Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

At ~~March 31,~~September 30, 2013, there were ~~86,568,385~~86,601,495 shares of Ferro Common Stock, par value $1.00, outstanding.


	Three months ended March 31,						Three months ended September 30,						Nine months ended September 30,
	2013			As adjusted 2012			2013			As adjusted 2012			2013			As adjusted 2012
	(Dollars in thousands, except per share amounts)						(Dollars in thousands, except per share amounts)
Net sales	$	417,524		$	460,425		$	408,104		$	408,865		$	1,261,083		$	1,344,836
Cost of sales		338,287			374,704			323,857			348,155			1,009,945			1,112,587

Gross profit		79,237			85,721			84,247			60,710			251,138			232,249
Selling, general and administrative expenses		61,592			72,508			59,078			63,863			184,986			202,675
Restructuring and impairment charges		9,454			311			3,834			198,695			26,738			203,734
Other expense (income):
Interest expense		7,297			6,374			6,766			6,716			21,034			19,566
Interest earned		(53	)		(84	)		(48	)		(57	)		(171	)		(192	)
Foreign currency losses, net		1,506			144			1,308			869			4,016			792
Miscellaneous (income) expense, net		(10,516	)		396			(209	)		797			(9,493	)		3,038

Income before income taxes		9,957			6,072
Income (loss) before income taxes								13,518			(210,173	)		24,028			(197,364	)
Income tax expense		1,016			2,809			474			105,447			4,025			113,115

Income from continuing operations		8,941			3,263
Income (loss) from continuing operations								13,044			(315,620	)		20,003			(310,479	)
(Loss) income from discontinued operations, net of income taxes		(8,421	)		707			—			(118	)		(8,421	)		917

Net income		520			3,970
Less: Net (loss) income attributable to noncontrolling interests		(363	)		124
Net income (loss)								13,044			(315,738	)		11,582			(309,562	)
Less: Net income attributable to noncontrolling interests								392			376			177			830

Net income attributable to Ferro Corporation common shareholders	$	883		$	3,846
Net income (loss) attributable to Ferro Corporation common shareholders							$	12,652		$	(316,114	)	$	11,405		$	(310,392	)

Earnings (loss) per share attributable to Ferro Corporation common shareholders:
Basic earnings (loss):
From continuing operations	$	0.11		$	0.03		$	0.15		$	(3.66	)	$	0.23		$	(3.61	)
From discontinued operations		(0.10	)		0.01		$	—			—			(0.10	)		0.01

	$	0.01		$	0.04		$	0.15		$	(3.66	)	$	0.13		$	(3.60	)

Diluted earnings (loss):
From continuing operations	$	0.11		$	0.03		$	0.15		$	(3.66	)	$	0.23		$	(3.61	)
From discontinued operations		(0.10	)		0.01		$	—			—			(0.10	)		0.01

	$	0.01		$	0.04		$	0.15		$	(3.66	)	$	0.13		$	(3.60	)


		March 31, 2013			December 31, 2012				September 30, 2013			December 31, 2012
		(Dollars in thousands)							(Dollars in thousands)
ASSETS	ASSETS							ASSETS
Current assets
Cash and cash equivalents		$	32,897		$	29,576			$	35,853		$	29,576
Accounts receivable, net			314,017			306,463				331,847			306,463
Inventories			210,232			200,824				195,617			200,824
Deferred income taxes			8,413			7,995				8,011			7,995
Other receivables			30,323			31,554				32,371			31,554
Other current assets			13,938			10,802				14,571			10,802
Current assets of discontinued operations			—			6,289				—			6,289

Total current assets			609,820			593,503				618,270			593,503
Other assets
Property, plant and equipment, net			298,434			309,374				299,619			309,374
Goodwill			62,413			62,975				63,234			62,975
Amortizable intangible assets, net			13,165			14,410				12,268			14,410
Deferred income taxes			21,246			21,554				20,527			21,554
Other non-current assets			55,608			61,941				55,444			61,941
Other assets of discontinued operations			—			15,346				—			15,346

Total assets		$	1,060,686		$	1,079,103			$	1,069,362		$	1,079,103

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities
Loans payable and current portion of long-term debt		$	75,178		$	85,152			$	59,665		$	85,152
Accounts payable			191,554			182,024				183,044			182,024
Accrued payrolls			32,375			31,643				44,081			31,643
Accrued expenses and other current liabilities			65,679			76,384				67,514			76,384
Current liabilities of discontinued operations			—			1,300				—			1,300

Total current liabilities			364,786			376,503				354,304			376,503
Other liabilities
Long-term debt, less current portion			265,526			261,624				278,119			261,624
Postretirement and pension liabilities			208,594			216,167				199,922			216,167
Other non-current liabilities			16,969			18,135				20,316			18,135

Total liabilities			855,875			872,429				852,661			872,429
Equity
Ferro Corporation shareholders’ equity:
Common stock, par value $1 per share; 300.0 million shares authorized; 93.4 million shares issued; 86.6 million shares outstanding in 2013 and 2012			93,436			93,436
Common stock, par value $1 per share; 300.0 million shares authorized; 93.4 million shares issued; 86.6 and 86.5 million shares outstanding in 2013 and 2012, respectively										93,436			93,436
Paid-in capital			319,267			321,652				320,216			321,652
Retained deficit			(85,723	)		(86,606	)			(75,201	)		(86,606	)
Accumulated other comprehensive income			13,579			16,650				12,513			16,650
Common shares in treasury, at cost			(148,553	)		(151,605	)			(147,608	)		(151,605	)

Total Ferro Corporation shareholders’ equity			192,006			193,527				203,356			193,527
Noncontrolling interests			12,805			13,147				13,345			13,147

Total equity			204,811			206,674				216,701			206,674

Total liabilities and equity		$	1,060,686		$	1,079,103			$	1,069,362		$	1,079,103


	Ferro Corporation Shareholders																							Ferro Corporation Shareholders
	Common Shares in Treasury						Common		Paid-in			Retained Earnings			Accumulated Other Comprehensive			Non- controlling						Common Shares in Treasury						Common		Paid-in			Retained Earnings			Accumulated Other Comprehensive			Non-controlling			Total
	Shares			Amount			Stock		Capital			(Deficit)			(Loss) Income			Interests			Total Equity			Shares			Amount			Stock		Capital			(Deficit)			Income (Loss)			Interests			Equity
	(In thousands)																							(In thousands)
Balances at December 31, 2011		6,865		$	(153,617	)	$	93,436	$	320,882		$	287,662		$	23,899		$	10,232		$	582,494			6,865		$	(153,617	)	$	93,436	$	320,882		$	287,662		$	23,899		$	10,232		$	582,494
Net (loss) income																																				(310,392	)					830			(309,562	)
Other comprehensive (loss) income																																							(3,266	)		15			(3,251	)
Stock-based compensation transactions																									32			588					4,255												4,843
Distributions to noncontrolling interests																																										(380	)		(380	)

Balances at September 30, 2012																									6,897		$	(153,029	)	$	93,436	$	325,137		$	(22,730	)	$	20,633		$	10,697		$	274,144

Balances at December 31, 2012																									6,962		$	(151,605	)	$	93,436	$	321,652		$	(86,606	)	$	16,650		$	13,147		$	206,674
Net income													3,846						124			3,970														11,405						177			11,582
Other comprehensive (loss) income																(638	)		(2	)		(640	)																(4,137	)		146			(3,991	)
Stock-based compensation transactions		3			637					1,081												1,718			(129	)		3,997					(1,436	)											2,561
Distributions to noncontrolling interests																			(44	)		(44	)																			(125	)		(125	)

Balances at March 31, 2012		6,868		$	(152,980	)	$	93,436	$	321,963		$	291,508		$	23,261		$	10,310		$	587,498
Balances at September 30, 2013																									6,833		$	(147,608	)	$	93,436	$	320,216		$	(75,201	)	$	12,513		$	13,345		$	216,701

Balances at December 31, 2012		6,962		$	(151,605	)	$	93,436	$	321,652		$	(86,606	)	$	16,650		$	13,147		$	206,674
Net income (loss)													883						(363	)		520
Other comprehensive (loss) income																(3,071	)		21			(3,050	)
Stock-based compensation transactions		(95	)		3,052					(2,385	)											667

Balances at March 31, 2013		6,867		$	(148,553	)	$	93,436	$	319,267		$	(85,723	)	$	13,579		$	12,805		$	204,811


	Three months ended March 31,						Nine months ended September 30,
	2013			2012			2013			2012
	(Dollars in thousands)						(Dollars in thousands)
Cash flows from operating activities
Net cash used for operating activities	$	(17,106	)	$	(10,975	)
Net cash provided by operating activities							$	3,003		$	19,536
Cash flows from investing activities
Capital expenditures for property, plant and equipment		(8,178	)		(22,579	)		(21,187	)		(46,245	)
Proceeds from sale of assets		15,109			368			16,034			2,386
Proceeds from sale of stock of Ferro Pfanstiehl Laboratories, Inc.		16,912			—			16,912			—
Dividends received from affiliates		1,119			—			1,119			96

Net cash provided by (used for) investing activities		24,962			(22,211	)		12,878			(43,763	)
Cash flows from financing activities
Net (repayments) borrowings under loans payable		(9,635	)		31,684
Proceeds from long-term debt		110,133			97,918
Principal payments on long-term debt		(106,094	)		(95,673	)
Net borrowings under loans payable⁽¹⁾								9,223			22,087
Proceeds from revolving credit facility								368,317			323,151
Principal payments on revolving credit facility								(351,404	)		(319,926	)
Extinguishment of convertible senior notes								(35,066	)		—
Other financing activities		1,409			(440	)		(734	)		760

Net cash (used for) provided by financing activities		(4,187	)		33,489			(9,664	)		26,072
Effect of exchange rate changes on cash and cash equivalents		(348	)		(23	)		60			(19	)

Increase in cash and cash equivalents		3,321			280			6,277			1,826
Cash and cash equivalents at beginning of period		29,576			22,991			29,576			22,991

Cash and cash equivalents at end of period	$	32,897		$	23,271		$	35,853		$	24,817

Cash paid during the period for:
Interest	$	12,308		$	12,059		$	25,484		$	25,343
Income taxes		1,548			1,229			2,905			3,130

The accompanying unaudited condensed consolidated financial statements of Ferro Corporation (“Ferro,” “we,” “us” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. These statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012. Prior periods have been adjusted for the presentation of discontinued operations.

Operating results for the three and nine months ended ~~March 31,~~September 30, 2013, are not necessarily indicative of the results expected in subsequent quarters or for the full year ending December 31, 2013.

Accounting Standards Adopted in the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2013

On January 1, 2013, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-11,Disclosures about Offsetting Assets and Liabilities, (“ASU 2011-11”) and ASU 2013-01,Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, (“ASU 2013-01”). These pronouncements are codified in Accounting Standards Codification (“ASC”) Topic 210, Balance Sheet, and contain new disclosure requirements about a company’s right of setoff and related arrangements associated with its financial and derivative instruments. Adoption of this pronouncement did not have a material effect on our consolidated financial statements.

On January 1, 2013, we adopted FASB ASU 2013-02,Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, (“ASU 2013-02”), which is codified in ASC Topic 220, Comprehensive Income. This pronouncement adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. Adoption of this pronouncement did not have a material effect on our consolidated financial statements.

During the third quarter of 2012, we elected to change our method of recognizing defined benefit pension and other postretirement benefit expense. Historically, we recognized actuarial gains and losses in accumulated other comprehensive income within equity on our consolidated balance sheets annually, and these gains and losses were amortized into our operating results over the average remaining service period of plan participants, to the extent such gains and losses were in excess of a corridor.

Under our new method, we recognize actuarial gains and losses in our operating results in the year in which the gains or losses occur. These gains and losses are generally measured annually as of December 31 and recorded during the fourth quarter, unless an interim remeasurement is required. The remaining components of benefit expense, primarily service and interest costs and the expected return on plan assets, will be recorded quarterly as ongoing expense or benefit. While the historical method of recognizing expense was acceptable, we believe the new method is preferable because it results in recognition in our operating results of actuarial gains and losses as they arise. In accordance with ASC Topic 250, Accounting Changes and Error Corrections, all prior periods have been adjusted to apply the new method retrospectively. The effect of the change on retained earnings as of January 1, 2012, was a reduction of $106.0 million with a corresponding offset to accumulated other comprehensive loss.

We have presented the effects of the change in accounting principle on our condensed consolidated financial statements for the three months ended March 31, 2012 below. The following tables present the significant effects of the change on our historical condensed consolidated statement of operations and statement of comprehensive income. There was no effect on our historical condensed consolidated statement of cash flows.


	March 31, 2013		December 31, 2012		September 30, 2013		December 31, 2012
	(Dollars in thousands)				(Dollars in thousands)
Raw materials	$	63,718	$	64,923	$	59,272	$	64,923
Work in process		35,819		35,028		35,716		35,028
Finished goods		110,695		100,873		100,629		100,873

Total inventories	$	210,232	$	200,824	$	195,617	$	200,824

In the production of some of our products, we use precious metals, some of which we obtain from financial institutions under consignment agreements with terms of one year or less. The financial institutions retain ownership of the precious metals and charge us fees based on the amounts we consign. These fees were ~~$1.0~~$0.7 million and ~~$1.9~~$1.4 million for the three months ended ~~March 31,~~September 30, 2013 and 2012, respectively, and were $2.5 million and $5.0 million for the nine months ended September 30, 2013 and 2012, respectively. We had on hand precious metals owned by participants in our precious metals consignment program of ~~$93.4~~$89.5 million at ~~March 31,~~September 30, 2013, and $112.2 million at December 31, 2012, measured at fair value based on market prices for identical assets and net of credits.

Property, plant and equipment is reported net of accumulated depreciation of ~~$662.4~~$686.5 million at ~~March 31,~~September 30, 2013, and $658.1 million at December 31, 2012. Unpaid capital expenditure liabilities, which are noncash investing activities, were ~~$2.4~~$6.6 million at ~~March 31,~~September 30, 2013, and ~~$7.8~~$7.3 million at ~~March 31,~~September 30, 2012. During the first quarter of 2013, the Nules, Spain and Casiglie, Italy properties classified as held for sale with a net book value of approximately $3.0 million as of December 31, 2012, were disposed of through sale. Total consideration received for the properties was approximately $3.3 million.

During the first quarter of 2013, we sold assets related to our solar pastes product line to Heraeus Precious Metals North America Conshocken LLC (“Heraeus LLC”). The assets sold included, among other things, certain machinery and equipment, certain open orders, raw materials and silver paste required for purchased open orders, and intellectual property. The consideration for the assets sold was $10.9 million, and resulted in a gain on the transaction of $9.0 million and is included within miscellaneous income within the condensed consolidated statement of operations. In addition, Heraeus LLC provided Ferro with approximately $12.0 million of precious metals, which was used to reduce amounts outstanding under our precious metals consignment program.


	March 31, 2013		December 31, 2012		September 30, 2013		December 31, 2012
	(Dollars in thousands)				(Dollars in thousands)
Loans payable to banks	$	3,123	$	2,477	$	3,247	$	2,477
Domestic accounts receivable asset securitization program		30,000		40,000		48,000		40,000
International accounts receivable sales programs		5,531		6,122		5,554		6,122
Current portion of long-term debt		36,524		36,553		2,864		36,553

Loans payable and current portion of long-term debt	$	75,178	$	85,152	$	59,665	$	85,152


	March 31, 2013			December 31, 2012			September 30, 2013			December 31, 2012
	(Dollars in thousands)						(Dollars in thousands)
7.875% Senior Notes	$	250,000		$	250,000		$	250,000		$	250,000
6.50% Convertible Senior Notes, net of unamortized discounts		34,662			34,417			—			34,417
Revolving credit facility		6,635			2,596			19,509			2,596
Capital lease obligations		6,126			6,433			6,053			6,433
Other notes		4,627			4,731			5,421			4,731

Total long-term debt		302,050			298,177			280,983			298,177
Current portion of long-term debt		(36,524	)		(36,553	)		(2,864	)		(36,553	)

Long-term debt, less current portion	$	265,526		$	261,624		$	278,119		$	261,624

We have an asset securitization program for Ferro’s U.S. trade accounts receivable. We sell interests in our domestic receivables to various purchasers, and we may obtain up to $50.0 million in the form of cash or letters of credit. Advances received under this program are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities. In the second quarter of 2013, we extended the maturity of this credit facility through May 2014. At ~~March 31,~~September 30, 2013, advances received of ~~$30.0~~$48.0 million were secured by ~~$88.2~~$77.6 million of accounts receivable, and based on available and qualifying receivables, ~~$20.0~~$2.0 million of additional borrowings were available under the program. During the third quarter of 2013 we amended the agreement. The interest rate under ~~this program~~the amended agreement is the sum of (A) either (1) ~~commercial paper rates, (2)~~ LIBOR rates or ~~(3)~~(2) the federal funds rate plus 0.5% or the prime rate and (B) a fixed margin. At ~~March 31,~~September 30, 2013, the interest rate was 0.6%.

We also have several international programs to sell with recourse trade accounts receivable to financial institutions. Advances received under these programs are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities. At ~~March 31,~~September 30, 2013, the commitments supporting these programs totaled ~~$17.9~~$18.9 million, the advances received of ~~$5.5~~$5.6 million were secured by ~~$8.3~~$8.7 million of accounts receivable, and based on available and qualifying receivables, ~~$0.3~~$0.2 million of additional borrowings were available under the programs. The interest rates under these programs are based on EURIBOR rates plus 1.75%. At ~~March 31,~~September 30, 2013, the weighted-average interest rate was 1.9%.

The 7.875% Senior Notes (the “Senior Notes”) were issued in 2010 at par, bear interest at a rate of 7.875% per year, payable semi-annually in arrears on February 15th and August 15th, and mature on August 15, 2018. ~~Through August 15, 2013, we may redeem up to 35% of the Senior Notes at a price equal to 107.875% of the principal amount using proceeds of certain equity offerings.~~ We may also redeem some or all of the Senior Notes prior to August 15, 2014, at a price equal to the principal amount plus a defined applicable premium. The applicable premium on any redemption date is the greater of 1% of the principal amount of the note or the excess of (1) the present value at such redemption date of the redemption price of the note at August 15, 2014, plus all required interest payments due on the note through August 15, 2014, computed using a discount rate equal to the Treasury Rate as of the redemption date plus 50 basis points; over (2) the principal amount of the note. In addition, we may redeem some or all of the Senior Notes beginning August 15, 2014, at prices ranging from 100% to 103.938% of the principal amount.

The Senior Notes are unsecured obligations and rank equally in right of payment with any other unsecured, unsubordinated obligations. The Senior Notes contain certain affirmative and negative covenants customary for high-yield debt securities, including, but not limited to, restrictions on our ability to incur additional debt, create liens, pay dividends or make other distributions or repurchase our common stock and sell assets outside the ordinary course of business. At ~~March 31,~~September 30, 2013, we were in compliance with the covenants under the Senior Notes’ indenture.

The ~~6.5%~~6.50% Convertible Senior Notes (the “Convertible Notes”) were ~~issued in 2008, bear interest~~repaid at ~~a rate of 6.5% per year, payable semi-annually in arrears on February 15th and August 15th, and mature~~maturity on August 15, 2013. We separately account for the liability and equity components of the Convertible Notes in a manner that, when interest cost is recognized in subsequent periods, will reflect our nonconvertible debt borrowing rate at the time the Convertible Notes were issued. The effective interest rate on the liability component is 9.5%. Under certain circumstances, holders of the Convertible Notes may convert their notes prior to maturity. The Convertible Notes are unsecured obligations and rank equally in right of payment with any other unsecured, unsubordinated obligations. The principal amount outstanding at maturity was $35.1 ~~million at March 31, 2013, and $35.1 million at December 31, 2012. At March 31, 2013, we were in compliance with the covenants under the Convertible Notes’ indenture.~~million.

In 2010, we entered into the Third Amended and Restated Credit Agreement with a group of lenders for a five-year, $350 million multi-currency senior revolving credit facility (the “2010 Credit Facility”). In March 2013, we amended the 2010 Credit Facility (the “2013 Amended Credit Facility”) to provide additional operating flexibility. The primary effects of the 2013 Amended Credit Facility were to:

The 2013 Amended Credit Facility matures on August 24, 2015, and is secured by substantially all of Ferro’s assets. After reductions for outstanding letters of credit, we had ~~$239.2~~$225.0 million of additional borrowings available at ~~March 31,~~September 30, 2013. The interest rate under the 2013 Amended Credit Facility is the sum of (A) either (1) LIBOR or (2) the higher of the Federal Funds Rate plus 0.5%, the Prime Rate, or LIBOR plus 1.0% and (B) a variable margin based on the Company’s leverage. At ~~March 31,~~September 30, 2013, the interest rate was ~~3.7%~~3.4%.

Under the 2013 Amended Credit Facility, we are subject to a number of financial covenants, including limitations on the payment of common stock dividends. At ~~March 31,~~September 30, 2013, we were in compliance with the covenants of the 2013 Amended Credit Facility.

The following financial instrument assets (liabilities) are presented at their respective carrying amount, fair value and classification within the fair value hierarchy:


	March 31, 2013													September 30, 2013
	Carrying			Fair Value										Carrying			Fair Value
	Amount			Total			Level 1		Level 2			Level 3		Amount			Total			Level 1		Level 2			Level 3
	(Dollars in thousands)													(Dollars in thousands)
Cash and cash equivalents	$	32,897		$	32,897		$	32,897	$	—		$	—	$	35,853		$	35,853		$	35,853	$	—		$	—
Loans payable		(38,654	)		(38,654	)		—		(38,654	)		—		(56,801	)		(56,801	)		—		(56,801	)		—
7.875% Senior Notes		(250,000	)		(261,540	)		—		(261,540	)		—		(250,000	)		(262,500	)		—		(262,500	)		—
6.50% Convertible Senior Notes, net of unamortized discounts		(34,662	)		(35,241	)		—		(35,241	)		—
Revolving credit facility		(6,635	)		(6,760	)		—		(6,760	)		—
Revolving Credit Facility															(19,509	)		(19,936	)		—		(19,936	)		—
Other long-term notes payable		(4,627	)		(3,850	)		—		(3,850	)		—		(5,421	)		(4,511	)		—		(4,511	)		—
Foreign currency forward contracts, net		2,715			2,715			—		2,715			—		(2,467	)		(2,467	)		—		(2,467	)		—

The fair values of cash and cash equivalents are based on the fair values of identical assets. The fair values of short-term loans payable are based on the present value of expected future cash flows and approximate their carrying amounts due to the short periods to maturity. The fair values of the Senior Notes and the Convertible Notes are based on third-party estimated bid prices. The fair values of the ~~revolving credit facility~~Revolving Credit Facility and the other long-term notes payable are based on the present value of expected future cash flows, ~~and~~ assumptions about current interest rates and the creditworthiness of the Company that market participants would use in pricing the debt.

Foreign currency forward contracts. We manage foreign currency risks principally by entering into forward contracts to mitigate the impact of currency fluctuations on ~~transactions.~~transactions, the majority of which are intercompany. These forward contracts are not designated as hedging instruments. Gains and losses on these foreign currency forward contracts are netted with gains and losses from currency fluctuations on transactions arising from international trade and reported as foreign currency ~~(gains)~~ losses, net in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2013, net foreign currency loss was approximately $1.3 million and $4.0 million, respectively, which is primarily comprised of the foreign exchange impact on transactions in countries where it is not economically feasible for us to enter into hedging arrangements and hedging inefficiencies, including timing of transactions, etc. Net losses arising from the change in fair value of our financial instruments of $2.7 million and $6.7 million, for the three and nine months ended September 30, 2013, respectively, offset related net gains on the underlying intercompany transactions of approximately the same amounts. The fair values of these contracts are based on market prices for comparable contracts. We had foreign currency forward contracts with notional amounts of ~~$249.1~~$231.3 million at ~~March 31,~~September 30, 2013, and $250.7 million at December 31, 2012.

The following table presents the effect on our consolidated statements of operations for the three months ended ~~March 31,~~September 30, 2013 and 2012, respectively, of our foreign currency forward contracts:

The following table presents the effect on our consolidated statements of operations for the nine months ended September 30, 2013 and 2012, respectively, of our foreign currency forward contracts:

The following table presents the fair values on our consolidated balance sheets of foreign currency forward contracts:


	March 31, 2013			December 31, 2012			Balance Sheet Location	September 30, 2013			December 31, 2012			Balance Sheet Location
	(Dollars in thousands)							(Dollars in thousands)
Asset derivatives:
Foreign currency forward contracts	$	3,640		$	—		Other current assets		211			213		Accrued expenses and other current liabilities
Foreign currency forward contracts		—			213		Accrued expenses and other current liabilities

Total	$	3,640		$	213

Liability derivatives:
Foreign currency forward contracts	$	(925	)	$	—		Other current assets		(2,678	)		(4,971	)	Accrued expenses and other current liabilities
Foreign currency forward contracts		—			(4,971	)	Accrued expenses and other current liabilities

Total	$	(925	)	$	(4,971	)

Income tax expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2013, was ~~$1.0~~$4.0 million, or ~~10.2%~~16.8% of pre-tax income. In the first ~~three~~nine months of 2012, we recorded income tax expense of ~~$2.8~~$113.1 million, or ~~46.3%~~(57.3)% of pre-tax income. The ~~decrease~~change in the effective tax rate was primarily due to the ~~result~~reserve for a significant portion of ~~differences~~the Company’s deferred tax assets, that was recorded in ~~pre-tax loss or income~~the third quarter of 2012 compared to the expected usage of tax assets in ~~loss jurisdictions with full valuation allowances for which no tax benefit or expense is recognized.~~2013.

We have recorded environmental liabilities of ~~$9.4~~$8.2 million at ~~March 31,~~September 30, 2013, and $9.6 million at December 31, 2012, for costs associated with the remediation of certain of our properties that have been contaminated, primarily a non-operating facility in Brazil. The costs include legal and consulting fees, site studies, the design and implementation of remediation plans, post-remediation monitoring and related activities. The ultimate liability could be affected by numerous uncertainties, including the extent of contamination found, the required period of monitoring and the ultimate cost of required remediation.

There are various lawsuits and claims pending against the Company and its subsidiaries. We do not currently expect the ultimate liabilities, if any, and expenses related to such lawsuits and claims to materially affect the consolidated financial position, results of operations, or cash flows of the Company.

Net periodic benefit (credit) cost of our U.S. pension plans (including our unfunded nonqualified plans), non-U.S. pension plans, and postretirement health care and life insurance benefit plans ~~have been adjusted~~ for ~~our change in accounting principle as described in Note 2, Recent Accounting Pronouncements~~the three months ended September 30, 2013 and ~~Change in Accounting Principle.~~ 2012, respectively, follow:

Net periodic benefit (credit) cost for the ~~three~~nine months ended ~~March 31,~~September 30, 2013 and 2012, respectively, follow:


	U.S. Pension Plans						Non-U.S. Pension Plans						Other Benefit Plans						U.S. Pension Plans						Non-U.S. Pension Plans						Other Benefit Plans
	2013			2012			2013			2012			2013			2012			2013			2012			2013			2012			2013			2012
	(Dollars in thousands)																		(Dollars in thousands)
Service cost	$	4		$	4		$	533		$	577		$	—		$	—		$	12		$	12		$	1,577		$	1,496		$	—		$	—
Interest cost		4,485			4,869			1,230			1,375			285			396			13,455			14,602			3,672			3,990			855			1,189
Expected return on plan assets		(6,181	)		(5,096	)		(748	)		(753	)		—			—			(18,543	)		(15,473	)		(2,229	)		(2,253	)		—			—
Amortization of prior service cost (credit)		3			12			6			(33	)		(29	)		(33	)		9			36			21			1			(87	)		(98	)
Curtailment and settlement effects																				—			—			—			(2,394	)		—			—

Net periodic benefit (credit) cost	$	(1,689	)	$	(211	)	$	1,021		$	1,166		$	256		$	363		$	(5,067	)	$	(823	)	$	3,041		$	840		$	768		$	1,091

Net periodic benefit credit for our U.S. pension plans for the ~~three~~nine months ended ~~March 31,~~September 30, 2013 increased from the effects of a lower discount rate and larger plan asset balances resulting in increased expected returns.

~~Our~~On May 22, 2013, our shareholders approved the 2013 Omnibus Incentive Plan (the “Plan”), which was adopted by the Board of Directors on February 22, 2013, subject to shareholder approval. The Plan’s purpose is to promote the Company’s long-term financial interests and growth by attracting, retaining and motivating high quality key employees and directors, motivating such employees and directors to achieve the Company’s short- and long-range performance goals and objectives, aligning their interests with those of its shareholders. The Plan reserves 4,400,000 shares of common stock to be issued for grants of several different types of long-term incentives including stock options, stock appreciation rights, restricted shares, performance shares, other common stock based awards, and dividend equivalent rights.

The 2010 Long Term Incentive Plan (the “Previous Plan”) was replaced by the Plan, and no future grants may be made under the Previous Plan. However, any outstanding awards or grants made under the Previous Plan will continue until the end of their specified terms.

In 2013, our Board of Directors granted ~~0.5~~0.6 million stock options, ~~0.4~~0.5 million performance share units and ~~0.3~~0.4 million deferred stock units ~~during the first quarter of 2013~~ under ~~our 2010 Long Term Incentive~~The Previous Plan and The Plan. The following table details the weighted-average grant-date fair values and the assumptions used for estimating the fair values of stock option grants made during the ~~three~~nine months ended ~~March 31,~~September 30, 2013:


	Stock Options			Stock Options
Weighted-average grant-date fair value	$	3.79		$	4.01
Expected life, in years		6.0			6.0
Risk-free interest rate		1.4	%		1.2% - 1.4	%
Expected volatility		85.6	%		83.9% - 86.4	%

The weighted average grant date fair value of our performance share units was ~~$5.29.~~$5.69. These shares are currently expensed at target and are evaluated each reporting period for likelihood of achieving the performance criteria.

We measure the fair value of deferred stock units based on the closing market price of our common stock on the date of the grant. The weighted-average fair value per unit for grants made during the ~~three~~nine months ended ~~March 31,~~September 30, 2013, was ~~$5.44.~~$5.70.

We recognized stock-based compensation expense of ~~$1.3~~$4.4 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2013, and ~~$2.0~~$5.7 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2012. At ~~March 31,~~September 30, 2013, unearned compensation cost related to the unvested portion of all stock-based awards was approximately ~~$10.2~~$8.4 million and is expected to be recognized over the remaining vesting period of the respective grants, through the first quarter of 2016.

In the first quarter of 2013, we developed and initiated various restructuring programs across the organization with the objectives of realigning the business and lowering our cost structure. Specifically, the programs relate to our European operations, certain corporate functions, improvement of operational efficiencies, and the exit of the solar pastes product line. As a result of the restructuring actions, the Company expects to incur charges of approximately ~~$26~~$40 million, ~~substantially all~~the majority of which will be for severance costs and require future cash expenditures. The programs are subject to required consultations with employee representatives at the affected sites and other local legal requirements. Charges associated with these programs were ~~$9.5~~$3.8 million and $26.7 million for the three and the nine months ended ~~March 31, 2013.~~September 30, 2013, respectively. The cumulative charges incurred to date associated with these programs are $37.0 million.

The activities and accruals related to our restructuring and cost reduction programs are summarized below:


	Employee Severance			Other Costs			Asset Impairment		Total			Employee Severance			Other Costs			Asset Impairment			Total
	(Dollars in thousands)											(Dollars in thousands)
Balance at December 31, 2012	$	4,093		$	6,139		$	—	$	10,232		$	4,093		$	6,139					$	10,232
Restructuring charges		8,170			1,284			—		9,454			19,647			7,094			(3	)		26,738
Cash payments		(2,902	)		(4,699	)		—		(7,601	)		(14,715	)		(7,671	)					(22,386	)
Non-cash items		(204	)		(77	)		—		(281	)		92			(820	)		3			(725	)

Balance at March 31, 2013	$	9,157		$	2,647		$	—	$	11,804
Balance at September 30, 2013												$	9,117		$	4,742		$	—		$	13,859

We expect to make cash payments to settle the remaining liability for employee termination benefits and other costs over the next twelve months, except where legal or contractual restrictions prevent us from doing so.

During the first quarter of 2013, we completed the sale of the stock of our pharmaceuticals business, Ferro Pfanstiehl Laboratories, Inc. (“FPL”), which was previously reported within the Pharmaceuticals reportable segment. Consideration was comprised of a $16.9 million cash payment, and the transaction also included an earn-out incentive of up to $8.0 million based on achieving certain earnings targets over a two-year period. In March 2013, prior to the sale, an impairment loss of $8.7 million associated with the long lived assets of FPL was recorded under ASC Topic 360 Property, Plant and Equipment. The write down was determined by estimating the fair value of the assets less cost to sell of $14.8 million using the market approach considering a bona fide purchase offer, a level three measurement within the fair value hierarchy.

The operations of FPL have been segregated from continuing operations and are included in discontinued operations in our condensed consolidated statements of operations. Interest expense has been allocated to the discontinued operation based on the ratio of net assets of FPL to consolidated net assets excluding debt.


	Three months ended March 31,
	2013			2012			Three months ended September 30,
	(Dollars in thousands)						2012
Net sales	$	4,791		$	5,965		$	5,975
Cost of sales		2,762			3,363			4,346

Gross profit		2,029			2,602			1,629
Selling, general and administrative expenses		1,181			1,198			1,246
Impairment		8,682			—
Restructuring charges								95
Interest expense		589			366			385
Miscellaneous expense (income), net		(2	)		(2	)
Miscellaneous income, net								(5	)

(Loss) income from discontinued operations before income taxes		(8,421	)		1,040
Loss from discontinued operations before income taxes								(92	)
Income tax expense		—			333			26

(Loss) income from discontinued operations, net of income taxes	$	(8,421	)	$	707
Loss from discontinued operations, net of income taxes							$	(118	)


	Nine months ended September 30,
	2013			2012
	(Dollars in thousands)
Net sales	$	4,791		$	17,899
Cost of sales		2,762			11,641

Gross profit		2,029			6,258
Selling, general and administrative expenses		1,181			3,631
Restructuring and impairment charges		8,682			95
Interest expense		589			1,123
Miscellaneous income, net		(2	)		(11	)

(Loss) income from discontinued operations before income taxes		(8,421	)		1,420
Income tax expense		—			503

(Loss) income from discontinued operations, net of income taxes	$	(8,421	)	$	917

The following is a summary of the assets and liabilities of FPL at December 31, 2012, which are presented separately on the condensed consolidated balance sheet:

Details of the calculation of basic and diluted earnings (loss) per share are shown below:


	Three months ended March 31,					Three months ended September 30,					Nine months ended September 30,
	2013		As adjusted 2012			2013		As adjusted 2012			2013		As adjusted 2012
	(In thousands, except per share amounts)					(In thousands, except per share amounts)
Basic earnings per share computation:
Net income attributable to Ferro Corporation common shareholders	$	883	$	3,846
Basic earnings (loss) per share computation:
Net income (loss) attributable to Ferro Corporation common shareholders						$	12,652	$	(316,114	)	$	11,405	$	(310,392	)
Adjustment for loss (income) from discontinued operations		8,421		(707	)		—		118			8,421		(917	)

Total	$	9,304	$	3,139		$	12,652	$	(315,996	)	$	19,826	$	(311,309	)

Weighted-average common shares outstanding		86,439		86,233			86,426		86,296			86,464		86,274
Basic earnings per share from continuing operations attributable to Ferro Corporation common shareholders	$	0.11	$	0.03
Diluted earnings per share computation:
Net income attributable to Ferro Corporation common shareholders	$	883	$	3,846
Basic earnings (loss) per share from continuing operations attributable to Ferro Corporation common shareholders						$	0.15	$	(3.66	)	$	0.23	$	(3.61	)
Diluted earnings (loss) per share computation:
Net income (loss) attributable to Ferro Corporation common shareholders						$	12,652	$	(316,114	)	$	11,405	$	(310,392	)
Adjustment for loss (income) from discontinued operations		8,421		(707	)		—		118			8,421		(917	)

Total	$	9,304	$	3,139		$	12,652	$	(315,996	)	$	19,826	$	(311,309	)

Weighted-average common shares outstanding		86,439		86,233			86,426		86,296			86,464		86,274
Assumed exercise of stock options		98		191			200		—			112		—
Assumed satisfaction of deferred stock unit conditions		62		23			77		—			63		—
Assumed satisfaction of restricted stock unit conditions		35		—			120		—			84		—
Assumed satisfaction of performance stock unit conditions		45		—			375		—			247		—
Assumed satisfaction of restricted share conditions		97		248			52		—			63		—

Weighted-average diluted shares outstanding		86,776		86,695			87,250		86,296			87,033		86,274

Diluted earnings per share from continuing operations attributable to Ferro Corporation common shareholders	$	0.11	$	0.03
Diluted earnings (loss) per share from continuing operations attributable to Ferro Corporation common shareholders						$	0.15	$	(3.66	)	$	0.23	$	(3.61	)

The number of anti-dilutive or unearned shares, including shares related to contingently convertible debt, was ~~5.3~~2.0 million and 2.4 million for the three and nine months ended ~~March 31,~~September 30, 2013, respectively, and ~~6.9~~7.5 million for the three and nine months ended ~~March 31,~~September 30, 2012.

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended ~~March 31,~~September 30, 2013, were as follows:


	Postretirement Benefit Liability Adjustments			Translation Adjustments			Other Adjustments			Total			Postretirement Benefit Liability Adjustments			Translation Adjustments		Other Adjustments			Total
	(Dollars in thousands)												(Dollars in thousands)
Beginning accumulated other comprehensive income (loss)	$	2,647		$	14,080		$	(77	)	$	16,650		$	2,510		$	5,911	$	(77	)	$	8,344
Other comprehensive income before reclassifications		—			(3,003	)		—			(3,003	)		—			4,203		—			4,203
Amounts reclassified from accumulated other comprehensive income		(68	)		—			—			(68	)
Amounts reclassified from accumulated other comprehensive income (loss)														(34	)		—		—			(34	)

Net current period other comprehensive income		(68	)		(3,003	)		—			(3,071	)
Net current period other comprehensive (loss) income														(34	)		4,203		—			4,169

Ending accumulated other comprehensive income (loss)	$	2,579		$	11,077		$	(77	)	$	13,579		$	2,476		$	10,114	$	(77	)	$	12,513

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2013, were as follows:

During the first quarter of 2013, the Company reorganized its operating segments to reflect the current structure under which performance is evaluated, strategic decisions are made and resources are allocated. The new structure aligns the continuing product lines of our former Electronic Materials segment with our continuing operating segments. Under the new structure, we will continue to report Specialty Plastics, Polymer Additives and Performance Coatings, which aggregates our Tile Coating Systems and Porcelain Enamel operating segments, consistent with the manner in which they have historically been reported. The Glass Systems and Performance Pigments and Colors operating segments that aggregated into the historically reported Color and Glass Performance Materials segment, now include our continuing product lines that were historically reported within the Electronic Materials segment, and as a result of such inclusion, fail to meet the aggregation criteria for continuing to report as one segment. These operating segments will now be reported as the Pigments, Powders and Oxides, and Performance Colors and Glass segments. As discussed in Note 12, our pharmaceuticals business that comprised the Pharmaceuticals segment was sold in the first quarter, and is reported as a discontinued operation.

Net sales to external customers by segment are presented in the table below. Sales between segments were not material.


	Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		As adjusted 2012		2013		As adjusted 2012
	(Dollars in thousands)				(Dollars in thousands)				(Dollars in thousands)
Pigments, Powders and Oxides	$	54,787	$	69,223	$	47,647	$	64,053	$	155,948	$	219,398
Performance Colors and Glass		98,127		103,908		94,059		86,398		298,633		294,806
Performance Coatings		138,902		152,514		151,873		137,228		445,969		447,065
Polymer Additives		80,869		87,724		71,599		79,881		229,266		251,055
Specialty Plastics		44,839		47,056		42,926		41,305		131,267		132,512

Total net sales	$	417,524	$	460,425	$	408,104	$	408,865	$	1,261,083	$	1,344,836

In the first quarter, in conjunction with the changes to operating segments, we ~~have~~ changed the profitability metric utilized by management to evaluate segment performance. The metric that was utilized historically was segment income, and segment gross profit is the metric that ~~will~~is now be utilized. We measure segment gross profit for internal reporting purposes by excluding certain other cost of sales, which includes costs associated with facilities that have been idled or closed. Each segment’s gross profit and a reconciliation to income (loss) before income taxes from continuing operations follows:


	Three months ended March 31,						Three months ended September 30,						Nine months ended September 30,
	2013			As adjusted 2012			2013			As adjusted 2012			2013			As adjusted 2012
	(Dollars in thousands)						(Dollars in thousands)						(Dollars in thousands)
Pigments, Powders and Oxides	$	8,173		$	7,032		$	8,390		$	7,231		$	25,882		$	28,363
Performance Colors and Glass		27,258			28,908			28,713			21,086			87,203			77,220
Performance Coatings		28,592			30,359			36,410			23,858			100,237			85,328
Polymer Additives		8,854			11,439			6,251			8,907			20,616			26,871
Specialty Plastics		7,389			8,659			6,881			6,984			22,116			23,207
Other cost of sales		(1,029	)		(676	)		(2,398	)		(7,356	)		(4,916	)		(8,740	)

Total gross profit		79,237			85,721			84,247			60,710			251,138			232,249
Selling, general and administrative expenses		61,592			72,508			59,078			63,863			184,986			202,675
Restructuring and impairment charges		9,454			311			3,834			198,695			26,738			203,734
Other (income) expense, net		(1,766	)		6,830
Other expense, net								7,817			8,325			15,386			23,204

Income before income taxes	$	9,957		$	6,072
Income (loss) before income taxes							$	13,518		$	(210,173	)	$	24,028		$	(197,364	)

Segment assets primarily consist of trade accounts receivable; inventories; property, plant and equipment; and intangible assets. Unallocated assets primarily include cash and cash equivalents, other receivables and deferred income taxes. As a result of the change in segments and the re-allocation of goodwill due to changes in reporting units, total segment assets under the new structure at March 31, 2013 are presented below and total segment assets at December 31, 2012 have been adjusted to also reflect the new structure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

During the three months ended ~~March 31,~~September 30, 2013, ~~we completed~~sales were flat compared to the ~~sale~~prior-year same period. Increases in sales excluding precious metals in Performance Colors and Glass and Performance Coatings were partially offset by lower sales in Polymer Additives due to the accelerated deselection of ~~assets related~~certain plasticizer products, and in Pigments, Powders and Oxides due to the exit of solar pastes ~~and exited~~in the ~~product line, which represents a~~first quarter of 2013. The decrease in sales of precious metals was primarily in Pigments, Powders and ~~gross~~Oxides and driven by the exit of solar pastes. Gross profit increased approximately $24 million in the ~~first~~third quarter of 2013 compared to the ~~first quarter~~prior-year same period, or 550 basis points as a percentage of ~~2012. However, this action will result~~net sales excluding precious metals, to 21.8%. The favorability was driven by our cost reduction initiatives, increased net sales excluding precious metals and improved business mix, partially offset by lower sales in ~~significant improvements in profitability for~~Polymer Additives and the ~~full year. In addition, we completed the sale~~impact of the ~~stock~~exit of our pharmaceuticals business, which is in line with our strategy to divest non-core businesses and drive earnings growth and profitability in our core Performance Materials and Performance Chemicals businesses.solar pastes.

~~Additionally, we~~We continue to execute against our cost savings plans, which has resulted in ~~significant~~additional savings in the ~~first~~third quarter of 2013 compared with the prior-year same period. Further, we have announced ~~additional planned~~that we now expect to achieve cost savings ~~which we expect to be approximately $70~~of greater than $100 million by ~~2014.~~

~~In addition to~~ the ~~impact~~end of solar pastes, we also experienced a continued decline in demand for certain plasticizer products in our Polymer Additives segment driven by changing environmental regulations, weakness in Europe and raw material challenges in our Performance Coatings segment.2015.

For the three months ended ~~March 31,~~September 30, 2013, ~~Ferro’s~~Ferro net income was ~~$0.5~~$13.0 million, compared with net ~~income~~loss of ~~$4.0~~$315.7 million in 2012, and net income attributable to common shareholders was ~~$0.9~~$12.7 million, compared towith net ~~income~~loss attributable to common shareholders of ~~$3.8~~$316.1 million in 2012. Income from continuing operations was ~~$8.9~~$13.0 million in the three months ended ~~March 31,~~September 30, 2013, compared with net ~~income~~loss from continuing operations of ~~$3.3~~$315.6 million in 2012. Our total segment gross profit for the ~~first~~third quarter of 2013 was ~~$79.2~~$84.2 million, compared with ~~$85.7~~$60.7 million in 2012. We incurred restructuring charges of ~~$9.5~~$3.8 million ~~associated with actions primarily related to our European and corporate operations~~ in the ~~first~~third quarter. ~~Further, we recorded a gain on~~

For the ~~sale~~nine months ended September 30, 2013, Ferro net income was $11.6 million, compared with net loss of ~~assets related~~$309.6 million in 2012, and net income attributable to ~~solar pastes~~common shareholders was $11.4 million, compared with net loss attributable to common shareholders of ~~$9.0 million.~~$310.4 million in 2012. Income from continuing operations was $20.0 million in the nine months ended September 30, 2013, compared with net loss from continuing operations of $310.5 million in 2012. Our total segment gross profit for the nine months ended September 30, 2013 was $251.1 million, compared with $232.2 million in 2012. We incurred restructuring and impairment charges of $26.7 million in the nine months ended September 30, 2013.

We have ~~made considerable~~continued to make progress against our strategic objectives during the ~~first~~third quarter of ~~2013, and expect the momentum that has been built to continue through the remainder of the year.~~2013. We have executed against our cost reduction plans, ~~for the first quarter, and have additional actions underway in the areas of (1) business realignment, (2) operational efficiency, and (3) corporate and back office functions,~~ which are expected to drive cost savings of approximately ~~$70~~$45 million ~~by 2014.~~for full year 2013. These actions, in addition to the cost savings from exiting solar pastes ~~will~~during the first quarter of 2013 have significantly ~~improve~~improved the Company’s cost structure.

In the fourth quarter, we expect to realize the continued benefits from our cost reduction plans, however, we also expect our normal seasonal business pattern, which is characterized by lower customer demand and reduced plant utilization due to holiday shutdowns.

Factors that could adversely affect our future performance include those described under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2012.

For the three and nine months ended ~~March 31,~~September 30, 2012, amounts originally reported have been adjusted for the effects of applying retrospectively the ~~change in accounting principle~~discontinued operations of FPL as described in Note ~~2, Recent Accounting Pronouncements~~12, Discontinued Operations and ~~Change~~the changes in ~~Accounting Principle, to~~our reportable segments as described in Note 15, Reporting for Segments. Both notes are part of the condensed consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q. ~~Additionally, all periods presented reflect FPL as a discontinued operation.~~

For the three months ended ~~March 31,~~September 30, 2013, Ferro net income was ~~$0.5~~$13.0 million, compared with net ~~income~~loss of ~~$4.0~~$315.7 million for the three months ended ~~March 31,~~September 30, 2012. For the three months ended ~~March 31,~~September 30, 2013, Ferro net income attributable to common shareholders was ~~$0.9~~$12.7 million, or ~~$0.01~~$0.15 per share, compared with Ferro net ~~income~~loss attributable to common shareholders of ~~$3.8~~$316.1 million, or ~~$0.04~~$3.66 loss per share, for the three months ended ~~March 31,~~September 30, 2012.


	Three months ended March 31,												Three months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Net sales excluding precious metals	$	386,787		$	417,903		$	(31,116	)		(7.4	)%	$	387,025		$	372,904		$	14,121			3.8	%
Sales of precious metals		30,737			42,522			(11,785	)		(27.7	)%		21,079			35,961			(14,882	)		(41.4	)%

Net sales		417,524			460,425			(42,901	)		(9.3	)%		408,104			408,865			(761	)		(0.2	)%
Cost of sales		338,287			374,704			(36,417	)		(9.7	)%		323,857			348,155			(24,298	)		(7.0	)%

Gross profit	$	79,237		$	85,721		$	(6,484	)		(7.6	)%	$	84,247		$	60,710		$	23,537			38.8	%

Gross profit as a % of net sales excluding precious metals		20.5	%		20.5	%								21.8	%		16.3	%

Net sales decreased by ~~9.3%~~0.2% in the three months ended ~~March 31,~~September 30, 2013, compared with the prior-year same period. Net sales excluding precious metals increased $14.1 million, driven by increased sales in our Performance Coatings, Performance Colors and Glass and Specialty Plastics segments, partially offset by decreased sales in our Polymer Additives and Pigments, Powders and Oxides segments. The exit of solar pastes during the first quarter of 2013 drove ~~a significant decrease in net sales compared to~~ the ~~prior-year, and also drove the significant~~ decrease in sales of precious ~~metals. Additionally, sales of our Performance Coatings products decreased~~metals compared to the prior-year primarily due to the increasingly competitive sales environment, in combination with reduced demand and Polymer Additives sales continued to decline due to reduced demand for certain plasticizer products resulting from changing environmental regulations.prior year.

Gross profit ~~decreased 7.6%~~increased 38.8% in the three months ended ~~March 31,~~September 30, 2013, compared to the prior-year same period. The significant drivers of the ~~reduced~~increased gross profit are ~~the exit of solar pastes, certain inventory obsolescence charges taken during the first quarter of 2013,~~strong demand and ~~reduced volumes~~lower raw material and production costs in our Performance Coatings segment and favorable product mix in our Performance Colors and Glass segment. These increases were partially offset by unfavorable product mix in our Pigments, Powders and Oxides segment and the impact of reduced demand for certain plasticizer products in our Polymer Additives ~~segments. Gross~~segment. Additionally, during the third quarter of 2012, inventory charges related to obsolete solar pastes impacted gross profit ~~percentage increased to 19.0% of net sales in the three months ended March 31, 2013 from 18.6% in the prior-year same period, and was driven~~ by ~~favorable mix.~~

The following table presents our segments summarized into their respective operating groups, with Pigments, Powders and Oxides, Performance Colors and Glass, and Performance Coatings comprising Performance Materials, and Polymer Additives and Specialty Plastics comprising Performance Chemicals. In conjunction with the changes to segments, we also changed the profitability metric utilized by management to evaluate segment performance, as discussed in Note 15. The metric that was utilized historically was segment income, which included selling, general and administrative (“SG&A”) expenses that were directly incurred by each segment, as well as certain allocated costs. Segment gross profit is the metric that is now utilized. Further, we have refined our approach to managing SG&A expenses and are intensely focused on analyzing expenses at the individual site level, and also across functional areas within the Company, as opposed to the segment level, and will evaluate performance in this manner.

SG&A expenses were ~~$10.9~~$4.8 million lower in the three months ended ~~March 31,~~September 30, 2013 compared with the prior-year same period. As a percentage of sales, SG&A expenses ~~declined 0.9%~~decreased 110 basis points from ~~15.7%~~15.6% in the third quarter of 2012 to 14.5% in the third quarter of 2013. The primary drivers of the change in SG&A expenses were lower bad debt expense in the third quarter of 2013 compared to the prior-year same period, and lower pension and other postretirement benefit expense resulting from a lower discount rate and higher plan assets, generating higher expected returns, compared to the prior-year same period. Personnel expenses decreased compared to the prior year driven by the exit of solar pastes and the various personnel actions taken during 2012 and into 2013, however, there was an increase in incentive compensation of approximately $11 million compared to the prior-year same period. The change in other SG&A expenses was primarily driven by a charge taken for a reserve required in the third quarter of 2012 that did not recur in the current year, partially offset by higher professional fees.

The following table includes SG&A components with significant changes between 2013 and 2012:

Restructuring and impairment charges decreased significantly in the third quarter of 2013 compared to the prior-year same period. The drivers of the decrease were the significant nonrecurring impairments of goodwill and property, plant and equipment in the third quarter of 2012, partially offset by additional charges related to our ongoing restructuring plans during the third quarter of 2013.

Interest expense in the third quarter of 2013 was consistent with the prior-year same period. The components of interest expense are as follows:

During the third quarter of 2013, income tax expense was $0.5 million compared with the income tax expense of $105.4 million in the third quarter of 2012. Income tax expense for the current period was less than the expense recorded in the prior-year same period primarily due to the reserve that was recorded in the third quarter of 2012 on a significant portion of our deferred tax assets.

Sales in Pigments, Powders and Oxides decreased due to the exit of solar pastes during the first quarter of ~~2012~~2013, which comprised approximately $4 million of the decrease in net sales excluding precious metals from the prior-year same period. The decrease in sales related to ~~14.8%~~the exit of solar pastes was partially mitigated by increased sales of our metal powders products produced in the United States compared to the prior year. The decreased sales from the exit of solar pastes were further mitigated by tolling revenue of approximately $1 million during the third quarter of 2013 related to a supply agreement entered into with the buyer of our solar pastes assets. Sales were unfavorably impacted by product mix, including the shift away from solar pastes products, which was only partially mitigated by increased volume and pricing benefits in the third quarter. The decrease in precious metal sales was primarily driven by the exit of solar pastes. Regionally, the United States drove the decrease in sales, primarily due to the exit of solar pastes. Gross profit increased from the prior-year same period primarily due to favorable production costs and higher volume, partially offset by unfavorable mix.

Net sales excluding precious metals increased compared to the prior-year same period, primarily driven by sales of our glass products. Sales of our glass products increased over the prior-year same period by approximately $7 million, with the remainder of the increase primarily coming from our electronic packaging materials products. Net sales excluding precious metals were impacted by favorable product mix, favorable pricing, and higher volume compared to the prior-year same period. Regionally, Europe and the United States increased approximately $5 million and $2 million, respectively, compared to the prior-year same period. Other regions increased by approximately $1 million in total. Gross profit increased from the prior-year same period due to favorable volume and product mix, favorable pricing, and favorable production costs.

Sales increased in Performance Coatings due to higher sales of our inks products and porcelain enamel products compared to the prior-year same period. The impact of these increases was approximately $12 million, with the balance of the increase due to higher sales of other tile coating products. Sales were favorably impacted by higher volumes and mix, partially offset by unfavorable pricing, most significantly related to our tile products. Regionally, Europe drove the largest increase in sales, approximately $11 million, due to increased customer demand and favorable product mix. Asia-Pacific and the United States also both increased by approximately $2 million and $1 million, respectively. Gross profit increased from the prior-year same period primarily due to favorable raw material and production costs and higher volume, partially offset by unfavorable pricing impacts.

Sales decreased in Polymer Additives primarily due to the continued decline in sales volume of certain plasticizer products, which is being driven by changing environmental regulations. Regionally, sales declined in the United States by approximately $8 million, comprising the majority of the decrease in the segment. Approximately $6 million of the United States sales decline related to lower volume of the noted plasticizer products. Gross profit decreased from the prior-year same period as a result of the lower sales volume, unfavorable pricing impacts, and unfavorable manufacturing costs.

Sales increased in Specialty Plastics primarily due to strong demand for certain plastic colorants products and filled and reinforced plastics products. Sales were favorably impacted by higher volume, which was only partially offset by unfavorable price and mix impacts. Regionally, Europe and Latin America drove a sales increase totaling approximately $3 million, which was partially offset by a sales decrease in the United States of approximately $1 million. Gross profit was flat compared to the prior-year same period.

Net sales declined slightly compared to the prior-year same period, with a decrease in the United States being partially mitigated by increased net sales in international regions. In the third quarter of 2013, sales originating in the United States were 39% of total net sales, compared with 42% of net sales in the third quarter of 2012. The decline in sales in the United States was primarily driven by the exit of solar pastes, in combination with reduced demand for certain plasticizer products that is being driven by changing environmental regulations. The increase in international regions was primarily driven by increased sales in Europe across all segments except for Polymer Additives, resulting in increased sales of approximately $18 million compared to the prior-year same period. Further, Latin America experienced slight increases across most segments. Higher sales in Europe and Latin America were partially offset by decreased sales in Asia-Pacific of approximately $5 million, which were primarily due to the exit of solar pastes and lower sales of metal powders products.

For the nine months ended September 30, 2013, Ferro net income was $11.6 million, compared with net loss of $309.6 million for the nine months ended September 30, 2012. For the nine months ended September 30, 2013, Ferro net income attributable to common shareholders was $11.4 million, or $0.13 per share, compared with Ferro net loss attributable to common shareholders of $310.4 million, or $3.60 loss per share, for the nine months ended September 30, 2012.

Net sales decreased by 6.2% in the nine months ended September 30, 2013, compared with the prior-year same period. Net sales excluding precious metals decreased $30.5 million, driven by decreased sales in our Pigments, Powders and Oxides segment, primarily due to the exit of solar pastes during the first quarter of 2013, and decreased sales in our Polymer Additives segment. Partially mitigating these decreases were increased sales in our Performance Colors and Glass segment. The exit of solar pastes during the first quarter of 2013 was also the primary driver of the decrease in sales of precious metals compared to the prior year.

Gross profit increased 8.1% in the nine months ended September 30, 2013, compared to the prior-year same period. The significant drivers of the increased gross profit are favorable product mix in our Performance Colors and Glass segment and strong demand and lower raw material and production costs, partially offset by unfavorable price impacts, in our Performance Coatings segment. These increases were partially offset by unfavorable mix in our Pigments, Powders and Oxides segment and the impact of reduced demand for certain plasticizer products and unfavorable production costs in our Polymer Additives segment. Additionally, in the prior year, inventory charges related to obsolete solar pastes impacted gross profit by approximately $5 million.


	Nine months ended September 30,
	2013		2012		$ Change			% Change
	(Dollars in thousands)
Performance Materials	$	113,700	$	137,393	$	(23,693	)		(17.2	)%
Performance Chemicals		17,575		24,294		(6,719	)		(27.7	)%
Corporate		53,711		40,988		12,723			31.0	%

Selling, general and administrative expenses	$	184,986	$	202,675	$	(17,689	)		(8.7	)%

SG&A expenses were $17.7 million lower in the nine months ended September 30, 2013 compared with the prior-year same period. As a percentage of sales, SG&A expenses decreased 40 basis points from 15.1% for the nine months ended September 30, 2012 to 14.7% for the nine months ended September 30, 2013. The primary drivers of the reduction in SG&A ~~expense~~expenses were the various personnel actions taken during 2012 and into ~~the first quarter of~~ 2013, which drove ~~the decrease~~decreases in personnel expenses and stock-based compensation expense. The decreases were partially offset by an increase in incentive compensation of approximately $14 million in the first nine months of 2013 compared to the prior-year same period. In addition, a lower discount rate and increased expected returns on our pension plan assets has reduced pension and other postretirement benefit expense in the first ~~quarter~~nine months of 2013 compared to the prior-year same ~~period, and our~~period. Our expenses related to ~~an initiative to streamline~~idle sites have decreased in the current year as a result of selling the majority of our idle sites in the current year, and ~~standardize business processes and improve management information systems tools have~~our bad debt expense has decreased approximately $2 million compared to the prior-year ~~as a result of the project being placed into service during 2012.~~same period.

The following table includes SG&A components with significant changes between 2013 and 2012:


	Three months ended March 31,											Nine months ended September 30,
	2013			2012		$ Change			% Change			2013			2012		$ Change			% Change
	(Dollars in thousands)											(Dollars in thousands)
Personnel expenses	$	42,250		$	46,993	$	(4,743	)		(10.1	)%	$	107,881		$	130,850	$	(22,969	)		(17.6	)%
Incentive compensation													14,147			115		14,032			NM
Stock-based compensation													4,392			5,699		(1,307	)		(22.9	)%
Pension and other postretirement benefits		(412	)		1,318		(1,730	)		NM			(1,258	)		1,108		(2,366	)		NM
Management information systems tools initiative		—			1,209		(1,209	)		(100.0	)%
Idle sites													—			1,791		(1,791	)		(100.0	)%
Bad debt expense		(92	)		1,038		(1,130	)		NM			1,835			4,174		(2,339	)		(56.0	)%
Stock-based compensation		1,346			2,043		(697	)		(34.1	)%
Idle sites		363			706		(343	)		(48.6	)%
Other		18,137			19,201		(1,064	)		(5.5	)%		57,989			58,938		(949	)		(1.6	)%

Selling, general and administrative expense	$	61,592		$	72,508	$	(10,916	)
Selling, general and administrative expenses												$	184,986		$	202,675	$	(17,689	)		(8.7	)%


	Three months ended March 31,									Nine months ended September 30,
	2013		2012		$ Change		% Change			2013			2012		$ Change			% Change
	(Dollars in thousands)									(Dollars in thousands)
Employee severance	$	8,170	$	311	$	7,859		NM		$	19,647		$	4,858	$	14,789			NM
Other restructuring costs		1,284		—		1,284		100.0	%		7,094			—		7,094			NM
Impairment											(3	)		198,876		(198,879	)		NM

Restructuring and impairment	$	9,454	$	311	$	9,143		NM
Restructuring and impairment charges										$	26,738		$	203,734	$	(176,996	)		NM

Restructuring and impairment charges ~~increased~~decreased significantly in the first ~~quarter~~nine months of 2013 compared to the prior-year same period. The drivers of the ~~increase are~~decrease were the ~~various~~significant nonrecurring impairments of goodwill and property, plant and equipment in the third quarter of 2012, partially offset by charges related to our ongoing restructuring ~~actions that have been taken~~plans during the first ~~quarter, as well as expense incurred during the first quarter related to the disposal~~nine months of ~~the leased corporate aircraft.~~2013.

Interest expense in the first ~~quarter~~nine months of 2013 increased compared to the prior-year same period, primarily due to the write-off of deferred financing fees resulting from amending our revolving credit facility and the commitment amount being reduced from $350.0 million to $250.0 ~~million.~~million, and reduced capitalization of interest costs resulting from an information systems tools project that did not recur in the current year. The components of interest expense are as follows:


	Three months ended March 31,												Nine months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change		% Change
	(Dollars in thousands)												(Dollars in thousands)
Interest expense	$	6,226		$	6,245		$	(19	)		(0.3	)%	$	19,763		$	19,495		$	268		1.4	%
Amortization of bank fees		1,075			496			579			NM			1,885			1,459			426		29.2	%
Interest capitalization		(4	)		(367	)		363			(98.9	)%		(614	)		(1,388	)		774		(55.8	)%

Interest expense	$	7,297		$	6,374		$	923			14.5	%	$	21,034		$	19,566		$	1,468		7.5	%

~~During the first quarter of 2013, income~~Income tax expense for the nine months ended September 30, 2013 was ~~$1.0~~$4.0 million, or ~~10.2%~~16.8% of pre-tax income. In the ~~first three months of 2012,~~prior-year same period, we recorded income tax expense of ~~$2.8~~$113.1 million, or ~~46.3%~~(57.3)% of pre-tax income. The ~~decrease~~change in the effective tax rate was primarily due to the ~~result~~reserve for a significant portion of ~~differences~~the Company’s deferred tax assets, which was recorded in ~~pre-tax loss or income in loss jurisdictions with full valuation allowances for which no tax benefit or expense is recognized.~~the third quarter of 2012.

Comparison of the ~~three~~nine months ended ~~March 31,~~September 30, 2013 and 2012


	Three months ended March 31,												Nine months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales excluding precious metals	$	35,505		$	42,874		$	(7,369	)		(17.2	)%	$	110,146		$	124,429		$	(14,283	)		(11.5	)%
Segment precious metal sales		19,282			26,349			(7,067	)		(26.8	)%		45,802			94,969			(49,167	)		(51.8	)%

Segment net sales		54,787			69,223			(14,436	)		(20.9	)%		155,948			219,398			(63,450	)		(28.9	)%
Segment gross profit		8,173			7,032			1,141			16.2	%		25,882			28,363			(2,481	)		(8.7	)%
Gross profit as a % of segment net sales excluding precious metals		23.0	%		16.4	%								23.5	%		22.8	%

Sales in Pigments, Powders and Oxides decreased primarily due to the exit of solar pastes during the first quarter of 2013, which comprised approximately $5$19 million of the decrease in net sales excluding precious metals from the prior-year same period. The decreased sales from the exit of solar pastes were partially mitigated by tolling revenue of approximately $3 million during the period related to a supply agreement entered into with the ~~remainder~~buyer of our solar pastes assets. Net sales excluding precious metals were unfavorably impacted by product mix, including the shift away from solar pastes products, and unfavorable pricing impacts, which was only partially mitigated by higher volume. The decrease in precious metal sales was driven by the exit of solar pastes. Regionally, the United States drove the decrease ~~attributable~~in sales, due to ~~reduced demand for certain pigments~~the exit of solar pastes. Gross profit decreased from the prior-year same period primarily due to unfavorable mix, which was partially mitigated by favorable production costs and higher volume.

Net sales excluding precious metals increased compared to the prior-year same period, primarily driven by sales of our glass products. ~~Gross profit~~Sales of our glass products increased over the prior-year same period ~~due to increased profitability of our metal powders product line,~~by approximately $12 million, partially offset by ~~inventory obsolescence charges~~decreased sales of our colors products of approximately ~~$2 million~~$4 million. Net sales excluding precious metals were favorably impacted by pricing and product mix, partially offset by lower volume. Regionally, Latin America, Europe and the ~~exit of solar pastes.~~

~~Performance Colors~~United States increased over the prior-year same period, and ~~Glass~~

Sales in Performance Colors and Glass decreased primarily due to lower volumes in our colors, container glass and dental glass product lines, partially mitigated by strong volumes in our automotive glass products.Asia Pacific was flat. Gross profit ~~also decreased~~increased from the prior-year same period as a result of favorable pricing and production costs, partially offset by unfavorable volume and ~~mix, as well as unfavorable pricing.~~mix.


	Three months ended March 31,												Nine months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales		138,902			152,514			(13,612	)		(8.9	)%	$	445,969		$	447,065		$	(1,096	)		(0.2	)%
Segment gross profit		28,592			30,359			(1,767	)		(5.8	)%		100,237			85,328			14,909			17.5	%
Gross profit as a % of segment net sales		20.6	%		19.9	%								22.5	%		19.1	%

~~The sales decrease~~Sales decreased in Performance Coatings ~~was driven by both Tile Coating Systems and Porcelain Enamel. Sales in Tile Coating Systems decreased~~ primarily due to ~~unfavorable pricing,~~lower sales of our tile colors products of approximately $16 million, which ~~impacted~~was partially mitigated by increased sales byof inks of approximately $8$11 million ~~as a result~~and other tile coating products and porcelain enamel products of significant reductions in raw material prices, as well as reduced volumes that were largely driven by the sale in 2012 of a business in Latin America that contributed to first quarter 2012 sales. Sales in Porcelain Enamel decreased by approximately $6$3 million compared to the prior-year same ~~period, primarily~~period. Sales were unfavorably impacted by price, partially mitigated by higher volume and mix. Regionally, Latin America was the most significant decrease, approximately $12 million, due to reduced customer demand and the impact of selling our borate mine in Argentina that contributed to Performance Coatings sales in the prior-year same period. Sales in the United States also decreased approximately $1 million compared to the prior-year same period. The decreased sales were partially mitigated by increased sales in Europe, driven by ~~lower volumes as a result~~increased sales of ~~continued weakness in Europe, in combination with reduced demand in North America~~both tile and ~~Latin America.~~porcelain enamel products, and Asia-Pacific, driven by increased sales of porcelain enamel products. Gross profit ~~in Tile Coating Systems and Porcelain Enamel decreased compared to~~increased from the prior-year same period primarily due to favorable raw material and production costs and higher volume, partially offset by unfavorable ~~volume and mix.~~


	Three months ended March 31,												Nine months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales	$	80,869		$	87,724		$	(6,855	)		(7.8	)%	$	229,266		$	251,055		$	(21,789	)		(8.7	)%
Segment gross profit		8,854			11,439			(2,585	)		(22.6	)%		20,616			26,871			(6,255	)		(23.3	)%
Gross profit as a % of segment net sales		10.9	%		13.0	%								9.0	%		10.7	%

Sales decreased in Polymer Additives primarily due to the continued decline in ~~demand for~~sales volume of certain plasticizer products that is being driven by changing environmental ~~regulations, as well as the weakness~~regulations. Regionally, this drove a decrease in ~~Europe.~~United States sales of approximately $18 million and Europe sales of approximately $5 million, which were partially mitigated by increased sales in Latin America of approximately $2 million. Gross profit decreased from the prior-year same period as a result of the ~~decline~~reduced sales volume, partially offset by favorable pricing impacts, primarily in ~~volumes and the unfavorable impact of raw material costs.~~Europe.


	Three months ended March 31,												Nine months ended September 30,
	2013			2012			$ Change			% Change			2013			2012			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales	$	44,839		$	47,056		$	(2,217	)		(4.7	)%	$	131,267		$	132,512		$	(1,245	)		(0.9	)%
Segment gross profit		7,389			8,659			(1,270	)		(14.7	)%		22,116			23,207			(1,091	)		(4.7	)%
Gross profit as a % of segment net sales		16.5	%		18.4	%								16.8	%		17.5	%

Sales decreased in Specialty Plastics primarily due to unfavorable product mix. Regionally, the ~~performance~~United States drove the majority of the decrease, approximately $5 million, which was partially mitigated by increases in ~~the first quarter of 2012 being extraordinarily high, as a result of numerous customers adjusting inventory to normalized levels after destocking in late 2011,~~Europe and certain customers pre-purchasing large volumes based on commodity pricing concerns, in addition to exiting certain low profitability customers. Lower sales volumes were partially offset by favorable pricing.Latin America that totaled approximately $4 million. Gross profit ~~also~~ decreased from the prior-year same period, primarily due to unfavorable ~~volumes~~production costs, unfavorable mix and ~~sales mix, in combination with~~ unfavorable ~~raw materials cost.~~pricing impacts.


	Three months ended March 31,										Nine months ended September 30,
	2013		2012		$ Change			% Change			2013		2012		$ Change			% Change
	(Dollars in thousands)										(Dollars in thousands)
Geographic Revenues
United States	$	174,403	$	203,771	$	(29,368	)		(14.4	)%	$	506,439	$	586,192	$	(79,753	)		(13.6	)%
International		243,121		256,654		(13,533	)		(5.3	)%		754,644		758,644		(4,000	)		(0.5	)%

Total	$	417,524	$	460,425	$	(42,901	)		(9.3	)%	$	1,261,083	$	1,344,836	$	(83,753	)		(6.2	)%

Net sales declined in the United States and international regions compared to the prior-year same period. In the first ~~quarter~~nine months of 2013, sales originating in the United States were ~~42%~~40% of total net sales, compared with 44% of net sales in the first ~~quarter~~nine months of 2012. ~~The~~Approximately $55 million of the decline in sales in the United States was ~~primarily~~ driven by the exit of solar pastes, ~~in combination with~~including sales of precious metals, and approximately $18 million was due to reduced demand for certain plasticizer ~~products.~~products, which is being driven by changing environmental regulations. International sales decreased approximately $12 million, primarily due to reduced sales of our Performance Coatings products in Latin America, continued ~~weakness~~reduction in demand for certain plasticizer products in Europe totaling approximately $5 million, and the impact of the exit of solar pastes on Asia-Pacific, ~~reduced demand for certain plasticizer products that has also had a significant impact on Europe, as well as reduced demand for~~totaling approximately $9 million. The declines in international regions were partially mitigated by increased sales of our Performance Coatings and Specialty Plastics products in ~~both~~Europe, totaling approximately $12 million, container glass products sales in Latin America of approximately $6 million, and ~~Europe.~~

Summary of Cash Flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2013 and 2012


	Three months ended March 31,									Nine months ended September 30,
	2013			2012			$ Change			2013			2012			$ Change
	(Dollars in thousands)									(Dollars in thousands)
Net cash used for operating activities		(17,106	)		(10,975	)		(6,131	)
Net cash provided by operating activities											3,003			19,536			(16,533	)
Net cash provided by (used for) investing activities		24,962			(22,211	)		47,173			12,878			(43,763	)		56,641
Net cash (used for) provided by financing activities		(4,187	)		33,489			(37,676	)		(9,664	)		26,072			(35,736	)
Effect of exchange rate changes on cash and cash equivalents		(348	)		(23	)		(325	)		60			(19	)		79

Increase in cash and cash equivalents	$	3,321		$	280		$	3,041		$	6,277		$	1,826		$	4,451

Details of net cash ~~used for~~provided by operating activities were as follows:


	Three months ended March 31,									Nine months ended September 30,
	2013			2012			$ Change			2013			2012			$ Change
	(Dollars in thousands)									(Dollars in thousands)
Cash flows from operating activities:
Net income	$	520		$	3,970		$	(3,450	)
Gain on sale of assets and business		(10,895	)		(208	)		(10,687	)
Net income (loss)										$	11,582		$	(309,562	)	$	321,144
(Gain) loss on sale of assets and business											(10,686	)		1,018			(11,704	)
Restructuring and impairment charges		1,859			(159	)		2,018			4,355			311,084			(306,729	)
Depreciation and amortization		13,264			13,879			(615	)		38,000			41,734			(3,734	)
Accounts receivable		(13,946	)		(33,733	)		19,787			(23,079	)		(23,006	)		(73	)
Inventories		(6,095	)		(11,929	)		5,834			12,118			15,637			(3,519	)
Accounts payable		8,233			11,554			(3,321	)		(5,864	)		(4,254	)		(1,610	)
Other changes in current assets and liabilities, net		(13,579	)		14,404			(27,983	)		(8,363	)		7,814			(16,177	)
Other adjustments, net		3,533			(8,753	)		12,286			(15,060	)		(20,929	)		5,869

Net cash used for operating activities	$	(17,106	)	$	(10,975	)	$	(6,131	)
Net cash provided by operating activities										$	3,003		$	19,536		$	(16,533	)

Cash flows from operating activities.Cash flows from operating activities decreased by ~~$6.1~~$16.5 million in the first ~~three~~nine months of 2013 compared with the prior-year same period. The decrease in cash flows was primarily the result of increased cash outflows related to our restructuring activities of ~~$7.6~~$22.4 million during the first ~~three~~nine months of 2013. Reconciling net income to cash flows from operating activities included approximately ~~$1.9~~$4.4 million of non-cash restructuring charges, depreciation and amortization, as well as the net financial statement impact of the sale of solar assets and Ferro Pfansteihl Laboratories, Inc. (“FPL”). Approximately ~~$12.3~~$25.5 million in interest was paid during the current ~~quarter~~year compared to ~~$12.1~~$25.3 million in the first ~~three~~nine months of 2012. Interest payments were primarily comprised of semiannual interest on our outstanding senior notes. ~~Accounts receivable and inventories~~Inventories increased from year end, but less than the increase in the prior-year same period, which is primarily the result of decreased sales compared to the prior-year, as well as stronger inventory management. The increase in accounts receivables from year end is consistent with that seen in the first nine months of 2012.

Cash flows from investing activities.Cash flows from investing activities increased ~~$47.2~~$56.6 million in the first ~~three~~nine months of 2013 compared with the prior-year same period. Cash received for the sale of solar assets and FPL, totaling $27.7 million, comprised the majority of the increase. Capital expenditures decreased to ~~$8.2~~$21.2 million in the first ~~three~~nine months of 2013 from ~~$22.6~~$46.2 million in the prior-year ~~same~~for the comparable period.

Cash flows from financing activities. Cash flows from financing activities decreased ~~$37.7~~$35.7 million in the first ~~three~~nine months of 2013 compared with the prior-year same period. In the first ~~three~~nine months of 2013, we ~~reduced~~increased borrowings under our domestic accounts receivable asset securitization program by ~~$10.0~~$8 million and increased borrowings through our revolving credit facility by ~~$4.0~~$16.9 million. The additional borrowings from the credit facility were used primarily to fund the extinguishment of our 6.50% convertible senior notes which matured during the third quarter. In the first ~~quarter~~nine months of 2012, we borrowed ~~$30.0~~$20.0 million through our domestic accounts receivable asset securitization program and ~~$2.2~~$3.2 million through our revolving credit facility.

The 7.875% Senior Notes (the “Senior Notes”) were issued in 2010 at par, bear interest at a rate of 7.875% per year, payable semi-annually in arrears on February 15th and August 15th, and mature on August 15, 2018. The principal amount outstanding was $250.0 million at ~~March 31,~~September 30, 2013, and December 31, 2012. ~~Through August 15, 2013, we may redeem up to 35% of the Senior Notes at a price equal to 107.875% of the principal amount using proceeds of certain equity offerings.~~ We may also redeem some or all of the Senior Notes prior to August 15, 2014, at a price equal to the principal amount plus a defined applicable premium. The applicable premium on any redemption date is the greater of 1% of the principal amount of the note or the excess of (1) the present value at such redemption date of the redemption price of the note at August 15, 2014, plus all required interest payments due on the note through August 15, 2014, computed using a discount rate equal to the Treasury Rate as of the redemption date plus 50 basis points; over (2) the principal amount of the note. In addition, we may redeem some or all of the Senior Notes beginning August 15, 2014, at prices ranging from 100% to 103.938% of the principal amount.

We have an asset securitization program for Ferro’s U.S. trade accounts receivable. We sell interests in our domestic receivables to various purchasers, and we may obtain up to $50.0 million in the form of cash or letters of credit. Advances received under this program are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities. In ~~2012,~~the second quarter of 2013, we extended the maturity of this credit facility through May ~~2013. The Company intends to renew or replace this program prior to its scheduled expiration; however, there can be no assurances that the company will be able to do so.~~2014. At ~~March 31,~~September 30, 2013, advances received of ~~$30.0~~$48.0 million were secured by ~~$88.2~~$77.6 million of accounts receivable, and based on available and qualifying receivables, ~~$20.0~~$2.0 million of additional borrowings were available under the program. At December 31, 2012, we had borrowed $40.0 million under this facility. During the third quarter of 2013 we amended the agreement. The interest rate under ~~this program~~the amended agreement is the sum of (A) either (1) ~~commercial paper rates, (2)~~ LIBOR rates or ~~(3)~~(2) the federal funds rate plus 0.5% or the prime rate and (B) a fixed margin. At ~~March 31,~~September 30, 2013, the interest rate was 0.6%.

We have several international programs to sell with recourse trade accounts receivable to financial institutions. Advances received under these programs are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities. At ~~March 31,~~September 30, 2013, commitments supporting these programs totaled ~~$17.9~~$18.9 million, advances received of ~~$5.5~~$5.6 million were secured by ~~$8.3~~$8.7 million of accounts receivable, and based on available and qualifying receivables, ~~$0.3~~$0.2 million of additional borrowings were available under the programs. At December 31, 2012, we had borrowed $6.1 million under this facility. The interest rates under these programs are based on EURIBOR rates plus 1.75%. At ~~March 31,~~September 30, 2013, the weighted-average interest rate was 1.9%.

Consignment Arrangements for Precious Metals. In the production of some of our products, we use precious metals, some of which we obtain from financial institutions under consignment agreements with terms of one year or less. The financial institutions retain ownership of the precious metals and charge us fees based on the amounts we consign. We had on hand precious metals owned by participants in our precious metals program of ~~$93.4~~$89.5 million at ~~March 31,~~September 30, 2013, and $112.2 million at December 31, 2012, measured at fair value based on market prices for identical assets and net of credits. On occasion, we have been required to deliver cash collateral. While no deposits were outstanding at ~~March 31,~~September 30, 2013, or December 31, 2012, we may be required to furnish cash collateral in the future based on the quantity and market value of the precious metals under consignment and the amount of collateral-free lines provided by the financial institutions. The amount of cash collateral required is subject to review by the financial institutions and can be changed at any time at their discretion, based in part on their assessment of our creditworthiness.

As of September 30, 2013, we had $35.9 million of cash and cash equivalents, of which $35.6 million was held in foreign countries. Cash generated in the U.S. is generally used to pay down amounts outstanding under our revolving credit facility. If needed, we could repatriate the majority of foreign cash without the need to accrue and pay U.S. income taxes. We do not anticipate a liquidity need requiring such repatriation of these funds to the U.S.

Our liquidity requirements primarily include debt service, purchase commitments, labor costs, working capital requirements, restructuring expenditures, capital investments, precious metals cash collateral requirements, and postretirement obligations. We expect to meet these requirements in the long term through cash provided by operating activities and availability under existing credit facilities or other financing arrangements. Cash flows from operating activities are primarily driven by earnings before noncash charges and changes in working capital needs. We had additional borrowing capacity of ~~$277.5~~$238.5 million at ~~March 31,~~September 30, 2013, and $361.5 million at December 31, 2012, available under various credit facilities, primarily our revolving credit facility. We have taken a variety of actions to enhance liquidity and to ensure short-term covenant compliance, including ongoing restructuring activities, suspension of dividend payments on our common stock in 2009, and the sale of assets related to our solar pastes product line in 2013.

Our credit facilities and the indenture governing our senior notes contain a number of restrictive covenants, including those described in more detail in Note 6 to the consolidated financial statements under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2012. These covenants include customary operating restrictions that limit our ability to engage in certain activities, including additional loans and investments; prepayments, redemptions and repurchases of debt; and mergers, acquisitions and asset sales. We are also subject to customary financial covenants under our credit facilities, including a leverage ratio and an interest coverage ratio. These covenants under our credit facilities restrict the amount of our borrowings, reducing our flexibility to fund ongoing operations and strategic initiatives. These facilities and our senior notes are described in more detail in “Capital Resources and Liquidity” under Item 7 and in Note 6 to the consolidated financial statements under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2012.

We may from time to time seek to retire or repurchase our outstanding debt through open market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

Difficulties experienced in global capital markets could affect the ability or willingness of counterparties to perform under our various lines of credit, receivable sales programs, forward contracts, and precious metals program. These counterparties are major, reputable, multinational institutions, all having investment-grade credit ratings, except for one, which is not rated. Accordingly, we do not anticipate counterparty default. However, an interruption in access to external financing could adversely affect our business prospects and financial condition.

We assess on an ongoing basis our portfolio of businesses, as well as our financial and capital structure, to ensure that we have sufficient capital and liquidity to meet our strategic objectives. As part of this process, from time to time we evaluate the possible divestiture of businesses that are not critical to our core strategic objectives and, where appropriate, pursue the sale of such businesses. A reduced forecast for our solar pastes sales and a diminished outlook for our future opportunities in the solar market led to our decision to sell assets related to our solar pastes product line in 2013. We also evaluate and pursue acquisition opportunities that we believe will enhance our strategic position. Generally, we publicly announce divestiture and acquisition transactions only when we have entered into definitive agreements relating to those transactions.

There were no material changes to our critical accounting policies described in “Critical Accounting Policies” within Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2012.

Refer to Note 2 to the condensed consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q for a discussion of accounting standards we recently adopted or will be required to adopt.

Certain statements contained here and in future filings with the SEC reflect the Company’s expectations with respect to future performance and constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are subject to a variety of uncertainties, unknown risks and other factors concerning the Company’s operations and business environment, which are difficult to predict and are beyond the control of the Company. Factors that could adversely affect our future financial performance include those described under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2012.

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our exposure to instruments that are sensitive to fluctuations in interest rates and foreign currency exchange rates.

Our exposure to interest rate risk arises from our debt portfolio. We manage this risk by controlling the mix of fixed-rate versus variable-rate debt after considering the interest rate environment and expected future cash flows. Our objective is to limit variability in earnings, cash flows and overall borrowing costs caused by changes in interest rates, while preserving operating flexibility.

We operate internationally and enter into transactions denominated in foreign currencies. These transactions expose us to gains and losses arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled. We manage this risk by entering into forward currency contracts that offset these gains and losses.

The notional amounts, net carrying amounts of assets (liabilities), and fair values associated with our exposure to these market risks and sensitivity analyses about potential gains (losses) resulting from hypothetical changes in market rates are presented below:


	March 31, 2013			December 31, 2012			September 30, 2013			December 31, 2012
	(Dollars in thousands)						(Dollars in thousands)
Variable-rate debt and utilization of accounts receivable sales programs:
Change in annual interest expense from 1% change in interest rates	$	453		$	543		$	763		$	543
Fixed-rate debt:
Carrying amount		289,289			289,148			255,421			289,148
Fair value		300,631			270,240			267,011			270,240
Change in fair value from 1% increase in interest rates		(11,227	)		(10,113	)		(10,324	)		(10,113	)
Change in fair value from 1% decrease in interest rates		11,846			10,668			10,844			10,668
Foreign currency forward contracts:
Notional amount		249,074			250,680			231,342			250,680
Carrying amount and fair value		2,715			(4,758	)		(2,467	)		(4,758	)
Change in fair value from 10% appreciation of U.S. dollar		12,880			13,205			11,455			13,205
Change in fair value from 10% depreciation of U.S. dollar		(15,742	)		(16,140	)		(14,000	)		(16,140	)

Ferro is committed to maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(b) of the Exchange Act, Ferro has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. The evaluation examined those disclosure controls and procedures as of ~~March 31,~~September 30, 2013, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2013.

During the ~~first~~third quarter of 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There are various lawsuits and claims pending against the Company and its consolidated subsidiaries. We do not currently expect the ultimate liabilities, if any, and expenses related to such lawsuits and claims to materially affect the consolidated financial position, results of operations, or cash flows of the Company.

~~Litigation Related to A. Schulman, Inc.’s Proposal to Acquire All Outstanding Shares of the Company—~~~~On March 29, 2013, a purported shareholder of the Company filed a putative shareholder derivative and class action lawsuit in the Cuyahoga County, Ohio, Court of Common Pleas (~~~~Turberg v. Lawrence et al.~~, No. 13-CV-803886), and on April 9, 2013, a purported shareholder of the Company filed a substantially similar putative shareholder derivative and class action lawsuit in the United States District Court for the Northern District of Ohio (~~Raul v. Hipple et al.~~, No. 1:13-cv-00783). Both complaints assert claims on behalf of the Company and the Company’s common shareholders and allege, among other things, that members of the Company’s current Board of Directors violated their fiduciary duties. The complaints relate generally to the proposal by A. Schulman, Inc. publicized on March 4, 2013 to acquire all outstanding common shares of the Company and the Board’s response to that proposal. Both actions seek a declaration that the Board violated its fiduciary duties, an injunction against the Board initiating defensive measures to prevent an acquisition, other declaratory and equitable relief, and attorneys’ fees.

The defendant directors believe the allegations against them lack merit and intend to defend the lawsuits vigorously. Because these proceedings are at the preliminary stages of litigation, their outcome cannot be predicted at this time.

There were no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Our ability to pay common stock dividends is limited by certain covenants in our 2010 Credit Facility, as amended, and the bond indenture governing the Senior Notes. The covenant in our 2010 Credit Facility, as amended, is the more limiting of the two covenants and is described under the Revolving Credit Facility in Note 6 within Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The following table summarizes purchases of our common stock by the Company and affiliated purchasers during the three months ended ~~March 31,~~September 30, 2013:

The exhibits listed in the attached Exhibit Index are the exhibits required by Item 601 of Regulation S-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

The following exhibits are filed with this report or are incorporated here by reference to a prior filing in accordance with Rule 12b-32 under the Securities and Exchange Act of 1934.


Ohio		34-0217820
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6060 Parkland Boulevard Mayfield Heights, OH		44124
(Address of principal executive offices)		(Zip Code)


	Page
PART I

Item 1. Financial Statements (Unaudited)		3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2019

Item 3. Quantitative and Qualitative Disclosures about Market Risk		3034

Item 4. Controls and Procedures		3135

PART II

Item 1. Legal Proceedings		3236

Item 1A. Risk Factors		3236

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3236

Item 3. Defaults Upon Senior Securities		3236

Item 4. Mine Safety Disclosures		3236

Item 5. Other Information		3336

Item 6. Exhibits		3336

Exhibit ~~10.5~~10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 Instance Document
EX-101 Schema Document
EX-101 Calculation Linkbase Document
EX-101 Labels Linkbase Document
EX-101 Presentation Linkbase Document
EX-101 Definition Linkbase Document


	Three months ended March 31,
	2013			As adjusted 2012
	(Dollars in thousands)
Net income	$	520		$	3,970
Other comprehensive (loss) income, net of tax:
Foreign currency translation		(2,982	)		24
Postretirement benefit liabilities		(68	)		(664	)

Total comprehensive (loss) income		(2,530	)		3,330
Less: Comprehensive (loss) income attributable to noncontrolling interests		(342	)		122

Comprehensive (loss) income attributable to Ferro Corporation	$	(2,188	)	$	3,208


	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Net income (loss)	$	13,044		$	(315,738	)	$	11,582		$	(309,562	)
Other comprehensive income (loss), net of tax:
Foreign currency translation		4,226			3,321			(3,820	)		(2,940	)
Postretirement benefit liabilities		(34	)		1,044			(171	)		(311	)

Total comprehensive income (loss)		17,236			(311,373	)		7,591			(312,813	)
Less: Comprehensive income attributable to noncontrolling interests		415			442			323			845

Comprehensive income (loss) attributable to Ferro Corporation	$	16,821		$	(311,815	)	$	7,268		$	(313,658	)


	Three months ended March 31, 2012
	As reported ⁽¹⁾			Effect of accounting change			As adjusted
	(Dollars in thousands, except per share amounts)
Net sales	$	460,425		$	—		$	460,425
Cost of sales		374,704			—			374,704

Gross profit		85,721			—			85,721
Selling, general and administrative expenses		76,487			(3,979	)		72,508
Restructuring and impairment charges		311			—			311
Other expense (income):
Interest expense		6,374			—			6,374
Interest earned		(84	)		—			(84	)
Foreign currency losses, net		144			—			144
Miscellaneous expense, net		396			—			396

Income before income taxes		2,093			3,979			6,072
Income tax expense		1,386			1,423			2,809

Income from continuing operations		707			2,556			3,263
Income from discontinued operations, net of income taxes		707			—			707

Net income		1,414			2,556			3,970
Less: Net income attributable to noncontrolling interests		124			—			124

Net income attributable to Ferro Corporation common shareholders	$	1,290		$	2,556		$	3,846

Earnings per share attributable to Ferro Corporation common shareholders:
Basic earnings:
From continuing operations	$	—		$	0.03		$	0.03
From discontinued operations		0.01			—			0.01

	$	0.01		$	0.03		$	0.04

Diluted earnings:
From continuing operations	$	—		$	0.03		$	0.03
From discontinued operations		0.01			—			0.01

	$	0.01		$	0.03		$	0.04


	Three months ended March 31, 2012
	As reported		Effect of accounting change			As adjusted
	(Dollars in thousands)
Net income	$	1,414	$	2,556		$	3,970
Other comprehensive income (loss), net of tax:
Foreign currency translation		24		—			24
Postretirement benefit liabilities		1,892		(2,556	)		(664	)

Total comprehensive income		3,330		—			3,330
Less: Comprehensive income attributable to noncontrolling interests		122		—			122

Comprehensive income attributable to Ferro Corporation	$	3,208	$	—		$	3,208


	December 31, 2012
	Carrying			Fair Value
	Amount			Total			Level 1		Level 2			Level 3
	(Dollars in thousands)
Cash and cash equivalents	$	29,576		$	29,576		$	29,576	$	—		$	—
Loans payable		(48,599	)		(48,599	)		—		(48,599	)		—
7.875% Senior Notes		(250,000	)		(231,500	)		—		(231,500	)		—
6.50% Convertible Senior Notes, net of unamortized discounts		(34,417	)		(34,803	)		—		(34,803	)		—
Revolving credit facility		(2,596	)		(2,634	)		—		(2,634	)		—
Other long-term notes payable		(4,731	)		(3,937	)		—		(3,937	)		—
Foreign currency forward contracts, net		(4,758	)		(4,758	)		—		(4,758	)		—


	Amount of Gain (Loss) Recognized in Earnings
	2013		2012			Location of Gain (Loss) in Earnings
	(Dollars in thousands)
Foreign currency forward contracts	$	964	$	(5,653	)		Foreign currency losses, net


	Amount of Loss Recognized in Earnings
	2013			2012			Location of Loss in Earnings
	(Dollars in thousands)
Foreign currency forward contracts	$	(2,652	)	$	(4,148	)	Foreign currency losses, net


	Amount of (Loss) Gain Recognized in Earnings
	2013			2012		Location of (Loss) Gain in Earnings
	(Dollars in thousands)
Foreign currency forward contracts	$	(6,652	)	$	5,385	Foreign currency losses, net


	(Dollars in thousands)
Inventories	$	6,267
Other current assets		22

Current assets of discontinued operations		6,289

Property, plant and equipment, net		15,346

Other assets of discontinued operations		15,346

Accounts payable		880
Accrued payrolls		47
Accrued expenses and other current liabilities		373

Current liabilities of discontinued operations	$	1,300


	March 31,		December 31,
	2013		2012
	(Dollars in thousands)
Pigments, Powders and Oxides	$	109,886	$	112,504
Performance Colors and Glass		236,220		232,737
Performance Coatings		352,894		366,068
Polymer Additives		129,559		110,865
Specialty Plastics		53,449		48,327
Unallocated assets		178,678		208,602

Total assets	$	1,060,686	$	1,079,103


	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
	(In thousands, except for per share amounts)
January 1, 2013 to January 31, 2013		—	$	—		—		—
February 1, 2013 to February 28, 2013		16		5.58		—		—
March 1, 2013 to March 31, 2013		—		—		—		—

Total		16				—


		FERRO CORPORATION (Registrant)

Date: ~~April 24,~~October 23, 2013
		/s/ Peter T. Thomas

	Peter T. Thomas
		~~Interim~~ President and Chief Executive Officer (Principal Executive Officer)

Date: ~~April 24,~~October 23, 2013
		/s/ Jeffrey L. Rutherford

	Jeffrey L. Rutherford
		Vice President and Chief Financial Officer (Principal Financial Officer)


Exhibit:

3		Articles of incorporation and by-laws:

3.1		Eleventh Amended Articles of Incorporation of Ferro Corporation (incorporated by reference to Exhibit 4.1 to Ferro Corporation’s Registration Statement on Form S-3, filed March 5, 2008).

3.2		Certificate of Amendment to the Eleventh Amended Articles of Incorporation of Ferro Corporation filed December 29, 1994 (incorporated by reference to Exhibit 4.2 to Ferro Corporation’s Registration Statement on Form S-3, filed March 5, 2008).

3.3		Certificate of Amendment to the Eleventh Amended Articles of Incorporation of Ferro Corporation filed on June 23, 1998 (incorporated by reference to Exhibit 4.3 to Ferro Corporation’s Registration Statement on Form S-3, filed March 5, 2008).

3.4		Certificate of Amendment to the Eleventh Amended Articles of Incorporation of Ferro Corporation filed on October 14, 2011 (incorporated by reference to Exhibit 3.1 to Ferro Corporation’s Current Report on Form 8-K, filed October 17, 2011).

3.5		Ferro Corporation Amended and Restated Code of Regulations (incorporated by reference to Exhibit ~~3.1~~3.5 to Ferro Corporation’s ~~Current~~Quarterly Report on Form ~~8-K, filed December 14, 2011).~~10-Q for the quarter ended June 30, 2013.)

4		Instruments defining rights of security holders, including indentures:

4.1		Senior Indenture, dated as of March 5, 2008, by and between Ferro Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.5 to Ferro Corporation’s Registration Statement on Form S-3, filed March 5, 2008).

4.2		First Supplemental Indenture, dated August 19, 2008, by and between Ferro Corporation and U.S. Bank National Association (with Form of 6.50% Convertible Senior Note due 2013) (incorporated by reference to Exhibit 4.2 to Ferro Corporation’s Current Report on Form 8-K, filed August 19, 2008).

4.3		Form of Indenture, by and between Ferro Corporation and Wilmington Trust FSB (incorporated by reference to Exhibit 4.1 to Ferro Corporation’s Registration Statement on Form S-3ASR, filed July 27, 2010).

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) (incorporated by reference to Exhibit 4.1 to Ferro Corporation’s Current Report on Form 8-K, filed August 24, 2010).

		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 Contracts:

10.1		Third Amendment to Third Amended and Restated Credit Agreement, dated March 28, 2013, by and among Ferro Corporation, certain of Ferro Corporation’s subsidiaries, PNC Bank, National Association, as the Administrative Agent and the Collateral Agent, and various financial institutions as Lenders (incorporated by reference to Exhibit 10.1 to Ferro Corporation’s Current Report on Form 8-K, filed March 28, 2013).

~~10.2~~		~~Second~~Fourth Amendment to Amended and Restated Receivables Purchase Agreement, dated as of September 20, 2013, by and among ~~Ferro Finance Corporation, Ferro Corporation, Market Street Funding LLC and~~ PNC Bank, National Association, ~~as Agent and LC Bank (incorporated by reference to Exhibit 10.1 to Ferro Corporation’s Current Report on Form 8-K, filed March 29, 2013).~~

~~10.3~~		~~Second Amendment to Purchase and Contribution Agreement by and between Ferro Corporation and~~ Ferro Finance Corporation ~~(incorporated by reference to Exhibit 10.2 to Ferro Corporation’s Current Report on Form 8-K, filed March 29, 2013).~~

~~10.4~~		~~Termination Agreement by~~ and ~~between Ferro Corporation and Ferro Pfanstiehl Laboratories Inc. (incorporated by reference to Exhibit 10.3 to Ferro Corporation’s Current Report on Form 8-K, filed March 29, 2013).~~

~~10.5~~		Change in Control Agreement, dated March 22, 2013, between Peter T. Thomas and Ferro Corporation.*Market Street Funding LLC.

31		Certifications:

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.


Exhibit:

101		XBRL Documents:

101.INS		XBRL Instance Document**

101.SCH		XBRL Schema Document**

101.CAL		XBRL Calculation Linkbase Document**

101.LAB		XBRL Labels Linkbase Document**

101.PRE		XBRL Presentation Linkbase Document**

101.DEF		XBRL Definition Linkbase Document**

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