06), 2010-06
  2010-29, Disclosure of Supplementary Pro Forma Information for
    Business Combinations 2010-29), 2010-29
  New
    Accounting Pronouncements Not Yet Adopted
  2009-13, Multiple Deliverable Revenue Arrangements 2009-13), 2010-17, Revenue Recognition  Milestone Method 2010-17),
 54




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  3.
    Inventories  December 31,2010


2009(Dollars in thousands)Raw materials

$
63,856


$
54,481Work in process


38,684



37,449Finished goods


99,527



88,770Total

$
202,067


$
180,700     4.
    Property,
    Plant and Equipment  December 31,2010


2009(Dollars in thousands)Land

$
31,120


$
41,809Buildings


264,004



265,367Machinery and equipment


666,118



749,913Construction in progress


24,584



19,205Total property, plant and equipment


985,826



1,076,294Total accumulated depreciation


(594,330
)


(643,889
)Net property, plant and equipment

$
391,496


$
432,405      55




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
        5.
    Goodwill
    and Other Intangible Assets    2010


2009(Dollars in thousands)Balance at beginning of year

$
221,044


$
229,665Acquisitions


4,038



Write-offs


(4,237
)


Impairments






(8,225
)Other adjustments


(219
)


(1,325
)Currency translation adjustments


(910
)


929Balance at end of year

$
219,716


$
221,044  56




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Color and GlassElectronic


Performance


Performance


Polymer


SpecialtyMaterials


Coatings


Materials


Additives


Plastics


Pharmaceuticals


Total(Dollars in thousands)Balance at December 31, 2008:Gross goodwill

$
151,901


$
41,978


$
68,949


$
73,447


$
16,973


$
40,431


$
393,679Accumulated impairment losses






(41,388
)






(73,447
)


(16,973
)


(32,206
)


(164,014
)151,901



590



68,949











8,225



229,665Impairment loss






















(8,225
)


(8,225
)Other adjustments


(67
)






(1,258
)














(1,325
)Foreign currency adjustment


141



6



782















929Balance at December 31, 2009:Gross goodwill


151,975



41,984



68,473



73,447



16,973



40,431



393,283Accumulated impairment losses






(41,388
)






(73,447
)


(16,973
)


(40,431
)


(172,239
)151,975



596



68,473















221,044Acquisitions






4,038



















4,038Write-offs










(4,237
)














(4,237
)Other adjustments


(17
)






(202
)














(219
)Foreign currency adjustment


637



(22
)


(1,525
)














(910
)Balance at December 31, 2010:Gross goodwill


152,595



46,000



62,509



73,447



16,973



40,431



391,955Accumulated impairment losses






(41,388
)






(73,447
)


(16,973
)


(40,431
)


(172,239
)$
152,595


$
4,612


$
62,509


$



$



$



$
219,716     Significant Assumptions

2010

2009Weighted-average cost of capital

12.0% - 13.0%

13.5% - 14.0%Residual growth rate

3.0% - 5.0%

3.0% - 5.0%        57




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
      Estimated

December 31,Economic Life

2010


2009(Dollars in thousands)Gross amortizable intangible assets:Patents

5 - 16 years

$
5,714


$
5,810Land rights

14 - 40 years


4,885



4,787Technological know-how and other

5 - 30 years


11,475



9,400Total gross amortizable intangible assets




22,074



19,997Accumulated amortization:Patents




(4,447
)


(4,014
)Land rights




(2,125
)


(1,996
)Technological know-how and other




(3,633
)


(3,377
)Total accumulated amortization




(10,205
)


(9,387
)Amortizable intangible assets, net



$
11,869


$
10,610     6.
    Financing
    and Short-term and Long-term Debt    2010


2009(Dollars in thousands)Loans payable to banks

$
709


$
5,891Accounts receivable asset securitization program






17,762Current portion of long-term debt


2,871



1,084Total loans payable and current portion of long-term debt

$
3,580


$
24,737  58




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Loans
    payable to banks
    Accounts
    receivable asset securitization program
          2010


2009(Dollars in thousands)7.875% Senior Notes

$
250,000


$
6.50% Convertible Senior Notes, net of unamortized discounts


33,368



156,896Former revolving credit facility






1,700Former term loan facility






231,385Capitalized lease obligations (see Note 15)


6,177



5,669Other notes


4,297



4,154Total long-term debt


293,842



399,804Current portion


(2,871
)


(1,084
)Total long-term debt, less current portion

$
290,971


$
398,720  59




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    (Dollars inthousands)2011

$
3,3492012


2,1112013


36,9682014


1,0922015


1,101Thereafter


254,514Total maturities of long-term debt


299,135Unamortized discounts on 6.50% Convertible Senior Notes


(2,473
)Imputed interest and executory costs on capitalized lease
    obligations


(2,820
)Total long-term debt

$
293,842   7.875% Senior
    Notes
        6.50% Convertible
    Senior Notes
   60




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
          2009
    Amended and Restated Credit Facility
     61




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  2010
    Credit Facility
         62




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  International
    Receivables Sales Programs
      2010


2009


2008(Dollars in thousands)Trade accounts receivable sold to financial institutions

$
91,233


$
112,745


$
232,065Cash proceeds from financial institutions


92,528



121,350



221,509Trade accounts receivable collected and remitted to financial
    institutions


12,177



34,101



73,301   Other
    Financing Arrangements
    7.
    Financial
    Instruments    
    Cash and cash equivalents;
    Notes receivable;
    Deposits;
    Miscellaneous receivables; and
    Short-term loans payable to banks. 63




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Long-term
    Debt
    2010


2009Fair





FairCarrying Amount


Value


Carrying Amount


Value(Dollars in thousands)7.875% Senior Notes

$
250,000


$
266,563


$



$
6.50% Convertible Senior Notes


33,368



36,379



156,896



157,191Former revolving credit facility










1,700



1,747Former term loan facility










231,385



237,047Other notes


4,297



3,600



4,154



3,084     Derivative
    Instruments
  Interest rate swaps.
  Foreign currency forward contracts.
 64




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    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

$



$
899


Other receivablesForeign currency forward contracts


1,261






Accrued expenses and other
    current liabilitiesTotal fair value

$
1,261


$
899Liability derivatives:Foreign currency forward contracts

$



$
(176
)

Other receivablesForeign currency forward contracts


(1,501
)





Accrued expenses and other
    current liabilitiesTotal fair value

$
(1,501
)

$
(176
)             2010Level 1


Level 2


Level 3


Total


2009(Dollars in thousands)Assets:Foreign currency forward contracts, net

$



$



$



$



$
723Liabilities:Interest rate swaps

$



$



$



$



$
(9,516
)Foreign currency forward contracts, net






(240
)






(240
)


Total fair value

$



$
(240
)

$



$
(240
)

$
(9,516
)  65




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    (Dollars inthousands)Balance at December 31, 2008

$
Total losses included in other comprehensive loss


(1,802
)Settlements


3,544Transfers in and/or out of Level 3


(1,742
)Balance at December 31, 2009

$
     Amount of Gain (Loss)Amount of Gain (Loss)


Reclassified from AOCI into


Location of Gain (Loss)Recognized in OCI


Income


Reclassified from AOCI into2010


2009


2010


2009


Income(Dollars in thousands)Derivatives in Cash Flow Hedging Relationships:Interest rate swaps









$
(4,885
)

$
(7,101
)

Interest expense(6,849
)





Miscellaneous expenseTotal

$
(2,218
)

$
(3,893
)

$
(11,734
)

$
(7,101
)   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

$
5,553


$
(11,833
)


Foreign currency losses, net  66




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  8.
    Income
    Taxes    2010


2009


2008(Dollars in thousands)U.S.

$
65,366


$
(18,755
)

$
(12,171
)Foreign


(41,625
)


(24,800
)


(43,915
)Total

$
23,741


$
(43,555
)

$
(56,086
)     2010


2009


2008(Dollars in thousands)Current:U.S. federal

$
6,388


$
982


$
(2,262
)Foreign


14,964



8,403



21,713State and local


374



(153
)


580Total current


21,726



9,232



20,031Deferred:U.S. federal


13,693



(8,490
)


(8,117
)Foreign


(11,321
)


(4,592
)


(15,167
)State and local


(7,630
)


335



49Total deferred


(5,258
)


(12,747
)


(23,235
)Total income tax expense (benefit)

$
16,468


$
(3,515
)

$
(3,204
)  67




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009


2008(Dollars in thousands)Foreign currency translation adjustments

$
1,717


$
583


$
1,952Postretirement benefit liability adjustments


4,553



6,453



(32,783
)Raw material commodity swap adjustments


83



285



394Interest rate swap adjustments


3,396



1,134



(1,643
)Issuance of convertible debt










7,164Dividends on performance shares










(43
)Stock options exercised










(3
)Other










(35
)Total income tax expense (benefit) allocated to Ferro
    Corporation shareholders equity

$
9,749


$
8,455


$
(24,997
)     2010


2009


2008U.S. federal statutory income tax rate


35.0
%


(35.0)
%


(35.0)
%Adjustment of valuation allowances


39.0



2.9



17.4State taxes


7.4



0.4



(0.7)Medicare subsidy


6.1



(0.3)



(0.1)Foreign tax rate difference


3.6



9.7



11.6Goodwill write-offs and impairments


0.9



6.6



27.5U.S. tax cost of foreign dividends


0.8



4.7



(10.9)Stock options


0.1



1.4



0.7Domestic production activities deduction


(8.7)







Net adjustment of prior year accrual


(4.6)



4.3



(4.0)Foreign exchange on loan settlement


(4.1)







Uncertain tax positions


(3.3)



6.6



(10.2)Research and development credit


(1.5)



(10.1)



(0.4)ESOP dividends


(1.0)



(0.6)



(0.8)Miscellaneous


(0.4)



1.3



(0.8)Effective tax rate


69.3
%


(8.1)
%


(5.7)
%  68




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009(Dollars in thousands)Deferred tax assets:Pension and other benefit programs

$
61,074


$
64,516Foreign operating loss carryforwards


55,984



44,595Foreign tax credit carryforwards


30,510



42,023Accrued liabilities


19,223



9,984Other credit carryforwards


11,502



14,202Capitalized research costs


10,278



12,347Inventories


4,011



3,625Allowance for doubtful accounts


3,285



4,654State operating loss carryforwards


2,632



5,011Other


14,715



16,125Total deferred tax assets


213,214



217,082Deferred tax liabilities:Property, equipment and intangibles  depreciation and
    amortization


30,507



31,264Unremitted earnings of foreign subsidiaries


2,051



3,037Convertible debt instruments


866



5,725Other


9,944



12,368Total deferred tax liabilities


43,368



52,394Net deferred tax assets before valuation allowance


169,846



164,688Valuation allowance


(26,815
)


(17,969
)Net deferred tax assets

$
143,031


$
146,719    69




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Operating Loss


Tax CreditCarryforwards


Carryforwards(Dollars in thousands)Expiring in:2011

$
243


$
252012-2016


12,360



36,4092017-2021


18,326



15,1592022-2026


665



7,5382027-2031


271



2,5202032-Indefinitely


26,663



2,402Total

$
58,528


$
64,053         2010


2009(Dollars in thousands)Current assets

$
24,924


$
19,618Non-current assets


121,640



133,705Current liabilities


(1,322
)


(5,480
)Non-current liabilities


(2,211
)


(1,124
)Net deferred tax assets

$
143,031


$
146,719  70




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009


2008(Dollars in thousands)Balance at beginning of year

$
36,399


$
34,764


$
52,173Additions based on tax positions related to the current year


3,619



4,094



1,770Additions for tax positions of prior years


78



2,064



2,774Reductions for tax positions of prior years


(1,029
)


(656
)


(5,256
)Reductions as a result of expiring statutes of limitations


(3,644
)


(4,199
)


(11,420
)Foreign currency translation of
    non-U.S.
    dollar denominated reserves


(1,968
)


1,282



(1,472
)Settlements with taxing authorities






(950
)


(3,805
)Balance at end of year

$
33,455


$
36,399


$
34,764     non-U.S. tax
  non-U.S. income
    9.
    Contingent
    Liabilities   71




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
          10.
    Retirement
    Benefits  Defined
    Benefit Pension Plans
  U.S. Plans


Non-U.S. Plans2010


2009


2008


2010


2009


2008(Dollars in thousands)Net periodic benefit cost:Service cost

$
21


$
24


$
201


$
3,289


$
4,279


$
5,405Interest cost


20,545



21,083



20,705



10,122



10,664



11,503Expected return on plan assets


(18,138
)


(15,437
)


(22,652
)


(6,908
)


(7,145
)


(8,353)Amortization of prior service cost (credit)


95



98



100



(308
)


(401
)


118Net amortization and deferral


12,630



15,794



2,495



753



1,047



189Curtailment and settlement effects










259



6,371



(606
)


(747)Special termination benefits














38



46



121Total net periodic benefit cost

$
15,153


$
21,562


$
1,108


$
13,357


$
7,884


$
8,236Weighted-average assumptions:Discount rate


6.20
%


6.74
%


6.49
%


5.88
%


5.85
%


5.56%Rate of compensation increase


N/A



N/A



N/A



3.42
%


3.45
%


3.49%Expected return on plan assets


8.50
%


8.50
%


8.50
%


5.28
%


5.24
%


5.25%    72




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
        U.S. Plans


Non-U.S. Plans2010


2009


2010


2009(Dollars in thousands)Change in benefit obligation:Benefit obligation at beginning of year

$
343,151


$
320,539


$
197,086


$
185,064Service cost


21



24



3,289



4,279Interest cost


20,545



21,083



10,122



10,664Amendments














(1,523
)Curtailments










(2,966
)


(688
)Settlements










(98,340
)


(1,372
)Special termination benefits










38



46Plan participants contributions










329



528Benefits paid


(20,571
)


(20,624
)


(9,507
)


(8,655
)Actuarial loss


17,338



22,129



14,842



1,511Exchange rate effect










(10,793
)


7,232Benefit obligation at end of year

$
360,484


$
343,151


$
104,100


$
197,086Accumulated benefit obligation at end of year

$
360,484


$
343,151


$
98,198


$
188,804Change in plan assets:Fair value of plan assets at beginning of year

$
230,789


$
200,708


$
149,921


$
131,395Actual return on plan assets


29,564



42,232



9,863



13,957Employer contributions


18,155



8,473



10,441



8,155Plan participants contributions










329



528Benefits paid


(20,571
)


(20,624
)


(9,507
)


(8,655
)Effect of settlements










(97,491
)


(1,372
)Exchange rate effect










(8,259
)


5,913Fair value of plan assets at end of year

$
257,937


$
230,789


$
55,297


$
149,921Amounts recognized in the balance sheet:Other non-current assets

$



$



$
607


$
1,994Accrued expenses and other current liabilities


(373
)


(396
)


(1,832
)


(1,992
)Postretirement and pension liabilities


(102,174
)


(111,966
)


(47,578
)


(47,167
)Funded status

$
(102,547
)

$
(112,362
)

$
(48,803
)

$
(47,165
)   73




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  U.S. Plans


Non-U.S. Plans2010


2009


2010


2009(Dollars in thousands)Weighted-average assumptions as of the measurement date:Discount rate


5.85
%


6.20
%


5.51
%


5.88
%Rate of compensation increase


N/A



N/A



3.44
%


3.42
%Pension plans with benefit obligations in excess of plan
    assets:Benefit obligations

$
360,484


$
343,151


$
101,819


$
178,573Plan assets


257,937



230,789



52,409



129,414Pension plans with accumulated benefit obligations in excess
    of plan assets:Projected benefit obligations

$
360,484


$
343,151


$
99,261


$
176,048Accumulated benefit obligations


360,484



343,151



94,151



169,768Plan assets


257,937



230,789



49,928



126,995     U.S. Plans


Non-U.S. Plans2010


2009


2010


2009(Dollars in thousands)Balance at beginning of year

$
(126,596
)

$
(147,153
)

$
(12,180
)

$
(18,948
)Net gain (loss) arising during the year


(5,913
)


4,665



(9,830
)


5,302Prior service cost arising during the year














1,523Amounts recognized as net periodic benefit costs


12,725



15,892



7,724



728Exchange rate effects










909



(785
)Balance at end of year

$
(119,784
)

$
(126,596
)

$
(13,377
)

$
(12,180
)Amounts recognized in accumulated other comprehensive income
    (loss):Net loss

$
(119,608
)

$
(126,325
)

$
(14,363
)

$
(16,458
)Prior service (cost) credit


(176
)


(271
)


986



4,278Total

$
(119,784
)

$
(126,596
)

$
(13,377
)

$
(12,180
)Estimated amounts to be amortized in 2011:Net loss

$
(12,938
)





$
(630
)Prior service (cost) credit


(73
)






140Total

$
(13,011
)





$
(490
)   non-U.S. plans,
 74




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
        Level 1


Level 2


Level 3


Total(Dollars in thousands)U.S. plans:Fixed income:Cash and cash equivalents

$
8,792


$



$



$
8,792Guaranteed deposits






2,620







2,620Mutual funds


63,758



1,353



602



65,713Equities:Common stocks


117,391











117,391Index mutual funds






63,421







63,421Total

$
189,941


$
67,394


$
602


$
257,937Non-U.S.
    plans:Fixed income:Cash and cash equivalents

$
2,735


$



$



$
2,735Guaranteed deposits






19,584







19,584Mutual funds


254



15,653







15,907Other


3,065











3,065Equities:Index mutual funds


386



12,486







12,872Real estate










679



679Other assets


103







352



455Total

$
6,543


$
47,723


$
1,031


$
55,297  75




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Level 1


Level 2


Level 3


Total(Dollars in thousands)U.S. plans:Fixed income:Cash and cash equivalents

$
12,237


$



$



$
12,237Guaranteed deposits






2,835







2,835Mutual funds


57,604



1,238



547



59,389Equities:Common stocks


121,443











121,443Index mutual funds






34,885







34,885Total

$
191,284


$
38,958


$
547


$
230,789Non-U.S.
    plans:Fixed income:Cash and cash equivalents

$
3,642


$



$



$
3,642Guaranteed deposits






25,335







25,335Mutual funds






73,736







73,736Other


2,776











2,776Equities:Common stocks


83











83Index mutual funds






38,398







38,398Real estate










5,586



5,586Other assets










365



365Total

$
6,501


$
137,469


$
5,951


$
149,921       non-U.S. pension
 76




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    U.S. Plans


Non-U.S. Plans(Dollars in thousands)2011

$
21,078


$
4,4012012


21,660



4,4172013


22,141



4,9712014


22,722



5,1712015


23,012



5,0532016-2020


122,265



33,112   Postretirement
    Health Care and Life Insurance Benefit Plans
  2010


2009


2008(Dollars in thousands)Net periodic benefit cost:Service cost

$



$
14


$
64Interest cost


2,426



2,877



2,923Amortization of prior service cost


(1,395
)


(1,748
)


(1,643
)Net amortization and deferral


(171
)






Curtailment and settlement effects






(626
)


Total net periodic benefit cost

$
860


$
517


$
1,344Weighted-average assumptions:Discount rate


5.85
%


6.45
%


6.10
%Current trend rate for health care costs


8.10
%


8.70
%


9.40
%Ultimate trend rate for health care costs


4.50
%


5.20
%


5.20
%Year that ultimate trend rate is reached


2028



2018



2017       1-Percentage-


1-Percentage-Point Increase


Point Decrease(Dollars in thousands)Effect on total of service and interest cost components

$
156


$
(137
)Effect on postretirement benefit obligation


2,291



(2,015
)   77




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  2010


2009(Dollars in thousands)Change in benefit obligation:Benefit obligation at beginning of year

$
43,827


$
47,164Service cost






14Interest cost


2,426



2,877Amendments


200



Curtailments






(626
)Benefits paid


(3,305
)


(3,425
)Actuarial (gain) loss


(5,955
)


(2,177
)Benefit obligation at end of year

$
37,193


$
43,827Change in plan assets:Fair value of plan assets at beginning of year

$



$
Employer contributions


3,305



3,425Benefits paid


(3,305
)


(3,425
)Fair value of plan assets at end of year

$



$
Amounts recognized in the balance sheet:Accrued expenses and other current liabilities

$
(3,590
)

$
(4,616
)Postretirement and pension liabilities


(33,603
)


(39,211
)Funded status

$
(37,193
)

$
(43,827
)Weighted-average assumptions as of December 31:Discount rate


5.45
%


5.85
%Current trend rate for health care costs


7.90
%


8.00
%Ultimate trend rate for health care costs


4.50
%


4.50
%Year that ultimate trend rate is reached


2028



2028  78




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009(Dollars in thousands)Balance at beginning of year

$
10,042


$
9,613Net gain arising during the year


5,955



2,177Prior service cost arising during the year


(200
)


Amounts recognized as net periodic benefit costs


(1,566
)


(1,748
)Balance at end of year

$
14,231


$
10,042Amounts recognized in accumulated other comprehensive income
    (loss):Net gain

$
12,570


$
6,786Prior service credit


1,661



3,256Total

$
14,231


$
10,042Estimated amounts to be amortized in 2011:Net gain

$
639Prior service credit


401Total

$
1,040    Before Medicare


After MedicareSubsidy


Subsidy(Dollars in thousands)2011

$
3,590


$
3,2042012


3,506



3,1182013


3,397



3,0102014


3,292



2,9132015


3,169



2,7982016-2020


13,899



12,268   Other
    Retirement Plans
   79




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  11.
    Serial
    Convertible Preferred Stock        12.
    Common
    Stock    13.
    Stock-based
    Compensation       80




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Stock
    Options
  General
    Information
    Stock
    Option Valuation Model and Method Information
      Assumption

Estimation MethodExpected life, in years

Historical stock option exercise experienceRisk-free interest rate

Yield of U.S. Treasury Bonds with remaining life equal to
    expected life of the stock optionExpected volatility

Historical daily price observations of the Companys common
    stock over a period equal to the expected life of the stock
    optionExpected dividend yield

Historical dividend rate at the date of grant     2010

2009

2008Weighted-average grant-date fair value per option

$5.64

$0.49

$4.25Expected life, in years

7.2

6.8

6.8Risk-free interest rate

1.94% - 3.12%

2.07% - 2.42%

2.67% - 3.44%Expected volatility

69.7% - 71.6%

39.7% - 45.0%

30.5% - 36.1%Expected dividend yield

0%

2.92% - 8.09%

2.73% - 6.99%  81




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Stock
    Option Activity Information
    Weighted-Weighted-


AverageAverage


RemainingNumber of


Exercise Price


Contractual


AggregateOptions


Per Option


Term


Intrinsic Value(In years)


(Dollars in thousands)Outstanding at December 31, 2009


4,221,330


$
18.70Granted


778,600



8.21Exercised


(115,306
)


1.37Forfeited or expired


(557,912
)


16.04Outstanding at December 31, 2010


4,326,712



17.61



5.0


$
10,356Exercisable at December 31, 2010


2,951,845


$
21.94



3.4


$
538Vested or expected to vest at December 31, 2010


4,245,465


$
17.79



4.9


$
9,791   in-the-money in-the-money
    2010


2009


2008(Dollars in thousands)Proceeds from the exercise of stock options

$
137


$



$
58Intrinsic value of stock options exercised


1,169







7Income tax benefit related to stock options exercised


409







3     Weighted-Average Grant-Number of


Date Fair ValueOptions


Per OptionNonvested at December 31, 2009


1,214,040


$
2.77Granted


778,600



5.64Vested


(440,148
)


3.68Forfeited


(177,625
)


3.65Nonvested at December 31, 2010


1,374,867



3.99  82




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Stock-Based
    Compensation Expense Information
    2010


2009


2008(Dollars in thousands)Compensation expense recorded in selling, general and
    administrative expenses

$
1,903


$
1,794


$
2,274Deferred income tax benefits related to compensation expense


666



628



796Total fair value of stock options vested


1,620



1,998



2,195Unrecognized compensation cost


3,616



2,009



3,656Expected weighted-average recognition period for unrecognized
    compensation, in years


2.8



1.9



2.3   Directors
    Deferred Compensation
   83




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Stock-based
    Compensation Transactions in Shareholders
    Equity
    Common Shares in TreasuryShares


Amount


Paid-in Capital(In thousands)2008:Stock options


(3
)

$
50


$
2,293Deferred stock units


(33
)


596



(48
)Restricted shares


(100
)


1,805



(1,377
)Performance shares, net






25



(83
)Directors deferred compensation






(664
)


664Preferred stock conversions


(185
)


3,519



(1,872
)Total


(321
)

$
5,331


$
(423
)2009:Stock options





$



$
1,794Deferred stock units


(34
)


835



(706
)Restricted shares


(115
)


2,732



(2,251
)Performance shares, net


181



(594
)


439Directors deferred compensation






(843
)


843Preferred stock conversions


(1,089
)


23,827



(21,705
)Total


(1,057
)

$
25,957


$
(21,586
)2010:Stock options


(113
)

$
2,790


$
(749
)Deferred stock units


(34
)


832



(267
)Restricted shares


(105
)


4,494



(3,700
)Performance shares, net


119



(1,065
)


1,539Directors deferred compensation






259



(259
)Preferred stock conversions










Total


(133
)

$
7,310


$
(3,436
)  84




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  14.
    Restructuring
    and Cost Reduction Programs      European
    Manufacturing Restructuring Program
      
    Manufacturing facilities in Casiglie, Italy, and Castanheira do
    Ribatejo, Portugal, were closed. Manufacturing capacity was
    transferred to Almazora, Spain, and Aveiro, Portugal.
    Manufacturing facilities in Limoges, France, and a portion of
    the facilities in Frankfurt, Germany, were shut down. The sites
    are being closed, and manufacturing capacity is being
    transferred to St. Dizier, France, and Frankfurt, Germany.
    Manufacturing facility in Burslem, United Kingdom, is being
    closed, and production will be transferred to Frankfurt,
    Germany, and Almazora, Spain.    
    Porcelain Enamel manufacturing facility in Rotterdam,
    Netherlands, was shut down and closed.
    Tile Coating Systems manufacturing facilities in Casiglie,
    Italy; Castanheira do Ribatejo, Portugal; and Nules, Spain, were
    closed Manufacturing capacity was transferred to Almazora,
    Spain, and Aveiro, Portugal.    
    Manufacturing facilities in Castanheira do Ribatejo, Portugal,
    and Rotterdam, Netherlands, were shut down and closed. The
    Rotterdam site was sold. Manufacturing capacity was transferred
    to Almazora, Spain. 85




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  Electronic
    Materials Restructuring Program
    
    Manufacturing facility in Niagara Falls, New York, was closed,
    and the site was sold.
    Manufacturing facility in Uden, Netherlands, was shut down. A
    portion of the real property was sold, and the site will be
    closed in the first quarter of 2011.
    Certain production from Niagara Falls, New York, and Uden,
    Netherlands, was transferred to Penn Yan, New York, and St.
    Dizier, France.  Other
    Restructuring Programs
    
    Color and Glass Performance Materials and Porcelain Enamel
    manufacturing facilities in Moorabin and Geelong, Australia,
    were shut down and are being closed.
    Color and Glass Performance Materials manufacturing facility in
    Toccoa, Georgia, was closed. The site is recorded as an asset
    held for sale.
    Specialty Plastics manufacturing facility in Aldridge, United
    Kingdom was shut down and closed. Manufacturing capacity was
    transferred to Almazora, Spain.
    Polymer Additives manufacturing facility in Villa Franca,
    Portugal was shut down and closed. Manufacturing capacity was
    transferred to Fort Worth, Texas.
    Fixed costs structures in Brazil, Mexico, and Venezuela were
    reduced.
    Selling, general, and administration costs were reduced through
    position eliminations. 86




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
     Employee


Other


AssetSeverance


Costs


Impairment


Total(Dollars in thousands)Expected restructuring charges:European manufacturing restructuring

$
62,766


$
25,832


$
9,901


$
98,499Electronic Materials restructuring


11,139



903



19,095



31,137Other restructuring programs


9,653



1,575



4,095



15,323Total expected restructuring charges

$
83,558


$
28,310


$
33,091


$
144,959Restructuring charges incurred:European manufacturing restructuring

$
12,878


$
5,860


$



$
18,738Electronic Materials restructuring


499



103







602Other restructuring programs


4,813



874



910



6,597Charges incurred in 2008

$
18,190


$
6,837


$
910


$
25,937European manufacturing restructuring

$
7,700


$
(408
)

$



$
7,292Electronic Materials restructuring


402



1







403Other restructuring programs


3,304



113







3,417Charges incurred in 2009

$
11,406


$
(294
)

$



$
11,112European manufacturing restructuring

$
27,662


$
13,696


$
5,582


$
46,940Electronic Materials restructuring


7,460



2,241



4,572



14,273Other restructuring programs


(164
)


188



2,495



2,519Charges incurred in 2010

$
34,958


$
16,125


$
12,649


$
63,732Cumulative restructuring charges incurred:European manufacturing restructuring

$
60,491


$
23,451


$
9,901


$
93,843Electronic Materials restructuring


11,102



638



19,095



30,835Other restructuring programs


9,653



1,115



3,405



14,173Cumulative restructuring charges incurred as of
    December 31, 2010

$
81,246


$
25,204


$
32,401


$
138,851  87




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    Total











CumulativeExpected











Charges ToCharges


2010


2009


2008


Date(Dollars in thousands)Electronic Materials

$
31,137


$
14,273


$
401


$
602


$
30,835Performance Coatings


40,912



3,464



928



17,806



36,477Color and Glass Performance Materials


55,124



31,910



9,734



3,877



53,753Polymer Additives


1,639







22



1,617



1,639Specialty Plastics


16,147



14,085



27



2,035



16,147Pharmaceuticals


















Total Restructuring Charges

$
144,959


$
63,732


$
11,112


$
25,937


$
138,851     Employee


Other


AssetSeverance


Costs


Impairment


Total(Dollars in thousands)Balance at December 31, 2007

$
8,381


$
1,560


$



$
9,941Restructuring charges


18,189



6,839



909



25,937Cash payments


(24,852
)


(2,466
)






(27,318
)Non-cash items


(512
)


(831
)


(909
)


(2,252
)Balance at December 31, 2008


1,206



5,102







6,308Restructuring charges


11,406



(294
)






11,112Cash payments


(9,389
)


(3,485
)






(12,874
)Non-cash items


(142
)


195







53Balance at December 31, 2009


3,081



1,518







4,599Restructuring charges


34,958



16,125



12,649



63,732Cash payments


(36,132
)


(8,109
)






(44,241
)Non-cash items


522



(3,671
)


(12,649
)


(15,798
)Balance at December 31, 2010

$
2,429


$
5,863


$



$
8,292        88




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  15.
    Leases      2010


2009(Dollars in thousands)Gross amounts capitalized:Buildings

$
3,100


$
3,100Equipment


13,017



11,22516,117



14,325Accumulated amortization:Buildings


(1,821
)


(1,744
)Equipment


(8,689
)


(8,790
)(10,510
)


(10,534
)Net assets under capital leases

$
5,607


$
3,791     Capital Leases

Operating Leases(Dollars in thousands)2011

$
1,868

$
13,3452012


1,697


8,9902013


792


6,0802014


757


5,2052015


677


4,967Thereafter


3,206


13,087Total minimum lease payments


8,997

$
51,674Less amount representing executory costs


56Net minimum lease payments


8,941Less amount representing imputed interest


2,764Present value of net minimum lease payments


6,177Less current portion


1,390Long-term obligations at December 31, 2010

$
4,787  89




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  16.
    Miscellaneous
    Expense (Income), Net    2010


2009


2008(Dollars in thousands)Loss for Brazil environmental contingency

$
9,160


$



$
Loss on settlement of interest rate swaps


6,848







Gain from Heraeus business combination


(8,255
)






Gain on sale of business


(1,247
)






Other, net


(692
)


(618
)


(357
)Total miscellaneous expense (income), net

$
5,814


$
(618
)

$
(357
)   17.
    Discontinued
    Operations      2010


2009


2008(Dollars in thousands)(Loss) gain on disposal of discontinued operations before income
    tax (benefit) expense

$



$
(523
)

$
16,614Income tax (benefit) expense






(198
)


7,580(Loss) gain on disposal of discontinued operations, net of
    income tax (benefit) expense

$



$
(325
)

$
9,034  90




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2008(Dollars in thousands)Net sales

$
60,980Cost of sales


47,464Gross profit


13,516Selling, general and administrative expenses


4,303Other expense:Interest expense


1,526Foreign currency losses, net


19Miscellaneous expense, net


76Income from discontinued operations before income taxes


7,592Income tax expense


2,578Income from discontinued operations, net of income taxes

$
5,014   and/or
 91




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  18.
    Earnings
    (Loss) per Share from Continuing Operations    2010


2009


2008(In thousands, except per share amounts)Basic earnings (loss) per share computation:Net income (loss) attributable to Ferro Corporation common
    shareholders

$
5,036


$
(43,621
)

$
(41,307
)Adjustment for loss (income) from discontinued operations






325



(14,048
)Total

$
5,036


$
(43,296
)

$
(55,355
)Weighted-average common shares outstanding


85,823



50,935



43,261Basic earnings (loss) per share from continuing operations
    attributable to Ferro Corporation common shareholders

$
0.06


$
(0.85
)

$
(1.28
)Diluted earnings (loss) per share computation:Net income (loss) attributable to Ferro Corporation common
    shareholders

$
5,036


$
(43,621
)

$
(41,307
)Adjustment for loss (income) from discontinued operations






325



(14,048
)Plus: Convertible preferred stock










Total

$
5,036


$
(43,296
)

$
(55,355
)Weighted-average common shares outstanding


85,823



50,935



43,261Assumed exercise of stock options


319







Assumed satisfaction of deferred stock unit conditions


74







Assumed satisfaction of restricted share conditions


323







Assumed conversion of convertible notes










Assumed conversion of convertible preferred stock










Weighted-average diluted shares outstanding


86,539



50,935



43,261Diluted earnings (loss) per share from continuing operations
    attributable to Ferro Corporation common shareholders

$
0.06


$
(0.85
)

$
(1.28
)     19.
    Business
    Combinations   92




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
      (Dollars inthousands)Fair value of consideration transferredCash

$
6,938Inventories


1,089Property, plant and equipment


164Amortizable intangible assets


5,417Total

$
13,608Recognized amounts of identifiable assets acquired and
    liabilities assumedCash

$
6,856Accounts receivable


1,399Inventories


3,776Property, plant and equipment


6,734Goodwill


4,038Amortizable intangible assets


2,156Current liabilities


(5,003
)Noncurrent liabilities


(258
)Total

$
19,698     20.
    Reporting
    for Segments     93




---



##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009


2008(Dollars in thousands)Electronic Materials

$
675,401


$
426,896


$
558,313Performance Coatings


555,023



487,891



627,918Color and Glass Performance Materials


382,155



321,750



456,644Polymer Additives


302,352



249,510



349,902Specialty Plastics


163,058



149,524



225,856Pharmaceuticals


23,876



21,998



26,519Total net sales

$
2,101,865


$
1,657,569


$
2,245,152     2010


2009


2008(Dollars in thousands)Electronic Materials

$
132,585


$
45,344


$
52,868Performance Coatings


39,416



29,551



36,935Color and Glass Performance Materials


31,514



13,123



39,112Polymer Additives


18,387



6,708



6,086Specialty Plastics


11,348



10,164



5,385Pharmaceuticals


814



438



3,524Total segment income


234,064



105,328



143,910Unallocated corporate expenses


69,135



63,315



37,362Restructuring and impairment charges


63,732



19,337



106,142Other expense, net


77,456



66,231



56,492Income (loss) before income taxes from continuing operations

$
23,741


$
(43,555
)

$
(56,086
)     2010


2009


2008(Dollars in thousands)Electronic Materials

$
11,586


$
13,382


$
17,294Performance Coatings


17,004



17,726



17,736Color and Glass Performance Materials


7,012



6,520



8,101Polymer Additives


10,776



10,492



10,753Specialty Plastics


2,369



2,610



3,314Pharmaceuticals


2,073



1,950



1,693Total segment depreciation and amortization


50,820



52,680



58,891Unallocated depreciation and amortization


26,116



35,458



15,704Total depreciation and amortization

$
76,936


$
88,138


$
74,595  94




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009(Dollars in thousands)Electronic Materials

$
316,793


$
302,537Performance Coatings


358,781



349,812Color and Glass Performance Materials


256,626



254,683Polymer Additives


117,482



118,222Specialty Plastics


46,598



47,480Pharmaceuticals


26,392



29,871Total segment assets


1,122,672



1,102,605Unallocated assets


311,683



423,750Total assets

$
1,434,355


$
1,526,355     2010


2009


2008(Dollars in thousands)Electronic Materials

$
9,308


$
4,249


$
18,892Performance Coatings


19,748



11,803



29,294Color and Glass Performance Materials


19,472



10,665



7,715Polymer Additives


5,404



5,224



8,379Specialty Plastics


968



685



1,989Pharmaceuticals


860



1,830



3,645Total segment expenditures for long-lived assets


55,760



34,456



69,914Expenditures for long-lived assets of discontinued operations










2,317Unallocated corporate expenditures for long-lived assets


1,905



8,804



4,237Total expenditures for long-lived assets

$
57,665


$
43,260


$
76,468     2010


2009


2008(Dollars in thousands)United States

$
1,039,457


$
758,048


$
973,717Spain


319,711



258,485



362,370Other international


742,697



641,036



909,065Total net sales

$
2,101,865


$
1,657,569


$
2,245,152  95




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
    2010


2009(Dollars in thousands)United States

$
377,158


$
393,571Spain


90,845



96,475Other international


155,078



174,013Total long-lived assets

$
623,081


$
664,059   21.
    Related
    Party Transactions      2010


2009


2008(Dollars in thousands)Sales

$
8,928


$
6,887


$
10,157Purchases


5,048



3,883



5,495Dividends and interest received


636



530



159Commissions and royalties received


173



956



194Commissions and royalties paid


88



86



230  96




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 Years
    ended December 31, 2010, 2009 and
    2008  (Continued)
  22.
    Quarterly
    Data (Unaudited)  Net Income


Earnings (Loss) Attributable(Loss)


to Ferro CorporationAttributable


Common Shareholders PerNet Income


to Ferro


Common ShareNet Sales


Gross Profit


(Loss)


Corporation


Basic


Diluted(Dollars in thousands, except per share data)2009Quarter 1

$
357,809


$
55,246


$
(19,971
)

$
(20,335
)

$
(0.46
)

$
(0.46
)Quarter 2


399,277



65,229



(11,188
)


(11,808
)


(0.27
)


(0.27
)Quarter 3


442,089



93,169



2,845



2,117



0.04



0.04Quarter 4


458,394



100,628



(12,051
)


(12,890
)


(0.19
)


(0.19
)Total

$
1,657,569


$
314,272


$
(40,365
)

$
(42,916
)

$
(0.86
)

$
(0.86
)2010Quarter 1

$
492,865


$
106,934


$
(812
)

$
(68
)

$



$
Quarter 2


543,485



122,330



7,594



7,100



0.08



0.08Quarter 3


528,564



120,296



(2,362
)


(3,345
)


(0.04
)


(0.04
)Quarter 4


536,951



109,105



2,853



2,009



0.02



0.02Total

$
2,101,865


$
458,665


$
7,273


$
5,696


$
0.06


$
0.06      97




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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  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(e),
  Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f).
      Internal Control  Integrated
    Framework
   98




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##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
     Internal Control  Integrated Framework
        Internal Control  Integrated Framework
    
    99




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##### Table of Contents



Changes
    in Internal Control over Financial Reporting and Other
    Remediation
    Item 9B 
    Other
    Information   100




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##### Table of Contents



PART III  Item 10 
    Directors,
    Executive Officers and Corporate Governance  Form 10-K.
  44114-1147, www.ferro.com
  Item 11 
    Executive
    Compensation    Item 12 
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Weighted-Average


Number of SharesNumber of Shares to Be


Exercise Price of


Remaining Available forIssued on Exercise of


Outstanding


Future Issuance UnderOutstanding Options,


Options, and


Equity CompensationEquity Compensation Plan

and Other Awards


Other Awards


Plans(1)Approved by Ferro Shareholders


4,712,837 shares
(2)

$
15.76



4,912,625 shares
(4)Not Approved by Ferro Shareholders


143,455 shares
(3)

$
24.96



0 sharesTotal


4,856,292 shares


$
15.91
(5)


4,912,625 shares     (1)
    
    Excludes shares listed in the second column.(2)
    
    Includes options and other awards issued under the
    Companys 2010 Long-Term Incentive Compensation Plan and
    prior equity compensation plans. 101




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##### Table of Contents



(3)
    
    Includes options granted in 2001 and 2002 to the Companys
    former Chief Executive Officer and phantom units issued under
    the Companys Executive Employee Deferred Compensation Plan
    and Supplemental Executive Defined Contribution Plan.(4)
    
    Shares are only available under the 2010 Long-Term Incentive
    Plan and may be issued as stock options, stock appreciation
    rights, restricted shares, performance shares, and other common
    stock-based awards.(5)
    
    Weighted-average exercise price of outstanding options and other
    awards; excludes phantom units.    
    Stock Options. On February 11, 2002 and
    February 9, 2001, respectively, the Board granted
    Mr. Ortino, the Companys former Chief Executive
    Officer, 155,000 and 122,000 options to purchase shares. Of this
    amount, options for 100,000 shares each year were granted
    under the 1985 Employee Stock Option Plan approved by
    shareholders and the remaining options were approved and granted
    by the Board from available treasury shares. The options granted
    in 2002 have an exercise price of $25.50 and the options granted
    in 2001 have an exercise price of $23.60. Both grants have
    maximum terms of ten years and are fully vested.
    Executive Employee Deferred Compensation Plan. The
    Executive Employee Deferred Compensation Plan allows
    participants to defer up to 75% of annual base salary and up to
    100% of incentive cash bonus awards and cash performance share
    payouts. Participants may elect to have all or a portion of
    their deferred compensation accounts deemed to be invested in
    shares of Ferro Common Stock and credited with hypothetical
    appreciation, depreciation, and dividends. When distributions
    are made from this Plan in respect of such shares, the
    distributions are made in actual shares of Ferro Common Stock.
    Supplemental Executive Defined Contribution
    Plan. The Supplemental Executive Defined Contribution
    Plan allows participants to be credited annually with matching
    and basic pension contributions that they would have received
    under the Companys 401(k) plan except for the applicable
    IRS limitations on compensation and contributions. Contributions
    vest at 20% for each year of service, are deemed invested in
    Ferro Common Stock and earn dividends. Distributions are made in
    Ferro Common Stock or in cash.  Item 13 
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14 
    Principal
    Accountant Fees and Services   102




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##### Table of Contents



PART IV  Item 15 
    Exhibits
    and Financial Statement Schedules  Form 10-K:
  (a)
    The consolidated financial statements of Ferro Corporation and
    subsidiaries contained in Part II, Item 8 of this
    Annual Report on
    Form 10-K:  
    Consolidated Statements of Operations for the years ended
    December 31, 2010, 2009 and 2008;
    Consolidated Balance Sheets at December 31, 2010 and 2009;
    Consolidated Statements of Equity for the years ended
    December 31, 2010, 2009 and 2008;
    Consolidated Statements of Cash Flows for the years ended
    December 31, 2010, 2009 and 2008; and
    Notes to Consolidated Financial Statements  (b)
    Schedule II  Valuation and Qualifying Accounts
    and Reserves for the years ended December 31, 2010, 2009,
    and 2008, contained on page 105 of this Annual Report on
    Form 10-K.
    All other schedules have been omitted because the material is
    not applicable or is not required as permitted by the rules and
    regulations of the U.S. Securities and Exchange Commission,
    or the required information is included in the consolidated
    financial statements.  Form 10-K.
 103




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##### Table of Contents



SIGNATURES
  Form 10-K
  FERRO
    CORPORATION
  By
    /s/  James
    F. Kirsch        Form 10-K
  /s/  James
    F. KirschJames
    F. Kirsch

Chairman, President and Chief Executive Officer
    (Principal Executive Officer)/s/  Thomas
    R. MiklichThomas
    R. Miklich

Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)/s/  Richard
    C. BrownRichard
    C. Brown

Director/s/  Sandra
    Austin CraytonSandra
    Austin Crayton

Director/s/  Richard
    J. HippleRichard
    J. Hipple

Director/s/  Jennie
    S. HwangJennie
    S. Hwang

Director/s/  Gregory
    E. HylandGregory
    E. Hyland

Director/s/  William
    B. LawrenceWilliam
    B. Lawrence

Director/s/  Timothy
    K. PistellTimothy
    K. Pistell

Director/s/  William
    J. SharpWilliam
    J. Sharp

Director/s/  Ronald
    P. VargoRonald
    P. Vargo

Director  104




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##### Table of Contents



FERRO
    CORPORATION AND SUBSIDIARIES
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
 Years
    Ended December 31, 2010, 2009 and 2008
  Additions ChargedBalance at


(Reductions Credited) to





Adjustment for


BalanceBeginning of


Costs and


Other





Differences in


at End ofPeriod


Expenses


Accounts


Deductions


Exchange Rates


Period(Dollars in thousands)Allowance for Possible Losses on Collection of Accounts and
    Trade Notes Receivable:Year ended December 31, 2010

$
10,685



2,935







(2,091
)


(373
)

$
11,156Year ended December 31, 2009

$
11,668



2,676







(3,835
)


176


$
10,685Year ended December 31, 2008

$
6,396



4,472



3,544
(1)


(2,436
)


(308
)

$
11,668Allowance for Possible Losses on Collection of Note
    Receivable from Ferro Finance Corporation:Year ended December 31, 2010

$



















$
Year ended December 31, 2009

$



















$
Year ended December 31, 2008

$
3,015



1,371



(3,544
)(1)


(842
)





$
Valuation Allowance on Net Deferred Tax AssetsYear ended December 31, 2010

$
17,969



9,608











(762
)

$
26,815Year ended December 31, 2009

$
21,451



(3,683
)










201


$
17,969Year ended December 31, 2008

$
8,906



20,598







(8,053
)





$
21,451     (1)
    
    When Ferro Finance Corporation (FFC) was
    consolidated in December 2008, the valuation allowance on
    Ferros note receivable from FFC was combined with the
    valuation allowance on accounts and trade notes receivable. 105




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##### Table of Contents



EXHIBIT INDEX
  Rule 12b-32
  Exhibit:3

Articles of Incorporation and by-laws3.1

Eleventh Amended Articles of Incorporation of Ferro Corporation.
    (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 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 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. (Reference is made to
    Exhibit 4.4 to Ferro Corporations Registration
    Statement on
    Form S-3,
    filed March 5, 2008, which Exhibit is incorporated here by
    reference.)3.5

Ferro Corporation Amended and Restated Code of Regulations.
    (Reference is made to Exhibit 3.4 to Ferro
    Corporations Quarterly Report for the quarter ended
    September 30, 2010, which Exhibit is incorporated here by
    reference.)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 Notes 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 Indenture, by and between Ferro Corporation and
    Wilmington Trust FSB (Reference is made to Exhibit 4.1
    to Ferro Corporations Registration Statement on
    Form S-3ASR,
    filed July 27, 2010, which Exhibit is incorporated here by
    reference.)4.4

First Supplemental Indenture, dated August 24, 2010, by and
    between Ferro Corporation and Wilmington Trust FSB (with
    Form of 7.875% Senior Notes due 2018). (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.10

Material contracts10.1

Third Amended and Restated Credit Agreement, dated
    August 24, 2010, by and among Ferro Corporation, PNC Bank,
    National Association, as the Administrative Agent, the
    Collateral Agent and the Issuer, and JPMorgan Chase Bank, N.A.
    and Bank of America, N.A., as the Syndication 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.)10.2

First Amendment to Second Amended and Restated Credit Agreement,
    dated July 26, 2010, by and among Ferro Corporation, the
    several banks and other financial institutions or entities
    listed on the signature pages hereto as Lenders, Credit Suisse
    AG, Cayman Islands Branch, as Original Term Loan Administrative
    Agent, and PNC Bank, National Association, as New Term Loan
    Administrative Agent and as Revolving Loan Administrative Agent.
    (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.) 106




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##### Table of Contents



10.3

Second Amended and Restated Credit Agreement, dated
    October 26, 2009, among Ferro Corporation and certain of
    its subsidiaries; various financial institutions; Credit Suisse,
    Cayman Islands Branch; PNC Bank, National Association; National
    City Bank; KeyBank National Association; and Citigroup Global
    Markets, Inc. (Reference is made to Exhibit 10.1 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed October 27, 2009, which Exhibit is incorporated here
    by reference.)10.4

Amendment and Restatement and Resignation and Appointment
    Agreement, dated October 26, 2009, among Ferro Corporation;
    the several banks and other financial institutions or entities
    listed on the signature pages thereto; Credit Suisse, Cayman
    Islands Branch,; National City Bank; and PNC Bank, National
    Association. (Reference is made to Exhibit 10.2 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed October 27, 2009, which Exhibit is incorporated here
    by reference.)10.5

First Amendment to Amended and Restated Credit Agreement and
    First Amendment to Pledge and Security Agreement, dated
    December 17, 2007, among Ferro Corporation; certain of
    Ferros subsidiaries; Credit Suisse, Cayman Islands Branch,
    as Term Loan Administrative Agent; and National City Bank, as
    Revolving loan Administrative Agent; and various financial
    institutions as Lenders. (Reference is made to Exhibit 10.2
    to Ferro Corporations Current Report on
    Form 8-K,
    filed January 10, 2008, which Exhibit is incorporated here
    by reference.)10.6

Amended and Restated Credit Agreement, dated June 8, 2007,
    among Ferro; certain of Ferros subsidiaries; Credit
    Suisse, as Term Loan Administrative Agent; National City Bank,
    as Revolving Loan Administrative Agent and Collateral Agent;
    KeyBank National Association, as Documentation Agent; Citigroup
    Global Markets, Inc., as Syndication Agent; and various
    financial institutions as Lenders. (Reference is made to
    Exhibit 10.3 to Ferro Corporations Current Report on
    Form 8-K,
    filed June 11, 2007, which Exhibit is incorporated here by
    reference.)10.7

Purchase Agreement, dated June 2, 2009, among Ferro
    Corporation, Ferro Color & Glass Corporation, and
    Ferro Pfanstiehl Laboratories, Inc. (Reference is made to
    Exhibit 10.1 to Ferro Corporations Current Report on
    Form 8-K,
    filed June 3, 2009, which Exhibit is incorporated here by
    reference.)10.8

Purchase and Contribution Agreement, dated June 2, 2009,
    between Ferro Corporation and Ferro Finance Corporation.
    (Reference is made to Exhibit 10.2 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed June 3, 2009, which Exhibit is incorporated here by
    reference.)10.9

Receivables Purchase Agreement, dated June 2, 2009, among
    Ferro Finance Corporation, Ferro Corporation, certain purchasers
    from time to time party thereto and Wachovia Bank, National
    Association. (Reference is made to Exhibit 10.3 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed June 3, 2009, which Exhibit is incorporated here by
    reference.)10.10

Amendment No. 1 to Receivables Purchase Agreement, dated
    February 3, 2010, among Ferro Finance Corporation, Ferro
    Corporation, as initial Collection Agent, and Wachovia Bank,
    National Association, as Purchaser and in its capacity as Agent
    for the Purchasers. (Reference is made to Exhibit 10.1 to
    Ferro Corporations Quarterly Report on
    Form 10-Q,
    for the quarter ended June 30, 2010, which Exhibit is
    incorporated here by reference.)10.11

Amendment No. 2 to Receivables Purchase Agreement, dated
    May 1, 2010, among Ferro Finance Corporation, Ferro
    Corporation, as initial Collection Agent, Wells Fargo Bank,
    N.A., as Purchaser and in its capacity as Agent for the
    Purchasers. (Reference is made to Exhibit 10.2 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed June 2, 2010, which Exhibit is incorporated here by
    reference.)10.12

Amendment No. 3 to Receivables Purchase Agreement, dated
    June 1, 2010, among Ferro Finance Corporation, Ferro
    Corporation, as initial Collection Agent, Wells Fargo Bank,
    N.A., as Purchaser and in its capacity as Agent for the
    Purchasers. (Reference is made to Exhibit 10.1 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed June 2, 2010, which Exhibit is incorporated here by
    reference.)10.13

Ferro Corporation Employee Stock Option Plan. (Reference is made
    to Exhibit 10.1 to Ferro Corporations Annual Report
    on
    Form 10-K
    for the year ended December 31, 2006, which Exhibit is
    incorporated here by reference.)*10.14

Ferro Corporation 2003 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.16 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.15

Form of Terms of Incentive Stock Option Award Grants under the
    Ferro Corporation 2003 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.17 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)* 107




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##### Table of Contents



10.16

Form of Terms of Performance Share Awards under the Ferro
    Corporation 2003 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.18 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.17

Ferro Corporation 2006 Long-Term Incentive Plan. (Reference is
    made to Exhibit 10.01 to Ferro Corporations Current
    Report on
    Form 8-K,
    filed November 8, 2006, which Exhibit is incorporated here
    by reference.)*10.18

Form of Terms of Incentive Stock Option Award Grants under the
    Ferro Corporation 2006 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.20 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.19

Form of Terms of Nonstatutory Stock Option Grants under the
    Ferro Corporation 2006 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.21 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.20

Form of Terms of Performance Share Awards under the Ferro
    Corporation 2006 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.22 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.21

Form of Terms of Restricted Share Awards under the Ferro
    Corporation 2006 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.23 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.22

Form of Terms of Deferred Stock Unit Awards under the Ferro
    Corporation 2006 Long-Term Incentive Compensation Plan.
    (Reference is made to Exhibit 10.24 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.23

Amendment to the Ferro Corporation Deferred Compensation Plan
    for Executive Employees. (Reference is made to
    Exhibit 10.18 to Ferro Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2009, which Exhibit is
    incorporated here by reference.)*10.24

Ferro Corporation Deferred Compensation Plan for Executive
    Employees. (Reference is made to Exhibit 10.1 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed September 24, 2007, which Exhibit is incorporated
    here by reference.)*10.25

Ferro Corporation Deferred Compensation Plan for Non-Employee
    Directors. (Reference is made to Exhibit 10.2 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed September 24, 2007, which Exhibit is incorporated
    here by reference.)*10.26

Ferro Corporation Deferred Compensation Plan for Non-Employee
    Directors Trust Agreement. (Reference is made to
    Exhibit 10.11.1 to Ferro Corporations Annual Report
    on
    Form 10-K
    for the year ended December 31, 2006, which Exhibit is
    incorporated here by reference.)*10.27

Ferro Corporation Supplemental Defined Benefit Plan for
    Executive Employees. (Reference is made to Exhibit 10.3 to
    Ferro Corporations Current Report on
    Form 8-K,
    filed September 24, 2007, which Exhibit is incorporated
    here by reference.)*10.28

Amendment to the Ferro Corporation Supplemental Defined
    Contribution Plan for Executive Employees. (Reference is made to
    Exhibit 10.23 to Ferro Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2009, which Exhibit is
    incorporated here by reference.)*10.29

Ferro Corporation Supplemental Defined Contribution Plan for
    Executive Employees. (Reference is made to Exhibit 10.4 to
    Ferro Corporations Current Report on
    Form 8-K,
    filed September 24, 2007, which Exhibit is incorporated
    here by reference.)*10.30

Amended and Restated Employment Agreement, dated
    December 31, 2008, between Mr. Kirsch and Ferro
    Corporation. (Reference is made to Exhibit 10.3 to Ferro
    Corporations Current Report on
    Form 8-K,
    filed January 7, 2009, which Exhibit is incorporated here
    by reference.)*10.31

Form of Indemnification Agreement. (James F. Kirsch is the only
    officer that is party to an indemnification agreement with Ferro
    Corporation.) (Reference is made to Exhibit 10.31 to Ferro
    Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 2008, which Exhibit is
    incorporated here by reference.)*10.32

Change in Control Agreement, dated January 1, 2009, between
    Mr. Kirsch and Ferro Corporation. (Reference is made to
    Exhibit 10.1 to Ferro Corporations Current Report on
    Form 8-K,
    filed January 7, 2009, which Exhibit is incorporated here
    by reference.)* 108




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##### Table of Contents



10.33

Form of Change in Control Agreement, dated January 1, 2009.
    (Mark H. Duesenberg, Ann E. Killian, James F. Kirsch, Michael J.
    Murry and Peter T. Thomas have entered into this form of change
    in control agreement.) (Reference is made to Exhibit 10.2
    to Ferro Corporations Current Report on
    Form 8-K,
    filed January 7, 2009, which Exhibit is incorporated here
    by reference.)*10.34

Form of Change in Control Agreement, dated as of
    December 22, 2010. (Thomas R. Miklich has entered into this
    form of change in control agreement.) (Reference is made to
    Exhibit 10.2 to Ferro Corporations Current Report on
    Form 8-K,
    filed December 22, 2010, which Exhibit is incorporated here
    by reference.)*10.35

Ferro Corporation 2010 Long-Term Incentive Plan (Reference is
    made to Exhibit 10.1 to Ferro Corporations Current
    Report on
    Form 8-K,
    filed May 6, 2010, which Exhibit is incorporated here by
    reference.)*10.36

Ferro Corporation Executive Separation Policy. (Reference is
    made to Exhibit 10.1 to Ferro Corporations Current
    Report on
    Form 8-K,
    filed June 28, 2010, which Exhibit is incorporated here by
    reference.)*10.37

Separation and Release Agreement, dated as of July 14,
    2010, between Sallie B. Bailey and Ferro Corporation. (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.)*10.38

Annual Incentive Plan (AIP) Summary Document.*12

Ratio of Earnings to Fixed Charges and Ratio of Earnings to
    Combined Fixed Charges and Preferred Stock Dividends.21

List of Subsidiaries.23.1

Consent of Independent Registered Public Accounting Firm.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.     *
    
    Indicates management contract or compensatory plan, contract or
    arrangement in which one or more Directors and/or executives of
    Ferro Corporation may be participants. 109