The weighted average shares outstanding for basic and diluted EPS were as follows:

For the three-month periods ended July 1, 2012, and July 3, 2011,The following chart depicts options to purchase 274,000 and 20,000 shares of common stock respectively,that were not included inexcluded from the computationcalculation of diluted EPS as their impactinclusion would be anti-dilutive. For the six-month periods ended July 1, 2012, and July 3, 2011, options to purchase 274,000 and 20,000 shares of common stock, respectively, were not included in the computation of diluted EPS as their impact would be anti-dilutive.anti-dilutive:

NOTE 4 – SEGMENT INFORMATION

Based on the quantitative thresholds specified by accounting standards, the Company has determined that it has twoone reportable segments: (1)segment: the Modular Carpet segment, which includes its Interface, InterfaceFLOR, Heuga and FLOR modular carpet businesses, and (2)businesses. In August 2012, the Bentley Prince Street segment, which includesCompany sold its Bentley Prince Street broadloom, modular carpet and area rug businesses. In 2007, the Company sold its former Fabrics Group business segment (see Note 910 for further information). Accordingly, the Company has included the operations of the former Fabrics GroupBentley Prince Street segment in discontinued operations, where applicable.

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The accounting policies of the operating segments are the same as those described in the Summary of Significant Accounting Policies contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2012, as filed with the Commission. Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net sales, where intercompany sales have been eliminated. The chief operating decision-maker evaluates performance of the segments based on operating income. Costs excluded from this profit measure primarily consist of allocated corporate expenses, interest/other expense and income taxes. Corporate expenses are primarily comprised of corporate overhead expenses. Thus, operating income includes only the costs that are directly attributable to the operations of the individual segment. Assets not identifiable to any individual segment are corporate assets, which are primarily comprised of cash and cash equivalents, short-term investments, intangible assets and intercompany amounts, which are eliminated in consolidation.

Segment Disclosures

Summary information by segment follows:

A reconciliation of the Company’s total segment operating income, depreciation and amortization, and assets to the corresponding consolidated amounts follows:

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NOTE 5 – LONG-TERM DEBT

7 5/8% Senior Notes

As of both July 1,September 30, 2012, and July 3,October 2, 2011, the Company had outstanding $275 million in 7 5/8% Senior Notes due 2018 (the “7 5/8% Senior Notes”). The estimated fair value of the 7 5/8% Senior Notes as of July 1,September 30, 2012, and July 3,October 2, 2011, based on then current market prices, was $292.2$299.8 million and $288.1$279.1 million, respectively.

11 3/8% Senior Secured Notes

As of July 1,September 30, 2012, and July 3,October 2, 2011, the Company had outstanding $8.1 million and $8.0 million, respectively, in 11 3/8% Senior Secured Notes due 2013 (the “11 3/8% Senior Secured Notes”). The estimated fair value of the 11 3/8% Senior Secured Notes as of July 1,September 30, 2012, and July 3,October 2, 2011, based on then current market prices, was $8.8$8.1 million and $8.1 million, respectively.

9.5% Senior Subordinated Notes

On April 9, 2012, the Company redeemed all of the remaining $11.5 million of its outstanding 9.5% Senior Subordinated Notes due 2014 at a price equal to 100% of the principal amount of the notes, plus accrued interest through the redemption date.

Credit Facilities

The Company maintains a domestic revolving credit agreement (the “Facility”) that provides a maximum aggregate amount of $100 million of loans and letters of credit available to us at any one time (subject to a borrowing base) with an option for us to increase that maximum aggregate amount to $150 million (upon the satisfaction of certain conditions, and subject to a borrowing base). The Company is presently in compliance with all covenants under the Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future. As of July 1,September 30, 2012, there were zero borrowings and $3.9 million in letters of credit outstanding under the Facility. As of July 1,September 30, 2012, the Company could have incurred $84.3$60.5 million of additional borrowings under the Facility.

Interface Europe B.V. (the Company’s modular carpet subsidiary based in the Netherlands) and certain of its subsidiaries maintain a Credit Agreement with The Royal Bank of Scotland N.V. (“RBS”). Under this Credit Agreement, RBS provides a credit facility, until further notice, for borrowings and bank guarantees of €20 million. As of July 1,September 30, 2012, there were no borrowings outstanding under this facility, and the Company could have incurred €20 million (approximately $24.9$25.7 million) of additional borrowings under the facility.

Other non-U.S. subsidiaries of the Company have an aggregate of the equivalent of $18.5$18.9 million of lines of credit available. As of July 1,September 30, 2012, there were no borrowings outstanding under these lines of credit.

NOTE 6 – STOCK-BASED COMPENSATION

Stock Option Awards

In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period in which the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award. The grant date fair value for options and similar instruments will be estimated using option pricing models. Under accounting standards, the Company is required to select a valuation technique or option pricing model that meets the criteria stated in the standard. The Company uses the Black-Scholes model. Accounting standards require that the Company estimate forfeitures for stock options and reduce compensation expense accordingly. The Company has reduced its stock compensation expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

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During the first sixnine months of 2012 and 2011, the Company recognized stock option compensation costs of $0.4 $0.5��million and $0.6$0.7 million, respectively. In the secondthird quarters of 2012 and 2011, the Company recognized stock option compensation costs of $0.2$0.1 million and $0.3$0.2 million, respectively. The remaining unrecognized compensation cost related to unvested awards at July 1,September 30, 2012, approximated $0.2$0.1 million, and the weighted average period of time over which this cost will be recognized is approximately one year.

The following table summarizes stock options outstanding as of July 1,September 30, 2012, as well as activity during the sixnine months then ended:

At July 1,September 30, 2012, the aggregate intrinsic value of in-the-money options outstanding and options exercisable was $2.6$2.3 million and $2.5$2.3 million, respectively (the intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option).

Cash proceeds and intrinsic value related to total stock options exercised during the first sixnine months of fiscal years 2012 and 2011 are provided in the table below. The Company did not recognize any significant tax benefit with regard to stock options in either period presented.

Restricted Stock Awards

During the sixnine months ended July 1,September 30, 2012, and July 3,October 2, 2011, the Company granted restricted stock awards for 573,500 and 668,000 shares, respectively, of common stock. These awards (or a portion thereof) vest with respect to each recipient over a two to five year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date. Additionally, awards (or a portion thereof) could vest earlier upon the attainment of certain performance criteria, in the event of a change in control of the Company, or upon involuntary termination without cause.

Compensation expense related to restricted stock grants was $2.2$3.2 million and $8.1$8.6 million for the sixnine months ended July 1,September 30, 2012, and July 3,October 2, 2011, respectively. Accounting standards require that the Company estimate forfeitures for restricted stock and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

The following table summarizes restricted stock activity as of July 1,September 30, 2012, and during the sixnine months then ended:

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As of July 1,September 30, 2012, the unrecognized total compensation cost related to unvested restricted stock was approximately $13.9$11.8 million. That cost is expected to be recognized by the end of 2015.

For the sixnine months ended July 1,September 30, 2012, and July 3,October 2, 2011, the Company recognized tax benefits with regard to restricted stock of $0.3$0.5 million and $2.1$2.4 million, respectively.

NOTE 7 – EMPLOYEE BENEFIT PLANS

The following tables provide the components of net periodic benefit cost for the three-month and six-monthnine-month periods ended July 1,September 30, 2012, and July 3,October 2, 2011, respectively:

NOTE 8 – 2012 RESTRUCTURING CHARGES

2012 Restructuring Charge

In the first quarter of 2012, the Company committed to a new restructuring plan in its continuing efforts to reduce costs across its worldwide operations and more closely align its operations with reduced demand levels in certain markets. The plan primarily consistsconsisted of ceasing manufacturing and warehousing operations at its facility in Shelf, England. In connection with this restructuring plan, the Company incurred a pre-tax restructuring and asset impairment charge in the first quarter of 2012 in an amount of $16.3 million. The charge iswas comprised of employee severance expenses of $5.4 million, other related exit costs of $1.6 million, and a charge for impairment of assets of approximately $9.3 million. Approximately $7 million of the charge will result in cash expenditures, primarily severance expense. Actions andIn the third quarter of 2012, the Company recorded an additional charge of $0.8 million of cash severance expenses related to the finalization of this plan were substantially completed by the end of the second quarter of 2012.for its European operations.

A summary of these restructuring activities is presented below:

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The table below details these restructuring activities by segment:

NOTE 9 – 2011 Restructuring ChargeRESTRUCTURING CHARGE

In the fourth quarter of 2011, the Company committed to a restructuring plan intended to reduce costs across its worldwide operations and more closely align its operations with reduced demand in certain markets. As a result of this plan, the Company incurred pre-tax restructuring and asset impairment charges of $6.2$5.8 million in the fourth quarter of 2011. The majority of this charge ($5.45.0 million) relatesrelated to the severance of approximately 11090 employees in Europe, Asia and the United States. The remainder of the charge ($0.8 million) relatesrelated to contract termination and fixed asset impairment costs. Approximately $5.4$5.0 million of this charge will result in cash expenditures, primarily severance expenses. Actions and expenses related to this plan were substantially completed by the end of 2011.

A summary of these restructuring activities is presented below:

The table below details these restructuring activities by segment:

NOTE 910 – DISCONTINUED OPERATIONS

In 2007,July of 2012, the Company soldentered into an agreement to sell its Fabrics GroupBentley Prince Street business segment to a third party. The sale was completed in the third quarter of 2012. The purchase price for the business segment was $33.4 million, after working capital and certain other adjustments. In the third quarter, the Company incurred approximately $10.0 million of direct costs to sell the business segment. All activity related to this business has been included in discontinued operations, where applicable. Assets and liabilitiesThe major classes of this business segment have been reported in assets and liabilities related to the business segment at disposition were accounts receivable of $10.1 million, inventory of $29.0 million, property, plant and equipment of $11.8 million, and accounts payable and accruals of $7.6 million.

Summary operating results for the above-described discontinued operations are as follows:

Asset and liabilities, including reserves, related to the above-described discontinued operations that were held for sale where applicable.

Discontinued operations had no net sales and no net income or loss in eitherconsist of the three-month or six-month periods ended July 1, 2012 and July 3, 2011.following:

NOTE 1011 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest amounted to $12.0$12.8 million and $11.2$12.0 million for the sixnine months ended July 1,September 30, 2012, and July 3,October 2, 2011, respectively. Income tax payments amounted to $6.0$9.1 million and $11.1$15.2 million for the sixnine months ended July 1,September 30, 2012, and July 3,October 2, 2011, respectively.

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NOTE 1112 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2011, the Financial Accounting Standards Board (“FASB”) issued an accounting standard regarding the performance of a company’s annual goodwill impairment evaluation. This standard allows companies to assess qualitative factors to determine if it is more likely than not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test. This standard is effective for fiscal years beginning after December 31, 2011. The adoption of this standard did not have any significant impact on the Company’s consolidated financial statements.

In June 2011, the FASB amended an accounting standard regarding the presentation of comprehensive income. This amendment will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amended guidance, which must be applied retroactively, was to be effective for interim and annual periods ending after December 31, 2012, with earlier adoption permitted. In December of 2011, the FASB issued an amendment to this statement which defers the requirements of this standard. As this amendment only affects presentation, there is not expected to be any impact on the Company’s consolidated financial statements.

NOTE 1213 – INCOME TAXES

Accounting standards require that all tax positions be analyzed using a two-step approach. The first step requires an entity to determine if a tax position is more-likely-than-not to be sustained upon examination. In the second step, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, that is more-likely-than-not to be realized upon ultimate settlement. In the first sixnine months of 2012, the Company increased its liability for unrecognized tax benefits by $0.1$0.4 million. As of July 1,September 30, 2012, the Company had accrued approximately $7.8$8.1 million for unrecognized tax benefits.

NOTE 1314 – SHARE CONVERSION

On March 5, 2012, the number of issued and outstanding shares of Class B Common Stock constituted less than 10% of the aggregate number of issued and outstanding shares of the Company’s Class A Common Stock and Class B Common Stock (that is, on that date, 6,459,556 shares of an aggregate of 65,372,375 shares), as the cumulative result of varied transactions that caused the conversion of shares of Class B Common Stock into shares of Class A Common Stock. Accordingly, in accordance with the respective terms for the Class B Common Stock and the Class A Common Stock in Article V of the Company’s Articles of Incorporation, (the “Articles”), the Class A Common Stock and Class B Common Stock are now, irrevocably from March 5, 2012, a single class of Common Stock in all respects, with no distinction whatsoever between the voting rights or any other rights and privileges of the holders of Class A Common Stock and the holders of Class B Common Stock. The Company intends to eliminate future uses of (or references to) the terms “Class A” and “Class B” in connection with the Common Stock, except for historical purposes or to facilitate transition by certain stock listing or administrative services organizations who are accustomed to the old designations for the Common Stock.

NOTE 14 – SUBSEQUENT EVENT15 – FIRE AT AUSTRALIAN MANUFACTURING FACILITY

On July 20, 2012, subsequent to the end of the second quarter of 2012, a fire occurred at the Company’s manufacturing facility in Picton, Australia. The facility’s carpet production line, primarily comprised of tufting and backing machinery, sustained substantialextensive damage and will be inoperable for an undetermined period of time.was rendered inoperable. Other areas of the Company’s Picton site relating to yarn preparation and warehousing were undamaged by the fire. The finished goods inventory and some raw materials for the business are kept at a separate offsite locationslocation and were not affected by this incident.

The Picton facility serves the Company’s customers throughout Australia and New Zealand. It represents approximately 7% of the Company’s total annual production, 10% of its net sales, and 13% of its operating income. The Company will utilize adequate production capacity at its manufacturing facilities in Thailand, China and Chinaelsewhere to meet customer demand typically serviced from Picton. The Company does not expect any significant inconvenience to customers. The Company has business interruption and property damage insurance.

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NOTE 15 – SUBSEQUENT EVENT – PENDING SALE OF BENTLEY PRINCE STREET

On July 25, 2012,The Company has recorded a charge of approximately $9.8 million for impairment of fixed assets related to the fire. In addition, the Company entered into a Stock Purchase Agreement with an affiliatehas incurred approximately $9.5 million of Dominus Capital, L.P., a private equity investment firm, forexcess production costs related to the sale offire as it has utilized other facilities to service customers in the Company’s Bentley Prince Street business segment. The aggregate purchase price under the Agreement would be $35.0 million paid in cash at the closing of the transaction, subject to possible working capital and/or other similar adjustments. The Company expects the closing of the transaction to occur in August of 2012.Australia market. As of the end of the secondthird quarter, the Company has determined that the receipt of 2012, Bentley Prince Street had netreimbursement of these expenses from its insurer is probable in accordance with its insurance policies and has therefore recorded a receivable for these items. To date, the Company has received $10 million of reimbursement from the insurance company related to the destruction of fixed assets at the Picton facility. The table below details the nature of expenses as well as insurance receivables and amounts already received related to the fire (in millions):

In addition to these additional production costs, the Company has incurred approximately $49 million. The Company expects to record exit$1.0 million of costs related to the divestiturefire that are non-production related and at this time are not considered probable of approximately $7-$9 million. The final loss on disposal will be calculated basedrecovery from the insurance company. As a result, these amounts are included in the determination of operating income as shown on the ending balance sheetline item “Losses Related to Australia Fire” on the consolidated condensed statement of Bentley Prince Streetoperations.