Financial Guarantees and Condensed Consolidating Financial Statements (Tables)

Condensed Consolidating Balance Sheet

As of June 28, 2014



In thousands	PGI (Issuer)			Guarantors		Non-Guarantors			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	296		$	121,459	$	89,441		$	—		$	211,196
Accounts receivable, net	—			46,040		215,618			—			261,658
Inventories, net	(789		)	49,081		140,694			—			188,986
Deferred income taxes	385			2,439		6,905			(2,823		)	6,906
Other current assets	17,342			12,165		76,467			—			105,974
Total current assets	17,234			231,184		529,125			(2,823		)	774,720
Property, plant and equipment, net	3,636			209,166		824,245			—			1,037,047
Goodwill	—			37,249		178,356			—			215,605
Intangible assets, net	39,348			112,771		24,006			—			176,125
Net investment in and advances to (from) subsidiaries	1,489,997			530,756		(720,955		)	(1,299,798		)	—
Deferred income taxes	—			—		1,977			—			1,977
Other noncurrent assets	291			8,976		27,992			—			37,259
Total assets	$	1,550,506		$	1,130,102	$	864,746		$	(1,302,621	)	$	2,242,733
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	719		$	—	$	13,351		$	—		$	14,070
Accounts payable and accrued liabilities	42,335			57,952		233,073			—			333,360
Income taxes payable	399			145		567			—			1,111
Deferred income taxes	—			—		1,777			1,148			2,925
Current portion of long-term debt	62,090			—		48,236			—			110,326
Total current liabilities	105,543			58,097		297,004			1,148			461,792
Long-term debt	1,311,050			—		63,446			—			1,374,496
Deferred income taxes	973			11,562		61,357			(3,971		)	69,921
Other noncurrent liabilities	407			26,833		85,208			—			112,448
Total liabilities	1,417,973			96,492		507,015			(2,823		)	2,018,657
Common stock	—			—		16,966			(16,966		)	—
Polymer Group, Inc. shareholders’ equity	132,533			1,033,610		249,222			(1,282,832		)	132,533
Noncontrolling interests	—			—		91,543			—			91,543
Total equity	132,533			1,033,610		357,731			(1,299,798		)	224,076
Total liabilities and equity	$	1,550,506		$	1,130,102	$	864,746		$	(1,302,621	)	$	2,242,733

Condensed Consolidating Balance Sheet

As of December 28, 2013



In thousands	PGI (Issuer)			Guarantors		Non-Guarantors			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	2,068		$	13,103	$	70,893		$	—		$	86,064
Accounts receivable, net	—			46,828		147,999			—			194,827
Inventories, net	(162		)	46,757		109,778			—			156,373
Deferred income taxes	385			2,438		2,318			(2,823		)	2,318
Other current assets	2,049			12,534		44,513			—			59,096
Total current assets	4,340			121,660		375,501			(2,823		)	498,678
Property, plant and equipment, net	2,756			176,380		473,332			—			652,468
Goodwill	—			43,182		64,640			—			107,822
Intangible assets, net	31,525			112,026		25,848			—			169,399
Net investment in and advances to (from) subsidiaries	1,012,661			627,422		(363,414		)	(1,276,669		)	—
Deferred income taxes	—			—		2,582			—			2,582
Other noncurrent assets	297			8,870		16,885			—			26,052
Total assets	$	1,051,579		$	1,089,540	$	595,374		$	(1,279,492	)	$	1,457,001
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	410		$	—	$	2,062		$	—		$	2,472
Accounts payable and accrued liabilities	36,510			61,950		209,201			—			307,661
Income taxes payable	369			—		3,244			—			3,613
Deferred income taxes	—			—		188			1,148			1,336
Current portion of long-term debt	3,039			—		10,758			—			13,797
Total current liabilities	40,328			61,950		225,453			1,148			328,879
Long-term debt	850,767			—		29,632			—			880,399
Deferred income taxes	974			8,053		22,278			(3,970		)	27,335
Other noncurrent liabilities	1,810			31,372		28,663			—			61,845
Total liabilities	893,879			101,375		306,026			(2,822		)	1,298,458
Common stock	—			—		16,966			(16,966		)	—
Polymer Group, Inc. shareholders’ equity	157,700			988,165		271,539			(1,259,704		)	157,700
Noncontrolling interests	—			—		843			—			843
Total equity	157,700			988,165		289,348			(1,276,670		)	158,543
Total liabilities and equity	$	1,051,579		$	1,089,540	$	595,374		$	(1,279,492	)	$	1,457,001

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 28, 2014



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	—		$	147,350		$	308,021		$	(15,473	)	$	439,898
Cost of goods sold	(93		)	(116,851		)	(252,516		)	15,473			(353,987		)
Gross profit	(93		)	30,499			55,505			—			85,911
Selling, general and administrative expenses	(12,101		)	(15,404		)	(37,868		)	—			(65,373		)
Special charges, net	(14,972		)	(1,681		)	(7,611		)	—			(24,264		)
Other operating, net	—			509			(4,364		)	—			(3,855		)
Operating income (loss)	(27,166		)	13,923			5,662			—			(7,581		)
Other income (expense):
Interest expense	(24,225		)	(482		)	(6,948		)	—			(31,655		)
Intercompany royalty and technical service fees	(9,893		)	1,140			8,753			—			—
Foreign currency and other, net	12,117			(678		)	(1,436		)	—			10,003
Equity in earnings of subsidiaries	24,258			(1,712		)	—			(22,546		)	—
Income (loss) before income taxes	(24,909		)	12,191			6,031			(22,546		)	(29,233		)
Income tax (provision) benefit	3,340			12,166			(10,119		)	—			5,387
Net income (loss)	(21,569		)	24,357			(4,088		)	(22,546		)	(23,846		)
Less: Earnings attributable to noncontrolling interests	—			—			(2,277		)	—			(2,277		)
Net income (loss) attributable to Polymer Group, Inc.	$	(21,569	)	$	24,357		$	(1,811	)	$	(22,546	)	$	(21,569	)
Comprehensive income (loss) attributable to Polymer Group, Inc.	$	(19,566	)	$	26,562		$	1,140		$	(27,702	)	$	(19,566	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Three Months Ended June 29, 2013



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	—		$	89,817		$	206,389		$	(4,668	)	$	291,538
Cost of goods sold	(11		)	(74,870		)	(170,935		)	4,668			(241,148		)
Gross profit	(11		)	14,947			35,454			—			50,390
Selling, general and administrative expenses	(14,331		)	(6,004		)	(19,036		)	—			(39,371		)
Special charges, net	(471		)	(103		)	(1,176		)	—			(1,750		)
Other operating, net	16			(145		)	(835		)	—			(964		)
Operating income (loss)	(14,797		)	8,695			14,407			—			8,305
Other income (expense):
Interest expense	(12,246		)	3,086			(3,163		)	—			(12,323		)
Intercompany royalty and technical service fees	1,428			1,697			(3,125		)	—			—
Foreign currency and other, net	2			(150		)	(752		)	—			(900		)
Equity in earnings of subsidiaries	15,630			1,872			—			(17,502		)	—
Income (loss) before income taxes	(9,983		)	15,200			7,367			(17,502		)	(4,918		)
Income tax (provision) benefit	2,077			458			(5,523		)	—			(2,988		)
Net income (loss)	$	(7,906	)	$	15,658		$	1,844		$	(17,502	)	$	(7,906	)
Comprehensive income (loss) attributable to Polymer Group, Inc.	$	(5,477	)	$	8,930		$	(44	)	$	(8,886	)	$	(5,477	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 28, 2014



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	—		$	296,246		$	594,687		$	(28,451	)	$	862,482
Cost of goods sold	(130		)	(239,270		)	(491,732		)	28,451			(702,681		)
Gross profit	(130		)	56,976			102,955			—			159,801
Selling, general and administrative expenses	(23,030		)	(29,440		)	(68,437		)	—			(120,907		)
Special charges, net	(18,937		)	(2,214		)	(11,824		)	—			(32,975		)
Other operating, net	11			299			(5,234		)	—			(4,924		)
Operating income (loss)	(42,086		)	25,621			17,460			—			995
Other income (expense):
Interest expense	(44,156		)	6,601			(12,006		)	—			(49,561		)
Intercompany royalty and technical service fees	(7,198		)	2,793			4,405			—			—
Foreign currency and other, net	22,916			(125		)	(7,829		)	—			14,962
Equity in earnings of subsidiaries	31,969			(10,138		)	—			(21,831		)	—
Income (loss) before income taxes	(38,555		)	24,752			2,030			(21,831		)	(33,604		)
Income tax (provision) benefit	6,931			7,251			(14,495		)	—			(313		)
Net income (loss)	(31,624		)	32,003			(12,465		)	(21,831		)	(33,917		)
Less: Earnings attributable to noncontrolling interests	—			—			(2,293		)	—			(2,293		)
Net income (loss) attributable to Polymer Group, Inc.	$	(31,624	)	$	32,003		$	(10,172	)	$	(21,831	)	$	(31,624	)
Comprehensive income (loss) attributable to Polymer Group, Inc.	$	(27,934	)	$	35,706		$	(5,177	)	$	(30,529	)	$	(27,934	)

Condensed Consolidating Statement of Comprehensive Income (Loss)

For the Six Months Ended June 29, 2013



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	—		$	182,829		$	405,918		$	(10,127	)	$	578,620
Cost of goods sold	(36		)	(156,714		)	(335,741		)	10,127			(482,364		)
Gross profit	(36		)	26,115			70,177			—			96,256
Selling, general and administrative expenses	(23,975		)	(11,764		)	(37,974		)	—			(73,713		)
Special charges, net	(1,826		)	(139		)	(1,589		)	—			(3,554		)
Other operating, net	18			(222		)	(1,100		)	—			(1,304		)
Operating income (loss)	(25,819		)	13,990			29,514			—			17,685
Other income (expense):
Interest expense	(22,474		)	6,187			(8,120		)	—			(24,407		)
Intercompany royalty and technical service fees	2,756			3,304			(6,060		)	—			—
Foreign currency and other, net	—			(247		)	(2,073		)	—			(2,320		)
Equity in earnings of subsidiaries	27,155			5,690			—			(32,845		)	—
Income (loss) before income taxes	(18,382		)	28,924			13,261			(32,845		)	(9,042		)
Income tax (provision) benefit	4,249			(1,687		)	(7,653		)	—			(5,091		)
Net income (loss)	$	(14,133	)	$	27,237		$	5,608		$	(32,845	)	$	(14,133	)
Comprehensive income (loss) attributable to Polymer Group, Inc.	$	(15,380	)	$	25,035		$	5,339		$	(30,374	)	$	(15,380	)

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 28, 2014



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	194,945		$	148,994		$	(333,947	)	$	—		$	9,992
Investing activities:
Purchases of property, plant and equipment	(1,703		)	(16,422		)	(15,675		)	—			(33,800		)
Proceeds from the sale of assets	—			—			47			—			47
Acquisition of intangibles and other	(124		)	—			—			—			(124		)
Acquisitions, net of cash acquired	(356,039		)	—			—			—			(356,039		)
Intercompany investing activities, net	(372,158		)	(399,794		)	(6,450		)	778,402			—
Net cash provided by (used in) investing activities	(730,024		)	(416,216		)	(22,078		)	778,402			(389,916		)
Financing activities:
Proceeds from long-term borrowings	523,000			—			152			—			523,152
Proceeds from short-term borrowings	1,265			—			16,156			—			17,421
Repayment of long-term borrowings	(3,808		)	—			(4,049		)	—			(7,857		)
Repayment of short-term borrowings	(956		)	—			(4,893		)	—			(5,849		)
Loan acquisition costs	(21,312		)	—			—			—			(21,312		)
Intercompany financing activities, net	35,118			375,578			367,706			(778,402		)	—
Net cash provided by (used in) financing activities	533,307			375,578			375,072			(778,402		)	505,555
Effect of exchange rate changes on cash	—			—			(499		)	—			(499		)
Net change in cash and cash equivalents	(1,772		)	108,356			18,548			—			125,132
Cash and cash equivalents at beginning of period	2,068			13,103			70,893			—			86,064
Cash and cash equivalents at end of period	$	296		$	121,459		$	89,441		$	—		$	211,196

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 29, 2013



In thousands	PGI (Issuer)			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(10,239	)	$	22,547		$	(13,926	)	$	—		$	(1,618	)
Investing activities:
Purchases of property, plant and equipment	(23,207		)	(1,658		)	(1,635		)	—			(26,500		)
Proceeds from the sale of assets	—			—			75			—			75
Acquisition of intangibles and other	(135		)	—			—			—			(135		)
Intercompany investing activities, net	5,766			(28,500		)	(4,000		)	26,734			—
Net cash provided by (used in) investing activities	(17,576		)	(30,158		)	(5,560		)	26,734			(26,560		)
Financing activities:
Issuance of common stock	(232		)	—			—			—			(232		)
Proceeds from long-term borrowings	—			—			14,177			—			14,177
Proceeds from short-term borrowings	1,879			—			—			—			1,879
Repayment of long-term borrowings	(65		)	—			(3,252		)	—			(3,317		)
Repayment of short-term borrowings	(1,554		)	—			—			—			(1,554		)
Loan acquisition costs	—			—			—			—			—
Intercompany financing activities, net	28,000			(1,766		)	500			(26,734		)	—
Net cash provided by (used in) financing activities	28,028			(1,766		)	11,425			(26,734		)	10,953
Effect of exchange rate changes on cash	—			—			(183		)	—			(183		)
Net change in cash and cash equivalents	213			(9,377		)	(8,244		)	—			(17,408		)
Cash and cash equivalents at beginning of period	486			28,285			69,108			—			97,879
Cash and cash equivalents at end of period	$	699		$	18,908		$	60,864		$	—		$	80,471