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 ~~September 30, 2013,~~March 31, 2014, there were ~~86,601,495~~86,924,138 shares of Ferro Common Stock, par value $1.00, outstanding.


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2013			As adjusted 2012			2013			As adjusted 2012			2014			2013
	(Dollars in thousands, except per share amounts)												(Dollars in thousands, except per share amounts)
Net sales	$	408,104		$	408,865		$	1,261,083		$	1,344,836		$	391,735		$	417,524
Cost of sales		323,857			348,155			1,009,945			1,112,587			302,261			338,287

Gross profit		84,247			60,710			251,138			232,249			89,474			79,237
Selling, general and administrative expenses		59,078			63,863			184,986			202,675			57,576			61,592
Restructuring and impairment charges		3,834			198,695			26,738			203,734			4,352			9,454
Other expense (income):
Interest expense		6,766			6,716			21,034			19,566			5,884			7,297
Interest earned		(48	)		(57	)		(171	)		(192	)		(15	)		(53	)
Foreign currency losses, net		1,308			869			4,016			792			1,367			1,506
Miscellaneous (income) expense, net		(209	)		797			(9,493	)		3,038
Miscellaneous expense (income), net														846			(10,516	)

Income (loss) before income taxes		13,518			(210,173	)		24,028			(197,364	)
Income before income taxes														19,464			9,957
Income tax expense		474			105,447			4,025			113,115			2,732			1,016

Income (loss) from continuing operations		13,044			(315,620	)		20,003			(310,479	)
(Loss) income from discontinued operations, net of income taxes		—			(118	)		(8,421	)		917
Income from continuing operations														16,732			8,941
Loss from discontinued operations, net of income taxes														—			(8,421	)

Net income (loss)		13,044			(315,738	)		11,582			(309,562	)
Less: Net income attributable to noncontrolling interests		392			376			177			830
Net income														16,732			520
Less: Net loss attributable to noncontrolling interests														(472	)		(363	)

Net income (loss) attributable to Ferro Corporation common shareholders	$	12,652		$	(316,114	)	$	11,405		$	(310,392	)
Net income attributable to Ferro Corporation common shareholders													$	17,204		$	883

Earnings (loss) per share attributable to Ferro Corporation common shareholders:
Basic earnings (loss):
From continuing operations	$	0.15		$	(3.66	)	$	0.23		$	(3.61	)	$	0.20		$	0.11
From discontinued operations	$	—			—			(0.10	)		0.01			—			(0.10	)

	$	0.15		$	(3.66	)	$	0.13		$	(3.60	)	$	0.20		$	0.01

Diluted earnings (loss):
From continuing operations	$	0.15		$	(3.66	)	$	0.23		$	(3.61	)	$	0.20		$	0.11
From discontinued operations	$	—			—			(0.10	)		0.01			—			(0.10	)

	$	0.15		$	(3.66	)	$	0.13		$	(3.60	)	$	0.20		$	0.01


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2013			2012			2013			2012			2014			2013
	(Dollars in thousands)												(Dollars in thousands)
Net income (loss)	$	13,044		$	(315,738	)	$	11,582		$	(309,562	)
Other comprehensive income (loss), net of tax:
Net income													$	16,732		$	520
Other comprehensive loss, net of tax:
Foreign currency translation		4,226			3,321			(3,820	)		(2,940	)		(350	)		(2,982	)
Postretirement benefit liabilities		(34	)		1,044			(171	)		(311	)		(36	)		(68	)

Other comprehensive loss, net of tax														(386	)		(3,050	)

Total comprehensive income (loss)		17,236			(311,373	)		7,591			(312,813	)		16,346			(2,530	)
Less: Comprehensive income attributable to noncontrolling interests		415			442			323			845
Less: Comprehensive loss attributable to noncontrolling interests														(652	)		(342	)

Comprehensive income (loss) attributable to Ferro Corporation	$	16,821		$	(311,815	)	$	7,268		$	(313,658	)	$	16,998		$	(2,188	)


		September 30, 2013			December 31, 2012				March 31, 2014			December 31, 2013
		(Dollars in thousands)							(Dollars in thousands)
ASSETS	ASSETS							ASSETS
Current assets
Cash and cash equivalents		$	35,853		$	29,576			$	41,088		$	28,328
Accounts receivable, net			331,847			306,463				318,838			287,925
Inventories			195,617			200,824				210,758			190,216
Deferred income taxes			8,011			7,995				7,791			6,584
Other receivables			32,371			31,554				22,043			25,775
Other current assets			14,571			10,802				12,513			16,561
Current assets of discontinued operations			—			6,289

Total current assets			618,270			593,503				613,031			555,389
Other assets
Property, plant and equipment, net			299,619			309,374				293,963			297,104
Goodwill			63,234			62,975				63,547			63,473
Amortizable intangible assets, net			12,268			14,410				12,598			13,027
Deferred income taxes			20,527			21,554				19,020			19,451
Other non-current assets			55,444			61,941				59,954			59,748
Other assets of discontinued operations			—			15,346

Total assets		$	1,069,362		$	1,079,103			$	1,062,113		$	1,008,192

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities
Loans payable and current portion of long-term debt		$	59,665		$	85,152			$	44,400		$	44,230
Accounts payable			183,044			182,024				193,654			153,877
Accrued payrolls			44,081			31,643				29,886			44,509
Accrued expenses and other current liabilities			67,514			76,384				64,013			71,115
Current liabilities of discontinued operations			—			1,300

Total current liabilities			354,304			376,503				331,953			313,731
Other liabilities
Long-term debt, less current portion			278,119			261,624				313,557			267,469
Postretirement and pension liabilities			199,922			216,167				94,995			120,527
Other non-current liabilities			20,316			18,135				28,745			32,622

Total liabilities			852,661			872,429				769,250			734,349
Equity
Ferro Corporation shareholders’ equity:
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
Common stock, par value $1 per share; 300.0 million shares authorized; 93.4 million shares issued; 86.9 million and 86.7 million shares outstanding at March 31, 2014, and December 31, 2013, respectively										93,436			93,436
Paid-in capital			320,216			321,652				315,232			318,055
Retained deficit			(75,201	)		(86,606	)
Retained earnings (accumulated deficit)										2,540			(14,664	)
Accumulated other comprehensive income			12,513			16,650				8,287			8,493
Common shares in treasury, at cost			(147,608	)		(151,605	)			(138,099	)		(143,802	)

Total Ferro Corporation shareholders’ equity			203,356			193,527				281,396			261,518
Noncontrolling interests			13,345			13,147				11,467			12,325

Total equity			216,701			206,674				292,863			273,843

Total liabilities and equity		$	1,069,362		$	1,079,103			$	1,062,113		$	1,008,192


	Ferro Corporation Shareholders																							Ferro Corporation Shareholders
	Common Shares in Treasury						Common		Paid-in			Retained Earnings			Accumulated Other Comprehensive			Non-controlling			Total			Common Shares in Treasury											Retained Earnings			Accumulated Other			Non-
	Shares			Amount			Stock		Capital			(Deficit)			Income (Loss)			Interests			Equity			Shares			Amount			Common Stock		Paid-in Capital			(Accumulated deficit)			Comprehensive Income (Loss)			controlling Interests			Total 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
Net (loss) income													(310,392	)					830			(309,562	)
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																(3,266	)		15			(3,251	)																(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

Balances at December 31, 2013																									6,730			(143,802	)		93,436		318,055			(14,664	)		8,493			12,325			273,843
Net income (loss)																																				17,204						(472	)		16,732
Other comprehensive loss																																							(206	)		(180	)		(386	)
Stock-based compensation transactions		32			588					4,255												4,843			(219	)		5,703					(2,823	)											2,880
Distributions to noncontrolling interests																			(380	)		(380	)																			(206	)		(206	)

Balances at September 30, 2012		6,897		$	(153,029	)	$	93,436	$	325,137		$	(22,730	)	$	20,633		$	10,697		$	274,144
Balances at March 31, 2014																									6,511		$	(138,099	)	$	93,436	$	315,232		$	2,540		$	8,287		$	11,467		$	292,863

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

Balances at September 30, 2013		6,833		$	(147,608	)	$	93,436	$	320,216		$	(75,201	)	$	12,513		$	13,345		$	216,701


	Nine months ended September 30,						Three months ended March 31,
	2013			2012			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Cash flows from operating activities
Net cash provided by operating activities	$	3,003		$	19,536
Net cash used for operating activities							$	(22,240	)	$	(17,106	)
Cash flows from investing activities
Capital expenditures for property, plant and equipment		(21,187	)		(46,245	)
Capital expenditures for property, plant and equipment and other long lived assets								(12,163	)		(8,178	)
Proceeds from sale of assets		16,034			2,386			652			15,109
Proceeds from sale of stock of Ferro Pfanstiehl Laboratories, Inc.		16,912			—			—			16,912
Dividends received from affiliates		1,119			96
Other investing activities								—			1,119

Net cash provided by (used for) investing activities		12,878			(43,763	)
Net cash (used for) provided by investing activities								(11,511	)		24,962
Cash flows from financing activities
Net borrowings under loans payable⁽¹⁾		9,223			22,087
Net borrowings (repayments) under loans payable⁽¹⁾								523			(9,635	)
Proceeds from revolving credit facility		368,317			323,151			155,301			110,133
Principal payments on revolving credit facility		(351,404	)		(319,926	)		(109,008	)		(106,094	)
Extinguishment of convertible senior notes		(35,066	)		—
Other financing activities		(734	)		760			(221	)		1,409

Net cash (used for) provided by financing activities		(9,664	)		26,072
Net cash provided by (used for) financing activities								46,595			(4,187	)
Effect of exchange rate changes on cash and cash equivalents		60			(19	)		(84	)		(348	)

Increase in cash and cash equivalents		6,277			1,826			12,760			3,321
Cash and cash equivalents at beginning of period		29,576			22,991		$	28,328		$	29,576

Cash and cash equivalents at end of period	$	35,853		$	24,817		$	41,088		$	32,897

Cash paid during the period for:
Interest	$	25,484		$	25,343		$	10,870		$	12,308
Income taxes		2,905			3,130		$	941		$	1,548

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~~2013.

The Company owns 51% of an operating affiliate in Venezuela that is accounted for as a fully consolidated subsidiary of Ferro. In the first quarter of 2014 the Venezuelan government expanded and introduced alternative market mechanisms for monetary exchange between the local currency, the Bolivar, and the United States Dollar. As a result of changes in the political and economic environment in the country, we began to remeasure the monetary assets and liabilities of the entity utilizing the most relevant exchange mechanism available. The impact of the remeasurement in the current period prior to adjustment for losses allocated to our nonconctrolling interest partner was a $1.6 million loss which is recorded within Foreign currency losses, net within our condensed consolidated statement of operations. In the event that other parallel markets become more relevant in future periods, ~~have been adjusted for the presentation of discontinued operations.~~additional losses or gains on remeasurement could occur.

Operating results for the three ~~and nine~~ months ended ~~September 30, 2013,~~March 31, 2014, are not necessarily indicative of the results expected in subsequent quarters or for the full year ending December 31, ~~2013.~~2014.

Accounting Standards Adopted in the ~~Nine Months Ended September 30, 2013~~period ended March 31, 2014

On January 1, ~~2013,~~2014, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) ~~2011-11,~~2013-05,~~Disclosures about Offsetting~~Parent’s Accounting for the Cumulative Translation Adjustments upon Derecognition of Certain Subsidiaries or Groups of Assets ~~and Liabilities~~within a Foreign Entity or of an Investments in a Foreign Entity, ~~(“ASU 2011-11”) and ASU 2013-01,~~~~Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities~~~~, (“ASU 2013-01”). These pronouncements are~~which is codified in ~~Accounting Standards Codification (“ASC”)~~ASC Topic ~~210, Balance Sheet,~~830, Foreign Currency Matters. This pronouncement clarifies the application of Subtopic 810-10, Consolidation—Overall, and ~~contain new disclosure requirements about~~Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, related to the release of the cumulative translation adjustment into net income when a ~~company’s right~~parent either sells a part or all of ~~setoff~~its investment in a foreign entity or no longer holds a controlling financial interest in a foreign entity, and ~~related arrangements associated with its financial and derivative instruments. Adoption~~the treatment of business combinations achieved in stages involving a foreign entity. The adoption of this pronouncement did not have a material effect on our condensed consolidated financial statements.

~~On January 1, 2013, we adopted~~In April 2014, the FASB issued ASU ~~2013-02,~~2014-08, Reporting Discontinued Operations and Disclosures of ~~Amounts Reclassified Out~~Disposals of ~~Accumulated Other Comprehensive Income~~~~, (“ASU 2013-02”),~~Components of an Entity, which is codified in ASC Topic ~~220, Comprehensive Income.~~205, Presentation of Financial Statements and ASC Topic 360, Property, Plant, and Equipment. This pronouncement ~~adds new disclosure requirements~~changes the definition of a discontinued operation to include only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and changes the criteria and enhances disclosures for ~~items reclassified out of accumulated other comprehensive income. Adoption~~reporting discontinued operations. The pronouncement is to be applied prospectively, and is effective for our fiscal year that begins January 1, 2015. We do not expect that the adoption of this pronouncement ~~did not~~will have a material effect on our consolidated financial statements.


	September 30, 2013		December 31, 2012		March 31, 2014		December 31, 2013
	(Dollars in thousands)				(Dollars in thousands)
Raw materials	$	59,272	$	64,923	$	60,883	$	58,765
Work in process		35,716		35,028		35,257		30,266
Finished goods		100,629		100,873		114,618		101,185

Total inventories	$	195,617	$	200,824	$	210,758	$	190,216

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 ~~$0.7~~$0.2 million and ~~$1.4~~$1.0 million for the three months ended ~~September 30,~~March 31, 2014 and 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 ~~$89.5~~$30.1 million at ~~September 30, 2013,~~March 31, 2014, and ~~$112.2~~$30.8 million at December 31, ~~2012,~~2013, 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 ~~$686.5~~$644.0 million at ~~September 30, 2013,~~March 31, 2014, and ~~$658.1~~$625.6 million at December 31, ~~2012.~~2013. Unpaid capital expenditure liabilities, which are noncash investing activities, were ~~$6.6~~$5.6 million at ~~September 30, 2013,~~March 31, 2014, and ~~$7.3~~$2.4 million at ~~September 30, 2012.~~March 31, 2013.

During the first quarter of 2013, we sold assets related to our solar pastes product line. 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 expense (income), net within the condensed consolidated statement of operations.


	September 30, 2013		December 31, 2012		March 31, 2014		December 31, 2013
	(Dollars in thousands)				(Dollars in thousands)
Loans payable to banks	$	3,247	$	2,477	$	2,214	$	2,062
Domestic accounts receivable asset securitization program		48,000		40,000		41,000		41,000
International accounts receivable sales programs		5,554		6,122
Current portion of long-term debt		2,864		36,553		1,186		1,168

Loans payable and current portion of long-term debt	$	59,665	$	85,152	$	44,400	$	44,230


	September 30, 2013			December 31, 2012			March 31, 2014			December 31, 2013
	(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		—			34,417
Revolving credit facility		19,509			2,596			55,498			9,204
Capital lease obligations		6,053			6,433			5,622			5,816
Other notes		5,421			4,731			3,623			3,617

Total long-term debt		280,983			298,177			314,743			268,637
Current portion of long-term debt		(2,864	)		(36,553	)		(1,186	)		(1,168	)

Long-term debt, less current portion	$	278,119		$	261,624		$	313,557		$	267,469

We have an asset securitization program for Ferro’s U.S. trade accounts receivable. We sell undivided variable percentage 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. The purchasers have no recourse to Ferro’s other assets for failure of payment of the receivables as a result of the lack of creditworthiness, or financial inability to pay, of the related obligor. In ~~the second quarter of~~May 2013, we extended the maturity of this credit facility through May 2014. At ~~September 30, 2013,~~March 31, 2014, advances received of ~~$48.0~~$41.0 million were secured by ~~$77.6~~$76.1 million of accounts ~~receivable,~~receivable. After reductions for any non-qualifying receivables and ~~based on available and qualifying receivables, $2.0 million~~outstanding letters of credit, we had additional borrowings ~~were~~ available under the ~~program. During the third quarter~~program of ~~2013 we amended the agreement.~~$0.2 million. The interest rate under the amended agreement is the sum of (A) either (1) LIBOR rates or (2) the federal funds rate plus 0.5% or the prime rate and (B) a fixed margin. At ~~September 30, 2013,~~March 31, 2014, 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 September 30, 2013, the commitments supporting these programs totaled $18.9 million, the advances received of $5.6 million were secured by $8.7 million of accounts receivable, and based on available and qualifying receivables, $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 September 30, 2013, the weighted-average interest rate was 1.9%0.4%.

The Senior Notes mature on August 15, 2018. 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%1.0% 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~~or (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,~~without limitation, 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 ~~September 30, 2013,~~March 31, 2014, we were in compliance with the covenants under the Senior Notes’ indenture.

~~The 6.50% Convertible Senior Notes (the “Convertible Notes”) were repaid at maturity on August 15, 2013. The principal amount outstanding at maturity was $35.1 million.~~

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 borrowings and outstanding letters of credit secured by these facilities, we had ~~$225.0~~$189.7 million of additional borrowings available at ~~September 30, 2013.~~March 31, 2014. 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 ~~September 30, 2013,~~March 31, 2014, the interest rate was 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 ~~September 30, 2013,~~March 31, 2014, we were in compliance with the covenants of the 2013 Amended Credit Facility.

We maintain other lines of credit to provide global flexibility for Ferro’s short-term liquidity requirements. These facilities are uncommitted lines for our international operations and totaled $17.1 million at March 31, 2014 and December 31, 2013, respectively. The unused portions of these lines provided additional liquidity of $13.5 million at March 31, 2014, and $10.1 million at December 31, 2013.

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


	December 31, 2012													March 31, 2014
	Carrying			Fair Value										Carrying Amount			Fair Value
	Amount			Total			Level 1		Level 2			Level 3		Carrying Amount			Total			Level 1			Level 2			Level 3
	(Dollars in thousands)													(Dollars in thousands)
Cash and cash equivalents	$	29,576		$	29,576		$	29,576	$	—		$	—	$	41,088		$	41,088		$	41,088		$	—		$	—
Loans payable		(48,599	)		(48,599	)		—		(48,599	)		—		(43,214	)		(43,214	)		—			(43,214	)		—
7.875% Senior Notes		(250,000	)		(231,500	)		—		(231,500	)		—		(250,000	)		(263,750	)		(263,750	)		—			—
6.50% Convertible Senior Notes, net of unamortized discounts		(34,417	)		(34,803	)		—		(34,803	)		—
Revolving Credit Facility															(55,498	)		(57,041	)					(57,041	)		—
Other long-term notes payable															(3,623	)		(2,993	)		—			(2,993	)		—
Foreign currency forward contracts, net															(726	)		(726	)		—			(726	)		—

														December 31, 2013
														Carrying Amount			Fair Value
														Carrying Amount			Total			Level 1			Level 2			Level 3
														(Dollars in thousands)
Cash and cash equivalents														$	28,328		$	28,328		$	28,328		$	—		$	—
Loans payable															(43,062	)		(43,062	)		—			(43,062	)		—
7.875% Senior Notes															(250,000	)		(266,250	)		(266,250	)		—			—
Revolving credit facility		(2,596	)		(2,634	)		—		(2,634	)		—		(9,204	)		(9,496	)		—			(9,496	)		—
Other long-term notes payable		(4,731	)		(3,937	)		—		(3,937	)		—		(3,617	)		(2,988	)		—			(2,988	)		—
Foreign currency forward contracts, net		(4,758	)		(4,758	)		—		(4,758	)		—		(2,255	)		(2,255	)		—			(2,255	)		—

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~~value of the 7.875% Senior Notes ~~and the Convertible Notes are~~is based on ~~third-party estimated bid prices.~~trades in an active market. At March 31, 2014, the quoted market price was $105.50 per $100 reflecting a yield of 6.41%. 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, the majority of which are intercompany.~~transactions. These forward contracts are not formally designated as ~~hedging instruments.~~hedges. 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 losses, net in the ~~condensed~~ consolidated statements of operations. ~~For the three and nine months ended September 30, 2013, net~~Net foreign currency loss was approximately ~~$1.3~~$1.4 million and ~~$4.0~~$1.5 million for the three months ended March 31, 2014 and 2013, respectively, ~~which~~and 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~~such as timing of ~~transactions, etc. Net~~transactions. We incurred net gains of $2.4 million and net losses of $1.0 million in the three months ended March 31, 2014 and 2013, respectively, arising from the change in fair value of our financial instruments, ~~of $2.7 million and $6.7 million, for~~which offset the ~~three and nine months ended September 30, 2013, respectively, offset~~ related net gains and losses on ~~the underlying intercompany transactions of approximately the same amounts.~~international trade transactions. The fair values of these contracts are based on market prices for comparable contracts. ~~We had~~The notional amount of foreign currency forward contracts ~~with notional amounts of $231.3~~was $274.8 million at ~~September 30, 2013,~~March 31, 2014, and ~~$250.7~~$244.9 million at December 31, ~~2012.~~2013.

The following table presents the effect on our consolidated statements of operations for the three months ended ~~September 30,~~March 31, 2014 and 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:~~


	Amount of (Gain) Loss Recognized in Earnings
	Three months ended March 31,
	2014			2013		Location of Loss in Earnings
	(Dollars in thousands)
Foreign currency forward contracts	$	(2,402	)	$	964	Foreign currency losses, net

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


	September 30, 2013			December 31, 2012			Balance Sheet Location	March 31, 2014			December 31, 2013			Balance Sheet Location
	(Dollars in thousands)							(Dollars in thousands)
Asset derivatives:
Foreign currency forward contracts		211			213		Accrued expenses and other current liabilities	$	444		$	186		Other current assets
Liability derivatives:
Foreign currency forward contracts		(2,678	)		(4,971	)	Accrued expenses and other current liabilities		(1,170	)		(2,441	)	Accrued expenses and other current liabilities

Income tax expense for the ~~nine~~three months ended ~~September 30, 2013,~~March 31, 2014, was ~~$4.0~~$2.7 million, or ~~16.8%~~14.0% of pre-tax income. In the ~~first nine~~three months ~~of 2012,~~ended March 31, 2013 we recorded income tax expense of ~~$113.1~~$1.0 million, or ~~(57.3)%~~10.2% of pre-tax income. The ~~change~~increase in the effective tax rate was primarily ~~due to~~ the ~~reserve~~result of differences in pre-tax income in loss jurisdictions with full valuation allowances for ~~a significant portion of the Company’s deferred~~which no tax ~~assets, that was recorded in the third quarter of 2012 compared to the expected usage of tax assets in 2013.~~benefit or expense is recognized.

We have recorded environmental liabilities of ~~$8.2~~$10.2 million at ~~September 30, 2013,~~March 31, 2014, and ~~$9.6~~$9.7 million at December 31, ~~2012,~~2013, for costs associated with the remediation of certain of our properties that have been ~~contaminated,~~contaminated. The balance at March 31, 2014, and December 31, 2013, was primarily comprised of liabilities related to a non-operating facility in ~~Brazil.~~Brazil, and for environmental obligations that we retained related to a site in the United States from the sale of our North American and Asian metal powders product lines during the fourth quarter of 2013. 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.

In the fourth quarter of 2013, the Supreme Court in Argentina ruled unfavorably related to certain export taxes associated with a divested operation. As a result of this ruling, we recorded a $6.8 million liability at March 31, 2014, and December 31, 2013, respectively.

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~~resolution of these 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 for the three months ended ~~September 30,~~March 31, 2014 and 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						Three months ended March 31,
	2013			2012			2013			2012			2013			2012			2014			2013			2014			2013			2014			2013
	(Dollars in thousands)																		(Dollars in thousands)
Service cost	$	4		$	4		$	519		$	493		$	—		$	—		$	5		$	4		$	451		$	533		$	—		$	—
Interest cost		4,485			4,867			1,224			1,313			285			396			4,924			4,485			1,301			1,230			301			285
Expected return on plan assets		(6,181	)		(5,158	)		(742	)		(748	)		—			—			(7,034	)		(6,181	)		(797	)		(748	)		—			—
Amortization of prior service cost (credit)		3			12			7			—			(29	)		(33	)		3			3			15			6			(26	)		(29	)

Net periodic benefit (credit) cost	$	(1,689	)	$	(275	)	$	1,008		$	1,058		$	256		$	363		$	(2,102	)	$	(1,689	)	$	970		$	1,021		$	275		$	256

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

~~Net periodic benefit credit~~ for our U.S. pension plans for the ~~nine~~three months ended ~~September 30, 2013~~March 31, 2014, increased from the effects of ~~a lower discount rate and~~ larger plan asset balances resulting in increased expected ~~returns.~~returns partially offset by the effect of a higher discount rate. Net periodic benefit cost for our non-U.S. pension plans ~~increased due to~~and postretirement health care and life insurance benefit plans did not change significantly compared with the ~~non-recurring credit recognized~~same period in the ~~second~~prior year. During the first quarter of ~~2012,~~2014 we made contributions to our U.S pension plans of $22.0 million, resulting ~~from curtailment of retirement benefit accumulations~~ in the ~~Netherlands. The affected employees in the Netherlands now receive benefits through a defined contribution plan.~~improvement of our funded status compared with December 31, 2013.

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, thereby 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~~ No future grants may be made under the ~~Previous Plan.~~previous incentive plans. However, any outstanding awards or grants made under the ~~Previous Plan~~previous incentive plans will continue until the end of their specified terms.

In ~~2013,~~the first quarter of 2014, our Board of Directors granted ~~0.6~~0.2 million stock options, ~~0.5~~0.2 million performance share units and ~~0.4~~0.1 million deferred stock units under The ~~Previous Plan and The~~ Plan. We estimate the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. 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 ~~nine~~three months ended ~~September 30, 2013:~~March 31, 2014:


	Stock Options			Stock Options
Weighted-average grant-date fair value	$	4.01		$	9.54
Expected life, in years		6.0			6.0
Risk-free interest rate		1.2% - 1.4	%		2.2	%
Expected volatility		83.9% - 86.4	%		86.3	%

The weighted average grant date fair value of our performance share units was ~~$5.69.~~$13.09. We measure the fair value of performance share units based on the closing market price of our common stock on the date of the grant. 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 ~~nine~~three months ended ~~September 30, 2013,~~March 31, 2014, was ~~$5.70.~~$13.09.

We recognized stock-based compensation expense of ~~$4.4~~$3.7 million for the ~~nine~~three months ended ~~September 30, 2013,~~March 31, 2014, and ~~$5.7~~$1.3 million for the ~~nine~~three months ended ~~September 30, 2012.~~March 31, 2013. At ~~September 30, 2013,~~March 31, 2014, unearned compensation cost related to the unvested portion of all stock-based awards was approximately ~~$8.4~~$11.4 million and is expected to be recognized over the remaining vesting period of the respective grants, through the first quarter of ~~2016.~~2017.

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 relateProgram that was designed to ~~our European operations, certain corporate functions, improvement of operational efficiencies, and the exit~~address 3 key areas of the ~~solar pastes product line. As a result~~company—(1) business realignment, (2) operational efficiency and (3) corporate and back office functions. Business realignment was targeted at right-sizing our commercial management organizations globally. The operational efficiency component of the ~~restructuring actions,~~program was designed to improve the ~~Company expects to incur charges~~efficiency of ~~approximately $40 million,~~our plant operations across our global footprint, as well as supply chain. Corporate and back office is principally comprised of work that we are doing with our strategic partners in the ~~majority~~areas of ~~which will be for severance costs~~finance and ~~require future cash expenditures. The programs are subject to required consultations with employee representatives at the affected sites~~accounting and ~~other local legal requirements. Charges associated with these programs were $3.8 million~~information technology outsourcing, and ~~$26.7 million for the three and the nine months ended September 30, 2013, respectively.~~procurement. The cumulative charges incurred to date associated with these programs are ~~$37.0~~$36.4 million. Total costs related to the program expected to be incurred are approximately $49 million. Total restructuring charges were $4.4 million and $9.5 million for the three months ended March 31, 2014 and March 31, 2013, respectively.

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
Balance at December 31, 2013													$	6,999		$	4,579		$	—	$	11,578
Restructuring charges		19,647			7,094			(3	)		26,738			1,697			2,655			—		4,352
Cash payments		(14,715	)		(7,671	)					(22,386	)		(4,689	)		(4,793	)		—		(9,482	)
Non-cash items		92			(820	)		3			(725	)		15			(10	)		—		5

Balance at September 30, 2013	$	9,117		$	4,742		$	—		$	13,859
Balance at March 31, 2014													$	4,022		$	2,431		$	—	$	6,453

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. In 2013 we did not record a tax benefit associated with the loss from discontinued operations as a result of the full valuation allowance in the jurisdiction.


	Three months ended September 30,
	2012			Three months ended March 31, 2013
Net sales	$	5,975		$	4,791
Cost of sales		4,346			2,762

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

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

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

   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 September 30,					Nine months ended September 30,					Three months ended March 31,
	2013		As adjusted 2012			2013		As adjusted 2012			2014		2013
	(In thousands, except per share amounts)										(In thousands, except per share amounts)
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		—		118			8,421		(917	)
Basic earnings per share computation:
Net income attributable to Ferro Corporation common shareholders											$	17,204	$	883
Adjustment for loss from discontinued operations												—		8,421

Total	$	12,652	$	(315,996	)	$	19,826	$	(311,309	)	$	17,204	$	9,304

Weighted-average common shares outstanding		86,426		86,296			86,464		86,274			86,778		86,439
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		—		118			8,421		(917	)
Basic earnings per share from continuing operations attributable to Ferro Corporation common shareholders											$	0.20	$	0.11
Diluted earnings per share computation:
Net income attributable to Ferro Corporation common shareholders											$	17,204	$	883
Adjustment for loss from discontinued operations												—		8,421

Total	$	12,652	$	(315,996	)	$	19,826	$	(311,309	)	$	17,204	$	9,304

Weighted-average common shares outstanding		86,426		86,296			86,464		86,274			86,778		86,439
Assumed exercise of stock options		200		—			112		—			454		98
Assumed satisfaction of deferred stock unit conditions		77		—			63		—			72		62
Assumed satisfaction of restricted stock unit conditions		120		—			84		—			179		35
Assumed satisfaction of performance stock unit conditions		375		—			247		—			507		45
Assumed satisfaction of restricted share conditions		52		—			63		—			—		97

Weighted-average diluted shares outstanding		87,250		86,296			87,033		86,274			87,990		86,776

Diluted earnings (loss) per share from continuing operations attributable to Ferro Corporation common shareholders	$	0.15	$	(3.66	)	$	0.23	$	(3.61	)
Diluted earnings per share from continuing operations attributable to Ferro Corporation common shareholders											$	0.20	$	0.11

The number of anti-dilutive or unearned shares, including shares related to contingently convertible debt, was ~~2.0~~1.4 million and ~~2.4~~5.3 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2014 and 2013, ~~respectively, and 7.5 million for the three and nine months ended September 30, 2012.~~respectively.

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended ~~September 30, 2013,~~March 31, 2014, 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)	$	2,510		$	5,911	$	(77	)	$	8,344		$	1,942		$	6,621		$	(70	)	$	8,493
Other comprehensive income before reclassifications		—			4,203		—			4,203
Other comprehensive loss before reclassifications													—			(170	)		—			(170	)
Amounts reclassified from accumulated other comprehensive income (loss)		(34	)		—		—			(34	)		(36	)		—			—			(36	)

Net current period other comprehensive (loss) income		(34	)		4,203		—			4,169
Net current period other comprehensive loss													(36	)		(170	)		—			(206	)

Ending accumulated other comprehensive income (loss)	$	2,476		$	10,114	$	(77	)	$	12,513		$	1,906		$	6,451		$	(70	)	$	8,287

~~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.

In the first quarter, in conjunction with the changes to operating segments, we 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 is now 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~~reconciliations to income ~~(loss)~~ before income taxes ~~from continuing operations follows:~~are presented in the table below:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2013			As adjusted 2012			2013			As adjusted 2012			2014			2013
	(Dollars in thousands)						(Dollars in thousands)						(Dollars in thousands)
Pigments, Powders and Oxides	$	8,390		$	7,231		$	25,882		$	28,363		$	6,930		$	8,173
Performance Colors and Glass		28,713			21,086			87,203			77,220			34,372			27,258
Performance Coatings		36,410			23,858			100,237			85,328			33,243			28,592
Polymer Additives		6,251			8,907			20,616			26,871			7,437			8,854
Specialty Plastics		6,881			6,984			22,116			23,207			7,870			7,389
Other cost of sales		(2,398	)		(7,356	)		(4,916	)		(8,740	)		(378	)		(1,029	)

Total gross profit		84,247			60,710			251,138			232,249			89,474			79,237
Selling, general and administrative expenses		59,078			63,863			184,986			202,675			57,576			61,592
Restructuring and impairment charges		3,834			198,695			26,738			203,734			4,352			9,454
Other expense, net		7,817			8,325			15,386			23,204
Other expense (income), net														8,082			(1,766	)

Income (loss) before income taxes	$	13,518		$	(210,173	)	$	24,028		$	(197,364	)
Income before income taxes													$	19,464		$	9,957

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

During the three months ended ~~September 30, 2013,~~March 31, 2014, net sales were ~~flat~~down $25.8 million , or 6.2%, compared towith the prior-year same period. ~~Increases~~Of the decline, approximately $27 million, or 6%, was the impact resulting from the sale of our North American and Asian metal powders business and the exit of solar pastes. Further, sales declined approximately $11 million due to lower sales of our plasticizer product that is being negatively impacted by changing environmental regulations. Strong performance in ~~sales excluding precious metals in~~our Performance Colors and Glass, and Performance Coatings ~~were~~segments, accounting for increased net sales of approximately $10.0 million compared with the prior-year same period, partially ~~offset by lower~~mitigated the declines. The decline in sales ~~in Polymer Additives due to~~of precious metals is the ~~accelerated deselection~~result of ~~certain plasticizer products,~~the sale of our North American and ~~in Pigments, Powders~~Asian metal powders business and ~~Oxides due to~~ the exit of solar pastes, inwhich drove the first quarter of 2013. The decrease in sales of precious metals was primarily in Pigments, Powders and Oxides and driven by the exit of solar pastes. Gross profit increased approximately $24 million in the third quarter of 2013entire change compared towith the prior-year same ~~period,~~period. Despite the decline in net sales, gross profit increased $10.2 million, or ~~550~~310 basis points as a percentage of net sales excluding precious metals, to ~~21.8%~~23.6%. The ~~favorability was~~primary drivers of the increase in gross profit were our cost reduction initiatives and higher volumes, particularly in our Performance Colors and Glass and Performance Coatings segments and favorable mix, partially offset by lower profitability in our Polymer Additives segment.

Selling, general and administrative (“SG&A”) expenses were down $4.0 million, or 6.5%, compared with the prior-year same period, primarily driven by our cost reduction ~~initiatives, increased net sales excluding precious metals~~initiatives. Partially offsetting the decline was higher stock based compensation expense and ~~improved business mix, partially offset by lower sales in Polymer Additives and the impact of the exit of solar pastes.~~

~~We continue~~bad debt expense for exposures related to execute against our cost savings plans, which has resulted in additional savings in the third quarter of 2013 compared with the prior-year same period. Further, we have announced that we now expect to achieve cost savings of greater than $100 million by the end of 2015.Venezuela.

For the three months ended ~~September 30, 2013,~~March 31, 2014, Ferro net income was ~~$13.0~~$16.7 million, compared with net ~~loss~~income of ~~$315.7~~$0.5 million in ~~2012,~~2013, and net income attributable to common shareholders was ~~$12.7~~$17.2 million, compared with net ~~loss~~income attributable to common shareholders of ~~$316.1~~$0.9 million in ~~2012.~~2013. Income from continuing operations was ~~$13.0~~$16.7 million in the three months ended ~~September 30, 2013,~~March 31, 2014, compared with net ~~loss~~income from continuing operations of ~~$315.6~~$8.9 million in ~~2012.~~2013. Our total segment gross profit for the ~~third~~first quarter of ~~2013~~2014 was ~~$84.2~~$89.5 million, compared with ~~$60.7~~$79.2 million in ~~2012. We incurred restructuring charges of $3.8 million in the third quarter.~~

For the nine months ended September 30, 2013, Ferro net income was $11.6 million, compared with net loss of $309.6 million in 2012, and net income attributable to common shareholders was $11.4 million, compared with net loss attributable to common shareholders of $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.

For the full year 2014, we continue to expect revenue growth to be approximately 3.5% to 4.0%, excluding the impacts of businesses and product lines that were divested in 2013 and the negative impact of the plasticizer product that has been driving underperformance in our Polymer Additives segment. We ~~have continued~~expect gross profit margin to ~~make progress against our strategic objectives during~~be slightly higher than 2013 at approximately 22% for the ~~third quarter of 2013. We have executed against our cost reduction plans, which are~~full year. The improvement is expected to ~~drive cost~~be driven by realization of savings ~~of approximately $45 million for full year 2013. These actions,~~resulting from our restructuring activities, as well as continued efficiency improvements in ~~addition to the cost savings from exiting solar pastes during the first quarter of 2013 have significantly improved the Company’s cost structure.~~

~~In the fourth quarter,~~our manufacturing processes, which we expect to ~~realize~~more than offset the competitive pressures that we continue face.

We expect continued ~~benefits~~improvement in SG&A leverage through the remainder of 2014, driven by realization of savings resulting from our restructuring activities, as well as incremental actions targeted at greater efficiency and improved 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.~~structure.

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.~~2013.

For the three and nine months ended September 30, 2012, amounts originally reported have been adjusted for the effects of applying retrospectively the discontinued operations of FPL as described in Note 12, Discontinued Operations and the changes in 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.

Comparison of the three months ended ~~September 30,~~March 31, 2014 and 2013 ~~and 2012~~

For the three months ended ~~September 30, 2013,~~March 31, 2014, Ferro net income was ~~$13.0~~$16.7 million , compared with net ~~loss~~income of ~~$315.7~~$0.5 million for the three months ended ~~September 30, 2012.~~March 31, 2013. For the three months ended ~~September 30, 2013,~~March 31, 2014, Ferro net income attributable to common shareholders was ~~$12.7~~$17.2 million, or ~~$0.15~~$0.20 per share, compared with Ferro net ~~loss~~income attributable to common shareholders of ~~$316.1~~$0.9 million, or ~~$3.66 loss~~$0.01 per share, for the three months ended ~~September 30, 2012.~~March 31, 2013.


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Net sales excluding precious metals	$	387,025		$	372,904		$	14,121			3.8	%	$	378,449		$	386,787		$	(8,338	)		(2.2	)%
Sales of precious metals		21,079			35,961			(14,882	)		(41.4	)%		13,286			30,737			(17,451	)		(56.8	)%

Net sales		408,104			408,865			(761	)		(0.2	)%		391,735			417,524			(25,789	)		(6.2	)%
Cost of sales		323,857			348,155			(24,298	)		(7.0	)%		302,261			338,287			(36,026	)		(10.6	)%

Gross profit	$	84,247		$	60,710		$	23,537			38.8	%	$	89,474		$	79,237		$	10,237			12.9	%

Gross profit as a % of net sales excluding precious metals		21.8	%		16.3	%								23.6	%		20.5	%

Net sales decreased by ~~0.2%~~$25.8 million, or 6.2% in the three months ended ~~September 30, 2013,~~March 31, 2014, compared with the prior-year same period. Net sales excluding precious metals ~~increased $14.1~~decreased $8.3 million, driven by ~~increased sales in our Performance Coatings, Performance Colors and Glass and Specialty Plastics segments, partially offset by decreased~~lower sales in our Polymer Additives and Pigments, Powders and Oxides segments, partially mitigated by higher sales in our Performance Colors and Glass, Performance Coatings and Specialty Plastics segments. The sale of our North American and Asian metal powders business and the exit of solar pastes ~~during the first quarter of 2013~~ drove the decrease in sales of precious ~~metals compared to the prior year.~~metals.

Gross profit increased ~~38.8%~~$10.2 million, or 12.9%, in the three months ended ~~September 30, 2013,~~March 31, 2014, compared to the prior-year same period. The significant drivers of the increased gross profit ~~are strong demand and lower raw material and production costs in our Performance Coatings segment and favorable product mix in~~were our Performance Colors and Glass ~~segment.~~segment, resulting from higher volumes and favorable mix and product pricing, and our Performance Coatings segment, which had favorable volume and mix, raw material impacts and manufacturing costs. These increases were partially offset by ~~unfavorable product mix~~lower gross profit in our ~~Pigments, Powders and Oxides~~Polymer Additives segment, driven by unfavorable manufacturing costs, and the impact of reduced demand for certain plasticizer products in our Polymer Additives segment. Additionally, during the third quarter of 2012, inventory charges related to obsolete solar pastes impacted gross profit by approximately $5 million.sold businesses and assets.

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 $4.8 million lower in the three months ended September 30, 2013 compared with the prior-year same period. As a percentage of sales, SG&A expenses decreased 110 basis points from 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~~2014 and ~~2012:~~2013:


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Personnel expenses	$	32,554		$	42,033		$	(9,479	)		(22.6	)%	$	34,168		$	40,457		$	(6,289	)		(15.5	)%
Incentive compensation		7,350			(4,090	)		11,440			NM			2,554			2,478			76			NM
Stock-based compensation		1,744			1,894			(150	)		(7.9	)%		3,698			1,341			2,357			(7.9	)%
Pension and other postretirement benefits		(425	)		1,146			(1,571	)		NM			(857	)		(412	)		(445	)		NM
Idle sites		—			476			(476	)		(100.0	)%		—			363			(363	)		NM
Bad debt expense		(89	)		2,759			(2,848	)		NM
Bad debt														1,122			(92	)		1,214			NM
Other		17,944			19,645			(1,701	)		(8.7	)%		16,891			17,457			(566	)		(3.2	)%

Selling, general and administrative expenses	$	59,078		$	63,863		$	(4,785	)		(7.5	)%	$	57,576		$	61,592		$	(4,016	)		(6.5	)%

SG&A expenses were $4.0 million lower in the three months ended March 31, 2014 compared with the prior-year same period. As a percentage of net sales excluding precious metals, SG&A expenses decreased 70 basis points from 15.9% in the first quarter of 2013 to 15.2% in the first quarter of 2014. Significant drivers of the reduction in SG&A expenses were the various restructuring activities executed in 2013 that drove the decrease in personnel expenses, partially offset by higher stock-based compensation expense due to higher grants to retirement-eligible employees and stock options granted in 2014 having a higher fair value compared to those granted in the prior-year same period, and higher bad debt expense, primarily exposures related to Venezuela.


	Three months ended September 30,										Three months ended March 31,
	2013		2012			$ Change			% Change		2014		2013		$ Change			% Change
	(Dollars in thousands)										(Dollars in thousands)
Employee severance	$	478	$	(34	)	$	512			NM
Employee Severance												1,697		8,170		(6,473	)		NM
Other restructuring costs		3,356		(83	)		3,439			NM		2,655		1,284		1,371			NM
Impairment		—		198,812			(198,812	)		NM

Restructuring and impairment charges	$	3,834	$	198,695		$	(194,861	)		NM	$	4,352	$	9,454	$	(5,102	)		NM

Restructuring and impairment charges decreased significantly in the ~~third~~first quarter of ~~2013~~2014 compared towith the prior-year same period. ~~The drivers~~Many of our restructuring activities commenced during the ~~decrease were the significant nonrecurring impairments of goodwill and property, plant and equipment in the third~~first quarter of ~~2012, partially offset by additional charges related to our ongoing~~2013. We had fewer restructuring ~~plans~~activities during the ~~third~~first quarter of ~~2013.~~2014.

Interest expense in the ~~third~~first quarter of ~~2013 was consistent~~2014 decreased $1.4 million compared with the prior-year same period. Interest expense was higher in the first quarter of 2013 due to the write-off of deferred financing fees that resulted from amending our revolving credit facility and the commitment amount being reduced from $350.0 million to $250.0 million. The components of interest expense are as follows:


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Interest expense	$	6,592		$	6,507		$	85			1.3	%	$	5,848		$	6,226		$	(378	)		(6.1	)%
Amortization of bank fees		393			483			(90	)		(18.6	)%		366			1,075			(709	)		(66.0	)%
Interest capitalization		(219	)		(274	)		55			(20.1	)%		(330	)		(4	)		(326	)		NM

Interest expense	$	6,766		$	6,716		$	50			0.7	%	$	5,884		$	7,297		$	(1,413	)		(19.4	)%

During the ~~third~~first quarter of ~~2013,~~2014, income tax expense was ~~$0.5~~$2.7 million, ~~compared with~~or 14.0% of pre-tax income. In the ~~income~~first quarter of 2013, we recorded tax expense of ~~$105.4~~$1.0 million, or 10.2% of pre-tax income. The increase in the ~~third quarter~~effective tax rate was primarily the result of ~~2012. Income tax expense for the current period was less than the expense recorded in~~differences from the prior-year ~~same period primarily due to the reserve that was recorded~~pre-tax income in ~~the third quarter of 2012 on a significant portion of our deferred~~loss jurisdictions with full valuation allowances for which no tax ~~assets.~~benefit or expense is recognized.

Comparison of the three months ended ~~September 30,~~March 31, 2014 and 2013 ~~and 2012~~


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales excluding precious metals	$	35,551		$	38,286		$	(2,735	)		(7.1	)%	$	26,993		$	35,505		$	(8,512	)		(24.0	)%
Segment precious metal sales		12,096			25,767			(13,671	)		(53.1	)%		3,055			19,282			(16,227	)		(84.2	)%

Segment net sales		47,647			64,053			(16,406	)		(25.6	)%		30,048			54,787			(24,739	)		(45.2	)%
Segment gross profit		8,390			7,231			1,159			16.0	%		6,930			8,173			(1,243	)		(15.2	)%
Gross profit as a % of segment net sales excluding precious metals		23.6	%		18.9	%								25.7	%		23.0	%

~~Sales in Pigments, Powders~~Net sales excluding precious metals decreased compared with the prior-year same period, primarily due to the sale of our North American and ~~Oxides decreased due to~~Asian metal powders business and the exit of solar pastes, ~~during the first quarter of 2013,~~ which comprised approximately $4$8 million of the decrease. Lower sales of our polishing materials and pigments products comprised the remainder of the decrease, ~~in net sales excluding precious metals from~~compared with the prior-year same period. The decrease in sales related to 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 net sales excluding precious metals. Gross profit decreased from the prior-year same period primarily due to the ~~exit~~impact of ~~solar pastes.~~the sold businesses and assets.

Net sales excluding precious metals increased compared with the prior-year same period, with increases in all product lines. Sales increased approximately $2.0 million over the prior-year same period for both our automotive glass products and electronics products. Net sales excluding precious metals were favorably impacted by higher volume and favorable product pricing, partially offset by unfavorable mix. Regionally, net sales excluding precious metals were higher in all regions compared with the prior-year same period, driven by increases of approximately $2.0 million in the United States and Latin America. Gross profit increased from the prior-year same period due to favorable volume, favorable product pricing and favorable manufacturing costs.

Net sales increased in Performance Coatings due to higher sales of our tile frit and glaze, and digital inks products, and our porcelain enamel products compared with the prior-year same period. The impact of these increases was approximately $9.4 million, with lower sales of other tile coating products partially offsetting the increases. Sales were favorably impacted by higher volumes, partially offset by unfavorable product pricing and mix. Regionally, Europe and Latin America drove the sales increase. Both regions recorded sales growth of approximately $2.0 million compared with the first quarter of 2013. Gross profit increased from the prior-year same period primarily due to favorable ~~production~~volume, raw material impacts and manufacturing 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.


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change			% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales	$	71,599		$	79,881		$	(8,282	)		(10.4	)%	$	69,743		$	80,869		$	(11,126	)		(13.8	)%
Segment gross profit		6,251			8,907			(2,656	)		(29.8	)%		7,437			8,854			(1,417	)		(16.0	)%
Gross profit as a % of segment net sales		8.7	%		11.2	%								10.7	%		10.9	%

~~Sales~~Net 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$13.0 million, comprising the majority of the decrease in the segment. Approximately $6$10.0 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~~primarily due to lower sales volume ~~unfavorable pricing impacts,~~ and unfavorable manufacturing costs.


	Three months ended September 30,												Three months ended March 31,
	2013			2012			$ Change			% Change			2014			2013			$ Change		% Change
	(Dollars in thousands)												(Dollars in thousands)
Segment net sales	$	42,926		$	41,305		$	1,621			3.9	%	$	45,311		$	44,839		$	472		1.1	%
Segment gross profit		6,881			6,984			(103	)		(1.5	)%		7,870			7,389			481		6.5	%
Gross profit as a % of segment net sales		16.0	%		16.9	%								17.4	%		16.5	%

~~Sales~~Net sales increased in Specialty Plastics primarily due to ~~strong demand for certain~~higher sales of our 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.~~compared with the prior-year same period. Regionally, Europe and Latin America drove a sales increase ~~totaling~~of approximately $3$0.7 million, which was partially offset by a sales decrease in the United States of approximately $1$0.3 million. Gross profit ~~was flat compared to~~increased from the prior-year same ~~period.~~period as a result of favorable manufacturing costs.


	Three months ended September 30,										Three months ended March 31,
	2013		2012		$ Change			% Change			2014		2013		$ Change			% Change
	(Dollars in thousands)										(Dollars in thousands)
Geographic Revenues
United States	$	157,421	$	173,648	$	(16,227	)		(9.3	)%	$	142,288	$	174,403	$	(32,115	)		(18.4	)%
International		250,683		235,217		15,466			6.6	%		249,447		243,121		6,326			2.6	%

Total	$	408,104	$	408,865	$	(761	)		(0.2	)%	$	391,735	$	417,524	$	(25,789	)		(6.2	)%

Net sales declined ~~slightly~~$25.8 million, or 6.2%, 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~~first quarter of ~~2013,~~2014, sales originating in the United States were ~~39%~~36.0% of total net sales, compared with ~~42%~~42.0% of net sales in the ~~third~~first quarter of ~~2012.~~2013. The decline in sales in the United States was primarily driven by the ~~exit~~sale of ~~solar pastes,~~our North American and Asian metal powders business, 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~~$5.0 million compared towith the prior-year same period. Further, Latin America ~~experienced slight increases across most segments.~~had increased sales of approximately $4.0 million, primarily driven by Performance Colors and Glass and Performance Coatings. Higher sales in Europe and Latin America were partially offset by ~~decreased~~lower sales in Asia-Pacific of approximately $5$3.0 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 expenses were the various personnel actions taken during 2012 and into 2013, which drove 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 nine months of 2013 compared to the prior-year same period. Our expenses related to idle sites have decreased in the current year as a result of selling the majority of our idle sites in the current year, and our bad debt expense has decreased approximately $2 million compared to the prior-year same period.

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

Restructuring and impairment charges decreased significantly in the first nine months 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 charges related to our ongoing restructuring plans during the first nine months of 2013.

Interest expense in the first 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, 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:

Income tax expense for the nine months ended September 30, 2013 was $4.0 million, or 16.8% of pre-tax income. In the prior-year same period, we recorded income tax expense of $113.1 million, or (57.3)% of pre-tax income. The change in the effective tax rate was primarily due to the ~~reserve for a significant portion~~sale of ~~the Company’s deferred tax assets, which was recorded in the third quarter of 2012.~~

~~Comparison of the nine months ended September 30, 2013~~our North American and ~~2012~~

~~Sales in Pigments, Powders and Oxides decreased primarily due to~~ the exit of solar pastes during the first quarter of 2013, which comprised approximately $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 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 in sales, due to 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. Sales of our glass products increased over the prior-year same period by approximately $12 million, partially offset by decreased sales of our colors products of approximately $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 United States increased over the prior-year same period, and Asia Pacific was flat. Gross profit increased from the prior-year same period as a result of favorable pricing and production costs, partially offset by unfavorable volume and mix.

Sales decreased in Performance Coatings primarily due to lower sales of our tile colors products of approximately $16 million, which was partially mitigated by increased sales of inks of approximately $11 million and other tile coating products and porcelain enamel products of approximately $3 million compared to the prior-year same 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 increased sales of both tile and porcelain enamel products, and Asia-Pacific, driven by increased sales of porcelain enamel products. 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 that is being driven by changing environmental regulations. Regionally, this drove a decrease in 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 reduced sales volume, partially offset by favorable pricing impacts, primarily in Europe.

Sales decreased in Specialty Plastics primarily due to unfavorable product mix. Regionally, the United States drove the majority of the decrease, approximately $5 million, which was partially mitigated by increases in Europe and Latin America that totaled approximately $4 million. Gross profit decreased from the prior-year same period, primarily due to unfavorable production costs, unfavorable mix and unfavorable pricing impacts.

Net sales declined in the United States and international regions compared to the prior-year same period. In the first nine months of 2013, sales originating in the United States were 40% of total net sales, compared with 44% of net sales in the first nine months of 2012. Approximately $55 million of the decline in sales in the United States was driven by the exit of solar pastes, including sales of precious metals, and approximately $18 million was due to reduced demand for certain plasticizer 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 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, totaling approximately $9 million. The declines in international regions were partially mitigated by increased sales of our Performance Coatings and Specialty Plastics products in Europe, totaling approximately $12 million, container glass products sales in Latin America of approximately $6 million, and Performance Coatings products sales in Asia-Pacific of approximately $2 million.

Summary of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2014 and 2013 ~~and 2012~~


	Three months ended March 31,
	2014			2013			$ Change
	(Dollars in thousands)
Net cash used for operating activities	$	(22,240	)	$	(17,106	)	$	(5,134	)
Net cash (used for) provided by investing activities		(11,511	)		24,962			(36,473	)
Net cash provided by (used for) financing activities		46,595			(4,187	)		50,782
Effect of exchange rate changes on cash and cash equivalents		(84	)		(348	)		264

Increase in cash and cash equivalents	$	12,760		$	3,321		$	9,439


	Nine months ended September 30,									Three months ended March 31,
	2013			2012			$ Change			2014			2013			$ Change
	(Dollars in thousands)									(Dollars in thousands)
Cash flows from operating activities:
Net income (loss)	$	11,582		$	(309,562	)	$	321,144
(Gain) loss on sale of assets and business		(10,686	)		1,018			(11,704	)
Net income										$	16,732		$	520		$	16,212
Loss gain on sale of assets and business											104			(10,895	)		10,999
Depreciation and amortization											11,336			13,264			(1,928	)
Restructuring and impairment charges		4,355			311,084			(306,729	)		(5,134	)		1,859			(6,993	)
Depreciation and amortization		38,000			41,734			(3,734	)
Accounts receivable		(23,079	)		(23,006	)		(73	)		(32,755	)		(13,946	)		(18,809	)
Inventories		12,118			15,637			(3,519	)		(21,427	)		(6,095	)		(15,332	)
Accounts payable		(5,864	)		(4,254	)		(1,610	)		36,590			8,233			28,357
Other changes in current assets and liabilities, net		(8,363	)		7,814			(16,177	)		(13,918	)		(13,579	)		(339	)
Other adjustments, net		(15,060	)		(20,929	)		5,869			(13,768	)		3,533			(17,301	)

Net cash provided by operating activities	$	3,003		$	19,536		$	(16,533	)
Net cash used for operating activities										$	(22,240	)	$	(17,106	)	$	(5,134	)

Cash flows from operating activities.Cash flows from operating activities decreased by ~~$16.5~~$5.1 million in the first ~~nine~~three months of ~~2013~~2014, compared with the prior-year same period. ~~The decrease in cash flows~~This was ~~primarily~~ the result of ~~increased cash outflows related to~~increases in our ~~restructuring activities of $22.4 million during the first nine months of 2013. Reconciling~~accounts receivable and inventory balances, partially offset by increased net income to cash flows from operating activities included approximately $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 $25.5 million in interest was paid during the current year compared to $25.3 million in the first ~~nine~~three months of ~~2012. Interest payments were primarily comprised of semiannual interest on our outstanding senior notes. Inventories increased from year end, but less than~~2014 compared with the ~~increase~~same period in the ~~prior-year same period, which is primarily~~prior year. Also driving the ~~result of decreased sales compared~~decrease in operating cash flows were higher payments for restructuring related activities and contributions to ~~the prior-year, as well as stronger inventory management. The increase in accounts receivables from year end is consistent with that seen~~our U.S. pension plan made in the ~~first nine months of 2012.~~current year.

Cash flows from investing activities.Cash flows from investing activities ~~increased $56.6~~decreased $36.5 million in the first ~~nine~~three months of ~~2013~~2014, compared with the prior-year same period. ~~Cash~~The primary driver of the decline was cash received ~~for~~in the first quarter of 2013 associated with the sale of our solar assets and FPL, totaling $27.7 ~~million, comprised the majority of the increase.~~million. Capital expenditures ~~decreased~~also increased $4.0 million, to ~~$21.2~~$12.2 million in the first ~~nine~~three months of ~~2013~~2014, from ~~$46.2~~$8.2 million in the prior-year ~~for the comparable~~same period.

Cash flows from financing activities. Cash flows from financing activities ~~decreased $35.7~~increased $50.8 million in the first ~~nine~~three months of ~~2013~~2014, compared with the prior-year same period. InThe primary driver of the ~~first nine months~~increase in cash flows is higher net proceeds from our revolving credit facility of ~~2013, we increased borrowings under~~$42.3 million. Also driving the increase in cash flows were net payments of $10.0 million to pay down amounts owed on our domestic accounts receivable ~~asset~~ securitization program by $8 million and increased borrowings through our revolving credit facility by $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. Inin the first ~~nine months~~quarter of ~~2012, we borrowed $20.0 million through our domestic accounts receivable asset securitization program and $3.2 million through our revolving credit facility.~~2013, compared with no net payments in the current year.

~~The~~In 2010, we issued $250 million of 7.875% Senior Notes due 2018 (the “Senior Notes”). The Senior Notes were issued ~~in 2010~~ at par and bear interest at a rate of 7.875% per year, payable semi-annually in arrears on February ~~15th~~15 and August ~~15th, and~~15 of each year. The Senior Notes mature on August 15, ~~2018.~~2018, and are unsecured. The principal amount outstanding was $250.0 million at ~~September 30, 2013, and December~~March 31, ~~2012. We may also redeem some or all of the Senior Notes prior to August 15,~~2014. At March 31, 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 September 30, 2013, we were in compliance with the covenants under the Senior Notes’ indenture.

~~The 6.50% Convertible Senior Notes (the “Convertible Notes”) were repaid at maturity on August 15, 2013. The principal amount outstanding at maturity was $35.1 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 2012, we amended the 2010 Credit Facility (the “2012 Amended Credit Facility”) primarily to provide additional operating flexibility.

In March 2013, we again 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:

Under the 2013 Amended Credit Facility, we are subject to a number of financial covenants, including limitations on the payment of common stock dividends. The covenants include requirements for a leverage ratio, an interest coverage ratio, and capital expenditures as follows:

Our ability to meet these covenants is primarily driven by our EBITDA; our total debt; our interest payments; and our capital expenditures. Our total debt is primarily driven by cash flow items, including net income before amortization, depreciation, and other noncash charges; our cash payments for restructuring; our capital expenditures; requirements for deposits from participants in our precious metals consignment program; our customers’ ability to make payments for purchases and the timing of such payments; and our ability to manage inventory and other working capital items. Our interest payments are driven by our debt level, external fees, and interest rates, primarily the Prime rate and LIBOR. Our capital expenditures are driven by our desire to invest in growth opportunities, to maintain existing property, plant and equipment, and to meet environmental, health and safety requirements. At ~~September 30, 2013,~~March 31, 2014, we were in compliance with the covenants of the 2013 Amended Credit Facility.

Our ability to pay common stock dividends is limited by certain covenants in our 2013 Amended Credit Facility and the bond indenture governing the Senior Notes. The covenant in our 2013 Amended Credit Facility is the more limiting of the two covenants and limits our ability to make restricted payments, which include, but are not limited to, common stock dividends and the repurchase of equity interests. We are not permitted to make restricted payments in excess of $30 million in any calendar year. However, if we make less than $30 million of restricted payments in any calendar year, the unused amount can be carried over for restricted payments in future years, provided that the maximum amount of restricted payments in any calendar year does not exceed $60 million.

We have an asset securitization program for Ferro’s U.S. trade accounts receivable. This program accelerates cash collections at favorable financing costs and helps us manage the Company’s liquidity requirements. We sell undivided variable percentage 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. The purchasers have no recourse to Ferro’s other assets for failure of payment of the receivables as a result of the lack of creditworthiness, or financial inability to pay, of the related obligor. In ~~the second quarter of~~May 2013, we extended the maturity of this credit facility through May 2014. At ~~September 30, 2013, advances received of $48.0~~March 31, 2014, we had borrowed $41.0 million ~~were secured by $77.6 million of accounts receivable, and based on available and qualifying~~under this facility. After reductions for non-qualifying receivables, ~~$2.0~~we had $0.2 million of additional borrowings ~~were~~ available under the ~~program. At December~~program at March 31, ~~2012, we had borrowed $40.0 million under this facility.~~2014. During the third quarter of 2013, we amended the ~~agreement.~~agreement to account for changes in the underlying funding source for the securitization process. The interest rate under the amended agreement is the sum of (A) either (1) LIBOR rates or (2) the federal funds rate plus 0.5% or the prime rate and (B) a fixed margin. At ~~September 30, 2013,~~March 31, 2014, the interest rate was ~~0.6%~~0.4%.

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 September 30, 2013, commitments supporting these programs totaled $18.9 million, advances received of $5.6 million were secured by $8.7 million of accounts receivable, and based on available and qualifying receivables, $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 September 30, 2013, the weighted-average interest rate was 1.9%.

Consignment and Customer Arrangements for Precious Metals. InWe use precious metals, primarily silver, in the production of some of our ~~products, we use~~products. We obtain most precious metals ~~some of which we obtain~~ from financial institutions under consignment agreements ~~with terms of one year or less.~~(generally referred to as our precious metals consignment program). The financial institutions retain ownership of the precious metals and charge us fees based on the amounts we ~~consign.~~consign and the period of consignment. These fees were $0.2 million and $1.0 million for the three months ended March 31, 2014 and 2013, respectively. We had on hand precious metals owned by participants in our precious metals program of ~~$89.5~~$30.1 million at ~~September 30, 2013,~~March 31, 2014, and ~~$112.2~~$30.8 million at December 31, ~~2012,~~2013, measured at fair value based on market prices for identical assets and net of credits.

The consignment agreements under our precious metals program involve short-term commitments that typically mature within 30 to 90 days of each transaction and are typically renewed on an ongoing basis. As a result, the Company relies on the continued willingness of financial institutions to participate in these arrangements to maintain this source of liquidity. On occasion, we have been required to deliver cash collateral. While no deposits were outstanding at ~~September 30, 2013,~~March 31, 2014, or December 31, ~~2012,~~2013, 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.

~~Cash~~Bank Guarantees and ~~Cash Equivalents~~Standby Letters of Credit. At March 31, 2014, the Company and its subsidiaries had bank guarantees and standby letters of credit issued by financial institutions that totaled $6.8 million. These agreements primarily relate to Ferro’s insurance programs, foreign energy purchase contracts and foreign tax payments.

We maintain other lines of credit to provide global flexibility for Ferro’s short-term liquidity requirements. These facilities are uncommitted lines for our international operations and totaled $17.1 million. We had $13.5 million of additional borrowings available under these lines at March 31, 2014.

Our primary sources of liquidity are available cash and cash equivalents, available lines of credit under the revolving credit facility, and cash flows from operating activities. As of ~~September 30, 2013,~~March 31, 2014, we had ~~$35.9~~$41.1 million of cash and cash equivalents. Substantially all of our cash and cash equivalents ~~of which $35.6 million was~~were held inby foreign ~~countries.~~subsidiaries. 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 cash held by foreign ~~cash~~subsidiaries 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. In 2013, cash flows from investing and operating activities were used to fund our financing activities. We had additional borrowing capacity of ~~$238.5~~$203.3 million at ~~September 30, 2013,~~March 31, 2014, and ~~$361.5~~$246.0 million at December 31, ~~2012,~~2013, 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.~~5. 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~~

The most critical of these ratios is the leverage ratio for the revolving credit facility. As of December 31, 2013, we were in compliance with our maximum leverage ratio covenant of 4.00x as our actual ratio was 2.57x, providing $43.8 million of EBITDA cushion on the leverage ratio, as defined within our credit facilities and ~~our~~ senior notes indenture. Our leverage ratio covenants decrease in 2013 to 3.50x. To the extent that economic conditions in key markets deteriorate or we are ~~described in more detail in “Capital Resources~~unable to meet our business projections and ~~Liquidity” under Item 7 and in Note 6 to the consolidated financial statements under Item 8~~EBITDA falls below approximately $100 million for rolling four quarters, based on reasonably consistent debt levels with those as of ~~our Annual Report on Form 10-K for the year ended~~ December 31, ~~2012.~~2013, we could become unable to maintain compliance with our leverage ratio covenant. In such case, our lenders could demand immediate payment of outstanding amounts and we would need to seek alternate financing sources to pay off such debts and to fund our ongoing operations. Such financing may not be available on favorable terms, if at all.

We may from time to time seek to retire or repurchase our outstanding debt through open market purchases, privately negotiated transactions, or ~~otherwise.~~other means. 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~~businesses and assets such as our ~~solar pastes~~completed 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.~~2013.

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.~~2013.

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.~~rates, and costs of raw materials and energy.

Our exposure to interest rate risk arises from our debt portfolio. We manage this risk by controlling the mix of ~~fixed-rate~~fixed 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 substantially 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~~analysis about potential gains (losses) resulting from hypothetical changes in market rates are presented below:


	September 30, 2013			December 31, 2012			March 31, 2014			December 31, 2013
	(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	$	763		$	543		$	980		$	516
Fixed-rate debt:
Carrying amount		255,421			289,148			253,623			253,617
Fair value		267,011			270,240			266,743			269,238
Change in fair value from 1% increase in interest rates		(10,324	)		(10,113	)		(9,505	)		(10,061	)
Change in fair value from 1% decrease in interest rates		10,844			10,668			9,941			10,546
Foreign currency forward contracts:
Notional amount		231,342			250,680			274,826			244,921
Carrying amount and fair value		(2,467	)		(4,758	)		(726	)		(2,255	)
Change in fair value from 10% appreciation of U.S. dollar		11,455			13,205			14,546			12,867
Change in fair value from 10% depreciation of U.S. dollar		(14,000	)		(16,140	)		(17,778	)		(15,727	)

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 ~~September 30, 2013,~~March 31, 2014, 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 ~~September 30, 2013.~~March 31, 2014.

During the ~~third~~first quarter of ~~2013,~~2014, 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.

On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an updated version of its Internal Control – Integrated Framework (2013 Framework). Originally issued in 1992 (1992 Framework), the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 1992 Framework remains available during the transition period, which extends to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework. As of March 31, 2014, the Company continues to utilize the 1992 Framework during the transition to the 2013 Framework by the end of 2014.

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~~resolution of such ~~lawsuits and claims~~matters to materially affect the consolidated financial position, results of operations, or cash flows of the Company.

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.~~2013.

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.~~5.

The following table summarizes purchases of our common stock by the Company and affiliated purchasers during the three months ended ~~September 30, 2013:~~March 31, 2014:

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		1917

Item 3. Quantitative and Qualitative Disclosures about Market Risk		3426

Item 4. Controls and Procedures		3527

PART II

Item 1. Legal Proceedings		3628

Item 1A. Risk Factors		3628

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3628

Item 3. Defaults Upon Senior Securities		3628

Item 4. Mine Safety Disclosures		3628

Item 5. Other Information		3628

Item 6. Exhibits		3628

Exhibit 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


	September 30, 2013
	Carrying			Fair Value
	Amount			Total			Level 1		Level 2			Level 3
	(Dollars in thousands)
Cash and cash equivalents	$	35,853		$	35,853		$	35,853	$	—		$	—
Loans payable		(56,801	)		(56,801	)		—		(56,801	)		—
7.875% Senior Notes		(250,000	)		(262,500	)		—		(262,500	)		—
Revolving Credit Facility		(19,509	)		(19,936	)		—		(19,936	)		—
Other long-term notes payable		(5,421	)		(4,511	)		—		(4,511	)		—
Foreign currency forward contracts, net		(2,467	)		(2,467	)		—		(2,467	)		—


	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


	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, 2014 to January 31, 2014		—	$	—		—		—
February 1, 2014 to February 28, 2014		17,906		13.09		—		—
March 1, 2014 to March 31, 2014		—		—		—		—

Total		17,906				—


		FERRO CORPORATION (Registrant)

Date: ~~October~~April 23, ~~2013~~2014
	/s/ Peter T. Thomas

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

Date: ~~October~~April 23, ~~2013~~2014
	/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 3.5 to Ferro Corporation’s Quarterly Report on Form 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		~~Fourth Amendment to Amended and Restated Receivables Purchase~~ Agreement dated ~~as of September 20, 2013,~~February 21, 2014, by and among ~~PNC Bank, National Association,~~ Ferro ~~Finance~~ Corporation, Front Four Master Fund, Ltd. and ~~Market Street Funding LLC.~~certain of its affiliates and Quinpario Partners, LLC and certain of its affiliates (incorporated by reference to Exhibit 10.1 to Ferro Corporation’s current report on From 8-K, filed February 24, 2014).

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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Smaller reporting company