##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHAGE ACT OF 1934For the transition period from ____ to ____
 Commission File Number: 020278
 ENCORE WIRE CORPORATION
  Delaware
(State of incorporation)
    
    75-2274963
(I.R.S. Employer Identification No.)
 1410 Millwood Road 
McKinney, Texas
(Address of principal executive offices)
    
    75069
(Zip Code)
 Registrants telephone number, including area code: (972) 562-9473
 Securities registered pursuant to Section 12(b) of the Act:
 Common Stock, par value $.01 per share
    
    The NASDAQ Stock Market LLC(Title of class)
    
    (Name of exchange on which registered)
 Securities registered pursuant to Section 12(g) of the Act: None
  o þ
  o þ
  þ o
  þ
  o þ o
  o þ
   Documents incorporated by reference
  (1)
    
    Proxy statement for the 2007 annual meeting of stockholders  Part III




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##### 



TABLE OF CONTENTS
 PageNumberPART I
    
    
    1ITEM 1. BUSINESS
    
    
    1General
    
    
    1Strategy
    
    
    1Products
    
    
    1Manufacturing
    
    
    2Customers
    
    
    3Marketing and Distribution
    
    
    3Employees
    
    
    3Raw Materials
    
    
    4Competition
    
    
    4Intellectual Property Matters
    
    
    4Internet Address/SEC Filings
    
    
    4ITEM 1A. RISK FACTORS
    
    
    4ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    6ITEM 2. PROPERTIES
    
    
    6ITEM 3. LEGAL PROCEEDINGS
    
    
    6ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    6EXECUTIVE OFFICERS OF THE COMPANY
    
    
    7PART II
    
    
    8ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    
    
    8Equity Compensation Plan Information
    
    
    8Performance Graph
    
    
    9ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
    
    
    11ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    12Executive Overview
    
    
    12General
    
    
    12Results of Operations
    
    
    13Off-Balance Sheet Arrangements
    
    
    15Liquidity and Capital Resources
    
    
    15Contractual Obligations
    
    
    17Critical Accounting Policies and Estimates
    
    
    17Recent Accounting Pronouncements
    
    
    18Information Regarding Forward Looking Statements
    
    
    18ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    19ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    19ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    33ITEM 9A. CONTROLS AND PROCEDURES
    
    
    33ITEM 9B. OTHER INFORMATION
    
    
    35PART III
    
    
    35ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    35ITEM 11. EXECUTIVE COMPENSATION
    
    
    35ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    35ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    35ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    35PART IV
    
    
    36ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    36SIGNATURES
    
    
    37CERTIFICATIONS
    
    
    42Consent of Ernst & Young LLPCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  ii




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PART I
 
 ITEM 1.
    
    BUSINESS
 
 General
     
 Strategy
  Customer Service.
 Product Innovation.
 Low-Cost Production.
 Efficient Plant Design.
 Incentivized Work Force.
 
 Products
  1




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NM-B Cable.
 UF-B Cable.
 THWN-2 Cable
 Armored Cable.
 
 Manufacturing
   Rod Mill
 Drawing
 Stranding.
 PVC Compounding.
 Insulating.
 Jacketing.
  2




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Customers
   
 Marketing and Distribution
     
 Employees
    3




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Raw Materials
    
 Competition
    
 Intellectual Property Matters
  
 Internet Address/SEC Filings
 http://www.encorewire.com
 
 ITEM 1A.
    
    RISK FACTORS
  4




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Product Pricing and Volatility of Copper Market
  Operating Results May Fluctuate
  Reliance on Senior Management
  Industry Conditions and Cyclicality
  Competition
  Common Stock Price May Fluctuate
  5




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Future Sales of Common Stock Could Affect Price of Common Stock
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  
 ITEM 3.
    
    LEGAL PROCEEDINGS
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  6




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EXECUTIVE OFFICERS OF THE COMPANY
  Name
    
    Age
    
    Position with CompanyDaniel L. Jones
    
    
    43
    
    
    President, Chief Executive Officer, and Member of
the Board of DirectorsFrank J. Bilban
    
    
    50
    
    
    Vice President  Finance, Treasurer, Secretary,
and Chief Financial Officer
 Mr. Jones
 Mr. Bilban
  7




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##### Table of Contents



PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
  High
    
    Low2006First Quarter
    
    $
    36.50
    
    
    $
    23.99Second Quarter
    
    
    46.56
    
    
    
    28.86Third Quarter
    
    
    39.75
    
    
    
    30.50Fourth Quarter
    
    
    36.84
    
    
    
    21.872005First Quarter
    
    $
    13.64
    
    
    $
    10.00Second Quarter
    
    
    11.75
    
    
    
    9.05Third Quarter
    
    
    16.34
    
    
    
    11.87Fourth Quarter
    
    
    25.24
    
    
    
    16.22
   
 Equity Compensation Plan Information
  Number of securitiesremaining availableNumber of securities to
    
    Weighted-average
    
    for future issuancebe issued upon
    
    exercise price of
    
    under equityexercise of outstanding
    
    outstanding
    
    compensation plansoptions, warrants
    
    options, warrants
    
    (excluding securitiesand rights
    
    and rights
    
    reflected in column (a))PLAN CATEGORY
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    592,126
    
    
    $
    8.87
    
    
    
    299,300Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    
    0
    
    
    
    0TOTAL
    
    
    592,126
    
    
    $
    8.87
    
    
    
    299,300
 8




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Performance Graph
 The following graph is not soliciting material, is not deemed filed with the SEC, and is not to
be incorporated by reference into any of the Companys filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, as amended, respectively.
 1
  COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, PEER GROUP AND CRSP TOTAL RETURN INDEX
 
 9




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Symbol
    
    CRSP Total Returns Index for:
    
    12/01
    
    12/02
    
    12/03
    
    12/04
    
    12/05
    
    12/06(ENCORE WIRE CORPORATION)
    
    
    Encore Wire Corporation
    
    
    100.00
    
    
    
    74.8
    
    
    
    147.5
    
    
    
    165.2
    
    
    
    282.1
    
    
    
    272.9(NASDAQ STOCK MARKET)
    
    
    Nasdaq Stock Market (US Companies)
    
    
    100.00
    
    
    
    69.1
    
    
    
    103.4
    
    
    
    112.5
    
    
    
    114.9
    
    
    
    126.2(SELF-DETERMINED PEER GROUP)
    
    
    Self-Determined Peer Group(1)
    
    
    100.00
    
    
    
    50.2
    
    
    
    79.6
    
    
    
    100.8
    
    
    
    117.5
    
    
    
    215.1
 
 (1)
    
    Consists of the following companies, with each company being added to the index on its
first date of public trading, as indicated: General Cable Corporation (5/16/97), Belden
CDT Inc. (9/30/93) and Superior Essex Inc. (10/11/96). These are the same companies that
were used in the Total Return Index last year.(2)
    
    Notes: A.
    
    The lines represent monthly index levels derived from compounded daily returns
that include all dividends.B.
    
    The indexes are reweighted daily, using the market capitalization on the
previous trading day.C.
    
    If the monthly interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.D.
    
    The index level for all series was set to $100.00 on 12/31/2001. 
 10




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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
 Year Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands, except per share amounts)Statement of Income Data:Net sales
    
    $
    1,249,330
    
    
    $
    758,089
    
    
    $
    603,225
    
    
    $
    384,750
    
    
    $
    285,207Cost of goods sold
    
    
    1,005,037
    
    
    
    632,842
    
    
    
    506,819
    
    
    
    328,887
    
    
    
    250,267Gross profit
    
    
    244,293
    
    
    
    125,247
    
    
    
    96,406
    
    
    
    55,863
    
    
    
    34,940Selling, general and
administrative expenses
    
    
    59,793
    
    
    
    46,335
    
    
    
    42,218
    
    
    
    31,090
    
    
    
    23,891Operating income
    
    
    184,500
    
    
    
    78,912
    
    
    
    54,188
    
    
    
    24,773
    
    
    
    11,049Other income (expense):Interest and other income (expense)
    
    
    (74
    )
    
    
    (7
    )
    
    
    473
    
    
    
    113
    
    
    
    (64
    )Interest expense
    
    
    (7,686
    )
    
    
    (3,929
    )
    
    
    (2,857
    )
    
    
    (2,423
    )
    
    
    (1,666
    )Income before income taxes
    
    
    176,740
    
    
    
    74,976
    
    
    
    51,804
    
    
    
    22,463
    
    
    
    9,319Income tax expense
    
    
    61,607
    
    
    
    24,898
    
    
    
    18,444
    
    
    
    8,087
    
    
    
    3,355Net income
    
    $
    115,133
    
    
    $
    50,078
    
    
    $
    33,360
    
    
    $
    14,376
    
    
    $
    5,964Net income per common and common
equivalent shares  basic
    
    $
    4.95
    
    
    $
    2.17
    
    
    $
    1.45
    
    
    $
    0.63
    
    
    $
    0.26Net income per common and common
equivalent shares  diluted
    
    $
    4.86
    
    
    $
    2.13
    
    
    $
    1.42
    
    
    $
    0.63
    
    
    $
    0.26Weighted average common and common
equivalent shares  basic
    
    
    23,254
    
    
    
    23,117
    
    
    
    23,018
    
    
    
    22,682
    
    
    
    22,805Weighted average common and common
equivalent shares  diluted
    
    
    23,674
    
    
    
    23,537
    
    
    
    23,528
    
    
    
    22,924
    
    
    
    23,009
 As of December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002(In thousands)Balance Sheet Data:Working capital
    
    $
    333,865
    
    
    $
    199,113
    
    
    $
    132,682
    
    
    $
    106,257
    
    
    $
    75,679Total assets
    
    
    474,157
    
    
    
    348,476
    
    
    
    251,515
    
    
    
    225,299
    
    
    
    183,129Long-term debt, net of current portion
    
    
    98,974
    
    
    
    70,438
    
    
    
    49,836
    
    
    
    53,425
    
    
    
    47,500Stockholders equity
    
    
    327,121
    
    
    
    210,535
    
    
    
    159,544
    
    
    
    121,776
    
    
    
    106,519
 11




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATIONS
 Introduction
  
 Executive Overview
  
    
    Industry leading order fill rates and responsive customer service.
    
    Product innovations based on listening to and understanding customer needs.
    
    Low cost manufacturing operations, resulting from a state of the art manufacturing plant.
    
    A focused management team leading an incentivized work force.
    
    Low general and administrative overhead costs.
    
    A team of experienced independent manufacturers representatives with strong customer
relationships across the United States.
    
 General
  12




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Results of Operations
  Year Ended December 31,2006
    
    2005
    
    2004Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold:Copper
    
    
    66.2
    
    
    
    64.2
    
    
    
    61.3Other raw materials
    
    
    5.0
    
    
    
    8.3
    
    
    
    9.7Depreciation
    
    
    .9
    
    
    
    1.5
    
    
    
    1.8Labor and overhead
    
    
    4.6
    
    
    
    6.6
    
    
    
    9.2LIFO adjustment
    
    
    3.7
    
    
    
    2.9
    
    
    
    2.0Lower cost or market adjustment
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.080.4
    
    
    
    83.5
    
    
    
    84.0Gross profit
    
    
    19.6
    
    
    
    16.5
    
    
    
    16.0Selling, general and administrative expenses
    
    
    4.8
    
    
    
    6.1
    
    
    
    7.0Operating income
    
    
    14.8
    
    
    
    10.4
    
    
    
    9.0Other (income) expense, net
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.4Income before income taxes
    
    
    14.1
    
    
    
    9.9
    
    
    
    8.6Income tax expense
    
    
    4.9
    
    
    
    3.3
    
    
    
    3.1Net income
    
    
    9.2
    %
    
    
    6.6
    %
    
    
    5.5
    %
    13




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2006
    
    
    2005
    
    
    2004Raw materials
    
    $
    18,259,579
    
    
    $
    11,288,100
    
    
    $
    5,025,479Work-in-process
    
    
    17,998,087
    
    
    
    8,427,935
    
    
    
    5,311,035Finished goods
    
    
    149,961,827
    
    
    
    84,664,933
    
    
    
    43,389,467186,219,493
    
    
    
    104,380,968
    
    
    
    53,725,981Adjust to LIFO cost
    
    
    (82,272,128
    )
    
    
    (36,449,280
    )
    
    
    (14,614,598
    )Lower of cost or market adjustment
    
    
    
    
    
    
    
    
    
    
    $
    103,947,365
    
    
    $
    67,931,688
    
    
    $
    39,111,383
         14




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Off-Balance Sheet Arrangements
  
 Liquidity and Capital Resources
  Year Ended December 31,2006
    
    
    2005
    
    
    2004(In thousands)Net income
    
    $
    115,133
    
    
    $
    50,078
    
    
    $
    33,360Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    12,437
    
    
    
    12,421
    
    
    
    11,758Other non-cash items
    
    
    (2,113
    )
    
    
    (3,385
    )
    
    
    5,108(Increase) decrease in accounts
receivable, inventory and other assets
    
    
    (74,087
    )
    
    
    (96,641
    )
    
    
    (11,198
    )Increase (decrease) in trade accounts
payable accrued liabilities and other
liabilities
    
    
    (37,119
    )
    
    
    32,524
    
    
    
    (14,099
    )Net cash provided by (used in) operating
activities
    
    
    14,251
    
    
    
    (5,003
    )
    
    
    24,929Investing activities:Purchases of property, plant and equipment
(net)
    
    
    (22,112
    )
    
    
    (16,890
    )
    
    
    (21,314
    )Financing activities:Increase (decrease) in indebtedness, net
    
    
    28,800
    
    
    
    21,363
    
    
    
    (4,128
    )Issuances of common stock
    
    
    692
    
    
    
    512
    
    
    
    2,761Tax benefit of option exercise
    
    
    805
    
    
    
    
    
    
    
    Deferred financing fees
    
    
    (455
    )
    
    
    
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) financing
activities
    
    
    29,842
    
    
    
    21,875
    
    
    
    (1,367
    )Net increase (decrease) in cash
    
    $
    21,981
    
    
    $
    (18
    )
    
    $
    2,248
   15




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16




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Contractual Obligations
  Payments Due By Period ($ in Thousands)Less Than
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligations
    
    Total
    
    1 Year
    
    13 Years
    
    35 Years
    
    5 YearsLong-Term Debt Obligations
    
    $
    100,000
    
    
    $
    
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase Obligations
    
    
    19,190
    
    
    
    19,190
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities Reflected on the
Companys Balance Sheet under
GAAP
    
    
    1,026
    
    
    
    
    
    
    
    
    
    
    
    1,026
    
    
    
    Total
    
    $
    120,216
    
    
    $
    19,190
    
    
    $
    
    
    
    $
    101,026
    
    
    $
    
 Note:
    
    Amounts listed as purchase obligations consist of major raw material purchase orders and
$14.5 million of capital equipment and construction orders open as of December 31, 2006.
 
 Critical Accounting Policies and Estimates
   17




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Recent Accounting Pronouncements
    
 Information Regarding Forward Looking Statements
  
    
    Fluctuations in the global and national economy.
    
    Fluctuations in the level of activity in the construction and remodeling industries.
    
    Demand for the Companys products.
    
    The impact of price competition on the Companys margins.
    
    Fluctuations in the price of copper and other key raw materials.
    
    The loss of key manufacturers representatives who sell the Companys product line.
    
    Fluctuations in utility costs, especially electricity and natural gas.
    
    Fluctuations in insurance costs of various types.
    
    Weather related disasters at the Companys and/or key vendors operating facilities.
    
    Stock price fluctuations due to stock market expectations.
    
    Unforeseen future legal issues and/or government regulatory changes.
    
    Fluctuations in the Companys financial position or national banking issues that impede
the Companys ability to obtain reasonable financing.
  18




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  19




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Report of Independent Registered Public Accounting Firm
 
    Share Based
Payment
 Internal
Control-Integrated Framework
 /s/ Ernst & Young LLP 
 20




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Encore Wire Corporation
 Consolidated Balance Sheets
 December 312006
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    24,602,846
    
    
    $
    2,621,718Accounts receivable, net of allowance for losses of $884,370
and $689,949 in 2006 and 2005, respectively
    
    
    214,963,196
    
    
    
    164,930,302Inventories
    
    
    103,947,365
    
    
    
    67,931,688Income taxes receivable
    
    
    18,523,158
    
    
    
    Current deferred income taxes
    
    
    2,300,710
    
    
    
    1,121,079Prepaid expenses and other
    
    
    6,712,876
    
    
    
    18,628,669Total current assets
    
    
    371,050,151
    
    
    
    255,233,456Property, plant and equipment  at cost:Land and land improvements
    
    
    9,591,600
    
    
    
    8,375,138Construction-in-progress
    
    
    6,671,210
    
    
    
    12,112,616Buildings and improvements
    
    
    47,065,117
    
    
    
    38,063,138Machinery and equipment
    
    
    136,552,315
    
    
    
    120,326,345Furniture and fixtures
    
    
    4,072,333
    
    
    
    3,624,317203,952,575
    
    
    
    182,501,554Accumulated depreciation
    
    
    (100,966,005
    )
    
    
    (89,364,409
    )102,986,570
    
    
    
    93,137,145Other assets
    
    
    119,873
    
    
    
    105,017Total assets
    
    $
    474,156,594
    
    
    $
    348,475,618Liabilities and Stockholders EquityCurrent liabilities:Trade accounts payable
    
    $
    13,412,749
    
    
    $
    17,276,887Accrued liabilities
    
    
    23,771,944
    
    
    
    19,304,108Current income taxes payable
    
    
    
    
    
    
    19,539,784Total current liabilities
    
    
    37,184,693
    
    
    
    56,120,779Noncurrent deferred income taxes
    
    
    9,850,908
    
    
    
    10,619,537Long-term notes payable
    
    
    98,974,291
    
    
    
    70,438,087Other long-term liabilities
    
    
    1,025,709
    
    
    
    761,913Commitments and contingenciesStockholders equity:Convertible preferred stock, $.01 par value: Authorized shares
2,000,000. Issued and outstanding shares  none.Common stock, $.01 par value: Authorized shares  40,000,000.
Issued shares  26,035,302 in 2006 and
25,939,103 in 2005.
    
    
    260,353
    
    
    
    259,391Additional paid-in capital
    
    
    40,848,753
    
    
    
    38,931,690Treasury stock, at cost  2,758,950 shares in 2006 and 2005
    
    
    (15,274,643
    )
    
    
    (15,274,643
    )Retained earnings
    
    
    301,286,530
    
    
    
    186,618,864Total stockholders equity
    
    
    327,120,993
    
    
    
    210,535,302Total liabilities and stockholders equity
    
    $
    474,156,594
    
    
    $
    348,475,618
 See accompanying notes.
 21




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##### Table of Contents



Encore Wire Corporation
 Consolidated Statements of Income
 Year ended December 312006
    
    2005
    
    2004Net sales
    
    $
    1,249,330,337
    
    
    $
    758,089,376
    
    
    $
    603,225,293Cost of goods sold
    
    
    1,005,037,049
    
    
    
    632,841,670
    
    
    
    506,818,934Gross profit
    
    
    244,293,288
    
    
    
    125,247,706
    
    
    
    96,406,359Selling, general and administrative expenses
    
    
    59,793,059
    
    
    
    46,335,261
    
    
    
    42,218,563Operating income
    
    
    184,500,229
    
    
    
    78,912,445
    
    
    
    54,187,796Other income (expense):Interest and other income
    
    
    (73,744
    )
    
    
    (6,643
    )
    
    
    473,080Interest expense
    
    
    (7,686,014
    )
    
    
    (3,928,905
    )
    
    
    (2,856,718
    )Income before income taxes
    
    
    176,740,471
    
    
    
    74,976,897
    
    
    
    51,804,158Income tax expense
    
    
    61,607,277
    
    
    
    24,898,441
    
    
    
    18,444,121Net income
    
    $
    115,133,194
    
    
    $
    50,078,456
    
    
    $
    33,360,037Weighted average common shares  basic
    
    
    23,254,259
    
    
    
    23,116,881
    
    
    
    23,017,848Basic earnings per common share
    
    $
    4.95
    
    
    $
    2.17
    
    
    $
    1.45Weighted average common shares  diluted
    
    
    23,674,275
    
    
    
    23,536,555
    
    
    
    23,528,155Diluted earnings per common share
    
    $
    4.86
    
    
    $
    2.13
    
    
    $
    1.42Cash dividends per share
    
    $
    0.02
    
    
    $
    
    
    
    $
    
 See accompanying notes.
 22




---



##### Table of Contents



Encore Wire Corporation
 Consolidated Statements of Stockholders Equity
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Treasury
    
    
    Comprehensive
    
    
    RetainedShares


    Amount


    Capital


    Stock


    Gain / (Loss)


    Earnings


    TotalBalance at
December
31, 2003
    
    
    16,966,750
    
    
    $
    169,668
    
    
    $
    34,193,455
    
    
    $
    (15,274,643
    )
    
    $
    (492,454
    )
    
    $
    103,180,371
    
    
    $
    121,776,397Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,360,037
    
    
    
    33,360,037Unrealized
gain on
hedging
activities,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    492,454
    
    
    
    
    
    
    
    492,454Total
comprehensi
ve income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,852,491Proceeds
from
exercise
of stock
options
    
    
    275,326
    
    
    
    2,753
    
    
    
    2,758,287
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,761,040Tax
benefit on
exercise
of stock
options
    
    
    
    
    
    
    
    
    
    
    1,154,337
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,154,337Purchase
of
treasury
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital
adjustment
for
3-for-2
stock split
    
    
    8,621,002
    
    
    
    86,210
    
    
    
    (86,210
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at
December
31, 2004
    
    
    25,863,078
    
    
    
    258,631
    
    
    
    38,019,869
    
    
    
    (15,274,643
    )
    
    
    
    
    
    
    136,540,408
    
    
    
    159,544,265Net income
(comprehensive
income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,078,456
    
    
    
    50,078,456Proceeds
from
exercise
of stock
options
    
    
    76,025
    
    
    
    760
    
    
    
    510,836
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511,596Tax
benefit on
exercise
of stock
options
    
    
    
    
    
    
    
    
    
    
    400,985
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400,985Purchase
of
treasury
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at
December
31, 2005
    
    
    25,939,103
    
    
    
    259,391
    
    
    
    38,931,690
    
    
    
    (15,274,643
    )
    
    
    
    
    
    
    186,618,864
    
    
    
    210,535,302Net income
(comprehensive
income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,133,194
    
    
    
    115,133,194Proceeds
from
exercise
of stock
options
    
    
    96,199
    
    
    
    962
    
    
    
    691,295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    692,257Tax
benefit on
exercise
of stock
options
    
    
    
    
    
    
    
    
    
    
    805,244
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    805,244Stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    420,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,524Dividend
declared 
$0.02 per
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (465,528
    )
    
    
    (465,528
    )Purchase
of
treasury
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at
December
31, 2006
    
    
    26,035,302
    
    
    $
    260,353
    
    
    $
    40,848,753
    
    
    $
    (15,274,643
    )
    
    $
    
    
    
    $
    301,286,530
    
    
    $
    327,120,993
 See accompanying notes
 23




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##### Table of Contents



Encore Wire Corporation
 Consolidated Statements of Cash Flows
 Year ended December 312006
    
    
    2005
    
    
    2004Operating ActivitiesNet income
    
    $
    115,133,194
    
    
    $
    50,078,456
    
    
    $
    33,360,037Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    12,437,245
    
    
    
    12,421,431
    
    
    
    11,758,623Deferred income taxes
    
    
    (1,948,260
    )
    
    
    (3,886,901
    )
    
    
    4,912,410Excess tax benefits of options exercised
    
    
    (805,244
    )
    
    
    
    
    
    
    Stock-based compensation
    
    
    420,524
    
    
    
    
    
    
    
    Provision for bad debts
    
    
    180,000
    
    
    
    330,000
    
    
    
    300,000(Gain) Loss on disposal of assets
    
    
    40,032
    
    
    
    171,482
    
    
    
    (104,494
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (50,212,894
    )
    
    
    (56,508,273
    )
    
    
    (27,622,100
    )Inventories
    
    
    (36,015,677
    )
    
    
    (28,820,306
    )
    
    
    20,232,482Prepaid expenses and other
    
    
    12,141,602
    
    
    
    (11,312,454
    )
    
    
    (3,808,709
    )Trade accounts payable and accrued liabilities
    
    
    138,170
    
    
    
    7,832,015
    
    
    
    (5,343,367
    )Current income taxes payable (receivable)
    
    
    (37,257,698
    )
    
    
    24,691,812
    
    
    
    (8,755,177
    )Net cash provided by (used in) operating activities
    
    
    14,250,994
    
    
    
    (5,002,738
    )
    
    
    24,929,705Investing ActivitiesPurchases of property, plant and equipment
    
    
    (22,423,428
    )
    
    
    (17,232,744
    )
    
    
    (23,805,702
    )Other
    
    
    (654
    )
    
    
    
    
    
    
    Proceeds from sale of assets
    
    
    311,911
    
    
    
    342,506
    
    
    
    2,491,422Net cash used in investing activities
    
    
    (22,112,171
    )
    
    
    (16,890,238
    )
    
    
    (21,314,280
    )Financing ActivitiesProceeds from issuance of private placement debt
    
    
    55,000,000
    
    
    
    
    
    
    
    45,000,000Proceeds from (repayments of) long-term note
payable, net
    
    
    (26,200,000
    )
    
    
    21,363,519
    
    
    
    (49,128,000
    )Proceeds from issuance of common stock, net
    
    
    692,257
    
    
    
    511,596
    
    
    
    2,761,040Excess tax benefits of options exercised
    
    
    805,244
    
    
    
    
    
    
    
    Deferred financing fees
    
    
    (455,196
    )
    
    
    
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    29,842,305
    
    
    
    21,875,115
    
    
    
    (1,366,960
    )Net increase (decrease) in cash and cash equivalents
    
    
    21,981,128
    
    
    
    (17,861
    )
    
    
    2,248,465Cash and cash equivalents at beginning of year
    
    
    2,621,718
    
    
    
    2,639,579
    
    
    
    391,114Cash and cash equivalents at end of year
    
    $
    24,602,846
    
    
    $
    2,621,718
    
    
    $
    2,639,579Non-cash activitiesUnrealized gain (loss) on hedging activities
    
    $
    
    
    
    $
    
    
    
    $
    1,031,936
 See accompanying notes.
 24




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##### Table of Contents



Encore Wire Corporation
 Notes to Consolidated Financial Statements
 December 31, 2006
 1. Significant Accounting Policies
 Business
   Principles of Consolidation
  Reclassifications
  Recent Accounting Pronouncements
    25




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##### Table of Contents



1. Significant Accounting Policies (continued)
 Use of Estimates
  Revenue Recognition
  Freight Expenses
  Financial Instruments and Concentrations of Credit Risk
   Allowance for Losses Progression
    
    2006
    
    2005
    
    2004Beginning balance January 1
    
    $
    689,949
    
    
    $
    577,305
    
    
    $
    490,143(Write offs) of bad debts, net of collections of previous write offs
    
    
    14,421
    
    
    
    (217,356
    )
    
    
    (212,838
    )Bad debt provision
    
    
    180,000
    
    
    
    330,000
    
    
    
    300,000Ending balance at December 31
    
    $
    884,370
    
    
    $
    689,949
    
    
    $
    577,305
 Cash and Cash Equivalents
  Inventories
  Property, Plant, and Equipment
  Stock-Based Compensation
  26




---



##### Table of Contents



1. Significant Accounting Policies (continued)
     Year Ended December 31,2005
    
    2004Net income, as reported
    
    $
    50,078
    
    
    $
    33,360Deduct: Total stock-based employee compensation expense
determined under fair value based methods for all
awards net of related tax effects
    
    
    301
    
    
    
    375Pro forma net income
    
    $
    49,777
    
    
    $
    32,985Earnings per share;Basic, as reported
    
    $
    2.17
    
    
    $
    1.45Basic, pro forma
    
    
    2.15
    
    
    
    1.43Diluted, as reported
    
    
    2.13
    
    
    
    1.42Diluted, pro forma
    
    
    2.11
    
    
    
    1.40
 Earnings Per Share
  Income Taxes
  27




---



##### Table of Contents



2. Inventories
  2006
    
    2005Raw materials
    
    $
    18,259,579
    
    
    $
    11,288,100Work-in-process
    
    
    17,998,087
    
    
    
    8,427,935Finished goods
    
    
    149,961,827
    
    
    
    84,664,933186,219,493
    
    
    
    104,380,968Adjust to LIFO cost
    
    
    (82,272,128
    )
    
    
    (36,449,280
    )Lower of cost or market adjustment
    
    
    
    
    
    
    $
    103,947,365
    
    
    $
    67,931,688
  3. Accrued Liabilities
  2006
    
    2005Sales volume discounts payable
    
    $
    14,820,902
    
    
    $
    12,192,399Property taxes payable
    
    
    2,041,370
    
    
    
    2,082,473Commissions payable
    
    
    2,089,781
    
    
    
    1,790,415Accrued salaries
    
    
    2,868,166
    
    
    
    2,078,899Other accrued liabilities
    
    
    1,951,725
    
    
    
    1,159,922$
    23,771,944
    
    
    $
    19,304,108
 4. Long-Term Notes Payable
  2006
    
    20055.27% Senior Notes due 2011
    
    $
    45,000,000
    
    
    $
    45,000,000Floating Rate Senior Notes due 2011
    
    
    55,000,000
    
    
    
    Revolving line of credit
    
    
    
    
    
    
    26,200,000Fair value of interest rate swap
    
    
    (1,025,709
    )
    
    
    (761,913
    )$
    98,974,291
    
    
    $
    70,438,087
  28




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##### Table of Contents



5. Income Taxes
  2006
    
    2005
    
    2004Current:Federal
    
    $
    61,072,801
    
    
    $
    27,350,626
    
    
    $
    13,022,404State
    
    
    2,482,736
    
    
    
    1,434,716
    
    
    
    509,307Deferred
    
    
    (1,948,260
    )
    
    
    (3,886,901
    )
    
    
    4,912,410$
    61,607,277
    
    
    $
    24,898,441
    
    
    $
    18,444,121
  2006
    
    2005
    
    2004Amount computed using the statutory rate
    
    $
    61,859,165
    
    
    $
    26,241,913
    
    
    $
    18,131,455State income taxes, net of federal tax benefit
    
    
    1,613,778
    
    
    
    932,565
    
    
    
    658,868Qualified domestic production activity deduction
    
    
    (1,867,862
    )
    
    
    (885,622
    )
    
    
    Other items
    
    
    2,196
    
    
    
    (1,390,415
    )
    
    
    (346,202
    )$
    61,607,277
    
    
    $
    24,898,441
    
    
    $
    18,444,121
 29




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##### Table of Contents



Deferred Tax Asset (Liability)2006
    
    2005Current
    
    Non-current
    
    Current
    
    Non-currentDepreciation
    
    $
    
    
    
    $
    (9,850,908
    )
    
    $
    
    
    
    $
    (10,619,537
    )Inventory
    
    
    1,906,463
    
    
    
    
    
    
    
    785,824
    
    
    
    Allowance for doubtful accounts
    
    
    320,049
    
    
    
    
    
    
    
    249,106
    
    
    
    Uniform capitalization rules
    
    
    293,496
    
    
    
    
    
    
    
    267,341
    
    
    
    Other
    
    
    (219,298
    )
    
    
    
    
    
    
    (181,192
    )
    
    
    $
    2,300,710
    
    
    $
    (9,850,908
    )
    
    $
    1,121,079
    
    
    $
    (10,619,537
    )
   6. Stock Options
   Number
    
    Weighted
    
    Weighted Averageof
    
    Average Exercise
    
    Remaining
    
    Aggregate IntrinsicShares
    
    Price
    
    Contractual Term
    
    ValueOutstanding at December 31, 2005
    
    
    639,825
    
    
    $
    6.73Granted
    
    
    50,000
    
    
    
    37.95Exercised
    
    
    (96,199
    )
    
    
    7.91Forfeited/Cancelled
    
    
    (1,500
    )
    
    
    7.70Outstanding at December 31, 2006
    
    
    592,126
    
    
    $
    8.87
    
    
    
    4.78
    
    
    $
    8,567Vested and exercisable at December 31, 2006
    
    
    530,426
    
    
    $
    5.99
    
    
    
    3.72
    
    
    $
    8,485
  Year Ended December 31,2006
    
    2005
    
    2004Risk-free interest rate
    
    
    3.84
    %
    
    
    3.84
    %
    
    
    3.42
    %Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    55.7
    %
    
    
    61.2
    %
    
    
    62.5
    %Expected lives
    
    5.0 years
    
    5.0 years
    
    5.0 years
  30




---



##### Table of Contents



7. Earnings Per Share
  2006
    
    2005
    
    2004Numerator:Net income
    
    $
    115,133,194
    
    
    $
    50,078,456
    
    
    $
    33,360,037Denominator:Denominator for basic
earnings per share 
weighted average shares
    
    
    23,254,259
    
    
    
    23,116,881
    
    
    
    23,017,848Effect of dilutive securities:Employee stock options
    
    
    420,016
    
    
    
    419,674
    
    
    
    510,307Denominator for diluted
earnings per share weighted
average shares
    
    
    23,674,275
    
    
    
    23,536,555
    
    
    
    23,528,155
  2006
    
    2005
    
    2004Weighted average anti-dilutive stock options
    
    
    50,000
    
    
    
    11,250
    
    
    
    15,000Weighted average exercise price
    
    $
    37.95
    
    
    $
    20.94
    
    
    $
    20.94
 8. Stockholders Equity
   9. Contingencies
  10. Encore Wire 401-K Plan
  31




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##### Table of Contents



11. Related Party Transactions
  12. Quarterly Financial Information (Unaudited)
  Three Months Ended2006
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    252,048
    
    
    $
    362,048
    
    
    $
    372,915
    
    
    $
    262,319Gross profit
    
    
    39,372
    
    
    
    106,853
    
    
    
    74,266
    
    
    
    23,802Net income
    
    
    16,137
    
    
    
    57,059
    
    
    
    35,761
    
    
    
    6,176Net income per common share  basic
    
    
    0.70
    
    
    
    2.45
    
    
    
    1.54
    
    
    
    0.27Net income per common share  diluted
    
    
    0.68
    
    
    
    2.41
    
    
    
    1.51
    
    
    
    0.26
 Three Months Ended2005
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    137,193
    
    
    $
    169,265
    
    
    $
    207,459
    
    
    $
    244,172Gross profit
    
    
    10,747
    
    
    
    15,371
    
    
    
    30,997
    
    
    
    68,133Net income
    
    
    1,037
    
    
    
    2,426
    
    
    
    11,205
    
    
    
    35,410Net income per common share  basic
    
    
    0.04
    
    
    
    0.10
    
    
    
    0.48
    
    
    
    1.53Net income per common share  diluted
    
    
    0.04
    
    
    
    0.10
    
    
    
    0.48
    
    
    
    1.50
 32




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
   Internal Control 
Integrated Framework.
  By:
    /s/ Daniel L. JonesDaniel L. JonesPresident , Chief Executive Officer and Director By:
    /s/ Frank J. BilbanFrank J. BilbanVice President  Finance, Treasurer, Secretary
and Chief Financial Officer 33




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Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
 
 Internal ControlIntegrated Framework
    .
   
 34




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
 None.
 
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
  http://www.encorewire.com
 
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  35




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PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    The following documents are filed as a part of this report:
 (1)
    
    Consolidated Financial Statements included in Item 8 above are filed as part of this annual report.(2)
    
    Consolidated Financial Statement Schedules included in Item 8 herein:All schedules for which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.(3)
    
    Exhibits:The information required by this Item 15(a)(3) is set forth in the Index to Exhibits accompanying
this Annual Report on Form 10-K.
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SIGNATURES
    By:
    /s/ DANIEL L. JONESDaniel L. JonesPresident and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ DANIEL L. JONES

Daniel L. Jones
    
    President, Chief Executive
Officer and Director (Principal
Executive Officer)
    
    March 9, 2007/s/ FRANK J. BILBAN

Frank J. Bilban
    
    Vice President-Finance,
Treasurer, Secretary and
Chief Financial Officer (Principal
Financial and Accounting Officer)
    
    March 9, 2007
 37




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Signature
    
    Title
    
    Date/s/ DONALD E. COURTNEY

Donald E. Courtney
    
    Director
    
    March 9, 2007/s/ JOSEPH M. BRITO

Joseph M. Brito
    
    Director
    
    March 9, 2007/s/ JOHN H. WILSON
    
    Director
    
    March 9, 2007John H. Wilson/s/ WILLIAM R. THOMAS
    
    Director
    
    March 9, 2007William R. Thomas/s/ SCOTT D. WEAVER
    
    Director
    
    March 9, 2007Scott D. Weaver/s/ THOMAS L. CUNNINGHAM
    
    Director
    
    March 9, 2007Thomas L. Cunningham
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ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as
amended (filed as Exhibit 3.1 to the Companys Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004, and
incorporated herein by reference).3.2
    
    Amended and Restated Bylaws of Encore Wire Corporation (filed
as Exhibit 3.2 to the Companys Annual Report on Form 10-K
for the year ended December 31, 2005 and incorporated herein
by reference).10.1
    
    Financing Agreement by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, and Comerica
Bank-Texas, as Lenders, dated August 31, 1999 (filed as
exhibit 10.1 to the Companys Quarterly Report on Form 10Q
for the quarter ended September 30, 1999 and incorporated
herein by reference).10.2
    
    First amendment to Financing Agreement of August 31, 1999,
dated June 27, 2000 by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, and Comerica
Bank-Texas, as Lenders (filed as Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000, and incorporated herein by reference).10.3
    
    Second amendment to Financing Agreement of August 31, 1999,
dated June 28, 2002 by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, and Comerica
Bank-Texas, as Lenders (filed as Exhibit 10.3 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002, and incorporated herein by reference).10.4
    
    Third amendment to Financing Agreement of August 31, 1999,
dated March 31, 2003 by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, and Comerica
Bank-Texas, as Lenders (filed as Exhibit 10.4 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
March 31, 2003 and incorporated herein by reference).10.5
    
    Fourth amendment to Financing Agreement of August 31, 1999,
dated November 5, 2003, by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, and Comerica
Bank-Texas, as Lenders (filed as exhibit 10.5 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2003 and incorporated herein by reference).10.6
    
    Fifth amendment to Financing Agreement of August 31, 1999,
dated January 15, 2004 by and among Encore Wire Limited, as
Borrower, Bank of America, National Association, as Agent,
and Bank of America, National Association, Comerica
Bank-Texas, Wells Fargo Bank, N.A., Bank One, N.A., Guaranty
Bank and Hibernia National Bank, as Lenders (filed as exhibit
10.6 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2003 and incorporated herein by
reference).10.7
    
    Credit Agreement by and among Encore Wire Limited, as
Borrower, Bank of America, N.A., as Agent, and Bank of
America, N.A. and Wells Fargo Bank, National Association, as
Lenders, dated August 27, 2004 (filed as Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004 and incorporated herein by reference).10.8
    
    First Amendment to Credit Agreement of August 27, 2004, dated
May 16, 2006 by and among Encore Wire Limited, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A.
and Wells Fargo Bank, National Association, as Lenders (filed
as Exhibit 10.3 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2006, and incorporated
herein by reference).
 39




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ExhibitNumber
    
    Description10.9
    
    Second Amendment to Credit Agreement of August 27, 2004,
dated August 31, 2006 by and among Encore Wire Limited, as
Borrower, Bank of America, N.A., as Agent, and Bank of
America, N.A. and Wells Fargo Bank, National Association, as
Lenders (filed as Exhibit 10.3 to the Companys Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006,
and incorporated herein by reference).10.10
    
    Note Purchase Agreement by and among Encore Wire Limited and
Encore Wire Corporation, as Debtors, and Hartford Life
Insurance Company, Great-West Life & Annuity Insurance
Company, London Life Insurance Company and London Life and
Casualty Reinsurance Corporation, as Purchasers, dated August
27, 2004 (filed as Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q for the quarter ended September 30, 2004
and incorporated herein by reference).10.11
    
    Master Note Purchase Agreement by and among Encore Wire
Limited and Encore Wire Corporation, as Debtors, and
Metropolitan Life Insurance Company, Metlife Insurance
Company of Connecticut and Great-West Life & Annuity
Insurance Company, as Purchasers, dated September 28, 2006
(filed as Exhibit 10.5 to the Companys Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006, and
incorporated herein by reference).10.12*
    
    1999 Stock Option Plan, as amended and restated, effective as
of October 24, 2001 (filed as Exhibit 99.1 to the Companys
Registration Statement on Form S-8 (No. 333-86620), and
incorporated herein by reference).10.13*
    
    1999 Stock Option Plan, as amended and restated, effective as
of February 20, 2006 (filed as Exhibit 4.1 to the Companys
Registration Statement on Form S-8 (No. 333-138165), and
incorporated herein by reference).21.1
    
    Subsidiaries (filed as Exhibit 21.1 to the Companys Annual
Report on Form 10-K for the year ended December 31, 2001 and
incorporated herein by reference).23.1
    
    Consent of Ernst & Young LLP (included herein).31.1
    
    Certificate by Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 9, 2007 and submitted
pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (included herein).31.2
    
    Certificate by Frank J. Bilban, Vice President  Finance,
Treasurer, Secretary and Chief Financial Officer of the
Company, dated March 9, 2007 and submitted pursuant to Rule
13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (included herein).32.1
    
    Certificate by Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 9, 2007 as required by 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (included herein).32.2
    
    Certificate by Frank J. Bilban, Vice President  Finance,
Treasurer, Secretary and Chief Financial Officer, dated March
9, 2007 as required by 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(included herein).
 
 *
    
    Management contract or compensatory plan 40