Market Overview

General Cable Reports Third Quarter 2017 Results


General Cable Corporation (NYSE:BGC) reported today results for
the third quarter ended September 29, 2017. For the quarter, reported
loss per share was $0.28 and reported operating income was $1 million
inclusive of $27 million in non-cash charges primarily related to the
sale of operations in China. Adjusted earnings per share and adjusted
operating income were $0.25 and $43 million, respectively, for the
quarter. See page 2 of this press release for the reconciliation of
reported to adjusted results and related disclosures.

Michael T. McDonnell, President and Chief Executive Officer, said, "We
are pleased to report a strong third quarter. Our team continues to
execute well on our strategic roadmap initiatives to drive performance
improvement in our core segments in North America, Europe and Latin
America, despite ongoing challenging industry dynamics. Overall, our
second half performance remains on track with our previously
communicated expectations. We anticipate the second half of 2017 to be
consistent with the first half of the year and up approximately 30% as
compared to the second half of 2016."

Third Quarter Summary

  • Reported operating income of $1 million primarily impacted by
    non-cash charges of $27 million principally related to the sale of
    operations in China
  • Adjusted operating income of $43 million increased $11 million
    year over year as restructuring savings, metal price tailwinds and
    continued performance improvement in Latin America more than offset
    the impact of lower subsea project activity
  • Divestiture program nearly complete with the sale of China
    bringing total proceeds to $220 million and on target to meet
    previously communicated range of $250 to $300
  • Maintained significant liquidity with $363 million of
    availability on the Company's $700 million asset-based revolving
    credit facility and $72 million of cash and cash equivalents
  • Impact of higher metal prices was a $6 million benefit compared
    to a negative $2 million impact in the prior year period
  • Board continues to execute on its previously announced review of
    strategic alternatives to maximize shareholder value, including a
    potential sale of the Company

Third Quarter Segment Demand

North America – Unit volume was up 12%
versus prior year driven principally by stronger demand for aerial
transmission cables and industrial, construction and specialty (ICS)

Europe – Unit volume was flat versus prior
year as stronger demand for electric utility products including
land-based turnkey projects helped to offset the easing performance of
the subsea turnkey project business and continued weakness in industrial
and construction markets throughout the region.

Latin America – Unit volume was up 11%
versus prior year driven by the shipment of aerial transmission cables
in Brazil. The region continues to experience uneven spending on
electric infrastructure and construction projects.

Net Debt

At the end of the third quarter of 2017 and the end of the fourth
quarter of 2016, total debt was $1,091 million and $939 million,
respectively, and cash and cash equivalents were $72 million and $101
million, respectively. The increase in net debt was principally due to
investment in working capital, partly due to higher metal prices, and
payments totaling $52 million related to our FCPA resolution through the
first half of 2017.

Non-GAAP Financial Measures

Adjusted operating income (defined as operating income before
extraordinary, nonrecurring or unusual charges and other certain items),
adjusted earnings per share (defined as diluted earnings per share
before extraordinary, nonrecurring or unusual charges and other certain
items) and net debt (defined as long-term debt plus current portion of
long-term debt less cash and cash equivalents) are "non-GAAP financial
measures" as defined under the rules of the Securities and Exchange
Commission. Metal-adjusted revenues, and return on metal-adjusted sales
on a segment basis, both of which are non-GAAP financial measures, are
also provided herein. See "Segment Information."

These Company-defined non-GAAP financial measures exclude from reported
results those items that management believes are not indicative of our
ongoing performance and are being provided herein because management
believes they are useful in analyzing the operating performance of the
business and are consistent with how management reviews our operating
results and the underlying business trends. Use of these non-GAAP
measures may be inconsistent with similar measures presented by other
companies and should only be used in conjunction with the Company's
results reported according to GAAP. Historical segment adjusted
operating results are disclosed in the Third Quarter 2017 Investor
Presentation available on the Company's website.

A reconciliation of GAAP operating income (loss) and diluted earnings
(loss) per share to adjusted operating income and earnings per share

Third Quarter of 2017 versus Third Quarter of 2016
  Third Quarter
2017     2016
Operating   Operating  
In millions, except per share amounts Income   EPS Income   EPS
Reported $ 0.8 $ (0.28) $ 4.7 $ (0.29)
Adjustments to reconcile operating Income/EPS
Non-cash convertible debt interest expense (1) - 0.01 - 0.01
Mark to market (gain) loss on derivative instruments (2) - (0.18) - (0.01)
Restructuring and divestiture costs (3) 7.7 0.09 24.1 0.29
Legal and investigative costs (4) 0.4 - 0.8 0.01
(Gain) loss on sale of assets (5) 6.3 0.12 (6.4) (0.08)
Project settlements (6) 3.5 0.04 - -
Asia Pacific and Africa (income)/loss (7) 24.3   0.45 8.9   0.14
Total adjustments 42.2   0.53 27.4   0.36
Adjusted $ 43.0   $ 0.25 $ 32.1   $ 0.07
NOTE: The tables above reflect EPS adjustments based on the
Company's full year effective tax rate for 2017 of 40% and 2016 of
(1)   The Company's adjustment for the non-cash convertible debt interest
expense reflects the accretion of the equity component of the 2029
convertible notes, which is reflected in the income statement as
interest expense.
(2) Mark to market (gains) and losses on derivative instruments
represents the current period changes in the fair value of commodity
instruments designated as economic hedges. The Company adjusts for
the changes in fair values of these commodity instruments as the
earnings associated with the underlying contracts have not been
recorded in the same period.
(3) Restructuring and divestiture costs represent costs associated with
the Company's announced restructuring and divestiture programs.
Examples consist of, but are not limited to, employee separation
costs, asset write-downs, accelerated depreciation, working capital
write-downs, equipment relocation, contract terminations, consulting
fees and legal costs incurred as a result of the programs. The
Company adjusts for these charges as management believes these costs
will not continue at the conclusion of both the restructuring and
divestiture programs.
(4) Legal and investigative costs represent costs incurred for external
legal counsel and forensic accounting firms in connection with the
restatement of our financial statements and the Foreign Corrupt
Practices Act investigation. The Company adjusts for these charges
as management believes these costs will not continue at the
conclusion of these investigations which are considered to be
outside the normal course of business.
(5) Gain and losses on the sale of assets are the result of divesting
certain General Cable businesses. The Company adjusts for these
gains and losses as management believes the gains and losses are
one-time in nature and will not occur as part of the ongoing
(6) Project settlements represents losses associated with claim
settlements related to the Company's German submarine power cable
business. The Company adjusts for these losses as management
believes they are one-time in nature and will not occur as part of
the ongoing operations.
(7) The adjustment excludes the impact of operations in the Africa and
Asia Pacific segment which are not considered "core operations"
under the Company's strategic roadmap. The Company is in the process
of divesting or closing these operations which are not expected to
continue as part of the ongoing business. For accounting purposes,
the continuing operations in Africa and Asia Pacific do not meet the
requirement to be presented as discontinued operations. Third
quarter of 2017 principally reflects the loss on the sale of the
Company's business in China of $19.9 million.

About General Cable

General Cable (NYSE:BGC), with headquarters in Highland Heights,
Kentucky, is a global leader in the development, design, manufacture,
marketing and distribution of aluminum, copper and fiber optic wire and
cable products for the energy, communications, transportation,
industrial, construction and specialty segments. General Cable is one of
the largest wire and cable manufacturing companies in the world,
operating manufacturing facilities in its core geographical markets, and
has sales representation and distribution worldwide. For more
information about General Cable visit our website at

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