UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended October 2, 2009

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

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

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 latest practicable date:

Class		Outstanding at November 2, 2009
Common Stock, $0.01 per value		51,981,058

 

 

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

				PAGE
PART I		Financial Statements
Item 1.		Condensed Consolidated Financial Statements (Unaudited)
		Statements of Operations — For the three fiscal months and nine fiscal months ended October 2, 2009 and September 26, 2008			3
		Balance Sheets — October 2, 2009 and December 31, 2008			4
		Statements of Cash Flows — For the nine fiscal months ended October 2, 2009 and September 26, 2008			5
		Notes to Condensed Consolidated Financial Statements			6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Item 3.		Quantitative and Qualitative Disclosures about Market Risk			45
Item 4.		Controls and Procedures			46
PART II		Other Information
Item 1.		Legal Proceedings			47
Item 1A.		Risk Factors			47
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			47
Item 3.		Defaults Upon Senior Securities			47
Item 4.		Submission of Matters to a Vote of Security Holders			47
Item 5.		Other Information			47
Item 6.		Exhibits			48
Signature					49
Exhibit Index					50
EX-12.1
EX-31.1
EX-31.2
EX-32.1

PART I. FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in millions, except per share data)

(unaudited)

		Three Fiscal Months Ended								Nine Fiscal Months Ended
		October 2,				September 26,				October 2,				September 26,
		2009				2008				2009				2008
Net sales		$	1,081.8			$	1,626.0			$	3,256.2			$	4,937.2
Cost of sales			957.7				1,416.2				2,767.9				4,287.4
Gross profit			124.1				209.8				488.3				649.8
Selling, general and administrative expenses			81.3				96.0				258.0				290.1
Operating income			42.8				113.8				230.3				359.7
Other income (expense)			0.9				(10.9	)			11.0				(11.3	)
Interest income (expense):
Interest expense			(21.4	)			(26.4	)			(66.0	)			(75.2	)
Interest income			0.9				3.8				2.7				10.1
			(20.5	)			(22.6	)			(63.3	)			(65.1	)
Income before income taxes			23.2				80.3				178.0				283.3
Income tax provision			(3.9	)			(25.3	)			(53.4	)			(96.5	)
Equity in earnings of affiliated companies			0.1				1.5				0.4				4.3
Net income including noncontrolling interest			19.4				56.5				125.0				191.1
Less: preferred stock dividends			0.1				0.1				0.3				0.3
Less: net income attributable to noncontrolling interest			2.9				5.9				7.1				12.7
Net income attributable to Company common shareholders		$	16.4			$	50.5			$	117.6			$	178.1
Earnings per share
Earnings per common share-basic		$	0.32			$	0.96			$	2.27			$	3.38
Weighted average common shares-basic			52.0				52.8				51.9				52.7
Earnings per common share-assuming dilution		$	0.31			$	0.94			$	2.23			$	3.27
Weighted average common shares-assuming dilution			52.9				53.7				52.8				54.6

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in millions, except share data)

(unaudited)

		October 2,				December 31,
		2009				2008
Assets
Current Assets:
Cash and cash equivalents		$	452.2			$	282.6
Receivables, net of allowances of $25.1 million at October 2, 2009 and $19.3 million at December 31, 2008			926.3				1,032.0
Inventories			962.3				953.2
Deferred income taxes			117.2				132.3
Prepaid expenses and other			80.0				71.5
Total current assets			2,538.0				2,471.6
Property, plant and equipment, net			1,003.9				880.9
Deferred income taxes			12.2				56.0
Goodwill			161.6				171.9
Intangible assets, net			196.7				201.8
Unconsolidated affiliated companies			9.1				7.5
Other non-current assets			46.9				46.7
Total assets		$	3,968.4			$	3,836.4
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable		$	747.6			$	757.2
Accrued liabilities			354.0				423.3
Current portion of long-term debt			132.2				230.5
Total current liabilities			1,233.8				1,411.0
Long-term debt			1,084.4				1,023.5
Deferred income taxes			129.9				133.6
Other liabilities			254.5				276.2
Total liabilities			2,702.6				2,844.3
Commitments and Contingencies (Note 16)
Shareholders’ Equity:
Redeemable convertible preferred stock, at redemption value (liquidation preference of $50.00 per share):
October 2, 2009 — 76,202 outstanding shares
December 31, 2008 — 76,233 outstanding shares			3.8				3.8
Common stock, $0.01 par value, issued and outstanding shares:
October 2, 2009 — 51,979,812 (net of 6,186,510 treasury shares)
December 31, 2008 — 51,775,200 (net of 6,177,498 treasury shares)			0.6				0.6
Additional paid-in capital			495.8				486.6
Treasury stock			(73.3	)			(71.9	)
Retained earnings			715.6				597.9
Accumulated other comprehensive loss			18.0				146.0
Total Company shareholders’ equity			1,124.5				871.0
Noncontrolling interest			141.3				121.1
Total equity			1,265.8				992.1
Total liabilities and equity		$	3,968.4			$	3,836.4

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)

		Nine Fiscal Months Ended
		October 2,				September 26,
		2009				2008
Cash flows of operating activities:
Net income including noncontrolling interest		$	125.0			$	191.1
Adjustments to reconcile net income to net cash flows of operating activities:
Depreciation and amortization			77.7				73.6
Foreign currency exchange (gain) loss			(11.0	)			11.3
Deferred income taxes			17.7				(9.0	)
Excess tax benefits from stock-based compensation			(0.7	)			(7.0	)
Changes in inventory provision			(19.7	)			6.3
Convertible debt instruments noncash interest charges			29.5				26.7
Loss on disposal of property			2.3				4.2
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in receivables			147.8				(202.8	)
(Increase) decrease in inventories			62.1				(110.9	)
Decrease in other assets			6.4				21.5
Increase (decrease) in accounts payable, accrued and other liabilities			(71.8	)			123.7
Net cash flows of operating activities			365.3				128.7
Cash flows of investing activities:
Capital expenditures			(110.3	)			(149.5	)
Proceeds from properties sold			0.4				5.9
Acquisitions, net of cash acquired			(14.2	)			(47.7	)
Other, net			4.9				(0.6	)
Net cash flows of investing activities			(119.2	)			(191.9	)
Cash flows of financing activities:
Preferred stock dividends paid			(0.3	)			(0.3	)
Excess tax benefits from stock-based compensation			0.7				7.0
Proceeds from revolving credit borrowings			91.5				124.7
Repayments of revolving credit borrowings			(91.5	)			(157.7	)
Proceeds (repayments) of other debt, net			(82.7	)			145.6
Proceeds from exercise of stock options			0.4				2.4
Net cash flows of financing activities			(81.9	)			121.7
Effect of exchange rate changes on cash and cash equivalents			5.4				(12.3	)
Increase in cash and cash equivalents			169.6				46.2
Cash and cash equivalents — beginning of period			282.6				325.7
Cash and cash equivalents — end of period		$	452.2			$	371.9
Supplemental Information
Cash paid during the period for:
Income tax payments (refunds), net		$	(11.2	)		$	66.0
Interest paid		$	36.7			$	29.9
Non-cash investing and financing activities:
Issuance of nonvested shares		$	3.2			$	2.7

See accompanying Notes to Condensed Consolidated Financial Statements.

GENERAL CABLE CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of General Cable Corporation and Subsidiaries (the Company) 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 and nine fiscal months ended October 2, 2009, are not necessarily indicative of results that may be expected for the full year. The December 31, 2008, 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.

As discussed below in Note 2, effective January 1, 2009, the Company adopted new accounting standards related to noncontrolling interest, earnings per share computation and convertible debt instruments all of which require retrospective application. On August 12, 2009, a Current Report on Form 8-K was filed with the Securities and Exchange Commission (SEC) to recast prior—period annual financial information to reflect certain accounting changes described above with respect to the financial information contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on March 2, 2009 and subsequently amended on Form 10-K/A which was filed with the SEC on May 8, 2009 (2008 Form 10-K). These financial statements should be read in conjunction with the Current Report on Form 8-K filed on August 12, 2009 and the audited financial statements and notes thereto in the Company’s 2008 Form 10-K.

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. All intercompany transactions and balances among the consolidated companies have been eliminated. The Company’s fiscal year end is December 31. The Company’s fiscal quarters consist of 13-week periods ending on the Friday nearest to the end of the calendar months of March, June and September.

2. New Accounting Standards

“Employers’ Disclosures about Postretirement Benefit Plan Assets” referred to in the transition guidance section of FASB Accounting Standards Codification (ASC) ASC715: Compensation-Retirement Benefits, provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. The additional requirements are designed to enhance disclosures regarding (i) investment policies and strategies, (ii) categories of plan assets, (iii) fair value measurements of plan assets, and (iv) significant concentrations of risk. The guidance is effective for fiscal years ending after December 15, 2009 and is not expected to have an impact on the Company’s financial position or results of operations.

During the nine fiscal months ended October 2, 2009, the Company did not change any of its existing accounting policies with the exception of the following accounting standards, all of which were adopted and became effective with respect to the Company on January 1, 2009:

•		“Disclosures about Derivative Instruments and Hedging Activities” referred to in the transition guidance located in ASC815 Derivatives and Hedging requires qualitative disclosures about the Company’s objectives and strategies for using derivatives, quantitative disclosures about the fair value of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. For additional information, see Note 8 to the condensed consolidated financial statements.
•		The recognition and disclosure of fair value measurements for non-financial assets and non-financial liabilities in the financial statements on a nonrecurring basis referred to in the transition guidance located in ASC820 Fair Value Measurements and Disclosures had no impact on the Company’s condensed consolidated balance sheet, statement of operations or cash flows. For additional information, see Note 18 to the condensed consolidated financial statements.
•		The measurement of identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired referred to in the transition guidance in ASC805 Business Combinations, at the time of adoption, had no impact on the Company’s condensed consolidated balance sheet, statement of operations or cash flows.

•		“Noncontrolling Interests in Consolidated Financial Statements” referred to in the transition guidance located in ASC810 Consolidation establishes new standards governing the accounting for and reporting of noncontrolling interests in partially owned consolidated subsidiaries. Certain provisions of this standard indicate, among other things, that noncontrolling interests (previously referred to as minority interests) should be treated as a separate component of equity and that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions, rather than as step acquisitions or dilution gains or losses; and that losses of a partially owned consolidated subsidiary be allocated to the noncontrolling interests even when such allocation might result in a deficit balance. Consolidated net income should include the net income for both the parent and the noncontrolling interest with disclosure of both amounts on the consolidated statement of operations. As a result of the retrospective presentation and disclosure requirements, the condensed consolidated balance sheet has been adjusted to reflect the reclassification of noncontrolling interest to equity, the condensed consolidated statement of operations has been adjusted to include the net income attributable to the noncontrolling interest and the disclosure of condensed consolidated comprehensive income has been adjusted to include comprehensive income attributable to the noncontrolling interest. For additional information, see Note 11 to the condensed consolidated financial statements.
•		“Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” referred to in the transition guidance located in ASC260 Earnings Per Share specifies that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends shall be considered participating securities in undistributed earnings along with common shareholders. As a result, the Company retrospectively applied the two-class method of computing basic and diluted earnings per share, resulting in a decrease in earnings per share — basic of $0.02 and $0.08 for the three and nine fiscal months ended September 26, 2008, respectively. Historically and for the three and nine fiscal months ended October 2, 2009 and September 26, 2008, the Company did not declare, pay or otherwise accrue a dividend payable to the holders of the Company’s common stock or holders of unvested share-based payment awards (restricted stock). There was no impact on the Company’s earnings per common share — assuming dilution computation. For additional information, see Note 14 to the condensed consolidated financial statements.
•		“Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (including Partial Cash Settlement)” referred to in the transition guidance located in ASC470 Debt specifies that when issuers of convertible debt instruments recognize interest cost, they should separately account for the liability and equity components of the instrument in a manner that will reflect the entity’s non-convertible debt borrowing rate on the instrument’s issuance date. As a result, the Company’s condensed consolidated balance sheet, statement of operations and cash flows have been adjusted for all periods presented. For additional discussion, see Note 7 to the condensed consolidated financial statements. As of October 2, 2009, the Company’s condensed consolidated balance sheet has been adjusted to reflect the reduction in the carrying value of the Company’s senior convertible notes of approximately $162.8 million, the increase in additional paid-in capital of approximately $198.2 million and net deferred taxes of approximately $30.6 million. Transaction costs of approximately $21.7 million directly related to the issuance of the Company’s convertible debt instruments have been allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as $13.3 million of debt issuance costs and $8.4 million of equity issuance costs. As a result of the retrospective application, certain amounts in the Company’s 2008 consolidated balance sheet were changed and are presented below:

		December 31, 2008
		As Reported				Adjustments				As Adjusted
Prepaid expenses and other		$	77.6			$	(6.1	)		$	71.5
Deferred income taxes			53.9				2.1				56.0
Total assets		$	3,840.4			$	(4.0	)		$	3,836.4
Long-term debt		$	1,216.1			$	(192.6	)		$	1,023.5
Deferred income taxes			96.4				37.2				133.6
Total liabilities		$	2,999.7			$	(155.4	)		$	2,844.3
Additional paid-in capital		$	288.4			$	198.2			$	486.6
Retained earnings			644.7				(46.8	)			597.9
Total liabilities and equity		$	3,840.4			$	(4.0	)		$	3,836.4

For the three and nine fiscal months ended October 2, 2009, the Company’s condensed consolidated statement of operations reflects the impact of incremental pre-tax noncash interest expense of approximately $10.1 million and $29.5 million, respectively. For the three and nine fiscal months ended October 2, 2009, the Company’s condensed consolidated statement of operations includes amortization expense related to debt issuance costs of approximately $0.6 million and $1.8 million. As a result of the retrospective application, certain amounts in the Company’s 2008 condensed consolidated statement of operations were changed and are presented below for the three and nine fiscal months ended September 26, 2008:

		Three Fiscal Months Ended September 26, 2008
		As Reported				Adjustments				As Adjusted
Interest expense		$	17.3			$	9.1			$	26.4
Income tax provision (benefit)			27.3				(2.0	)			25.3
Net income attributable to Company common shareholders		$	57.6				(7.1	)		$	50.5

		Nine Fiscal Months Ended September 26, 2008
		As Reported				Adjustments				As Adjusted
Interest expense		$	48.5			$	26.7			$	75.2
Income tax provision (benefit)			102.3				(5.8	)			96.5
Net income attributable to Company common shareholders		$	199.0				(20.9	)		$	178.1

•

“Determining whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock” referred to in the transition guidance section of ASC815 Derivatives and Hedging specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the balance sheet would not be considered a derivative financial instrument. This two-step test is to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception. This test was applied to the embedded conversion options contained in the Company’s two convertible debt instruments. The Company determined the embedded conversion options are indexed to the Company’s own stock and classified in shareholders’ equity, thereby qualifying for the scope exception.

3. Acquisitions and Divestitures

In the third quarter 2008, the Company acquired and consolidated Phelps Dodge Philippines (PDP) through an increase of its equity investment from 40% to 60%. The Company paid approximately $16.4 million (at prevailing exchange rates) in cash to the sellers in consideration for the additional equity interest in PDP and incurred insignificant fees and expenses related to the transaction. PDP is a joint venture established in 1955 by A Soriano Corporation (Anscor), a Philippine public holding company with diverse investments, and Phelps Dodge International Corporation (PDIC), a subsidiary of the Company which was acquired in the fourth quarter of 2007. PDP employs approximately 277 associates and operates one of the largest wire and cable manufacturing facilities in the Philippines. The investment complements the Company’s strategy in the region by providing a platform for further penetration into Southeast Asia markets as well as supporting ongoing operations in Australia, the Middle East and South Africa. In 2007, the last full year before the purchase of additional equity ownership, PDP reported net revenues of approximately $100 million. Net assets and pro forma results of the PDP acquisition are immaterial. The purchase price allocation was finalized in the third quarter of 2009. The results of operations have been included in the condensed consolidated financial statements since the acquisition date.

4. 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 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.

Inventories consisted of the following (in millions):

		October 2,				December 31,
		2009				2008
Raw materials		$	169.8			$	197.4
Work in process			159.4				168.9
Finished goods			633.1				586.9
Total		$	962.3			$	953.2

At October 2, 2009 and December 31, 2008, $599.0 million and $610.1 million, respectively, of inventories were valued using the LIFO method before lower of cost or market provisions. Approximate replacement costs of inventories valued using the LIFO method totaled $732.5 million at October 2, 2009 and $505.9 million at December 31, 2008.

If the Company is not able to recover the LIFO value of its inventory when replacement costs are lower than the LIFO value of the inventory, the Company is required to record a lower of cost or market LIFO inventory adjustment to recognize the charge in its consolidated statement of operations. As of December 31, 2008, a lower of cost or market provision of approximately $36.3 million for copper and aluminum raw material inventory was recorded in which the replacement costs at the end of the year were lower than the LIFO value of the acquired copper and aluminum raw material inventory. Replacement costs for copper and aluminum raw material inventory remained below the Company’s LIFO value but increased as compared to replacement costs at the end of the year resulting in a favorable adjustment to the lower of cost or market provision of approximately $5.1 million and $19.7 million for the three and nine fiscal months ended October 2, 2009. The resulting lower of cost or market provision of $16.6 million is attributable to LIFO values exceeding to a lesser extent than at year end the replacement costs for acquired copper and aluminum raw material metal inventory.

5. 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 the acquisition date. Depreciation is provided using the straight-line method over the estimated useful lives of the assets: 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 amortized over the shorter of the useful life of the assets or a term that includes the reasonably assured life of the lease.

Property, plant and equipment consisted of the following (in millions):

		October 2,				December 31,
		2009				2008
Land		$	108.2			$	93.1
Buildings and leasehold improvements			282.1				214.7
Machinery, equipment and office furnishings			943.9				783.3
Construction in progress			81.1				121.0
Total — gross book value			1,415.3				1,212.1
Less accumulated depreciation			(411.4	)			(331.2	)
Total — net book value		$	1,003.9			$	880.9

Depreciation expense for the three and nine fiscal months ended October 2, 2009 was $21.4 million and $62.0 million, respectively. Depreciation expense for the three and nine fiscal months ended September 26, 2008 was $19.7 million and $57.8 million, respectively.

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. 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 material impairment charges incurred during the three and nine fiscal months ended October 2, 2009 and September 26, 2008.

6. 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, impairment loss is recognized in the amount equal to the excess. Intangible assets that are not deemed to have indefinite lives are amortized over their useful lives.

The amounts of goodwill and indefinite-lived intangible assets were as follows:

		Goodwill																Indefinite-lived assets — Trade names
		North				Europe and												North				Europe and
(in millions)		America				North Africa				ROW				Total				America				North Africa				ROW				Total
Balance at December 31, 2008		$	0.8			$	22.9			$	148.2			$	171.9			$	—			$	0.5			$	122.6			$	123.1
Acquisitions			6.1				(22.1	)			4.6				(11.4	)			—				—				—				—
Currency translation and other adjustments			—				(0.8	)			1.9				1.1				—				—				4.0				4.0
Balance at October 2, 2009		$	6.9			$	—			$	154.7			$	161.6			$	—			$	0.5			$	126.6			$	127.1

In the second quarter of 2009, the Company finalized its purchase price allocation related to the acquisition of Enica Biskra in the Company’s Europe and North Africa segment. As a result of the fair value of net assets acquired exceeding the purchase price the Company recorded an adjustment of $22.1 million to goodwill in order to allocate the pro rata reduction of amounts that would otherwise be assigned to all of the net assets acquired as a result in the increase in the value of property, plant and equipment. The Company recorded goodwill and trade names of $154.7 million and $126.6 million, respectively, after currency translation adjustments related to the acquisition of PDIC and PDP in the Company’s ROW segment.

The amounts of other intangible assets — customer relationships were as follows (in millions):

		October 2,				December 31
Amortized intangible assets:		2009				2008
Customer relationships		$	106.4			$	106.4
Accumulated amortization			(30.9	)			(19.1	)
Foreign currency translation adjustment			(5.9	)			(8.6	)
Total Amortized intangible assets		$	69.6			$	78.7

As part of the PDIC acquisition, the Company acquired certain customer relationships for which the fair market value as of October 31, 2007 was $104.9 million, before currency translation adjustments. Amortized intangible assets are stated at cost less accumulated amortization as of October 2, 2009 and December 31, 2008. Customer relationships have been determined to have a useful life in the range of 3.5 to 10 years and the Company has accelerated the amortization expense to align with the historical customer attrition rates. The amortization of intangible assets for the first nine fiscal months of 2009 was $11.8 million. The estimated amortization expense during the twelve-month periods beginning October 2, 2009 through September 30, 2014 are $13.8 million, $11.5 million, $9.1 million, $8.3 million, $7.5 million and $19.4 million thereafter.

7. Long-Term Debt

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

		October 2,				December 31,
		2009				2008
1.00% Senior Convertible Notes due 2012		$	475.0			$	475.0
Debt discount on 1.00% Senior Convertible Notes due 2012			(81.6	)			(99.3	)
0.875% Convertible Notes due 2013			355.0				355.0
Debt discount on 0.875% Convertible Notes due 2013			(81.2	)			(93.3	)
7.125% Senior Notes due 2017			200.0				200.0
Senior Floating Rate Notes			125.0				125.0
PDIC credit facilities			19.1				71.5
Spanish Term Loans			76.8				64.1
Silec credit facilities			34.0				84.9
Amended credit facility			—				—
Other			94.5				71.1
Total debt			1,216.6				1,254.0
Less current maturities			132.2				230.5
Long-term debt		$	1,084.4			$	1,023.5
Weighted average interest rates on the above outstanding balances were as follows:
1.00% Senior Convertible Notes due 2012			7.5	%			7.5	%
0.875% Convertible Notes due 2013			7.35	%			7.35	%
7.125% Senior Notes due 2017			7.125	%			7.125	%
Senior Floating Rate Notes			2.7	%			6.3	%
PDIC credit facilities			2.5	%			5.3	%
Spanish Term Loans			4.0	%			4.4	%
Silec credit facilities			2.3	%			4.4	%
Amended credit facility			—	%			—	%
Other			3.9	%			5.8	%

1.00% Senior Convertible Notes

The Company’s 1.00% Senior Convertible Notes were issued in September 2007 in the amount of $475.0 million. The 1.00% Senior Convertible Notes bear interest at a fixed rate of 1.00%, payable semi-annually in arrears, and mature in 2012. Beginning January 1, 2009, as discussed in Note 2, the Company has separately accounted for the liability and equity components of the instrument, retrospectively, based on the Company’s nonconvertible debt borrowing rate on the instrument’s issuance date of 7.5%. At issuance, the liability and equity components were $348.2 million and $126.8 million, respectively. The equity component (debt discount) is being amortized to interest expense based on the effective interest method. The net book value as of October 2, 2009 was $393.4 million (net of debt discount of $81.6 million). The estimated fair value of the 1.00% Senior Convertible Notes was approximately $410.9 million at October 2, 2009.

The notes were sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Subsequently, on April 16, 2008, the notes and the common stock issuable upon conversion of the notes were registered on a Registration Statement on Form S-3. The 1.00% Senior Convertible Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by the Company’s wholly-owned U.S. and Canadian subsidiaries.

The 1.00% Senior Convertible Notes are convertible at the option of the holder into the Company’s common stock at an initial conversion price of $83.93 per share (approximating 11.9142 shares per $1,000 principal amount of the 1.00% Senior Convertible Notes), upon the occurrence of certain events, including (i) during any calendar quarter commencing after March 31, 2008 in which the closing price of the Company’s common stock is greater than or equal to 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter (establishing a contingent conversion price of $109.11); (ii) during any five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of 1.00% Senior Convertible Notes for each day of that period is less than 98% of the product of the closing sale price of the Company’s common stock and the applicable conversion rate; (iii) distributions to holders of the Company’s common stock are made or upon specified corporate transactions including a consolidation or merger; and (iv) at any time during the period beginning on September 15, 2012 and ending on the close of business on the business day immediately preceding the stated maturity date. In addition, upon events defined as a “fundamental change” under the 1.00% Senior Convertible Note indenture, holders of the 1.00% Senior Convertible Notes may require the Company to repurchase the 1.00% Senior Convertible Notes. If upon the occurrence of such events in which the holders of the 1.00% Senior Convertible Notes exercise the conversion provisions, the Company would need to remit the principal balance of the 1.00% Senior Convertible Notes to the holders in cash.

Therefore, in the event of “fundamental change’ or the aforementioned average pricing thresholds, the Company would be required to classify the entire amount outstanding of the 1.00% Senior Convertible Notes as a current liability. The evaluation of the classification of amounts outstanding associated with the 1.00% Senior Convertible Notes will occur every quarter.

Upon conversion, a holder will receive, in lieu of common stock, an amount of cash equal to the lesser of (i) the principal amount of 1.00% Senior Convertible Note, or (ii) the conversion value, determined in the manner set forth in the indenture governing the 1.00% Senior Convertible Notes, of a number of shares equal to the conversion rate. If the conversion value exceeds the principal amount of the 1.00% Senior Convertible Note on the conversion date, the Company will also deliver, at the Company’s election, cash or common stock or a combination of cash and common stock with respect to the conversion value upon conversion. If conversion occurs in connection with a “fundamental change” as defined in the 1.00% Senior Convertible Notes indenture, the Company may be required to repurchase the 1.00% Senior Convertible Notes for cash at a price equal to the principal amount plus accrued but unpaid interest. In addition, if conversion occurs in connection with certain changes in control, the Company may be required to deliver additional shares of the Company’s common stock (a “make whole” premium, not to exceed 15.1906 shares per $1,000 principal amount) by increasing the conversion rate with respect to such notes, under this scenario the maximum aggregate number of shares that the Company would be obligated to issue upon conversion of the 1.00% Senior Convertible Notes is 7,215,535. Under almost all other conditions, the Company may be obligated to issue additional shares up to a maximum of 5,659,245 upon conversion in full of the 1.00% Senior Convertible Notes.

Proceeds from the 1.00% Senior Convertible Notes were used to partially fund the purchase price of $707.6 million related to the PDIC acquisition and to pay transaction costs of approximately $12.3 million directly related to the issuance that have been allocated to the liability and equity components in proportion to the allocation of proceeds.

0.875% Convertible Notes

The Company’s 0.875% Convertible Notes were issued in November of 2006 in the amount of $355.0 million. The 0.875% Convertible Notes bear interest at a fixed rate of 0.875%, payable semi-annually in arrears, and mature in 2013. Beginning on January 1, 2009, as discussed in Note 2, the Company has separately accounted for the liability and equity components of the instrument, retrospectively, based on the Company’s nonconvertible debt borrowing rate on the instrument’s issuance date of 7.35%. At issuance, the liability and equity components were $230.9 million and $124.1 million, respectively. The equity component (debt discount) is being amortized to interest expense based on the effective interest method. The net book value as of October 2, 2009 was $273.8 million (net of debt discount of $81.2 million). The estimated fair value of the 0.875% Convertible Notes was approximately $347.0 million at October 2, 2009.

At the time of issuance, the notes and the common stock issuable upon conversion of the notes were registered on a Registration Statement on Form S-3ASR and subsequently, on September 30, 2009, the Company filed a Renewal Registration Statement for the underlying common stock on Form S-3ASR. The 0.875% Convertible Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by the Company’s wholly-owned U.S. and Canadian subsidiaries.

The 0.875% Convertible Notes are convertible at the option of the holder into the Company’s common stock at an initial conversion price of $50.36 per share (approximating 19.856 shares per $1,000 principal amount of the 0.875% Convertible Notes), upon the occurrence of certain events, including (i) during any calendar quarter commencing after March 31, 2007 in which the closing price of the Company’s common stock is greater than or equal to 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter (establishing a contingent conversion price of $65.47 per share); (ii) during any five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of 0.875% Convertible Notes for each day of that period is less than 98% of the product of the closing sale price of the Company’s common stock and the applicable conversion rate; (iii) distributions to holders of the Company’s common stock are made or upon specified corporate transactions including a consolidation or merger; and (iv) at any time during the period beginning on October 15, 2013 and ending on the close of business on the business day immediately preceding the stated maturity date. In addition, upon events defined as a “fundamental change” under the 0.875% Convertible Note indenture, holders of the 0.875% Convertible Notes may require the Company to repurchase the 0.875% Convertible Notes. If upon the occurrence of such events in which the holders of the 0.875% Convertible Notes exercise the conversion provisions, the Company would need to remit the principal balance of the 0.875% Convertible Notes to the holders in cash.

Therefore, in the event of “fundamental change’ or the aforementioned average pricing thresholds, the Company would be required to classify the entire amount outstanding of the 0.875% Convertible Notes as a current liability. The evaluation of the classification of amounts outstanding associated with the 0.875% Convertible Notes will occur every quarter.

Upon conversion, a holder will receive, in lieu of common stock, an amount of cash equal to the lesser of (i) the principal amount of 0.875% Convertible Note, or (ii) the conversion value, determined in the manner set forth in the indenture governing the 0.875% Convertible Notes, of a number of shares equal to the conversion rate. If the conversion value exceeds the principal amount of the 0.875% Convertible Note on the conversion date, the Company will also deliver, at the Company’s election, cash or common stock or a combination of cash and common stock with respect to the conversion value upon conversion. If conversion occurs in connection with a “fundamental change” as defined in the 0.875% Convertible Notes indenture, the Company may be required to repurchase the 0.875% Convertible Notes for cash at a price equal to the principal amount plus accrued but unpaid interest. In addition, if conversion occurs in connection with certain changes in control, the Company may be required to deliver additional shares of the Company’s common stock (a “make whole” premium) by increasing the conversion rate with respect to such notes, under this scenario the maximum aggregate number of shares that the Company would be obligated to issue upon conversion of the 0.875% Convertible Notes is 8,987,322. Under almost all other conditions, the Company may be obligated to issue additional shares up to a maximum of 7,048,880 upon conversion in full of the 0.875% Convertible Notes.

Concurrent with the sale of the 0.875% Convertible Notes, the Company purchased note hedges that are designed to mitigate potential dilution from the conversion of the 0.875% Convertible Notes in the event that the market value per share of the Company’s common stock at the time of exercise is greater than approximately $50.36. Under the note hedges that cover approximately 7,048,880 shares of the Company’s common stock, the counterparties are required to deliver to the Company either shares of the Company’s common stock or cash in the amount that the Company delivers to the holders of the 0.875% Convertible Notes with respect to a conversion, calculated exclusive of shares deliverable by the Company by reason of any additional make whole premium relating to the 0.875% Convertible Notes or by reason of any election by the Company to unilaterally increase the conversion rate as permitted by the indenture governing the 0.875% Convertible Notes. The note hedges expire at the close of trading on November 15, 2013, which is also the maturity date of the 0.875% Convertible Notes, although the counterparties will have ongoing obligations with respect to 0.875% Convertible Notes properly converted on or prior to that date as to which the counterparties have been timely notified.

The Company issued warrants to counterparties that could require the Company to issue up to approximately 7,048,880 shares of the Company’s common stock in equal installments on each of the fifteen consecutive business days beginning on and including February 13, 2014. The strike price is $76.00 per share, which represents a 92.4% premium over the closing price of the Company’s shares of common stock on November 9, 2006. The warrants are expected to provide the Company with some protection against increases in the common stock price over the conversion price per share.

The note hedges and warrants are separate and legally distinct instruments that bind the Company and the counterparties and have no binding effect on the holders of the 0.875% Convertible Notes. The note hedges and warrants were accounted for as equity transactions. Therefore, the payment associated with the issuance of the note hedges and the proceeds received from the issuance of the warrants were recorded as a charge and an increase, respectively, in additional paid-in capital in shareholders’ equity as separate equity transactions.

Proceeds from the offering were used to pay down $87.8 million outstanding, including accrued interest, under the Company’s Amended Credit Facility, to pay $124.5 million for the cost of the note hedges, and to pay transaction costs of approximately $9.4 million directly related to the issuance that have been allocated to the liability and equity components in proportion to the allocation of proceeds. Additionally, the Company received $80.4 million in proceeds from the issuance of the warrants. At the conclusion of these transactions, the net effect of the receipt of the funds from the 0.875% Convertible Notes and the payments and proceeds mentioned above was an increase in cash of approximately $213.7 million, which is being used by the Company for general corporate purposes including acquisitions.

7.125% Senior Notes and Senior Floating Rate Notes

On March 21, 2007, the Company completed the issuance and sale of $325.0 million in aggregate principal amount of new senior unsecured notes, comprised of $125.0 million of Senior Floating Rate Notes due 2015 (the “Senior Floating Rate Notes”) and $200.0 million of 7.125% Senior Fixed Rate Notes due 2017 (the “7.125% Senior Notes” and together, the “Notes”). The Notes were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). An exchange offer commenced on June 11, 2007 and was completed on July 26, 2007 to replace the unregistered Notes with registered Notes with like terms pursuant to an effective Registration Statement on Form S-4. The Notes are jointly and severally guaranteed by the Company’s wholly-owned U.S. and Canadian subsidiaries. The estimated fair value of the 7.125% Senior Notes and Senior Floating Rate Notes was approximately $195.9 million and $110.2 million, respectively, at October 2, 2009.

The Senior Floating Rate Notes bear interest at an annual rate equal to the 3-month LIBOR rate plus 2.375%, which combine for a rate of 2.7% at October 2, 2009. Interest on the Senior Floating Rate Notes is payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on July 1, 2007. The 7.125% Senior Notes bear interest at a rate of 7.125% per year and are payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2007. The Senior Floating Rate Notes mature on April 1, 2015 and the 7.125% Senior Notes mature on April 1, 2017.

The Notes’ indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to (i) pay dividends on, redeem or repurchase the Company’s capital stock; (ii) incur additional indebtedness; (iii) make investments; (iv) create liens; (v) sell assets; (vi) engage in certain transactions with affiliates; (vii) create or designate unrestricted subsidiaries; and (viii) consolidate, merge or transfer all or substantially all assets. However, these covenants are subject to important exceptions and qualifications, one of which will permit the Company to declare and pay dividends or distributions on the Series A preferred stock so long as there is no default on the Notes and the Company meets certain financial conditions.

The Company may, at its option, redeem the Senior Floating Rate Notes and 7.125% Senior Notes on or after the following dates and at the following percentages plus accrued and unpaid interest:

Senior Floating Rate Notes				7.125% Senior Notes
Beginning Date		Percentage		Beginning Date		Percentage
April 1, 2009		102.000%		April 1, 2012		103.563%
April 1, 2010		101.000%		April 1, 2013		102.375%
April 1, 2011		100.000%		April 1, 2014		101.188%
				April 1, 2015		100.000%

Proceeds from the Notes of $325.0 million, less approximately $7.9 million of cash payments for fees and expenses that will be amortized over the life of the Notes, were used to pay approximately $285.0 million for the 9.5% Senior Notes, $9.3 million for accrued interest on the 9.5% Senior Notes and $20.5 million for tender fees and the inducement premium on the 9.5% Senior Notes, leaving net cash proceeds of approximately $2.3 million which were used for general corporate purposes.

PDIC credit facilities

As of October 2, 2009, PDIC related debt was $19.1 million of which approximately $18.6 million was short-term financing agreements at various interest rates. The weighted average interest rate was 2.5% as of October 2, 2009. The Company has approximately $350.4 million of borrowing availability under the various credit facilities at October 2, 2009.

Spanish Term Loans and Spanish Credit Facility

As of October 2, 2009 and December 31, 2008, the U.S. dollar equivalent of $76.8 million and $64.1 million, respectively, was outstanding under the following term loan facilities. The proceeds of which were used to partially fund the acquisition of Enica Biskra and for general working capital purposes. There is no remaining availability under these Spanish Term Loans. In February 2008, the Company entered into a term loan in the amount of 20 million euros with an interest rate of Euribor plus 0.5%. The term loan is payable in semi-annual installments, due in September and March, maturing in March 2013. Simultaneously, the Company entered into a fixed interest rate swap to coincide with the terms and conditions of the term loan starting in September 2008 and maturing in March 2013 that will effectively hedge the variable interest rate with a fixed interest rate of 4.2%. In April 2008, the Company entered into a term loan in the amount of 10 million euros with an interest rate of Euribor plus 0.75%. The term loan is payable in semi-annual installments, due in April and October, maturing in April 2013. Simultaneously, the Company entered into a fixed interest rate swap to coincide with the terms and conditions of the term loan starting in October 2008 and maturing in April 2013 that will effectively hedge the variable interest rate with a fixed interest rate of 4.58%. In June 2008, the Company entered into a term loan in the amount of 21 million euros with an interest rate of Euribor plus 0.75%. The term loan is payable in quarterly installments, due in March, June, September and December, maturing in June 2013. Simultaneously, the Company entered into a fixed interest rate swap to coincide with the terms and conditions of the term loan starting in September 2008 and maturing in June 2013 that will effectively hedge the variable interest rate with a fixed interest rate of 4.48%. In September 2009, the Company entered into a term loan in the amount of 15 million euros with an interest rate of Euribor plus 2.0% payable quarterly. The term loan is payable in semi-annual installments, due in February and August, maturing in August 2014. The weighted average interest rate for these term loans was 4.0% as of October 2, 2009.

Three Spanish Credit Facilities totaling 45 million euros were established in 2008, and mature in 2010, 2011 and 2013 and carry an interest rate of Euribor plus 0.4% to 0.65% depending on certain debt ratios. The Company has currently drawn $14.1 million under these facilities, leaving undrawn availability of approximately the U.S. dollar equivalent of $51.5 million as of October 2, 2009. Commitment fees ranging from 15 to 25 basis points per annum on any unused commitments under these credit facilities are payable on a quarterly basis. The weighted average interest rate as of October 2, 2009 was 4.5%.

The Spanish Term Loans and Spanish Credit Facility are subject to certain financial ratios of the Company’s European subsidiaries, which includes minimum net equity and net debt to EBITDA (earnings before interest, taxes, depreciation and amortization). At October 2, 2009 and December 31, 2008, the Company was in compliance with all covenants under these facilities.

Silec credit facilities

As of October 2, 2009, Silec’s debt was the U.S. dollar equivalent of $34.0 million. The debt consisted of approximately $20.8 million relating to an uncommitted accounts receivable facility and approximately $13.2 million of short-term financing agreements at a weighted average interest rate of 2.3%. The Company has approximately $79.1 million of excess availability under these short-term financing agreements.

Senior Secured Revolving Credit Facility (“Amended Credit Facility”)
The Company’s current senior secured revolving credit facility (“Amended Credit Facility”), as amended, is a five-year, $400.0 million asset based revolving credit agreement that includes an approximate $50.0 million sublimit for the issuance of commercial and standby letters of credit and a $20.0 million sublimit for swingline loans. The Company under the Amended Credit Facility has the option (subject to certain limitations and conditions) to elect whether loans under the Amended Credit Facility will be LIBOR loans or alternative base rate loans. Eurodollar loans bear interest at a rate equal to an adjusted LIBOR rate plus an applicable margin percentage (which margin has a range of 1.125% to 1.875%) and alternative base rate loans bear interest at a rate equal to an alternative base rate plus an applicable margin percentage (which margin has a range of 0.00% to 0.625%). The applicable margin percentage is subject to adjustments based upon the excess availability, as defined in the Amended Credit Facility. At October 2, 2009, the Company had no outstanding borrowing and undrawn availability of $306.0 million under the Amended Credit Facility. As of October 2, 2009, the Company had outstanding letters of credit related to this Amended Credit Facility of $28.2 million.

Indebtedness under the Amended Credit Facility is guaranteed by the Company’s U.S. and Canadian subsidiaries and is secured by a first priority security interest in tangible and intangible property and assets of the Company’s U.S. and Canadian subsidiaries. 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.

The Amended Credit Facility requires that the Company comply with certain financial covenants, the principal covenant of which is a quarterly minimum fixed charge coverage ratio test, which is only applicable when excess availability, as defined, is below a certain threshold. At October 2, 2009, the Company was in compliance with all covenants under the Amended Credit Facility. In addition, the Amended Credit Facility includes negative covenants, which restrict certain acts. However, the Company will be permitted to declare and pay dividends or distributions on the Series A preferred stock so long as there is no default under the Amended Credit Facility and the Company meets certain financial conditions.

The Company pays fees in connection with the issuance of letters of credit and commitment fees equal to 25 basis points, per annum on any unused commitments under the Amended Credit Facility. Both fees are payable quarterly. In connection with the original issuance and related subsequent amendments to the Amended Credit Facility, the Company incurred fees and expenses aggregating $11.1 million, which are being amortized over the term of the Amended Credit Facility.

Other

As of October 2, 2009 and December 31, 2008, ECN Cable’s debt was the U.S. dollar equivalent of $23.0 million and $17.4 million, respectively. As of October 2, 2009 the debt consisted of approximately $0.5 million relating to an uncommitted accounts receivable facility and approximately $22.5 million of various credit facilities. The Company has approximately $46.0 million of excess availability under the uncommitted accounts receivable facility and the credit facilities.

At October 2, 2009, maturities of long-term debt during twelve month periods beginning October 2, 2009 through September 30, 2014 are $132.2 million, $33.3 million, $14.9 million, $408.3 million and $287.6 million, respectively, and $340.3 million thereafter.

As of October 2, 2009 and December 31, 2008, the Company was in compliance with all debt covenants.

8. Derivative and Other Financial Instruments

The Company is exposed to various market risks, including changes in interest rates, foreign currency and raw material (commodity) prices. To manage risks associated with the volatility of these natural business exposures the Company enters into interest rate, commodity and foreign currency derivative agreements, as well as copper and aluminum forward pricing agreements. The Company does not purchase or sell derivative instruments for trading purposes. The Company does not engage in trading activities involving derivative contracts for which a lack of marketplace quotations would necessitate the use of fair value estimation techniques.

Cash Flow Hedges

The Company utilizes interest rate swaps to manage its interest expense exposure by fixing its interest rate on portions of the Company’s floating rate debt. The Company has entered into interest rate swaps on the Company’s Spanish Term Loans, as discussed above in Note 7. As of October 2, 2009, in addition to the above mentioned Spanish Term Loans related interest rate swaps with a notional value of $55.0 million which provides for a fixed interest rate of 4.4% maturing in October 2011, the Company has one outstanding interest rate swap on $9.0 million of variable rate debt (classified as “Other” North America debt). The fair value of these financial derivatives which are designated as and qualify as cash flow hedges are based on quoted market prices which reflect the present values of the difference between estimated future variable-rate receipts and future fixed-rate payments.

The Company enters into commodity futures contracts, which are designated and qualify as cash flow hedges, for the purchase of copper, aluminum and lead for delivery in a future month to match certain sales transactions.

The Company enters into foreign currency exchange contracts, which are designated as and qualify as cash flow hedges, principally to manage its foreign currency exposure in certain transactions denominated in foreign currencies, thereby attempting to limit the 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.

Fair Value of Derivatives Instruments

The notional amounts and fair values of derivatives designated as cash flow hedges and derivatives not designated as cash flow hedges at October 2, 2009 are shown below (in millions).

		October 2, 2009
		Notional				Fair Value
		Amount				Asset (1)				Liability (2)
Derivatives designated as cash flow hedges:
Interest rate swap		$	64.0			$	2.9			$	0.6
Commodity futures			163.7				6.4				17.9
Foreign currency exchange			314.4				6.3				3.9
						$	15.6			$	22.4
Derivatives not designated as cash flow hedges:
Commodity futures		$	—			$	—			$	—
Foreign currency exchange			24.0				0.2				0.3
						$	0.2			$	0.3

Depending on the extent of an unrealized loss position on a derivative contract held by the Company, certain counterparties may require collateral to secure the Company’s derivative contract position. The Company recorded $8.7 million in the “prepaid expenses and other” line item on the condensed consolidated balance sheet as of December 31, 2008. As of October 2, 2009, there were no contracts held by the Company that required collateral to secure the Company’s derivative liability positions.

For the above derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the unrealized gain and loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings, which generally occurs over periods of less than one year. Gains and loss on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

		Three Fiscal Months Ended October 2, 2009
										Ineffective portion
										and amount excluded
		Effective Portion				Reclassified from				from effectiveness
		recognized in OCI				Accumulated OCI				testing
(in millions)		Gain / (Loss)				Gain / (Loss)				Gain / (Loss)				Location
Derivatives designated as cash flow hedges:
Interest rate swap		$	(0.2	)		$	(0.1	)		$	0.2			Interest Expense
Commodity futures			11.5				(3.3	)			—			Costs of Sales
Foreign currency exchange			4.5				1.3				(0.3	)		Other income /(expense)
Total		$	15.8			$	(2.1	)		$	(0.1	)

		Nine Fiscal Months Ended October 2, 2009
										Ineffective portion
										and amount excluded
		Effective Portion				Reclassified from				from effectiveness
		recognized in OCI				Accumulated OCI				testing
(in millions)		Gain / (Loss)				Gain / (Loss)				Gain / (Loss)				Location
Derivatives designated as cash flow hedges:
Interest rate swap		$	2.2			$	(0.3	)		$	0.1			Interest Expense
Commodity futures			(11.5	)			(45.6	)			—			Costs of Sales
Foreign currency exchange			1.6				(2.5	)			0.8			Other income /(expense)
Total		$	(7.7	)		$	(48.4	)		$	0.9

For the above derivative instruments that are not designated as cash flow hedges, the unrealized gain or loss on the derivatives is reported in current earnings. For the three and nine fiscal months ended of October 2, 2009, the Company recorded a loss of $0.1 million and $0.7 million, respectively, for derivatives instruments not designated as cash flow hedges in other income/(expense) on the condensed consolidated statement of operations. As of October 2, 2009, foreign currency exchange derivatives not designated as hedges of $24.0 million includes an $8.0 million U.S. dollar to Mexican peso cross currency and interest rate swap agreement related to an intercompany loan among the Company’s subsidiaries in its ROW operations, in order to hedge the effects of the changes in spot exchange rates and to exchange floating rate interest with a fixed interest rate of 8.46%. The swap matures in March 2011.

Other Forward Pricing Agreements

In the normal course of business, the Company enters into forward pricing agreements for the purchase of copper and aluminum for delivery in a future month to match certain sales transactions. These forward pricing 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 and are therefore considered “normal purchases and normal sales”. 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 October 2, 2009 and December 31, 2008, the Company had $58.3 million and $90.5 million, respectively, of future copper and aluminum purchases that were under forward pricing agreements. At October 2, 2009 and December 31, 2008, the fair value of these arrangements were $60.1 million and $65.4 million, respectively, and the Company had an unrealized gain (loss) of $1.8 million and $(25.1) million, respectively, related to these transactions. The Company believes the unrealized gains (losses) under these agreements to be largely offset as a result of firm sales price commitments with customers.

9. Income Taxes

During the third quarter of 2009, the Company accrued approximately $1.6 million of income tax expense for uncertain tax positions likely to be taken in the current year and for interest and penalties on tax positions taken in prior periods, all of which would have a favorable impact on the effective tax rate, if recognized.

The Company files income tax returns in numerous tax jurisdictions around the world. Due to uncertainties regarding the timing and outcome of various tax audits, appeals and settlements, it is difficult to reliably estimate the amount of unrecognized tax benefits that could change within the next twelve months. The Company believes it is reasonably possible that approximately $27.0 million of unrecognized tax benefits could change within the next twelve months due to the resolution of tax audits and statute of limitations expirations.

Tax years that are open for examination and assessment by the Internal Revenue Service are 2006 through 2008. With limited exceptions, tax years prior to 2005 are no longer open in major foreign, state or local tax jurisdictions.

10. Employee Benefit Plans

The Company provides retirement benefits through contributory and noncontributory qualified and non-qualified defined benefit pension plans covering eligible domestic and international employees as well as through defined contribution plans and other postretirement benefits.

Defined Benefit Pension Plans

Benefits under the Company’s qualified U.S. defined benefit pension plan generally are based on years of service multiplied by a specific fixed dollar amount, and benefits under the Company’s qualified non-U.S. defined benefit pension plans generally are based on years of service and a variety of other factors that can include a specific fixed dollar amount or a percentage of either current salary or average salary over a specific period of time. The amounts funded for any plan year for the qualified U.S. defined benefit pension plan are neither less than the minimum required under federal law nor more than the maximum amount deductible for federal income tax purposes. The Company’s non-qualified unfunded non-U.S. defined benefit pension plans include plans that provide retirement indemnities to employees within the Company’s European business. Pension obligations for the majority of non-qualified unfunded defined benefit pension plans are provided for by book reserves and are based on local practices and regulations of the respective countries. The Company makes cash contributions for the costs of the non-qualified unfunded defined benefit pension plans as the benefits are paid.

The components of net periodic benefit cost for pension benefits were as follows (in millions):

		Three Fiscal Months Ended
		October 2, 2009								September 26, 2008
		U.S. Plans				Non-U.S Plans				U.S. Plans				Non-U.S. Plans
Service cost		$	0.4			$	0.6			$	0.4			$	0.6
Interest cost			2.0				1.2				2.0				1.3
Expected return on plan assets			(1.9	)			(0.3	)			(2.7	)			(0.5	)
Amortization of prior service cost			0.1				0.1				0.2				0.1
Amortization of net loss			1.9				0.1				0.6				0.1
Net pension expense		$	2.5			$	1.7			$	0.5			$	1.6

		Nine Fiscal Months Ended
		October 2, 2009								September 26, 2008
		U.S. Plans				Non-U.S Plans				U.S. Plans				Non-U.S. Plans
Service cost		$	1.2			$	1.8			$	1.2			$	1.8
Interest cost			6.1				3.7				6.0				3.9
Expected return on plan assets			(5.6	)			(1.1	)			(8.1	)			(1.5	)
Amortization of prior service cost			0.4				0.1				0.5				0.1
Amortization of net loss			5.4				0.3				1.7				0.4
Net pension expense		$	7.5			$	4.8			$	1.3			$	4.7

Defined benefit pension plan cash contributions for the three and nine fiscal months ended October 2, 2009 were $6.8 million and $10.4 million, respectively. Defined benefit pension plan cash contributions for the three and nine fiscal months ended September 26, 2008 were $4.4 million and $6.0 million, respectively.

Postretirement Benefits Other Than Pensions

The Company has postretirement benefit plans that provide medical and life insurance for certain retirees and eligible dependents. The Company funds the plans as claims or insurance premiums are incurred.

Net postretirement benefit expense included the following components (in millions):

		Three Fiscal Months Ended								Nine Fiscal Months Ended
		October 2,				September 26,				October 2,				September 26,
		2009				2008				2009				2008
Service cost		$	—			$	—			$	0.1			$	0.1
Interest cost			0.2				0.2				0.4				0.4
Net amortization and deferral			—				—				0.1				0.1
Net postretirement benefit expense		$	0.2			$	0.2			$	0.6			$	0.6

Defined Contribution Plans

Expense under both U.S. and non-U.S. defined contribution plans generally equals up to six percent of each eligible employee’s covered compensation based on the location and status of the employee. The net defined contribution plan expense recognized for the three and nine fiscal months ended October 2, 2009 was $2.0 million and $6.9 million, respectively. The net defined contribution plan expense recognized for the three and nine fiscal months ended September 26, 2008 was $2.2 million and $7.0 million, respectively.

11. Shareholders’ Equity

General Cable is authorized to issue 200 million shares of common stock and 25 million shares of preferred stock.

Condensed consolidated statement of changes in equity is presented below for October 2, 2009 and September 26, 2008.

						General Cable shareholders
														Add’l												Accumulated Other
						Preferred stock				Common Stock				Paid in				Treasury				Retained				Comprehensive				Noncontrolling
		Total				Amount				Amount				Capital				Stock				Earnings				Income/(Loss)				Interest
Balance, December 31, 2008		$	992.1			$	3.8			$	0.6			$	486.6			$	(71.9	)		$	597.9			$	(146.0	)		$	121.1
Comprehensive income:
Net income including noncontrolling interest			125.0				—				—				—				—				117.9				—				7.1
Foreign currency translation adj.			83.2				—				—				—				—				—				79.9				3.3
Unrealized gain (loss) on financial instruments			45.7				—				—				—				—				—				42.3				3.4
Unrealized investment gain (loss) on def comp			5.8				—				—				—				—				—				5.8				—
Defined benefit plans adjustments			—				—				—				—				—				—				—				—
Comprehensive income			259.7				—				—				—				—				—				—				—
Preferred stock dividend			(0.3	)			—				—				—				—				(0.3	)			—				—
Excess tax benefit from stock compensation			0.7				—				—				0.7				—				—				—				—
Other — Issuance pursuant to restricted stock, stock options and other			13.6				—				—				8.5				(1.4	)			0.1				—				6.4
Balance, October 2, 2009		$	1,265.8			$	3.8			$	0.6			$	495.8			$	(73.3	)		$	715.6			$	(18.0	)		$	141.3

						General Cable shareholders
														Add’l												Accumulated Other
						Preferred stock				Common Stock				Paid in				Treasury				Retained				Comprehensive				Noncontrolling
		Total				Amount				Amount				Capital				Stock				Earnings				Income/(Loss)				Interest
Balance, December 31, 2007		$	931.4			$	5.1			$	0.6			$	466.2			$	(60.3	)		$	409.8			$	51.2			$	58.8
Comprehensive income:
Net income including noncontrolling interest			191.1				—				—				—				—				178.4				—				12.7
Foreign currency translation adj.			(27.1	)			—				—				—				—				—				(23.6	)			(3.5	)
Unrealized gain (loss) on financial instruments			8.3				—				—				—				—				—				6.4				1.9
Unrealized investment gain (loss) on def comp			(3.5	)			—				—				—				—				—				(3.5	)			—
Defined benefit plans adjustments			—				—				—				—				—				—				—				—
Comprehensive income			168.8				—				—				—				—				—				—				—
Preferred stock dividend			(0.3	)			—				—				—				—				(0.3	)			—				—
Excess tax benefit from stock compensation			7.0				—				—				7.0				—				—				—				—
Acquisition and divestiture			25.3				—				—								—				—				—				25.3
Other — Issuance pursuant to restricted stock, stock options and other			9.8				(1.3	)			—				11.9				(0.3	)			(0.5	)			—				—
Balance, September 26, 2008		$	1,142.0			$	3.8			$	0.6			$	485.1			$	(60.6	)		$	587.4			$	30.5			$	95.2

The components of accumulated other comprehensive loss of $22.5 million and $157.2 million as of October 2, 2009 and December 31, 2008, respectively, consisted of the following (in millions):

		October 2, 2009								December 31, 2008
		Company common				Noncontrolling				Company common				Noncontrolling
		shareholders				interest				shareholders				interest
Foreign currency translation adjustment		$	61.1			$	(4.6	)		$	(18.8	)		$	(7.9	)
Pension adjustments, net of tax			(51.7	)			—				(51.7	)			—
Change in fair value of derivatives, net of tax			(27.9	)			0.1				(70.2	)			(3.3	)
Unrealized investment gains, net of tax			7.2				—				1.4				—
Defined benefit — pension, net of tax			(7.0	)			—				(7.0	)			—
Other			0.3				—				0.3				—
Accumulated other comprehensive loss		$	(18.0	)		$	(4.5	)		$	(146.0	)		$	(11.2	)

Comprehensive income consists of the following (in millions):

		Three Fiscal Months Ended
		October 2, 2009								September 26, 2008
		Company common				Noncontrolling				Company common				Noncontrolling
		shareholders				interest				shareholders				interest
Net income (1)		$	16.5			$	2.9			$	50.6			$	5.9
Currency translation gain (loss)			48.5				1.2				(65.5	)			(1.3	)
Change in fair value of derivatives, net of tax			6.5				0.2				(25.8	)			(1.2	)
Unrealized investment gain, net of tax			—				—				(1.3	)			—
Comprehensive income (loss)		$	71.5			$	4.3			$	(42.0	)		$	3.4

		Nine Fiscal Months Ended
		October 2, 2009								September 26, 2008
		Company common				Noncontrolling				Company common				Noncontrolling
		shareholders				interest				shareholders				interest
Net income (1)		$	117.9			$	7.1			$	178.4			$	12.7
Currency translation gain (loss)			79.9				3.3				(23.6	)			(3.5	)
Change in fair value of derivatives, net of tax			42.3				3.4				6.4				1.9
Unrealized investment gain, net of tax			5.8				—				(3.5	)			—
Comprehensive income		$	245.9			$	13.8			$	157.7			$	11.1

The Company maintains a deferred compensation plan (“Deferred Compensation Plan”) under the terms and conditions disclosed in the Company’s 2008 Annual Report on Form 10-K. The Company accounts for the Deferred Compensation Plan in accordance with guidance located in ASC710 Compensation - General, as it relates to arrangements where amounts earned are held in rabbi trusts. The market value of mutual fund investments, nonvested and subsequently vested stock and restricted stock in the Rabbi Trust (the “Trust”) was $37.3 million as of October 2, 2009 and $23.5 million as of December 31, 2008. 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 October 2, 2009 and December 31, 2008 was $13.1 million and $11.4 million, respectively, and is classified as “other non-current assets” in the condensed consolidated balance sheets. Amounts payable to the plan participants at October 2, 2009 and December 31, 2008, excluding the market value of the shares of the Company’s nonvested and subsequently vested stock and restricted stock, was $15.3 million and $12.6 million, respectively, and is classified as “other liabilities” in the condensed consolidated balance sheets.

12. Share-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. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. The table below summarizes compensation expense for the Company’s non-qualified stock options, non-vested stock awards and performance-based non-vested stock awards based on the fair value method as estimated using the Black-Scholes valuation model for the three and nine fiscal months ending October 2, 2009 and September 26, 2008.

		Three Fiscal Months Ended
		October 2, 2009				September 26, 2008
Non-qualified stock option expense		$	1.3			$	1.3
Non-vested stock awards expense			1.5				1.3
Total pre-tax share-based compensation expense		$	2.8			$	2.6
Excess tax benefit on share-based compensation (1)		$	—			$	0.2

		Nine Fiscal Months Ended
		October 2, 2009				September 26, 2008
Non-qualified stock option expense		$	3.8			$	3.6
Non-vested stock awards expense			4.3				4.5
Total pre-tax share-based compensation expense		$	8.1			$	8.1
Excess tax benefit on share-based compensation (1)		$	0.7			$	7.0