NOTE 16 – SUPPLEMENTAL CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS

The Guarantor Subsidiaries, which consist of the Company’s principal domestic subsidiaries, are guarantors of the Company’s 11 3/8% Senior Secured Notes due 2013 and its 7 5/8% Senior Notes due 2018. These guarantees are full and unconditional. The Supplemental Guarantor Financial Statements are presented herein pursuant to requirements of the Commission.

INTERFACE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012


	GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES		INTERFACE, INC. (PARENT CORPORATION)			CONSOLIDATION AND ELIMINATION ENTRIES			CONSOLIDATED TOTALS
	(In thousands)
Net sales	$	165,391		$	120,383	$	0		$	(42,911	)	$	242,863
Cost of sales		122,447			80,466		0			(42,911	)		160,002

Gross profit on sales		42,944			39,917		0			0			82,861
Selling, general and administrative expenses		23,966			28,260		5,788			0			58,014
Losses related to Australia fire		0			980		0			0			980
Restructuring and asset impairment charge		0			770		0			0			770

Operating income (loss)		18,978			9,907		(5,788	)		0			23,097
Interest/other expense		3,598			3,410		(542	)		0			6,466

Income before taxes on income and equity in income of subsidiaries		15,380			6,497		(5,246	)		0			16,631
Income tax expense		5,145			2,174		(1,755	)		0			5,564
Equity in income (loss) of subsidiaries		0			0		(2,282	)		2,282			0

Income (loss) from continuing operations		10,235			4,323		(5,773	)		2,282			11,067
Income (loss) from discontinued operations (net of tax)		(16,840	)		0		0			0			(16,840	)

Net income (loss)	$	(6,605	)	$	4,323	$	(5,773	)	$	2,282		$	(5,773	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012


	GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES		INTERFACE, INC. (PARENT CORPORATION)			CONSOLIDATION AND ELIMINATION ENTRIES			CONSOLIDATED TOTALS
	(In thousands)
Net sales	$	428,084		$	358,564	$	0		$	(104,223	)	$	682,425
Cost of sales		314,158			240,409		0			(104,223	)		450,344

Gross profit on sales		113,926			118,155		0			0			232,081
Selling, general and administrative expenses		68,452			82,928		16,754			0			168,134
Losses related to Australia fire		0			980		0			0			980
Restructuring and asset impairment charge		1,143			15,943		0			0			17,086

Operating income (loss)		44,331			18,304		(16,754	)		0			45,881
Interest/other expense		21,827			10,013		(11,884	)		0			19,956

Income (loss) before taxes on income and equity in income of subsidiaries		22,504			8,291		(4,870	)		0			25,925
Income tax expense		7,329			4,452		(1,363	)		0			10,418
Equity in income (loss) of subsidiaries		0			0		2,058			(2,058	)		0

Income (loss) from continuing operations		15,175			3,839		(1,449	)		(2,058	)		15,507
Income (loss) from discontinued operations (net of tax)		(16,956	)		0		0			0			(16,956	)

Net income (loss)	$	(1,781	)	$	3,839	$	(1,449	)	$	(2,058	)	$	(1,449	)

CONDENSED CONSOLIDATING BALANCE SHEET

SEPTEMBER 30, 2012


	GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES			INTERFACE, INC. (PARENT CORPORATION)			CONSOLIDATION AND ELIMINATION ENTRIES			CONSOLIDATED TOTALS
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2,529		$	38,250		$	50,872		$	0		$	91,651
Accounts receivable		53,733			74,122			586			0			128,441
Inventories		69,258			78,504			0			0			147,762
Prepaids and deferred income taxes		5,272			27,002			9,340			0			41,614

Total current assets		130,792			217,878			60,798			0			409,468
Property and equipment less accumulated depreciation		72,076			97,388			3,403			0			172,867
Investment in subsidiaries		361,233			195,361			(18,453	)		(538,141	)		0
Goodwill		6,542			67,252			0			0			73,794
Other assets		1,585			10,846			92,849			0			105,280

	$	572,228		$	588,725		$	138,597		$	(538,141	)	$	761,409

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	53,943		$	79,966		$	17,509		$	0		$	151,418
Senior notes		0			0			283,090			0			283,090
Deferred income taxes		0			11,655			(2,783	)		0			8,872
Other		0			8,199			27,680			0			35,879

Total liabilities		53,943			99,820			325,496			0			479,259
Common stock		81,844			102,199			6,594			(184,043	)		6,594
Additional paid-in capital		191,411			12,525			365,038			(203,936	)		365,038
Retained earnings (deficit)		246,979			429,549			(548,978	)		(150,162	)		(22,612	)
Foreign currency translation adjustment		(1,949	)		(20,331	)		(7,054	)		0			(29,334	)
Pension liability		0			(35,037	)		(2,499	)		0			(37,536	)

	$	572,228		$	588,725		$	138,597		$	(538,141	)	$	761,409

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS

ENDED SEPTEMBER 30, 2012


	GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES			INTERFACE, INC. (PARENT CORPORATION)			CONSOLIDATION AND ELIMINATION ENTRIES			CONSOLIDATED TOTALS
	(In thousands)
Net cash provided by operating activities	$	36,070		$	4,652		$	(12,466	)	$	15,648		$	43,904

Cash flows from investing activities:
Purchase of plant and equipment		(11,284	)		(17,492	)		(41	)		0			(28,817	)
Other		465			(39	)		(1,953	)		0			(1,527	)
Net proceeds from sale of Bentley Prince Street		0			0			32,174			0			32,174
Cash received from insurance company		0			10,000			0			0			10,000

Net cash used for investing activities		(10,819	)		(7,531	)		30,180			0			11,830

Cash flows from financing activities:
Repurchase of senior subordinated notes		0			0			(11,477	)		0			(11,477	)
Other		(24,015	)		4,705			34,958			(15,648	)		0
Proceeds from issuance of common stock		0			0			293			0			293
Dividends paid		0			0			(4,276	)		0			(4,276	)

Net cash provided by (used for) financing activities		(24,015	)		4,705			19,498			(15,648	)		(15,460	)
Effect of exchange rate change on cash		192			561			0			0			753

Net increase (decrease) in cash		1,428			2,387			37,212			0			41,027
Cash at beginning of period		1,101			35,863			13,660			0			50,624

Cash at end of period	$	2,529		$	38,250		$	50,872		$	0		$	91,651