BGC- 2015.7.03
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________ 
FORM 10-Q 
_____________________________________________ 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 2015
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission file number: 1-12983
_____________________________________________ 
GENERAL CABLE CORPORATION
(Exact name of registrant as specified in its charter)
_____________________________________________ 
Delaware
06-1398235
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
4 Tesseneer Drive
Highland Heights, KY
41076-9753
(Address of principal executive offices)
(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  x    No  ¨
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  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer
x
  
Accelerated filer
¨
Non-accelerated filer
¨
  
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
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 August 3, 2015
Common Stock, $0.01 par value
48,921,307

Table of Contents

GENERAL CABLE CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
 
 
 
PAGE
PART I
Financial Information
 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II
Other Information
 
Item 1.
Item 1A.
Item 2.
Item 6.


2
Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in millions, except per share data) (unaudited)
 
Three Fiscal Months Ended
 
Six Fiscal Months Ended
 
July 3,
2015
 
June 27,
2014
 
July 3,
2015
 
June 27,
2014
Net sales
$
1,113.4

 
$
1,387.3

 
$
2,284.5

 
$
2,688.8

Cost of sales
990.2

 
1,261.1

 
2,047.6

 
2,444.8

Gross profit
123.2

 
126.2

 
236.9

 
244.0

Selling, general and administrative expenses
97.8

 
101.3

 
195.3

 
209.3

Goodwill impairment charge
—

 
—

 
—

 
93.5

Intangible asset impairment charges
1.7

 
2.1

 
1.7

 
75.0

Operating income (loss)
23.7

 
22.8

 
39.9

 
(133.8
)
Other income (expense)
(6.0
)
 
3.4

 
(31.8
)
 
(92.8
)
Interest income (expense):
 
 
 
 
 
 
 
Interest expense
(25.3
)
 
(29.1
)
 
(49.7
)
 
(55.9
)
Interest income
0.5

 
0.6

 
1.0

 
1.5

 
(24.8
)
 
(28.5
)
 
(48.7
)
 
(54.4
)
Income (loss) before income taxes
(7.1
)
 
(2.3
)
 
(40.6
)
 
(281.0
)
Income tax (provision) benefit
5.5

 
(11.8
)
 
4.1

 
4.3

Equity in net earnings of affiliated companies
—

 
0.4

 
0.2

 
0.6

Net income (loss) from continuing operations
(1.6
)
 
(13.7
)
 
(36.3
)
 
(276.1
)
Net income (loss) from discontinued operations, net of taxes
(6.8
)
 
(9.0
)
 
(13.0
)
 
(86.0
)
Net income (loss) including noncontrolling interest
(8.4
)
 
(22.7
)
 
(49.3
)
 
(362.1
)
Less: net income (loss) attributable to noncontrolling interest
(1.5
)
 
2.1

 
(4.3
)
 
(21.9
)
Net income (loss) attributable to Company common shareholders
$
(6.9
)
 
$
(24.8
)
 
$
(45.0
)
 
$
(340.2
)
Earnings (loss) per share - Earnings (loss) from continuing operations attributable to Company common shareholders per common share
 
 
 
 
 
 
 
Earnings (loss) per common share-basic
$
(0.03
)
 
$
(0.28
)
 
$
(0.72
)
 
$
(5.56
)
Earnings (loss) per common share-assuming dilution
$
(0.03
)
 
$
(0.28
)
 
$
(0.72
)
 
$
(5.56
)
Earnings (loss) per share - Earnings (loss) from discontinued operations attributable to Company common shareholders per common share
 
 
 
 
 
 
 
Earnings (loss) per common share-basic
$
(0.11
)
 
$
(0.23
)
 
$
(0.20
)
 
$
(1.40
)
Earnings (loss) per common share-assuming dilution
$
(0.11
)
 
$
(0.23
)
 
$
(0.20
)
 
$
(1.40
)
Earnings (loss) per share - Net income (loss) attributable to Company common shareholders per common share
 
 
 
 
 
 
 
Earnings (loss) per common share-basic
$
(0.14
)
 
$
(0.51
)
 
$
(0.92
)
 
$
(6.96
)
Earnings (loss) per common share-assuming dilution
$
(0.14
)
 
$
(0.51
)
 
$
(0.92
)
 
$
(6.96
)
Dividends per common share
$
0.18

 
$
0.18

 
$
0.36

 
$
0.36

Comprehensive income (loss):
 
 
 
 


 


   Net income (loss)
$
(8.4
)
 
$
(22.7
)
 
$
(49.3
)
 
$
(362.1
)
   Currency translation gain (loss)
(13.6
)
 
9.0

 
(58.2
)
 
(1.8
)
Defined benefit plan adjustments, net of tax of $1.0 million and $2.5 million in the three and six months ended July 3, 2015 and $2.1 million and $2.6 million in the three and six months ended June 27, 2014
1.8

 
4.2

 
4.8

 
5.1

Comprehensive income (loss), net of tax
(20.2
)
 
(9.5
)
 
(102.7
)
 
(358.8
)
Comprehensive income (loss) attributable to noncontrolling interest, net of tax
(2.3
)
 
0.8

 
(8.7
)
 
(24.2
)
Comprehensive income (loss) attributable to Company common shareholders, net of tax
$
(17.9
)
 
$
(10.3
)
 
$
(94.0
)
 
$
(334.6
)
See accompanying Notes to Condensed Consolidated Financial Statements.

3
Table of Contents

GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in millions, except share data)
(unaudited)
 
July 3,
2015
 
December 31,
2014
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
102.3

 
$
136.7

Receivables, net of allowances of $16.5 million at July 3, 2015 and $20.3 million at December 31, 2014
857.3

 
895.1

Inventories
897.8

 
926.6

Deferred income taxes
36.3

 
24.0

Prepaid expenses and other
67.7

 
99.9

Current assets of discontinued operations
252.7

 
313.8

Total current assets
2,214.1

 
2,396.1

Property, plant and equipment, net
604.0

 
670.7

Deferred income taxes
27.4

 
18.4

Goodwill
23.3

 
22.8

Intangible assets, net
44.0

 
50.5

Unconsolidated affiliated companies
8.7

 
17.5

Other non-current assets
62.6

 
70.8

Non-current assets of discontinued operations
106.0

 
119.9

Total assets
$
3,090.1

 
$
3,366.7

Liabilities and Total Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
625.7

 
$
552.7

Accrued liabilities
338.0

 
379.9

Current portion of long-term debt
217.9

 
391.6

Current liabilities of discontinued operations
128.5

 
158.6

Total current liabilities
1,310.1

 
1,482.8

Long-term debt
969.5

 
933.9

Deferred income taxes
182.7

 
178.3

Other liabilities
206.3

 
228.7

Non-current liabilities of discontinued operations
15.5

 
16.0

Total liabilities
2,684.1

 
2,839.7

Commitments and contingencies (see Note 18)

 

Redeemable noncontrolling interest
18.2

 
13.8

Total equity:
 
 
 
Common stock, $0.01 par value, issued and outstanding shares:
 
 
 
July 3, 2015 – 48,890,423 (net of 9,919,543 treasury shares)
 
 
 
December 31, 2014 – 48,683,493 (net of 10,126,473 treasury shares)
0.6

 
0.6

Additional paid-in capital
713.5

 
714.8

Treasury stock
(180.3
)
 
(184.3
)
Retained earnings
121.7

 
184.4

Accumulated other comprehensive income (loss)
(312.4
)
 
(263.4
)
Total Company shareholders’ equity
343.1

 
452.1

Noncontrolling interest
44.7

 
61.1

Total equity
387.8

 
513.2

Total liabilities, redeemable noncontrolling interest and equity
$
3,090.1

 
$
3,366.7

See accompanying Notes to Condensed Consolidated Financial Statements.


4
Table of Contents

GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (in millions) (unaudited)
 
Six Fiscal Months Ended
 
July 3, 2015
 
June 27, 2014
Cash flows of operating activities:
 
 
 
Net income (loss) from continuing operations including noncontrolling interest
$
(36.3
)
 
$
(276.1
)
Adjustments to reconcile net income (loss) to net cash flows of operating activities:
 
 
 
Depreciation and amortization
47.4

 
57.8

Amortization of restricted stock awards
—

 
0.8

Foreign currency exchange (gain) loss
29.4

 
86.6

Deferred income taxes
(11.3
)
 
(11.6
)
Excess tax (benefits) deficiencies from stock-based compensation
—

 
0.1

Non-cash asset impairment charges
12.2

 
183.6

Convertible debt instruments non-cash interest charges
0.9

 
0.8

(Gain) loss on disposal of subsidiaries
10.8

 
—

(Gain) loss on disposal of property
1.3

 
3.5

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
(Increase) decrease in receivables
(13.1
)
 
(107.8
)
(Increase) decrease in inventories
(24.4
)
 
(81.5
)
(Increase) decrease in other assets
26.1

 
8.9

Increase (decrease) in accounts payable, accrued and other liabilities
85.8

 
39.4

Net cash flows of operating activities from continuing operations
128.8

 
(95.5
)
Net cash flows of operating activities from discontinued operations
0.7

 
(14.8
)
Net cash flows of operating activities
129.5

 
(110.3
)
Cash flows of investing activities:
 
 
 
Capital expenditures
(30.3
)
 
(41.9
)
Proceeds from properties sold
0.3

 
0.8

Disposal of subsidiaries, net of cash disposed of
22.7

 
—

Other
0.3

 
—

Net cash flows of investing activities from continuing operations
(7.0
)
 
(41.1
)
Net cash flows of investing activities from discontinued operations
(4.4
)
 
(3.5
)
Net cash flows of investing activities
(11.4
)
 
(44.6
)
Cash flows of financing activities:
 
 
 
Dividends paid to shareholders
(17.7
)
 
(17.8
)
Excess tax benefits (deficiencies) from stock-based compensation
—

 
(0.1
)
Proceeds from debt
1,839.8

 
1,147.6

Repayments of debt
(1,949.7
)
 
(976.4
)
Purchase of noncontrolling interest
—

 
(0.3
)
Dividends paid to noncontrolling interest
(0.1
)
 
(0.7
)
Repurchase of common shares
—

 
(30.7
)
Proceeds from exercise of stock options
0.2

 
0.1

Net cash flows of financing activities from continuing operations
(127.5
)
 
121.7

Net cash flows of financing activities from discontinued operations
(3.4
)
 
(1.0
)
Net cash flows of financing activities
(130.9
)
 
120.7

Effect of exchange rate changes on cash and cash equivalents
(38.2
)
 
(85.5
)
Increase (decrease) in cash and cash equivalents
(51.0
)
 
(119.7
)
Cash and cash equivalents – beginning of period
205.8

 
418.8

Cash and cash equivalents – end of period
$
154.8

 
$
299.1

Less cash and cash equivalents of discontinued operations
52.5

 
69.0

Cash and cash equivalents of continuing operations – end of period
102.3

 
230.1

Supplemental Information
 
 
 
Cash paid during the period for:
 
 
 
Income tax payments from continuing operations, net of refunds
$
7.0

 
$
12.0

Interest paid from continuing operations
$
44.5

 
$
53.9

Non-cash investing and financing activities from continuing operations:
 
 
 
Capital expenditures included in accounts payable
$
11.7

 
$
10.3

See accompanying Notes to Condensed Consolidated Financial Statements.

5
Tables of Contents


GENERAL CABLE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Total Equity
(in millions) (unaudited)
 
 
 
General Cable Total Equity
 
 
 
Total Equity
 
Common
Stock
 
Additional
Paid in
Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income/(Loss)
 
Noncontrolling
Interest
Balance, December 31, 2014
$
513.2

 
$
0.6

 
$
714.8

 
$
(184.3
)
 
$
184.4

 
$
(263.4
)
 
$
61.1

Comprehensive income (loss)
(102.7
)
 

 

 

 
(45.0
)
 
(49.0
)
 
(8.7
)
Common stock dividend
(17.7
)
 

 

 

 
(17.7
)
 

 

Excess tax benefit (deficiency) from stock based compensation
(1.5
)
 

 
(1.5
)
 

 

 

 

Dividends paid to noncontrolling interest
(2.3
)
 

 

 

 

 

 
(2.3
)
Sale of noncontrolling interests related to Fiji operations
(5.4
)
 

 

 


 

 

 
(5.4
)
Other – issuance pursuant to restricted stock, stock options and other
4.2

 

 
0.2

 
4.0

 

 

 


Balance, July 3, 2015
$
387.8

 
$
0.6

 
$
713.5

 
$
(180.3
)
 
$
121.7

 
$
(312.4
)
 
$
44.7

 
 
 
General Cable Total Equity
 
 
 
Total Equity
 
Common
Stock
 
Additional
Paid in
Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income/(Loss)
 
Noncontrolling
Interest
Balance, December 31, 2013
$
1,379.8

 
$
0.6

 
$
699.6

 
$
(155.3
)
 
$
847.4

 
$
(112.1
)
 
$
99.6

Comprehensive income (loss)
(358.8
)
 
 
 
 
 
 
 
(340.2
)
 
5.6

 
(24.2
)
Common stock dividend
(17.8
)
 
 
 
 
 
 
 
(17.8
)
 
 
 
 
Excess tax benefit (deficiency) from stock based compensation
(0.1
)
 
 
 
(0.1
)
 
 
 
 
 
 
 
 
Purchase of noncontrolling interest
(0.3
)
 
 
 
(1.5
)
 
 
 
 
 
 
 
1.2

Dividends paid to noncontrolling interest
(3.1
)
 
 
 


 
 
 
 
 
 
 
(3.1
)
Repurchase of common shares
(30.7
)
 
 
 
 
 
(30.7
)
 
 
 
 
 
 
Other – issuance pursuant to restricted stock, stock options and other
7.5

 
 
 
6.8

 
0.7

 
 
 
 
 


Balance, June 27, 2014
$
976.5

 
$
0.6

 
$
704.8

 
$
(185.3
)
 
$
489.4

 
$
(106.5
)
 
$
73.5

See accompanying Notes to Condensed Consolidated Financial Statements.


6
Table of Contents

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 (“General Cable” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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 GAAP 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 six fiscal months ended July 3, 2015 are not necessarily indicative of results that may be expected for the full year. The December 31, 2014 Condensed Consolidated Balance Sheet amounts are derived from the audited financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto in General Cable’s 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2015 provided that the Company’s results from continuing operations do not include the results of the Asia Pacific businesses. The results of these businesses, which comprised a portion of the Africa/Asia Pacific segment, have been reclassified as discontinued operations. Previously, the results of these businesses included certain allocated corporate costs, which have been reallocated to the remaining continuing operations on a retrospective basis, which are included in the Africa/Asia Pacific segment. Results for all periods disclosed in this report have been reclassified as discontinued operations.
The Company’s first three fiscal quarters consist of 13-week periods ending on the Friday nearest to the end of the calendar months of March, June and September. The Company's fourth fiscal quarter consists of the first day following the third quarter through December 31.

The Condensed Consolidated Financial Statements include the accounts of General Cable Corporation and its majority-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.
2.
Accounting Standards
The Company’s significant accounting policies are described in Note 2 to the audited annual consolidated financial statements in the 2014 Annual Report on Form 10-K. In the six months ended July 3, 2015, there have been no significant changes to these policies. There have been no accounting pronouncements adopted by the Company in 2015.
The following accounting pronouncement was adopted and became effective with respect to the Company in 2014:
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity", which raises the threshold for determining which disposals are required to be presented as discontinued operations and modifies related disclosure requirements. The revised accounting guidance applies prospectively to all disposals (or classifications as held for sale) of components of an entity and for businesses that, upon acquisition, are classified as held for sale on or after adoption. Early adoption is permitted for disposals (or classifications as held for sale) that have not been previously reported in financial statements. The Company elected to early adopt the guidance and implemented ASU 2014-08 for the year ended December 31, 2014. The effects of applying the revised guidance will vary based upon the nature and size of future disposal transactions. It is expected that fewer disposal transactions will meet the new criteria to be reported as discontinued operations. In the quarter ended July 3, 2015, the Company reported the results of the Asia Pacific businesses as discontinued operations, refer to Note 1 - Basis of Presentation and Principles of Consolidation and Note 3 - Assets and Liabilities Held for Sale and Discontinued Operations. The Company will continually evaluate the status of discontinued operations each quarter to ensure compliance with ASU 2014-08 requirements.
The following accounting pronouncements, which will become effective in future periods with respect to the Company, were issued in 2015 and 2014:
In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on the Company’s Consolidated Financial Statements.

7
Table of Contents

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance outlines a single, comprehensive model for accounting for revenue from contracts with customers. The Company will adopt the standard on January 1, 2018. The Company is evaluating the impact that the standard will have on its Consolidated Financial Statements.
In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." This standard provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its Consolidated Financial Statements.
3.    Assets and Liabilities Held for Sale and Discontinued Operations
In October 2014, the Company announced the intent to divest all of the Company's operations in Africa and Asia Pacific in order to simplify the Company's geographic portfolio and reduce operational complexity. The October divestiture plan is focused on the sale and closure of the Company's non-core assets. The Company expects to incur approximately $14 million in pre-tax charges consisting primarily of legal and transaction fees for the dispositions. Such amounts are reflected in the North America segment. Charges incurred in the three and six months ended July 3, 2015 were immaterial.

As part of this plan, in the first quarter of 2015, the Company completed the sale of its interests in certain joint ventures including Dominion Wire and Cables ("Fiji"), 51% interest, and Keystone Electric Wire and Cable ("Keystone"), 20% interest, for cash consideration of $9.3 million and $11.0 million, respectively. In the three months ended April 3, 2015, the pre-tax loss recognized on the sale from the disposition of Fiji was $2.6 million and the pre-tax gain recognized from the disposition of Keystone was $3.6 million. In addition, in the fourth quarter of 2014, the Company completed the sale of its interest in Phelps Dodge International Philippines, Inc. (“PDP”) and Phelps Dodge Philippines Energy Products Corporation (“PDEP”) for cash consideration of $67.1 million. The pre-tax gain on the sale from the disposition of PDP and PDEP recognized in the quarter ended December 31, 2014 was $17.6 million.
On June 25, 2015, the Company announced it reached a definitive agreement to sell its Asia Pacific operations for cash consideration of approximately $205 million which includes preliminary estimated net cash of $30 million available at the closing of the purchased businesses, subject to customary working capital adjustments at the respective closing dates. The Company’s Asia Pacific operations consist of Phelps Dodge International Thailand, Alcan (Tianjin) Alloy Products, General Cable New Zealand Limited and General Cable Australia Pty. Ltd (together "the remaining Asia Pacific Operations") with assets of $409.2 million and liabilities of $205.4 million as of July 3, 2015. The Company expects to close the sale of the operations in the third quarter of 2015, subject to customary closing conditions. The Company reviewed each component entity in the Company's Africa/Asia Pacific reportable segment to determine if the assets should be considered held for sale. As of July 3, 2015, the Company determined that the remaining Asia Pacific Operations did meet the held for sale criteria set forth in ASC 360 to be classified as held for sale.
Assets held for sale are measured at the lower of their carrying amount or fair value less cost to sell and depreciation has ceased. Development of estimates of fair values in this circumstance is complex and is dependent upon, among other factors, the nature of the potential sales transaction, composition of assets and/or businesses in the disposal group, the comparability of the disposal group to market transactions, negotiations with third party purchasers, etc. Such factors bear directly on the range of potential fair values and the selection of the best estimates. Key assumptions were developed based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction.
As of July 3, 2015, the Company determined that the remaining businesses in the Africa/Asia Pacific segment, the Africa businesses, did not meet the held for sale criteria set forth in ASC 360 primarily driven by management’s belief that the probability of a sale within one year is uncertain.
The Company assessed the discontinued operations financial reporting treatment for those businesses which were contemplated as part of the divestiture plan. The disposals of the PDP and PDEP, Fiji and Keystone businesses combined with the businesses held for sale (the remaining Asia Pacific Operations and India (together "Asia Pacific Operations")) will result in the Company’s disposal of a major geographical area, Asia Pacific. This disposal is considered a strategic shift that has and will have a major effect on the Company's operations and financial results; therefore, the results of the Asia Pacific Operations have been reclassified as discontinued operations for all periods presented. Previously the results of these businesses included certain allocated corporate costs, which have been reallocated to the remaining continuing operations within the Africa/Asia Pacific segment on a retrospective basis. As a result of the Company’s strategic shift out of the Asia Pacific Operations, the Africa/Asia Pacific segment is now comprised primarily of the Company’s Africa businesses. The financial results of the Company's Africa businesses are presented as continuing operations in the Condensed Consolidated Financial Statements.

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The results of operations, financial position and cash flows for the Asia Pacific Operations are separately reported as discontinued operations for all periods presented. Included in Net income (loss) from discontinued operations, net of taxes in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) were the following (in millions):
 
Three Fiscal Months Ended
 
Six Fiscal Months Ended
 
July 3,
2015
 
June 27,
2014
 
July 3,
2015
 
June 27,
2014
Net sales
$
89.5

 
$
144.0

 
$
180.6

 
$
272.6

Cost of sales
81.2

 
138.4

 
165.3

 
252.7

Gross profit
8.3

 
5.6

 
15.3

 
19.9

Selling, general and administrative expenses
13.1

 
14.3

 
25.1

 
27.0

Goodwill and intangible asset impairment charges
—

 
—

 
3.2

 
82.1

Operating income (loss)
(4.8
)
 
(8.7
)
 
(13.0
)
 
(89.2
)
Other income (expense)
(2.1
)
 
0.2

 
(1.2
)
 
(1.3
)
Interest expense, net
(0.4
)
 
(0.2
)
 
(1.0
)
 
(0.5
)
Income (loss) before income taxes
(7.3
)
 
(8.7
)
 
(15.2
)
 
(91.0
)
Income tax (provision) benefit
0.5

 
(0.3
)
 
2.1

 
5.0

Equity in net earnings of affiliated companies
—

 
—

 
0.1

 
—

Net income (loss) including noncontrolling interest
$
(6.8
)
 
$
(9.0
)
 
$
(13.0
)
 
$
(86.0
)
The pre-tax loss attributable to the parent for the Asia Pacific Operations for the three and six months ended July 3, 2015 was $5.5 million and $9.7 million, respectively. The pre-tax loss attributable to the parent for the Asia Pacific Operations for the three and six months ended June 27, 2014 was $11.3 million and $68.1 million, respectively.
Financial information for assets and liabilities held for sale were the following (in millions):

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July 3, 2015
 
December 31, 2014
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
52.5

 
$
69.1

Receivables, net of allowances
84.6

 
111.9

Inventories
89.0

 
92.2

Deferred income taxes
8.6

 
8.4

Prepaid expenses and other
18.0

 
32.2

Total current assets
252.7

 
313.8

Property, plant and equipment, net
80.2

 
87.7

Deferred income taxes
5.9

 
6.4

Goodwill
—

 
3.3

Intangible assets, net
12.5

 
14.6

Other non-current assets
7.4

 
7.9

Total assets
$
358.7

 
$
433.7

Liabilities
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
97.6

 
$
119.4

Accrued liabilities
20.2

 
27.3

Current portion of long-term debt
10.7

 
11.9

Total current liabilities
128.5

 
158.6

Deferred income taxes
4.5

 
4.7

Other liabilities
11.0

 
11.3

Total liabilities
$
144.0

 
$
174.6


4.    Restructuring
In July 2014, the Company announced a comprehensive restructuring program. The restructuring program, which builds on the Company's previously launched productivity and asset optimization plans, is focused on the closure of certain underperforming assets as well as the consolidation and realignment of other facilities. The Company is also implementing initiatives to reduce selling, general and administrative ("SG&A") expenses globally. During the first half of 2015, the Company continued with incremental restructuring actions including SG&A cost reductions and further asset optimization plans in North America and Europe. Costs incurred as part of the restructuring program related to the Company's Asia Pacific Operations are not included below as the costs associated with these exit or disposal activities are included within the results of discontinued operations. Total expected and aggregate restructuring costs related to the Asia Pacific Operations are $15 million and $14.8 million as of July 3, 2015, respectively. There are no restructuring costs related to the continuing operations of the Africa/Asia Pacific segment as of July 3, 2015.

As part of the restructuring program, in the second quarter of 2015, the Company completed the disposal of a subsidiary in Spain for cash consideration of $1.8 million. The pre-tax loss on the sale from the disposition in the quarter ended July 3, 2015 was $11.6 million. This sale does not represent a strategic shift; therefore, the results are not presented as discontinued operations. This loss is included as asset-related restructuring costs in the Europe segment in the three and six months ended July 3, 2015 and is recognized in the SG&A expenses caption in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company expects to incur approximately $210 million of pre-tax restructuring charges. The total expected costs are $25 million in the North America segment, $145 million in the Europe segment and $40 million in the Latin America segment. As of July 3, 2015, aggregate costs incurred are $14.4 million in the North America segment, $137.1 million in the Europe segment, and $34.7 million in the Latin America segment. For the three and six months ended July 3, 2015, the Company incurred charges of $19.2 million and $35.1 million, respectively. For the three and six months ended July 3, 2015, costs incurred were $3.7 million

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and $7.6 million in the North America segment, $12.4 million and $21.5 million in the Europe segment, and $3.1 million and $6.0 million in the Latin America segment, respectively. For the three and six months ended July 3, 2015, approximately $2.4 million and $11.5 million of these charges were recorded in cost of sales and $16.8 million and $23.6 million of these charges were recorded as SG&A expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), respectively. Restructuring costs incurred consist primarily of employee separation costs and asset-related costs to exit or realign facilities. The Company is also incurring other costs as outlined below.

Changes in the restructuring reserve and activity for the six months ended July 3, 2015 are below (in millions):

 
Employee Separation Costs
Asset-Related Costs
Other Costs
Total
Total expected restructuring charges
$
65.0

$
120.0

$
25.0

$
210.0

Balance, December 31, 2014
$
32.4

$
—

$
1.0

$
33.4

Net provisions
12.2

14.0

8.9

35.1

Net benefits charged against the assets
(2.7
)
(14.0
)
(3.9
)
(20.6
)
Payments
(13.5
)
—

(4.0
)
(17.5
)
Foreign currency translation
(2.6
)
—

(0.1
)
(2.7
)
Balance, July 3, 2015
$
25.8

$
—

$
1.9

$
27.7

Total aggregate costs to date
$
50.5

$
118.2

$
17.5

$
186.2

Remaining expected restructuring charges
$
14.5

$
1.8

$
7.5

$
23.8

Employee Separation Costs
The Company recorded employee separation costs of $2.7 million and $12.2 million for the three and six months ended July 3, 2015, consisting of $2.7 million and $6.4 million in North America, $(0.2) million and $4.8 million in Europe, and $0.2 million and $1.0 million in Latin America, respectively.
Employee separation costs include severance, retention bonuses and pension costs. As of July 3, 2015, employee separation costs included severance charges for approximately 1,140 employees; approximately 900 of these employees were classified as manufacturing employees and approximately 240 of these employees were classified as non-manufacturing employees. The charges relate to involuntary separations based on current salary levels and past service periods and are either considered one-time employee termination benefits in accordance with ASC 420 - Exit or Disposal Cost Obligations or charges for contractual termination benefits under ASC 712 - Compensation - Nonretirement Postemployment Benefits.
Asset-Related Costs
The Company recorded asset-related costs of $12.8 million and $14.0 million in the three and six months ended July 3, 2015, respectively. The Company recorded long-lived asset impairment charges of $11.4 million and $10.8 million in Europe, and $1.4 million and $3.2 million in Latin America for the three and six months ended July 3, 2015, respectively.
Asset-related costs consist of both asset write-downs and the loss on the sale of a subsidiary in Spain as noted above. Asset write-downs relate to the establishment of a new fair value basis for assets to be classified as held-for-sale or to be disposed of, as well as asset impairment charges for asset groups to be held-and-used in locations which are being restructured and it has been determined the undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than their carrying value. Management will continue to evaluate the recoverability of the carrying amount of its long-lived assets as the restructuring program is executed.
To determine the fair value, a current appraisal of each impaired asset groups' machinery and equipment and real property, as applicable, was performed utilizing standard valuation approaches, which incorporate Level 3 inputs. The Company assesses impairment at the asset group level which represents the lowest level for which identifiable cash flows can be determined independent of other groups of assets and liabilities. The asset groups at the Company are primarily each manufacturing unit, unless the cash flows of the manufacturing unit are not independent due to shared production, distribution and sale of the finished product. The Company considered the expected net cash flows to be generated by the use of each asset group, as well as the expected cash proceeds from the disposition of the assets, if any, to determine fair value. The impairment charges were recorded in the Cost of sales caption in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

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The Company notes the plan to abandon a long-lived asset before the end of its previously estimated useful life is a change in accounting estimate per ASC 250 - Accounting Changes and Error Corrections. The annual depreciation impact from the asset write-downs and changes in estimated useful lives is immaterial.
Other Costs
The Company recorded other restructuring-type charges of $3.7 million and $8.9 million for the three and six months ended July 3, 2015, respectively. The other restructuring-type charges were $1.0 million and $1.2 million in North America, $1.2 million and $5.9 million in Europe, and $1.5 million and $1.8 million in Latin America, respectively.
Other restructuring-type charges are incurred as a direct result of the restructuring program. Such charges primarily include working capital write-downs not associated with normal operations, equipment relocation, termination of contracts and other costs.
5.
Other Income (Expense)
Other income (expense) includes foreign currency transaction gains or losses, which result from changes in exchange rates between the designated functional currency and the currency in which a transaction is denominated, as well as gains and losses on derivative instruments that are not designated as cash flow hedges. During the three months ended July 3, 2015 and June 27, 2014, the Company recorded other expense of $6.0 million and other income of $3.4 million, respectively. For the three months ended July 3, 2015, other expense was primarily attributable to $3.6 million related to other foreign currency transaction losses and $2.4 million related to losses on derivative instruments that were not designated as cash flow hedges. For the three months ended June 27, 2014, other income included $3.6 million related to gains on derivative instruments that were not designated as cash flow hedges.
During the six months ended July 3, 2015 and June 27, 2014, the Company recorded other expense of $31.8 million and $92.8 million, respectively. For the six months ended July 3, 2015, other expense was primarily attributable to the adoption of the SIMADI currency exchange system in Venezuela and ongoing remeasurement of the local balance sheet which resulted in an expense of $22.8 million, $7.0 million related to other foreign currency transaction losses and $2.0 million related to losses on derivative instruments that were not designated as cash flow hedges. For the six months ended June 27, 2014, other expense was primarily attributable to $83.1 million related to a Venezuela currency devaluation, $8.4 million related to losses on derivative instruments that were not designated as cash flow hedges and other expense of $1.3 million related to foreign currency transaction losses.
Refer to Note 21 - Venezuelan Operations for more information regarding the Company's Venezuelan operations.
6.    Inventories
Approximately 82% of the Company’s inventories are valued using the average cost method and all remaining inventories are valued using the first-in, first-out (FIFO) method. All inventories are stated at the lower of cost or market.
(in millions)
July 3, 2015
 
December 31, 2014
Raw materials
$
197.3

 
$
206.6

Work in process
140.1

 
144.4

Finished goods
560.4

 
575.6

Total
$
897.8

 
$
926.6


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7.    Property, Plant and Equipment
Property, plant and equipment consisted of the following (in millions): 
 
July 3, 2015
 
December 31, 2014
Land
$
52.8

 
$
60.3

Buildings and leasehold improvements
218.8

 
228.6

Machinery, equipment and office furnishings
784.8

 
819.9

Construction in progress
38.1

 
35.3

Total gross book value
1,094.5

 
1,144.1

Less accumulated depreciation
(490.5
)
 
(473.4
)
Total net book value
$
604.0

 
$
670.7

Depreciation expense for the three and six fiscal months ended July 3, 2015 was $19.9 million and $42.0 million, respectively. Depreciation expense for the three and six fiscal months ended June 27, 2014 was $25.9 million and $52.1 million, respectively.

8.    Goodwill and Other Intangible Assets
Goodwill and intangible assets with indefinite useful lives are not amortized, but are reviewed at least annually for impairment. If the carrying amount of goodwill or an intangible asset with an indefinite life exceeds its fair value, an impairment loss would be recognized in the amount equal to the excess.
The amounts of goodwill and indefinite-lived intangible assets were as follows (millions of dollars):
 
Goodwill
 
Indefinite-Lived Assets – Trade Names
 
North
America
 
Latin America
 
Africa/Asia Pacific
 
Total
 
North
America
 
Europe
 
Total
Balance, December 31, 2014
$
17.0

 
$
3.0

 
$
2.8

 
$
22.8

 
$
0.3

 
$
0.4

 
$
0.7

Currency translation and other adjustments
(0.2
)
 
0.9

 
(0.2
)
 
0.5

 
—

 
—

 
—

Goodwill and indefinite-lived asset impairment
—

 
—

 
—

 
—

 
—

 
—

 
—

Balance, July 3, 2015
$
16.8

 
$
3.9

 
$
2.6

 
$
23.3

 
$
0.3

 
$
0.4

 
$
0.7

The amounts of other intangible assets were as follows (millions of dollars):
 
July 3, 2015
 
December 31, 2014
Amortized intangible assets:
 
 
 
Amortized intangible assets
$
129.4

 
$
131.0

Accumulated amortization
(83.1
)
 
(78.1
)
Foreign currency translation adjustment
(3.0
)
 
(3.1
)
Amortized intangible assets, net
$
43.3

 
$
49.8

Amortized intangible assets are stated at cost less accumulated amortization as of July 3, 2015 and December 31, 2014. Other intangible assets have been determined to have a useful life in the range of 7 to 12 years. The approximate weighted average useful life of the amortized intangible assets is 10 years. For customer relationships, the Company has accelerated the amortization expense to align with the historical customer attrition rates. All other amortized intangible assets are amortized on a straight-line basis. The amortization of intangible assets for the six months ended July 3, 2015 and June 27, 2014 was $5.0 million and $5.5 million, respectively. The estimated amortization expense during the twelve month periods beginning July 3, 2015 through July 3, 2020 and thereafter, based on exchange rates as of July 3, 2015, is $9.5 million, $8.4 million, $6.3 million, $5.0 million, $3.9 million and $10.2 million thereafter.

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9.
Long-Term Debt
(in millions)
July 3, 2015
 
December 31, 2014
North America
 
 
 
5.75% Senior Notes due 2022 ("5.75% Senior Notes")
$
600.0

 
$
600.0

Subordinated Convertible Notes due 2029 ("Subordinated Convertible Notes")
429.5

 
429.5

Debt discount on Subordinated Convertible Notes
(258.8
)
 
(259.7
)
Senior Floating Rate Notes due 2015 ("Senior Floating Rate Notes")
—

 
125.0

Asset-Based Revolving Credit Facility ("Revolving Credit Facility")
180.1

 
136.8

Other
9.1

 
9.0

Europe debt
9.1

 
10.5

Latin America credit facilities
185.6

 
238.6

Africa/Asia Pacific credit facilities
32.8

 
35.8

Total debt
1,187.4

 
1,325.5

Less current maturities
217.9

 
391.6

Long-term debt
$
969.5

 
$
933.9

At July 3, 2015, maturities of long-term debt during the twelve month periods beginning July 3, 2015 through July 3, 2020 and thereafter are $217.9 million, $4.0 million, $3.0 million, $180.8 million and $0.8 million, respectively, and $780.9 million thereafter.

The fair value of the Company's long-term debt, as noted below, was estimated using inputs other than quoted prices that are observable, either directly or indirectly.
5.75% Senior Notes
The Company's 5.75% Senior Notes are summarized in the table below:
 
5.75% Senior Notes 
(in millions)
July 3, 2015
 
December 31, 2014
Face Value
$
600.0

 
$
600.0

Fair Value (Level 2)
559.5

 
483.0

Interest Rate
5.75
%
 
5.75
%
Interest Payment
Semi-Annual: Apr 1 & Oct 1
Maturity Date
October 2022
Guarantee
Jointly and severally guaranteed by the Company's wholly owned U.S. subsidiaries
 
 
5.75% Senior Notes
 
Beginning Date
Percentage
Call Option (1)
October 1, 2017
102.875%
 
October 1, 2018
101.917%
 
October 1, 2019
100.958%
 
October 1, 2020 and thereafter
100.000%
(1)
The Company may, at its option, redeem the 5.75% Senior Notes on or after the stated beginning dates at percentages noted above (plus accrued and unpaid interest). Additionally, the Company may, on or prior to October 1, 2015 redeem in the aggregate up to 35% of the aggregate principal amount of 5.75% Senior Notes issued with the cash proceeds from one or more equity offerings, at a redemption price in cash equal to 105.75% of the principal plus accrued and unpaid interest so long as (i) at least 65% of the aggregate principal amount of the 5.75% Senior Notes issued remains outstanding immediately after giving effect to any such redemption; and (ii) notice of any such redemption is given within 60 days after the date of the closing of any such equity offering. In addition, at any time prior to October 1, 2017, the Company may redeem some or all of the 5.75% Senior Notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, plus a make whole premium.

The 5.75% Senior Notes' indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem

14
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the Company's capital stock; (iii) purchase, redeem or retire debt; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) sell assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting the Company's subsidiaries' ability to pay dividends; and (x) consolidate, merge or sell all or substantially all assets. However, these covenants are subject to exceptions and qualifications.

The 5.75% Senior Notes may also be repurchased at the option of the holders in connection with a change of control (as defined in the indenture governing the 5.75% Senior Notes) or in connection with certain asset sales.
Subordinated Convertible Notes
The Company’s Subordinated Convertible Notes are summarized as of July 3, 2015 and December 31, 2014 as follows:
 
Subordinated Convertible
Notes
(in millions)
July 3, 2015
 
December 31, 2014
Face value
$
429.5

 
$
429.5

Debt discount
(258.8
)
 
(259.7
)
Book value
170.7

 
169.8

Fair value (Level 1)
356.5

 
313.1

Maturity date
Nov 2029
Stated annual interest rate
4.50% until Nov 2019
2.25% until Nov 2029
Interest payments
Semi-annually:
May 15 & Nov 15
Senior Floating Rate Notes
On March 31, 2015, the Company used proceeds from the Revolving Credit Facility to repay the outstanding principal of $125 million and accrued interest of $0.8 million on the Senior Floating Rate Notes due April 2015.
The Company’s Senior Floating Rate Notes are summarized as of July 3, 2015 and December 31, 2014 as follows:
 
Senior Floating Rate Notes
(in millions)
July 3, 2015
 
 
 
December 31, 2014
Face value
$
—

 
 
 
$
125.0

Fair value (Level 1)
—

 
 
 
123.8

Interest rate
N/A
 
 
 
2.6
%
Interest payment
3-month LIBOR rate plus 2.375%
Quarterly: Jan 1, Apr 1, Jul 1 & Oct 1
Maturity date
Apr 2015
Guarantee
Jointly and severally guaranteed by the Company’s wholly-owned U.S. subsidiaries
Revolving Credit Facility
On July 21, 2011, the Company entered into a $400 million Revolving Credit Facility, which has been subsequently amended and restated to, among other things, increase the Revolving Credit Facility to $1.0 billion, $630 million of which may be borrowed by the U.S. borrower, $300 million of which may be borrowed by the European borrowers and $70 million of which may be borrowed by the Canadian borrower. The Revolving Credit Facility contains restrictions including limitations on, among other things, distributions and dividends, acquisitions and investments, indebtedness, liens and affiliate transactions. The Revolving Credit Facility provides the Company with flexibility and the restrictions in the Revolving Credit Facility generally only apply in the event that the Company's availability under the Revolving Credit Facility falls below certain specific thresholds.
The Revolving Credit Facility has a maturity date of September 6, 2018. The commitment amount under the Revolving Credit Facility may be increased by an additional $250 million, subject to certain conditions and approvals as set forth in the Revolving Credit Facility. The Company capitalized $0.9 million in 2015, $1.7 million in 2014 and $4.9 million in 2013 in deferred financing costs in connection with the Revolving Credit Facility. The Revolving Credit Facility requires maintenance of a minimum fixed charge coverage ratio of 1.00 to 1.00 if availability under the Revolving Credit Facility is less than the greater of $100 million or

15
Tables of Contents


10% of the then existing aggregate lender commitments under the Revolving Credit Facility. The fair value of the Revolving Credit Facility approximates the carrying value.
Indebtedness under the Revolving Credit Facility is secured by: (a) for US borrowings under the facility, a first priority security interest in substantially all of our domestic assets and, (b) for Canadian and European borrowings under the facility, a first priority security interest in substantially all of our domestic and Canadian assets and certain assets of our Spanish, French and German subsidiaries party to the facility.   In addition, the lenders under our Revolving Credit Facility have received a pledge of (i) 100% of the equity interests in all of the Company's domestic subsidiaries, and (ii) 65% of the voting equity interests in and 100% of the non-voting equity interests in certain of our foreign subsidiaries, including our Canadian subsidiaries and our Spanish, French and German subsidiaries party to the Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at interest rate bases elected by the Company plus an applicable margin calculated quarterly based on the Company's average availability and Total Consolidated Leverage Ratio as set forth in the credit agreement. The Revolving Credit Facility also requires the payment of a commitment fee equal to the available but unused commitments multiplied by an applicable margin of either 0.25% or 0.375% based on the average daily unused commitments.
The Company’s Revolving Credit Facility is summarized in the table below:
 
Revolving Credit Facility
(in millions)
July 3, 2015
 
December 31, 2014
Outstanding borrowings
$
180.1

 
$
136.8

Total credit under facility
1,000.0

 
1,000.0

Undrawn availability(1)
375.3

 
425.0

Interest rate
2.5
%
 
2.1
%
Outstanding letters of credit
$
41.2

 
$
58.5

Original issuance
July 2011
Maturity date
Sept 2018
(1) Total undrawn availability for the U.S. borrower, the Canadian borrower and the European borrowers at July 3, 2015 is $230.5 million, $50.5 million and $94.3 million, respectively. Total undrawn availability for the U.S. borrower, the Canadian borrower and the European borrowers at December 31, 2014 was $257.7 million, $54.3 million and $113.0 million, respectively.
Latin America Credit Facilities
The Company’s Latin America credit facilities are summarized in the table below: 
(in millions)
July 3, 2015
 
December 31, 2014
Outstanding borrowings
$
185.6

 
$
238.6

Undrawn availability
32.0

 
79.6

Interest rate – weighted average
8.7
%
 
6.1
%
Maturity date
Various; $182.7 million due within one year
The Company's Latin America credit facilities are short term loans utilized for working capital purposes. The fair value of the Latin America credit facilities approximates the carrying value due to the short term nature of the facilities.
Africa/Asia Pacific Credit Facilities
The Company’s Africa credit facilities are summarized in the table below: 
(in millions)
July 3, 2015
 
December 31, 2014
Outstanding borrowings
$
32.8

 
$
35.8

Undrawn availability
75.5

 
44.4

Interest rate – weighted average
3.9
%
 
4.2
%
Maturity date
Various; $32.8 million due within one year

16
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The Company’s Africa credit facilities are short term loans utilized for working capital purposes. The fair value of the Africa credit facilities approximates the carrying value due to the short term nature of the facilities.
10.
Financial Instruments
The Company is exposed to various market risks, including changes in interest rates, foreign currency exchange rates 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, and copper and aluminum forward pricing agreements. The Company does not purchase or sell derivative instruments for trading purposes. The Company does not engage in derivative contracts for which a lack of marketplace quotations would necessitate the use of fair value estimation techniques.

The Company enters into commodity instruments to hedge the purchase of copper, aluminum and lead in future periods and foreign currency exchange contracts principally to hedge the currency fluctuations in certain transactions denominated in foreign currencies, thereby reducing 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.

As of July 3, 2015 and December 31, 2014, there were no derivatives that were designated as cash flow hedges. In the three and six months ended July 3, 2015 and June 27, 2014, there was no activity related to derivatives that were designated as cash flow hedges. Changes in the fair value of economic hedges are recognized in current period earnings.
Fair Value of Derivatives Instruments
The notional amounts and fair values of derivatives not designated as cash flow hedges at July 3, 2015 and December 31, 2014 are shown below (in millions):
 
July 3, 2015
 
December 31, 2014
 
Notional
Amount
 
Fair Value
 
Notional
Amount
 
Fair Value
 
Asset (1)
 
Liability (2)
 
Asset (1)
 
Liability (2)
Derivatives not designated as cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Commodity futures
$
96.8

 
$
0.6

 
$
3.3

 
$
104.0

 
$
0.5

 
$
3.7

Foreign currency exchange
104.0

 
0.6

 
4.4

 
110.3

 
3.7

 
4.1

 
 
 
$
1.2

 
$
7.7

 
 
 
$
4.2

 
$
7.8

 
(1)
Balance recorded in “Prepaid expenses and other” and “Other non-current assets”
(2)
Balance recorded in “Accrued liabilities” and “Other liabilities”

As of July 3, 2015 and December 31, 2014, all financial instruments held by the Company were subject to enforceable master netting arrangements held by various financial institutions. In general, the terms of our agreements provide that in the event of an early termination the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty.  The Company's accounting policy is to not offset these positions in the Condensed Consolidated Balance Sheets.  As of July 3, 2015 and December 31, 2014, the net positions of the enforceable master netting agreements are not significantly different from the gross positions noted in the table above. 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. As of July 3, 2015 and December 31, 2014, there were no contracts held by the Company that required collateral to secure the Company's derivative liability positions.


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11.
Income Taxes
The Company’s effective tax rate for the six months ended July 3, 2015 and June 27, 2014 was 10.1% and 1.5%, respectively. The low effective tax rate on the Company’s pre-tax losses for the six months ended July 3, 2015 were primarily due to the following:

•
No tax benefits being available for the $22.8 million Venezuelan currency devaluation loss and foreign currency loss in Venezuela, and
•
No tax benefit being recognized on $53.0 million of operational losses incurred in jurisdictions where valuation allowances are recorded against net deferred tax assets.

These factors were partially offset by the following:

•
$6.5 million of tax benefits associated with the net release of uncertain tax position reserves,
•
$4.3 million of tax benefits associated with valuation allowance releases, and
•
$11.9 million of tax benefits associated with the recording of a deferred tax asset on the outside tax over book basis in the shares of Thailand businesses resulting from the pending sale of those businesses in the third quarter of 2015.

The low effective tax rate on the Company’s pre-tax losses for the six months ended June 27, 2014 were primarily due to the following:

•
No tax benefits being available for the $83.1 million Venezuelan currency devaluation loss,
•
A relatively small tax benefit of $13.9 million was recorded on $184.5 million pre-tax charges related to asset impairments, and
•
No tax benefit being recognized on $38.1 million of operational losses incurred in jurisdictions where valuation allowances are recorded against net deferred tax assets.

These factors were partially offset by the following:

•
$4.6 million of tax benefits associated with the net release of uncertain tax position reserves.

The Company’s effective tax rate for the three months ended July 3, 2015 and June 27, 2014 was 77.5% and (513.0)% respectively. The high effective tax rate for the three months ended July 3, 2015 was primarily due to $11.9 million of tax benefits associated with the recording of a deferred tax asset on the outside tax over book basis in the shares of the Thailand business resulting from the pending sale in the third quarter of 2015. This was partially offset by no tax benefit being recognized on $24.2 million of operational losses incurred in jurisdictions where valuation allowances are recorded against net deferred tax assets. The large negative effective tax rate for the three months ended June 27, 2014 was primarily due to no tax benefit being recognized on $10.1 million of asset impairments and $13.4 million of operational losses incurred in jurisdictions where valuation allowances are recorded against net deferred tax assets. The pre-tax loss was extremely low for both three month periods which also contributed to the volatile effective tax rates.

During the second quarter of 2015, the Company accrued approximately $1.0 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. In addition, $0.4 million of income tax benefits were recognized due to statute of limitation expirations associated with various uncertain tax positions.

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 $5 million of unrecognized tax benefits could change within the next twelve months due to the resolution of tax audits and statute of limitations expiration.

The Internal Revenue Service ("IRS") currently is in the process of examining the Company's 2012 consolidated income tax return. The IRS completed its examination of the Company's 2007 through 2010 consolidated income tax returns in the second quarter of 2013 with insignificant tax adjustments. With limited exceptions, tax years prior to 2010 are no longer open in major foreign, state, or local tax jurisdictions.




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12.
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.

The components of net periodic benefit cost for pension benefits were as follows (in millions): 
 
Three Fiscal Months Ended
 
July 3, 2015
 
June 27, 2014
 
U.S.
Plans
 
Non-U.S.
Plans
 
U.S.
Plans
 
Non-U.S.
Plans
Service cost
$
0.4

 
$
1.5

 
$
0.5

 
$
1.4

Interest cost
1.8

 
1.1

 
2.0

 
1.6

Expected return on plan assets
(2.6
)
 
(0.7
)
 
(2.6
)
 
(0.8
)
Amortization of prior service cost
—

 
0.2

 
0.1

 
0.3

Amortization of net loss
1.9

 
0.7

 
1.2

 
0.1

Settlement loss
—

 
—

 
—

 
4.5

Net pension expense
$
1.5

 
$
2.8

 
$
1.2

 
$
7.1


 
Six Fiscal Months Ended
 
July 3, 2015
 
June 27, 2014
 
U.S.
Plans
 
Non-U.S.
Plans
 
U.S.
Plans
 
Non-U.S.
Plans
Service cost
$
0.8

 
$
3.0

 
$
1.0

 
$
2.8

Interest cost
3.6

 
2.2

 
4.0

 
3.3

Expected return on plan assets
(5.2
)
 
(1.4
)
 
(5.3
)
 
(1.6
)
Amortization of prior service cost
—

 
0.4

 
0.1

 
0.6

Amortization of net loss
3.8

 
1.4

 
2.4

 
0.2

Settlement loss
—

 
0.9

 
—

 
4.5

Net pension expense
$
3.0

 
$
6.5

 
$
2.2

 
$
9.8

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net pension expense in 2015 is $10.5 million. The prior service cost to be amortized from accumulated other comprehensive income into net pension expense over the next fiscal year is immaterial.
Defined benefit pension plan cash contributions for the three fiscal months ended July 3, 2015 and June 27, 2014 were $3.0 million and $3.3 million, respectively. Defined benefit pension plan cash contributions for the six fiscal months ended July 3, 2015 and June 27, 2014 were $6.0 million and $6.6 million, respectively.
Refer to Note 4 - Restructuring for charges for contractual termination benefits under ASC 712 - Compensation - Nonretirement Postemployment Benefits.




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13.
Accumulated Other Comprehensive Income
The components of accumulated other comprehensive income (loss) as of July 3, 2015 and December 31, 2014, respectively, consisted of the following (in millions):
 
July 3, 2015
 
December 31, 2014
 
Company
Common
Shareholders
 
Noncontrolling
Interest
 
Company
Common
Shareholders
 
Noncontrolling
Interest
Foreign currency translation adjustment
$
(238.9
)
 
$
(8.2
)
 
$
(185.1
)
 
$
(3.8
)
Pension adjustments, net of tax
(73.5
)
 
(2.9
)
 
(78.3
)
 
(2.9
)
Accumulated other comprehensive income (loss)
$
(312.4
)
 
$
(11.1
)
 
$
(263.4
)
 
$
(6.7
)
The following is the detail of the change in the Company's accumulated other comprehensive income (loss) from December 31, 2014 to July 3, 2015 including the effect of significant reclassifications out of accumulated other comprehensive income (loss) (in millions, net of tax):
 
Foreign currency translation
 
Change of fair value of pension benefit obligation
 
Total
Balance, December 31, 2014
$
(185.1
)
 
$
(78.3
)
 
$
(263.4
)
Other comprehensive income (loss) before reclassifications
(65.2
)
 
—

 
(65.2
)
Amounts reclassified from accumulated other comprehensive income
11.4

 
4.8

 
16.2

Net current - period other comprehensive income (loss)
(53.8
)
 
4.8

 
(49.0
)
Balance, July 3, 2015
$
(238.9
)
 
$
(73.5
)
 
$
(312.4
)
The following is the detail of the change in the Company's accumulated other comprehensive income (loss) from December 31, 2013 to June 27, 2014 including the effect of significant reclassifications out of accumulated other comprehensive income (loss) (in millions, net of tax):
 
Foreign currency translation
 
Change of fair value of pension benefit obligation
 
Other
 
Total
Balance, December 31, 2013
$
(67.1
)
 
$
(52.6
)
 
$
7.6

 
$
(112.1
)
Other comprehensive income (loss) before reclassifications
0.6

 
—

 
—

 
0.6

Amounts reclassified from accumulated other comprehensive income
—

 
5.0

 
—

 
5.0

Net current - period other comprehensive income (loss)
0.6

 
5.0

 
—

 
5.6

Balance, June 27, 2014
$
(66.5
)
 
$
(47.6
)
 
$
7.6

 
$
(106.5
)

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The following is the detail of the reclassifications out of accumulated other comprehensive income (loss) for the three and six months ended July 3, 2015 (in millions, net of tax):
 
 
Three Fiscal Months Ended
Six Fiscal Months Ended
 
 
 
July 3, 2015
July 3, 2015
 
 
 
Amount reclassified from accumulated other comprehensive income (loss)
Amount reclassified from accumulated other comprehensive income (loss)
Affected line item in the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
Foreign currency translation
 
 
 
 
Sale of subsidiaries
 
$
5.2

$
11.4

SG&A
Amortization of defined pension items, net of tax:
 
 
 
 
  Prior service cost
 
$
0.1

$
0.2

SG&A
Net loss
 
1.7

3.4

SG&A
Settlement loss
 
—

1.2

SG&A
Total - Pension Items
 
$
1.8

$
4.8

 
Total
 
$
7.0

$
16.2

 
 
Three Fiscal Months Ended
 
Six Fiscal Months Ended
 
 
June 27, 2014
 
June 27, 2014
 
 
Amount reclassified from accumulated other comprehensive income (loss)
 
Amount reclassified from accumulated other comprehensive income (loss)
Affected line item in the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
Amortization of defined pension items, net of tax:
 
 
 
 
  Prior service cost
$
0.2

 
$
0.4

SG&A
Net loss
0.7

 
1.4

SG&A
Settlement loss
3.2

 
3.2

SG&A
Total - Pension Items
$
4.1

 
$
5.0

 
Total
$
4.1

 
$
5.0

 


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Table of Contents

14.     Redeemable Noncontrolling Interest
On October 1, 2012, the Company participated in a share subscription for 60% of the outstanding and issued shares of Procables. The existing shareholders immediately prior to the subscription (the “Sellers” or “Minority Shareholders”) maintained control of the remaining 40% of the shares. The Company and the Minority Shareholders also agreed to certain put and call options with regard to the remaining 40% interest in Procables retained by the Minority Shareholders. For a 36-month period commencing on the fifth anniversary of the closing date, the Minority Shareholders may exercise a put option to sell their entire 40% interest in Procables to the Company. The Company shall be irrevocably obligated to purchase the shares (the "Put Option"). In addition, the Company has a call option (the "Call Option") to purchase the Minority Shareholders’ 40% interest in Procables, during the 36-month period commencing on the expiration of the Put Option period. The consideration to be exchanged, per share in the event of a Put Option or Call Option shall be the higher of the following (1) the final per share purchase price; or (2) a price per share based on the Company's enterprise value equal to seven times the average of its earnings before interest, taxes, depreciation and amortization (“EBITDA”) over the two most recently audited year-end financial statements immediately prior to the option being exercised, minus the 12-month average Net Indebtedness, as defined in the agreement, of the Company for the most recent audited fiscal year (“EBITDA average”). The Company determined that the Put Option is embedded within the noncontrolling interest shares that are subject to the Put Option. The redemption feature requires classification of the Minority Shareholder's interest in the Condensed Consolidated Balance Sheets outside of equity under the caption “Redeemable noncontrolling interest.”

The redeemable noncontrolling interest of Procables was recorded on the acquisition date based on the estimated fair value of the shares including the embedded Put Option. The fair value of the Put Option was estimated at the higher of the final per share purchase price or EBITDA average. At July 3, 2015, the final per share purchase price was greater than the EBITDA average; therefore, the redeemable noncontrolling interest was valued at the same cost as the fair value determined at the opening balance sheet date, $18.2 million. Subsequent adjustments to the value of the redeemable noncontrolling interest due to the redemption feature, if any, will be recognized as they occur and recorded within Net income (loss).
15.     Shipping and Handling Costs
All shipping and handling amounts billed to a customer in a sales transaction are classified as revenue. Shipping and handling costs associated with storage and handling of finished goods and shipments to customers are included in cost of sales and totaled $28.5 million and $37.5 million, respectively, for the three fiscal months ended July 3, 2015 and June 27, 2014 and $59.5 million and $76.3 million, respectively, for the six fiscal months ended July 3, 2015 and June 27, 2014.

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16.
Earnings (Loss) Per Common Share
The Company applies the two-class method of computing basic and diluted earnings per share.
A reconciliation of the numerator and denominator of earnings (loss) per common share-basic to earnings (loss) per common share-assuming dilution is as follows (in millions, except per share data):
 
Three Fiscal Months Ended
 
Six Fiscal Months Ended
 
July 3, 2015
 
June 27, 2014
 
July 3, 2015
 
June 27, 2014
Amounts attributable to the Company – basic and diluted:
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
(1.6
)
 
$
(13.7
)
 
$
(36.3
)
 
$
(276.1
)
Less: net income (loss) attributable to continuing operations noncontrolling interest
(0.2
)
 
(0.2
)
 
(1.0
)
 
(4.0
)
Net income (loss) from continuing operations
 attributable to Company common shareholders
$
(1.4
)
 
$
(13.5
)
 
$
(35.3
)
 
$
(272.1
)
Net income (loss) from discontinued operations
(6.8
)
 
(9.0
)
 
(13.0
)
 
(86.0
)
Less: net income (loss) attributable to discontinued operations noncontrolling interest
(1.3
)
 
2.3

 
(3.3
)
 
(17.9
)
Net income (loss) from discontinued operations attributable to Company common shareholders
$
(5.5
)
 
$
(11.3
)
 
$
(9.7
)
 
$
(68.1
)
Net income (loss) attributable to Company common shareholders (1)
$
(6.9
)
 
$
(24.8
)
 
$
(45.0
)
 
$
(340.2
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding for basic EPS computation (2)
48.9

 
48.7

 
48.8

 
48.9

 
 
 
 
 
 
 
 
Earnings (loss) per common share calculation - basic:
 
 
 
 
 
 
 
Earnings (loss) from continuing operations attributable to Company common shareholders per common share – basic (3)
$
(0.03
)
 
$
(0.28
)
 
$
(0.72
)
 
$
(5.56
)
Earnings (loss) from discontinued operations attributable to Company common shareholders per common share – basic
$
(0.11
)
 
$
(0.23
)
 
$
(0.20
)
 
$
(1.40
)
Earnings (loss) per common share attributable to Company common shareholders – basic (3)
$
(0.14
)
 
$
(0.51
)
 
$
(0.92
)
 
$
(6.96
)
 
 
 
 
 
 
 
 
Weighted average shares outstanding including nonvested shares
48.9

 
48.7

 
48.8

 
48.9

Weighted average shares outstanding for diluted EPS computation (2)
48.9

 
48.7

 
48.8

 
48.9

 
 
 
 
 
 
 
 
Earnings (loss) per common share calculation - dilution:
 
 
 
 
 
 
 
Earnings (loss) from continuing operations attributable to Company common shareholders per common share – assuming dilution
$
(0.03
)
 
$
(0.28
)
 
$
(0.72
)
 
$
(5.56
)
Earnings (loss) from discontinued operations attributable to Company common shareholders per common share – assuming dilution
(0.11
)
 
(0.23
)
 
(0.20
)
 
(1.40
)
Earnings (loss) per common share attributable to Company common shareholders – assuming dilution
$
(0.14
)
 
$
(0.51
)
 
$
(0.92
)
 
$
(6.96
)
(1)
Numerator
(2)
Denominator
(3)
Under the two-class method, earnings (loss) per share – basic reflects undistributed earnings per share for both common stock and unvested share-based payment awards (restricted stock).

Under ASC 260 - Earnings per Share and ASC 470 - Debt and because of the Company’s obligation to settle the par value of the Subordinated Convertible Notes in cash, the Company is not required to include any shares underlying the Subordinated Convertible Notes in its weighted average shares outstanding – assuming dilution until the average stock price per share for the quarter exceeds the $36.75 conversion price of the Subordinated Convertible Notes and only to the extent of the additional shares that the Company may be required to issue in the event that the Company’s conversion obligation exceeds the principal amount of the Subordinated Convertible Notes. The average stock price threshold conditions had not been met as of July 3, 2015. At any such time in the future that threshold conditions are met, only the number of shares issuable under the “treasury” method of accounting for the

23
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share dilution would be included in the Company’s earnings per share – assuming dilution calculation, which is based upon the amount by which the average stock price exceeds the conversion price.

The following table provides examples of how changes in the Company’s stock price would require the inclusion of additional shares in the denominator of the weighted average shares outstanding – assuming dilution calculation for the Subordinated Convertible Notes.
Share Price
Shares Underlying Subordinated Convertible Notes
 
Total Treasury Method Incremental Shares (1)
$36.75
—

 
—

$38.75
603,152

 
603,152

$40.75
1,147,099

 
1,147,099

$42.75
1,640,151

 
1,640,151

$44.75
2,089,131

 
2,089,131

 
(1)
Represents the number of incremental shares that must be included in the calculation of fully diluted shares under GAAP.
17.
Segment Information
The chief operating decision maker ("CODM") evaluates segment performance and allocates resources based on segment operating income. Segment operating income represents income from continuing operations before interest income, interest expense, other income (expense), other financial costs and income tax. Effective in the fourth quarter of 2014, in connection with the Company's announcement to commit to a plan to divest all of the Company's operations in Asia Pacific and Africa, the Company reorganized its reportable segments as a result of a change to what the CODM uses to measure profitability and allocate resources. Accordingly, in the fourth quarter of 2014, the Company presented four geographic operating and reportable segments — North America, Europe, Latin America, and Africa/Asia Pacific. As a result of the change in how the CODM manages and allocates resources, there was a change in how certain corporate costs are allocated to better align with how the CODM allocates resources. Previously, the amounts were evenly allocated across each reportable segment and the amounts are now allocated based on a percentage of revenue at each segment. This change in the allocation method is reflected in the results below retrospectively. The Company’s operating and reportable segments align with the structure of the Company’s internal management organization. All four segments engage in the development, design, manufacturing, marketing and distribution of copper, aluminum, and fiber optic communication, construction, electric utility and electrical infrastructure wire and cable products. In addition to the above products, the North America, Latin America and Africa/Asia Pacific segments manufacture and distribute rod mill wire and cable products.

Net revenues as shown below represent sales to external customers for each segment. Intersegment sales have been eliminated. In the three and six months ended July 3, 2015, intersegment sales were $10.8 million and $17.8 million in North America, $1.8 million and $14.3 million in Europe, and $5.2 million and $9.5 million in Latin America. In the three and six months ended June 27, 2014, intersegment sales were $8.5 million and $17.8 million in North America, $17.4 million and $34.7 million in Europe, and $11.0 million and $19.8 million in Latin America.

Summarized financial information for the Company’s reportable segments reported in continuing operations for the three and six fiscal months ended July 3, 2015 and June 27, 2014 is as follows:

24
Tables of Contents


 
Three Fiscal Months Ended
 
Six Fiscal Months Ended
(in millions)
July 3, 2015
 
June 27, 2014
 
July 3, 2015
 
June 27, 2014
Net Sales:
 
 
 
 
 
 
 
North America
$
609.4

 
$
645.3

 
$
1,247.6

 
$
1,240.0

Europe
250.9

 
349.7

 
512.7

 
672.8

Latin America
188.8

 
302.3

 
394.1

 
591.0

Africa/Asia Pacific
64.3

 
90.0

 
130.1

 
185.0

Total
$
1,113.4

 
$
1,387.3

 
$
2,284.5

 
$
2,688.8

 Segment Operating Income (Loss):
 
 
 
 
 
 
 
North America
$
30.9

 
$
18.9

 
$
60.5

 
$
51.6

Europe
(1.2
)
 
14.9

 
4.7

 
4.6

Latin America
(2.5
)
 
(15.2
)
 
(18.4
)
 
(180.2
)
Africa/Asia Pacific
(3.5
)
 
4.2

 
(6.9
)
 
(9.8
)
Total
$
23.7

 
$
22.8

 
$
39.9

 
$
(133.8
)
(in millions)
July 3, 2015
 
December 31, 2014
Total Assets:
 
 
 
North America
$
1,153.8

 
$
1,220.3

Europe
756.7

 
751.4

Latin America
561.1

 
656.6

Africa/Asia Pacific
618.5

 
738.4

Total
$
3,090.1

 
$
3,366.7

The total assets of the discontinued operations as of July 3, 2015 and December 31, 2014 are $358.7 million and $433.7 million, respectively. The total assets of the discontinued operations are included in the Africa/Asia Pacific segment above.

25
Table of Contents

18.
Commitments and Contingencies
Environmental matters
We are subject to a variety of federal, state, local and foreign laws and regulations covering the storage, handling, emission and discharge of materials into the environment, including CERCLA, the Clean Water Act, the Clean Air Act (including the 1990 amendments) and the Resource Conservation and Recovery Act.
Our subsidiaries in the United States have been identified as potentially responsible parties with respect to several sites designated for cleanup under CERCLA or similar state laws, which impose liability for cleanup of certain waste sites and for related natural resource damages without regard to fault or the legality of waste generation or disposal. Persons liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although CERCLA imposes joint and several liability on all potentially responsible parties, in application, the potentially responsible parties typically allocate the investigation and cleanup costs based upon, among other things, the volume of waste contributed by each potentially responsible party.
Settlements can often be achieved through negotiations with the appropriate environmental agency or the other potentially responsible parties. Potentially responsible parties that contributed small amounts of waste (typically less than 1% of the waste) are often given the opportunity to settle as “de minimus” parties, resolving their liability for a particular site. We do not own or operate any of the waste sites with respect to which we have been named as a potentially responsible party by the government. Based on our review and other factors, we believe that costs relating to environmental clean-up at these sites will not have a material adverse effect on our results of operations, cash flows or financial position.
At July 3, 2015 and December 31, 2014, we had an accrued liability of approximately $3.9 million and $4.5 million, respectively, for various environmental-related liabilities to the extent costs are known or can be reasonably estimated as a liability. While it is difficult to estimate future environmental-related liabilities accurately, we do not currently anticipate any material adverse effect on our results of operations, financial position or cash flows as a result of compliance with federal, state, local or foreign environmental laws or regulations or cleanup costs of the sites discussed above.
Asbestos litigation
We have been a defendant in asbestos litigation for the past 27 years. Our subsidiaries have been named as defendants in lawsuits alleging exposure to asbestos in products manufactured by us. As of July 3, 2015, we were a defendant in approximately 532 cases brought in state and federal courts throughout the United States. In the six months ended July 3, 2015, 49 asbestos cases were brought against us. In the calendar year 2014, 104 asbestos cases were brought against us. In the last 27 years, we have had no cases proceed to verdict. In many of the cases, we were dismissed as a defendant before trial for lack of product identification. As of July 3, 2015, 50,637 asbestos cases have been dismissed. In the six months ended July 3, 2015, 2,750 asbestos cases were dismissed. As of December 31, 2014, 47,887 cases were dismissed. With regards to the approximately 532 remaining pending cases, we are aggressively defending these cases based upon either lack of product identification as to whether we manufactured asbestos-containing product and/or lack of exposure to asbestos dust from the use of our product.
As of July 3, 2015, 0 pending lawsuits were brought on behalf of plaintiffs by a single admiralty law firm (“MARDOC”) and seek unspecified damages. Plaintiffs in the MARDOC cases generally allege that they formerly worked in the maritime industry and sustained asbestos-related injuries from products that General Cable ceased manufacturing in the mid-1970s. The MARDOC cases are managed and supervised by a federal judge in the United States District Court for the Eastern District of Pennsylvania (“District Court”) by reason of a transfer by the judicial panel on Multidistrict Litigation (“MDL”). In September 2014, upon receipt from the MDL Court of a current statistical report listing numbers of outstanding cases as well as a list identifying outstanding Maritime/MARDOC cases by plaintiff name, General Cable recorded a dismissal of 25,759 cases reducing its number of pending Maritime/MARDOC cases to 2,679. As of July 3, 2015, upon further review of the outstanding cases, General Cable recorded a dismissal of the remaining 2,679 Maritime/MARDOC cases.
For cases outside the MDL as of July 3, 2015, plaintiffs have asserted monetary damages in 224 cases. In 99 of these cases, plaintiffs allege only damages in excess of some dollar amount (about $523 thousand per plaintiff); in these cases there are no claims for specific dollar amounts requested as to any defendant. In the 124 other cases pending in state and federal district courts (outside the MDL), plaintiffs seek approximately $470 million in damages from as many as 50 defendants. In one case, plaintiffs have asserted damages related to General Cable in the amount of $10 million. In addition, in relation to these 224 cases, there are claims of $321 million in punitiv