Market Overview

General Cable Reports Fourth Quarter 2017 Results


General Cable Corporation (NYSE:BGC) reported today results for
the fourth quarter ended December 31, 2017. For the quarter, reported
earnings per share was $0.31 and reported operating income was $8
million. Adjusted earnings per share and adjusted operating income were
$0.03 and $20 million, respectively, for the quarter. See page two of
this press release for the reconciliation of reported to adjusted
results and related disclosures.

Michael T. McDonnell, President and Chief Executive Officer, said, "Our
fourth quarter reflects improved performance in Latin America and demand
stability of key businesses in North America (electric utility,
construction and automotive) and Europe (land turnkey). Although
industry dynamics, especially in Europe, and business uncertainties
resulting from our review of strategic alternatives did impact results,
our 2018 outlook is positive based on trends we have seen since the
beginning of this year." McDonnell added, "We are also pleased to have
now received our stockholders' approval for the pending merger with
Prysmian S.p.A., and we continue to expect the merger to be completed by
the third quarter of 2018, subject to regulatory approvals and other
customary conditions."


  • Announced, at its special meeting of common stockholders on
    February 16, 2018, a majority of the votes cast, which also
    represented a majority of the outstanding shares of the Company's
    common stock, voted to approve the adoption of the previously
    announced definitive merger agreement under which Prysmian will
    acquire General Cable for $30.00 per share in cash
  • Reported operating income of $8 million primarily impacted by
    charges of $15 million related to the review of strategic alternatives
    that resulted in the previously announced definitive merger agreement
    with Prysmian
  • Adjusted operating income of $20 million decreased $7 million
    year over year as restructuring savings and continued performance
    improvement in Latin America were offset by ongoing challenging
    industry dynamics particularly in Europe and unfavorable product mix
    in North America
  • Operating cash flow was a use of $39 million for the full year
    of 2017 including payments totaling $82 million for the resolution of
    FCPA related matters
  • Completed the divestiture program focused on the sale or
    liquidation of non-core operations in Asia Pacific and Africa
    generating total proceeds of approximately $260 million consistent
    with management's expectations
  • Maintained significant liquidity with $326 million of
    availability on the Company's $700 million asset-based revolving
    credit facility and $85 million of cash and cash equivalents
  • Impact of rising metal prices was a benefit of $4 million and $5
    million for the fourth quarter of 2017 and 2016, respectively

Fourth Quarter Segment Demand

North America – Unit volume as measured in
metal pounds sold was up 5% versus prior year driven by stronger demand
for aerial transmission cables and construction products.

Europe – Unit volume as measured in metal
pounds sold was up 6% versus prior year as stronger demand for electric
utility products including land turnkey projects helped to more than
offset lower subsea project activity and weakness in industrial and
construction markets.

Latin America – Unit volume as measured in
metal pounds sold was down 6% versus prior year driven by uneven
spending on electric infrastructure and construction projects throughout
the region as well as the impact of the Company's go-to-market
initiatives (focused on margin improvement). Shipments of aerial
transmission cables in Brazil were up sharply year over year.

Net Debt

At the end of 2017 and 2016, total debt was $1,086 million and $939
million, respectively, and cash and cash equivalents were $85 million
and $101 million, respectively. The increase in net debt was principally
driven by payments totaling $82 million related to the resolution of
FCPA matters as well as investments in working capital (partly due to
higher metal prices) and funding of restructuring actions.

Other Matters – Income Taxes

The enactment of the Tax Cuts and Jobs Act ("Tax Reform Act") provides
for a one-time deemed taxable repatriation of the Company's off-shore
accumulated earnings. This deemed repatriation resulted in a preliminary
estimate of $46 million of noncash deferred tax expense in the fourth
quarter of 2017 as the deemed repatriation income was offset by existing
net operating losses. In addition, the Tax Reform Act provides for the
reduction of the U.S. corporate income tax rate from 35% to 21%,
effective for 2018. Accordingly, the Company's deferred tax assets and
liabilities were required to be remeasured in the fourth quarter of 2017
resulting in a preliminary estimated noncash deferred tax benefit of
approximately $62 million. Prospectively, the Company expects its
reported earnings to be favorably impacted by the reduced U.S. tax rate.

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 ("SEC"). 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 Fourth 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

Fourth Quarter of 2017 versus Fourth Quarter of 2016
Fourth Quarter
2017   2016
Operating   Operating  
In millions, except per share amounts Income EPS Income EPS
Reported $ 7.5 $ 0.31 $ (96.8 ) $ (2.10 )
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) - (0.11 ) - (0.08 )
Restructuring and divestiture costs (3) 17.6 0.20 27.8 0.44
Legal and investigative costs (4) 0.3 - (0.7 ) (0.01 )
(Gain) loss on sale of assets (5) - - 1.0 0.02
Foreign Corrupt Practices Act (FCPA) accrual (6) - - 49.3 0.99
US Pension Settlement (7) - - 7.4 0.12
Asia Pacific and Africa (income)/loss (8) (5.3 ) (0.07 ) 39.3 0.66
Tax reform act (9)   -     (0.31 )   -     -  
Total adjustments   12.6     (0.28 )
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