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and the potential environmental risks and opportunities within the wire and cable industry, the more successful they will be conducting business across borders.

Economic Environment

General Cable Corp utilizes 47 manufacturing locations in 23 countries, selling into nearly every country in the world. The company operates from three primary regions: North American (US/Canada), Europe/North Africa, and the Rest of the World (ROW). Based on both historical and forecasted data collected from the Bureau of Labor Statistics and Financial Forecast Center, it is clear that emerging economies are quickly achieving wealth and large middle classes, thus increasing personal consumption and energy usage.

During recent years, GCC’s end markets have recovered from the previous low points of demand experienced in 2003; however, beginning in the fourth quarter of 2007 and continuing throughout 2008, an economic slowdown in the United States and slowing growth in certain European markets resulted in lower demand during 2008 as compared to 2007. In the past several years, there has been significant merger and acquisition activity, which, the Company believes, has led to a reduction in inefficient, high cost capacity in the industry. However, to help sustain and protect the success of these recent acquisitions and mergers, the company must thoroughly analyze the environments in which they operate.

For example, while the company’s two largest geographic markets include the United States and Spain, the United States has clearly dominated with net revenues between 31 and 49 percent during 2006-2008. Although Spain has consistently fell into second place, and France into third, net revenues for all three countries have declined since 2006 as a growing percentage of net revenues is now dominated by the ROW segment. Nonetheless, the US, Spain, and France still dominate more than half of the company’s net revenues and should therefore be looked at in greater detail with a variety of economic environmental factors taken under consideration.

For example, it is critical for GCC and other companies in the wire and cable industry to consider the various forces thought to direct changes in the exchange rate and how it impacts the value of any given currency. Exchange rate changes affect business transactions due to differences in inflation, interest rates, and market confidence as they float based on speculations and change in supply and demand. For instance, when trying to predict inflation, high predictions often lead to the weakening of currencies. As interest rates rise, it costs more and more to acquire the same amount of money; therefore, currency weakens. Thus, while higher interest rates tend to be related to inflation (meaning we actually have a booming economy); lower interest rates often mean the government is trying to “kick-start” something. In addition to inflation and interest rates, companies should also take market confidence under careful consideration as predictions center around industry growth and intertwine with interest rates, inflation, and willingness to invest.

While taking these forces into consideration will allow wire and cable manufacturers must carefully evaluate which currency to deal with when negotiating contracts, the International Monetary Fund (IMF) provides stability to the international monetary system through stabilizing exc