##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to.
 Commission file number: 1-12983
 GENERAL CABLE CORPORATION
  Delaware
    
    06-1398235(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)4 Tesseneer Drive
    
    41076-9753Highland Heights, KY
    
    (Zip Code)(Address of principal executive offices)
 Registrants telephone number, including area code: (859) 572-8000
 þ o
 o þ o
 o þ
  Class
    
    Outstanding at May 1, 2006Common Stock, $0.01 per value
    
    
    50,544,232




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##### 



GENERAL CABLE CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
 PAGEPART I Financial InformationItem 1. Condensed Consolidated Financial StatementsStatements of Operations -
For the three fiscal months ended March 31, 2006 and April 1, 2005
    
    
    3Balance Sheets -
March 31, 2006 and December 31, 2005
    
    
    4Statements of Cash Flows -
For the three fiscal months ended March 31, 2006 and April 1, 2005
    
    
    5Statements of Changes in Shareholders Equity -
For the three fiscal months ended March 31, 2006 and April 1, 2005
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    33Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    47Item 4. Controls and Procedures
    
    
    47PART II Other InformationItem 1A. Risk Factors
    
    
    48Item 6. Exhibits
    
    
    48Signature
    
    
    49Index to Exhibits
    
    
    50EX-12.1EX-31.1EX-31.2EX-32.1
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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(in millions, except per share data)
 (unaudited)
 Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005Net sales
    
    $
    804.3
    
    
    $
    554.2Cost of sales
    
    
    706.7
    
    
    
    486.8Gross profit
    
    
    97.6
    
    
    
    67.4Selling, general and administrative expenses
    
    
    55.4
    
    
    
    43.2Operating income
    
    
    42.2
    
    
    
    24.2Other income (expense)
    
    
    0.8
    
    
    
    (0.1
    )Interest income (expense):Interest expense
    
    
    (10.1
    )
    
    
    (10.3
    )Interest income
    
    
    0.5
    
    
    
    0.4(9.6
    )
    
    
    (9.9
    )Income before income taxes
    
    
    33.4
    
    
    
    14.2Income tax provision
    
    
    (12.0
    )
    
    
    (5.2
    )Net income
    
    
    21.4
    
    
    
    9.0Less: preferred stock dividends
    
    
    (0.1
    )
    
    
    (1.5
    )Net income applicable to common shareholders
    
    $
    21.3
    
    
    $
    7.5Earnings per shareEarnings per common share
    
    $
    0.43
    
    
    $
    0.19Weighted average common shares
    
    
    50.0
    
    
    
    39.2Earnings per common share-assuming dilution
    
    $
    0.41
    
    
    $
    0.18Weighted average common shares-assuming dilution
    
    
    51.6
    
    
    
    50.7
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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
(in millions, except share data)
 March 31,
    
    
    December 31,2006
    
    
    2005(unaudited)AssetsCurrent Assets:Cash
    
    $
    63.0
    
    
    $
    72.2Receivables, net of allowances of $10.8 million at March 31, 2006 and
$8.6 million at December 31, 2005
    
    
    633.6
    
    
    
    542.9Inventories
    
    
    389.0
    
    
    
    363.9Deferred income taxes
    
    
    41.9
    
    
    
    41.9Prepaid expenses and other
    
    
    46.6
    
    
    
    48.6Total current assets
    
    
    1,174.1
    
    
    
    1,069.5Property, plant and equipment, net
    
    
    367.9
    
    
    
    366.4Deferred income taxes
    
    
    52.5
    
    
    
    52.5Other non-current assets
    
    
    35.5
    
    
    
    34.8Total assets
    
    $
    1,630.0
    
    
    $
    1,523.2Liabilities and Shareholders EquityCurrent Liabilities:Accounts payable
    
    $
    538.1
    
    
    $
    472.3Accrued liabilities
    
    
    189.3
    
    
    
    212.2Current portion of long-term debt
    
    
    7.1
    
    
    
    6.4Total current liabilities
    
    
    734.5
    
    
    
    690.9Long-term debt
    
    
    465.2
    
    
    
    445.2Deferred income taxes
    
    
    12.9
    
    
    
    13.4Other liabilities
    
    
    88.7
    
    
    
    80.4Total liabilities
    
    
    1,301.3
    
    
    
    1,229.9Shareholders Equity:Redeemable convertible preferred stock, at redemption value
(liquidation preference of $50.00 per share):
March 31, 2006  101,949 outstanding shares
December 31, 2005  129,916 outstanding shares
    
    
    5.1
    
    
    
    6.5Common stock, $0.01 par value, issued and outstanding shares:
March 31, 2006  50,425,943 (net of 4,991,105 treasury shares)
December 31, 2005  49,520,209 (net of 4,968,755 treasury shares)
    
    
    0.5
    
    
    
    0.5Additional paid-in capital
    
    
    253.2
    
    
    
    246.3Treasury stock
    
    
    (52.7
    )
    
    
    (52.2
    )Retained earnings
    
    
    125.1
    
    
    
    103.8Accumulated other comprehensive loss
    
    
    (2.5
    )
    
    
    (6.8
    )Other shareholders equity
    
    
    
    
    
    
    (4.8
    )Total shareholders equity
    
    
    328.7
    
    
    
    293.3Total liabilities and shareholders equity
    
    $
    1,630.0
    
    
    $
    1,523.2
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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
 Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005Cash flows of operating activities:Net income
    
    $
    21.4
    
    
    $
    9.0Adjustments to reconcile net income to net cash flows of
operating activities:Depreciation and amortization
    
    
    12.5
    
    
    
    9.0Foreign currency exchange (gain) loss
    
    
    (0.8
    )
    
    
    0.1Deferred income taxes
    
    
    2.7
    
    
    
    (1.1
    )Loss on disposal of property
    
    
    0.7
    
    
    
    0.3Changes in operating assets and liabilities, net of effect of
acquisitions and divestitures:Increase in receivables
    
    
    (86.4
    )
    
    
    (30.3
    )Increase in inventories
    
    
    (15.7
    )
    
    
    (24.3
    )Decrease in other assets
    
    
    3.2
    
    
    
    13.1Increase in accounts payable, accrued and other liabilities
    
    
    32.2
    
    
    
    19.1Net cash flows of operating activities
    
    
    (30.2
    )
    
    
    (5.1
    )Cash flows of investing activities:Capital expenditures
    
    
    (8.0
    )
    
    
    (7.2
    )Proceeds from properties sold
    
    
    0.4
    
    
    
    Acquisitions, net of cash acquired
    
    
    
    
    
    
    (7.5
    )Other, net
    
    
    (0.8
    )
    
    
    (0.3
    )Net cash flows of investing activities
    
    
    (8.4
    )
    
    
    (15.0
    )Cash flows of financing activities:Preferred stock dividends paid
    
    
    (0.1
    )
    
    
    (1.5
    )Excess tax benefits from stock-based compensation
    
    
    3.3
    
    
    
    Net change in revolving credit borrowings
    
    
    19.2
    
    
    
    20.1Proceeds of other debt
    
    
    0.6
    
    
    
    1.0Proceeds from exercise of stock options
    
    
    6.1
    
    
    
    0.2Net cash flows of financing activities
    
    
    29.1
    
    
    
    19.8Effect of exchange rate changes on cash
    
    
    0.3
    
    
    
    (1.6
    )Decrease in cash
    
    
    (9.2
    )
    
    
    (1.9
    )Cash  beginning of period
    
    
    72.2
    
    
    
    36.4Cash  end of period
    
    $
    63.0
    
    
    $
    34.5Supplemental InformationCash paid during the period for:Income tax payments, net of refunds
    
    $
    5.8
    
    
    $
    (2.8
    )Interest paid
    
    $
    3.1
    
    
    $
    2.4Non-cash investing and financing activities:Issuance of nonvested shares
    
    $
    5.3
    
    
    $
    1.5Entrance into capital leases
    
    $
    0.1
    
    
    $
    
  5




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Changes in Shareholders Equity
(dollars in millions, share amounts in thousands)
(unaudited)
 AccumulatedAddl
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    OtherPreferred Stock
    
    
    Common Stock
    
    
    Paid in
    
    
    Treasury
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Stock
    
    
    Earnings
    
    
    Income/ (Loss)
    
    
    Equity
    
    
    TotalBalance, December 31, 2004
    
    
    2,070
    
    
    $
    103.5
    
    
    
    39,336
    
    
    $
    0.4
    
    
    $
    144.1
    
    
    $
    (51.0
    )
    
    $
    86.4
    
    
    $
    22.4
    
    
    $
    (4.4
    )
    
    $
    301.4Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.0
    
    
    
    
    
    
    
    
    
    
    
    9.0Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.4
    )
    
    
    
    
    
    
    (8.4
    )Unrealized investment
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Gain on change in fair
value of
financial instruments, net of
$0.4 tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    0.6Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.5
    )
    
    
    
    
    
    
    
    
    
    
    (1.5
    )Issuance of nonvested shares
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    
    
    
    
    1.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.5
    )
    
    
    Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2Amortization of nonvested shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    0.2Other
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.5
    
    
    
    
    
    
    
    (0.1
    )
    
    
    0.6Balance, April 1, 2005
    
    
    2,070
    
    
    $
    103.5
    
    
    
    39,498
    
    
    $
    0.4
    
    
    $
    146.0
    
    
    $
    (51.0
    )
    
    $
    94.4
    
    
    $
    14.2
    
    
    $
    (5.8
    )
    
    $
    301.7Balance, December 31, 2005
    
    
    130
    
    
    $
    6.5
    
    
    
    49,520
    
    
    $
    0.5
    
    
    $
    246.3
    
    
    $
    (52.2
    )
    
    $
    103.8
    
    
    $
    (6.8
    )
    
    $
    (4.8
    )
    
    $
    293.3Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.4
    
    
    
    
    
    
    
    
    
    
    
    21.4Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Unrealized investment
gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.6
    
    
    
    
    
    
    
    1.6Gain on change in fair
value of
financial instruments, net of $1.7
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.9
    
    
    
    
    
    
    
    2.9Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25.7Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Reclass of unearned stock
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.8
    
    
    
    Issuance of nonvested shares
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    564
    
    
    
    
    
    
    
    6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.1Treasury shares related to nonvested
stock vesting
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Amortization of nonvested shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6Excess tax benefits from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3Conversion of preferred stock
    
    
    (28
    )
    
    
    (1.4
    )
    
    
    140
    
    
    
    
    
    
    
    1.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Balance, March 31, 2006
    
    
    102
    
    
    $
    5.1
    
    
    
    50,426
    
    
    $
    0.5
    
    
    $
    253.2
    
    
    $
    (52.7
    )
    
    $
    125.1
    
    
    $
    (2.5
    )
    
    $
    
    
    
    $
    328.7
  6




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 Notes to Condensed Consolidated Financial Statements
 1. General
  2. Summary of Accounting Policies
 Principles of Consolidation
  Basis of Presentation
  Use of Estimates
  Revenue Recognition
  7




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Stock-Based Compensation
   Three FiscalMonths EndedApril 1, 2005Net income as reported
    
    $
    9.0Less: preferred stock dividends
    
    
    (1.5
    )Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net of
related tax effects
    
    
    (0.2
    )Pro forma net income for basic EPS computation
    
    $
    7.3Net income as reported
    
    $
    9.0Less: preferred stock dividends, if applicable
    
    
    n/aDeduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net of
related tax effects
    
    
    (0.2
    )Pro forma net income for diluted EPS computation
    
    $
    8.8Earnings per share:Basic  as reported
    
    $
    0.19Basic  pro forma
    
    $
    0.19Diluted  as reported
    
    $
    0.18Diluted  pro forma
    
    $
    0.17
 8




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  March 31,
    
    
    April 1,2006
    
    
    2005Risk-free interest rate (a)
    
    
    4.7
    %
    
    
    4.4
    %Expected dividend yield (b)
    
    
    N/A
    
    
    
    N/AExpected option life (c)
    
    4.6 years
    
    6.5 yearsExpected stock price volatility (d)
    
    
    62.6
    %
    
    
    32.1
    %Weighted average fair value of options granted
    
    $
    12.73
    
    
    $
    4.52
 
 (a)
    
    Risk-free interest rate This is the U.S. Treasury rate at the end of the quarter in which
the option was granted having a term approximately equal to the expected life of the option. An
increase in the risk-free interest rate will increase compensation expense.(b)
    
    Expected dividend yield The Company has not made any dividend payments on common stock nor
does it have plans to pay dividends on common stock in the foreseeable future. Any dividends paid
in the future will decrease compensation expense.(c)
    
    Expected option life This is the period of time over which the options granted are expected
to remain outstanding and is based on historical experience. Options granted have a maximum term
of ten years. An increase in expected life will increase compensation expense.(d)
    
    Expected stock price volatility This is a measure of the amount by which a price has
fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market
value of the Companys stock to calculate the volatility assumption as it is managements belief
that this is the best indicator of future volatility. An increase in the expected volatility will
increase compensation expense. Earnings Per Share
  Foreign Currency Translation
  Business Combination Accounting
  Inventories
  9




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
   Property, Plant and Equipment
     Goodwill and Other Intangible Assets
  10




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  March 31, 2006
    
    
    December 31, 2005Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedLife
    
    
    Cost
    
    
    Amortization
    
    
    Life
    
    
    Cost
    
    
    AmortizationPatents
    
    
    12
    
    
    $
    1.8
    
    
    $
    *
    
    
    
    
    
    
    $
    
    
    
    $
    Customer Lists
    
    
    10
    
    
    
    0.4
    
    
    
    0.1
    
    
    
    10
    
    
    
    0.4
    
    
    
    *Total
    
    
    
    
    
    $
    2.2
    
    
    $
    0.1
    
    
    
    
    
    
    $
    0.4
    
    
    $
    *
 
 *
    
    Not significant during this period   2006
    
    $
    0.22007
    
    $
    0.22008
    
    $
    0.22009
    
    $
    0.22010
    
    $
    0.2
 Fair Value of Financial Instruments
  Forward Pricing Agreements for Purchases of Copper and Aluminum
  Pension Plans
  Self-insurance
  Concentration of Labor Subject to Collective Bargaining Agreements
  11




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Concentration of Credit Risk
  Income Taxes
   Deferred Income Tax Valuation Allowance
  Derivative Financial Instruments
   12




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Shipping and Handling Costs
  Advertising Expense
  New Standards
     13




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
   3. Acquisitions and Divestitures
  ® ® ® ®
   14




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 4. Other Income (Expense)
  5. Inventories
  March 31,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    40.9
    
    
    $
    40.6Work in process
    
    
    72.7
    
    
    
    56.2Finished goods
    
    
    275.4
    
    
    
    267.1Total
    
    $
    389.0
    
    
    $
    363.9
   6. Restructuring Charges
  Severance and
    
    
    FacilityRelated Costs
    
    
    Closing Costs
    
    
    TotalBalance, December 31, 2005
    
    $
    1.0
    
    
    $
    0.5
    
    
    $
    1.5Provisions, net
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Utilization
    
    
    (0.4
    )
    
    
    (0.2
    )
    
    
    (0.6
    )Balance, March 31, 2006
    
    $
    0.4
    
    
    $
    0.3
    
    
    $
    0.7
  7. Long-Term Debt
  March 31,
    
    
    December 31,2006
    
    
    2005Senior notes due 2010
    
    $
    285.0
    
    
    $
    285.0Revolving loans
    
    
    134.3
    
    
    
    115.1Spanish term loan
    
    
    36.4
    
    
    
    35.4Capital leases
    
    
    5.3
    
    
    
    5.2Other
    
    
    11.3
    
    
    
    10.9Total debt
    
    
    472.3
    
    
    
    451.6Less current maturities
    
    
    7.1
    
    
    
    6.4Long-term debt
    
    $
    465.2
    
    
    $
    445.2
 15




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Senior notes due 2010
    
    
    9.5
    %
    
    
    9.5
    %Revolving loans
    
    
    6.3
    %
    
    
    6.4
    %Spanish term loan
    
    
    3.7
    %
    
    
    3.4
    %Capital leases
    
    
    6.5
    %
    
    
    6.5
    %Other
    
    
    3.8
    %
    
    
    3.8
    %
        16




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
   ® ®
       8. Financial Instruments
   17




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
       9. Pension Plans and Other Post-retirement Benefits
  18




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
    Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Pension
    
    
    Other
    
    
    Pension
    
    
    OtherService cost
    
    $
    0.7
    
    
    $
    0.1
    
    
    $
    0.5
    
    
    $
    Interest cost
    
    
    2.5
    
    
    
    0.1
    
    
    
    2.4
    
    
    
    0.1Expected return on plan assets
    
    
    (2.8
    )
    
    
    
    
    
    
    (2.7
    )
    
    
    Net amortization and deferral
    
    
    1.2
    
    
    
    
    
    
    
    0.9
    
    
    
    Total defined benefit plans expense
    
    
    1.6
    
    
    
    0.2
    
    
    
    1.1
    
    
    
    0.1Total defined contribution plans expense
    
    
    2.3
    
    
    
    
    
    
    
    1.8
    
    
    
    Total
    
    $
    3.9
    
    
    $
    0.2
    
    
    $
    2.9
    
    
    $
    0.1
   10. Shareholders Equity
    19




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
     20




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
   March 31,
    
    
    December 31,2006
    
    
    2005Foreign currency translation adjustment
    
    $
    14.0
    
    
    $
    14.2Pension adjustments, net of tax
    
    
    (33.4
    )
    
    
    (33.4
    )Change in fair value of derivatives, net of tax
    
    
    11.4
    
    
    
    8.5Unrealized investment gains
    
    
    5.1
    
    
    
    3.5Other
    
    
    0.4
    
    
    
    0.4Total
    
    $
    (2.5
    )
    
    $
    (6.8
    )
  March 31,
    
    
    December 31,2006
    
    
    2005Loans to shareholders
    
    $
    
    
    
    $
    Nonvested stock
    
    
    
    
    
    
    (4.8
    )Total
    
    $
    
    
    
    $
    (4.8
    )
  11. Share-Based Compensation
    21




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
     Stock Options
   WeightedAverageOptions
    
    
    ExerciseOutstanding
    
    
    PriceBalance At December 31, 2005
    
    
    3,144
    
    
    $
    10.90Granted
    
    
    109
    
    
    
    23.18Exercised
    
    
    (564
    )
    
    
    10.83Forfeited or Expired
    
    
    (22
    )
    
    
    21.86Balance At March 31, 2006
    
    
    2,667
    
    
    $
    11.29
  22




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Weighted

    
    Weighted

    
    
    
    
    
    WeightedAverage

    
    Average

    
    
    
    
    
    AverageRange of
    
    Options

    
    Exercise

    
    Remaining

    
    Options

    
    ExerciseOption Prices
    
    Outstanding

    
    Price

    
    Contractual Life
    
    Exercisable

    
    Price$0 - $7
    
    
    847
    
    
    $
    4.03
    
    
    6.8 years
    
    
    828
    
    
    $
    4.00$7 - $14
    
    
    1,282
    
    
    
    11.92
    
    
    4.8 years
    
    
    1,108
    
    
    
    11.95$14 - $21
    
    
    115
    
    
    
    14.25
    
    
    3.4 years
    
    
    115
    
    
    
    14.24$21 - $28
    
    
    423
    
    
    
    23.09
    
    
    4.3 years
    
    
    314
    
    
    
    23.06
 Nonvested Stock
     WeightedAverageShares

    
    Grant DateOutstanding

    
    Fair ValueBalance At December 31, 2005
    
    
    743
    
    
    $
    9.90Granted
    
    
    229
    
    
    
    23.48Vested
    
    
    (262
    )
    
    
    8.73Forfeited
    
    
    
    
    
    
    Balance At March 31, 2006
    
    
    710
    
    
    $
    14.72
  23




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 12. Earnings Per Common Share
  Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005Earnings per common share  basic:Net income
    
    $
    21.4
    
    
    $
    9.0Less: preferred stock dividends
    
    
    (0.1
    )
    
    
    (1.5
    )Net income for basic EPS computation (1)
    
    $
    21.3
    
    
    $
    7.5Weighted average shares outstanding for basic EPS
computation (2)
    
    
    50.0
    
    
    
    39.2Earnings per common share  basic
    
    $
    0.43
    
    
    $
    0.19Earnings per common share  diluted:Net income
    
    $
    21.4
    
    
    $
    9.0Less: preferred stock dividends, if applicable
    
    
    (0.1
    )
    
    
    n/aNet income for diluted EPS computation(1)
    
    $
    21.3
    
    
    $
    9.0Weighted average shares outstanding
    
    
    50.0
    
    
    
    39.2Dilutive effect of stock options and restricted stock units
    
    
    1.1
    
    
    
    1.2Dilutive effect of assumed conversion of preferred stock,
if applicable
    
    
    0.5
    
    
    
    10.3Weighted average shares outstanding for diluted EPS
computation(2)
    
    
    51.6
    
    
    
    50.7Earnings per common share  diluted
    
    $
    0.41
    
    
    $
    0.18
 
 (1)
    
    Numerator(2)
    
    Denominator  13. Segment Information
    24




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
  Three Fiscal Months EndedIndustrial &Energy
    
    Specialty
    
    Communications
    
    Corporate
    
    TotalNet Sales:March 31, 2006
    
    $
    300.1
    
    
    $
    354.2
    
    
    $
    150.0
    
    
    $
    
    
    
    $
    804.3April 1, 2005
    
    
    196.5
    
    
    
    241.2
    
    
    
    116.5
    
    
    
    
    
    
    
    554.2Operating Income:March 31, 2006
    
    
    18.5
    
    
    
    19.9
    
    
    
    3.8
    
    
    
    
    
    
    
    42.2April 1, 2005
    
    
    12.3
    
    
    
    9.2
    
    
    
    2.7
    
    
    
    
    
    
    
    24.2Identifiable Assets:March 31, 2006
    
    
    509.6
    
    
    
    646.8
    
    
    
    315.6
    
    
    
    158.0
    
    
    
    1,630.0December 31, 2005
    
    
    473.7
    
    
    
    580.8
    
    
    
    301.8
    
    
    
    166.9
    
    
    
    1,523.2
 14. Commitments and Contingencies
      25




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
   ®
       26




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 15. Supplemental Guarantor Information
  Condensed Statements of Operations
Three Fiscal Months Ended March 31, 2006
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalNet sales:Customers
    
    $
    
    
    
    $
    454.9
    
    
    $
    349.4
    
    
    $
    
    
    
    $
    804.3Intercompany
    
    
    12.2
    
    
    
    
    
    
    
    
    
    
    
    (12.2
    )
    
    
    12.2
    
    
    
    454.9
    
    
    
    349.4
    
    
    
    (12.2
    )
    
    
    804.3Cost of sales
    
    
    
    
    
    
    403.3
    
    
    
    303.4
    
    
    
    
    
    
    
    706.7Gross profit
    
    
    12.2
    
    
    
    51.6
    
    
    
    46.0
    
    
    
    (12.2
    )
    
    
    97.6Selling, general and administrative
expenses
    
    
    11.4
    
    
    
    34.0
    
    
    
    22.2
    
    
    
    (12.2
    )
    
    
    55.4Operating income
    
    
    0.8
    
    
    
    17.6
    
    
    
    23.8
    
    
    
    
    
    
    
    42.2Other income (expense)
    
    
    
    
    
    
    (0.1
    )
    
    
    0.9
    
    
    
    
    
    
    
    0.8Interest income (expense):Interest expense
    
    
    (6.4
    )
    
    
    (15.4
    )
    
    
    (1.5
    )
    
    
    13.2
    
    
    
    (10.1
    )Interest income
    
    
    12.5
    
    
    
    0.2
    
    
    
    1.0
    
    
    
    (13.2
    )
    
    
    0.56.1
    
    
    
    (15.2
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (9.6
    )Income before income taxes
    
    
    6.9
    
    
    
    2.3
    
    
    
    24.2
    
    
    
    
    
    
    
    33.4Income tax provision
    
    
    (2.4
    )
    
    
    (1.5
    )
    
    
    (8.1
    )
    
    
    
    
    
    
    (12.0
    )Net income
    
    
    4.5
    
    
    
    0.8
    
    
    
    16.1
    
    
    
    
    
    
    
    21.4Less: preferred stock dividends
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Net income applicable to common
shareholders
    
    $
    4.4
    
    
    $
    0.8
    
    
    $
    16.1
    
    
    $
    
    
    
    $
    21.3
 27




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 Condensed Statements of Operations
Three Fiscal Months Ended April 1, 2005
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalNet sales:Customers
    
    $
    
    
    
    $
    351.9
    
    
    $
    202.3
    
    
    $
    
    
    
    $
    554.2Intercompany
    
    
    112.2
    
    
    
    
    
    
    
    5.2
    
    
    
    (117.4
    )
    
    
    112.2
    
    
    
    351.9
    
    
    
    207.5
    
    
    
    (117.4
    )
    
    
    554.2Cost of sales
    
    
    98.1
    
    
    
    316.8
    
    
    
    174.3
    
    
    
    (102.4
    )
    
    
    486.8Gross profit
    
    
    14.1
    
    
    
    35.1
    
    
    
    33.2
    
    
    
    (15.0
    )
    
    
    67.4Selling, general and administrative
expenses
    
    
    12.5
    
    
    
    28.6
    
    
    
    17.1
    
    
    
    (15.0
    )
    
    
    43.2Operating income
    
    
    1.6
    
    
    
    6.5
    
    
    
    16.1
    
    
    
    
    
    
    
    24.2Other expense
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Interest income (expense):Interest expense
    
    
    (7.4
    )
    
    
    (11.6
    )
    
    
    (1.2
    )
    
    
    9.9
    
    
    
    (10.3
    )Interest income
    
    
    9.5
    
    
    
    
    
    
    
    0.8
    
    
    
    (9.9
    )
    
    
    0.42.1
    
    
    
    (11.6
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    (9.9
    )Income (loss) before income taxes
    
    
    3.7
    
    
    
    (5.2
    )
    
    
    15.7
    
    
    
    
    
    
    
    14.2Income tax (provision) benefit
    
    
    (1.3
    )
    
    
    1.4
    
    
    
    (5.3
    )
    
    
    
    
    
    
    (5.2
    )Net income (loss)
    
    
    2.4
    
    
    
    (3.8
    )
    
    
    10.4
    
    
    
    
    
    
    
    9.0Less: preferred stock dividends
    
    
    (1.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.5
    )Net income (loss) applicable to common
shareholders
    
    $
    0.9
    
    
    $
    (3.8
    )
    
    $
    10.4
    
    
    $
    
    
    
    $
    7.5
 28




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 Condensed Balance Sheets
March 31, 2006
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash
    
    $
    
    
    
    $
    7.2
    
    
    $
    55.8
    
    
    $
    
    
    
    $
    63.0Receivables, net of allowances
    
    
    
    
    
    
    248.8
    
    
    
    384.8
    
    
    
    
    
    
    
    633.6Inventories
    
    
    
    
    
    
    217.5
    
    
    
    171.5
    
    
    
    
    
    
    
    389.0Deferred income taxes
    
    
    
    
    
    
    41.9
    
    
    
    
    
    
    
    
    
    
    
    41.9Prepaid expenses and other
    
    
    1.2
    
    
    
    34.5
    
    
    
    10.9
    
    
    
    
    
    
    
    46.6Total current assets
    
    
    1.2
    
    
    
    549.9
    
    
    
    623.0
    
    
    
    
    
    
    
    1,174.1Property, plant and equipment, net
    
    
    0.2
    
    
    
    178.9
    
    
    
    188.8
    
    
    
    
    
    
    
    367.9Deferred income taxes
    
    
    4.8
    
    
    
    43.5
    
    
    
    4.2
    
    
    
    
    
    
    
    52.5Intercompany accounts
    
    
    646.0
    
    
    
    77.5
    
    
    
    124.4
    
    
    
    (847.9
    )
    
    
    Investment in subsidiaries
    
    
    33.7
    
    
    
    190.3
    
    
    
    
    
    
    
    (224.0
    )
    
    
    Other non-current assets
    
    
    7.5
    
    
    
    23.6
    
    
    
    4.4
    
    
    
    
    
    
    
    35.5Total assets
    
    $
    693.4
    
    
    $
    1,063.7
    
    
    $
    944.8
    
    
    $
    (1,071.9
    )
    
    $
    1,630.0Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    183.1
    
    
    $
    355.0
    
    
    $
    
    
    
    $
    538.1Accrued liabilities
    
    
    9.3
    
    
    
    76.3
    
    
    
    103.7
    
    
    
    
    
    
    
    189.3Current portion of long-term debt
    
    
    
    
    
    
    1.0
    
    
    
    6.1
    
    
    
    
    
    
    
    7.1Total current liabilities
    
    
    9.3
    
    
    
    260.4
    
    
    
    464.8
    
    
    
    
    
    
    
    734.5Long-term debt
    
    
    285.0
    
    
    
    147.5
    
    
    
    32.7
    
    
    
    
    
    
    
    465.2Deferred income taxes
    
    
    
    
    
    
    2.2
    
    
    
    10.7
    
    
    
    
    
    
    
    12.9Intercompany accounts
    
    
    37.2
    
    
    
    674.1
    
    
    
    136.6
    
    
    
    (847.9
    )
    
    
    Other liabilities
    
    
    12.8
    
    
    
    57.0
    
    
    
    18.9
    
    
    
    
    
    
    
    88.7Total liabilities
    
    
    344.3
    
    
    
    1,141.2
    
    
    
    663.7
    
    
    
    (847.9
    )
    
    
    1,301.3Total shareholders equity (deficit)
    
    
    349.1
    
    
    
    (77.5
    )
    
    
    281.1
    
    
    
    (224.0
    )
    
    
    328.7Total liabilities and shareholders equity
    
    $
    693.4
    
    
    $
    1,063.7
    
    
    $
    944.8
    
    
    $
    (1,071.9
    )
    
    $
    1,630.0
 29




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GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 Condensed Balance Sheets
December 31, 2005
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash
    
    $
    
    
    
    $
    14.5
    
    
    $
    57.7
    
    
    $
    
    
    
    $
    72.2Receivables, net of allowances
    
    
    
    
    
    
    219.3
    
    
    
    323.6
    
    
    
    
    
    
    
    542.9Inventories
    
    
    
    
    
    
    209.2
    
    
    
    154.7
    
    
    
    
    
    
    
    363.9Deferred income taxes
    
    
    
    
    
    
    40.0
    
    
    
    1.9
    
    
    
    
    
    
    
    41.9Prepaid expenses and other
    
    
    1.2
    
    
    
    31.9
    
    
    
    15.5
    
    
    
    
    
    
    
    48.6Total current assets
    
    
    1.2
    
    
    
    514.9
    
    
    
    553.4
    
    
    
    
    
    
    
    1,069.5Property, plant and equipment, net
    
    
    0.2
    
    
    
    206.2
    
    
    
    160.0
    
    
    
    
    
    
    
    366.4Deferred income taxes
    
    
    
    
    
    
    49.6
    
    
    
    2.9
    
    
    
    
    
    
    
    52.5Intercompany accounts
    
    
    616.1
    
    
    
    109.4
    
    
    
    98.7
    
    
    
    (824.2
    )
    
    
    Investment in subsidiaries
    
    
    33.7
    
    
    
    190.3
    
    
    
    
    
    
    
    (224.0
    )
    
    
    Other non-current assets
    
    
    10.6
    
    
    
    23.3
    
    
    
    0.9
    
    
    
    
    
    
    
    34.8Total assets
    
    $
    661.8
    
    
    $
    1,093.7
    
    
    $
    815.9
    
    
    $
    (1,048.2
    )
    
    $
    1,523.2Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    168.6
    
    
    $
    303.7
    
    
    $
    
    
    
    $
    472.3Accrued liabilities
    
    
    3.3
    
    
    
    95.7
    
    
    
    113.2
    
    
    
    
    
    
    
    212.2Current portion of long-term debt
    
    
    
    
    
    
    1.0
    
    
    
    5.4
    
    
    
    
    
    
    
    6.4Total current liabilities
    
    
    3.3
    
    
    
    265.3
    
    
    
    422.3
    
    
    
    
    
    
    
    690.9Long-term debt
    
    
    285.0
    
    
    
    128.3
    
    
    
    31.9
    
    
    
    
    
    
    
    445.2Deferred income taxes
    
    
    1.1
    
    
    
    2.4
    
    
    
    9.9
    
    
    
    
    
    
    
    13.4Intercompany accounts
    
    
    34.5
    
    
    
    698.1
    
    
    
    91.6
    
    
    
    (824.2
    )
    
    
    Other liabilities
    
    
    12.3
    
    
    
    54.3
    
    
    
    13.8
    
    
    
    
    
    
    
    80.4Total liabilities
    
    
    336.2
    
    
    
    1,148.4
    
    
    
    569.5
    
    
    
    (824.2
    )
    
    
    1,229.9Total shareholders equity (deficit)
    
    
    325.6
    
    
    
    (54.7
    )
    
    
    246.4
    
    
    
    (224.0
    )
    
    
    293.3Total liabilities and shareholders equity
    
    $
    661.8
    
    
    $
    1,093.7
    
    
    $
    815.9
    
    
    $
    (1,048.2
    )
    
    $
    1,523.2
 30




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 Condensed Statements of Cash Flows
Three Fiscal Months Ended March 31, 2006
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash flows of operating activities:Net income
    
    $
    4.5
    
    
    $
    0.8
    
    
    $
    16.1
    
    
    $
    
    
    
    $
    21.4Adjustment to reconcile net income to
net cash flows of operating activities:Depreciation and amortization
    
    
    
    
    
    
    8.3
    
    
    
    4.2
    
    
    
    
    
    
    
    12.5Foreign currency exchange (gain) loss
    
    
    
    
    
    
    0.1
    
    
    
    (0.9
    )
    
    
    
    
    
    
    (0.8
    )Deferred income taxes
    
    
    (2.7
    )
    
    
    4.2
    
    
    
    1.2
    
    
    
    
    
    
    
    2.7Loss on disposal of property
    
    
    
    
    
    
    0.4
    
    
    
    0.3
    
    
    
    
    
    
    
    0.7Changes in operating assets and
liabilities, net of effect of
acquisitions and divestitures:Increase in receivables
    
    
    
    
    
    
    (29.5
    )
    
    
    (56.9
    )
    
    
    
    
    
    
    (86.4
    )(Increase) decrease in inventories
    
    
    
    
    
    
    0.7
    
    
    
    (16.4
    )
    
    
    
    
    
    
    (15.7
    )(Increase) decrease in other assets
    
    
    3.1
    
    
    
    2.1
    
    
    
    (2.0
    )
    
    
    
    
    
    
    3.2Increase (decrease) in accounts
payable, accrued and other
liabilities
    
    
    3.3
    
    
    
    (14.0
    )
    
    
    42.9
    
    
    
    
    
    
    
    32.2Net cash flows of operating activities
    
    
    8.2
    
    
    
    (26.9
    )
    
    
    (11.5
    )
    
    
    
    
    
    
    (30.2
    )Cash flows of investing activities:Capital expenditures
    
    
    
    
    
    
    (3.3
    )
    
    
    (4.7
    )
    
    
    
    
    
    
    (8.0
    )Proceeds from properties sold
    
    
    
    
    
    
    0.1
    
    
    
    0.3
    
    
    
    
    
    
    
    0.4Acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other, net
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Net cash flows of investing activities
    
    
    
    
    
    
    (4.0
    )
    
    
    (4.4
    )
    
    
    
    
    
    
    (8.4
    )Cash flows of financing activities:Preferred stock dividends paid
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Excess tax benefits from stock-based compensation
    
    
    3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3Intercompany accounts
    
    
    (17.5
    )
    
    
    4.5
    
    
    
    13.0
    
    
    
    
    
    
    
    Net change in revolving credit borrowings
    
    
    
    
    
    
    19.2
    
    
    
    
    
    
    
    
    
    
    
    19.2Net change in other debt
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    0.6Proceeds from exercise of stock options
    
    
    6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.1Net cash flows of financing activities
    
    
    (8.2
    )
    
    
    23.7
    
    
    
    13.6
    
    
    
    
    
    
    
    29.1Effect of exchange rate changes on cash
    
    
    
    
    
    
    (0.1
    )
    
    
    0.4
    
    
    
    
    
    
    
    0.3Decrease in cash
    
    
    
    
    
    
    (7.3
    )
    
    
    (1.9
    )
    
    
    
    
    
    
    (9.2
    )Cash  beginning of period
    
    
    
    
    
    
    14.5
    
    
    
    57.7
    
    
    
    
    
    
    
    72.2Cash  end of period
    
    $
    
    
    
    $
    7.2
    
    
    $
    55.8
    
    
    $
    
    
    
    $
    63.0
 31




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 Notes to Condensed Consolidated Financial Statements  (Continued)
 Condensed Statements of Cash Flows
Three Fiscal Months Ended April 1, 2005
 Non-Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash flows of operating activities:Net income (loss)
    
    $
    2.4
    
    
    $
    (3.8
    )
    
    $
    10.4
    
    
    $
    
    
    
    $
    9.0Adjustment to reconcile net income (loss) to
net cash flows of operating activities:Depreciation and amortization
    
    
    
    
    
    
    7.5
    
    
    
    1.5
    
    
    
    
    
    
    
    9.0Foreign currency exchange loss
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Deferred income taxes
    
    
    
    
    
    
    1.5
    
    
    
    (2.6
    )
    
    
    
    
    
    
    (1.1
    )Loss on disposal of property
    
    
    
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    
    
    
    
    0.3Changes in operating assets and
liabilities, net of effect of
acquisitions and divestitures:Increase in receivables
    
    
    
    
    
    
    (24.1
    )
    
    
    (6.2
    )
    
    
    
    
    
    
    (30.3
    )Increase in inventories
    
    
    
    
    
    
    (22.0
    )
    
    
    (2.3
    )
    
    
    
    
    
    
    (24.3
    )(Increase) decrease in other assets
    
    
    (3.7
    )
    
    
    16.7
    
    
    
    0.1
    
    
    
    
    
    
    
    13.1Increase in accounts payable,
accrued and other liabilities
    
    
    6.8
    
    
    
    4.1
    
    
    
    8.2
    
    
    
    
    
    
    
    19.1Net cash flows of operating activities
    
    
    5.5
    
    
    
    (19.8
    )
    
    
    9.2
    
    
    
    
    
    
    
    (5.1
    )Cash flows of investing activities:Capital expenditures
    
    
    
    
    
    
    (3.1
    )
    
    
    (4.1
    )
    
    
    
    
    
    
    (7.2
    )Acquisitions,
net of cash acquired
    
    
    
    
    
    
    (7.5
    )
    
    
    
    
    
    
    
    
    
    
    (7.5
    )Other, net
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Net cash flows of investing activities
    
    
    
    
    
    
    (10.9
    )
    
    
    (4.1
    )
    
    
    
    
    
    
    (15.0
    )Cash flows of financing activities:Preferred stock dividends paid
    
    
    (1.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.5
    )Intercompany accounts
    
    
    (4.2
    )
    
    
    12.9
    
    
    
    (8.7
    )
    
    
    
    
    
    
    Net change in revolving credit borrowings
    
    
    
    
    
    
    20.1
    
    
    
    
    
    
    
    
    
    
    
    20.1Net change in other debt
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    1.0Proceeds from exercise of stock options
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2Net cash flows of financing activities
    
    
    (5.5
    )
    
    
    33.0
    
    
    
    (7.7
    )
    
    
    
    
    
    
    19.8Effect of exchange rate changes on cash
    
    
    
    
    
    
    (0.1
    )
    
    
    (1.5
    )
    
    
    
    
    
    
    (1.6
    )Increase (decrease) in cash
    
    
    
    
    
    
    2.2
    
    
    
    (4.1
    )
    
    
    
    
    
    
    (1.9
    )Cash  beginning of period
    
    
    0.1
    
    
    
    7.3
    
    
    
    29.0
    
    
    
    
    
    
    
    36.4Cash  end of period
    
    $
    0.1
    
    
    $
    9.5
    
    
    $
    24.9
    
    
    $
    
    
    
    $
    34.5
 32




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##### Table of Contents



GENERAL CABLE CORPORATION AND SUBSIDIARIES
 
 ITEM 2
 Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  
    
    General  a general description of the Companys business, financial information by
geographic regions, raw material price volatility and seasonal trends.
    
    Current Business Environment  the Companys perspective on the challenges it faces and
its relative competitive advantage.
    
    Acquisitions and Divestitures  a brief history of acquisitions and divestitures as they
relate to the financial statements presented.
    
    Critical Accounting Policies and Estimates  a discussion of the accounting policies
that require critical judgments and estimates.
    
    Results of Operations  an analysis of the Companys results of operations for the
financial statement periods presented.
    
    Liquidity and Capital Resources  an analysis of cash flows, sources and uses of cash.
 General
   ®
 Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Amount
    
    
    %
    
    
    Amount
    
    
    %Net sales:North America
    
    $
    464.2
    
    
    
    58
    %
    
    $
    351.9
    
    
    
    63
    %International
    
    
    340.1
    
    
    
    42
    %
    
    
    202.3
    
    
    
    37
    %Total net sales
    
    $
    804.3
    
    
    
    100
    %
    
    $
    554.2
    
    
    
    100
    %
 33




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##### Table of Contents



Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Amount
    
    
    %
    
    
    Amount
    
    
    %Operating income:North America
    
    $
    20.3
    
    
    
    48
    %
    
    $
    8.1
    
    
    
    33
    %International
    
    
    21.9
    
    
    
    52
    %
    
    
    16.1
    
    
    
    67
    %Subtotal
    
    
    42.2
    
    
    
    100
    %
    
    
    24.2
    
    
    
    100
    %Corporate charges
    
    
    
    
    
    
    
    
    
    
    Total operating income
    
    $
    42.2
    
    
    
    
    
    
    $
    24.2
     Current Business Environment
   34




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®
   35




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##### Table of Contents



Acquisitions and Divestitures
   ® ® ® ®
   Critical Accounting Policies and Estimates
  36




---



##### Table of Contents



Inventory Costing and Valuation
   Pension Accounting
     37




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##### Table of Contents



Deferred Income Tax Valuation Allowance
  Revenue Recognition
  Business Combination Accounting
 ®
 New Accounting Standards
   38




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##### Table of Contents



Results of Operations
  Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Amount
    
    
    %
    
    
    Amount
    
    
    %Net sales
    
    $
    804.3
    
    
    
    100.0
    %
    
    $
    554.2
    
    
    
    100.0
    %Cost of sales
    
    
    706.7
    
    
    
    87.9
    %
    
    
    486.8
    
    
    
    87.8
    %Gross profit
    
    
    97.6
    
    
    
    12.1
    %
    
    
    67.4
    
    
    
    12.2
    %Selling, general and
administrative expenses
    
    
    55.4
    
    
    
    6.9
    %
    
    
    43.2
    
    
    
    7.8
    %Operating income
    
    
    42.2
    
    
    
    5.2
    %
    
    
    24.2
    
    
    
    4.4
    %Other income (expense)
    
    
    0.8
    
    
    
    0.1
    %
    
    
    (0.1
    )
    
    
    Interest expense, net
    
    
    (9.6
    )
    
    
    (1.2
    )%
    
    
    (9.9
    )
    
    
    (1.8
    )%Income before income taxes
    
    
    33.4
    
    
    
    4.2
    %
    
    
    14.2
    
    
    
    2.6
    %Income tax provision
    
    
    (12.0
    )
    
    
    (1.5
    )%
    
    
    (5.2
    )
    
    
    (0.9
    )%Net income
    
    
    21.4
    
    
    
    2.7
    %
    
    
    9.0
    
    
    
    1.6
    %Less: preferred stock
dividends
    
    
    (0.1
    )
    
    
    
    
    
    
    (1.5
    )
    
    
    (0.3
    )%Net income applicable to
common shareholders
    
    $
    21.3
    
    
    
    2.6
    %
    
    $
    7.5
    
    
    
    1.4
    %
 39




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##### Table of Contents



Three Fiscal Months Ended March 31, 2006 Compared with Three Fiscal Months Ended April 1, 2005
  Net Sales
   Metal-Adjusted Net SalesThree Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Amount
    
    
    %
    
    
    Amount
    
    
    %Energy
    
    $
    300.1
    
    
    
    37
    %
    
    $
    223.3
    
    
    
    34
    %Industrial & specialty
    
    
    354.2
    
    
    
    44
    %
    
    
    288.6
    
    
    
    44
    %Communications
    
    
    150.0
    
    
    
    19
    %
    
    
    139.8
    
    
    
    22
    %Total metal-adjusted net sales
    
    
    804.3
    
    
    
    100
    %
    
    
    651.7
    
    
    
    100
    %Metal adjustment
    
    
    
    
    
    
    
    
    
    
    (97.5
    )Total net sales
    
    $
    804.3
    
    
    
    
    
    
    $
    554.2
 Metal Pounds SoldThree Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Pounds
    
    
    %
    
    
    Pounds
    
    
    %Energy
    
    
    89.5
    
    
    
    44
    %
    
    
    70.6
    
    
    
    44
    %Industrial & specialty
    
    
    80.3
    
    
    
    40
    %
    
    
    60.4
    
    
    
    38
    %Communications
    
    
    31.8
    
    
    
    16
    %
    
    
    29.5
    
    
    
    18
    %Total metal pounds sold
    
    
    201.6
    
    
    
    100
    %
    
    
    160.5
    
    
    
    100
    %
 ® ® ®
  40




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##### Table of Contents



®
 ®
  Gross Profit
  Selling, General and Administrative Expense
 ®
 Operating Income
  Operating IncomeThree Fiscal Months Ended,March 31, 2006
    
    
    April 1, 2005Amount
    
    
    %
    
    
    Amount
    
    
    %Energy
    
    $
    18.5
    
    
    
    44
    %
    
    $
    12.3
    
    
    
    51
    %Industrial & specialty
    
    
    19.9
    
    
    
    47
    %
    
    
    9.2
    
    
    
    38
    %Communications
    
    
    3.8
    
    
    
    9
    %
    
    
    2.7
    
    
    
    11
    %Subtotal excluding corporate charges
    
    
    42.2
    
    
    
    100
    %
    
    
    24.2
    
    
    
    100
    %Corporate charges
    
    
    
    
    
    
    
    
    
    
    Total operating income
    
    $
    42.2
    
    
    
    
    
    
    $
    24.2
 ®
 41




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##### Table of Contents



Other Income (Expense)
  Interest Expense
 ®
 Tax Provision
  Preferred Stock Dividends
  Liquidity and Capital Resources
    Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005North America
    
    $
    (18.0
    )
    
    $
    (14.3
    )International
    
    
    (12.2
    )
    
    
    9.2Total
    
    $
    (30.2
    )
    
    $
    (5.1
    )
  42




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43




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##### Table of Contents



 ® ®
 
 
    44




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##### Table of Contents



Payments Due by PeriodLess than
    
    
    1 - 3
    
    
    4 - 5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsContractual obligations:Total debt (excluding capital leases)
    
    $
    467.0
    
    
    $
    6.1
    
    
    $
    11.0
    
    
    $
    430.2
    
    
    $
    19.7Capital leases
    
    
    5.3
    
    
    
    1.0
    
    
    
    2.0
    
    
    
    2.3
    
    
    
    Interest payments on Senior Notes
    
    
    135.4
    
    
    
    27.1
    
    
    
    54.2
    
    
    
    54.1
    
    
    
    Preferred stock dividend payments
    
    
    2.3
    
    
    
    0.3
    
    
    
    0.6
    
    
    
    0.6
    
    
    
    0.8Operating leases
    
    
    26.5
    
    
    
    7.5
    
    
    
    9.1
    
    
    
    5.6
    
    
    
    4.3Commodity futures and forward pricing
agreements
    
    
    226.8
    
    
    
    226.6
    
    
    
    0.2
    
    
    
    
    
    
    
    Foreign currency contracts
    
    
    51.1
    
    
    
    50.1
    
    
    
    1.0
    
    
    
    
    
    
    
    Cross currency and interest rate swap
    
    
    174.6
    
    
    
    11.4
    
    
    
    163.2
    
    
    
    
    
    
    
    Total
    
    $
    1,089.0
    
    
    $
    330.1
    
    
    $
    241.3
    
    
    $
    492.8
    
    
    $
    24.8
     45




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##### Table of Contents



Off Balance Sheet Assets and Obligations
 ®
   Environmental Matters
 ®
 46




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
   March 31, 2006
    
    
    December 31, 2005Notional
    
    
    Fair
    
    
    Notional
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueCash flow hedges:Interest rate swap
    
    $
    9.0
    
    
    $
    (0.3
    )
    
    $
    9.0
    
    
    $
    (0.4
    )Foreign currency forward exchange
    
    
    51.1
    
    
    
    2.7
    
    
    
    43.1
    
    
    
    0.3Commodity futures
    
    
    85.0
    
    
    
    16.9
    
    
    
    39.9
    
    
    
    11.6Net investment hedges:Cross currency and interest rate swap
    
    
    150.0
    
    
    
    (0.6
    )
    
    
    150.0
    
    
    
    2.6$
    18.7
    
    
    
    
    
    
    $
    14.1
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
 .
 .
 47




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
   
 PART II. Other Information
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
  a)
    
    Exhibits
 **10.85
    
    Salary Adjustment for Executive Vice President, General Counsel and Secretary
dated February 23, 2006 (incorporated by reference to the Form 8-K Current Report as
filed on February 23, 2006).*12.1
    
    Computation of Ratio of Earnings to Fixed Charges*31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a  14(a) or 15d  14(a)*31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a  14(a) or 15d  14(a)*32.1
    
    Certification pursuant to 18 U.S.C. Section 1350
 48




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##### Table of Contents



Signature
  General Cable CorporationSigned: May 10, 2006
    
    By:
    
    /s/ CHRISTOPHER F. VIRGULAKChristopher F. VirgulakExecutive Vice President andChief Financial Officer(Chief Accounting Officer)
 49




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##### Table of Contents



Exhibit Index
 10.85
    
    Salary Adjustment for Executive Vice President, General Counsel and Secretary dated
February 23, 2006 (incorporated by reference to the Form 8-K Current Report as filed on
February 23, 2006).12.1
    
    Computation of Ratio of Earnings to Fixed Charges31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a  14(a) or 15d  14(a)31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a  14(a) or 15d  14(a)32.1
    
    Certification pursuant to 18 U.S.C. Section 1350
 50