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General Cable Announces Inventory Accounting Change from LIFO to Average Cost; Updates Earnings Guidance for Accounting Change; Shareholders' Equity Expected to Increase $110 to $130 Million
HIGHLAND HEIGHTS, Ky., Mar 18, 2010 (BUSINESS WIRE) -- General Cable Corporation (NYSE: BGC), today announced a change in accounting for inventories from the last-in, first-out (LIFO) method to the average cost method. The Company believes the change is preferable because the average cost method provides better matching of sales and expenses, particularly during periods of metal and petrochemical price volatility, and enhances comparability with industry peers.

The change to average cost is effective with the first quarter of 2010. Due to this change in accounting, the Company expects to record an increase in its Shareholders' Equity of approximately $110 to $130 million due primarily to the recognition of the higher average cost value of inventory compared to the historical LIFO-based inventory value. In addition, the Company expects its reported earnings per share for the first quarter of 2010 to increase as a result of the lower average cost of raw materials, primarily metals, under the average cost accounting method as compared to the value that would be used for the first quarter under the Company's historical LIFO accounting method. As a result of the expected increase in earnings for the first quarter resulting from the application of the new inventory accounting method, the Company now expects to report earnings before items in the range of $0.30 to $0.40 per share compared to our previously issued guidance of $0.05 to $0.15 per share before items.

The updated first quarter 2010 adjusted non-GAAP earnings per share guidance does not include the estimated impact of the previously disclosed devaluation of the Venezuelan Bolivar. The Company has previously indicated that it expected to record a pre-tax charge in the first quarter of 2010 in the range of approximately $40 to $45 million. The Company is continuing to evaluate the overall impact of the devaluation.

Due to the unpredictability of metal and petrochemical prices, there is no way to forecast the impact that this accounting change will have on full year 2010 results. In a relatively stable metal and petrochemical price environment, this change is expected to have little or no impact on earnings over time.

Certain historical financial information adjusted for this change in accounting method is expected to be made available at www.generalcable.com before the release of the Company's first quarter of 2010 results.

General Cable (NYSE:BGC), a Fortune 500 Company, is a global leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets. For more information about General Cable, visit our website at www.generalcable.com.

Certain statements in this press release, including without limitation, statements regarding future financial results and performance, plans and objectives, capital expenditures and the Company's or management's beliefs, expectations or opinions, are forward-looking statements. Actual results may differ materially from those statements as a result of factors, risks and uncertainties over which the Company has no control. Such factors, risks, and uncertainties are more fully discussed in the Company's Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2010, as well as periodic reports filed with the Commission.

SOURCE: General Cable Corporation

General Cable Corporation
Michael P. Dickerson, 859-572-8684
Vice President of Finance and Investor Relations