UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

GENERAL CABLE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		06-1398235 (I.R.S. Employer Identification No.)
4 Tesseneer Drive Highland Heights, KY (Address of principal executive offices)		41076-9753 (Zip Code)

Registrant’s telephone number, including area code: (859) 572-8000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class		Outstanding at August 1, 2006
Common Stock, $0.01 par value			51,332,717

 

 

GENERAL CABLE CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT
ON FORM 10-Q/A

				PAGE
Explanatory Note
					3
PART I		Financial Information
Item 1.		Condensed Consolidated Financial Statements (Unaudited)
		Statements of Operations - For the three fiscal months and six fiscal months ended June 30, 2006 and July 1, 2005			4
		Balance Sheets - June 30, 2006 and December 31, 2005			5
		Statements of Cash Flows - For the six fiscal months ended June 30, 2006 and July 1, 2005			6
		Statements of Changes in Shareholders’ Equity - For the six fiscal months ended June 30, 2006 and July 1, 2005			7
		Notes to Condensed Consolidated Financial Statements			8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			40
Item 3.		Quantitative and Qualitative Disclosures about Market Risk			63
Item 4.		Controls and Procedures			64
PART II		Other Information
Item 1A.		Risk Factors			65
Item 4.		Submission of Matters to a Vote of Security Holders			66
Item 6.		Exhibits			66
Signature					67
Exhibit Index					68
EX-12.1
EX-31.1
EX-31.2
EX-32.1

EXPLANATORY NOTE

This Form 10-Q/A is being filed to restate the segment reporting footnote disclosure related to our operations. We have restated the accompanying unaudited condensed consolidated financial statements mainly to correct our segment disclosure for all periods presented to disaggregate our previously reported three reportable segments (Energy, Industrial & Specialty and Communications) to eight reportable segments (North American Electric Utility, International Electric Utility, North American Portable Power and Control, North American Electrical Infrastructure, International Electrical Infrastructure, Transportation and Industrial Harnesses, Telecommunications and Networking). See revised disclosures as discussed in Note 13 to the Unaudited Condensed Consolidated Financial Statements. Unless otherwise indicated, no information in this Form 10-Q/A has been updated for any subsequent information or events from the original filing.

For the convenience of the reader, this Form 10-Q/A sets forth the entire June 30, 2006 Quarterly Report on Form 10-Q. However, this Form 10-Q/A amends and restates only Items 1, 2 and 4 of Part I of the June 30, 2006 Form 10-Q, in each case mainly to restate our segment disclosures. The aforementioned changes to the Unaudited Condensed Consolidated Financial Statements have no effect on the Company’s financial position as of June 30, 2006 and December 31, 2005 or its results of operations and cash flows for the three and six fiscal months ended June 30, 2006 and July 1, 2005.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

(unaudited)

		Three Fiscal Months Ended								Six Fiscal Months Ended
		June 30,				July 1,				June 30,				July 1,
		2006				2005				2006				2005
Net sales		$	987.1			$	608.6			$	1,791.4			$	1,162.8
Cost of sales			857.6				537.3				1,564.3				1,024.1
Gross profit			129.5				71.3				227.1				138.7
Selling, general and administrative expenses			59.1				43.3				114.5				86.5
Operating income			70.4				28.0				112.6				52.2
Other income (expense)			0.2				—				1.0				(0.1	)
Interest income (expense):
Interest expense			(12.3	)			(10.6	)			(22.4	)			(20.9	)
Interest income			0.7				1.5				1.2				1.9
			(11.6	)			(9.1	)			(21.2	)			(19.0	)
Income before income taxes			59.0				18.9				92.4				33.1
Income tax provision			(17.5	)			(7.1	)			(29.5	)			(12.3	)
Net income			41.5				11.8				62.9				20.8
Less: preferred stock dividends			(0.1	)			(1.5	)			(0.2	)			(3.0	)
Net income applicable to common shareholders		$	41.4			$	10.3			$	62.7			$	17.8
Earnings per share
Earnings per common share-basic		$	0.81			$	0.26			$	1.24			$	0.45
Weighted average common shares-basic			50.8				39.4				50.4				39.3
Earnings per common share-assuming dilution		$	0.80			$	0.23			$	1.21			$	0.41
Weighted average common shares-assuming dilution			52.2				50.9				51.8				50.8

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

(unaudited)

		June 30,				December 31,
		2006				2005
Assets
Current Assets:
Cash		$	59.0			$	72.2
Receivables, net of allowances of $10.3 million at June 30, 2006 and $8.6 million at December 31, 2005			791.7				542.9
Inventories			399.2				363.9
Deferred income taxes			47.6				41.9
Prepaid expenses and other			70.1				48.6
Total current assets			1,367.6				1,069.5
Property, plant and equipment, net			368.7				366.4
Deferred income taxes			54.5				52.5
Other non-current assets			33.3				34.8
Total assets		$	1,824.1			$	1,523.2
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable		$	647.8			$	472.3
Accrued liabilities			211.4				212.2
Current portion of long-term debt			20.0				6.4
Total current liabilities			879.2				690.9
Long-term debt			425.3				445.2
Deferred income taxes			13.1				13.4
Other liabilities			106.4				80.4
Total liabilities			1,424.0				1,229.9
Shareholders’ Equity:
Redeemable convertible preferred stock, at redemption value (liquidation preference of $50.00 per share):
June 30, 2006 — 101,949 shares
December 31, 2005 — 129,916 shares			5.1				6.5
Common stock, $0.01 par value, issued and outstanding shares:
June 30, 2006 — 51,078,781 (net of 4,998,730 treasury shares)
December 31, 2005 — 49,520,209 (net of 4,968,755 treasury shares)			0.6				0.5
Additional paid-in capital			269.4				246.3
Treasury stock			(53.0	)			(52.2	)
Retained earnings			166.5				103.8
Accumulated other comprehensive income (loss)			11.5				(6.8	)
Other shareholders’ equity			—				(4.8	)
Total shareholders’ equity			400.1				293.3
Total liabilities and shareholders’ equity		$	1,824.1			$	1,523.2

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

(unaudited)

		Six Fiscal Months Ended
		June 30,				July 1,
		2006				2005
Cash flows of operating activities:
Net income		$	62.9			$	20.8
Adjustments to reconcile net income to net cash flows of operating activities:
Depreciation and amortization			25.5				22.2
Foreign currency exchange (gain) loss			(1.0	)			0.1
Deferred income taxes			2.6				1.0
Loss on disposal of property			0.8				0.7
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Increase in receivables			(223.9	)			(86.8	)
Increase in inventories			(17.3	)			(25.6	)
(Increase) decrease in other assets			(7.3	)			12.5
Increase in accounts payable, accrued and other liabilities			162.8				55.8
Net cash flows of operating activities			5.1				0.7
Cash flows of investing activities:
Capital expenditures			(22.6	)			(15.7	)
Proceeds from properties sold			0.4				0.1
Acquisitions, net of cash acquired			(13.7	)			(7.4	)
Other, net			1.6				(0.5	)
Net cash flows of investing activities			(34.3	)			(23.5	)
Cash flows of financing activities:
Preferred stock dividends paid			(0.2	)			(3.0	)
Excess tax benefits from stock-based compensation			8.4				—
Proceeds from revolving credit borrowings			101.3				161.7
Repayments of revolving credit borrowings			(120.4	)			(135.0	)
Proceeds from other debt			9.7				2.7
Proceeds from exercise of stock options			14.8				0.5
Net cash flows of financing activities			13.6				26.9
Effect of exchange rate changes on cash			2.4				(4.9	)
Decrease in cash			(13.2	)			(0.8	)
Cash — beginning of period			72.2				36.4
Cash — end of period		$	59.0			$	35.6
Supplemental Information
Cash paid during the period for:
Income tax payments, net of refunds		$	15.8			$	3.0
Interest paid		$	19.4			$	20.5
Non-cash investing and financing activities:
Issuance of nonvested shares		$	5.5			$	3.6
Entrance into capital leases		$	0.1			$	0.2

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

																														Accumulated
																		Add’l												Other				Other
		Preferred Stock								Common Stock								Paid in				Treasury				Retained				Comprehensive				Shareholders’
		Shares				Amount				Shares				Amount				Capital				Stock				Earnings				Income/ (Loss)				Equity				Total
Balance, December 31, 2004			2,070			$	103.5				39,336			$	0.4			$	144.1			$	(51.0	)		$	86.4			$	22.4			$	(4.4	)		$	301.4
Comprehensive loss:
Net income																											20.8												20.8
Foreign currency translation adjustment																															(22.7	)							(22.7	)
Unrealized investment gain																															0.2								0.2
Gain on change in fair value of financial instruments, net of $0.3 tax expense																															1.1								1.1
Comprehensive loss																																							(0.6	)
Preferred stock dividend																											(3.0	)											(3.0	)
Issuance of nonvested shares											294								3.6																(3.6	)			—
Exercise of stock options											64								0.5																				0.5
Repayment of loans from shareholders											(83	)							(1.2	)			(1.2	)											1.6				(0.8	)
Amortization of nonvested shares																																			0.5				0.5
Other			—				—				16				—				0.2				—				0.5				—				—				0.7
Balance, July 1, 2005			2,070			$	103.5				39,627			$	0.4			$	147.2			$	(52.2	)		$	104.7			$	1.0			$	(5.9	)		$	298.7
Balance, December 31, 2005			130			$	6.5				49,520			$	0.5			$	246.3			$	(52.2	)		$	103.8			$	(6.8	)		$	(4.8	)		$	293.3
Comprehensive income:
Net income																											62.9												62.9
Foreign currency translation adjustment																															12.0								12.0
Unrealized investment gain																															2.2								2.2
Gain on change in fair value of financial instruments, net of $2.8 tax expense																															4.1								4.1
Comprehensive income																																							81.2
Preferred stock dividend																											(0.2	)											(0.2	)
Reclass of unearned stock compensation																			(4.8	)															4.8				—
Issuance of nonvested shares											213																												—
Stock option expense																			0.7																				0.7
Exercise of stock options											1,214				0.1				14.8																				14.9
Treasury shares related to nonvested stock vesting											(30	)											(0.8	)															(0.8	)
Amortization of nonvested shares																			2.5																				2.5
Excess tax benefits from stock-based compensation																			8.4																				8.4
Conversion of preferred stock			(28	)			(1.4	)			140								1.4																				—
Other			—				—				22								0.1												—				—				0.1
Balance, June 30, 2006			102			$	5.1				51,079			$	0.6			$	269.4			$	(53.0	)		$	166.5			$	11.5			$	—			$	400.1

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

1. General

General Cable Corporation and Subsidiaries (General Cable) is a leading global developer and manufacturer in the wire and cable industry. The Company sells copper, aluminum and fiber optic wire and cable products worldwide. The Company’s operations are divided into eight main reportable segments: North American Electric Utility, International Electric Utility, North American Portable Power and Control, North American Electrical Infrastructure, International Electrical Infrastructure, Transportation and Industrial Harnesses, Telecommunications and Networking. As of June 30, 2006, General Cable operated 28 manufacturing facilities in eleven countries with regional distribution centers around the world in addition to the corporate headquarters in Highland Heights, Kentucky.

2. Summary of Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of General Cable Corporation and its wholly-owned subsidiaries. Investments in 50% or less owned joint ventures in which the Company has the ability to exercise significant influence are accounted for under the equity method of accounting. The Company adopted Financial Accounting Standards Board Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” which resulted in the consolidation of its fiber optic joint venture in the first quarter of 2004. In the fourth quarter of 2004, the Company unwound the joint venture and as of December 31, 2004, owned 100% of the business and in 2005 merged the entity into its principal U.S. operating subsidiary. All intercompany transactions and balances among the consolidated companies have been eliminated.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of General Cable Corporation and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the three fiscal months and six fiscal months ended June 30, 2006, are not necessarily indicative of results that may be expected for the full year. The December 31, 2005, condensed consolidated balance sheet amounts are derived from the audited financial statements but do not include all disclosures herein required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the audited financial statements and notes thereto in General Cable’s 2005 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on November 8, 2006. The Company’s fiscal year end is December 31. The Company’s fiscal quarters consist of a 13-week period ending on the Friday nearest to the end of the calendar months of March, June and September.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on historical experience and information that is available to management about current events and actions the Company may take in the future. Significant items subject to estimates and assumptions include valuation allowances for sales incentives, accounts receivable, inventory and deferred income taxes; legal, environmental, asbestos, tax contingency and customer reel deposit liabilities; assets and obligations related to pension and other post-retirement benefits; business combination accounting and related purchase accounting valuations; and self insured workers’ compensation and health insurance reserves. There can be no assurance that actual results will not differ from these estimates.

Revenue Recognition

The majority of the Company’s revenue is recognized when goods are shipped to the customer, title and risk of loss are transferred, pricing is fixed and determinable and collectibility is reasonably assured. Most revenue transactions represent sales of inventory. A provision for payment discounts, product returns and customer rebates is estimated based upon historical experience and other relevant factors and is recorded within the same period that the revenue is recognized. The Company also has revenue arrangements with multiple deliverables. Based on the guidance in EITF 00-21, “Revenue

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Arrangements with Multiple Deliverables,” the multiple deliverables in these revenue arrangements are divided into separate units of accounting because (i) the delivered item(s) have value to the customer on a standalone basis; (ii) there is objective and reliable evidence of the fair value of the undelivered items(s); and (iii) to the extent that a right of return exists relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue arrangements of this type are generally contracts where the Company is hired to both produce and install a certain product. In these arrangements, the majority of the customer acceptance provisions do not require complete product delivery and installation for the amount related to the production of the item(s) to be recognized as revenue, but the requirement of successful installation does exist for the amount related to the installation to be recognized as revenue. Therefore, revenue is recognized for the product upon delivery to the customer (the “completed-contract method”) but revenue recognition on installation is deferred until installation is complete.

Stock-Based Compensation

General Cable has various plans which provide for granting options and common stock to certain employees and independent directors of the Company and its subsidiaries. Prior to the first quarter of 2006, the Company accounted for compensation expense related to such transactions using the “intrinsic value” based method under the provisions of Accounting Principles Board (“APB”) Opinion No. 25 and its related interpretations and therefore recognized no compensation cost for stock options. On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123(R)”) under the modified prospective transition method, and therefore, prior periods have not been retrospectively adjusted to include prior period compensation expense. The Company has applied SFAS 123(R) to new awards and to awards modified, repurchased or cancelled after January 1, 2006. Additionally, compensation cost for the portion of the awards for which the requisite service had not been rendered, that were outstanding as of January 1, 2006, is being recognized as the requisite service is rendered on or after January 1, 2006 (generally over the remaining vesting period). The compensation cost for that portion of awards has been based on the grant-date fair value of those awards as calculated previously for pro forma disclosures. General Cable’s equity compensation plans are described more fully in Note 11.

The following table illustrates the pro forma effect on net income and earnings per share for the three and six fiscal month periods ended July 1, 2005 if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation (in millions, except per share data).

		Three Fiscal Months				Six Fiscal Months
		Ended				Ended
		July 1, 2005				July 1, 2005
Net income as reported		$	11.8			$	20.8
Less: preferred stock dividends			(1.5	)			(3.0	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(0.2	)			(0.4	)
Pro forma net income for basic EPS computation		$	10.1			$	17.4
Net income as reported		$	11.8			$	20.8
Less: preferred stock dividends, if applicable			—				—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(0.2	)			(0.4	)
Pro forma net income for diluted EPS computation		$	11.6			$	20.4
Earnings per share:
Basic — as reported		$	0.26			$	0.45
Basic — pro forma		$	0.26			$	0.44
Diluted — as reported		$	0.23			$	0.41
Diluted — pro forma		$	0.23			$	0.40

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

In determining the pro forma amounts above for the three and six fiscal months ended July 1, 2005 and the compensation cost related to options for the three and six fiscal months ended June 30, 2006, the fair value of each option was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

		June 30,				July 1,
		2006				2005
Risk-free interest rate (a)			4.7	%			3.7	%
Expected dividend yield (b)			N/A				N/A
Expected option life (c)		4.6 years				5.5 years
Expected stock price volatility (d)			62.6	%			45.3	%
Weighted average fair value of options granted		$	12.75			$	5.56

Earnings Per Share

Earnings per common share-basic is computed based on the weighted average number of common shares-basic outstanding. Earnings per common share-assuming dilution is computed based on the weighted average number of common shares outstanding and the dilutive effect of stock options and restricted stock units outstanding and the assumed conversion of the Company’s preferred stock, if applicable. See further discussion in Note 12.

Foreign Currency Translation

For operations outside the United States that prepare financial statements in currencies other than the U.S. dollar, results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at spot exchange rates at the end of the period. Foreign currency translation adjustments are included as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. The effects of changes in exchange rates between the designated functional currency and the currency in which a transaction is denominated are recorded as foreign currency transaction gains (losses) in the condensed consolidated statements of operations. See further discussion in Note 4.

Business Combination Accounting

Acquisitions entered into by the Company are accounted for using the purchase method of accounting. The purchase method requires management to make significant estimates. Management must allocate the purchase price of the acquired entity based on the fair value of the consideration paid or the fair value of the net assets acquired, whichever is more clearly evident. The purchase price is then allocated to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. In addition, management, with the assistance of valuation professionals, must identify and estimate the fair values of intangible assets that should be recognized as assets apart from goodwill. Management utilizes third-party appraisals to assist in estimating the fair value of tangible property, plant and equipment and intangible assets acquired.

Inventories

General Cable values all of its North American inventories and all of its non-North American metal inventories using the last-in first-out (LIFO) method and all remaining inventories using the first-in first-out (FIFO) method. Inventories are stated at the lower of cost or market value. The Company determines whether a lower of cost or market provision is required on a

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

quarterly basis by computing whether inventory on hand, on a LIFO basis, can be sold at a profit based upon current selling prices less variable selling costs. No provision was required in the first six fiscal months of 2006 or 2005. In the event that a provision is required in some future period, the Company will determine the amount of the provision by writing down the value of the inventory to the level of current selling prices less variable selling costs.

The Company has consignment inventory at certain of its customer locations for purchase and use by the customer or other parties. General Cable retains title to the inventory and records no sale until it is ultimately sold either to the customer storing the inventory or to another party. In general, the value and quantity of the consignment inventory is verified by General Cable through either cycle counting or annual physical inventory counting procedures. At June 30, 2006, the Company had approximately $27.6 million of consignment inventory at locations not operated by the Company with approximately 80% of the consignment inventory being located throughout the United States and Canada.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Costs assigned to property, plant and equipment relating to acquisitions are based on estimated fair values at that date. Depreciation is provided using the straight-line method over the estimated useful lives of the assets: new buildings, from 15 to 50 years; and machinery, equipment and office furnishings, from 2 to 15 years. Leasehold improvements are depreciated over the life of the lease unless acquired in a business combination, in which case the leasehold improvements are depreciated over the shorter of the useful life of the assets or a term that includes the reasonably assured life of the lease. Depreciation expense for the three fiscal months and six fiscal months ended June 30, 2006 was $10.8 million and $22.2 million, respectively, as compared to $12.5 million and $20.8 million, respectively, of depreciation expense for the three and six fiscal months ended July 1, 2005.

On December 27, 2005, General Cable entered into a capital lease for certain pieces of equipment being used at the Company’s Indianapolis polymer plant. The capital lease agreement provides that the lease payments for the machinery and equipment will be approximately $0.6 million semi-annually, or approximately $1.2 million on an annual basis. The lease expires in December of 2010, and General Cable has the option to purchase the machinery and equipment for fair value at the end of the lease term. The present value of the minimum lease payments on the capital lease at inception was approximately $5.0 million and was reflected in fixed assets and in short-term ($0.9 million) and long-term ($4.1 million) lease obligations in the Company’s December 31, 2005 balance sheet.

Capital leases included within property, plant and equipment on the balance sheet were $5.8 million at June 30, 2006 and $5.7 million at December 31, 2005. Accumulated depreciation on capital leases was $1.1 million at June 30, 2006 and $0.5 million at December 31, 2005.

The Company periodically evaluates the recoverability of the carrying amount of long-lived assets (including property, plant and equipment and intangible assets with determinable lives) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The Company evaluates events or changes in circumstances based mostly on actual historical operating results, but business plans, forecasts, general and industry trends and anticipated cash flows are also considered. An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount. Impairment losses are measured as the amount by which the carrying value of an asset exceeds its fair value and are recognized in earnings. The Company also continually evaluates the estimated useful lives of all long-lived assets and, when warranted, revises such estimates based on current events. There were no impairment charges, including accelerated depreciation related to plant rationalizations, in the three and six fiscal months ended June 30, 2006, but there were accelerated depreciation charges of $3.0 million for the three and six fiscal months ended July 1, 2005. These charges were included in depreciation and amortization in the Condensed Consolidated Statements of Cash Flows.

Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite useful lives are not amortized, but are reviewed at least annually for impairment. If the carrying amount of goodwill or an intangible asset with an indefinite life exceeds its fair value, an impairment loss is recognized in the amount equal to the excess. There was no goodwill on the Company’s balance sheet as of June 30, 2006 or December 31, 2005, and no impairment of intangible assets with indefinite lives was identified during the three and six fiscal months ended June 30, 2006 and July 1, 2005. The Company has various trademarks and intangible pension assets, included in other non-current assets, totaling $5.1 million at June 30, 2006 and $4.0 million at December 31, 2005, that are not amortized.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Separate intangible assets that are not deemed to have an indefinite life are amortized over their useful lives. Amortizable intangible assets, included in other non-current assets, at June 30, 2006 and December 31, 2005 consist of the following (in millions):

		June 30, 2006												December 31, 2005
										Accumulated												Accumulated
		Life				Cost				Amortization				Life				Cost				Amortization
Patents			12			$	1.1			$	*				—			$	—			$	—
Customer Lists			10				0.4				0.1				10				0.4				*
Total						$	1.5			$	0.1							$	0.4			$	*

The total intangible amortization expense for the three fiscal months ended June 30, 2006 was not significant and for the six fiscal months ended June 30, 2006 was $0.1 million and was not significant for the three and six fiscal months ended July 1, 2005.

The estimated amortization expense, assuming no residual value and using the straight-line method, for the next five years beginning January 1, 2006 through December 31, 2010 is as follows (in millions):

2006		$	0.2
2007		$	0.2
2008		$	0.1
2009		$	0.1
2010		$	0.1

Fair Value of Financial Instruments

Financial instruments are defined as cash or contracts relating to the receipt, delivery or exchange of financial instruments. Except as otherwise noted, fair value approximates the carrying value of such instruments.

Forward Pricing Agreements for Purchases of Copper and Aluminum

In the normal course of business, General Cable enters into forward pricing agreements for purchases of copper and aluminum to match certain sales transactions. The Company accounts for these forward pricing arrangements under the “normal purchases and normal sales” scope exemption of SFAS No. 133 because these arrangements are for purchases of copper and aluminum that will be delivered in quantities expected to be used by the Company over a reasonable period of time in the normal course of business. For these arrangements, it is probable at the inception and throughout the life of the arrangements that the arrangements will not settle net and will result in physical delivery of the inventory. At June 30, 2006 and December 31, 2005, General Cable had $198.3 million and $106.2 million, respectively, of future copper and aluminum purchases that were under forward pricing agreements. The fair market value of the forward pricing agreements was $211.5 million and $117.6 million at June 30, 2006 and December 31, 2005, respectively. The increase in the fair market value of the forward pricing agreements is primarily due to the rapid increases in the price of copper and aluminum experienced in 2006. General Cable expects to recover the cost of copper and aluminum under these agreements as a result of firm sales price commitments with customers.

Pension Plans

The Company and certain of its subsidiaries have defined benefit pension plans covering certain of its domestic regular full-time employees and, to a lesser extent, international employees. Pension benefits are based on formulas that reflect the employees’ years of service and compensation during the employment period and participation in the plans. The pension expense recognized by the Company is determined using various assumptions, including the expected long-term rate of return on plan assets, the discount rate used to determine the present value of future pension benefits and the rate of compensation increases. See Note 9.

Self-insurance

The Company is self-insured for certain employee medical benefits, workers’ compensation benefits, environmental and asbestos-related issues. The Company purchases stop-loss coverage in order to limit its exposure to any significant level of employee medical and workers’ compensation claims. Certain insurers are also partly responsible for coverage on many of the asbestos-related issues (see Note 14 for information relating to the release of one of these insurers during 2006). Self-

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

insured losses are accrued based upon estimates of the aggregate liability for uninsured claims incurred using the Company’s historical claims experience.

Concentration of Labor Subject to Collective Bargaining Agreements

At June 30, 2006, approximately 7,500 persons were employed by General Cable, and collective bargaining agreements covered approximately 4,550 employees, or 61% of total employees, at various locations around the world. During the five calendar years ended December 31, 2005, the Company experienced two strikes in North America and one strike in Asia Pacific all of which were settled on satisfactory terms. There were no other major strikes at any of the Company’s facilities during the five years ended December 31, 2005, and there have been no strikes during the three and six fiscal months ended June 30, 2006. The only strike that occurred in 2005 was at the Company’s Lincoln, Rhode Island manufacturing facility, and it lasted approximately two weeks. In the United States and Canada, union contracts expired at one facility in 2006 (consisting of two separate contracts) representing approximately 2% of total employees as of June 30, 2006 and will expire at two facilities in 2007 representing approximately 3% of total employees as of June 30, 2006. The first of the two contracts expiring at the Company’s U.S. facility in 2006 was successfully negotiated and ratified on March 5, 2006. The second contract expiring in 2006 was successfully negotiated and ratified on May 21, 2006. In Europe, Mexico and Asia Pacific, labor agreements are generally negotiated on an annual or bi-annual basis.

Concentration of Credit Risk

General Cable sells a broad range of products primarily in the United States, Canada, Europe and the Asia Pacific region. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers, including members of buying groups, composing General Cable’s customer base. General Cable customers in North America generally receive a 30 to 60 day payment period on purchases from the Company. Certain automotive aftermarket customers of the Company receive payment terms ranging from 60 days to 180 days, which is common in this particular market. Ongoing credit evaluations of customers’ financial condition are performed, and generally, no collateral is required. General Cable maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management’s estimates. Certain subsidiaries also maintain credit insurance for certain customer balances. Bad debt expense associated with uncollectible accounts for the three and six fiscal months ended June 30, 2006 was $(0.4) million and $(0.3) million, respectively, due to better than expected customer payment performance. Bad debt expense associated with uncollectible accounts was $0.5 million and $1.9 million for the three and six fiscal months ended July 1, 2005.

Income Taxes

The Company and certain of its wholly-owned subsidiaries file a consolidated U.S. federal income tax return. Other subsidiaries of the Company file tax returns in their local jurisdictions.

The Company provides for income taxes on all transactions that have been recognized in the Condensed Consolidated Financial Statements in accordance with SFAS No. 109. Accordingly, the impact of changes in income tax laws on deferred tax assets and deferred tax liabilities are recognized in net earnings in the period during which such changes are enacted.

The Company records a valuation allowance to reduce deferred tax assets to the amount that it believes is more likely than not to be realized. The valuation of the deferred tax asset is dependent on, among other things, the ability of the Company to generate a sufficient level of future taxable income. In estimating future taxable income, the Company has considered both positive and negative evidence, such as historical and forecasted results of operations, including the losses realized earlier in the decade, and has considered the implementation of prudent and feasible tax planning strategies. At June 30, 2006, the Company had recorded a net deferred tax asset of $86.5 million ($45.1 million current and $41.4 million long term). Approximately $7.5 million of this deferred tax asset must be utilized prior to its expiration in the period 2007-2009. The remainder of the asset may be used for at least 15 years. This finite life has also been considered by the Company in the valuation of the asset. The Company has and will continue to review on a quarterly basis its assumptions and tax planning strategies, and, if the amount of the estimated realizable net deferred tax asset is less than the amount currently on the balance sheet, the Company would reduce its deferred tax asset, recognizing a non-cash charge against reported earnings. As a part of the quarterly review previously mentioned, during the second quarter of 2006, the Company recognized a benefit of approximately $3.7 million due to the release of a portion of the state deferred tax valuation allowance as it became more likely than not that the related deferred tax asset would be utilized in future years as a result of improved performance in the Company’s U.S. operations.

The Company believes it has a reasonable basis in the tax law for all of the positions it takes in the various tax returns it files. However, in recognition of the fact that (i) various taxing authorities may take opposing views on some issues, (ii) the cost and risk of litigation in sustaining the positions that the Company has taken on various returns might be significant, and (iii)

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

the taxing authorities may prevail in their attempts to overturn such positions, the Company maintains tax reserves, which are established for amounts that are judged to be probable liabilities based on the definition presented in SFAS No. 5. These tax reserves cover a wide range of issues and involve numerous different taxing jurisdictions. The potential issues covered by tax reserves as well as the amount and adequacy of the tax reserves are topics of frequent review internally and with outside tax advisors. Where necessary, periodic adjustments are made to such reserves to reflect the lapsing of statutes of limitations, closing of ongoing examinations, or other relevant factual developments.

Derivative Financial Instruments

Derivative financial instruments are utilized to manage interest rate, commodity and foreign currency risk as it relates to both transactions and the Company’s net investment in its European operations. General Cable does not hold or issue derivative financial instruments for trading purposes. SFAS No. 133, “Accounting For Derivative Instruments and Hedging Activities,” as amended, requires that all derivatives be recorded on the balance sheet at fair value. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and whether it qualifies for hedge accounting. SFAS No. 133, as applied to General Cable’s risk management strategies, may increase or decrease reported net income, and shareholders’ equity, or both, prospectively depending on changes in interest rates and other variables affecting the fair value of derivative instruments and hedged items, but will have no effect on cash flows or economic risk. See further discussion in Note 8.

Foreign currency and commodity contracts are used to hedge future sales and purchase commitments. Interest rate swaps are used to achieve a targeted mix of floating rate and fixed rate debt. Unrealized gains and losses on these derivative financial instruments are recorded in other comprehensive income (loss) until the underlying transaction occurs and is recorded in the income statement at which point such amounts included in other comprehensive income (loss) are recognized in earnings which generally will occur over periods less than one year.

In October 2005, the Company entered into a U.S. dollar to Euro cross currency and interest rate swap agreement that qualifies as a net investment hedge of the Company’s net investment in its European operations in order to hedge the effects of the changes in spot exchange rates on the value of the net investment. The swap is marked-to-market quarterly using the “spot method” to measure the amount of hedge ineffectiveness. Changes in the fair value of the swap as they relate to spot exchange rates are recorded as other comprehensive income (loss) whereas changes in the fair value of the swap as they relate to the interest rate differential and the change in interest rate differential since the last marked-to-market date are recognized currently in earnings for the period.

Shipping and Handling Costs

All shipping and handling amounts billed to a customer in a sales transaction are classified as revenue. Shipping and handling costs associated with storage and handling of finished goods and storage and handling of shipments to customers are included in cost of sales and totaled $26.9 million and $17.5 million, respectively, for the three fiscal months ended June 30, 2006 and July 1, 2005 and totaled $54.4 million and $37.8 million, respectively, for the six fiscal months ended June 30, 2006 and July 1, 2005.

Advertising Expense

Advertising expense consists of expenses relating to promoting the Company’s products, including trade shows, catalogs, and e-commerce promotions, and is charged to expense when incurred. Advertising expense was $2.2 million and $1.7 million for the three fiscal months ended June 30, 2006 and July 1, 2005, respectively, and was $3.7 million and $3.2 million, respectively, for the six fiscal months ended June 30, 2006 and July 1, 2005.

New Standards

In February 2006, SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments—an Amendment of FASB Statements No. 133 and 140,” was issued. This statement provides companies with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No. 133 by allowing companies to make an irrevocable election to measure a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. The election may be made on an instrument-by-instrument basis and can be made only when a hybrid financial instrument is initially recognized or undergoes a remeasurement event. SFAS No. 155 also requires that interests in securitized financial assets be evaluated to identify whether they are freestanding derivatives or hybrid financial instruments containing an embedded derivative that requires bifurcation. SFAS No. 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. The Company is currently evaluating the impact of adopting SFAS No. 155 on its consolidated financial position, results of operations and cash flows.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

In March 2006, SFAS No. 156, “Accounting for Servicing of Financial Assets—an Amendment of FASB Statement No. 140,” was issued. SFAS No. 156 requires recognition of a servicing asset or liability at fair value each time an obligation is undertaken to service a financial asset by entering into a servicing contract. SFAS No. 156 also provides guidance on subsequent measurement methods for each class of servicing assets and liabilities and specifies financial statement presentation and disclosure requirements. SFAS No. 156 is effective for fiscal years beginning after September 15, 2006. The Company is currently evaluating the impact of adopting SFAS No. 156 on its consolidated financial position, results of operations and cash flows.

In July 2006, FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” was issued. This Interpretation clarifies accounting for uncertain tax positions in accordance with SFAS No. 109. Specifically, the Interpretation requires recognition of a Company’s best estimate of the impact of a tax position only if that position is “more-likely-than-not” to be sustained by an audit based only on the technical merits of the position. Tax positions that meet the threshold are recognized at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority. Tax positions currently held that fail the “more-likely-than-not” recognition threshold would result in adjustments in recorded deferred tax assets or liabilities and changes in income tax payables or receivables. In addition, Interpretation 48 specifies certain annual disclosures that are required to be made once the Interpretation has taken effect. This Interpretation is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of adopting this proposed Interpretation on its consolidated financial position, results of operations and cash flows.

3. Acquisitions and Divestitures

In the first quarter of 2005, the Company acquired certain assets of Draka Comteq’s business in North America for a purchase price of $7.5 million in cash, subject to post-closing adjustments. The Company incurred $0.1 million of costs and expenses associated with the acquisition. The assets acquired are located in Franklin, Massachusetts and manufacture electronics and datacom products. The assets acquired included machinery and equipment, inventory, prepaid assets and intangible assets, net of the assumption of trade payables. The purchase price has been allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition. During the second quarter of 2005, the final purchase price was agreed with Draka resulting in a cash payment of approximately $0.2 million to the Company. The pro forma effects of the acquisition were not material.

On December 22, 2005, the Company completed its purchase of the shares of the wire and cable manufacturing business of SAFRAN SA, a diverse, global high technology company. The acquired business is known under the name Silec Cable, S.A.S. (“Silec”). Silec^® is based in Montereau, France and employs approximately 1,000 associates with nearly one million square feet of manufacturing space in that location. In 2005, prior to the acquisition date, Silec^® reported global sales of approximately $282.7 million (based on 2005 average exchange rates) of which about 52% were linked to electric utility and electrical infrastructure. The original consideration paid for the acquisition was approximately $82.8 million (at prevailing exchange rates during that period) including fees and expenses and net of cash acquired at closing. In accordance with the terms of the definitive share purchase agreement, the Company withheld approximately 15% of the purchase price at closing until the parties agreed on the final closing balance sheet. During the second quarter of 2006, the Company agreed on the closing balance sheet and resolved other claims with SAFRAN SA, and therefore, the Company paid additional consideration of approximately $13.7 million (at prevailing exchange rates during the period) including fees and expenses in final settlement of the acquisition price. The Company acquired Silec^® primarily as the latest step in the positioning of the Company as a global leader in cabling systems for the energy exploration, production, transmission and distribution markets.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

A preliminary purchase price allocation based on the estimated fair values, or other measurements as applicable, of the assets acquired and the liabilities assumed at the date of acquisition is as follows (in millions at the prevailing exchange rate for that date):

		As of
		December 22, 2005
Cash		$	1.4
Accounts receivable			113.5
Inventories			49.1
Prepaid expenses and other			8.4
Property, plant and equipment			17.6
Other noncurrent assets			2.0
Total assets		$	192.0
Accounts payable		$	43.1
Accrued liabilities			40.0
Other liabilities			12.0
Total liabilities		$	95.1

The values of property, plant and equipment and intangible assets reflected above have been adjusted for the pro rata allocation (based on their relative fair values) of the excess of the fair value of acquired net assets over the cost of the acquisition. The Company has not yet finalized the deferred tax accounting in establishing the acquisition opening balance sheet. This valuation is expected to be completed in the third quarter of 2006, which could result in changes to the values assigned above to property, plant and equipment and intangible assets.

Intangible assets reflected above in “Other noncurrent assets” were determined by management to meet the criteria for recognition apart from goodwill and include the following (in millions at the prevailing exchange rate for that date):

						Amortization
		Estimated Fair				Period
		Value				(in years)
Patents		$	1.0				12.0
Total amortizable intangible assets		$	1.0				12.0
Trademarks		$	1.0
Total intangible assets		$	2.0

Trademarks have been determined by management to have indefinite lives and are not amortized, based on management’s expectation that the trademarked products will generate cash flows for the Company for an indefinite period. Management expects to continue to use the acquired trademarks on existing products and to introduce new products that will also display the trademarks, thus extending their lives indefinitely.

The patents were determined by management to have finite lives. The useful life for the patents was based on the remaining lives of the related patents.

No in-process research and development costs have been identified to be written off.

The following table presents, in millions, actual unaudited consolidated results of operations for the Company for the three and six fiscal months ended June 30, 2006, including the operations of Silec^® and presents the unaudited pro forma consolidated results of operations for the Company for the three and six fiscal months ended July 1, 2005 as though the acquisition of Silec^® had been completed as of the beginning of each period. This pro forma information is intended to provide information regarding how the Company might have looked if the acquisition had occurred as of January 1, 2005. The pro forma adjustments represent management’s best estimates based on information available at the time the pro forma information was prepared and may differ from the adjustments that may actually have been required. Accordingly, the pro forma financial information should not be relied upon as being indicative of the historical results that would have been realized had the acquisition occurred as of the dates indicated or that may be achieved in the future.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

		Unaudited Three Fiscal								Unaudited Six Fiscal
		Months Ended								Months Ended
		June 30,				July 1,				June 30,				July 1,
		2006				2005				2006				2005
		(As reported)				(Pro forma)				(As reported)				(Pro forma)
Revenue		$	987.1			$	680.3			$	1,791.4			$	1,304.0
Net income applicable to common shareholders		$	41.4			$	11.2			$	62.7			$	19.2
Earnings per common share — assuming dilution		$	0.80			$	0.25			$	1.21			$	0.44

The pro forma results reflect immaterial pro forma adjustments for interest expense, depreciation and related income taxes in order to present the amounts on a purchase accounting adjusted basis. These pro forma results also include an estimated $1.2 million and an estimated $2.4 million, respectively, of corporate costs allocated by SAFRAN SA to Silec^® during the three and six fiscal months ended July 1, 2005. Certain overhead costs previously incurred on behalf of and allocated to Silec^® by SAFRAN SA are incurred directly by Silec^® in 2006.

Net income during the three and six fiscal months ended June 30, 2006 and July 1, 2005 includes certain material one-time benefits (charges) unrelated to the acquisition, as listed below (in millions):

		Unaudited Three Fiscal								Unaudited Six Fiscal
		Months Ended								Months Ended
		June 30,				July 1,				June 30,				July 1,
		2006				2005				2006				2005
Release of deferred tax valuation allowance		$	3.7			$	—			$	3.7			$	—
Plant rationalization charges		$	—			$	(3.5	)		$	—			$	(3.5	)

On December 30, 2005, the Company completed the acquisition of the Mexican ignition wire set business of Beru AG, a worldwide leading manufacturer of diesel cold start systems. The acquired business is known under the name Beru S.A. de C.V. (Beru S.A.). Beru S.A. is based in Cuernavaca, Mexico and employs approximately 100 associates with one hundred thousand square feet of manufacturing space. Beru S.A. operates an automotive aftermarket assembly and distribution operation with annual revenues of approximately $7 million. Pro forma results of the Beru S.A. acquisition are not material.

The results of operations of the acquired businesses discussed above have been included in the consolidated financial statements since the respective dates of acquisition.

4. Other Income (Expense)

Other income (expense) includes foreign currency transaction gains or losses which result from changes in exchange rates between the designated functional currency and the currency in which a transaction is denominated. The Company recorded a $0.2 million gain during the three fiscal months ended June 30, 2006 and a $1.0 million gain during the six fiscal months ended June 30, 2006 resulting from foreign currency transaction gains. The Company recorded an insignificant amount during the three fiscal months ended July 1, 2005 and a $0.1 million loss during the six fiscal months ended July 1, 2005 resulting from foreign currency transaction losses.

5. Inventories

Inventories consisted of the following (in millions):

		June 30,				December 31,
		2006				2005
Raw materials		$	43.3			$	40.6
Work in process			78.5				56.2
Finished goods			277.4				267.1
Total		$	399.2			$	363.9

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

At June 30, 2006 and December 31, 2005, $299.2 million and $285.7 million, respectively, of inventories were valued using the LIFO method. Approximate replacement costs of inventories valued using the LIFO method totaled $554.5 million at June 30, 2006 and $410.5 million at December 31, 2005.

If in some future period, the Company was not able to recover the LIFO value of its inventory when replacement costs were lower than the LIFO value of the inventory, the Company would be required to take a charge to recognize in its income statement an adjustment of LIFO inventory to market value.

6. Restructuring Charges

Changes in accrued restructuring costs were as follows (in millions):

		Severance and				Facility Closing
		Related Costs				Costs				Total
Balance, December 31, 2005		$	1.0			$	0.5			$	1.5
Provisions, net			(0.2	)			—				(0.2	)
Utilization			(0.7	)			(0.3	)			(1.0	)
Balance, June 30, 2006		$	0.1			$	0.2			$	0.3

The December 31, 2005 balance represents previously accrued costs related to the Company’s discontinued operations and the closure of North American Electrical Infrastructure, Telecommunications and Networking manufacturing facilities in prior years. The utilization of these provisions in the three and six fiscal months ended June 30, 2006 was $0.3 million and $0.7 million, respectively, of severance and related costs and $0.1 million and $0.3 million, respectively, of facility closing costs.

7. Long-Term Debt

Long-term debt consisted of the following (in millions):

		June 30,				December 31,
		2006				2005
Senior notes due 2010		$	285.0			$	285.0
Revolving loans			96.0				115.1
Spanish term loan			35.6				35.4
Capital leases			4.8				5.2
Other			23.9				10.9
Total debt			445.3				451.6
Less current maturities			20.0				6.4
Long-term debt		$	425.3			$	445.2

Weighted average interest rates on the above outstanding balances were as follows:

Senior notes due 2010			9.5	%			9.5	%
Revolving loans			6.6	%			6.4	%
Spanish term loan			3.7	%			3.4	%
Capital leases			6.5	%			6.5	%
Other			4.5	%			3.8	%

On November 24, 2003, the Company completed a comprehensive refinancing of its bank debt that improved its capital structure and provided increased financial and operating flexibility by reducing leverage, increasing liquidity and extending debt maturities. The refinancing included the following: (i) the private placement of 7-year senior unsecured notes, (ii) a new senior secured revolving credit facility, (iii) the private placement of redeemable convertible preferred stock and (iv) a public offering of common stock. The Company applied the net proceeds from these refinancing transactions to repay all amounts outstanding under its former senior secured revolving credit facility, senior secured term loans and accounts receivable asset-backed securitization facility and to pay fees and expenses related to the refinancing.

The senior unsecured notes (the “Notes”) were issued in the amount of $285.0 million, bear interest at a fixed rate of 9.5% and mature in 2010. The estimated fair value of the Notes was approximately $297.8 million at June 30, 2006.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

The senior secured revolving credit facility, as amended, is a five year $300.0 million asset based revolving credit agreement (the “Credit Agreement”). The Credit Agreement, as amended, is guaranteed by the Company’s U.S. subsidiaries and is secured by substantially all U.S. assets. The lenders have also received a pledge of all of the capital stock of the Company’s existing domestic subsidiaries and any future domestic subsidiaries. Borrowing availability, as amended, is based on eligible U.S. accounts receivable and inventory and certain U.S. fixed assets. As of June 30, 2006, the Company had outstanding borrowings of $96.0 million and availability of approximately $161.0 million under the terms of the Credit Agreement. Availability of borrowings under the fixed asset component of the facility, as amended, is reduced quarterly over a seven-year period by $7.1 million per annum. This may result in a reduction in the overall availability depending upon the calculation of eligible accounts receivable and inventory. The facility also includes a sub-facility for letters of credit of up to $50.0 million. The Company had outstanding letters of credit related to this revolving credit agreement of $31.8 million at June 30, 2006.

During the fourth quarter of 2004, the Company amended the Amended and Restated Credit Agreement which lowered the borrowing rate at that point by 50 basis points, increased the annual capital spending limit and provided for the ability to swap up to $100 million of existing fixed rate Notes to a floating interest rate.

During the second quarter of 2005, the Company amended the Amended and Restated Credit Agreement which increased the borrowing limit on the senior secured revolving credit facility from $240.0 million to $275.0 million. Additionally, the amendment increased the maximum amount permitted under the facility for investments in joint ventures from $10 million to $25 million.

During the fourth quarter of 2005, the Company further amended the Amended and Restated Credit Agreement which increased the borrowing limit on the senior secured revolving credit facility from $275.0 million to $300.0 million. Additionally, the amendment extended the maturity date by almost two years to August 2010, lowered borrowing costs by approximately 65 basis points and reduced unused facility fees. Also, the amendment eliminated or relaxed several provisions, including eliminating the annual limit on capital expenditures, expanding permitted indebtedness to include acquired indebtedness of newly acquired foreign subsidiaries, and increasing the level of permitted loan-funded acquisitions. Finally, the amendment satisfied the financing conditions to the Company’s inducement offer to convert shares of its 5.75% Series A Redeemable Convertible Preferred Stock into its common stock, which was announced and commenced on November 9, 2005. Specifically, the amendment permitted the Company to draw funds from its credit facility to pay the conversion offer premium plus the funds necessary to make a final dividend payment to holders of the preferred stock who converted their shares in the inducement offer.

During the second quarter of 2006, the Company further amended the Amended and Restated Credit Agreement. The amendment removed the dollar limits on the amount of borrowings which the Company’s foreign subsidiaries can enter into locally and increased the dollar amount which the Company can send from the U.S. to its foreign affiliates (via either investments or advances) to $300 million, subject to excess availability, as defined, from the former limit of $10 million. The amendment also included the insertion of a provision to allow for a common stock buyback or common stock dividend program up to the lesser of $125 million or the maximum permitted by the existing Senior Note indenture. In addition, the amendment released the liens and guarantees of the Company’s Canadian subsidiaries securing the facility and allowed for the entry into a broader range of other types of financing agreements than the previous Amended and Restated Credit Agreement.

Borrowings under the Credit Agreement, as amended, bear interest at a rate of LIBOR plus 1.00% to 1.75% and/or prime plus 0.00% to 0.50% depending upon the Company’s excess availability, as defined by the Credit Agreement. The weighted average interest rate on borrowings outstanding under the Credit Agreement during the first six fiscal months of 2006 was 6.41%. Under the Credit Agreement, the Company pays a commitment fee of 0.25%, as amended, per annum on the unused portion of the commitment. In connection with the November 2003 refinancing and related subsequent amendments to the Credit Agreement, the Company incurred fees and expenses aggregating $8.6 million, which are being amortized over the term of the Credit Agreement.

The Credit Agreement, as amended, requires a minimum fixed charge coverage ratio, as defined, only when excess availability, as defined, is below a certain threshold. At June 30, 2006, the Company was in compliance with all covenants under the Credit Agreement.

On December 22, 2005, Grupo General Cable Sistemas, S.A., a wholly owned Spanish subsidiary of General Cable, entered into both a term loan facility and a revolving credit facility totaling €75 million. This combined facility was entered into to

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

provide Euro-denominated borrowings to partly fund the subsidiary’s acquisition of Silec^® and to provide funds for general corporate needs of the European business. See Note 3 for more details on the acquisition of Silec^®.

The term loan facility of €50 million is available in up to three tranches, with an interest rate of Euribor plus 0.8% to 1.5% depending on certain debt ratios. The term loan is repayable in fourteen semi-annual installments, maturing seven years following the draw down of each tranche. As of June 30, 2006, the U.S. dollar equivalent of $35.6 million was drawn under this term loan facility, leaving undrawn availability of approximately $25.6 million.

The revolving credit facility of €25 million matures at the end of five years and carries an interest rate of Euribor plus 0.6% to 1.0% depending on certain debt ratios. No funds are currently drawn under this revolving credit facility, leaving undrawn availability of approximately the U.S. dollar equivalent of $32.0 million as of June 30, 2006. Commitment fees ranging from 15 to 25 basis points per annum on any unused commitments under the revolving credit facility will be assessed to Grupo General Cable Sistemas, S.A., and are payable on a quarterly basis.

The combined facility is subject to certain financial ratios of the European group, the most restrictive of which is net debt to EBITDA (earnings before interest, taxes, depreciation and amortization). In addition, the indebtedness under the combined facility is guaranteed by the Company’s Portuguese subsidiary, General Cable Celcat Energia E Telecomunicacoes, S.A., and by the recently acquired Silec Cable, S.A.S.

During 2005 and the six fiscal months ended June 30, 2006, one of the Company’s international operations contracted with a bank to transfer accounts receivable that it was owed from one customer to the bank in exchange for payments of approximately $1 million and $0.8 million, respectively. As the transferor, the Company surrendered control over the financial assets included in the transfers and has no further rights regarding the transferred assets. The transfers were treated as sales and the approximate $1.8 million received was accounted for as proceeds from the sales. All assets sold were removed from the Company’s balance sheet upon completion of the transfers, and no further obligations exist under these agreements.

At June 30, 2006, maturities of long-term debt (excluding capital leases) during twelve month periods beginning July 1, 2006 through July 1, 2011 are $19.0 million, $5.8 million, $5.8 million, $5.8 million and $386.7 million, respectively, and $17.4 million thereafter.

At June 30, 2006, maturities of capital lease obligations during twelve month periods beginning July 1, 2006 through July 1, 2011 are $1.0 million, $1.0 million, $1.1 million, $1.1 million and $0.6 million, respectively.

8. Financial Instruments

General Cable is exposed to various market risks, including changes in interest rates, foreign currency and commodity prices. To manage risk associated with the volatility of these natural business exposures, General Cable enters into interest rate, commodity and foreign currency derivative agreements, as it relates to both transactions and the Company’s net investment in its European operations, as well as copper and aluminum forward purchase agreements. General Cable does not purchase or sell derivative instruments for trading purposes.

General Cable has utilized interest rate swaps and interest rate collars to manage its interest expense exposure by fixing its interest rate on a portion of the Company’s floating rate debt. Under the swap agreements, General Cable paid a fixed rate while the counterparty paid to General Cable the difference between the fixed rate and the three-month LIBOR rate.

During 2001, the Company entered into several interest rate swaps which effectively fixed interest rates for borrowings under the former credit facility and other debt. At June 30, 2006, the remaining outstanding interest rate swap had a notional value of $9.0 million, an interest rate of 4.49% and matures in October 2011. The Company does not provide or receive any collateral specifically for this contract. The fair value of interest rate derivatives, that qualify as cash flow hedges as defined in SFAS No. 133, are based on quoted market prices and third party provided calculations, which reflect the present values of the difference between estimated future variable-rate receipts and future fixed-rate payments. At June 30, 2006 and December 31, 2005, the net unrealized loss on the interest rate derivative and the related carrying value was $(0.2) million and $(0.4) million, respectively.

The Company enters into forward exchange contracts, that qualify as cash flow hedges as defined in SFAS No. 133, principally to hedge the currency fluctuations in certain transactions denominated in foreign currencies, thereby limiting the

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

Company’s risk that would otherwise result from changes in exchange rates. Principal transactions hedged during the year were firm sales and purchase commitments. The fair value of foreign currency contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. At June 30, 2006 and December 31, 2005, the net unrealized gain on the net foreign currency contracts was $0.8 million and $0.3 million, respectively.

Outside of North America, General Cable enters into commodity futures contracts, that qualify as cash flow hedges as defined in SFAS No. 133, for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. At June 30, 2006 and December 31, 2005, General Cable had an unrealized gain of $29.0 million and $11.6 million, respectively, on the commodity futures.

Unrealized gains and losses on the derivative financial instruments discussed above are recorded in other comprehensive income (loss) until the underlying transaction occurs and is recorded in the income statement at which point such amounts included in other comprehensive income (loss) are recognized in earnings which generally will occur over periods less than one year. During the three and six fiscal months ended June 30, 2006, a $2.6 million gain and a $5.5 million gain, respectively, was reclassified from accumulated other comprehensive income to the income statement. During the three and six fiscal months ended July 1, 2005, a $0.8 million gain and an $1.2 million gain, respectively, was reclassified from accumulated other comprehensive income to the income statement.

In October 2005, the Company entered into a U.S. dollar to Euro cross currency and interest rate swap agreement with a notional value of $150 million, that qualifies as a net investment hedge of the Company’s net investment in its European operations, in order to hedge the effects of the changes in spot exchange rates on the value of the net investment. The swap has a term of just over two years with a maturity date of November 15, 2007. The fair value of the cross currency and interest rate swap is based on third party provided calculations. At June 30, 2006 and December 31, 2005, the net unrealized gain (loss) on the swap was $(10.2) million and $1.6 million, respectively. The swap is marked-to-market quarterly using the “spot method” to measure the amount of hedge ineffectiveness. Changes in the fair value of the swap as they relate to spot exchange rates are recorded as other comprehensive income (loss) whereas changes in the fair value of the swap as they relate to the interest rate differential and the change in interest rate differential since the last marked-to-market date, equaling approximately $(1.6) million and $1.0 million as of June 30, 2006 and December 31, 2005, respectively, are recognized currently in earnings for the period.

In North America, General Cable enters into forward pricing agreements for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. The Company accounts for these forward pricing arrangements under the “normal purchases and normal sales” scope exemption of SFAS No. 133 because these arrangements are for purchases of copper and aluminum that will be delivered in quantities expected to be used by the Company over a reasonable period of time in the normal course of business. For these arrangements, it is probable at the inception and throughout the life of the arrangements that the arrangements will not settle net and will result in physical delivery of the inventory. At June 30, 2006 and December 31, 2005, General Cable had $198.3 million and $106.2 million, respectively, of future copper and aluminum purchases that were under forward pricing agreements. At June 30, 2006 and December 31, 2005, General Cable had unrealized gains of $13.2 million and $11.4 million, respectively, related to these transactions. General Cable expects to offset the unrealized gains under these agreements as a result of firm sale price commitments with customers.

9. Pension Plans and Other Post-retirement Benefits

General Cable provides retirement benefits through contributory and noncontributory pension plans covering certain of its domestic regular full-time employees and, to a lesser extent, international employees. Pension expense under the defined contribution plans sponsored by General Cable in the United States equaled up to four percent of each eligible employee’s covered compensation. In addition, General Cable sponsors employee savings plans under which General Cable may match a specified portion of contributions made by eligible employees.

Benefits provided under defined benefit plans sponsored by General Cable are generally based on years of service multiplied by a specific fixed dollar amount. Contributions to these pension plans are based on generally accepted actuarial methods, which may differ from the methods used to determine pension expense. The amounts funded for any plan year are neither less than the minimum required under federal law nor more than the maximum amount deductible for federal income tax purposes.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

General Cable also has post-retirement benefit plans that provide medical and life insurance for certain retirees and eligible dependents. General Cable funds the plans as claims or insurance premiums are incurred.

The components of net periodic benefit cost for pension and other post-retirement benefits were as follows (in millions):

		Three Fiscal Months Ended																Six Fiscal Months Ended
		June 30, 2006								July 1, 2005								June 30, 2006								July 1, 2005
		Pension				Other				Pension				Other				Pension				Other				Pension				Other
Service cost		$	0.8			$	—			$	0.7			$	—			$	1.5			$	0.1			$	1.2			$	—
Interest cost			2.7				0.2				2.5				0.2				5.2				0.3				4.9				0.3
Expected return on plan assets			(2.8	)			—				(2.6	)			—				(5.6	)			—				(5.3	)			—
Net amortization and deferral			1.2				0.1				0.9				—				2.4				0.1				1.8				—
Curtailment (gain) loss			—				—				0.7				(0.2	)			—				—				0.7				(0.2	)
Total defined benefit plans expense			1.9				0.3				2.2				—				3.5				0.5				3.3				0.1
Total defined contribution plans expense			1.9				—				1.5				—				4.2				—				3.3				—
Total		$	3.8			$	0.3			$	3.7			$	—			$	7.7			$	0.5			$	6.6			$	0.1

Defined benefit plan cash contributions for the three and six fiscal months ended June 30, 2006 were $1.3 million and $2.3 million, respectively. Defined benefit plan cash contributions for the three and six fiscal months ended July 1, 2005 were $1.1 million and $2.1 million, respectively.

The Company has additional contracts related to pension benefits outside of the United States not included in the tables and financial figures above due to their designation as nonparticipating annuity contracts as defined by SFAS 87. These annuity contracts cover 12 retired and 11 current employees in the Company’s operations in Spain, and the contracts act as irrevocable transfers of risk from the Company to the other party to the contracts, an insurance company. The cost of the benefits covered by the annuity contracts is recorded based on the premiums, or costs, required to purchase the contracts. The service cost component of net pension cost was $0.3 million in 2005, $0.2 million in 2004, and $0.3 million in 2003. The benefits covered by the annuity contracts are excluded from the projected benefit obligation and the accumulated benefit obligation of the Company, and the annuity contracts are excluded from the Company’s plan assets as required by SFAS 87.

10. Shareholders’ Equity

General Cable is authorized to issue 75 million shares of common stock and 25 million shares of preferred stock.

In the fourth quarter of 2003, the Company completed a comprehensive refinancing of its bank debt. The refinancing included the private placement of 2,070,000 shares of redeemable convertible preferred stock and a public offering of 5,807,500 shares of common stock. As of June 30, 2006, 101,949 shares of redeemable convertible preferred stock remained outstanding. The reduction in redeemable convertible preferred stock shares is mainly due to an inducement offer made by the Company in the fourth quarter of 2005.

The preferred stock has a liquidation preference of $50.00 per share. Dividends accrue on the convertible preferred stock at the rate of 5.75% per annum and are payable quarterly in arrears. Dividends are payable in cash, shares of General Cable common stock or a combination thereof. Holders of the convertible preferred stock are entitled to convert any or all of their shares of convertible preferred stock into shares of General Cable common stock, at an initial conversion price of $10.004 per share. The conversion price is subject to adjustments under certain circumstances. General Cable is obligated to redeem all outstanding shares of convertible preferred stock on November 24, 2013 at par. The Company may, at its option, elect to pay the redemption price in cash or in shares of General Cable common stock with an equivalent fair value, or any combination thereof. The Company has the option to redeem some or all of the outstanding shares of convertible preferred stock in cash beginning on the fifth anniversary of the issue date. The redemption premium will initially equal one-half the dividend rate on the convertible preferred stock and decline ratably to par on the date of mandatory redemption. In the event of a change in control, the Company has the right to either redeem the preferred stock for cash or to convert the preferred stock to common stock.

The Company maintains a deferred compensation plan (“Deferred Compensation Plan”). This plan is available to directors and certain officers and managers of the Company. The plan allows participants to defer all or a portion of their directors’ fees and/or salary and annual bonuses, as applicable, and it permits participants to elect to contribute and defer all or any portion of their nonvested stock, restricted stock and stock awards. All deferrals to the participants’ accounts vest

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

immediately; Company contributions vest according to the vesting schedules in the qualified plan, and nonvested stock and restricted stock vests according to the schedule designated by the award. The Company makes matching and retirement contributions (currently equal to 6%) of compensation paid over the maximum allowed for qualified pension benefits, whether or not the employee elects to defer any compensation. The Deferred Compensation Plan does not have dollar limits on tax-deferred contributions. The assets of the Deferred Compensation Plan are held in a Rabbi Trust (“Trust”) and, therefore, are available to satisfy the claims of the Company’s creditors in the event of bankruptcy or insolvency of the Company. Participants have the right to request that their account balance be determined by reference to specified investment alternatives (with the exception of the portion of the account which consists of deferred nonvested and subsequently vested stock and restricted stock). With certain exceptions, these investment alternatives are the same alternatives offered to participants in the General Cable Retirement and Savings Plan for Salaried Associates. In addition, participants have the right to request that the Plan Administrator re-allocate the deferral among available investment alternatives; provided, however that the Plan Administrator is not required to honor such requests. Distributions from the plan are generally made upon the participants’ termination as a director and/or employee, as applicable, of the Company. Participants receive payments from the plan in cash, either as a lump sum payment or through equal annual installments from between one and ten years, except for the nonvested and subsequently vested stock and restricted stock, which the participants receive in shares of General Cable stock. The Company accounts for the Deferred Compensation Plan in accordance with EITF 97-14, “Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust and Invested.”

Assets of the Trust, other than the nonvested and subsequently vested stock of the Company, are invested in funds covering a variety of securities and investment strategies, including a General Cable stock fund. Mutual funds available to participants are publicly quoted and reported at market value. The Company accounts for these investments in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” The Trust also holds nonvested and subsequently vested stock and restricted stock shares of the Company. The Company’s nonvested and subsequently vested stock and restricted stock that is held by the Trust has been accounted for in additional paid-in capital since the adoption of SFAS 123(R) on January 1, 2006, and prior to that date had been accounted for in other shareholders’ equity in the consolidated balance sheet, and the market value of this nonvested and subsequently vested stock and restricted stock was $24.3 million as of June 30, 2006 and $13.6 million as of December 31, 2005. The market value of the assets held by the Trust, exclusive of the market value of the shares of the Company’s nonvested and subsequently vested stock and restricted stock, at June 30, 2006 and December 31, 2005 was $10.6 million and $8.3 million, respectively, and is classified as “other non-current assets” in the condensed consolidated balance sheet. Amounts payable to the plan participants at June 30, 2006 and December 31, 2005, excluding the market value of the shares of the Company’s nonvested and subsequently vested stock and restricted stock, was $10.6 million and $8.3 million, respectively, and is classified as “other liabilities” in the condensed consolidated balance sheet.

In accordance with EITF 97-14, all market value fluctuations of the Trust assets, exclusive of the shares of nonvested and subsequently vested stock and restricted stock of the Company, have been reflected in other comprehensive income (loss). Increases or decreases in the market value of the deferred compensation liability, excluding the shares of nonvested and subsequently vested stock and restricted stock of the Company held by the Trust, are included as compensation expense in the condensed consolidated statements of operations. Based on the changes in the total market value of the Trust’s assets, exclusive of the nonvested and subsequently vested stock and restricted stock, the Company recorded net compensation expense of $0.6 million and $0.7 million, respectively, for the three fiscal months ended June 30, 2006 and July 1, 2005 and $2.2 million and $0.3 million, respectively, for the six fiscal months ended June 30, 2006 and July 1, 2005. See Note 11 for compensation costs recorded on nonvested and subsequently vested stock shares and restricted stock.

In November 1998, General Cable entered into a Stock Loan Incentive Plan (SLIP) with executive officers and key employees. Under the SLIP, the Company loaned $6.0 million to facilitate open market purchases of General Cable common stock. A matching restricted stock unit (MRSU) was issued for each share of stock purchased under the SLIP. The fair value of the MRSUs at the grant date of $6.0 million, adjusted for subsequent forfeitures, was amortized to expense over the initial five-year vesting period. In June 2003, all executive officers repaid their loans plus interest that were originally made under the SLIP in the amount of $1.8 million. The Company accepted, as partial payment for the loans, common stock owned by the executive officers and restricted stock units previously awarded to them under the SLIP. In July 2003, the Company approved an extension of the loan maturity for the remaining participants in the SLIP for an additional three years to November 2006, subject in the extension period to a rate of interest of 5.0%. As part of the loan extension the vesting schedule on the MRSUs was also extended so that the MRSUs vest in November 2006. During the third quarter of 2004, certain employees repaid their loans plus interest that were originally made under the SLIP in the amount of $1.4 million. The Company accepted, as partial payment for the loans, common stock owned by the employees and restricted stock units

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

previously awarded to them under the SLIP. During the second quarter of 2005, the remaining participants in the SLIP repaid their loans plus interest that were originally made under the SLIP in the amount of $2.2 million. The Company accepted, as partial payment for the loans, common stock owned by the employees and restricted stock units previously awarded to them under the SLIP. Approximately $0.2 million of the loans were forgiven. There are no MRSUs outstanding as of June 30, 2006.

The components of accumulated other comprehensive income (loss) consisted of the following (in millions):

		June 30,				December 31,
		2006				2005
Foreign currency translation adjustment		$	26.2			$	14.2
Pension adjustments, net of tax			(33.4	)			(33.4	)
Change in fair value of derivatives, net of tax			12.6				8.5
Unrealized investment gains			5.7				3.5
Other			0.4				0.4
Total		$	11.5			$	(6.8	)

Other shareholders’ equity consisted of nonvested stock of $4.8 million at December 31, 2005. The nonvested stock amount was reclassed to additional paid-in capital as part of the adoption of SFAS 123(R). See Note 11 for details.

11. Share-Based Compensation

The adoption of SFAS 123(R)’s fair value method has resulted in share-based expense in the amount of $0.5 million and $0.7 million, respectively, related to stock options for the three and six fiscal months ended June 30, 2006, which is included as a component of selling, general and administrative expenses. No compensation expense related to stock options was recorded during the three and six fiscal months ended July 1, 2005 under APB 25. In addition, the Company continued to record compensation expense related to nonvested stock awards as a component of selling, general and administrative expense. The three and six fiscal months ended June 30, 2006 included $0.6 million and $0.9 million, respectively, of compensation costs related to performance-based nonvested stock awards (as compared to $0.2 million and $0.3 million, respectively, for the three and six fiscal months ended July 1, 2005) and $1.3 million and $1.6 million, respectively, related to all other nonvested stock awards (as compared to $0.1 million and $0.2 million, respectively, for the three and six fiscal months ended July 1, 2005). For the three and six fiscal months ended June 30, 2006, all share-based compensation costs lowered pre-tax earnings by $2.4 million and $3.3 million, respectively, lowered net income by $1.6 million and $2.1 million, respectively, and lowered basic and diluted earnings per share by $0.03 per share and $0.04 per share, respectively.

SFAS 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required prior to SFAS 123(R). For the three and six fiscal months ended June 30, 2006, the $5.1 million and $8.4 million, respectively, excess tax benefit classified as a financing cash flow would have been classified as an operating cash inflow if the Company had not adopted SFAS 123(R). The Company has elected the alternative method, as discussed in SFAS 123(R)-3, to calculate the pool of excess tax benefits available to absorb tax deficiencies recognized subsequent to the adoption of SFAS 123(R).

General Cable currently has share-based compensation awards outstanding under three plans. These plans allow the Company to fulfill its incentive award obligations generally by granting nonqualified stock options and nonvested stock awards. New shares are issued when nonqualified stock options are exercised and when nonvested stock awards are granted. There have been no material modifications made to these plans during the three and six fiscal months ended June 30, 2006. On May 10, 2005, the General Cable Corporation 2005 Stock Incentive Plan (“2005 Plan”) was approved and replaced the two previous equity compensation plans, the 1997 Stock Incentive Plan and the 2000 Stock Option Plan. The Compensation Committee of the Board of Directors will no longer grant any awards under the previous plans but will continue to administer awards which were previously granted under the 1997 and 2000 plans. The 2005 Plan authorized a maximum of 1,800 thousand shares to be granted. Shares reserved for future grants, including options, under the 2005 Plan, approximated 1,441 thousand at June 30, 2006.

The 2005 Stock Incentive Plan authorizes the following types of awards to be granted: (i) Stock Options (both Incentive Stock Options and Nonqualified Stock Options); (ii) Stock Appreciation Rights; (iii) Nonvested and Restricted Stock Awards; (iv) Performance Awards; and (v) Stock Units, as more fully described in the 2005 Plan. Each award is subject to

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

such terms and conditions consistent with the 2005 Plan as determined by the Compensation Committee and as set forth in an award agreement and awards under the 2005 Plan were granted at not less than the closing market price on the date of grant.

The 2000 Stock Option Plan (“2000 Plan”) as amended authorized a maximum of 1,500 thousand non-incentive options to be granted. No other forms of award were authorized under this plan. Stock options were granted to employees selected by the Compensation Committee of the Board or the Chief Executive Officer at prices which were not less than the closing market price on the date of grant. The Compensation Committee (or Chief Executive Officer) had authority to set all the terms of each grant.

The 1997 Stock Incentive Plan (“1997 Plan”) authorized a maximum of 4,725 thousand nonvested shares, options or units of common stock to be granted. Stock options were granted to employees selected by the Compensation Committee of the Board or the Chief Executive Officer at prices which were not less than the closing market price on the date of grant. The Compensation Committee (or Chief Executive Officer) had authority to set all the terms of each grant.

Stock Options

All options awarded under the 2005 Plan have a term of 10 years from the grant date. The majority of the options vest three years from grant date. The majority of the options granted under the 2000 Plan expire in 10 years and become fully exercisable ratably over three years of continued employment or become fully exercisable after three years of continued employment. The majority of the options granted under the 1997 Plan expire in 10 years and become fully exercisable ratably over three years of continued employment or become fully exercisable after three years of continued employment.

A summary of stock option activity since the Company’s most recent fiscal year end is as follows (options in thousands):

						Weighted
						Average
		Options				Exercise
		Outstanding				Price
Balance At December 31, 2005			3,144			$	10.90
Granted			109				23.24
Exercised			(1,214	)			12.19
Forfeited or Expired			(34	)			21.86
Balance At June 30, 2006			2,005			$	10.61

At June 30, 2006, the aggregate intrinsic value of all outstanding options was $48.9 million with a weighted average remaining contractual term of 5.7 years, of which 1,702 thousand of the outstanding options are currently exercisable with an aggregate intrinsic value of $43.0 million, a weighted average exercise price of $9.74 and a weighted average remaining contractual term of 5.1 years. Since December 31, 2005, the weighted average grant date fair value of options granted was $12.75, the total intrinsic value of options exercised was $22.8 million and 979 thousand options have vested, net of forfeitures, with a total fair value of $2.6 million. At June 30, 2006, the total compensation cost related to nonvested options not yet recognized was $1.4 million with a weighted average expense recognition period of 3 years.

Additional information regarding options outstanding as of June 30, 2006 is as follows (options in thousands):

										Weighted
						Weighted				Average								Weighted
Range of		Options				Average				Remaining				Options				Average
Option Prices		Outstanding				Exercise Price				Contractual Life				Exercisable				Exercise Price
$  0 - $  7			737			$	4.04			6.6 years					718			$	4.00
$  7 - $14			923				11.76			5.3 years					750				11.77
$14 - $21			67				14.30			3.2 years					66				14.28
$21 - $28			277				23.32			5.0 years					168				23.40
$28 - $35			1				31.98			9.8 years					—				—

Nonvested Stock

The majority of the nonvested stock awards issued under the 2005 Plan are restricted as to transferability and salability with these restrictions being removed in equal annual installments over the five-year period following the grant date. The majority

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

of the nonvested stock awards issued under the 1997 Plan are restricted as to transferability and salability with these restrictions expiring ratably over a three-year or five-year period, expiring after six years from the date of grant or expiring ratably from the second anniversary to the sixth anniversary of the date of grant. Also, a minimal amount of immediately vesting restricted stock held by certain members of the Company’s Board of Directors in the Deferred Compensation Plan are included in this presentation as nonvested stock.

During the first quarter of 2001 and 2004, approximately 356 thousand and 341 thousand, respectively, nonvested common stock shares with performance accelerated vesting features were awarded to certain senior executives and key employees under the Company’s 1997 Stock Incentive Plan, as amended. The nonvested shares vest either six years from the date of grant or ratably from the second anniversary of the date of grant to the sixth anniversary unless certain performance criteria are met. The performance measure used to determine vesting is either the Company’s stock price or earnings per share. As of June 30, 2006, 696 thousand shares were issued as nonvested performance shares and approximately 461 thousand shares have vested. Approximately 45 thousand shares have been cancelled.

Prior to January 1, 2006, unearned stock compensation was recorded within shareholders’ equity at the date of award based on the quoted market price of the Company’s common stock on the date of grant and was amortized to expense using the straight-line method from the grant date through the earlier of the vesting date or the estimated retirement eligibility date. Upon adoption of SFAS 123(R), the $4.8 million of unearned stock compensation as of December 31, 2005 was required to be charged against additional paid-in capital.

A summary of all nonvested stock activity since the Company’s most recent fiscal year end is as follows (shares in thousands):

						Weighted
						Average
		Shares				Grant Date
		Outstanding				Fair Value
Balance At December 31, 2005			743			$	9.90
Granted			241				23.06
Vested			(301	)			9.14
Forfeited			(1)				24.49
Balance At June 30, 2006			682			$	14.70

As of June 30, 2006, there was $0.7 million of total unrecognized compensation cost related to performance-based nonvested stock and $7.0 million of total unrecognized compensation cost related to all other nonvested stock. The cost is expected to be recognized over a weighted average period of 2.6 years for the performance-based nonvested stock and 4.2 years for all other nonvested stock.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited) — (Continued)

12. Earnings Per Common Share

A reconciliation of the numerator and denominator of earnings per common share-basic to earnings per common share — assuming dilution is as follows (in millions, except per share data):

		Three Fiscal Months Ended								Six Fiscal Months Ended
		June 30,				July 1,				June 30,				July 1,
		2006				2005				2006				2005
Earnings per common share — basic:
Net income		$	41.5			$	11.8			$	62.9			$	20.8
Less: preferred stock dividends			(0.1	)			(1.5	)			(0.2	)			(3.0	)
Net income for basic EPS computation (1)		$	41.4			$	10.3			$	62.7			$	17.8
Weighted average shares outstanding for basic EPS computation (2)			50.8				39.4				50.4				39.3
Earnings per common share — basic		$	0.81			$	0.26			$	1.24			$	0.45
Earnings per common share — diluted:
Net income		$	41.5			$	11.8			$	62.9			$	20.8
Less: preferred stock dividends, if applicable			—				—				—				—
Net income for diluted EPS computation(1)		$	41.5			$	11.8			$	62.9			$	20.8
Weighted average shares outstanding			50.8				39.4				50.4				39.3
Dilutive effect of stock options and restricted stock units			0.9				1.2				0.9				1.2
Dilutive effect of assumed conversion of preferred stock, if applicable			0.5				10.3				0.5				10.3
Weighted average shares outstanding for diluted EPS computation(2)			52.2				50.9				51.8				50.8
Earnings per common share — diluted		$	0.80			$	0.23			$	1.21			$	0.41