EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial information herein is based upon the historical consolidated financial statements of the Company, Fiberweb and Providência and has been prepared to illustrate the effects of the Fiberweb Acquisition, the Fiberweb Refinancing and the Transactions.¹ The accompanying unaudited pro forma condensed combined statement of operations for the three months ended March 29, 2014, the three months ended March 30, 2013, the year ended December 28, 2013 and the twelve months ended March 29, 2014 have been prepared to give pro forma effect to the Fiberweb Acquisition, the Fiberweb Refinancing and the Transactions as if they had occurred on December 30, 2012. The accompanying unaudited pro forma condensed combined balance sheet as of March 29, 2014 has been prepared to give pro forma effect to the Fiberweb Acquisition, the Fiberweb Refinancing and the Transactions as if they had occurred on March 29, 2014. The unaudited pro forma condensed combined statement of operations data for the twelve month period ended March 29, 2014 have been derived by adding the unaudited pro forma condensed combined statement of operations data for the fiscal year ended December 28, 2013 and the unaudited pro forma condensed combined statement of operations data the three month period ended March 29, 2014 and subtracting the unaudited pro forma condensed combined statement of operations data for the three month period ended March 30, 2013.

The following unaudited pro forma condensed combined balance sheet information includes only factually supportable adjustments that are directly attributable to the Fiberweb Acquisition, the Fiberweb Refinancing or the Transactions, as applicable, regardless of whether they have a continuing impact or are nonrecurring. The following unaudited pro forma condensed combined statements of operations include only factually supportable adjustments that are directly attributable to the Fiberweb Acquisition, the Fiberweb Refinancing or the Transactions, as applicable, and are expected to have a continuing impact. The unaudited pro forma condensed combined financial statements are based on preliminary estimates and assumptions, which have been made solely for the purposes of developing such pro forma information. The Providência Acquisition has been accounted for using the acquisition method of accounting in accordance with current accounting guidance for business combinations and non-controlling interest. As a result, the total purchase price has been preliminarily allocated to the net tangible and intangible assets acquired and liabilities assumed of Providência based on their estimated fair values. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed is recognized as goodwill. The preliminary allocation reflects management’s best estimates of fair value, which are based on certain assumptions relating to the Providência Acquisition, including prior acquisition experience, benchmarking of similar acquisitions and historical data. In addition, portions of the preliminary allocation are dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Upon completion of detailed valuation studies and the final determination of fair value, the Company may make additional adjustments to the fair value allocation, which may differ significantly from the valuations set forth in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined statements of operations also include certain purchase accounting adjustments such as increased depreciation and amortization expense on acquired tangible and intangible assets, increased interest expense on the debt incurred in connection with the Providência Acquisition as well as the tax impacts related to these adjustments. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable. In addition, the unaudited pro forma condensed combined financial information include adjustments, which are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes.

¹	The term “Transactions” refers to the completion of our acquisition of 71.25% of the capital stock of Providência, the completion of the proposed financing transactions and the payment of related fees and expenses.

The unaudited pro forma condensed combined financial information has been presented for informational purposes only and is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the Fiberweb Acquisition, the Fiberweb Refinancing or the Transactions, as applicable, been completed as of the dates indicated, nor is it necessarily indicative of the future operating results or financial position of the combined company. As a result, they do not reflect future events that may occur after the Transactions, including the potential realization of any cost savings from operating efficiencies, synergies, restructuring or any other costs relating to the integration of the Providência. Therefore, the actual amounts recorded as of date of acquisition and thereafter may differ from the information presented herein. The information presented below should be read in conjunction with the historical financial statements of the Company, Providência and Fiberweb including the related notes, incorporated by reference in this offering memorandum. See “Summary — Summary Historical and Pro Forma Condensed Combined Financial Information,” “Summary — Summary Historical Consolidated Financial Information of Providência” and “Summary — Summary Historical Consolidated Financial Information of Fiberweb.”

Unaudited Pro Forma Condensed Combined Balance Sheet

As of March 29, 2014


	PGI			Providência As Adjusted(1)			Pro Forma Adjustments(2)				Combined
	in thousands
ASSETS
Current assets:
Cash and cash equivalents	$	59,640		$	20,948		$	88,356		G	$	168,944
Accounts receivable, net		213,301			70,157			—		A		283,458
Inventories, net		152,282			29,444			3,556		B		185,282
Deferred income taxes		3,023			3,870			—				6,893
Other current assets		76,627			33,167			(18,072	)	I		91,722

Total current assets		504,873			157,586			73,840				736,299

Property, plant and equipment, net		611,016			324,839			75,161		C		1,011,016
Goodwill		120,305			143,403			(143,403	)	D		200,789
								80,484		F
Intangible assets, net		164,405			24,726			(24,726	)	D		184,555
								4,500		E
								15,650		H
Deferred income taxes		2,499			4,280			—				6,779
Other noncurrent assets		26,939			4,757			—				31,696

Total assets	$	1,430,037		$	659,591		$	81,506			$	2,171,134


LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	8,147		$	—		$	—			$	8,147
Accounts payable and accrued expenses		302,094			22,695			—				324,789
Income taxes payable		3,571			922			—				4,493
Deferred income taxes		1,195			—			1,249		K		2,444
Current portion of long-term debt		12,333			42,993			(42,993	)	D		24,953
								12,620		G

Total current liabilities		327,340			66,610			(29,124	)			364,826

Long-term debt		878,656			215,909			(150,935	)	D		1,441,010
								497,380		G
Deferred consideration		—			—			47,228		G		47,228
Deferred income taxes		23,632			15,781			21,564		K		60,977
Other noncurrent liabilities		59,809			423			—				60,232

Total liabilities		1,289,437			298,723			386,113				1,974,273

Commitments and contingencies
Stockholders’ equity:
Common stock		—			180,738			(180,738	)	J		—
Additional paid-in capital		296,407			5,431			(5,431	)	J		296,407
Retained earnings (deficit)		(150,241	)		175,319			(215,254	)	J		(190,176	)
Accumulated other comprehensive income (loss)		(6,419	)		(620	)		620		J		(6,419	)

Total PGI stockholders’ equity		139,747			360,868			(400,803	)			99,812
Noncontrolling interests		853			—			96,196		J		97,049

Total equity		140,600			360,868			(304,607	)			196,861

Total liabilities and equity	$	1,430,037		$	659,591		$	81,506			$	2,171,134

See accompanying notes to unaudited pro forma condensed combined financial statements.

(1)

See Note 5 for additional information on the components included under the heading “Providência As Adjusted.”

(2)

See Note 3 for additional information on the components included under the heading “Pro Forma Adjustments.”

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 29, 2014


	PGI As Reported			Conforming Adjustments(1)			PGI As Adjusted			Providência As Adjusted(2)			Providência Pro Forma Adjustments(3)				Combined
	in thousands
Net sales	$	422,584		$	—		$	422,584		$	89,521		$	—			$	512,105
Cost of goods sold		(347,948	)		2,429			(345,519	)		(69,443	)		(873	)	A		(415,835	)

Gross profit		74,636			2,429			77,065			20,078			(873	)			96,270
Selling, general and administrative expenses		(56,019	)		—			(56,019	)		(15,080	)		(116	)	A		(70,800	)
														415		B
Special charges, net		(8,711	)		—			(8,711	)		—			—				(8,711	)
Other operating, net		(1,069	)		—			(1,069	)		—			—				(1,069	)

Operating income (loss)		8,837			2,429			11,266			4,998			(574	)			15,690
Other income (expense):
Interest expense		(17,906	)		—			(17,906	)		(2,408	)		(6,756	)	C		(27,070	)
Foreign currency and other, net		4,959			—			4,959			(2,778	)		(11,998	)	D		(9,817	)

Income (loss) before income taxes		(4,110	)		2,429			(1,681	)		(188	)		(19,328	)			(21,197	)
Income tax (provision) benefit		(5,700	)		(329	)		(6,029	)		(1,663	)		6,787		E		(905	)

Net income (loss)		(9,810	)		2,100			(7,710	)		(1,851	)		(12,541	)			(22,102	)
Less: Noncontrolling interests		(16	)		—			(16	)		—			(4,138	)	F		(4,154	)

Net income (loss) attributable to PGI	$	(9,794	)	$	2,100		$	(7,694	)	$	(1,851	)	$	(8,403	)		$	(17,948	)

See accompanying notes to unaudited pro forma condensed combined financial statements.

(1)

The following is a summary of the material adjustments reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 29, 2014 under the “Conforming Adjustments” column heading:

•

At acquisition, assets and liabilities of an acquired business are recognized at fair value. Inventory is valued at net realizable value which is the estimated selling price, less the sum of (a) cost of disposal and (b) a reasonable profit margin for the selling effort. Based upon a preliminary valuation analysis, the estimated fair value of acquired inventory related to the Fiberweb Acquisition was $71.1 million. The $9.3 million step up in inventory value was amortized into earnings over the period of the Company’s normal inventory turns, which approximated two months. However, the $2.4 million impact of this adjustment to the current period has been removed in the Unaudited Pro Forma Condensed Combined Statement of Operations since it is nonrecurring in nature.

•

For purposes of the Unaudited Pro Forma Condensed Combined Statement of Operations, the effective tax rate of 37.7% (the Company’s applicable statutory tax rate) has been used to calculate any necessary tax effects associated with these adjustments. Tax amounts associated with the inventory adjustment were recorded using a tax rate of 33.3%, the rate utilized for non-U.S. adjustments.

(2)	See Note 5 for additional information on the components included under the heading “Providência As Adjusted.”

(3)	See Note 4 for additional information on the components included under the heading “Providência Pro Forma Adjustments.”

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 30, 2013


	PGI As Reported			Fiberweb As Adjusted(1)			Fiberweb Pro Forma Adjustments(2)			PGI As Adjusted			Providência As Adjusted(3)			Providência Pro Forma Adjustments(4)				Combined
	in thousands
Net sales	$	287,082		$	118,724		$	—		$	405,806		$	79,057		$	—			$	484,863
Cost of goods sold		(241,216	)		(92,862	)		114			(333,964	)		(57,202	)		(873	)	A		(392,039	)

Gross profit		45,866			25,862			114			71,842			21,855			(873	)			92,824
Selling, general and administrative expenses		(34,342	)		(20,207	)		(1,256	)		(55,805	)		(14,937	)		(116	)	A		(70,418	)
																	440		B
Special charges, net		(1,804	)		(398	)		—			(2,202	)		—			—				(2,202	)
Other operating, net		(340	)		867			—			527			—			—				527

Operating income (loss)		9,380			6,124			(1,142	)		14,362			6,918			(549	)			20,731
Other income (expense):
Interest expense		(12,084	)		(556	)		(4,095	)		(16,735	)		(2,382	)		(6,758	)	C		(25,875	)
Foreign currency and other, net		(1,420	)		—			—			(1,420	)		(1,699	)		—				(3,119	)

Income (loss) before income taxes		(4,124	)		5,568			(5,237	)		(3,793	)		2,837			(7,307	)			(8,263	)
Income tax (provision) benefit		(2,103	)		(1,976	)		1,974			(2,105	)		(1,039	)		2,566		E		(578	)

Net income (loss)		(6,227	)		3,592			(3,263	)		(5,898	)		1,798			(4,741	)			(8,841	)
Less: Noncontrolling interests		—			—			—			—			—			(846	)	F		(846	)

Net income (loss) attributable to PGI	$	(6,227	)	$	3,592		$	(3,263	)	$	(5,898	)	$	1,798		$	(3,895	)		$	(7,995	)

See accompanying notes to unaudited pro forma condensed combined financial statements.

(1)

See Note 6 for additional information on the components included under the heading “Fiberweb As Adjusted.”

(2)

Reflects amounts associated with the acquisition method of accounting, whereby the Fiberweb purchase price is allocated to assets acquired and liabilities assumed based on the preliminary estimate of fair market value of such assets and liabilities at the date of acquisition. Amounts recorded within Operating income (loss) reflect incremental depreciation and amortization associated with the preliminary valuation of property, plant and equipment and identified intangible assets. Amounts recorded within Interest expense reflects incremental interest expense, including $0.2 million of deferred financing costs amortization, associated with borrowings incurred to finance the Fiberweb Acquisition. The effective tax rate of 37.7% (the Company’s applicable statutory tax rate) has been used to calculate any necessary tax effects associated with these adjustments.

(3)

See Note 5 for additional information on the components included under the heading “Providência As Adjusted.”

(4)

See Note 4 for additional information on the components included under the heading “Providência Pro Forma Adjustments.”

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 28, 2013


	PGI As Reported			Fiberweb As Adjusted(1)			Fiberweb Pro Forma Adjustments(2)			PGI As Adjusted			Providência As Adjusted(3)			Providência Pro Forma Adjustments(4)				Combined
	in thousands
Net sales	$	1,214,862		$	397,647		$	—		$	1,612,509		$	360,614		$	—			$	1,973,123
Cost of goods sold		(1,018,456	)		(312,438	)		6,512			(1,324,382	)		(272,343	)		(3,491	)	A		(1,600,216	)

Gross profit		196,406			85,209			6,512			288,127			88,271			(3,491	)			372,907
Selling, general and administrative expenses		(153,412	)		(70,532	)		(3,885	)		(227,829	)		(55,725	)		(464	)	A		(282,340	)
																	1,678		B
Special charges, net		(33,188	)		(15,945	)		15,386			(33,747	)		—			—				(33,747	)
Other operating, net		(2,512	)		2,009			—			(503	)		(1,260	)		—				(1,763	)

Operating income (loss)		7,294			741			18,013			26,048			31,286			(2,277	)			55,057
Other income (expense):
Interest expense		(55,974	)		(2,899	)		(14,007	)		(72,880	)		(12,890	)		(23,721	)	C		(109,491	)
Foreign currency and other, net		(12,185	)		—			—			(12,185	)		(4,866	)		—				(17,051	)

Income (loss) before income taxes		(60,865	)		(2,158	)		4,006			(59,017	)		13,530			(25,998	)			(71,485	)
Income tax (provision) benefit		22,593			(3,520	)		(1,511	)		17,562			(4,828	)		9,131		E		21,865

Net income (loss)		(38,272	)		(5,678	)		2,495			(41,455	)		8,702			(16,867	)			(49,620	)
Less: Noncontrolling interests		(34	)		(127	)		—			(161	)		—			(2,347	)	F		(2,508	)

Net income (loss) attributable to PGI	$	(38,238	)	$	(5,551	)	$	2,495		$	(41,294	)	$	8,702		$	(14,520	)		$	(47,112	)

See accompanying notes to unaudited pro forma condensed combined financial statements.

(1)

See Note 6 for additional information on the components included under the heading “Fiberweb As Adjusted”.

(2)

At acquisition, assets and liabilities of an acquired business are recognized at fair value. Inventory is valued at net realizable value which is the estimated selling price, less the sum of (a) cost of disposal and (b) a reasonable profit margin for the selling effort. Based upon a preliminary valuation analysis, the estimated fair value of acquired inventory related to the Fiberweb Acquisition was $71.1 million. The $9.3 million step up in inventory value was amortized into earnings over the period of the Company’s normal inventory turns, which approximated two months. However, the $6.9 million impact of this adjustment to Cost of goods sold in the current period has been removed in the Unaudited Pro Forma Condensed Combined Statement of Operations since it is nonrecurring in nature. Other nonrecurring charges of $15.4 million related to direct acquisition costs associated with the Fiberweb Acquisition and impacted Special charges, net.

Other amounts recorded within Operating income (loss) reflect incremental depreciation and amortization associated with the preliminary valuation of property, plant and equipment and identified intangible assets. Amounts recorded within Interest expense reflects incremental interest expense, including $0.9 million of deferred financing costs amortization, associated with borrowings incurred to finance the Fiberweb Acquisition.

(3)

See Note 5 for additional information on the components included under the heading “Providência As Adjusted.”

(4)

See Note 4 for additional information on the components included under the heading “Providência Pro Forma Adjustments.”

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Twelve Months Ended March 29, 2014


	Pro Forma Full Year 2013			Pro Forma First Quarter 2014			Pro Forma First Quarter 2013			Pro Forma Twelve Months Ended March 29, 2014
	in thousands
Net sales	$	1,973,123		$	512,105		$	484,863		$	2,000,365
Cost of goods sold		(1,600,216	)		(415,835	)		(392,039	)		(1,624,012	)

Gross profit		372,907			96,270			92,824			376,353
Selling, general and administrative expenses		(282,340	)		(70,800	)		(70,418	)		(282,722	)
Special charges, net		(33,747	)		(8,711	)		(2,202	)		(40,256	)
Other operating, net		(1,763	)		(1,069	)		527			(3,359	)

Operating income (loss)		55,057			15,690			20,731			50,016
Other income (expense):
Interest expense		(109,491	)		(27,070	)		(25,875	)		(110,686	)
Foreign currency and other, net		(17,051	)		(9,817	)		(3,119	)		(23,749	)

Income (loss) before income taxes		(71,485	)		(21,197	)		(8,263	)		(84,419	)
Income tax (provision) benefit		21,865			(905	)		(578	)		21,538

Net income (loss)		(49,620	)		(22,102	)		(8,841	)		(62,881	)
Less: Noncontrolling interests		(2,508	)		(4,154	)		(846	)		(5,816	)

Net income (loss) attributable to PGI	$	(47,112	)	$	(17,948	)	$	(7,995	)	$	(57,065	)

The unaudited pro forma condensed combined statement of operations data for the twelve month period ended March 29, 2014 have been derived by adding the unaudited pro forma condensed combined statement of operations data for the fiscal year ended December 28, 2013 and the unaudited pro forma condensed combined statement of operations data the three month period ended March 29, 2014 and subtracting the unaudited pro forma condensed combined statement of operations data for the three month period ended March 30, 2013.

Notes to Unaudited Pro Forma Condensed Combined Financial Information

Note 1. Basis of Presentation

Following the Providência Acquisition, we will indirectly own 71.25% of the outstanding capital stock of Providência. Within 30 days of the completion of the Providência Acquisition, Acquisition Co. will commence the Mandatory Tender Offer. While we intend to acquire the remaining shares of Providência pursuant to the Mandatory Tender Offer, there is no assurance that we will be able to do so. If we do acquire more shares, our balance sheet will reflect lower cash and minority interests and our combined statements of operations will reflect lower minority interest expense for the percentage of Providência capital stock that we acquire. Assuming all shares outstanding that will not be owned by Acquisition Co. after the closing of the Providência Acquisition are tendered by the minority shareholders on the same terms and price per share as that payable to the Sellers under the Stock Purchase Agreement, the total consideration for the Mandatory Tender Offer would be approximately R$228.2 million (or $100.8 million), payable as follows: (1) R$184.3 million (or $81.4 million) would be due on the closing date of the Mandatory Tender Offer, of which (i) approximately R$176.7 million (or $78.1 million) would be paid to the tendering minority shareholders and (ii) R$7.6 million (or $3.4 million) would be deposited into an escrow account to guarantee certain indemnification obligations, which amount would be released to the tendering minority shareholders if such obligations are not due, and (2) approximately R$43.1 million (or $19.0 million) would constitute deferred purchase price, which would accrete at a rate of 9.5% per annum accrued daily, and paid to the tendering minority shareholders to the extent certain existing and potential tax claims of Providência are resolved. For the purposes of the following unaudited pro forma condensed combined financial information, we have assumed that we only own 71.25% of the outstanding capital stock of Providência. Certain amounts in the Providência consolidated financial statements have been reclassified to conform to the Company’s basis of presentation.

The historical financial statements of Providência and Fiberweb have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Any measurement differences in accounting principles between IFRS and U.S. Generally Accepted Accounting Principles (“GAAP”) as they apply to Providência or Fiberweb have been adjusted to reflect results in accordance with GAAP. Adjustments have also been made to conform Providência’s accounting policies to the Company’s. Providência has historically reported its financial statements in its local currency, the Brazilian Real (“BRL” or R$). In order to present the pro forma condensed combined financial statements in U.S. dollars, Providência’s balance sheet has been translated using the spot rate on March 29, 2014, and each of Providência’s statement of operations have been translated using the average rate for the applicable period. Adjustments have also been made to conform Fiberweb’s accounting policies to the Company’s. Fiberweb has historically reported its financial information in its local currency, British pounds sterling (“GBP” or £). In order to present the pro forma condensed combined financial statements in U.S. dollars, Fiberweb’s balance sheet data have been translated using the spot rate on March 29, 2014, and Fiberweb’s statement of operations data have been translated using the average rate for the applicable period. Certain reclassifications of amounts reported by Providência and Fiberweb have been made to conform with the Company’s presentation.

Note 2. Preliminary Estimated Purchase Price Allocation

The Providência Acquisition has been accounted for using the acquisition method of accounting in accordance with current accounting guidance for business combinations and non-controlling interest. As a result, the total purchase price has been preliminarily allocated to the net tangible and intangible assets acquired and liabilities assumed of Providência based on their estimated fair values. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed is recognized as goodwill.

The preliminary allocation of the purchase price, as if the Providência Acquisition occurred on March 29, 2014, is as follows:


	March 29, 2014
	in thousands
Cash	$	20,948
Accounts receivable		70,157
Inventory		33,000
Other current assets		29,840
Property and equipment		400,000
Intangible assets		4,500
Other assets		9,037

Total assets acquired		567,482
Accounts payable and accrued expenses		22,695
Other liabilities		1,345
Long-term debt		64,974
Deferred income taxes		38,594
Noncontrolling interest		96,196

Total liabilities assumed		223,804
Net assets acquired		343,678
Goodwill		80,484

Purchase price allocation	$	424,162

Note 3. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

The following is a summary of pro forma adjustments reflected in the Unaudited Pro Forma Condensed Combined Balance Sheet. These adjustments are based on preliminary estimates, which may change as additional information is obtained:

At acquisition, assets and liabilities of an acquired business are to be recognized at fair value. Accounts receivable are valued under an “in use” premise where a market participant would acquire the business and collect the accounts receivables in the normal course of business assuming their highest and best use. Therefore, the Company estimated that the current value of Providência’s accounts receivables reflects their fair value as of March 29, 2014.

At acquisition, assets and liabilities of an acquired business are to be recognized at fair value. Inventory is valued at net realizable value which is the estimated selling price, less the sum of (a) cost of disposal and (b) a reasonable profit margin for the selling effort. Based upon a preliminary valuation analysis, for the purpose of these pro forma condensed combined financial statements, the estimated fair value of acquired inventory is $33.0 million. The impact of this adjustment is not reflected in the Unaudited Pro Forma Condensed Combined Statements of Operations since it is expected to be nonrecurring in nature.

At acquisition, property, plant and equipment is required to be measured at fair value. Based upon a preliminary valuation analysis, for the purpose of these pro forma condensed combined financial

statements, the estimated fair value of acquired property, plant and equipment of Providência is $400.0 million. The preliminary fair value has been estimated using the cost approach in which the concept of replacement is used as an indicator of fair value. As a result, the Company recorded an $75.2 million adjustment to property, plant and equipment to reflect the fair value adjustment as of March 29, 2014.

Represents the elimination of Providência’s pre-acquisition goodwill and other identifiable intangible assets of $143.4 million and $24.7 million, respectively. In addition, the adjustments reflect the expected repayment of approximately $193.9 million (of which $49.0 million is presented within Current portion of long-term debt) of Providência’s debt in connection with the Providência Acquisition.

Based upon a preliminary valuation analysis of Providência, for the purpose of these pro forma condensed combined financial information, the Company identified a finite-lived customer relationship intangible asset with an estimated fair value of $4.5 million. The preliminary fair value has been estimated based on an income approach methodology using the multi-period excess earnings method.

Represents the excess of the purchase price over the fair value of identified assets acquired and liabilities assumed.

In connection with the Providência Acquisition, we expect to borrow $310.0 million of Additional Term Loans pursuant to the Incremental Amendment and issue $200.0 million aggregate principal amount of senior unsecured notes offered hereby. These amounts are recorded under Long-term debt, less the current portion, in the Condensed Combined Balance Sheets as the Additional Term Loans and the senior unsecured notes due in 2019.

A reconciliation of the sources to fund the purchase price consideration is as follows:


	Increase / (Decrease)
	in thousands
Additional Term Loans	$	310,000
Senior unsecured notes offered hereby		200,000

Total Debt		510,000
Deferred consideration		47,228

Total funding		557,228
Less:
Debt issuance costs		(15,650	)
Transaction costs		(29,060	)
Cash to balance sheet		(88,356	)

Net sources to fund the purchase price consideration	$	424,162

The aggregate purchase price for the Providência Acquisition is $424.2 million, including $47.2 million of deferred consideration to be paid to the majority shareholders to the extent certain existing and potential tax claims of Providência are resolved.

Reflects $15.7 million of assumed deferred financing costs incurred in connection with the $310.0 million of Additional Term Loans and the issuance of $200.0 million aggregate principal amount of senior unsecured notes. These costs will be deferred and recognized over the respective term of the Term Loan and the life of the senior unsecured notes using the straight-line method. Per current accounting guidance, transaction costs are expensed as incurred and therefore, reflected in Retained earnings (deficit). However, the impact of transaction costs related to the Transactions have not been reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations since these costs are expected to be nonrecurring in nature.

Reflects the elimination of $6.5 million of derivative financial instruments associated with Providência’s outstanding debt at the date of acquisition. Other related amounts associated with the debt repayment reflect the elimination of $0.7 million in deferred financing costs. In addition, the Company entered into a financial instrument with a third-party financial institution to minimize foreign exchange risk on the consideration paid for the Providência Acquisition. As of March 29, 2014, the fair value of the financial instrument was $10.9 million, which was eliminated as of the date of acquisition.

Reflects the elimination of the separate components of Providência’s historical stockholders’ equity assuming the purchase of the 71.25% controlling interest.

Reflects an adjustment to deferred taxes associated with the preliminary valuation analysis of intangible assets assuming an effective tax rate of 35.1% (the Company’s applicable statutory tax rate).

Note 4. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments

The following is a summary of pro forma adjustments reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations. These adjustments are based on preliminary estimates, which may change as additional information is obtained:

Reflects the increase in depreciation expense as a result of the preliminary allocation of the purchase price to Providência’s property, plant and equipment. The estimated useful life of the property, plant and equipment is considered to be 19 years. The estimated useful lives have been determined based upon historical acquisition experience, economic factors and future cash flows.

Reflects the increase in amortization expense as a result of the preliminary allocation of the purchase price to the creation of the finite-lived customer relationship intangible asset. The average estimated useful life of the intangible asset is considered to be 15 years, determined based upon various accounting studies, historical acquisition experience, economic factors and future cash flows. The adjustment is net of historical amounts recorded for previously established intangible assets recorded by Providência that have been eliminated due to the Providência Acquisition.

Represents the estimated increase in interest expense associated with borrowing $310.0 million of Additional Term Loans pursuant to the Incremental Amendment and issuance of $200.0 million aggregate principal amount of senior unsecured notes offered hereby in connection with the Providência Acquisition, assuming a blended annual interest rate of 5.9% in respect of such new indebtedness. A 0.125% change in the weighted average interest rate in respect of the Additional Term Loans and the senior unsecured notes offered hereby would change our annual pro forma cash interest expense by approximately $0.6 million. In addition, the amortization of estimated deferred financing costs was included to determine the total increase in interest expense.

During the three months ended March 29, 2014, the Company entered into a series of financial instruments used to minimize foreign exchange risk on the future consideration to be paid for the Providência Acquisition and the deferred consideration. For purposes of the pro forma condensed combined financial statements, the impact of such financial instruments in place related to the Providência Acquisition has been eliminated.

For purposes of the pro forma condensed combined financial statements, the effective rate of 35.1% (the Company’s applicable statutory tax rate) has been used for all periods presented to calculate the tax effect associated with the pro forma adjustments. The rate is an estimate and does not take into account future tax strategies that may apply to the entire Company.

Noncontrolling interest represents the minority partners’ interest in the income or loss of consolidated subsidiaries which are not wholly-owned by the Company. For the purposes of the following unaudited pro forma condensed combined financial information, we have assumed that we only own 71.25% of the outstanding capital stock of Providência.

Note 5. Providência Historical Financial Information

Financial information reported under the column heading “Providência As Adjusted” has been adjusted to represent Providência’s historical financial information issued under GAAP and further adjusted to conform with the Company’s accounting policies. In addition, the financial information has been translated from Providência’s local currency, the Brazilian Real, to the U.S. dollar. A reconciliation of Providência’s historical balance sheet to amounts presented in the Unaudited Pro Forma Condensed Combined Balance Sheet under the column heading “Providência As Adjusted” is as follows:

Providência

Consolidated Balance Sheet

IFRS to GAAP Reconciliation

As of March 29, 2014


	Providência As Reported (BRL)			Providência Translated(A) (USD)			Conforming Adjustments(B) (USD)				Providência As Adjusted (USD)
	in thousands
ASSETS
Current assets:
Cash and cash equivalents	R$	47,404		$	20,948		$	—			$	20,948
Accounts receivable, net		165,408			73,094			(2,937	)	E		70,157
Inventories, net		77,677			34,325			(4,881	)	E		29,444
Deferred income taxes		—			—			3,870		D,E		3,870
Other current assets		73,514			32,486			681		D		33,167

Total current assets		364,003			160,853			(3,267	)			157,586

Property, plant and equipment, net		853,866			377,323			(52,484	)	C,E		324,839
Goodwill		—			—			143,403		B		143,403
Intangible assets, net		41,176			18,196			6,530		D		24,726
Deferred income taxes		35,402			15,644			(11,364	)	D		4,280
Other noncurrent assets		10,766			4,757			—				4,757

Total assets	R$	1,305,213		$	576,773		$	82,818			$	659,591

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	R$	—		$	—		$	—			$	—
Accounts payable and accrued expenses		51,356			22,695			—				22,695
Income taxes payable		2,470			1,091			(169	)			922
Deferred income taxes		—			—			—				—
Current portion of long-term debt		95,750			42,312			681		D		42,993

Total current liabilities		149,576			66,098			512				66,610

Long-term debt		473,954			209,440			6,469		D		215,909
Deferred income taxes		16,455			7,271			8,510		D		15,781
Deferred consideration		—			—			—				—
Other noncurrent liabilities		957			423			—				423

Total liabilities		640,942			283,232			15,491				298,723

Commitments and contingencies
Stockholders’ equity:
Common stock		409,003			180,738			—				180,738
Additional paid-in capital		12,439			5,497			(66	)			5,431
Retained earnings (deficit)		244,231			107,926			67,393				175,319
Accumulated other comprehensive income (loss)		(1,402	)		(620	)		—				(620	)

Total PGI stockholders’ equity		664,271			293,541			67,327				360,868
Noncontrolling interest		—			—			—				—

Total equity		664,271			293,541			67,327				360,868

Total liabilities and equity	R$	1,305,213		$	576,773		$	82,818			$	659,591

The following is a summary of the material adjustments reflected in the IFRS to GAAP Reconciliation for amounts reported in the Unaudited Pro Forma Condensed Combined Balance Sheet under the “Providência As Adjusted” column heading:

Historical financial information of Providência has been translated to U.S. Dollars using the March 29, 2014 spot rate of R$0.4419 to $1.00.

The Company has updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with a 2007 transaction whereby Providência was acquired by a group of private investors for an aggregate purchase price of R$932 million. In addition, the Company has further updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with the 2007 acquisition of ISOFILME by Providência, which was purchased for an aggregate purchase price of R$43.0 million. The transaction increased fixed assets by $62.6 million, increased goodwill by $143.4 million and reduced deferred taxes assets by $57.6 million.

Providência adopted IFRS during 2010. As part of the first time adoption, a retrospective revaluation adjustment was allowed to adjust the historical cost of property, plant and equipment to its current fair value with a corresponding adjustment to equity. Under GAAP, property, plant and equipment is recognized at historical cost and revaluation adjustments are not permitted. As a result, the Company has updated the balance sheet to properly reflect amounts under GAAP which included a $97.5 million reduction in fixed assets and a $33.2 million reduction in deferred taxes liabilities.

Under IFRS, all deferred taxes are recorded as noncurrent amounts. Under GAAP, deferred tax assets and liabilities must be classified as either current or noncurrent, governed by the classification of the related asset or liability that gives rise to the tax asset or liability. As a result, the Company has made appropriate reclassifications to properly present deferred tax amounts under GAAP. Other reclassifications include $6.5 million of deferred financing costs classified as intangible assets under GAAP previously classified as long-term debt.

The Company has made adjustments to conform Providência’s accounting policies to the Company’s. Areas include capitalization thresholds for expenditures, the useful lives of property, plant and equipment, the alignment of inventory and bad debt reserves as well as the alignment of revenue recognition policies. As a result, the balance sheet was adjusted to reduce accounts receivable by $2.9 million, inventory by $4.9 million, fixed assets by $17.5 million and deferred tax liabilities by $5.6 million.

A reconciliation of Providência’s historical income statements to amounts presented in the Unaudited Pro Forma Condensed Combined Statement of Operations under the column heading “Providência As Adjusted” is as follows:

Providência

Consolidated Statement of Operations

IFRS to GAAP Reconciliation

For the Three Months Ended March 29, 2014


	Providência As Reported (BRL)			Providência Translated (USD)(A)			Conforming Adjustments (USD)(B)				Providência As Adjusted (USD)
	in thousands
Net sales	R$	211,749		$	89,570		$	(49	)	D	$	89,521
Cost of goods sold		(160,554	)		(67,915	)		(1,528	)	C,D		(69,443	)

Gross profit		51,195			21,655			(1,577	)			20,078
Selling, general and administrative expenses		(35,560	)		(15,042	)		(38	)			(15,080	)
Special charges, net		—			—			—				—
Other operating, net		—			—			—				—

Operating income (loss)		15,635			6,613			(1,615	)			4,998
Other income (expense):
Interest expense		(5,693	)		(2,408	)		—				(2,408	)
Foreign currency and other, net		(6,256	)		(2,646	)		(132	)			(2,778	)

Income (loss) before income taxes		3,686			1,559			(1,747	)			(188	)
Income tax (provision) benefit		(5,336	)		(2,257	)		594		E		(1,663	)

Net income (loss)	R$	(1,650	)	$	(698	)	$	(1,153	)		$	(1,851	)

The following is a summary of the material adjustments reflected in the IFRS to GAAP Reconciliation for amounts reported in the Unaudited Pro Forma Condensed Combined Statement of Operations under the “Providência As Adjusted” column heading:

Historical financial information of Providência has been translated to U.S. Dollars using the weighted-average rate for the respective period. For the three months ended March 29, 2014, the weighted-average rate was R$0.4230 to $1.00.

The Company has updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with a 2007 transaction whereby Providência was acquired by a group of private investors for an aggregate purchase price of R$932 million. In addition, the Company has further updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with the 2007 acquisition of ISOFILME by Providência, which was purchased for an aggregate purchase price of R$43.0 million. As a result of the adjustments made to the balance sheet for these transactions, the Company increased Cost of goods sold by $0.7 million to reflect ongoing activities.

Providência adopted IFRS during 2010. As part of the first time adoption, a retrospective revaluation adjustment was allowed to adjust the historical cost of property, plant and equipment to its current fair value with a corresponding adjustment to equity. Under GAAP, property, plant and equipment is recognized at historical cost and revaluation adjustment are not permitted. As a result, the Company has updated the balance sheet to properly reflect amounts under GAAP which included a $1.6 million reduction in Cost of goods sold.

the alignment of inventory and bad debt reserves as well as the alignment of revenue recognition policies. Related impacts to the Statement of Operations increased Cost of goods sold by $2.5 million.

For purposes of the IFRS to GAAP reconciliation, the effective tax rate of 35.1% (the Company’s applicable statutory tax rate) has been used to calculate any necessary tax effects associated with these adjustments. The rate is an estimate and does not take into account future tax strategies that may apply to the entire Company.

Providência

Consolidated Statement of Operations

IFRS to GAAP Reconciliation

For the Three Months Ended March 30, 2013


	Providência As Reported (BRL)			Providência Translated(A) (USD)			Conforming Adjustments(B) (USD)				Providência As Adjusted (USD)
	in thousands
Net sales	R$	160,609		$	80,481		$	(1,424	)	D	$	79,057
Cost of goods sold		(114,921	)		(57,587	)		385		C,D		(57,202	)

Gross profit		45,688			22,894			(1,039	)			21,855
Selling, general and administrative expenses		(29,728	)		(14,896	)		(41	)			(14,937	)
Special charges, net		—			—			—				—
Other operating, net		—			—			—				—

Operating income (loss)		15,960			7,998			(1,080	)			6,918
Other income (expense):
Interest expense		(4,753	)		(2,382	)		—				(2,382	)
Foreign currency and other, net		(3,329	)		(1,668	)		(31	)			(1,699	)

Income (loss) before income taxes		7,878			3,948			(1,111	)			2,837
Income tax (provision) benefit		(2,828	)		(1,417	)		378		E		(1,039	)

Net income (loss)	R$	5,050		$	2,531		$	(733	)		$	1,798

Historical financial information of Providência has been translated to U.S. Dollars using the weighted-average rate for the respective period. For the three months ended March 30, 2013, the weighted-average rate was R$0.5011 to $1.00.

The Company has updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with a 2007 transaction whereby Providência was acquired by a group of private investors for an aggregate purchase price of R$932 million. In addition, the Company has further updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with the 2007 acquisition of ISOFILME by Providência, which was purchased for an aggregate purchase price of R$43.0 million. As a result of the adjustments made to the balance sheet for these transactions, the Company increased Cost of goods sold by $0.8 million to reflect ongoing activities.

Providência adopted IFRS during 2010. As part of the first time adoption, a retrospective revaluation adjustment was allowed to adjust the historical cost of property, plant and equipment to its current fair value with a corresponding adjustment to equity. Under GAAP, property, plant and equipment is recognized at historical cost and revaluation adjustment are not permitted. As a result, the Company has updated the balance sheet to properly reflect amounts under GAAP which included a $1.9 million reduction in Cost of goods sold.

The Company has made adjustments to conform Providência’s accounting policies to the Company’s. Areas include capitalization thresholds for expenditures, the useful lives of property, plant and equipment, the alignment of inventory and bad debt reserves as well as the alignment of revenue recognition policies. Related impacts to the Statement of Operations increased Cost of goods sold by $0.7 million.

Providência

Consolidated Statement of Operations

IFRS to GAAP Reconciliation

For the Year Ended December 28, 2013


	Providência As Reported (BRL)			Providência Translated(A) (USD)			Conforming Adjustments(B) (USD)				Providência As Adjusted (USD)
	in thousands
Net sales	R$	782,002		$	362,458		$	(1,844	)	D	$	360,614
Cost of goods sold		(578,579	)		(268,171	)		(4,172	)	C,D		(272,343	)

Gross profit		203,423			94,287			(6,016	)			88,271
Selling, general and administrative expenses		(119,809	)		(55,531	)		(194	)			(55,725	)
Special charges, net		—			—			—				—
Other operating, net		(2,717	)		(1,260	)		—				(1,260	)

Operating income (loss)		80,897			37,496			(6,210	)			31,286
Other income (expense):
Interest expense		(27,811	)		(12,890	)		—				(12,890	)
Foreign currency and other, net		(11,554	)		(5,356	)		490				(4,866	)

Income (loss) before income taxes		41,532			19,250			(5,720	)			13,530
Income tax (provision) benefit		(14,612	)		(6,773	)		1,945		E		(4,828	)

Net income (loss)	R$	26,920		$	12,477		$	(3,775	)		$	8,702

Historical financial information of Providência has been translated to U.S. Dollars using the weighted-average rate for the respective period. For the year ended December 28, 2013, the weighted-average rate was R$0.4635 to $1.00.

The Company has updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with a 2007 transaction whereby Providência was acquired by a group of private investors for an aggregate purchase price of R$932 million. In addition, the Company has further updated Providência’s balance sheet to reflect certain fair value adjustments required under GAAP associated with the 2007 acquisition of ISOFILME by Providência, which was purchased for an aggregate purchase price of R$43.0 million. As a result of the adjustments made to the balance sheet for these transactions, the Company increased Cost of goods sold by $3.6 million to reflect ongoing activities.

Providência adopted IFRS during 2010. As part of the first time adoption, a retrospective revaluation adjustment was allowed to adjust the historical cost of property, plant and equipment to its current fair value with a corresponding adjustment to equity. Under GAAP, property, plant and equipment is recognized at historical cost and revaluation adjustment are not permitted. As a result, the Company has updated the balance sheet to properly reflect amounts under GAAP which included a $7.2 million reduction in Cost of goods sold.

The Company has made adjustments to conform Providência’s accounting policies to the Company’s. Areas include capitalization thresholds for expenditures, the useful lives of property, plant and equipment, the alignment of inventory and bad debt reserves as well as the alignment of revenue recognition policies. Related impacts to the Statement of Operations increased Cost of goods sold by $7.8 million.

Note 6. Fiberweb Historical Financial Information

On November 15, 2013, PGI Acquisition Limited, our wholly-owned subsidiary, completed the acquisition of the entire issued ordinary share capital of Fiberweb plc (“Fiberweb”) for total cash consideration of approximately £180.1 million (or $287.8 million, based on an exchange rate of £1.00= $1.60), which was funded on November 27, 2013. To fund the cash consideration and to pay certain related fees and expenses, we borrowed $268.0 million under the Secured Bridge Facility and $50.0 million under the Unsecured Bridge Facility. The completion of the acquisition of Fiberweb, the borrowings under the Bridge Facilities and the use of proceeds therefrom are collectively referred to as the “Fiberweb Acquisition.” On December 19, 2013, we entered into the Term Loan Facility and borrowed $295.0 million of Term Loans thereunder. In addition, Blackstone made an additional equity investment of approximately $30.7 million in Holdings, the proceeds of which were contributed as a capital contribution to Parent, which in turn contributed such proceeds to the Issuer as a capital contribution (the “Equity Contribution”). The proceeds of such borrowings under the Term Loans and the Equity Contribution were used to repay in full the amounts outstanding under the Bridge Facilities. Following such repayment, the Bridge Facilities were terminated. The Equity Contribution, the borrowings under the Term Loans and the use of proceeds therefrom are collectively referred to in this offering memorandum as the “Fiberweb Refinancing.” As a result of the Fiberweb Acquisition, the operating results of Fiberweb Limited (formerly Fiberweb plc) have been included in the Company’s historical financial information since November 15, 2013.

Historical financial information reported under the column heading “Fiberweb As Adjusted” has been adjusted to include Fiberweb’s historical results prior to the Fiberweb Acquisition (from January 1, 2013 through November 14, 2013 for the year ended December 28, 2013 and from January 1, 2013 through March 31, 2013 for the three months ended March 30, 2013). Any measurement differences in accounting principles between IFRS and GAAP as they apply to Fiberweb have been adjusted to reflect results in accordance with GAAP and further adjusted to conform with the Company’s accounting policies. In addition, results have been translated from Fiberweb’s local currency, the pounds sterling (“GBP” or “£”), to the U.S. dollar. A reconciliation of Fiberweb’s historical Statements of Operations to amounts presented in the Unaudited Pro Forma Condensed Combined Statement of Operations under the column heading “Fiberweb As Adjusted” is as follows:

Fiberweb

Consolidated Statement of Operations

IFRS to U.S. GAAP Reconciliation

For the Three Months Ended March 30, 2013


	Fiberweb As Reported (GBP)			Fiberweb Translated(A) (USD)			Conforming Adjustments (USD)				Fiberweb As Adjusted (USD)
	in thousands
Net sales	£	76,216		$	118,478		$	246		D	$	118,724
Cost of goods sold		(59,490	)		(92,477	)		(385	)	B,D		(92,862	)

Gross profit		16,726			26,001			(139	)			25,862
Selling, general and administrative expenses		(13,443	)		(20,897	)		690		C,D		(20,207	)
Special charges, net		(256	)		(398	)		—				(398	)
Other operating, net		558			867			—				867

Operating income (loss)		3,585			5,573			551				6,124
Other income (expense):
Interest expense		(118	)		(183	)		(373	)	B		(556	)
Foreign currency and other, net		—			—			—				—

Income (loss) before income taxes		3,467			5,390			178				5,568
Income tax (provision) benefit		(1,228	)		(1,909	)		(67	)	E		(1,976	)

Net income (loss)	£	2,239		$	3,481		$	111			$	3,592

The following is a summary of the material adjustments reflected in the IFRS to U.S. GAAP Reconciliation for amounts reported in the Unaudited Pro Forma Condensed Combined Statement of Operations under the “Fiberweb As Adjusted” column heading for the three months ended March 30, 2013:

Historical financial information of Fiberweb has been translated to U.S. Dollars using the weighted-average rate. For the three months ended March 30, 2013, the weighted-average rate was £1.5545 to $1.00.

The Company has adjusted Property, plant and equipment for a transaction recorded as a sale/leaseback under IFRS. Due to continuing involvement with the property, the Company has recognized the asset and a related financing obligation in accordance with GAAP. Related impacts to the Statement of Operations are included in Cost of goods sold and Interest expense.

The Company has adjusted Accumulated other comprehensive income (loss) for amounts related to defined benefit plans. Under IFRS, actuarial gains and losses are recognized immediately in the statement of operations, whereas these amounts are deferred in Accumulated other comprehensive income (loss) using a corridor approach under GAAP.

The Company has made adjustments to conform Fiberweb’s accounting policies to the Company’s. Areas include capitalization thresholds for expenditures, warranties, the alignment of inventory and bad debt reserves as well as accounting for spare parts inventory. Related impacts to the Statement of Operations increased Cost of goods sold by $0.7 million.

The effective tax rate of 37.7% (the Company’s applicable statutory tax rate) has been used to calculate any necessary tax effects associated with these adjustments. The rate is an estimate and does not take into account future tax strategies that may apply to the entire Company.

Fiberweb

Consolidated Statement of Operations

IFRS to U.S. GAAP Reconciliation

For the Period Ended November 14, 2013


	Fiberweb As Reported (GBP)			Fiberweb Translated(A) (USD)			Conforming Adjustments (USD)				Fiberweb As Adjusted (USD)
	in thousands
Net sales	£	253,997		$	397,404		$	243		D	$	397,647
Cost of goods sold		(199,985	)		(312,897	)		459		B,D		(312,438	)

Gross profit		54,012			84,507			702				85,209
Selling, general and administrative expenses		(45,274	)		(70,836	)		304		C,D		(70,532	)
Special charges, net		(31,870	)		(49,864	)		33,919		E		(15,945	)
Other operating, net		1,459			2,283			(274	)			2,009

Operating income (loss)		(21,673	)		(33,910	)		34,651				741
Other income (expense):
Interest expense		(1,128	)		(1,765	)		(1,134	)	B		(2,899	)
Foreign currency and other, net		—			—			—				—

Income (loss) before income taxes		(22,801	)		(35,675	)		33,517				(2,158	)
Income tax (provision) benefit		(2,347	)		(3,672	)		152		F		(3,520	)

Net income (loss)		(25,148	)		(39,347	)		33,669				(5,678	)
Less: Noncontrolling interests		(81	)		(127	)		—				(127	)

Net income (loss) attributable to PGI	£	(25,067	)	$	(39,220	)	$	33,669			$	(5,551	)

Historical financial information of Fiberweb has been translated to U.S. Dollars using the weighted-average rate of £1.5646 to $1.00.

The Company has made balance sheet adjustments to conform Fiberweb’s accounting policies to the Company’s. Areas include capitalization thresholds for expenditures, warranties, the alignment of inventory and bad debt reserves as well as accounting for spare parts inventory. Related impacts to the Statement of Operations increased Cost of goods sold by $0.4 million.

During the period ended November 14, 2013, Fiberweb recorded a goodwill impairment charge of £22.0 million in accordance with IFRS. Under GAAP, an impairment charge would not have been recognized and therefore the Company reversed the USD equivalent within Special charges, net.

RISK FACTORS

Risks Related to our Acquisitions

Our acquisitions, including the Providência Acquisition, may not achieve their intended results, including anticipated cost savings.

Although we will complete the Providência Acquisition with the expectation that the transaction will result in various benefits, including a significant amount of cost savings and other financial and operational benefits, there can be no assurance regarding when or the extent to which we will be able to realize any of these benefits. Achieving the anticipated benefits of an acquisition, including cost savings, is subject to a number of uncertainties, including whether the businesses acquired can be operated in the manner we intend. The integration may be subject to delays or changed circumstances, and we can give no assurance that the acquired businesses will perform in accordance with our expectations or that our expectations with respect to integration or cost savings as a result of acquisitions will materialize. In addition, we expect to incur additional costs and charges in connection with integrating the acquired businesses, including severance payments and other restructuring and transitional charges. Additional unanticipated costs, expenses, liabilities, competitive responses, or loss of customer and supplier relationships may also arise during the integration process. The integration of acquired businesses, including the Providência businesses, may place an additional burdens on our management and internal resources, and the diversion of management’s attention during the integration and restructuring process could have an adverse effect on our profit margins, results of operations and financial condition.

The Providência Acquisition exposes us to additional risks and uncertainties with respect to the acquired businesses and their operations.

We expect that the Providência Acquisition will rebalance our business mix to a greater percentage of international operations. The acquired businesses will generally be subject to risks similar to those that we are subject to in our existing international businesses. In addition, we will be subject to increased foreign currency exchange rate risks because a greater portion of our cash flows will be generated by our international business operations. These risks relate primarily to changes in the relative value of the Brazilian real and the U.S. dollar between the time we initially invest U.S. dollars in our Brazilian business and the time that cash is repatriated to the United States from Brazil. In addition, our consolidated reported earnings on a U.S. GAAP basis may be subject to increased currency translation risk, which is the result of the conversion of earnings as reported in our Brazilian businesses on a Brazilian real basis to a U.S. dollar basis in accordance with U.S. GAAP requirements. In addition, regulatory requirements, political and/or market conditions associated with aspects of the acquired businesses may differ from those of our existing business, which may increase our costs.

In connection with the Providência Acquisition, approximately R$106.9 million (or $47.2 million) of the total consideration due to the Sellers pursuant to the Stock Purchase Agreement is allocated as Deferred Purchase Price, payable to the Sellers to the extent certain existing and potential tax claims with respect to Providência are resolved. In addition, to the extent minority shareholders participate in the Mandatory Tender Offer, a pro rata amount of the consideration due to such tendering shareholders will be treated as Deferred Purchase Price with respect to such tendering shareholders. Based on currently available information, we do not anticipate that the actual tax liability will materially exceed the Deferred Purchase Price, however, the actual tax liability will be determined according to applicable Brazilian law, and to the extent the actual tax liability is in excess of the Deferred Purchase Price, we will be responsible for such excess.

Following the Providência Acquisition, we will have minority shareholders, who may interfere with our business plans and adversely affect our business strategy, or our future operating performance, financial condition, cash flows or results of operations.

Following the Providência Acquisition, we will own approximately 71.25% of the outstanding shares of Providência, and other shareholders unrelated to us will own 28.75% of the outstanding shares of Providência. While we are required under Brazilian law to commence the Mandatory Tender Offer, completion of the Mandatory Tender offer may be delayed, certain minority shareholders may choose not to participate and/or we may incur additional costs in connection with the acquisition of the minority shareholders’ shares. In the event

we do not own 100% of Providência, any such minority shareholders may have interests that are contrary to our business plans with respect to Providência, which may include de-listing of Providência’s common stock, or may seek to assert certain rights that they may purport to have under Brazilian law. If we are not able to implement our business plan with respect to Providência, we may incur additional costs. In addition, it could also adversely affect our business strategy, or our future operating performance, financial condition, cash flows or results of operations.

We may not receive dividends from Providência.

According to the bylaws of Providência, the company must pay to its shareholders, including us, at least 25% of its annual net income as dividends, calculated and adjusted pursuant to Brazilian Law No. 6,404 of December 15, 1976, as amended (the “Brazilian Corporate Law”). Providência’s net income may be used to absorb losses or otherwise retained as allowed by the Brazilian Corporate Law and Providência’s bylaws, and may not be available to be paid as dividends. In addition, Providência is allowed to suspend the mandatory distribution of dividends in any particular fiscal year if its board of directors decides and informs its shareholders that such distribution would negatively impact its financial condition. While we will own 71.25% of the outstanding shares of Providência following the Providência Acquisition, 20% of the board of directors will be independent from us, pursuant to applicable Brazilian law.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income (loss) before interest expense (net of interest income), income and franchise taxes and depreciation and amortization, further adjusted to exclude certain unusual, noncash, non-recurring and other items. Adjusted EBITDA is not a recognized term under GAAP, should not be considered in isolation or as a substitute for a measure of our liquidity or performance prepared in accordance with GAAP and is not indicative of income from operations as determined under GAAP. Adjusted EBITDA and other non-GAAP financial measures have limitations which should be considered before using these measures to evaluate the Company’s liquidity or financial performance. Adjusted EBITDA, as presented by us, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. We believe that Adjusted EBITDA provides useful information about flexibility under our covenants to investors, lenders, financial analysts and rating agencies since these groups have historically used EBITDA-related measures in our industry, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company’s ability to meet its debt service requirements. Adjusted EBITDA eliminates the effect of non-cash depreciation of tangible assets and amortization of intangible assets, much of which results from acquisitions accounted for under the purchase method of accounting. Adjusted EBITDA also eliminates the effects of interest rates and changes in capitalization which management believes may not necessarily be indicative of a company’s underlying operating performance.

The following table reconciles pro forma net income (loss) to pro forma Adjusted EBITDA for the twelve months ended March 29, 2014:


(in thousands) (unaudited)	Twelve Months Ended March 29, 2014 (PGI)(a)			Twelve Months Ended March 31, 2014 (Providência)		Adjustments			Pro Forma Twelve Months Ended March 29, 2014(b)
Net income (loss) attributable to Polymer Group, Inc.	$	(43,090	)	$	5,053	$	(19,028	)	$	(57,065	)
Net income (loss) attributable to noncontrolling interest		(117	)		—		(5,639	)		(5,816	)
Discontinued operations, net of tax		—			—		—			—
Interest expense		74,051			12,916		23,719			110,686
Income and franchise tax		(13,108	)		5,909		(13,352	)		(20,551	)
Depreciation and amortization(c)		97,425			27,508		2,302			127,235
Non-cash compensation(d)		4,920			293		—			5,213
Special charges, net(e)		40,256			—		—			40,256
Foreign currency and other non-operating, net(f)		7,148			5,432		11,998			24,578
Loss on debt modification		3,334			—		—			3,334
Severance and relocation expenses(g)		5,746			7		—			5,753
Unusual or non-recurring charges, net		1,095			2,634		—			3,729
Business optimization expense(h)		952			1,105		—			2,057
Management, monitoring and advisory fees(i)		3,545			—		—			3,545
Adjusted EBITDA contributions from synergies(j)		31,757			16,000		—			47,757

Adjusted EBITDA	$	213,855		$	76,857				$	290,712

(a)	As adjusted to give pro forma effect to the Fiberweb Acquisition and the Fiberweb Refinancing as if they occurred on December 30, 2012.

(b)	As adjusted to give pro forma effect to the Fiberweb Acquisition, the Fiberweb Refinancing and the Transactions as if they occurred on December 30, 2012.

(c)	Excludes amortization of loan acquisition costs that are included in interest expense.

(d)	Reflects non-cash compensation costs related to employee and director restricted stock, restricted stock units and stock options.

(e)

Reflects costs associated with non-cash asset impairment charges, the restructuring and realignment of manufacturing operations and management organizational structures, pursuit of certain transaction opportunities and other charges included in Special charges, net in our consolidated statement of operations.

(f)

Reflects (gains) losses from foreign currency translation of intercompany loans, unrealized (gains) losses on interest rate and foreign currency hedging transactions, (gains) losses on sales of assets outside the ordinary course of business, factoring costs and certain other non-operating (gains) losses recorded in Foreign Currency and Other, net above as well as (gains) losses from foreign currency transactions recorded in Other Operating, net above.

(g)	Reflects severance and relocation expenses not included under Special charges, net as well as costs incurred with the CEO transition.

(h)	Reflects costs incurred to improve IT and accounting functions, costs associated with establishing new facilities and certain other expenses.

(i)	Reflects management, monitoring and advisory fees paid under the Sponsor management agreement.

(j)

The PGI amount represents the remaining amount of the estimated synergies in respect of the Fiberweb Acquisition that are not already reflected in Net income (loss) attributable to Polymer Group, Inc. for the period presented. PGI expects to implement initiatives within 12 months of completion of the Fiberweb Acquisition that represent annualized cost savings in excess of $36 million. The Providência amount represents the approximately $16 million of annualized benefits of synergy initiatives to be implemented within 12 months of the Providência Acquisition.