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Executives

Len Texter -

Brian J. Robinson - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Gregory B. Kenny - Chief Executive Officer, President and Director

Analysts

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Matthew S. McCall - BB&T Capital Markets, Research Division

Brent Thielman - D.A. Davidson & Co., Research Division

Shawn M. Harrison - Longbow Research LLC

Richard Wesolowski - Sidoti & Company, LLC

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Steven J O'Brien - JP Morgan Chase & Co, Research Division

Brett Levy - Jefferies & Company, Inc., Research Division

General Cable (BGC) Q4 2011 Earnings Call February 9, 2012 8:30 AM ET

Operator

Good morning. My name is Tracy, and I will be your conference facilitator. I would like to welcome everyone to General Cable Corporation's Fourth Quarter 2011 Earnings Conference Call. This conference call is being recorded at the request of General Cable. [Operator Instructions] General Cable, you may begin your conference.

Len Texter

Good morning, everyone, and welcome to General Cable's Fourth Quarter 2011 Earnings Conference Call. I'm Len Texter, Manager, Investor Relations at General Cable.

Joining me this morning are Greg Kenny, our President and Chief Executive Officer; Brian Robinson, our Chief Financial Officer; and Bob Siverd, our General Counsel.

Many of you have already seen a copy of our press release from last night. For those of you who have not, it's available on First Call and on our website at generalcable.com. Today's call will be accompanied by a slide presentation, also available on our website. If you have not downloaded a copy, we recommend that you do so, as we will refer to the presentation throughout our prepared remarks today.

The format of today's call will first be an overview by Brian Robinson of our fourth quarter and 2011 full year results. Secondly, Greg Kenny will provide comments on the company's first quarter 2011 outlook and business trends followed by a question-and-answer period.

Before we get started, I wanted to call your attention to our Safe Harbor provisions regarding forward-looking statements and company-defined non-GAAP financial measures as defined on Slide #2, as we may refer to adjusted operating income and adjusted EBITDA in today's call.

To begin, please turn to Slide #5, where we have included a reconciliation of our previously-communicated outlook provided on November 1. With that, I will turn the call over to Brian Robinson.

Brian J. Robinson

Thank you, Len. Good morning. Fourth quarter operating results were above our expectations in North America, as product pricing held up better than anticipated in many of our businesses despite the significant decrease in copper prices experienced near the end of the third quarter.

In Rest of World, excluding the impact of the severe it flooding in Thailand, which reduced the operating income by $6.5 million, our operating results were generally in line with expectation. In Europe, however, the further weakening of Iberian end markets and Spain severance-related costs of $3 million more than offset strong submarine and land-based high-voltage and extra-high voltage project-related production activities during the quarter.

Overall, underlying demand in most markets remained stable and consistent with historical seasonal demand patterns. The combination of further weakening of Iberian end markets and severe flooding in Thailand negatively impacted our unit volume, resulting in lower-than-expected net sales, operating income and seasonal inventory quantity reductions as compared to our earlier communication.

Putting aside our forward purchase of metals in Algeria and Venezuela of approximately $35 million, our inventory quantity levels were relatively flat from Q3 to Q4. The timing of raw material inventory purchases in these markets is heavily influenced by currency and metals availability. As a result, from time to time, we make sizable forward purchases of raw material inventory when we believe the circumstances warrant such action, as was the case in the fourth quarter.

Heading into the fourth quarter. We estimated the impact of selling substantially higher average cost inventory into a lower metal price environment at about $15 million of operating income impact. We estimate the actual impact was closer to $20 million, principally in Iberia, as a result of the very weak economic environment.

On Slide #6, we have provided comments explaining our fourth quarter results compared to the third quarter with net sales for Q3 presented on a metals adjusted basis. The top line was lower principally due to the sequential increase in unit volume of 4% experienced during the quarter. Gross profit and operating income in the fourth quarter reflects the impact of selling substantially higher average cost inventory into a lower metal price environment. Further weakening of Iberian end markets, Spain severance charges of $3 million and the impact of severe flooding in Thailand, which reduced operating income by $6.5 million.

Other expense for the fourth quarter of $3.3 million reflects the net impact of $5.1 million of transactional currency gains, which were more than offset by a $8.4 million of accounting losses on economic hedges, which are used to manage currency and commodity risk on our project businesses globally.

This level of transactional currency gains is more consistent with historical norms, given the numerous currencies in which we transact business around the world. The third quarter transactional currency losses were higher than normal due principally to the rapid and significant weakening of the Brazilian real and Mexican peso near the end of Q3.

On the next slide, we charted the movement of copper and aluminum to demonstrate the significant volatility experienced over the previous 2 quarters. Copper prices declined sharply at the end of the third quarter to $3.15 per pound before bottoming at $3.05 per pound early in the fourth quarter.

After this step-down, copper prices is averaged $3.41 in the fourth quarter as compared to $4.07 in the third quarter. As you can see, aluminum prices followed the downward trend as well, which is not inconsequential, particularly from a top line perspective, as the mix of aluminum-based products shipments increased as a result of growth in our aerial transmission businesses in North America and Brazil. As a result of this growth in aerial transmission, we saw our historical mix of metal pounds sold, shift from about 1/3 aluminum to around 40% aluminum over the second half of 2011. This range of about 1/3 to 40% is indicative of what we expect going forward given the volatility inherent in our metal-intensive project-oriented aerial transmission business.

As we mentioned in our November communication, this downward movement in metal prices presented a significant headwind in the fourth quarter, as we sold higher average cost inventory into a lower metal price environment.

On the next 3 pages, Slides 8, 9 and 10, we have provided segment information for your reference. First in ROW, putting aside our business in Thailand, we continued to experience broad-based stability in terms of demand across many of our businesses. Sources of ongoing strength during the fourth quarter included electrical infrastructure spending in Brazil and Venezuela, as well as construction activity from Central America. Excluding the impact of the severe flooding in Thailand, which reduced the operating income by approximately $6.5 million, fourth quarter operating income would have exceeded our expectations due to the strength of our businesses in Latin America.

In North America, sequentially stronger demand for aerial transmission products and specialty cables, particularly those used in natural resource extraction, offset normal seasonal declines in our other North American businesses. The fourth quarter of 2010 reflected a record quarter for aerial transmission product shipments. Sequentially, fourth quarter operating income of $17.3 million was above our expectations, as product pricing held up better than anticipated.

In Europe and Mediterranean, project-related activities in our submarine power and terrestrial high-voltage and extra-high voltage businesses were more than offset by the further weakening of Iberian end markets. The company's backlog continue to build during the quarter for submarine and land-based high-voltage and extra-high voltage cable projects.

Sequentially, operating income reflects the impact of further weakening of Iberian end markets, and Spain's severance-related costs of approximately $3 million. Partially offsetting these decreases were stronger submarine and land-based high-voltage and extra-high voltage project-related production activities during the quarter.

Turning to Slide 11. While volatile and uncertain at times, the overall global business remains on a positive trajectory as reflected in our 2011 results. For the full year 2011, we reported revenue of $5.9 billion, which represents growth of 12% on a metal adjusted basis as compared to 2010, as metal pounds sold increased year-over-year by 8%.

Operating earnings increased 12% year-over-year principally due to the better volume and improved product mix and a better pricing environment in certain markets in North America and ROW, coupled with the growing submarine and land-based project turnkey business in Europe.

Finally, moving to Slide 12. Our credit profile remains strong with the financial flexibility to fund our working capital requirements and to capitalize on global opportunities. In addition, the company repurchased $62.5 million or 5% of its common shares during the fourth quarter under the terms of its $125 million share repurchase program. At the end of the fourth quarter, the company had approximately $1.1 billion of excess liquidity across the globe.

With those comments, I'll turn the call over to Greg for a recap of our Q1 expectations and business trends, which are summarized on Slides 14 and 15. Greg?

Gregory B. Kenny

Good morning, everybody. Revenues for the first quarter of 2012 are expected to be in the range of $1.35 billion to $1.45 billion on sequentially flat to slightly up global volume. This range reflects the recent significant volatility expected -- experienced in metal prices, particularly copper. Copper prices averaged $3.67 for the month of January, which represents an increase of 8% as compared to the fourth quarter average of $3.41. Copper continues to increase as prices have traded up this week as well. It's now -- this morning in the $3.89, $3.90 range.

In the first quarter, this recent increase in copper prices were helped to alleviate the burden of selling higher average cost inventory into our relatively lower metal price environment, particularly as we progress through the quarter. In addition, conditions in Thailand just have started to normalize as the country begins to recover from the severe flooding experienced during the fourth quarter.

However, the general weakness in our business in Iberia is expected to persist. As a result, we anticipate operating earnings in the range of $35 million to $45 million in the first quarter. In quarter 1, should the metal -- in quarter 1, we estimate the impact of selling higher average cost inventory at about $10 million to $15 million of operating income, about half of the impact experienced in quarter 4.

We expect the positive momentum experienced in the full year 2011 to carry into the new year with typical seasonal patterns returning. We would actually see the second quarter improving nicely from the current level, as we enter the construction season, the weather is warm in the North Sea, Baltic Seas and a lot of our new-built projects around the world come fully online. So we feel good about the second quarter as metals stay in the current trading range.

We anticipate unit volume to grow in 2012 in the range of 3% to 7% year-over-year, with the warmer months in quarter 2 and 3 being the strongest, followed by quarter 4 and 1, respectively. This expected improvement is based upon strength in aerial transmission projects in North America, especially cable demand for products used in oil and gas and natural resource traction in North America, electrical infrastructure, mining and construction activities in Central and South America and the growth of our submarine and land-based high-voltage and extra high-voltage projects and wind farm and projects in Europe.

Before we get to the Q&A, I thought I'd just spend some time talking about how I currently see our global business environment. In Europe and the Mediterranean, market conditions for traditional construction and industrial cable products remain depressed, particularly in Iberia, as domestic end markets further weakened near the end of 2011 and construction activity has nearly ceased. As a result, we took further action to reduce personnel in our Spanish facilities in the fourth quarter. Including these actions, we have reduced our headcount in Iberia at approximately 20% at a cost of $29 million over the past 4 years. In addition, our pan-European go-to-market strategy continues to advance, resulting in better market coverage, improved logistics and plant optimization.

At the same time, we continued to gain traction in our submarine and terrestrial high and extra high-voltage transmission project businesses with a growing backlog, which is now approximately $650 million headed into 2012.

As a result, our European business has shown improvement, with relative strength during the warmer months when cables can be installed and services performed for turnkey projects in the Baltic and North Seas. Consistent with 2011, we expect North America to continue to benefit from stable demand for products tied to information technology, natural resource extraction and electrical infrastructure.

Momentum continues in the aerial transmission market as demand for aluminum products used to upgrade the grid and tie in new sources of renewable generation remains encouraging. We also continue to see a positive outlook for our core specialty products driven by sustained investment in the natural gas, oil and mining markets. Our Data Communications segment continues to grow as we leverage commercialization of our 17 FREE product line for more and more of our data communication and fiber optic cables.

In ROW, investments in power generation, grid development, extension and reinforcement, residential construction, electrical infrastructure and mining continue to fuel demand for the company's products in many emerging markets. Aside from these fundamental growth drivers, there are event-based sources of strengths such as the industrial construction activity in Brazil in preparation for the World Cup in 2014 and the Olympic Games in 2016, as well as recovery expected in Thailand following the devastating flooding experienced in quarter 4 '11.

Finally, our strength and market position and investments in Mexico, Peru, South Africa and India should allow us to capture opportunities for mining construction and electrical infrastructure projects as well.

That concludes our prepared remarks. I'll now turn the call back over to the operator, who will assist us in taking your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Jeff Beach, Stifel, Nicolaus.

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Can you elaborate on Spain specifically? In my analyzing the numbers, it looks like the volume in Spain fell 50% fourth quarter from third quarter, which may not be correct. But if it is, it's just a huge drop. And you're taking restructuring, but is the restructuring going to return Spain to profitability? And what kind of margins would depress business in Spain might you target, let's say for the second half of this year going forward?

Gregory B. Kenny

Jeff, Spain has stepped down. Housing has gone from a peak of about 800,000 units to about 65,000 units over the last 4 years. About -- we're -- there's some ins and outs, but we've been able to pull cost down in Spain. We -- the new President has got a number of initiatives, which I think will be announced shortly, and have announced some with respect to more labor flexibility. We have got about half of our volume now leading Spain and going elsewhere in the region, in fact, all over the world. We know -- we continue to look at the problem. As you know, our facilities around Barcelona are 50, 60, 70 miles from the French border, so we happen to be in Spain. Our job is to push more volume in other markets. But Spain has been our second largest market historically, and has shrunk materially. We're also seeing pressure at the local and state levels, that is the government in terms of their spending. And of course, with no housing, the electrical transmission spend is also reduced. We continue to look at the envelopes. They're all focused around product families. Again, the pricing in Spain is awful because of the demand drop, but we've been able to really continue to focus the output regionally. And also, we have focused hard in Portugal on the communications business, which we think is a better business. But Spain is broadly operating, putting aside quarter-to-quarter, but we're at roughly the operating breakeven number, a bit below that in the fourth quarter, as I think there's a lot of fear and distributors didn't want to hold material. So the volume drop was strong, as I think fear spread into Spain. I'm watching bond prices and other things. And while I don't think Spain gets well any time soon as a domestic economy, we are a leader there, as we are in Portugal, and we'll stay focused there. But really think of it as facilities that supply the entire European Union, North Africa, the Gulf, they happen to be in Spain. But yes, that was a very strong market for us historically. We've pulled a lot of cost out. We continue to look for more labor flexibility and for more process improvement, but that's the weakest part of our business in Europe. We expect our demand in Europe for the high-voltage and submarine to remain relatively strong. And certainly other markets that didn't have the bubble are relatively more stable, but there's a knock-on effect as capacity looks for work. So we continue to look at how we can pull cost out. We've taken our headcount down from 1,600-ish to around just below 1,200. And we continue to build the business, the plants, with more business regionally, which is the market they serve.

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Okay. That's good. Just one other question. On this copper squeeze, I guess, is the way I'll describe it. The fourth quarter was pretty severe. And explain the lag here, if you look at the copper pricing in the fourth quarter, and I had assumed in the first quarter, you've got pretty much across-the-board lower costs running through your income statement. Why is the pricing on the cables not moving up enough to completely eliminate or alleviate the situation in the first quarter? And what's your markets?

Gregory B. Kenny

We have announced price increases. It's harder to do in markets with lots of open capacity, such as southern Europe, where people are trying to absorb fixed. We hope that, that zero-sum game, eventually if people can't make money, they either leave the market or they need to raise prices. But frankly, Jeff, we look at sort of the trailing average, as we think about our forecast, and copper has been moving up strongly. So if we continue to see copper in this $3.90 level, I would say we would be looking toward the higher end of our $35 million to $45 million range. The U.S. and Canada are relatively stronger markets, so there seems to be a better element of pricing discipline. And that gave us a positive, a healthy surprise in the fourth quarter, where we did better than what we had estimated in terms of copper headwind. Again, we're dealing with a profound movement of copper down by $1 a pound or something like that in a very short period of time. So anyway, the tail of that, I would say we're dealing with it relatively well in the U.S. and Canada. I would say most of the ROW developing country markets are generally getting it through. And Europe is probably the most difficult market. I'd also point out that aluminum broke more than $0.20 a pound over a very short period of time. And we have, as Brian said, almost 40% of our business today is aluminum. And those kinds of volumes, they're not trivial. So broadly, if copper stays where it is today, we would hope to be at the higher range end of our expectation.

Operator

Your next question comes from the line of Matt McCall, BB&T Capital Markets.

Matthew S. McCall - BB&T Capital Markets, Research Division

Greg or Brian, can you talk about the utilization by geography, and then give us an update? You talked about some investments of where your capacity, overall capacity went. I know it's going to be directional, I'm assuming now. But anymore color you can provide will be helpful, where the capacity went in '11 and what the expectations are in 2012 that maybe caused any specific growth initiatives that -- from a capacity perspective, that would help us.

Gregory B. Kenny

Yes. There isn't unfortunately any kind of independent analysis of demonstrated capacity, theoretical capacity, et cetera. But broadly, we remain in most markets down, say 20%, say in North America from the peak. Spain is off by more than 50%. The home market is off materially more than that. But broadly, I would say the U.S. -- again, we only can look into ours, then we get into discussions that we're running 7 days or 5 days plus over time. But broadly, I would say the U.S. is relatively stable in the -- again, we have 13 factories, I think, in the U.S. and several in Canada. So it depends on the product, et cetera. But the U.S. demand seems to be kind of rolling sideways. Some areas of some strength with our specialty cable business, which is in the rail and oil and gas and transit, seems to be pretty good. I look at our portable power and control, and that seems to be stable as a good look into the overall economy. Again down 15%, 20% or more from the peaks, but stable and kind of rolling sideways. A little bit of weakness in the industrial markets, but I think last year was a very good year with a lot of activity, but generally at a decent level, but again, down from the peak. The telecommunications side is really at the maintenance and repair level, and seems to be somewhat stable. We see the utility market more outlead by transmission as opposed to the distribution side picking up. People are scrambling to win projects under the grid. And I guess, there's uncertainty with the renewal whether that will be renewed or not, but that ends some of the incentives this year. But there is some nice activity around wind, around transmission, as they have to take this sort of stranded power into the grid. So in North America, we're leveraging into the North American market product families that we make all over the world and particularly in the Americas, so we have some internal growth and see the U.S. generally up next year, maybe mid-single digits. In Europe, we have very nice momentum in our submarine cable businesses. Again, we have to go ahead and execute those projects and they're very complex projects, and they're both high-voltage and medium-voltage submarine, plus we've had a lot of the European grid interconnector work that is bullying Europe; again, they have to be paid for. But we see nice growth, double-digit growth easily in our submarine cable business, which also includes our submarine fiber optics business. We also see some major spending in Algeria, that is public spending, some weakness in Egypt, but Algeria is pretty strong. And then, I would say, I expect Spain not to step down further, but to really roll over for a while at a very low level. So Spain dropped in the second half of last year. I don't frankly expect it to get worse. Unfortunately, all of the cost take out is -- I think we're doing better than some in that market, but all the cost take out has allowed us to stay strong as a leader in that market. But it's not -- we're not going to get a return on those assets. But again, those assets are really servicing a much greater area. We see very nice growth in Chile, in Central America. We see growth in Columbia. Thailand, we think, recovers from the floods and nice growth. And again, I would say significant, we have a full year entry into Peru, which again we saw nice growth. The Brazil will be -- we had some major shipments. We have a pause for the transmission, which is metal-intensive, and then we'll see more in 2013. But Brazil, we're pushing into the industrial and data communications market. A little bit of weakness in Africa. but probably rolling sideways, and we do have a facility that we have improved in South Africa, that I think will help us. So net-net, we see decent activity in the rest of the world. Europe, Northern Europe and submarine offsetting really a step down in Spain. I think Portugal is already operating at a low level, so I don't see it getting worse. In North Africa, we seen some strength in Algeria offsetting Egypt, which is profitable, but again, with the uncertainty, investment has slowed down there. In the U.S., basically, moving sideways to up in some product areas plus our job is to be our customers' preferred partner, so we work hard on that as well. So I feel good about 2012. It's not a breakout, but I would say if barring any further fallout in Europe, if we do get a gradual healing there, I like our hand. And as you saw -- may have seen in industry week, we continue to place plants among the best in the world or best in North America, and that culture is obviously worldwide. So we've also taken out lots of costs internally through leveraging purchasing/manufacturing technology best practices, which we hope we can take to the bottom line, as these world markets begin to recover. And we see something beyond the early cycle business, where construction really starts to get serious, particularly in the U.S. and Canada, which will give us a lot of nice leverage on the upside. That's a long answer to I think an open-ended question about what are we seeing in 2012.

Matthew S. McCall - BB&T Capital Markets, Research Division

Very helpful. And just let me squeezed another one in. Just to understand the puts and the takes around the Q1 guidance as it pertains to Q4. I think you talked about $20 million of price costs. I know in Thailand, you expect to get better volumes, you expect it to be up a little bit. Maybe just walk through the pressure you alluded to in the previous question. If copper stays where it is, maybe some of that pressure goes away. But relative to that $20 million, relative to the pressure in Thailand, what is assumed from those 2 sources in your Q4 guidance?

Brian J. Robinson

Matt, it's Brian. In our Q1 guidance, we are looking forward from Q4, and as we said in our prepared remarks, we thought that, again, the average cost impact. And we have to always keep thinking about also in terms of the pricing, our ability to move price in the different markets. But the first quarter impact would be half of what it was in Q4. So stepping down from about we think about $20 million of impact in Q4 to about $10 million or so in Q1. And then, I think the other pieces to it, as Greg said, I think for 2012, overall, we feel pretty good. And we feel pretty good as we've referenced, as we think about the second quarter. I think, in addition to the metals, the things that we're wrestling within Q1 are that exit rate in Iberia, which doesn't just flip a switch on January 1 and get materially better. And then, there's some seasonality, a couple of seasonality points I'll mention, which would be in some of the Latin markets, you would have a generally weaker first quarter for events like Carnival and other things in those markets. And also, as the impact on Q1 around some of our project business, where the services that we can perform in the Baltic and the North Sea are, let's call it, muted relative to the summer months. So those are some of the factors that sort of go to the -- what's the right word -- which are maybe in the headwind column as we enter into Q1.

Operator

Your next question comes from the line of Brent Thielman with D.A. Davidson and Company.

Brent Thielman - D.A. Davidson & Co., Research Division

Greg, is there going to be more charges associated with Thailand looking ahead?

Gregory B. Kenny

Well, that wasn't a charge -- we were trying to be helpful in terms of explaining a natural disaster. But Thailand will be significantly better than the fourth quarter, and we'll be profitable in the first quarter. I think we'll really begin to hit in stride, as we go through the year. But it's been a devastating flood. We can't get -- the customers are having a hard time receiving product, they need product, and then, of course, getting exports out of the country. It is our major hub and largest operation in the region, and trades all the way into the Gulf and all the way over to Oceania and elsewhere. So we see a material swing in Thailand in the first quarter, and then that continues up. And I don't see, other than it will underperform its potential in the first quarter. I don't -- it will be profitable, but it will miss by millions what it could be doing if there were no flood in the first quarter.

Brent Thielman - D.A. Davidson & Co., Research Division

Okay. So it sounds like it's returning to normal at least?

Gregory B. Kenny

It's returning to normal, but it's a slow return. Again, a lot of the distributors we have in the country, utilities there in sort of the triage level, and then they begin to rebuild the infrastructure, et cetera. So we think demand is going to be strong, but it's really how the country works through this crisis. But there will be a multi-million dollar swing positively. The business should be positive, I believe, in the first quarter, but well below its potential.

Brent Thielman - D.A. Davidson & Co., Research Division

Okay. And then just trying to get a better feel for the backlog in Europe. I guess, sort of assuming no changes in conditions in Iberia, what would you expect that backlog to sort of begin to contribute to stronger earnings for that segment? I mean, would there be sort of a ramp in terms of delivery of cable?

Gregory B. Kenny

Yes, it actually helped mitigate almost paralysis in Spain in the fourth quarter. And again, we've seen -- in other crisis, we've seen places pause and sort of business leaders do nothing until the crisis. So they had no action. They had a major economic crisis, which they're still in, but they've elected a new government. And frankly, we had a decent offset to Spain, which did not make money in the fourth quarter. Spain made money for the whole year from an operating income perspective, which I think is quite extraordinary and a testimony to really our guised one-company business model, that we've deployed in Europe. We are putting load on those Spanish factories, as we are a major player in Europe and access to lots of markets. But they were contributing to fourth quarter not enough. So much of this is now tied to the big investment we made in the submarine cable area. And given that they really can't be activity in the current conditions in North sea, we expect a very nice contribution in the second quarter. Again we've got to manage these projects, their percentage of completion. And there's all kind of things we don't control in terms of these very complicated grids in terms of timing and other vendors, they need to have their equipment at the site on time. But generally, we expect now looking forward for our project business to have a nice contribution in the second quarter and beyond. And the primary pickup in Europe will be the seasonality of our projects, so we'd expect a much better performance in Europe in the second quarter from the first. And we continue to look for ways of pulling costs out of our manufacturing envelope in Europe, which is, as you know, is 4 facilities in Spain, 1 in Portugal, a very large complex in France, which, again, is doing well, and the French market has held together and then a major facility in the North Sea area for submarine projects, as well as a couple facilities in North Africa. So I feel that Europe, Spain, we don't expect to have anything other than what we can do to help ourselves. I don't expect demand to materially improve. Eventually, some competitors -- economics says that people can't do this forever. But it's a huge adjustment when you have domestic demand falling on average about 60% peak to trough, which is obviously far worse than anything we really have seen anywhere in the world. But I feel like that we're doing the right things in Europe, and we've got a very energized team, and we do have some European focus around alternative energy and good reinforcement, which helps us.

Brent Thielman - D.A. Davidson & Co., Research Division

Sure that's helpful. And, Greg, you mentioned on Spain, I guess without the severance cost, would you have been profitable there for the fourth quarter?

Gregory B. Kenny

No, we would have missed. But again, just to give you a sense, we put through the P&L. I think we called it out once when we had a huge drop of people, I think $11 million from memory in the quarter 3 of...

Brian J. Robinson

Second quarter of 2010.

Gregory B. Kenny

Second quarter Of 2010, but we have put through P&L, approximately $30 million of, in Spain, which is one of the reasons why there are issues. We sort of go through this negotiation with people individually. Again, we've made a lot of progress with our trade unions, but that country is going through a gut-wrenching change, and you can read about it almost daily in the Wall Street Journal. I think there was an article yesterday on their vacation time. But again, a very productive work force. We just need them at the wheel with us, and we'll be fine, but we're not alone. But, yes, Spain had made money during the course of the year last year, but the majority of the money it made was in the first half. But we were really -- we've been adjusting now for 4 years there and running it through the P&L.

Brent Thielman - D.A. Davidson & Co., Research Division

Sure, Greg, just one more if I could. And I appreciate all the previous commentary on kind of your outlook for 2012. But the guidance of 3% to 7% unit volume growth for the year, how much of that is sort of project-related business or business you've got in your backlog now versus kind of what you expect?

Gregory B. Kenny

Yes. You go through sort of unit versus dollar growth, then the projects have a lot of metal in them, but really you're getting paid for engineering and for installation and things like that. But our project business, it is probably -- this is where we actually have turnkey responsibility on land or in sea is in the $300 million to $400 million range. It's lumpy annually. So we've got about 2 years in backlog. Again some of it may be more than 2 years, and some of them are multiyear projects. But that's frankly $300 million on a company that's in the $6 billion range is a nice thing. And this is obviously very complex, high-value added products, but it's not. There are other projects we have, but then you start getting into transmission or industrial projects. So we don't keep a running grid of that, but there's hundreds of millions of other projects. But that's no different than most years where you do have specific delivery requirements for aerial cable or for industrial projects, say oil and gas or something like that. We have a delivery next August. But our systems business has grown materially from say, $50 million business 5 years ago to a $300 million to $400 million business, and I'm proud of the guys that accomplished that technology, and obviously, we built an installation skill set as well.

Operator

Your next question comes from the line of Shawn Harrison, Longbow Research.

Shawn M. Harrison - Longbow Research LLC

I just wanted to follow up on, to an extent, that volume question. If we look at the 3 major regions against that 3% to 7% volume range for 2012, should we anticipate Rest Of World be at the top end of that range? And then how would Europe or EMEA and, I guess, North America shake out against that range?

Gregory B. Kenny

I would say we'll run into with the assumption that Spain, as a domestic market and Portugal don't get better and that they step down in the second of the year, I would gauge that Europe is likely to be at the lower end of that range while ROW, Rest of World, and North America toward the higher end of the range.

Shawn M. Harrison - Longbow Research LLC

Okay. Second question I had was, I'm trying to figure out, I guess, profitability in Europe and how much of, what's occurring right now if we assume Spain gets back to breakeven in the March quarter, the region is essentially operating a breakeven, is the mismatch between inventory and market pricing versus some other factors. Because even if you add a big chunk of that market pricing back, EBIT margins there are still much lower than where we were. And I guess I'm trying to figure out, I guess, maybe the other question is, what's the upside? What drives the upside? Is it the submarine in high-voltage business? Are there further actions to come? Just how do we come to retire?

Gregory B. Kenny

It's a great question. I think the upside, we are -- I feel good about our business model in Europe. We're the, I would say , the #3 player regionally, well behind Nexans and Prysmian. And we have primarily been focused in France and Spain, but we have traded all over the region. So I think the first principle is we're trying to do is really leverage -- we're about 1.5 years, 1 year into really a European model, it's Pan-European, including the Mediterranean, leveraging a lot of the work we have done in the U.S. So this is really cross-leveraging their facilities, making it easy for customers to place their order in the company, product management, continuous improvement. And again, there's been aspects of it, but I think we've used this crisis to really hammer that hard. We have a very strong, aggressive team there. The business should pick up nicely in the warmer months, meaning, in fact even in the fourth quarter, because we get to do these projects, which are inherently better business than -- I think there's more capital employed in them, in terms of you need serious equipment to do it and you know that we spend more money to get in a position to do it. But the project business, both land and sea, will be the strongest driver, and I think then expanding our reach globally with our footprint and riding profitable business, as one company is the other lever. Eventually, Spain, there's a fair overhang of houses to be sold and restructuring that banks need to do. But eventually Spain comes around. But we're profitable in our undersea business. We're profitable in France. We are marginally profitable but profitable in North Africa despite the remnants of Arab Spring. And in Portugal actually, we're trading heavily throughout Africa and throughout the region. So I think the big step-up is our one company and then really getting into the sweet spot of the projects. As you know, we've just won projects. They're being led. They're complicated thing, so you need lots of approvals and sea lanes clear and everything else. So we'll never be linear, but it is feeling good, and we continue to strengthen our skills. So I think really the business mix shift in Europe to higher-valued products, as well as working in the communications area, we're doing a lot of nice work in the data communications area and the fiber optics. Copper, we have now that set up as a global business. We have a small but nice footprint in Europe, and Bob Kenny is doing a fine job in really leveraging our global relationships. So I think that's going to help as well. As well as I had an expectation we should pull $10 million-plus of cost just in building things, exactly the spec doing more with less. And we're having very serious discussions with our workers council about everything because they need to be competitive globally.

Shawn M. Harrison - Longbow Research LLC

This is a follow-up. Of that $10 million of headwind expected into the March quarter from the price mismatch, how much of that is European-focused?

Brian J. Robinson

Shawn, we have to think about it, because again, we're looking at this relatively alone. Our best estimate here is, I would -- of the overall number that we mentioned, I would weigh it towards the European business. So I can't give you a precise number, but again, it's back to -- it's a market, that is so weak that our ability to move price to help offset the impact of the higher inventory cost is more muted than in many other markets. So I think when you think about that $10 million delta from Q4 to Q1, I guess that weighted more towards the E and Med business.

Gregory B. Kenny

I would expect, Shawn, that Europe will be -- we have a view that Europe will be profitable, but at roughly half the operating margin of the U.S. -- I'm sorry, of North America and ROW. So again we don't want to get into the 2012 forecast, but it is profitable, but it is just in that work out. We don't expect it to be contributing the same as the other regions, but we expect it to be contributory, principally for the reasons I told you.

Operator

Your next question comes from the line of Richard Wesolowski with Sidoti and Company.

Richard Wesolowski - Sidoti & Company, LLC

Looking forward to a period when copper doesn't have as great an influence on your results. Greg, in the past you stated that the company could generate $1 billion to $2 billion of additional sales without adding much in fixed costs, which I was translated to mean that you could add ships or expand ships in your existing plants.

Gregory B. Kenny

Right.

Richard Wesolowski - Sidoti & Company, LLC

Given that your leading competitors were similar in abating close any large plants during the downturn, can we expect that as volume improves for General Cable and for the entire industry, the companies will continue to expand their effective capacity by adding those shifts, thereby pushing the industry further away from utilization that would be necessary to get real pricing power?

Gregory B. Kenny

We saw obviously real pricing power in the last cycle, and we may or may not see the replay of '06, '07. But some markets are pretty good and maybe getting better. That question, we continue to try get our breakeven points down, and we expect to drive costs out of the system internally. We don't communicate our goals around that continuous improvement or lean journey, as we call it. But we know some capacity, as high-cost capacity is not working, I don't know if it comes online. But in my own thinking is we have key customers. If the market comes back and they need our output, sure, I wish we had utilization levels up in the high 80s and 90s, and in some areas we might. But capacity sort of goes away, but it's not like the car industry, where you can point to specific facilities. We've talked in the past about some facilities being shuttered, and we sense that some competitors are struggling, but I don't know, Richard. I still see that if we can get anywhere back toward a normal construction environment in some of our major markets, I feel good about the business. but I -- and if capacity goes away, that's great. We would expect to see less and less capacity being built today. So a lot of the investment by competitors would've happened 3 or 4 years ago. We did note that there have been some plans announced for the U.S. in the high-voltage, extra high-voltage area, but that capacity is going and coming all the time, but there isn't anywhere I can point to you, saying what is or isn't, because there's no independent work. But I still feel, we have 1 billion-plus of open capacity, and we're running kind of sideways to up a bit next year, we think. And we know that if we can hold at the current pricing environment, I hope it improves. But if it's the current pricing environment, we can go and run more, that would fall on the bottom line.

Richard Wesolowski - Sidoti & Company, LLC

And then secondly, speaking of your European submarine and the land-based transmission backlog, which is growing, how much more work would you book in that realm? And if the answer is not much, are you considering expanding your capacity in that sector?

Gregory B. Kenny

That's a great question, Richard. Part of it is developing the technology and skill sets to manage these complex projects, which are rewarding if done well because it's hard to do, and not everybody can do it. In fact, very few can. We continue to look at -- can these projects, some of them we like to public policy, European Union directives, how committed are the German people to funding these. It looks like very committed. How about Spain to wind, et cetera, maybe less committed. So we're sorting through all of that. But we are busy; we could be busier. We have some -- we also see the submarine oil and gas improving, and we've done some work to add capacity there, which should come online. Again it was a relatively modest investment but a very intriguing part of the business. So we continue to look at it. We could go ahead, and sure, we could spend the money and double the business or we could optimize what we have now, but we're relatively busier in those areas that we are in other parts of the company. So I don't have the same kind of upside with those existing assets because, they're right in the sweet part of the demand. And it's probably 18 months. If I make a decision now and the management team and the board to bring on capacity, but we're constantly looking at that. Is this a 10-year or 20-year run? And then I look at relative returns on capital, and be mindful that the capital investment is important in this area. And we can get sometimes equal returns in areas way off the radar. So right now, we have more room to build more product in those areas, but haven't made any decision to add meaningful amounts of capacity. But we did expand that capacity, in hindsight, I guess it was a good decision. Where we added the high-voltage, extra high-voltage, we developed DC technologies and then went into the deep water on power and composite cables for the oil and gas industry. I think that's been a good position. And hopefully, we'll see some of those shareholders rewarded with those decisions as the year progresses. And in fact, it helped us, as I said earlier, in the fourth quarter.

Operator

Your next question comes from the line of Anthony Kure with KeyBanc.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

I just wanted to clarify, I apologize if I missed this, but the $650 million backlog of, let's call it, project activity for delivery over the next, is it 3 years? And then, if we use the blocks of time as just a year, could you sort of layout the linearity by year? I know it's lumpy within the year, but if you can just talk about the linearity over the next several years?

Gregory B. Kenny

Yes, I mean, Richard, projects are getting moved around. We're booking new projects. We announced more booking in the fourth quarter. But we said that, maybe you missed it, is our turnkey, which is where we design, engineer, install projects is about a $300 million to $400 million business. It is in percentage of completion, so it's not linear and it's tilted towards the warmer times of year, particularly for the submarine business. And we said that we expected those businesses to contribution more strongly as the year progresses because in the North Sea and Baltic Sea, which is where the bulk of our submarine work is done, it's impossible to do any material work up there now because of the temperatures.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

But that $300 million to $400 million is a 2012 number?

Gregory B. Kenny

Yes. Again, I'm trying to be helpful as opposed to commitment, but that's about the size of the business. And it will be lumpy, and stuff will move out and stuff will move in. And our capacity, we're saying earlier, is busier there than, say, other parts of the business. And we've made some investments to get better -- deeper into the oil and gas, submarine area. And one day, we think that that communications cable business will pick up as well as the submarine communications. And that number includes our land turnkey business as well, so that's the high-voltage, extra high-voltage business that we do on a turnkey basis globally as well. The submarine is probably becoming as bigger or bigger than the land piece at this point.

Anthony C. Kure - KeyBanc Capital Markets Inc., Research Division

Okay. And then I'm just looking at your business model now relative to a couple years ago. Obviously, you've taken a lot of costs out. We've got a different mix here going forward with these projects. In prior years, there was some disclosure discussion around what incremental margins were potential for the model. Now if we look forward to 2012, 2013 with where your model stands now, and if we just assume copper stays flat for the year, which I know would be as not likely, but let's just assume the copper stays flat for the full year at $3.90, 3% to 7% volume growth, where would that put you from an incremental margin perspective going into 2012 and '13?

Gregory B. Kenny

Yes, I mean, what we've said is to the extent you don't have to add fixed costs, so it's a product that you actually have open capacity, and then depending on the product, it's a 10% to 20% net contribution depending on the product. So lower-value added product, say like overhead transmission cable, which has a lot of metal content in it, absorbs much less fixed cost in the factory because it's a simpler cable than, say, running a highly complex transit cable through one of our facilities. So it depends upon what it is, but it's 10% to 20% if I don't have to add new fix. And in general, we said we have 1 billion-plus of open capacity, which we've talked about in prior time. And frankly, business is roughly rolling sideways if you think about pockets of strength, offsetting pockets like Iberia. And then of course, some of that can be into new markets, which competitors don't always greet you in a friendly way as they battled to make your experience unpleasant. So a lot of it depends. But I'd say a rough rule of thumb is 10% to 20% should fall to the bottom line, depending upon what you're running. And I'm not going to get into how much of our business is new entry. We would, for example, we will sell more in India this year but I wouldn't expect it to be -- we haven't hit a critical mass yet, so that business wouldn't be profitable. I hope it is, but we don't think it would be. But we think it's going to be a very strong business for us over time. So it all depends on where you are in the curve, but in our new market areas, I expect places like Mexico to be more contributory to this year and to have a positive swing, Peru, South Africa. India, I wouldn't expect it to be a contribution yet. And we are beginning to get a return on our investment in the submarine area. As you know, Spain was strong for years. And happily, we took some of that free cash and leveraged it into other markets, and I think in some ways, some of the solution for us in Spain is the market reach that we've established through going beyond the Spanish domestic market. And eventually, our European business I would hope would pick up broadly. But other than that we can't do much in Spain improving materially other than stuff we can do to help ourselves.

Operator

Your next question comes from the line of Steve O'Brien, JPMorgan.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

I'd like to revisit the operating income walk from Q4 to Q1. If I heard you right, there's sort of a $12 million benefit on the inventory side going from sort of a $24 million headwind to a $12 million headwind, then maybe you get some savings on the $6 million of Thailand cost. You get maybe some savings versus the $3 million of Spain restructuring actions. I guess I'm just trying to figure out if some of these -- how some of these headwinds you talked about with the pause in Latin America or some slowness in Baltic services can really amount to -- what appears like a much bigger potential for an increase in operating income than sort of the $10 million jump your guidance suggests?

Brian J. Robinson

Yes, Steve. I would say just on the average cost numbers, you referenced the $24 million to $12 million, I would think of them more as sort of $20 million and $10 million, let's call on average. That's more on the rounding side in terms of this walk forward. So, yes, I think we get better, and our favor would be a lower headwind from the net of the pricing and the average cost impact. And then, I guess, we touched on some of this earlier, but in the headwind column, I put in it the exit rate to Iberia in the fourth quarter. As Greg mentioned earlier, the Q4 was a good quarter in our project business. It was about as we expected. But there is a -- it is a seasonally weaker Q1, again because of our, or on a relative basis, the inability to perform some of the project work in the North and the Baltic Sea. So those are headwinds. And in the ROW segment, the headwinds are varied. But it tends to be a region that we tend to have again a number of a slower to start to the year, a number of holidays in the first quarter. So on a relative basis, we're seeing some of these headwinds in Q1 out of ROW. So those negative factors are, I guess, maybe the link that maybe walks us down from your expectation or the way you've described it as being a higher expectation.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

So really just getting the only difference in terms of operating income really comes down to the $10 million improvement in the headwind on the inventories?

Brian J. Robinson

Broadly, yes. That's correct.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

Looking at sort of North America profitability, I'm just trying to understand some of the commentary that seem pretty positive toward General Cable's view of the profitability in the fourth quarter. Looking at that metal volumes that weren't too far off prior quarterly levels, commentary, the demand for specialty cables for natural resources was healthy. I understand there was some problems in terms of the average cost inventory. So I mean, was alone enough to create the Craig the difference in operating income profitability? When I look at sort of $17 million for the quarter versus the run rate in prior quarters of $30 million. So...

Gregory B. Kenny

Our fourth quarter is generally weaker because it's getting cold and the outside plant work is -- there's less than they've done plus you have major blocks of holidays, as people adjust inventories in December, et cetera. So we would not expect unless we had a reoccurrence of 2006, '07 timeframe, where you have economy expanding very rapidly. Generally, we would expect operating profit in the fourth quarter to be as strong as the third quarter. Broadly, our business generally is strongest in the second quarter, followed by the third. This is a broad rule of thumb over time. But yes, the headwinds were very big, as we saw -- as we go through an average cost inventory that was built in the second and third quarter, where metals were well above $4. They averaged $4.15 or something in those timeframe, in a market that, again, not everything flexes with the metals, but we're selling stuff. Some of it, we actually -- they pay what we have pre-agreed price, et cetera, or there will be an adjuster. But in general, we had this very tough time of selling into a $3.41 average market COMEX with material, that we built before in the over $4 range, and we're selling 150-ish kind of million pounds of copper globally. So that's -- you can do the math -- an enormous headwinds. Again, that's the gross headwind because some of the stuff is contractually handled in a different way. We also had a $0.20 decline in the aluminum, and we sell an awful lot of aluminum worldwide, some of it with formulaic escalators and de-escalators, but it's a big problem. So I think -- I guess the takeaway is our volumes hung in there in the fourth quarter. We held our market position. We continue to do new initiatives. And other than the big copper headwind, which was somewhat less meaningly, we held price better than I had anticipated when we spoke with you around the announcement of the third quarter results. I felt good about it, but it was way -- your point is correct, it was way off of where we were in the third quarter, where we're at $27 million, or the second quarter, where we're at $41 million.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

Okay, Greg. I just want to clarify a couple quick things. Do you expect any transactional currency benefits or losses in Q1?

Brian J. Robinson

Steve, it's Brian. I would say probably why we've now gone to an operating income guidance, as we said, the fourth quarter, the transactional benefits were about $5 million, about what sort of a more normal run rate after a very extreme third quarter. So far, I would say we're probably slightly to the positive and the quarter to date, but that's probably -- that's what I would offer on that.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

Yes. I mean, I'm certainly in line with your expectations for the fourth quarter. The guidance reflects $3.67 copper and sort of $1.06 aluminum, is that correct versus the higher levels of spot levels right now?

Brian J. Robinson

That's right, Steve. It's probably correct, and as we said in the prepared comments, to the extent metals continue to hang in there, that should be a positive thing for us.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

I guess one more, if I could. I mean, The share buyback this quarter, do you feel like it's the right time to be buying back shares with the maturity coming up on one of your sizable converts in 2013? and operating performance, during the quarter, you must have seen that the drop in metal prices was really going to be a headwind. So I mean, I think generally, if possibly like to be buying shares ahead of kind of an improving tone for the business. Maybe you can just help us with your thought process on the buyback and your satisfaction with the program thus far.

Brian J. Robinson

Yes, I would say, Steve, the headwinds from the metals and the significant drop in the metals, you also have to look at the cash flow side of the equation. So the significant drop can generate cash flow. The converts that you mentioned in 2013 are also in the back half of 2013. I would say, I guess what I would comment on the buyback is when we look at it, and we take a very long-term view on the business and where the stock, where the value of the stock, we thought it was just a one of a number of correct ways to deploy our capital in the current environment. So, yes, that's what I would say about that.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

You think the pace is going to kind of remain similar or I guess, it just depends on where, or you see the value in the stock price?

Brian J. Robinson

Yes.

Gregory B. Kenny

We -- I'm sorry. Go ahead.

Brian J. Robinson

I wouldn't comment on that. I think we'll leave it at what we -- we spent $62.5 million, and we bought back 5% of the outstanding shares.

Steven J O'Brien - JP Morgan Chase & Co, Research Division

I mean, do you think that the free cash flow in 2011 was sort of satisfactory and with respect to your expectations?

Brian J. Robinson

Steve, I think we -- again, we have to take a longer view of our free cash flow. I think , in 2011 and 2010, our free cash flow, were hit for different reasons. In other words, in 2010, volumes grew significantly in the second half of the year. 2011 for most of the year, metal prices have run up and were higher, so that required cash. But if you go back to the couple of years before that, we had very significant free cash flow and operating cash flows. So this is -- again, I'm going to go back to a broader perspective here, which is part of our job in this business and certainly on the liquidity side is to be able to manage these massive swings, than we get in working capital that come frankly they come quickly, and they can be very significant. And you can see that -- in our -- the piece I think we shared with investors and the piece that we have up on the website around our cash flows for the last 4 years.

Gregory B. Kenny

Steve, our operating performance improved last year. We also -- I'm never satisfied with our networking capital as a percentage of revenues. We're constantly trying to reduce that, so we can improve our return on capital. So that's one of the challenges we take as a management team. We talk about our expectation around CapEx for next year and then we're looking at obviously continually on internal growth opportunities versus external and those kinds of returns. So it's a big simultaneous equation, but we're going to avoid getting into a discussion regarding how we think about deploying or not, our authorization from the board to buy back the stock if we wish.

Operator

Your final question comes from the line of Brett Levy with Jefferies & Company.

Brett Levy - Jefferies & Company, Inc., Research Division

My sense is that because you're buying back your own shares, that what you see in the M&A market right now is not all that compelling. Can you talk about whether or not you're still actively out there sort of looking at M&A opportunities? And then the second one sort of revolves around hedging. Obviously, there is a swing factor around metals pricing and currencies. Have you guys sort of put any thoughts in changing the way that you might hedge either of those factors?

Gregory B. Kenny

Maybe you're on mute for the first sentence or 2, but I think I'll let Brian talk about the hedging. I'll address what I think you said is how are we seeing and still actively looking at M&A kinds of work. And I think the answer is yes, we're one of the major companies in the world. We've communicated for years around leveraging our product diversity and geographic building out of the developing world as well as taking advantage of trends within the developed world and aimed at return on capital over time. So we're always looking at that. I would say we're in the flow now with 4 years, which is very -- it's not a normal business cycle, as you all know. So we aren't seeing that sort of peak to trough for a year-time horizon. We're sort of in a financial recovery. So we do see people who don't have the same business model that we have and the same kind of leverage, saying maybe we should be part of a business that has that kind of scale and know-how. So we continue to stay active. We stay very fussy and discipline some things we do with a longer view on the capital where we enter markets such as India. In this case, we did not see an appropriate entry vehicle through acquisition, so we built it. That can be dilutive near term as you build, put capital on the ground and then seek a market position. In other places, you can find things that you can really take cost out and there are an ongoing operating entity. We stay in the flow. We stay active, but I wouldn't say that there has been any shift other than when people, I guess, are contrary in nature. And I think of the operating model is such when people get tired of things, that's always a good time. And obviously, it's been a long slog for a lot of folks, depending on where you are in the world. With respect to that -- so there's no change in our strategy internal growth versus external versus looking internally as we announced this year, buyback, which is still in place. And we've acted on this in part. With respect to hedging, I'm going to turn it over to Brian.

Brian J. Robinson

Yes, on the hedging side, I would say, on the large projects, we haven't changed one bit, and that's probably why we're getting these mark-to-market adjustments in our P&L. So what we're saying is on the large projects, they've got many months, sometimes years, we're economically protecting ourselves against the currency and the commodity exposure. And so that mark-to-market accounting answer is something that we call out in our results. On the flow business, we've over time looked a lot of different ideas so we probably -- we haven't changed our strategies. On the currency side, on the flow side, we may be increased a bit. But generally, we look at these things over time and I would say we haven't dramatically changed anything.

Operator

This now concludes the Q&A portion of today's call. I'll turn the call back over to Mr. Len Texter.

Len Texter

Thank you for joining us this morning. That concludes our conference call for today. A replay of this call will be available on our website later this afternoon. We appreciate your continued interest in General Cable. Thank you.

Operator

Your may now disconnect. This concludes today's conference call.

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