ANIXTER INTERNATIONAL INC, 10-K, 1997-03-19

ANIXTER INTERNATIONAL INC
10-K, 1997-03-19
ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934................FOR THE FISCAL YEAR ENDED JANUARY 3, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

COMMISSION FILE NUMBER 1-5989
ANIXTER INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

94-1658138
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

2 NORTH RIVERSIDE PLAZA
SUITE 1900
CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 902-1515

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Stock, $1 par value New York Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE.
------------------------

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the shares of Registrant's Common Stock, $1 par
value, held by nonaffiliates of Registrant was approximately $500,000,000 as of
March 14, 1997.

At March 14, 1997, 47,611,662 shares of Registrant's Common Stock, $1 par value,
were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Certain portions of the Registrant's Proxy Statement for the 1997 Annual Meeting
of Stockholders of Anixter International Inc. are incorporated by reference into
Part III. This document consists of 54 pages. Exhibit List begins on page 34.
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<PAGE> 2

TABLE OF CONTENTS

PART I.

<S> <C> <C>
Item 1. Business of the Company..................................... 3
Item 2. Properties.................................................. 5
Item 3. Legal Proceedings........................................... 5
Item 4. Submission of Matters to a Vote of Security Holders......... 5
Executive Officers of the Registrant........................ 5

PART II.
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters....................................... 7
Item 6. Selected Financial Data..................................... 8
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 9
Item 8. Consolidated Financial Statements and Supplementary Data.... 14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 14

PART III.
Item 10. Directors and Executive Officers of the Registrant.......... 33
Item 11. Executive Compensation...................................... 33
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 33
Item 13. Certain Relationships and Related Transactions.............. 33

PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 33
</TABLE>

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PART I

ITEM 1. BUSINESS OF THE COMPANY.

GENERAL

Anixter International Inc. (the "Company"), formerly known as Itel
Corporation, which was incorporated in Delaware in 1967, is engaged in providing
networking and cabling solutions for private network infrastructure requirements
through Anixter Inc. and its subsidiaries (collectively "Anixter"). As of
January 3, 1997 the Company also owned approximately 31% of ANTEC Corporation
and its subsidiaries (collectively "ANTEC"), a broadband communications
technology company. This percentage was reduced to approximately 19% in February
1997 by the issuance of additional stock by ANTEC in connection with a merger.

In 1996 the Company changed its year end from a calendar year ending
December 31 to the Friday nearest December 31. Fiscal year 1996 ended on January
3, 1997. This change does not have a significant effect on the results of
operations for the year ended January 3, 1997.

In 1995 the Company largely completed its strategy of selling its non-core
businesses and investments including the sale of its 9% investment in the common
stock of Santa Fe Energy Resources, Inc. ("Energy").

In 1994, the Company sold its remaining interests in its rail car leasing
business conducted by Itel Rail Corporation ("Rail"). In 1994, 1993 and 1992,
the Company sold all of its other transportation services assets. For
information about the 1994 and 1993 sales see Item 7--Financial Liquidity and
Capital Resources--Asset Sales and Other Dispositions and Note 3 of the Notes to
the Consolidated Financial Statements.

In 1994, the Company sold its 9% investment in the common stock of Catellus
Development Corporation ("Catellus").

At January 3, 1997, the Company and its subsidiaries employed approximately
5,600 persons. For information on segment and geographic data see Note 15 of the
Notes to the Consolidated Financial Statements.

OPERATIONS

Anixter is a leading supplier of wiring systems, networking and
internetworking products for voice, data and video networks and electrical power
applications in North America, Europe, Asia and Latin America. Anixter stocks
and/or sells a full line of these products from a network of 86 locations in the
United States, 20 in Canada, 14 in the United Kingdom, 35 in Continental Europe,
13 in Latin America, 6 in Australia, and 14 in Asia. Anixter sells approximately
80,000 products to over 80,000 active customers and works with over 2,000
suppliers. Its customers include international, national, regional and local
companies that are end users of these products and engage in manufacturing,
communications, finance, education, health care, transportation, utilities and
government. Also, Anixter sells products to resellers such as contractors,
installers, system integrators, value added resellers, architects, engineers and
wholesale distributors. The average order size is about $1,700.

The products sold by Anixter include communication (voice, data and video)
products used to connect personal computers, peripheral equipment, mainframe
equipment and various networks to each other. The products include an assortment
of transmission media (copper and fiber optic cable) and components, as well as
active data components for networking applications. Anixter sells products that
are incorporated in local area networks ("LANs"), and the internetworking of
LANs to form wide area networks ("WANs"). Anixter's products also include
electrical wiring systems products used for the transmission of electrical
energy and control/monitoring of industrial processes.

Increasingly, the Company's end user customer base is seeking complete
solutions to their network infrastructure needs as opposed to just purchasing
networking products. Therefore, in some circumstances Anixter is providing
network design advice through its sales engineers prior to major sales
commitments as well as project management, staging and configuration during
customer project implementation, customer training and installation of
networking products. On a post-sale basis Anixter provides network trouble

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shooting, maintenance and warranty services. Anixter service offerings do not
include cable system installation, application software development or the
provision of terminal devices.

Prior to 1989, Anixter's operations were primarily limited to North America
and the United Kingdom. In 1989, Anixter made a major commitment to expand its
operations into the international voice, data and video communications markets.
Since then, Anixter has opened businesses throughout Western and Central Europe
and in significant markets in the Pacific Rim (other than Japan and Korea) and
Latin America. While most of the European businesses have achieved operating
profits, the Pacific Rim and Latin American expansion programs are considered to
be in the start-up mode.

An important element of Anixter's business strategy is to develop and
maintain close relationships with its key suppliers, which include the world's
leading manufacturers of networking, communications cabling and electrical
wiring systems products. Such relationships stress joint product planning,
inventory management, technical support, advertising and marketing. In support
of this strategy, Anixter does not compete with its suppliers in product design
or manufacturing activities. Approximately 45% of the Company's purchases in
1996 were from its five largest suppliers.

Anixter's ability to cost effectively serve its customers' needs is
possible through its proprietary computer system which connects all of its
warehouses and sales offices throughout the world. The system is designed for
sales support, order entry, inventory status, order tracking, credit review and
material management. In addition, the Company operates a series of large modern
hub warehouses in key distribution centers in North America, Europe, Asia and
Latin America which provide for cost effective and reliable storage and delivery
of products to its customers. The hub warehouses store the bulk of the Company's
inventory and are to a certain degree specialized by broad product category.
Some smaller warehouses are also maintained to provide for the local pick up
needs of customers in certain cities. Anixter has also developed close
relationships with certain freight, package delivery and courier services to
minimize transit times between its facilities and customer locations.

The combination of its information systems, distribution network and
delivery partnerships allows Anixter to provide a high level of customer
services while maintaining a reasonable level of investment in inventory and
facilities.

Anixter competes with distributors and manufacturers who sell products
directly or through existing distribution channels to end users or other
resellers. In addition, Anixter's future performance could be subject to
economic downturns and possibly rapid changes in applicable technologies. To
guard against inventory obsolescence, Anixter has negotiated various return and
price protection agreements with its key suppliers. Although Anixter's
relationships with its suppliers are good, the loss of a major supplier could
have a temporary adverse effect on Anixter's business but would not have a
lasting impact since comparable products are available from alternate sources.

INVESTMENT IN ANTEC

As of January 3, 1997 and December 31, 1995, the Company's interest in
ANTEC was approximately 31%. Effective January 1, 1994, the Company reflects
ANTEC as an equity investment in the consolidated financial statements. As of
January 3, 1997, the market value of the Company's 7,113,500 shares of ANTEC was
$74.2 million compared with a carrying value of $77.8 million. The Company views
ANTEC as a long-term investment, subject to change should future circumstances
warrant.

On February 6, 1997, a wholly-owned subsidiary of ANTEC was merged into TSX
Corporation. Under the terms of the transaction, TSX Corporation shareholders
received one share of ANTEC Corporation stock for each share of TSX Corporation
stock that they owned. The transaction was accounted for as a pooling of
interests. Upon consummation of this transaction the Company's ownership
interest in ANTEC was reduced to approximately 19% which will result in a
cessation of equity method accounting for this investment after February 6,
1997.

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ANTEC is a communications technology company, specializing in the design
and engineering of hybrid fiber/coax (HFC) broadband networks and the
manufacturing, materials management and distribution of products for these
networks.

ASSETS HELD FOR SALE

The principal assets held for sale at January 3, 1997 are those of the
finance business of Signal Capital which have been classified as assets held for
sale in the Company's consolidated financial statements since its acquisition in
1988. Subsequent to the purchase, the Company has sold or liquidated $1.4
billion of the portfolio through January 3, 1997. The $21.4 million net
portfolio at January 3, 1997 represents approximately 2% of the original
acquired Signal Capital portfolio. The Company continues to liquidate the
acquired Signal Capital portfolio in an orderly manner that maximizes its value
to shareholders and no material amounts of new loans or investments are being
made by Signal Capital.

ITEM 2. PROPERTIES.

Most of the Company's facilities are leased.

ITEM 3. LEGAL PROCEEDINGS.

In the ordinary course of business, the Company and its subsidiaries became
involved as plaintiffs or defendants in various legal proceedings. The claims
and counterclaims in such litigation, including those for punitive damages,
individually in certain cases and in the aggregate, involve amounts which may be
material. However, it is the opinion of the Company's management, based upon the
advice of its counsel, that the ultimate disposition of pending litigation will
not be material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

During the fourth quarter of 1996, no matters were submitted to a vote of
the security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table lists the name, age as of March 19, 1997, position,
offices and certain other information with respect to the executive officers of
the Company. The term of office of each executive officer will expire upon the
appointment of his successor by the Board of Directors.

<TABLE>
<S> <C>
Rod F. Dammeyer, 56............... Chief Executive Officer, President and Director of the
Company since January 1993; President and Director of the
Company from 1985 to 1993.

John A. Dul, 36................... Assistant Secretary of the Company since May 1995; General
Counsel and Secretary of Anixter since January 1996;
Associate General Counsel and Secretary from July 1994 to
January 1996; Associate General Counsel and Assistant
Secretary from May 1993 to July 1994; Associate General
Counsel from January 1990 to May 1993.

James M. Froisland, 46............ Vice President--Controller of the Company since February
1996; Vice President--Corporate Controller of Budget Rent a
Car Corporation from March 1992 to February 1996; Vice
President Finance and Chief Financial Officer of Allsteel
Inc., from August 1990 to March 1992; Corporate Controller
and Director of Management Information Systems of the
Haagen-Dazs Company, a subsidiary of The Pillsbury Company
from October 1988 to August 1990.
</TABLE>

5
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<TABLE>
<S> <C>
Robert W. Grubbs Jr., 40.......... President and Chief Executive Officer of Anixter since July
1994; President Anixter U.S.A. from August 1993 to July
1994; Executive Vice President, Sales and Marketing of
Anixter from August 1992 to August 1993; Senior Vice
President Southeastern Group of Anixter from May 1989 to
August 1992.

James E. Knox, 59................. Senior Vice President, General Counsel and Secretary of the
Company since 1986.

Dennis J. Letham, 45.............. Chief Financial Officer, Senior Vice President--Finance of
the Company since January 1995; Chief Financial Officer,
Executive Vice President of Anixter since July 1993; Chief
Financial Officer, Vice President of National Intergroup,
Inc. from March 1991 to July 1993; Chief Financial Officer,
Senior Vice President of FoxMeyer, Inc from September 1990
to July 1993; Vice President--Controller of National
Intergroup, Inc. from 1989 to March 1991.

James A. Loudon, 53............... Vice President--Treasurer of the Company and Anixter since
February 1996; Vice President--Controller of the Company
from March 1995 to February 1996; Vice President--Controller
of Anixter from January 1994 to February 1996; Vice
President--Treasurer of Anixter from February, 1988 to
January, 1994.

Philip F. Meno, 38................ Vice President--Taxes of the Company since May 1993;
Director of Taxes from January 1990 to May 1993; Tax Manager
from 1986 to January 1990.

Samuel Zell, 55................... Chairman of the Board of Directors of the Company since
January 1993; Chairman of the Board of Directors and Chief
Executive Officer of the Company from 1985 to 1993.
</TABLE>
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PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.

A. MARKET INFORMATION

Anixter International Inc.'s Common Stock is traded on the New York Stock
Exchange under the symbol AXE.

B. STOCK PRICES

The following table sets forth the high and low sales prices for the Common
Stock on the NYSE.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1995
First Quarter.......................................... $19 5/16 $16 3/4
Second Quarter......................................... 20 3/16 17 1/4
Third Quarter.......................................... 22 1/16 18 9/16
Fourth Quarter......................................... 20 7/8 16 3/4

1996
First Quarter.......................................... $20 $16
Second Quarter......................................... 19 1/4 14 7/8
Third Quarter.......................................... 16 1/8 12 5/8
Fourth Quarter......................................... 17 7/8 13 3/8

1997
First Quarter (through March 14, 1997)................. $17 3/4 $13
</TABLE>

C. DIVIDENDS ON COMMON STOCK

The Company has not paid cash dividends on its Common Stock since 1979. On
August 10, 1995, the Company's Board of Directors authorized a two-for-one stock
split in the form of a stock dividend paid October 25, 1995, to stockholders of
record September 22, 1995. All share and per share data have been adjusted to
reflect this split.

D. NUMBER OF HOLDERS OF COMMON STOCK

There were approximately 5,700 holders of record of the Common Stock as of
March 14, 1997.

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ITEM 6. SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------
DECEMBER 31,
JANUARY 3, -----------------------------------------
1997 1995 1994 1993 1992
---------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Results of operations(a):
Revenues--Anixter..................................... $2,475.3 $2,194.8 $1,732.6 $1,328.6 $1,163.6
--ANTEC....................................... -- -- -- 427.6 301.0
-------- -------- -------- -------- --------
Consolidated revenues................................. $2,475.3 $2,194.8 $1,732.6 $1,756.2 $1,464.6
======== ======== ======== ======== ========
Operating income--Anixter and all other............... $ 88.4 $ 99.6 $ 69.8 $ 45.8 $ 30.5
--ANTEC.............................. -- -- -- 22.4 12.1
-------- -------- -------- -------- --------
Consolidated operating income......................... $ 88.4 $ 99.6 $ 69.8 $ 68.2 $ 42.6
======== ======== ======== ======== ========
Interest expense and other, net....................... $ (27.7) $ (21.6) $ (27.1) $ (58.9) $ (77.9)
Equity in income (loss) of ANTEC...................... 4.1 (.6) 7.9 -- --
Non-recurring items, net(b)........................... -- -- 59.0 71.8 --
Marketable equity securities losses, principally
write-downs(c)...................................... -- (3.0) (39.6) (25.0) (25.0)
Income (loss) from continuing operations.............. 36.1 39.1 46.2 28.8 (45.8)
Income (loss) from discontinued operations............ -- -- 200.7 (14.0) (38.1)
Extraordinary items, net(d)........................... -- -- -- (16.0) (20.4)
Net income (loss)..................................... $ 36.1 $ 39.1 $ 246.9 $ (1.2) $ (104.3)

Income (loss) per common and common equivalent
share(g):
Continuing operations............................. $ .73 $ .71 $ .72 $ .43 $ (.89)
Before extraordinary items........................ -- -- 3.85 .20 (1.55)
Net income (loss)................................. .73 .71 3.85 (.07) (1.90)
Financial position at year end(a):
Total assets.......................................... $1,261.0 $1,184.7 $1,110.9 $1,380.6 $1,436.2
Total debt............................................ 468.4 333.7 280.5 494.8 725.6
Stockholders' equity(e)(f)............................ 435.5 449.0 543.9 405.3 367.3
Book value per common and common equivalent
share(f)(g)......................................... $ 9.07 $ 8.77 $ 9.25 $ 6.14 $ 5.05
Weighted average common and common equivalent
shares(g)........................................... 49,717 55,410 64,090 60,264 58,170
</TABLE>

- - ---------------
Notes:

(a) Due to the 1994 sale of 4.0 million shares of ANTEC (see Note 1 of the Notes
to the Consolidated Financial Statements), all 1996, 1995 and 1994 financial
information reflects ANTEC as an equity investment. All prior financial
information reflects ANTEC as a consolidated subsidiary of the Company.

(b) The non-recurring items in 1994 include a $48.2 million pre-tax gain on the
May 1994 public offering of shares of common stock of ANTEC and a $10.8
million pre-tax gain relating to ANTEC's issuance of common stock in
connection with an acquisition in November 1994. Non-recurring items in 1993
principally include an $84.5 million pre-tax gain on the 1993 initial public
offering of shares of common stock of ANTEC and a $6.4 million pre-tax gain
on other investments offset by a pre-tax loss of approximately $19.1 million
relating to the liquidation of the Company's equity investment in Q-TEL (see
Note 4 of the Notes to the Consolidated Financial Statements).

(c) In 1994, 1993 and 1992, the Company wrote down the value of its investments
in marketable equity securities by $34.4 million, $25.0 million and $25.0
million, respectively. The remaining $5.2 million pre-tax charge in 1994
relates to the loss on sale of the Company's investment in Catellus. The
remaining marketable securities were sold in 1995 resulting in a pre-tax
loss of $3 million.

(d) Extraordinary items in 1993 and 1992 represent the gain/(loss), net of
related income taxes, on early extinguishment of senior and subordinated
debt at the Company and its subsidiaries.

(e) Stockholders' equity reflects treasury stock purchases of $75.5 million,
$129.2 million, $138.9 million, $.3 million and $114.3 million in 1996,
1995, 1994, 1993 and 1992, respectively. No dividends on common stock were
declared or paid during any of the periods shown.

(f) Stockholders' equity includes unrealized losses on marketable equity
securities available-for-sale, net of deferred income tax benefit of $3.9
million, $23.7 million and $49.1 million at December 31, 1994, 1993 and
1992, respectively. Stockholders' equity at December 31, 1992 included
approximately $83 million of Series C convertible preferred stock which was
converted into 3.8 million shares of Common Stock in 1993.

(g) All share and per share data has been adjusted to reflect the dividend paid
in the form of a two-for-one stock split on October 25, 1995.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Asset Sales and Other Dispositions

Recapitalization Program: In 1990, the Company began a program of modifying
its capital structure by reducing certain senior and subordinated debt and
purchasing Common Stock. Over the last several years, the Company also
implemented a program of selling or otherwise monetizing certain assets to fund
the recapitalization program. Since the program began, the Company has used
proceeds to eliminate all debt at the holding company, temporarily reduce
borrowings at the subsidiary level and to repurchase approximately $795 million
of outstanding Common Stock. The financial liquidity and capital resources in
1996 and 1995 reflect the impact of the Company's recapitalization program.

Sale of Rail Car Leasing Business: In 1994, the Company sold its remaining
interest in its rail cars for an aggregate purchase price of $205.5 million
which was used to: (1) repay $150 million of the Corporate senior bank term loan
("Term Loan"); (2) pay the related income tax liability of approximately $25
million caused by the sale which resulted after utilization of the Company's NOL
and ITC carryforwards; and (3) other general corporate purposes including the
purchase of the Company's Common Stock.

ANTEC Public Offerings: In May 1994, the Company completed a public
offering of shares of common stock of ANTEC for approximately $83 million. As a
result of the ANTEC Offering, the Company's ownership of ANTEC common stock was
reduced from 53% to 33%. In addition, in November 1994, ANTEC issued
approximately 2.0 million shares of ANTEC common stock in connection with an
acquisition which lowered the Company's ownership to approximately 30%. In the
fourth quarter of 1995 the Company purchased .4 million shares of ANTEC stock
increasing its ownership to 31%. This percentage was reduced to approximately
19% in February 1997 by the issuance of additional stock by ANTEC in connection
with a merger.

Liquidation of Signal Capital: Signal Capital has been classified as assets
held for sale since its acquisition in 1988. Subsequent to the purchase, the
Company sold or liquidated $1.4 billion of the portfolio. The $21.4 million net
portfolio at January 3, 1997 represents approximately 2% of the original
acquired Signal Capital portfolio. Proceeds were used to repay indebtedness. The
Company continues to liquidate the acquired Signal Capital portfolio in an
orderly manner that maximizes its value to the Company's shareholders and no
material amounts of new loans or investments are being made.

Other Dispositions: In 1995 the Company sold its investment in Energy for
approximately $72.6 million. In 1994, the Company sold its investment in the
marketable equity securities of Catellus for approximately $47.8 million. In
1994, 1993 and 1992, the Company sold all of its other transportation services
assets. Proceeds from these other dispositions were used to reduce debt or to
purchase the Company's Common Stock.

Cash Flow

Year ended January 3, 1997: Consolidated net cash used by continuing
operating activities was ($39.8) million for the year ended January 3, 1997
compared to ($38.3) million in 1995. Cash used by continuing operating
activities increased primarily as a result of increased working capital
investment resulting from increased sales volume and a decrease in income from
continuing operations. Consolidated net cash used by investing activities was
($33.3) million in 1996 versus $108.7 million provided in 1995. Consolidated
investing activities in 1995 included approximately $72.6 million of proceeds
from the sale of the Company's investment in Energy. Cash from discontinued
operations, net was $11.1 million in 1996 versus $71.2 million in 1995.
Consolidated cash provided by net financing activities was $80.8 million for the
year ended 1996 in comparison to ($74.1) million used in 1995. The consolidated
net financing activities in 1996 and 1995 include $75.5 million and $129.2
million, respectively of treasury stock purchases and net increases in
borrowings of $161.1 million in 1996 versus $50.1 million in 1995.

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Year ended December 31, 1995: Consolidated net cash used by continuing
operating activities was ($38.3) million for the year ended December 31, 1995
compared to ($35.4) million in 1994. Cash used by continuing operating
activities increased due primarily to increased working capital investment
resulting from a 27% increased sales volume and a decrease in net income from
continuing operations partially offset by non-recurring items and marketable
equity security losses in 1994. Consolidated net cash provided by investing
activities was $108.7 million in 1995 versus $381.8 million in 1994.
Consolidated investing activities in 1995 include approximately $72.6 million of
proceeds from the sale of the Company's investment in Energy. Consolidated
investing activities in 1994 include approximately $82.8 million of proceeds
from the ANTEC Offering and approximately $60.3 million from the Company's sales
of Catellus and Q-TEL. Cash from discontinued operations, net was $71.2 million
in 1995 versus $262.5 million in 1994. Consolidated cash used for net financing
activities was ($74.1) million for the year ended 1995 in comparison to ($363.2)
million for the year ended 1994. 1994 included the paydown of a substantial
amount of subordinated debt. The consolidated net financing activities in 1995
and 1994 also include $129.2 million and $138.9 million, respectively of
treasury stock purchases. Discontinued operations in 1995 and 1994 include net
proceeds from the reduction of assets at Signal Capital of $67 million and $60
million, respectively and include net proceeds of $17 million and $10 million,
respectively from the sale of the Company's other transportation assets.
Discontinued operations in 1994 include net proceeds of $205.5 million from the
sale of the Company's remaining interest in its rail car leasing business.

Interest Expense: Consolidated net interest expense and other was $27.7
million, $21.6 million and $27.1 million for the years ended January 3, 1997 and
December 31, 1995 and 1994, respectively. The Company has entered into interest
rate agreements which effectively fix or cap, for a period of time, the interest
rate on a portion of its floating rate obligations. As a result, the interest
rate on approximately 85% of debt obligations at January 3, 1997 is fixed or
capped. The impact of interest rate swaps and caps on interest expense, net for
the years ended January 3, 1997 and December 31, 1995 and 1994, was to increase
interest expense by approximately $.9 million, $.9 million and $6.0 million,
respectively.

Financings

In November 1995, the Company terminated its $115 million senior bank term
loan facility. Effective with this termination, all existing financing
facilities are maintained by the operating subsidiaries of the Company.

In September 1996, the Company increased Anixter's secured domestic
revolving line of credit to $550 million, obtained a release of collateral
making the facility unsecured, lowered the interest rate spreads, and extended
the expiration to 2001.

In September, 1996 Anixter filed a shelf registration statement with the
Securities and Exchange Commission to offer from time to time up to $200 million
aggregate principal amount of unsecured notes. On September 17, 1996 Anixter
issued $100 million of these notes due September, 2003. The notes, which bear
interest at 8%, contain various restrictions with respect to secured borrowings
and are unconditionally guaranteed by the Company. Proceeds of the offering were
used to reduce the amount of debt outstanding under Anixter's revolving line of
credit.

At January 3, 1997, $230 million was available under the bank revolving
lines of credit at Anixter, of which $32 million was available to the Company
for general corporate purposes.

Debt Maturities and Repayments

In 1994, the Company repaid the entire $250 million term loan with proceeds
from the sale of the Company's rail car leasing business and the ANTEC Offering.
The term loan was originally obtained in December 1993 and was secured by the
Company's investments in the capital stock of Anixter, ANTEC and Signal Capital
and its investment in marketable securities.

In 1994, the Company retired the remaining $221 million of the face value
of subordinated debt at the Company.

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<PAGE> 11

NOL Carryforwards

As of January 3, 1997, the Company had no NOL or ITC carryforwards for
Federal income tax purposes due to the sale in 1994 of the Company's rail car
leasing business which exhausted virtually all carryforwards in 1994. Certain of
these carryforwards are currently being examined by the IRS and, therefore, may
still be subject to adjustment.

As a result of the 1995 sale of the Energy shares the Company generated a
capital loss of approximately $80 million, most of which was carried back and
offset against the 1994 gain on the Rail sale. This carryback generated cash
refunds of $12.2 million in 1996 and also caused $9.0 million of the ITC's
claimed in 1994 to be available for carryforward to 1995. Approximately $2.4
million of the ITC's claimed in 1994 expired as a result of the carryback of the
Energy loss.

In addition, at January 3, 1997, various foreign subsidiaries of the
Company had aggregate cumulative NOL carryforwards for foreign income tax
purposes of approximately $74.5 million which are subject to various tax
provisions of each respective country. Approximately $26.5 million of this
amount expires between 1997 and 2006 and $48.0 million of the amount has an
indefinite life.

The availability of tax benefits of NOL and ITC carryforwards to reduce the
Company's Federal income tax liability is subject to various limitations under
the Internal Revenue Code.

Liquidity Considerations and Other

Certain debt agreements entered into by the Company's operating
subsidiaries contain various restrictions including restrictions on payments to
the Company. Such restrictions have not had nor are expected to have an adverse
impact on the Company's ability to meet its cash obligations.

CAPITAL EXPENDITURES

Consolidated capital expenditures were $32.9 million, $31.3 million and
$17.2 million for 1996, 1995 and 1994, respectively.

RESULTS OF OPERATIONS

The Company has experienced increased revenues due to the continued growth
of the North American communications and electrical wire and cable businesses
and its continuing worldwide expansion. Anixter competes with distributors and
manufacturers who sell products directly or through existing distribution
channels to end users or other resellers. In addition, Anixter's future
performance could be affected by economic downturns and possible rapid changes
in applicable technologies.

The Company had a 31% investment in ANTEC at year end 1996 and 1995 and
views ANTEC as a long-term investment, subject to change should future
circumstances warrant. Consolidated results for 1996, 1995 and 1994 include
ANTEC as an equity investment in the results of operations.

Year ended January 3, 1997: Net income was $36.1 million in 1996 compared
with $39.1 million in 1995. The results for 1996 were negatively impacted as a
result of slower than expected sales growth and increased operating expenses as
further described below.

Revenues grew by 13% to $2.5 billion. The North American communications
business experienced 11% growth to $1.9 billion as compared to 23% in 1995. The
slower growth was attributed to the combination of disruptions caused by a
salesforce reorganization, substantial changes in industry wide availability
from manufacturers of certain teflon coated communication cables and an industry
wide slowing of shared media hub market growth. In Europe, sales of $478.2
million represented growth of 11% as compared to 35% in 1995. The slower growth
rates were principally attributable to efforts to build network integration
capabilities that compete with a number of our customers, the separation of the
salesforce to meet these efforts and the loss of business due to competition
with some of our customers in the network integration area.

11
<PAGE> 12

North American electrical wire and cable distribution revenues of $346.6
million represented a 10% increase as compared to 28% in 1995. Despite a 17%
volume increase, lower copper prices in much of 1996 were the principal factor
in the lower year over year sales growth. Asia Pacific and Latin America
revenues increased by a combined 43% to $137.7 million due to increased market
penetration and expansion within these territories. Revenues by major markets
are presented in the following table.

<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
North America............................................... $1,859.4 $1,669.3
Europe...................................................... 478.2 429.1
Asia and Latin America...................................... 137.7 96.4
-------- --------
$2,475.3 $2,194.8
======== ========
</TABLE>

In 1996, operating income declined to $88.4 million from $99.6 million in
1995. Gross margins remained constant at 25.2% in each year, therefore the drop
in operating earnings is attributable to operating expenses increases outpacing
revenue growth. In North America, $11.0 million was spent in excess of related
revenues to build our technical services capabilities in the form of our
Customer Service Center, staging facilities and network engineering staffs and
technical training. In Latin America, the initial startup of businesses in
Argentina, Brazil and Colombia resulted in operating losses of $5.9 million. In
Asia Pacific, the further staffing of businesses initiated in 1994 and 1995 and
the enhancement of the regional headquarters staff resulted in over 150 new
hires in 1996 which generated further start up losses of $14.6 million in 1996
compared to losses of $5.4 million in 1995. Lastly, approximately $19.8 million
was spent in the initiation of a network integration business in Europe in 1996.
These costs along with the disruption caused by the salesforce reorganization
and the loss of business which resulted from competition with some of our
customers reduced operating income from 1995. Operating income (loss) by major
markets is presented in the following table.

<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
North America.............................................. $105.7 $89.7
Europe..................................................... 2.8 17.6
Asia and Latin America..................................... (20.1) (7.7)
------ -----
$ 88.4 $99.6
====== =====
</TABLE>

Consolidated net interest expense rose to $27.7 million in 1996 from $21.6
million in 1995 as a result of higher working capital levels and the use of cash
from the sale of non operating assets to fund $76 million of share repurchases.
Overall costs of borrowings increased in September 1996 as $100 million of short
term borrowings, which had an average cost of 6.3% in 1996 was replaced with
seven year term debt at a cost of 8%.

The 1996 effective income tax rate was approximately 44% as compared with
approximately 47% in 1995. The effective tax rate exceeds the combined federal,
foreign and state rate of approximately 40% principally because of goodwill
amortization which is not a tax deductible expense, start up losses in some
foreign countries where there is no current year benefit for the losses, less
the effect of a reassessment, and adjustment of prior year tax accounts.

Year ended December 31, 1995: Income from continuing operations was $39.1
million in 1995 compared with $46.2 million in 1994. Results in 1994 include a
$48.2 million pre-tax gain on the ANTEC Offering and a $10.8 million pre-tax
gain relating to ANTEC's issuance of common stock in connection with an
acquisition in November 1994. Results of continuing operations in 1994 include
pre-tax charges associated with the sale and write down of marketable equity
securities of $39.6 million. Net income was $39.1 million and $246.9 million for
the years ended December 31, 1995 and 1994, respectively. Net income from 1995
results includes a ($.3) million after tax loss on the Company's equity interest
in ANTEC, due to the one-time pre-tax reorganization charge of $21.7 million
recorded in the third quarter by ANTEC, versus $7.9 million of income

12
<PAGE> 13

in 1994. In 1995, the Company also recorded a ($3.0) million loss associated
with the sale of its investment in marketable securities. Income from
discontinued operations in 1994 reflects a $202.0 million after-tax gain from
the sale of the Company's rail car leasing business.

Revenues in 1995 rose 27% to $2.2 billion resulting from the continued
growth of the North American business and the continuing penetration in Europe,
Asia, and Latin America. North America revenues in 1995 increased 23% to $1.7
billion due to strong demand for its communications products and focused
marketing efforts in its electrical wiring systems business. Europe revenues in
1995 increased to $429.1 million from $316.8 million due primarily to continued
expansion and increased market penetration, particularly in networking products,
across all geographic territories. Asia and Latin America revenues increased to
$96.4 million in 1995 due to increased market penetration, strong product demand
and expansion into new territories. Revenues by major markets are presented in
the following table.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994
-------- --------
(IN MILLIONS)
<S> <C> <C>
North America............................................. $1,669.3 $1,360.5
Europe.................................................... 429.1 316.8
Asia and Latin America.................................... 96.4 55.3
-------- --------
$2,194.8 $1,732.6
======== ========
</TABLE>

Operating income for 1995 increased 43% to $99.6 million due primarily to
significantly improved volume and earnings in North America. North America
operating income increased 36% to $89.7 million in 1995 due to volume related
economies of scale offset by increased spending for new service and logistics
initiatives. Europe operating income in 1995 increased 167% to $17.6 million
from $6.6 million due primarily to continued expansion and volume related
economies of scale. Asia and Latin America operating losses increased to ($7.7)
million from ($2.6) million in 1994 due to geographic expansion, new offices and
staff increases. Aggregate gross start-up losses in expansion markets, which
have yet to achieve profitable operations were $12.6 million through 1995.
Operating income (loss) by major markets is presented in the following table.

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------
1995 1994
----- -----
(IN MILLIONS)
<S> <C> <C>
North America............................................... $89.7 $65.8
Europe...................................................... 17.6 6.6
Asia and Latin America...................................... (7.7) (2.6)
----- -----
$99.6 $69.8
===== =====
</TABLE>

Consolidated net interest expense and other for 1995 declined to $21.6
million from $27.1 million in 1994 due to the extinguishment of high-cost
corporate debt from the monetization of the Company's non-core assets in the
first half of 1994 partially offset by the cost of funding the stock purchase
program and increased working capital borrowings.

The consolidated tax provision for the year ended December 31, 1995
reflects an effective tax rate of 47.4% based on pre-tax book income adjusted
for goodwill amortization and start up losses in certain international
businesses which are not currently deductible and for which no anticipated
future tax benefit has been recorded. The increase in the effective tax rate
from the prior year period is due to the absence in 1995 of certain
non-recurring tax benefits associated with the secondary offering of ANTEC which
occurred in 1994.

Impact of Inflation: Inflation has slowed in recent years and is currently
not an important determinant of Anixter's results of operations due, in part, to
rapid inventory turnover.

13
<PAGE> 14

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. 15
Consolidated Balance Sheets................................. 16
Consolidated Statements of Operations....................... 17
Consolidated Statements of Cash Flows....................... 18
Consolidated Statements of Stockholders' Equity............. 19
Notes to the Consolidated Financial Statements.............. 20
Summary Quarterly Financial Information (Unaudited)......... 32
</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

14
<PAGE> 15

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Anixter International Inc.

We have audited the accompanying consolidated balance sheets of Anixter
International Inc. as of January 3, 1997 and December 31, 1995, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended January 3, 1997. Our audits also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Anixter
International Inc. at January 3, 1997 and December 31, 1995, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended January 3, 1997, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

ERNST & YOUNG LLP

Chicago, Illinois
February 10, 1997

15
<PAGE> 16

ANIXTER INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents...................................... $ 18,200 $ 10,500
Accounts receivable (net of allowances for doubtful
accounts of $9,000 and $9,000, respectively)........... 441,100 400,000
Inventories, primarily finished goods..................... 397,300 364,100
Income taxes receivable................................... -- 8,300
Other assets.............................................. 11,900 6,400
---------- ----------
Total current assets.............................. 868,500 789,300
Property, primarily equipment, at cost...................... 128,400 97,400
Accumulated depreciation.................................... (66,800) (48,200)
---------- ----------
Net property...................................... 61,600 49,200
Goodwill (net of accumulated amortization of $57,600 and
$51,500, respectively).................................... 183,100 183,000
Assets held for sale, net................................... 44,000 42,800
Investment in ANTEC......................................... 77,800 73,700
Other assets................................................ 26,000 55,000
---------- ----------
$1,261,000 $1,193,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 209,200 $ 232,400
Accrued expenses.......................................... 97,100 99,500
Income taxes payable...................................... 7,200 --
---------- ----------
Total current liabilities......................... 313,500 331,900
Deferred income taxes....................................... 29,800 37,400
Other liabilities........................................... 7,600 11,200
Long-term debt.............................................. 468,400 333,700
---------- ----------
Total liabilities................................. 819,300 714,200
Minority interests.......................................... 6,200 6,400
Common stock repurchase commitment.......................... -- 23,400
Stockholders' equity:
Common stock--$1.00 par value, 100,000,000 shares
authorized, 48,006,614 and 52,488,090 shares issued and
outstanding............................................ 48,000 52,500
Capital surplus........................................... 57,100 99,900
Retained earnings......................................... 344,500 308,400
Cumulative translation adjustments........................ (14,100) (11,800)
---------- ----------
Total stockholders' equity........................ 435,500 449,000
---------- ----------
$1,261,000 $1,193,000
========== ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

16
<PAGE> 17

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------
DECEMBER 31,
JANUARY 3, -------------------------
1997 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Revenues.............................................. $ 2,475,300 $ 2,194,800 $ 1,732,600
Cost of operations:
Cost of sales....................................... (1,852,600) (1,641,100) (1,298,300)
Operating expenses.................................. (528,200) (448,100) (358,500)
Amortization of goodwill............................ (6,100) (6,000) (6,000)
----------- ----------- -----------
(2,386,900) (2,095,200) (1,662,800)
----------- ----------- -----------
Operating income...................................... 88,400 99,600 69,800
Other (expenses) income:
Interest expense.................................... (29,900) (24,800) (33,000)
Interest income and other........................... 2,200 3,200 5,900
Equity in income (loss) of ANTEC.................... 4,100 (600) 7,900
Non-recurring items, net............................ -- -- 59,000
Marketable equity securities losses, principally
write-downs...................................... -- (3,000) (39,600)
----------- ----------- -----------
Income from continuing operations
before income taxes................................. 64,800 74,400 70,000
Income tax expense.................................... (28,700) (35,300) (23,800)
----------- ----------- -----------
Income from continuing operations..................... 36,100 39,100 46,200
Income from discontinued operations
(net of related taxes).............................. -- -- 200,700
----------- ----------- -----------
Net income............................................ $ 36,100 $ 39,100 $ 246,900
=========== =========== ===========
Income per common and common equivalent share:
Continuing operations............................... $.73 $.71 $ .72
Net income.......................................... $.73 $.71 $3.85
=========== =========== ===========
</TABLE>

See accompanying notes to the consolidated financial statements.

17
<PAGE> 18

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------
DECEMBER 31,
JANUARY 3, -----------------------
1997 1995 1994
----------- --------- -----------
<S> <C> <C> <C>
Operating activities:
Income from continuing operations..................... $ 36,100 $ 39,100 $ 46,200
Adjustments to reconcile income from continuing
operations to net cash used by continuing operating
activities:
Depreciation..................................... 20,800 15,700 10,000
Amortization of goodwill......................... 6,100 6,000 6,000
Deferred income taxes............................ (4,800) 17,000 20,400
Non-recurring items, net......................... -- -- (59,000)
Marketable equity securities losses, principally
write-downs................................... -- 3,000 39,600
Non-cash financing expense....................... 1,000 800 3,900
Other, net....................................... (4,100) 3,500 (800)
Changes in assets and liabilities:
Accounts receivable........................... (39,500) (75,700) (99,100)
Inventories................................... (33,200) (88,300) (35,400)
Accounts payable and accrued expenses......... (19,100) 61,600 51,800
Other, net.................................... (3,100) (21,000) (19,000)
----------- --------- -----------
Net cash used by continuing operating
activities............................... (39,800) (38,300) (35,400)
----------- --------- -----------
Investing activities:
Sales of securities................................... -- 72,600 47,800
Purchases of property................................. (32,900) (31,300) (17,200)
Sale of and net receipts from ANTEC................... -- -- 82,800
Receipts from Q-TEL................................... -- -- 12,500
Proceeds from sales of discontinued operations, net... (400) 71,200 262,500
Other, net............................................ -- (3,800) (6,600)
----------- --------- -----------
Net cash provided (used) by investing
activities............................... (33,300) 108,700 381,800
----------- --------- -----------
Net cash provided (used) before financing activities.... (73,100) 70,400 346,400
Financing activities:
Borrowings............................................ 1,191,100 836,400 858,600
Reductions in borrowings.............................. (1,030,000) (786,300) (1,087,300)
Proceeds from issuance of common stock................ 4,800 8,300 8,600
Purchases of treasury stock........................... (75,500) (129,200) (138,900)
Other, net............................................ (9,600) (3,300) (4,200)
----------- --------- -----------
Net cash provided (used) in financing
activities............................... 80,800 (74,100) (363,200)
----------- --------- -----------
Cash provided (used).................................... 7,700 (3,700) (16,800)
Cash and equivalents at beginning of year............... 10,500 14,200 31,000
----------- --------- -----------
Cash and equivalents at end of year..................... $ 18,200 $ 10,500 $ 14,200
=========== ========= ===========
</TABLE>

See accompanying notes to the consolidated financial statements.

18
<PAGE> 19

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED JANUARY 3, 1997 AND DECEMBER 31, 1995 AND 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
CUMULATIVE UNREALIZED LOSSES
COMMON CAPITAL RETAINED TRANSLATION ON MARKETABLE
STOCK SURPLUS EARNINGS ADJUSTMENTS EQUITY SECURITIES TOTAL
------ --------- -------- ----------- ----------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993............ $33,000 $ 383,500 $ 22,400 $ (9,900) $(23,700) $ 405,300
Net income.............................. -- -- 246,900 -- -- 246,900
Issuance of common stock and other,
net................................... 500 13,800 -- -- -- 14,300
Foreign currency translation
adjustments........................... -- -- -- (200) -- (200)
Purchases and retirement of treasury
stock................................. (4,100) (134,800) -- -- -- (138,900)
Net change in unrealized losses on
marketable equity securities
available-for-sale.................... -- -- -- -- 16,500 16,500
------- --------- -------- -------- -------- ---------
Balance at December 31, 1994............ 29,400 262,500 269,300 (10,100) (7,200) 543,900
Net income.............................. -- -- 39,100 -- -- 39,100
Issuance of common stock................ 500 12,600 -- -- -- 13,100
Foreign currency translation
adjustments........................... -- -- -- (1,700) -- (1,700)
Purchases and retirement of treasury
stock................................. (4,200) (125,000) -- -- -- (129,200)
Common stock repurchase commitment...... -- (23,400) -- -- -- (23,400)
Two-for-one stock split................. 26,800 (26,800) -- -- -- --
Net change in unrealized losses on
marketable equity securities
available-for-sale.................... -- -- -- -- 7,200 7,200
------- --------- -------- -------- -------- ---------
Balance at December 31, 1995............ 52,500 99,900 308,400 (11,800) -- 449,000
Net income.............................. -- -- 36,100 -- -- 36,100
Issuance of common stock................ 200 4,600 -- -- -- 4,800
Foreign currency translation
adjustments........................... -- -- -- (2,300) -- (2,300)
Purchases and retirement of treasury
stock................................. (4,700) (47,400) -- -- -- (52,100)
------- --------- -------- -------- -------- ---------
Balance at January 3, 1997.............. $48,000 $ 57,100 $344,500 $(14,100) $ -- $ 435,500
======= ========= ======== ======== ======== =========
</TABLE>

See accompanying notes to the consolidated financial statements.

19
<PAGE> 20

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization: Anixter International Inc. (the "Company"), formerly known as
Itel Corporation, which was incorporated in Delaware in 1967, is engaged in
providing networking and cabling solutions for private network infrastructure
requirements through Anixter Inc. and its subsidiaries (collectively "Anixter").
As of January 3, 1997 the Company also owned approximately 31% of ANTEC
Corporation and its subsidiaries (collectively "ANTEC"), a broadband
communications technology company.

Consolidation: The consolidated financial statements include the accounts
of Anixter International Inc. and its majority-owned subsidiaries (collectively
"the Company") after elimination of intercompany transactions. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.

Basis of presentation: In 1996 the Company changed its year end from a
calendar year ending December 31 to the Friday nearest December 31. Fiscal year
1996 ended on January 3, 1997. This change does not have a significant effect on
the results of operations for the year ended January 3, 1997.

Reclassifications: Certain prior information has been reclassified to
conform to the 1996 presentation.

Cash and equivalents: The Company considers all highly liquid investments
with a purchased maturity of three months or less to be cash equivalents. The
carrying amount of cash and equivalents approximates fair value because of the
short maturity of those instruments.

Inventories: Inventories are valued principally at the lower of average,
approximating first-in, first-out, cost or market.

Depreciation: The Company provides for depreciation of property principally
on the straight-line basis over various useful lives including 3 to 10 years for
equipment and the term of the lease for leasehold improvements.

Goodwill: Goodwill relates to the excess of cost over the fair value of the
net tangible assets of businesses acquired. The Company at each balance sheet
date evaluates, for recognition of potential impairment, its recorded goodwill
against the current and undiscounted expected future operating income before
goodwill amortization expense of the entities to which goodwill relates.
Goodwill is amortized on a straight-line basis over 40 years.

Marketable equity securities available-for-sale: Realized losses on
dispositions of securities were determined using the average cost method.
Realized pre-tax losses, before related interest carrying costs, were ($3.0)
million and ($5.2) million in 1995 and 1994, respectively.

Investment in ANTEC: Dilution of the Company's ownership position in ANTEC
which results from the issuance of shares of common stock by ANTEC is treated as
if an equivalent percentage of ownership had been disposed of by the Company. To
the extent ANTEC issues shares of common stock at amounts per share in excess of
or less than the Company's average per share carrying value, gains or losses
from such changes in ownership are recorded in income when such issuances occur.
In May 1994, the Company sold 4.0 million shares of ANTEC common stock in a
public offering (the "ANTEC Offering"). As a result of the ANTEC Offering, the
Company's ownership of ANTEC common stock was reduced from 53% to 33%. In
addition, in November 1994, ANTEC issued approximately 2.0 million shares of
ANTEC common stock in connection with an acquisition which lowered the Company's
ownership to approximately 30%. In the fourth quarter of 1995 the Company
purchased .4 million additional shares of ANTEC stock increasing the ownership
to 31%. The Company reflects ANTEC as an equity investment. As of January 3,
1997, the market value of the Company's investment in ANTEC was $74.2 million.

Interest rate agreements: In addition to the fixed rate 8% debentures, the
Company has entered into interest rate agreements which effectively fix or cap,
for a period of time, the LIBOR component of the

20
<PAGE> 21

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

interest rate on a portion of its floating rate obligations. As a result, the
interest rate on approximately 85% and 67%, of debt obligations at January 3,
1997 and December 31, 1995, respectively, is fixed or capped. At January 3, 1997
and December 31, 1995, the Company had interest rate cap agreements outstanding
with notional amounts aggregating $100 million and $175 million, respectively.
These interest rate cap agreements effectively entitle the Company to receive
from the banks the amount by which the LIBOR component of the floating rate
interest payments exceeds 6.0% on $50 million and $125 million of its floating
rate debt, at January 3, 1997 and December 31, 1995, respectively, and on $50
million exceeding 7.5% at January 3, 1997 and December 31, 1995. The $2.3
million of premiums paid in 1995, for these interest rate cap agreements are
included in other assets and are being amortized to interest expense over the
life of the respective interest rate cap agreements which expire in 1997 and
1998. Payments received as a result of the interest rate cap agreements are
recognized as a reduction of interest expense. The carrying value of these
interest rate cap agreements is $.3 million and $1.0 million at January 3, 1997
and December 31, 1995, respectively. At January 3, 1997, the Company had an
interest rate swap agreement outstanding with a notional amount of $50 million.
This swap agreement obligates the Company to pay a fixed rate of 6.0% through
June 1998. The Company has three additional interest rate swap agreements with a
notional amount aggregating $100 million that obligate the Company to pay a
fixed rate of approximately 6.11% through July 2000. At January 3, 1997 the
Company also has one forward rate interest collar agreement with a notional
amount of $50 million. This interest rate agreement entitles the Company to
receive from the bank the amount by which the LIBOR component of the floating
rate interest payments exceed 6.50% and for the Company to pay the bank the
difference between 6.30% and the floating rate when interest rates fall below
5.30%. This interest rate collar matures in January 2002. The fair value of all
of the Company's interest rate agreements at January 3, 1997 and December 31,
1995, is $1.1 million and ($4.0) million, respectively. The fair value of
interest rate agreements is the estimated amount that the Company would receive
or pay to enter into the interest rate agreements at the reporting date, taking
into account current interest rates. The impact of interest rate agreements for
the years ended January 3, 1997 and December 31, 1995 and 1994 was to increase
interest expense by approximately $.9 million, $.9 million and $6.0 million,
respectively. The Company does not enter into interest rate transactions for
speculative purposes.

Foreign currency forward contracts: The Company has purchased short-term
foreign currency forward contracts to minimize the effect of fluctuating foreign
currencies on its reported income. The impact of these foreign currency forward
contracts on the income statement was insignificant in 1996, 1995 and 1994. The
forward contracts are revalued at current foreign exchange rates, with the
changes in valuation reflected directly in income. At January 3, 1997 and
December 31, 1995, the Company had approximately $45.7 million and $61.9
million, respectively, in foreign currency forward contracts outstanding.

Revenue recognition: Sales and related cost of sales are recognized
primarily upon shipment of products.

Advertising and sales promotion: Advertising and sales promotion costs are
expensed as incurred.

Income taxes: Provisions for income taxes include deferred taxes resulting
from temporary differences in determining income for financial and tax purposes
using the liability method. Such temporary differences result primarily from
differences in the carrying value of assets and liabilities.

Income per common share: Weighted average common and common equivalent
shares were 49,717,000, 55,410,000, and 64,090,000 for 1996, 1995, and 1994,
respectively. All share and per share data other than amounts displayed on the
balance sheets and consolidated statements of stockholders' equity have been
adjusted to reflect the two-for-one stock split in the form of a stock dividend,
paid October 25, 1995.

NOTE 2. SUPPLEMENTAL CASH FLOW INFORMATION

Continuing operations of the Company paid interest, of approximately $22.8
million, $24.0 million and $52.4 million for the years ended January 3, 1997 and
December 31, 1995 and 1994, respectively.

21
<PAGE> 22

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Approximately $18.1 million, $24.6 million and $27.8 million was paid for income
taxes for the years ended January 3, 1997 and December 31, 1995 and 1994,
respectively.

NOTE 3. DISCONTINUED AND ASSETS HELD FOR SALE

The finance business of Signal Capital Corporation ("Signal Capital") has
been included as assets held for sale since acquisition in 1988. Subsequent to
the purchase, the Company sold or liquidated $1.4 billion of the portfolio. The
$21.4 million net portfolio at January 3, 1997 represents approximately 2% of
the original acquired Signal Capital portfolio. Proceeds were used to repay
indebtedness and repurchase shares of the Company's common stock. The Company
continues to liquidate the acquired Signal Capital portfolio in an orderly
manner that maximizes its value to shareholders and no material amounts of new
loans or investments are being made by Signal Capital.

In 1994, the Company sold its remaining interests in its rail cars for an
aggregate purchase price of $205.5 million. The net gain on the sale of the
Company's interest in rail cars was approximately $202.0 million. The total cash
proceeds of $205.5 million were used to: (1) repay the $150 million Corporate
senior bank term loan ("Term Loan"); (2) pay the related income tax liability of
approximately $25 million caused by the sale which resulted after utilization of
the Company's net operating loss ("NOL") and investment tax credit ("ITC")
carryforwards; and (3) other general corporate purposes including the purchase
of the Company's common stock.

The results of operations of the rail car leasing business, the other
transportation services segment, other previously sold businesses and the
results of the acquired Signal Capital portfolio have been included in
discontinued operations net of allocated corporate interest expense. Allocated
corporate interest expense amounted to $6.3 million for the year ended December
31, 1994. No interest was allocated in 1996 and 1995. Summarized financial
results of discontinued operations were as follows:

<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------
DECEMBER 31,
JANUARY 3, ---------------
1997 1995 1994
---------- ----- ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues:
Signal Capital............................................ $ 4.9 $ 3.9 $ 2.0
Rail car leasing.......................................... -- -- 89.3
Other discontinued operations, principally transportation
services............................................... -- -- .6
----- ----- ------
$ 4.9 $ 3.9 $ 91.9
===== ===== ======
Operating income (loss):
Signal Capital............................................ $(4.8) $ 3.0 $ 4.2
Rail car leasing.......................................... -- -- 52.3
Other discontinued operations, principally transportation
services............................................... 4.8 (3.0) .5
----- ----- ------
$ -- $ -- $ 57.0
===== ===== ======
Loss from discontinued operations before gain on sales (net
of related taxes)......................................... $ -- $ -- $ (1.3)
Gain on sales (net of related taxes)........................ -- -- 202.0
----- ----- ------
Income from discontinued operations (net of related tax
benefits of $101.1 million in 1994)....................... $ -- $ -- $200.7
===== ===== ======
</TABLE>

The composition of remaining assets held for sale at January 3, 1997 and
December 31, 1995 consisted primarily of finance receivables.

22
<PAGE> 23

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 4. NON-RECURRING ITEMS

Non-recurring items in 1994 reflect a $48.2 million pre-tax gain on the
ANTEC Offering relating to the May 1994 public offering of shares of common
stock of ANTEC. The Company sold 4.0 million shares of ANTEC common stock at
$21.75 per share. Net proceeds from the ANTEC Offering were approximately $83
million. Non-recurring items in 1994 also reflect a $10.8 million pre-tax gain
relating to ANTEC's issuance of approximately 2.0 million shares of ANTEC common
stock in connection with an acquisition in November 1994. The Company provided
income taxes relating to the recognized pre-tax book gains.

NOTE 5. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.

The Company has an approximately 99% ownership interest in Anixter Inc. at
January 3, 1997 and December 31, 1995 which is included in the consolidated
financial statements of the Company. The following summarizes the financial
information for Anixter Inc.

ANIXTER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 29,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Current assets........................................... $ 857.7 $ 777.9
Property, net............................................ 61.6 49.2
Goodwill................................................. 183.1 183.0
Other assets............................................. 34.1 28.7
-------- --------
$1,136.5 $1,038.8
======== ========
Liabilities and Stockholders' Equity:
Current liabilities...................................... $ 304.0 $ 330.2
Other liabilities........................................ 11.4 12.9
Long-term debt........................................... 468.4 309.4
Subordinated notes payable to parent..................... 29.0 85.0
Stockholders' equity..................................... 323.7 301.3
-------- --------
$1,136.5 $1,038.8
======== ========
</TABLE>

ANIXTER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED
JANUARY 3, DECEMBER 29,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
Revenues................................................... $2,475.3 $2,194.8
======== ========
Operating income........................................... $ 87.1 $ 103.1
======== ========
Income before income tax expense........................... $ 56.9 $ 78.7
======== ========
Net income (loss).......................................... $ 23.4 $ 39.4
======== ========
</TABLE>

23
<PAGE> 24

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6. SUMMARIZED FINANCIAL INFORMATION OF ANTEC

The Company has an approximately 31% ownership interest in ANTEC at January
3, 1997 and December 31, 1995 and accounts for ANTEC under the equity method.
The following summarizes the financial information for ANTEC:

ANTEC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1996 1995
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Assets:
Current assets.......................................... $225.8 $232.2
Property, net........................................... 25.5 25.9
Goodwill................................................ 167.1 171.8
Other assets............................................ 18.8 27.0
------ ------
$437.2 $456.9
====== ======
Liabilities and Stockholders' Equity:
Current liabilities..................................... $ 82.0 $101.8
Long-term debt.......................................... 102.7 117.9
Stockholders' equity.................................... 252.5 237.2
------ ------
$437.2 $456.9
====== ======
</TABLE>

ANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1996 1995
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Revenues.................................................. $604.4 $658.2
====== ======
Operating income.......................................... $ 31.7 $ 9.7
====== ======
Income (loss) before income tax expense................... $ 26.8 $ (1.3)
====== ======
Net income (loss)......................................... $ 13.5 $ (3.6)
====== ======
</TABLE>

Operating income in 1995 includes a $21.7 million one-time reorganization
charge recorded by ANTEC in the third quarter.

On February 6, 1997 a wholly-owned subsidiary of ANTEC was merged into TSX
Corporation. Under the terms of the transaction, TSX Corporation shareholders
received one share of ANTEC Corporation stock for each share of TSX Corporation
stock that they owned. The transaction was accounted for as a pooling of
interests. Upon consummation of this transaction the Company's ownership
interest in ANTEC was reduced to approximately 19% which will result in a
cessation of equity method accounting for this investment after February 6,
1997.

24
<PAGE> 25

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7. ACCRUED EXPENSES

Accrued expenses consists of the following:

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
Interest.................................................. $ 4.9 $ 5.6
Wages, salaries and related............................... 50.9 44.0
Taxes other than income................................... 10.4 12.5
Other..................................................... 30.9 37.4
----- -----
$97.1 $99.5
===== =====
</TABLE>

NOTE 8. DEBT

Debt is summarized below:

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
Bank revolving lines of credit............................ $368.4 $309.4
8% notes.................................................. 100.0 --
Other..................................................... -- 24.3
------ ------
Total debt........................................... $468.4 $333.7
====== ======
</TABLE>

Anixter has various revolving bank lines of credit worldwide which provide
for up to $598 million of borrowings. At January 3, 1997, approximately $368
million was borrowed and $230 million was available under the bank revolving
lines of credit at Anixter, of which $32 million was available for general
corporate purposes. These lines of credit reduce or mature at various dates from
1998 through 2001. The $550 million domestic revolving line of credit matures in
2001. Floating and fixed interest rate options, based on the prime or LIBOR
rate, are available under these facilities and the weighted average interest
rate at January 3, 1997 for bank revolving lines of credit was 5.8%. Facility
fees of .2% payable on the revolving lines of credit were insignificant.

Certain debt agreements entered into by the Company's subsidiaries contain
various restrictions including restrictions on payments to the Company. These
debt agreements are secured by certain assets of the subsidiaries aggregating
approximately $131.8 million at January 3, 1997. The Company has guaranteed
certain debt of Anixter. Restricted net assets of subsidiaries were
approximately $268.5 million at January 3, 1997.

Aggregate annual maturities of debt are as follows: 1997--none; 1998--$26.4
million; 1999--none; 2000--none; 2001--$342.0 million; $100.0 million
thereafter.

The carrying amount of the Company's debt generally approximates fair
value.

25
<PAGE> 26

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9. INCOME TAXES

The Company and its U.S. subsidiaries file their Federal income tax return
on a consolidated basis. As of January 3, 1997, the Company had no NOL or ITC
carryforwards for Federal income tax purposes due to the sale of the Company's
rail car leasing business which exhausted virtually all carryforwards in 1994.
These carryforwards are currently being examined by the Internal Revenue Service
("IRS") and, therefore, may still be subject to adjustment. The availability of
tax benefits of NOL and ITC carryforwards to reduce the Company's Federal income
tax liability is subject to various limitations under the Internal Revenue Code
of 1986, as amended (the "Code"). In addition, at January 3, 1997, various
foreign subsidiaries of the Company had aggregate cumulative NOL carryforwards
for foreign income tax purposes of approximately $74.5 million which are subject
to various provisions of each respective country. Approximately $26.5 million of
this amount expires between 1997 and 2006 and $48.0 million of the amount has an
indefinite life.

As a result of the 1995 sale of the Santa Fe Energy Resources, Inc.
("Energy") shares the Company generated a capital loss of approximately $80
million, most of which was carried back and offset against the 1994 gain on the
Rail sale. This carryback generated cash refunds of $12.2 million in 1996 and
caused $9.0 million of the ITC's claimed in 1994 to be available for
carryforward to 1995. Approximately $2.4 million of the ITC's claimed in 1994
expired as a result of the carryback of the Energy loss.

Domestic income from continuing operations before income taxes was $77.6
million, $63.3 million and $70.6 million for the years ended January 3, 1997 and
December 31, 1995 and 1994, respectively. Foreign (loss) income from continuing
operations before income taxes was $(12.8) million, $11.1 million and ($.6)
million for the years ended January 3, 1997 and December 31, 1995 and 1994,
respectively.

Significant components of the Company's deferred tax liabilities and assets
were as follows:

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
(IN MILLIONS)
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation............................ $ 3.4 $ 5.4
Other deferred tax liabilities........................ 67.7 76.4
------ ------
Total deferred tax liabilities..................... 71.1 81.8
Deferred tax assets:
Foreign NOL carryforwards............................. 27.0 15.8
Other deferred tax assets............................. 35.3 42.1
------ ------
Total deferred tax assets.......................... 62.3 57.9
Valuation allowance on deferred tax assets............ (21.0) (13.5)
------ ------
Net deferred tax assets............................ 41.3 44.4
------ ------
Net deferred tax liability......................... $ 29.8 $ 37.4
====== ======
</TABLE>

At January 3, 1997 and December 31, 1995 and 1994, consolidated valuation
allowances for deferred tax assets, primarily related to foreign NOLS, were
$21.0 million, $13.5 million and $12.5 million, respectively.

26
<PAGE> 27

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Income tax (expense) benefit relating to continuing operations was
comprised of:

<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
DECEMBER 31,
JANUARY 3, ---------------
1997 1995 1994
---------- ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Current--Foreign.......................................... $ (8.9) $ (8.5) $ (.1)
State........................................... (3.9) (2.2) (3.3)
Federal......................................... (20.7) (7.6) --
------ ------ ------
(33.5) (18.3) (3.4)

Deferred--Foreign......................................... 3.7 (.7) --
State.......................................... (1.3) (3.1) (.9)
Federal........................................ 2.4 (13.2) (19.5)
------ ------ ------
4.8 (17.0) (20.4)
------ ------ ------
$(28.7) $(35.3) $(23.8)
====== ====== ======
</TABLE>

Reconciliations of income tax expense in continuing operations to the
statutory corporate Federal tax rate of 35% were as follows:

<TABLE>
<CAPTION>
YEARS ENDED
------------------------------
DECEMBER 31,
JANUARY 3, ----------------
1997 1995 1994
---------- ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory tax expense....................................... $(22.7) $(26.0) $(24.5)
Effects of--
Amortization of goodwill.................................. (1.8) (1.8) (2.1)
Losses on foreign operations.............................. (7.7) (4.0) 3.0
State income taxes, net of Federal benefit................ (3.4) (3.5) (2.7)
Equity accounting, net.................................... -- -- 4.5
Adjustment to prior year tax accounts..................... 8.3 1.7 (2.5)
Other, net................................................ (1.4) (1.7) .5
------ ------ ------
$(28.7) $(35.3) $(23.8)
====== ====== ======
</TABLE>

NOTE 10. CONTINGENCIES AND LITIGATION

In the ordinary course of business, the Company and its subsidiaries become
involved as plaintiffs or defendants in various legal proceedings. The claims
and counterclaims in such litigation, including those for punitive damages,
individually in certain cases and in the aggregate, involve amounts which may be
material. However, it is the opinion of the Company's management, based upon the
advice of its counsel, that the ultimate disposition of pending litigation will
not be material.

NOTE 11. LEASE COMMITMENTS

Substantially all of the Company's office and warehouse facilities and
equipment are leased under operating leases. Certain of these leases are
long-term operating leases and expire at various dates through 2013. Minimum
lease commitments under operating leases at January 3, 1997 are as follows: 1997
- - -$38.6 million; 1998 - $30.8 million; 1999 - $22.9 million; 2000 - $14.0
million; 2001 - $11.4 million; beyond

27
<PAGE> 28

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2001 - $48.0 million. Total rental expense was $38.2 million, $30.0 million and
$23.3 million in 1996, 1995 and 1994, respectively.

NOTE 12. PENSION PLANS, POST-RETIREMENT BENEFITS AND OTHER BENEFITS

The Company's various pension plans are non-contributory and cover
substantially all full-time domestic employees. Retirement benefits are provided
based on compensation as defined in the plans. The Company's policy is to fund
these plans as required by ERISA and the Code.

Assets of the Company's plans at fair value were $55.1 million and $45.8
million at January 3, 1997 and December 31, 1995, respectively. Projected
benefit obligations of the Company's plans were $61.7 million and $58.3 million
at January 3, 1997 and December 31, 1995, respectively. The accumulated benefit
obligations of the Company's plans were $47.4 million and $45.1 million at
January 3, 1997 and December 31, 1995, respectively. The weighted-average
assumed discount rate used to measure the projected benefit obligation was 7.5%
and 7.25% at January 3, 1997 and December 31, 1995, respectively. Pension
expense, including the cost of 401(k) plans, for 1996, 1995 and 1994 was
immaterial. The Company's liability for post-retirement benefits other than
pensions is immaterial.

NOTE 13. PREFERRED STOCK AND COMMON STOCK

Common Stock--

On October 25, 1995 the Company paid a dividend in the form of a
two-for-one stock split to shareholders of record on September 22, 1995 which
resulted in the issuance of 26,783,000 shares of stock.

On June 27, 1995 the Company agreed to purchase up to 3.8 million shares of
its common stock from Sam Zell, the Company's Chairman, and other related
stockholders. The first 2.5 million shares were purchased on July 10, 1995 at
$18 per share. The remaining 1.3 million shares were to be purchased at $18 per
share plus an incremental increase of 6.5% per annum from the date of the
agreement. These shares were purchased in the first quarter of 1996 at $18.874
per share.

Preferred Stock--

The Company has the authority to issue 15 million shares of preferred
stock, par value $1.00 per share none of which was outstanding at the end of
1996, 1995 and 1994.

Stock Options and Stock Grants--

The Company has Employee Stock Incentive Plans ("ESIP") which at inception
authorized an aggregate of 11.4 million stock options or restricted grants. In
1996 the Board of Directors adopted and the stockholders approved the 1996 Stock
Incentive Plan which provides for the issuance of an additional 2,500,000 shares
of the Company's Common Stock. The Company also has a Director Stock Option Plan
("DSOP") authorizing an aggregate of .4 million stock options. Substantially all
options and grants under these plans have been at or higher than the fair market
value of the common stock on the date of grant. One-fourth to one-third of the
options granted become exercisable each year after the year of grant (except in
the case of director options which vest fully in six months) and the options
expire ten years after the date of grant.

Additionally, the Company has an Employee Stock Purchase Plan ("ESPP")
covering most employees. Participants can request that up to 10% of their base
compensation be applied toward the purchase of Common Stock under the Company's
ESPP. The exercise price is the lower of 85% of the fair market value of the
Common Stock at the date of grant or at the later exercise date (currently one
year). Under the Plan, the

28
<PAGE> 29

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Company sold 153,600 shares, 137,700 shares, and 121,700 shares to employees in
1996, 1995 and 1994, respectively.

The following table summarizes the 1996, 1995 and 1994 activity under the
ESIP and DSOP.

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
ESIP EXERCISE DSOP EXERCISE
OPTIONS PRICE OPTIONS PRICE
------------ -------- ------------ --------
<S> <C> <C> <C> <C>
Balance at December 31, 1993..................... 2,658,078 $ 8.46 450,000 $10.27
Grants during 1994............................... 365,000 14.31 70,000 16.65
Exercised........................................ (1,758,156) 7.92 (20,000) 8.42
Expirations and terminations..................... (12,000) 10.94 --
------------ ------------
Balance at December 31, 1994..................... 1,252,922 10.89 500,000 11.23
Grants during 1995............................... 3,000 17.25 100,000 20.69
Exercised........................................ (392,296) 10.32 (90,000) 9.89
Expirations and terminations..................... -- --
------------ ------------
Balance at December 31, 1995..................... 863,626 11.17 510,000 13.32
Grants during 1996............................... 1,344,500 19.59 -- --
Exercised........................................ (12,000) 11.06 (30,000) 10.48
Expirations and terminations..................... (28,000) 19.63 -- --
------------ ------------
Balance at January 3, 1997....................... 2,168,126 $16.28 480,000 $13.50
============ ============
</TABLE>

The following table summarizes information relating to options outstanding
and exercisable at January 3, 1997 using various ranges of exercise prices:

<TABLE>
<CAPTION>
ESIP OPTIONS DSOP OPTIONS
- - ---------------------------------------------------------------- ----------------------------------------------------------------
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE RANGE OF AVERAGE AVERAGE
EXERCISE EXERCISE REMAINING EXERCISE EXERCISE REMAINING
PRICES OUTSTANDING EXERCISABLE PRICE YEARS PRICES OUTSTANDING EXERCISABLE PRICE YEARS
-------- ----------- ----------- -------- --------- -------- ----------- ----------- -------- ---------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 5.18-$12.13 545,224 545,224 $ 9.38 4.0 $ 8.38-$12.13 260,000 260,000 $ 9.67 2.9
$14.25-$19.63 1,622,900 182,732 $18.60 8.6 $15.00-$20.69 220,000 220,000 $18.03 7.2
</TABLE>

Stock Option Plans of Anixter--

In 1995 and prior, Anixter granted to key employees options to purchase the
common stock of Anixter. Substantially all options have been granted at fair
market value. These options vest over four years and terminate seven to ten
years from the date of grant. At January 3, 1997, the Company owned 99% of the
approximately 33.6 million shares of outstanding Anixter common stock. The
following table summarizes the 1996, 1995 and 1994 option activity:

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
1996 PRICE 1995 PRICE 1994 PRICE
------------ -------- ------------ -------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of
year....................... 2,079,876 $10.74 1,867,627 $ 9.79 2,067,629 $ 9.00
Grants....................... -- -- 419,100 14.50 714,150 11.40
Exercises.................... (304,910) 9.28 (118,076) 9.02 (409,576) 9.00
Expirations and
terminations............... (54,932) 10.91 (88,775) 10.74 (504,576) 9.48
------------ ------------ ------------
Balance at end of year....... 1,720,034 10.99 2,079,876 10.74 1,867,627 9.79
============ ============ ============
Options exercisable.......... 1,173,023 $10.12 770,553 $ 9.11 600,186 $ 9.00
</TABLE>

29
<PAGE> 30

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Exercise prices for options outstanding as of January 3, 1997 ranged from
$9.00 to $14.50 per share and had a weighted average contractual life of five
years.

Units--

In 1996 the Company paid its non-employee directors annual retainers and
directors fees in the form of stock units. These stock units convert to Common
Stock of the Company at the pre-arranged time selected by each director. At
January 3, 1997 there were 35,181 units issued and outstanding at a value of
$15.35 per unit.

Accounting for Stock Based Compensation--

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123 (SFAS No. 123) Accounting for Stock Based
Compensation. Accordingly, no compensation expense has been recognized for the
stock option plans. Had compensation costs for the plans been determined based
on the fair value at the grant date for awards in 1995 and 1996 consistent with
the provisions of SFAS No. 123, the Company's net income would have been reduced
to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Net income--as reported..................................... $36,100 $39,100
Net income--pro forma....................................... $33,328 $38,016
Net income per share--as reported........................... $0.73 $0.71
Net income per share--pro forma............................. $0.67 $0.69
</TABLE>

The fair value for the Company's stock options (which was $9.32 per share
and $9.80 per share in 1996 and 1995, respectively) was estimated at the date of
grant using the Black-Scholes option pricing model with the following
assumptions for 1996 and 1995: expected stock price volatility of 45%, expected
dividend yield of zero, risk-free interest rate of 6.1%, and expected life of
the options of 5 years.

The fair value of the Anixter stock options (which was $4.38 per share in
1995) was estimated at the date of grant using the minimum value method and is
not a significant component of pro forma net income disclosed above. The pro
forma effect on net income for 1996 and 1995 is not representative of the pro
forma effect on earnings in future years because the pro forma calculation, as
required by SFAS No. 123, does not take into consideration outstanding
non-vested awards granted prior to 1995.

The Black-Scholes option pricing model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of the Company's stock options.

30
<PAGE> 31

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 14. BUSINESS SEGMENTS

The Company is engaged in one principal area of business: providing
networking and cabling solutions for business information and network
infrastructure requirements. The Company obtains and coordinates financing,
legal and other related services, certain of which are rebilled to subsidiaries.

The classification of the Company's 1996, 1995 and 1994 foreign operations
in the following table includes all revenues and related items of the Company's
non-U.S. operations. Export sales are insignificant.

<TABLE>
<CAPTION>
WORLDWIDE (NON-U.S.)
OPERATIONS
--------------------------
1996 1995 1994
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues:
Europe......................................... $478.2 $429.1 $316.8
Other.......................................... 343.2 285.8 190.8
------ ------ ------
$821.4 $714.9 $507.6
====== ====== ======
Operating income (loss):
Europe......................................... $ 2.8 $ 17.6 $ 6.6
Other.......................................... (8.9) 4.5 3.6
------ ------ ------
$ (6.1) $ 22.1 $ 10.2
====== ====== ======
Identifiable assets:
Europe......................................... $226.3 $193.6 $147.2
Other.......................................... 161.3 136.3 101.2
------ ------ ------
$387.6 $329.9 $248.4
====== ====== ======
</TABLE>

Foreign operations' revenues were 33%, 33% and 29% of consolidated revenues
in 1996, 1995 and 1994, respectively. Foreign operations' operating income
(loss) were negatively impacted for all years due to start-up losses in
expansion markets. Aggregate start-up losses in expansion markets were ($22.1)
million, ($9.1) million and ($6.7) million in 1996, 1995 and 1994, respectively,
as Anixter continues to penetrate new markets in Europe, Asia and Latin America.
Operating income in Europe decreased substantially as a result of start up costs
related to the network integration business and the related salesforce
disruption, and loss of business due to competition with our customers in this
area.

NOTE 15. RELATED PARTY TRANSACTION

The Company is seeking the approval of the Small Business Administration of
an agreement to sell its interest in a small business investment company and
other related assets in a transaction in which an affiliate of Sam Zell and Rod
Dammeyer would be a purchaser. If the transaction had closed on March 31, 1996,
the purchase price would have been approximately $5.9 million, the net book
value of these assets on that date. The actual purchase price will reflect
events since that date and interest at the rate of seven percent per annum.

31
<PAGE> 32

SUMMARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following tables summarize the Company's quarterly financial
information.
<TABLE>
<CAPTION>
QUARTERS ENDED
---------------------------------------------------------------
MARCH 29, MARCH 31, JUNE 29, JUNE 30, SEPTEMBER 27,
1996 1995 1996 1995 1996
--------- --------- -------- -------- -------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Revenues................. $567.4 $502.9 $611.8 $542.0 $631.5
Operating income......... $ 23.4 $ 23.8 $ 20.3 $ 25.7 $ 20.5
Income from continuing
operations before
income taxes(a)........ $ 18.7 $ 20.7 $ 14.8 $ 17.6 $ 15.5
Income from continuing
operations............. 10.3 11.1 8.1 8.9 8.6
Net income............... 10.3 11.1 8.1 8.9 8.6
====== ====== ====== ====== ======
Income per common and
common equivalent
share:
Continuing
operations........... $ .20 $ .19 $ .16 $ .16 $ .18
Net income............. $ .20 $ .19 $ .16 $ .16 $ .18
====== ====== ====== ====== ======

<CAPTION>
QUARTERS ENDED
-------------------------------------------
SEPTEMBER 30, JANUARY 3, DECEMBER 31,
1995 1997 1995
------------- ---------- ------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Revenues................. $571.1 $664.6 $578.8
Operating income......... $ 26.3 $ 24.2 $ 23.8
Income from continuing
operations before
income taxes(a)........ $ 16.7 $ 15.8 $ 19.4
Income from continuing
operations............. 9.1 9.1 10.0
Net income............... 9.1 9.1 10.0
====== ====== ======
Income per common and
common equivalent
share:
Continuing
operations........... $ .17 $ .19 $ .19
Net income............. $ .17 $ .19 $ .19
====== ====== ======
</TABLE>

- - ---------------
(a) Continuing operations in the second quarter of 1995 include a $3.0 million
pre-tax loss associated with the sale of the Company's investment in Energy.

32
<PAGE> 33

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

See Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders--"Election of Directors."

ITEM 11. EXECUTIVE COMPENSATION.

See Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders--"Executive Compensation," "Compensation of Directors," "Employment
Contracts and Termination of Employment and Changes in Control Arrangements,"
and "Compensation Committee Interlocks and Insider Participation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

See Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders--"Security Ownership of Management" and "Security Ownership of
Principal Stockholders."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

See Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders--"Certain Relationships and Related Transactions."

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Exhibits.
The exhibits listed below in Item 14(a)1, 2 and 3 are filed as part of
this annual report. Each management contract or compensatory plan
required to be filed as an exhibit is identified by an asterisk(*).

(b) Reports on Form 8-K.
None.

ITEM 14(a)1 AND 2. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES.

Financial Statements.

The following Consolidated Financial Statements of Anixter International
Inc. and Report of Independent Auditors are filed as part of this report.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. 15
Consolidated Balance Sheets at January 3, 1997 and December
31, 1995.................................................. 16
Consolidated Statements of Operations for the years ended
January 3, 1997 and December 31, 1995 and 1994............ 17
Consolidated Statements of Cash Flows for the years ended
January 3, 1997 and December 31, 1995 and 1994............ 18
Consolidated Statements of Stockholders' Equity for the
years ended January 3, 1997 and December 31, 1995 and
1994...................................................... 19
Notes to the Consolidated Financial Statements.............. 20
</TABLE>

33
<PAGE> 34

Financial Statement Schedules.

The following financial statement schedules of Anixter International Inc.
are filed as part of this Report and should be read in conjunction with the
Consolidated Financial Statements of Anixter International Inc.

Consolidated Schedules for the years ended January 3, 1997 and December 31,
1995 and 1994, except as noted:

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
I. Condensed financial information of Registrant............... 39
II. Valuation and qualifying accounts and reserves.............. 42
</TABLE>

All other schedules are omitted because they are not required or are not
applicable, or the required information is shown in the consolidated financial
statements or notes thereto.

ITEM 14(a)3. EXHIBIT LIST. Each management contract or compensation plan
required to be filed as an exhibit is identified by an asterisk(*).

<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
------- ---------------------- ------
<C> <S> <C> <C>
(3) Articles of Incorporation and by-laws.

3.1 Restated Certificate of Incorporation of Anixter
International Inc., filed with Secretary of State of
Delaware on September 29, 1987 and Certificate of Amendment
thereof, filed with Secretary of Delaware on August 31, 1995
(Incorporated by reference from Anixter International Inc.
Annual Report on Form 10-K for the year ended December 31,
1995, Exhibit 3.1)..........................................

3.2 By-laws of Anixter International Inc. as amended through
November 9, 1995 (Incorporated by reference from Anixter
International Inc. Annual Report on Form 10-K for the year
ended December 31, 1995, Exhibit 3.2).......................

(4) Instruments defining the rights of security holders, including
indentures.+

4.1 (a) Amended and Restated Credit Agreement, dated March 11,
1994, among Anixter Inc., Chemical Bank, as Agent, and the
other banks named therein. (Incorporated by reference from
Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Exhibit 4.2.) ................

(b) Amendment, dated March 24, 1995, to Amended and Restated
Credit Agreement, dated March 11, 1994, among Anixter Inc.,
Chemical Bank, as Agent, and the other banks named therein.
(Incorporated by reference from Itel Corporation's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1995,
Exhibit 4.1.)...............................................

(c) Amendment dated September 6, 1996, to Amended and
Restated Credit Agreement, dated March 11, 1994, among
Anixter Inc., The Chase Manhattan Bank, as Agent, and the
other banks named therein. (Incorporated by reference from
Anixter International Inc. Quarterly Report on Form 10-Q for
the quarter ended September 27, 1996, Exhibit 4.2)..........

4.2 Indenture dated September 17, 1996 between Anixter Inc.,
Anixter International Inc. and the Bank of New York, as
Trustee, providing for 8% Senior Notes due 2003.
(Incorporated by reference from Amendment No. 1 to Anixter
Inc.'s Registration Statement on Form S-3, Registration
Number 333-09185, filed August 27, 1996, Exhibit 4.1).......
</TABLE>

34
<PAGE> 35
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
------- ---------------------- ------
<C> <S> <C> <C>
(10) Material contracts.+

10.1 Form of the Company's Tax Allocation Agreement, dated
January 1, 1987. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987, Exhibit 10.1.).....................

10.2* Company's Management Incentive Plan, dated February 9, 1995.
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit 10.2.)........................................

10.3* Company's 1983 Stock Incentive Plan as amended and restated
July 16, 1992. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Exhibit 10.3.).....................

10.4 * Supplemental Pension Agreement, dated November 17, 1986,
between the Company and Rod F. Dammeyer. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986, Exhibit
10.14.).....................................................

10.5 * (a) Company's Supplemental Retirement Benefits Plan, dated
January 1, 1987. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987, Exhibit 10.16.)....................

* (b) Amendment No. 1, dated May 17, 1989 and effective as of
January 1, 1989, to the Company's Supplemental Retirement
Benefits Plan. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, Exhibit 10.9(b).)..................

* (c) Amendment No. 2, dated October 15, 1992, to the
Company's Supplemental Retirement Benefits Plan
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1992, Exhibit 10.7(c).).....................................

* (d) Amendment No. 3, dated February 25, 1993, to the
Company's Supplemental Retirement Benefits Plan.
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1992, Exhibit 10.7(d).).....................................

10.6 * Company's Key Executive Equity Plan, as amended and restated
July 16, 1992. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Exhibit 10.8.).....................

10.7 * Warrant Agreement, dated September 10, 1987, between the
Company and William A. Buzick, Jr., F. Philip Handy, Harold
Haynes, Jerome Jacobson, Melvyn N. Klein and James D. Woods,
individually. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, Exhibit 10.15.)....................

10.8 * Warrant Agreement, dated July 14, 1988, between the Company
and William A. Buzick, Jr., F. Philip Handy, Harold Haynes,
Jerome Jacobson, Melvyn N. Klein, Robert H. Lurie, John R.
Petty and James D. Woods, individually. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, Exhibit
10.19.).....................................................

10.9 * Executive Supplemental Life Plan, dated June 15, 1989, for
the Company and participating subsidiaries. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, Exhibit
10.20.).....................................................
</TABLE>

35
<PAGE> 36
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
------- ---------------------- ------
<C> <S> <C> <C>
10.10* (a) Company's Supplemental Executive Retirement Plan, dated
January 18, 1990. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, Exhibit 10.23.)....................

* (b) Amendment No. 1 dated February 25, 1993, to Company's
Supplemental Executive Retirement Plan. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992, Exhibit
10.13(b).)..................................................

10.11* Warrant Agreement, dated July 13, 1989, between Company and
Bernard F. Brennan, William A. Buzick, Jr., F. Philip Handy,
Harold Haynes, Jerome Jacobson, Melvyn N. Klein, Robert H.
Lurie, John R. Petty and James D. Woods, individually.
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1990, Exhibit 10.21.).......................................

10.12* Company's Director Stock Option Plan. (Incorporated by
reference from Itel Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991, Exhibit
10.24.).....................................................

10.13* Warrant Agreement, dated August 22, 1990, between the
Company and Bernard F. Brennan, William A. Buzick, Jr., F.
Philip Handy, Harold Haynes, Jerome Jacobson, Melvyn Klein,
John R. Petty and James D. Woods, individually.
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, Exhibit 10.25.).......................................

10.14* (a) Agreement, dated February 9, 1995, with Rod F. Dammeyer
(Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit 10.18(d).)....................................

(b) Amended and Restated Agreement dated February 9, 1995
with Rod F. Dammeyer (Incorporated by reference from Anixter
International Inc. Annual Report on Form 10-K for the year
ended December 31, 1995, Exhibit 10.17 (b)).................

10.15* Agreement, dated November 1, 1992, with James E. Knox, as
amended (Incorporated by reference from Anixter
International Inc. Annual Report on Form 10-K for the year
ended December 31, 1995, Exhibit 10.18).....................

10.16* Form of Stock Option Agreement. (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Exhibit 10.24.)........

10.17 Tax Allocation Agreement with ANTEC Corporation.
(Incorporated by reference from Amendment No. 2 to ANTEC
Corporation's Registration Statement on Form S-1,
Registration Number 33-65488, filed August 20, 1993, Exhibit
10.5.)......................................................

10.18 Registration Rights Agreement with ANTEC Corporation.
(Incorporated by reference from Amendment No. 3 to ANTEC
Corporation's Registration Statement on Form S-1,
Registration Number 33-65488, filed September 13, 1993,
Exhibit 10.9.)..............................................

10.19 Directors & Officers Insurance Agreement with ANTEC
Corporation. (Incorporated by reference to ANTEC
Corporation's Registration Statement on Form S-1,
Registration Number 33-65488, filed July 2, 1993, Exhibit
10.8.)......................................................

10.20 Purchase Agreement dated as of June 23, 1994 among the
Company, Itel Rail Holdings Corporation and SCAP Associates,
L.L.C. (Incorporated by reference from Itel Corporation's
Current Report on Form 8-K, November 7, 1994, Exhibit
2.1)........................................................
</TABLE>

36
<PAGE> 37
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
------- ---------------------- ------
<C> <S> <C> <C>
10.21 Stock Purchase Agreement, dated March 10, 1996, between
Anixter International Inc. and Great American Management and
Investment, Inc. and Supplementary Agreement thereto, dated
May 10, 1996, between Signal Capital Corporation and Great
American Management and Investment, Inc. ...................

10.22* Form of Indemnity Agreement with all directors and officers
(Incorporated by reference from Anixter International Inc.
Annual Report on Form 10-K for the year ended December 31,
1995, Exhibit 10.24)........................................

10.23 Agreement, dated June 27, 1995, among Riverside Partners,
SZRL Investments, Equity Holdings and Company. (Incorporated
by reference from Riverside Partners' Amendment No. 20 to
its Schedule 13D, filed for an event on June 27, 1995,
relating to the shares of Itel Corporation, Exhibit 1.).....

10.24* Anixter International Inc. 1996 Stock Incentive Plan
(Incorporated by reference from Anixter International Inc.
Annual Report on Form 10-K for the year ended December 31,
1995, Exhibit 10.26)........................................

10.25* Form of Stock Option Grant (Incorporated by reference from
Anixter International Inc. Annual Report on Form 10-K for
the year ended December 31, 1995, Exhibit 10.27)............

10.26* Anixter Excess Benefit Plan (Incorporated by reference from
Anixter International Inc. Annual Report on Form 10-K for
the year ended December 31, 1995, Exhibit 10.28)............

10.27* Forms of Anixter Stock Option, Stockholder Agreement and
Stock Option Plan (Incorporated by reference from Anixter
International Inc. Annual Report on Form 10-K for the year
ended December 31, 1995, Exhibit 10.29).....................

10.28* Anixter Deferred Compensation Plan (Incorporated by
reference from Anixter International Inc. Annual Report on
Form 10-K for the year ended December 31, 1995, Exhibit
10.30)......................................................

(21) Subsidiaries of the Registrant.

21.1 List of Subsidiaries of the Registrant......................

(23) Consents of experts and counsel.

23.1 Consent of Ernst & Young LLP................................

(24) Power of attorney.

24.1 Power of Attorney executed by Lord James Blyth, Rod F.
Dammeyer, Robert E. Fowler, Jr., Robert W. Grubbs, F. Philip
Handy, Melvyn N. Klein, John R. Petty, Sheli Rosenberg,
Stuart M. Sloan, Thomas C. Theobald and Samuel Zell.........

(27) Financial data schedule.

27.1 Financial data schedule.....................................

(28) Additional exhibits.
</TABLE>

37
<PAGE> 38

This Annual Report on Form 10-K includes the following Financial Statement
Schedules:

ANIXTER INTERNATIONAL INC. AND SUBSIDIARIES--
FINANCIAL SCHEDULES

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Schedule I--Condensed financial information of Registrant............ 39
Schedule II--Valuation and qualifying accounts and reserves........... 42
</TABLE>

All other schedules are omitted because they are not required or are not
applicable, or the required information is included in the consolidated
financial statements or notes thereto.
- - ---------------

+ Copies of other instruments defining the rights of holders of long-term debt
of the Company and its subsidiaries not filed pursuant to Item 601(b)(4)(iii)
of Regulation S-K and omitted copies of attachments to plans and material
contracts will be furnished to the Securities and Exchange Commission upon
request.

For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, as amended,
the Registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into the Registrant's Registration Statement on Form
S-8 Nos. 2-93173 (filed September 30, 1987), 33-13486 (filed April 15, 1987),
33-21656 (filed May 3, 1988) and 33-60676 (filed April 5, 1993):

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provision, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

38
<PAGE> 39

ANIXTER INTERNATIONAL INC.

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
JANUARY 3, DECEMBER 31,
1997 1995
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents...................................... $ 4,800 $ 1,000
Accounts receivable....................................... 100 400
Amounts currently due from (to) affiliates, net........... (3,300) 61,200
Other assets.............................................. 5,400 500
-------- --------
Total current assets......................... 7,000 63,100
Investment in ANTEC......................................... 77,800 73,700
Investment in and advances to subsidiaries.................. 405,900 380,700
Other assets................................................ 16,500 18,000
-------- --------
$507,200 $535,500
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses, due currently........ $ 15,400 $ 15,600
Income taxes, net, primarily deferred....................... 56,300 46,100
Other liabilities........................................... -- 1,400
-------- --------
Total liabilities............................ 71,700 63,100
Common stock repurchase commitment.......................... -- 23,400
Stockholders' equity:
Common stock.............................................. 48,000 52,500
Capital surplus........................................... 57,100 99,900
Retained earnings......................................... 344,500 308,400
Cumulative translation adjustments........................ (14,100) (11,800)
-------- --------
Total stockholders' equity................... 435,500 449,000
-------- --------
$507,200 $535,500
======== ========
</TABLE>

39
<PAGE> 40

ANIXTER INTERNATIONAL INC.

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------
DECEMBER 31,
JANUARY 3, ------------------
1997 1995 1994
---------- ---- ----
<S> <C> <C> <C>
Operating loss.............................................. $ (200) $(3,500) $ (4,700)
Other (expenses) income:
Corporate interest expense................................ (500) (1,300) (14,900)
Interest and investment income, including intercompany.... 14,600 14,900 6,200
Gain on ANTEC Offerings................................... -- -- 59,000
Marketable equity securities losses, principally
write-downs............................................ -- (3,000) (39,600)
------- ------- --------
14,100 10,600 10,700
------- ------- --------
Income from operations before income taxes and equity in
earnings of subsidiaries.................................. 13,900 7,100 6,000
Income tax benefit.......................................... 6,300 6,500 9,100
Equity in earnings of subsidiaries.......................... 15,900 25,500 231,800
------- ------- --------
Net income.................................................. $36,100 $39,100 $246,900
======= ======= ========
</TABLE>

40
<PAGE> 41

ANIXTER INTERNATIONAL INC.

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------
DECEMBER 31,
JANUARY 3, ---------------------
1997 1995 1994
---------- ---- ----
<S> <C> <C> <C>
Operating activities:
Income before extraordinary items......................... $ 36,100 $ 39,100 $ 246,900
Adjustments to reconcile income before extraordinary items
to net cash used by operating activities:
Income tax benefit..................................... (6,300) (6,500) (9,100)
Gain on ANTEC common stock issuances................... -- -- (59,000)
Marketable equity securities losses, principally
write-downs.......................................... -- 3,000 39,600
Equity in earnings of subsidiaries..................... (15,900) (25,500) (231,800)
Non-cash financing expense............................. -- (100) 1,900
Change in other operating items........................ 1,500 (6,600) (18,100)
-------- --------- ---------
Net cash provided (used) by operating
activities...................................... 15,400 3,400 (29,600)
Investing activities:
Sales of securities....................................... -- 72,600 47,800
Proceeds from ANTEC Offerings............................. -- -- 82,800
Net dividends from subsidiaries........................... -- 8,200 219,700
Loans from subsidiaries, net.............................. 64,500 37,300 108,000
Other, net................................................ (5,400) (4,000) --
-------- --------- ---------
Net cash provided by investing activities......... 59,100 114,100 458,300
-------- --------- ---------
Net cash provided before financing activities............... 74,500 117,500 428,700
Financing activities:
Borrowings................................................ -- 50,000 200,000
Reductions in borrowings.................................. -- (50,000) (496,600)
Purchases of treasury stock............................... (75,500) (129,200) (138,900)
Proceeds from issuance of common stock.................... 4,800 10,100 8,600
-------- --------- ---------
Net cash used in financing activities............. (70,700) (119,100) (426,900)
-------- --------- ---------
Cash provided (used)........................................ 3,800 (1,600) 1,800
Cash and equivalents at beginning of year................... 1,000 2,600 800
-------- --------- ---------
Cash and equivalents at end of year......................... $ 4,800 $ 1,000 $ 2,600
======== ========= =========
</TABLE>

41
<PAGE> 42

ANIXTER INTERNATIONAL INC.

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

YEARS ENDED JANUARY 3, 1997 AND DECEMBER 31, 1995 AND 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
------------------------
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF CHARGED TO OTHER END OF
DESCRIPTION THE PERIOD INCOME ACCOUNTS DEDUCTIONS THE PERIOD
----------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended January 3, 1997:
Allowance for doubtful accounts........ $ 9,000 $ 4,800 $ 200 $ (5,000) $ 9,000
Allowance for deferred tax asset....... $13,500 6,500 -- -- $21,000
Year ended December 31, 1995:
Allowance for doubtful accounts........ $ 6,000 5,800 1,200 (4,000) $ 9,000
Unrealized losses on marketable equity
securities available-for-sale(b).... $11,100 -- -- (11,100) $ --
Allowance for deferred tax asset....... $12,500 1,000 -- -- $13,500
Year ended December 31, 1994:
Allowance for doubtful accounts(a)..... $ 6,200 5,100 600 (5,900) $ 6,000
Unrealized losses on marketable equity
securities available-for-sale(c).... $36,600 -- 8,900 (34,400) $11,100
Allowance for deferred tax asset....... $30,100 (17,600) -- -- $12,500
</TABLE>

- - ---------------
(a) The deconsolidation of ANTEC resulted in a $1.4 million deduction in
allowance for doubtful accounts in 1994.

(b) In 1995 the Company sold its marketable equity securities resulting in a $3
million loss.

42
<PAGE> 43

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
CHICAGO, STATE OF ILLINOIS, ON THE 19TH DAY OF MARCH, 1997.

ANIXTER INTERNATIONAL INC.

JAMES E. KNOX

----------------------------------------
James E. Knox
Senior Vice President, General Counsel
and Secretary

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<C> <C> <C>
Chief Executive Officer
and President
ROD F. DAMMEYER (Principal Executive Officer) March 19, 1997
- - -----------------------------------------------------
Rod F. Dammeyer
Senior Vice President--Finance
DENNIS J. LETHAM (Chief Financial Officer) March 19, 1997
- - -----------------------------------------------------
Dennis J. Letham

Vice President--Controller
JAMES M. FROISLAND (Chief Accounting Officer) March 19, 1997
- - -----------------------------------------------------
James M. Froisland

LORD JAMES BLYTH* Director March 19, 1997
- - -----------------------------------------------------
Lord James Blyth

ROD F. DAMMEYER Director March 19, 1997
- - -----------------------------------------------------
Rod F. Dammeyer

ROBERT E. FOWLER, JR.* Director March 19, 1997
- - -----------------------------------------------------
Robert E. Fowler, Jr.

ROBERT W. GRUBBS Director March 19, 1997
- - -----------------------------------------------------
Robert W. Grubbs

F. PHILIP HANDY* Director March 19, 1997
- - -----------------------------------------------------
F. Philip Handy

MELVYN N. KLEIN* Director March 19, 1997
- - -----------------------------------------------------
Melvyn N. Klein

JOHN R. PETTY* Director March 19, 1997
- - -----------------------------------------------------
John R. Petty

SHELI Z. ROSENBERG* Director March 19, 1997
- - -----------------------------------------------------
Sheli Z. Rosenberg

STUART M. SLOAN* Director March 19, 1997
- - -----------------------------------------------------
Stuart M. Sloan

THOMAS C. THEOBALD* Director March 19, 1997
- - -----------------------------------------------------
Thomas C. Theobald

SAMUEL ZELL* Director March 19, 1997
- - -----------------------------------------------------
Samuel Zell

*By JAMES E. KNOX
- - -----------------------------------------------------
James E. Knox (Attorney in fact)

James E. Knox, as attorney in fact for each person indicated.
</TABLE>

<PAGE> 1
EXHIBIT 10.21

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of the 10th
day of May, 1996 by and between Anixter International Inc., a Delaware
corporation ("Seller"), and Great American Management and Investment, Inc.

WHEREAS, Seller is the owner of all the issued and outstanding shares of
capital stock ("the Stock") of Seacoast Capital Corporation and Seacoast
Capital Corporation II, both Delaware corporations (together the "Companies").

WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Stock, upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties as hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:

ARTICLE I - PURCHASE AND SALE OF STOCK

1.1 PURCHASE AND SALE OF STOCK. Subject to the terms and conditions set
forth in this Agreement, Seller shall sell, assign, transfer and deliver to
Buyer at the Closing, and Buyer shall purchase from Seller at the Closing the
Stock, for the purchase price set forth in Article 2 hereof.

ARTICLE II - PURCHASE PRICE

2.1 PURCHASE PRICE. The purchase price ("Purchase Price") of the Stock
shall be equal to the net book value of the Company's assets, less the
Company's outstanding liabilities, as of March 31, 1996, increased at the rate
of 7% per annum from March 31, 1996 to the Closing, plus the amount of any
contributions to the capital of the Companies after March 31, 1996, increased
at the rate of 7% per annum from the date of each contribution to the Closing.

2.2 PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall pay the
Purchase Price to Seller, by wire transfer of immediately available federal
funds, or by such other means as is acceptable to Seller.

<PAGE> 2

ARTICLE III - SELLER'S REPRESENTATIONS AND WARRANTIES

Seller represents and warrants to Buyer on the date of this Agreement as
follows:

3.1 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Companies are corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware.

3.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by Seller have been duly and properly authorized by proper corporate
action in accordance with applicable law and with its Articles of Incorporation
and By-Laws.

3.3 TRANSACTION NOT A BREACH. Neither the execution and delivery of
this Agreement nor the performance by Seller of its obligations hereunder will
conflict with or result in a breach of the terms, conditions or provisions of
the Articles of Incorporation or By-Laws of Seller or the Companies or any
material contract, agreement, mortgage or other material instrument or
obligation of any nature to which either Seller of either of the Companies is a
party or by which Seller or either of the Companies is bound which have not
been waived or cured; and neither the execution and delivery of this Agreement
nor its performance by Seller or either of the Companies will contravene or
violate any material statute or any material judicial or governmental
regulation, order, injunction judgment or decree or require the approval,
consent or permission of any governmental or regulator body or authority,
except for consents or approvals which have already been obtained.

3.4 OWNERSHIP OF STOCK. Seller is the beneficial and record owner of
all the issued and outstanding Stock, free and clear of all liens and
encumbrances. The Stock is validly authorized, duly issued, fully paid and
non-assessable. No person or entity has any rights by way of stock option,
convertible security, subscription, warrant, contract or other agreement or
arrangement, written or oral, to purchase or acquire any capital stock of
either of the Companies.

3.5 SPECIAL PURPOSE CORPORATIONS. The Companies are special purpose
corporations which have not engaged in any activities other than those relating
to their ownership of interests in Seacoast Capital Partners Limited
Partnership (the "Partnership").

3.6 FINANCIAL STATEMENTS. The financial statements for the Companies
and the Partnership have been prepared in accordance with general accounting
principles and are accurate and complete to the knowledge of Seller.

3.7 MATERIAL AGREEMENTS. Correct copies of all material agreements
relating to the Companies and the Partnership have been made available to
Buyer.

2
<PAGE> 3
3.8 NO DISTRIBUTIONS. No distributions have been made from the
Companies since March 31, 1996.

3.9 CONTINUING TRUTH OF REPRESENTATIONS. The representations and
warranties of the Seller will be true and correct in all material respects as
of the Closing Date.

ARTICLE IV - BUYER'S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants to Seller on the date of this Agreement as
follows:

4.1 ORGANIZATION. Buyer is a corporation duly organized and existing
under the laws of the State of Delaware.

4.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by Buyer have been duly and properly authorized by proper corporate
action in accordance with applicable law and with the Articles of Incorporation
and By-Laws of Buyer.

4.3 TRANSACTION NOT A BREACH. Neither the execution and delivery of
this Agreement nor the performance by Buyer of its obligations hereunder will
conflict with or result in a breach of the terms, conditions or provisions of
the Articles of Incorporation or By-Laws of Buyer or any contract, agreement,
mortgage or other instrument or obligation of any nature to which Buyer is a
party or by which Buyer is bound; and neither the execution and delivery of
this Agreement nor its performance by Buyer will contravene or violate any
statute or any judicial or governmental regulation, order, injunction judgment
or decree or require the approval, consent or permission of any governmental or
regulatory body or authority.

4.4 CONTINUING TRUTH OF REPRESENTATIVES. The representatives and
warranties of the Buyer will be true and correct in all material respects as of
the Closing Date.

ARTICLE V - CLOSING

5.1 TIME, DATE AND PLACE OF CLOSING. The transaction which is the
subject of this Agreement shall be closed at 9:00 a.m., of the fifth business
day following the satisfaction of all applicable requirements of the Small
Business Administration ("SBA"), or on such other date and time as the parties
shall mutually agree upon in writing ("the Closing Date"). The Closing shall
take place at the offices of Seller's counsel in Chicago, Illinois, or such
other place as the parties shall mutually agree.

5.2 DELIVERIES BY SELLER AT CLOSING. At the Closing, Seller will
deliver to Buyer the following documents:

3
<PAGE> 4

(a) Share certificates representing all of the Stock duly endorsed for
transfer to Buyer or with separate stock transfer powers duly endorsed by
Seller for transfer of the Stock to Buyer.

(b) A copy of a resolution of Seller's board of directors, or a committee
thereof, certified by Seller's secretary as having been duly adopted and being
in full force and effect, authorizing Seller's execution and performance of
this Agreement.

5.3 DELIVERIES BY BUYER AT CLOSING. At the Closing, Buyer will deliver
to Seller:

(a) The payment of the Purchase Price in the amount and manner required by
Section 2.2 hereof.

(b) A copy of a resolution of Buyer's board of directors, or a committee
thereof, certified by Buyer's Secretary as having been duly adopted and being
in full force and effect authorizing Buyer's execution and performance of this
Agreement.

ARTICLE VI - MISCELLANEOUS

6.1 SEVERABILITY. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of any other
provision.

6.2 ASSIGNMENT. Neither this Agreement nor any interest hereunder shall
be assigned or transferred by Seller or Buyer. Subject to the foregoing, this
Agreement shall inure to the benefit of and shall be binding upon Seller and
Buyer and their respective successors and assigns.

6.3 ENTIRE AGREEMENT. This Agreement and a related agreement between
the Buyer and Signal Capital Corporation executed contemporaneously with this
Agreement set forth the entire understanding of the parties with respect to the
subject matter hereof and may be modified only by instruments signed by both of
the parties hereto. Any and all prior or collateral representations, promises
and conditions in connection with the subject matter hereof and any
representations, promise or condition not incorporated herein or made a part
hereof or incorporated into shall not be binding upon either party.

6.4 DOCUMENTS. Each party will execute all documents and take such
other actions as the other party may reasonably request in order to consummate
the transactions provided for herein and to accomplish the purposes of this
Agreement. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

6.5 THIRD PARTIES. Nothing in this Agreement is intended to confer any
right or remedy under or by reason of this Agreement on any person other than
the parties hereto

<PAGE> 5

and their respective successors and assigns.

6.6 GOVERNING LAW. This Agreement shall be construed and governed in
accordance with the laws of the State of Illinois, without regard to principles
of conflicts of law.

6.7 EXPENSES. Each party hereto shall pay its own expenses and costs
incurred in connection with the negotiation and consummation of this Agreement
and the transactions contemplated hereby, except that Buyer shall be
responsible for and pay all applicable sales, transfer documentary, use, filing
and other taxes and fees (other than income taxes) that may become due and
payable as a result of the sale, transfer and delivery of the Stock, whether
levied on Buyer, Seller or the Companies, and the Seller.

6.8 GUARANTEE SUBSTITUTION. At the request of Seller, and subject to
the satisfaction of any SBA requirements, Buyer will substitute itself for
Seller and its subsidiaries as the guarantor in the guarantee they have
provided the SBA of the obligation of the Companies to invest in the
Partnership. In any event, Buyer will save Seller and its subsidiaries
harmless from such guarantee after the Closing.

6.9 CONDUCT OF BUSINESS. Prior to the Closing, the Companies and the
Partnership will conduct their business in the normal course,

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

BUYER: SELLER:

Great American Management and Anixter International Inc.
Investment, Inc.

By: /s/ Gus J. Athas By: /s/ James E. Knox
-------------------------- ---------------------------
Its Senior Vice President Its Senior Vice President
-------------------------- ---------------------------

<PAGE> 6

SUPPLEMENTARY AGREEMENT

This Supplementary Agreement is entered into as of the 10th day of May
1996 by and between Signal Capital Corporation ("SCC") and Great American
Management and Investment, Inc. ("Buyer") in connection with a Stock Purchase
Agreement as of this same date by and between Anixter International Inc. and
Buyer.

1. Subject to the terms and conditions set forth in this Agreement, SCC
will sell, assign, transfer and deliver to Buyer at the Closing and Buyer will
purchase from Seller at the Closing, the furniture, equipment, supplies,
leaseholds and leasehold improvements (the "Assets") of the Merchant Banking
Division of SCC. The Assets do not include any of the investments in the
investment portfolio of SCC other than the stock being sold pursuant to the
Stock Purchase Agreement. The excluded assets are referred to herein as "SCC's
Investment Portfolio."

2. The purchase price for the Assets ("Purchase Price") will be equal to
the net book value of the Assets as of March 31, 1996, increased at the rate of
7% per annum from March 31, 1996 to the Closing, plus the cost of any additions
to the Assets, less the proceeds from any deletions of non-consumables from the
Assets, increased at the rate of 7% per annum from the applicable month to the
Closing.

3. Subject to the terms and conditions set forth in this Agreement, SCC at
the Closing will make available to Buyer all the personnel then working for the
Merchant Banking Division of SCC (the "Personnel") and Buyer will employ the
Personnel. Buyer will adopt for the Personnel the severance plans and policies
covering them at SCC on March 31, 1996. Any payments due under these plans and
policies from Buyer for a severance of Personnel prior to March 31, 1997 will
promptly be reimbursed to Buyer by SCC to the extent of the amount SCC would
have incurred if the severance had occurred on March 31, 1996. SCC will
continue to be responsible for any incentive amounts earned prior to the
Closing as well as any incentive amounts earned after the closing in relation
to SCC's Investment Portfolio.

4. Prior to the Closing, Buyer may utilize the services of the Personnel
to the extent such utilization does not interfere with their management and
administration of SCC's Investment Portfolio. Buyer will hold SCC and its
affiliates harmless from any liabilities arising from such utilization.

5. Subject to the terms of conditions set forth in this Agreement, Buyer
will reimburse SCC (the "Reimbursement") for all costs incurred by the Merchant
Banking Division of SCC after March 31, 1996, excluding costs solely related to
SCC's Investment Portfolio such as incentive or disposition bonuses, travel,
attorneys and consultants for SCC's Investment portfolio, but including
salaries and benefits of the Personnel and costs associated with the Assets.
Such reimbursement will be increased at the rate of 7% from the month paid by
SCC to the Closing.

<PAGE> 7

6. For a period beginning with Closing and ending December 31, 1997, the
Personnel, to the extent employed by Buyer or its affiliates, will be made
available without charge for the management and administration of SCC's
Investment portfolio. SCC will be responsible for costs solely related to
SCC's Investment Portfolio such as incentive or disposition bonuses, travel,
attorneys, and consultants for SCC's Investment Portfolio but excluding
salaries and benefits of the Personnel and costs associated with the Assets or
replacements therefor. SCC will hold Buyer and its affiliates harmless from
any liability in connection with SCC's Investment Portfolio, other than the
costs associated with the Personnel or the Assets or replacements therefor.

7. The Purchase Price and Reimbursement shall be paid at the Closing by
wire transfer of immediately available federal funds, or by such other means as
is acceptable to SCC.

8. The Closing under this Agreement shall occur when and if the Closing
under the Stock Purchase Agreement shall occur. At the Closing, and from time
to time thereafter, the parties will execute such documents as shall be
necessary or appropriate to effect the transactions provided by this Agreement.

9. The representations and warranties of the Stock Purchase Agreement
shall be deemed to apply to the transactions provided by this Agreement. Buyer
acknowledges that the application of the severance plans and policies covering
the Personnel has been explained to Buyer.

Dated as of May 10, 1996.

GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC.

By: /s/ Gus J. Athas
--------------------------

Its: Senior Vice-President
--------------------------

SIGNAL CAPITAL CORPORATION

By: /s/ James E. Knox
--------------------------

Its: Senior Vice President
--------------------------

<PAGE> 1

EXHIBIT 21.1

ANIXTER INTERNATIONAL SCHEDULE 21

LIST OF SUBSIDIARIES

<TABLE>
<CAPTION>
JURISDICTION
COMPANY NAME OF INCORPORATION
- - ------------ ----------------
<S> <C>
Anixter Inc. ............................................... Delaware
Anixter Argentina S.A. ................................... Argentina
Anixter Canada Inc. ...................................... Canada
WireXpress Ltd. ....................................... Canada
Anixter Colombia S.A. .................................... Colombia
Anixter de Mexico, S.A. de C.V. .......................... Mexico
Anixter Holdings, Inc. ................................... Delaware
Anixter Venezuela Inc. ................................... Delaware
Anixter Financial Inc. ................................... Delaware
Anixter Europe Holdings B.V. .......................... Netherlands
Anixter Austria GmbH................................. Austria
Anixter Belgium N.V. ................................ Belgium
Anixter Denmark A/S ................................. Denmark
Anixter Deutschland GmbH............................. Germany
Anixter Espana S.A. ................................. Spain
Anixter France S.A. ................................. France
Anixter Network Systems Greece, L.L.C. .............. Greece
Anixter Iletsim Sistemleri Pazarlama ve Ticaret
A.S. ............................................... Turkey
Anixter International N.V./S.A. ..................... Belgium
Anixter Italia S.r.1. ............................... Italy
Anixter International Ltd. (U.K.).................... England
Anixter U.K. Ltd. ................................ England
Anixter Logistics, Europe N.V. ...................... Belgium
Anixter Nederland B.V. .............................. Netherlands
Anixter Norge A.S. .................................. Norway
Anixter Poland Sp.z.o.o. ............................ Poland
Anixter Portugal S.A. ............................... Portugal
Anixter Switzerland S.A./A.G. ....................... Switzerland
Anixter Sverige AB (Sweden).......................... Sweden
Anixter Singapore Pte Ltd. ............................ Singapore
Anixter Hong Kong Limited.............................. Hong Kong
Anixter Australia Pty. Ltd. .............................. Australia
Anixter Thailand Inc. .................................... Delaware
Anixter Puerto Rico, Inc. ................................ Delaware
Anixter do Brasil Ltda. .................................. Brazil
Anixter Philippines Inc. ................................. Delaware
WireXpress, Inc. ......................................... Illinois
Anixter-Real Estate, Inc. ................................ Illinois
Anixter -- Frontier (JV).................................. New York
Anixter -- Lincoln (JV)................................... Nebraska
Anixter Information Systems Corporation................... Illinois
B.E.L. Corporation.......................................... Delaware
Foreign Investments, Inc. .................................. Delaware
GL Holding of Delaware, Inc. ............................... Delaware
</TABLE>
<PAGE> 2

<TABLE>
<CAPTION>
JURISDICTION
COMPANY NAME OF INCORPORATION
- - ------------ ----------------
<S> <C>

Itel Corporation............................................................................ California
Itel Container Corporation International................................................. California
Itel Container Ventures Inc. ................................................................. Delaware
Itel Distribution Systems, Inc. .............................................................. Delaware
Itel Rail Holdings Corporation................................................................ Delaware
Fox River Valley Railroad Corporation....................................................... Wisconsin
Green Bay and Western Railroad Company...................................................... Wisconsin
Michigan & Western Railroad Company...................................................... Michigan
Hartford and Slocomb Railroad Company....................................................... Wisconsin
McCloud River Railroad Company.............................................................. California
Rex Leasing, Inc. .......................................................................... New Jersey
Signal Capital Corporation.................................................................. Delaware
SC Arizona, Inc. ........................................................................ Delaware
SC Connecticut, Inc. .................................................................... Delaware
Richdale, Ltd.......................................................................... Delaware
Signal Capital Projects, Inc............................................................. Delaware
Signal Capital Norwalk, Inc............................................................ Delaware
Seacoast Capital Corp. ....................................................................... Delaware
Seacoast Capital Corp. II..................................................................... Delaware
Seacoast Capital Partners L.P. ............................................................. Delaware
Plainsboro Holding Corporation................................................................ Delaware
</TABLE>

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 2-93173) pertaining to the Anixter International Inc. 1983 Stock
Incentive Plan, the Registration Statement (Form S-8 No. 33-13486) pertaining to
the Anixter International Inc. Key Executive Equity Plan, the Registration
Statement (Form S-8 No. 33-21656) pertaining to the Anixter International Inc.
1988 Employee Stock Purchase Plan, the Registration Statement (Form S-8 No.
33-38364) pertaining to the Anixter International Inc. 1989 Employee Stock
Incentive Plan, the Registration Statement (Form S-8 No. 33-60676) pertaining to
the Anixter International Inc. 1993 Director Stock Option Plan, and the
Registration Statement (Form S-8 No. 333-05907) pertaining to the Anixter
International Inc. 1996 Stock Incentive Plan and in the related Prospectuses of
our report dated February 10, 1997 with respect to the consolidated financial
statements and schedules of Anixter International Inc. included in this Annual
Report (Form 10-K) for the year ended January 3, 1997.

ERNST & YOUNG LLP

Chicago, Illinois
March 18, 1997

<PAGE> 1

EXHIBIT 24.1

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Anixter International Inc., a Delaware corporation (the
"Corporation"), which is about to file an annual report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, on Form 10-K hereby
constitutes and appoints Dennis J. Letham, Rod F. Dammeyer, and James E. Knox,
and each of them, his or her true and lawful attorney-in-fact and agents, with
full power and all capacities, to sign the Corporation's Form 10-K and any or
all amendments thereto, and any other documents in connection therewith, to be
filed with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as she or he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.

IN WITNESS WHEREOF, the undersigned and hereunto set her or his hand and
seal as of the 19th day of March 1997.

/s/ JAMES BLYTH /s/ JOHN R. PETTY
- - ------------------------------------ ------------------------------------

/s/ ROD F. DAMMEYER /s/ SHELI Z. ROSENBERG
- - ------------------------------------ ------------------------------------

/s/ ROBERT E. FOWLER, JR. /s/ STUART M. SLOAN
- - ------------------------------------ ------------------------------------

/s/ ROBERT W. GRUBBS /s/ THOMAS C. THEOBALD
- - ------------------------------------ ------------------------------------

/s/ F. PHILIP HANDY /s/ SAMUEL ZELL
- - ------------------------------------ ------------------------------------

/s/ MELVYN N. KLEIN
- - ------------------------------------

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM ANIXTER
INTERNATIONAL INC.'S CONSOLIDATED STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-03-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JAN-03-1997
<CASH> 18,200
<SECURITIES> 0
<RECEIVABLES> 441,100
<ALLOWANCES> 9,000
<INVENTORY> 397,300
<CURRENT-ASSETS> 868,500
<PP&E> 128,400
<DEPRECIATION> 66,800
<TOTAL-ASSETS> 1,261,000
<CURRENT-LIABILITIES> 313,500
<BONDS> 0
0
0
<COMMON> 48,000
<OTHER-SE> 387,500
<TOTAL-LIABILITY-AND-EQUITY> 1,261,000
<SALES> 2,475,300
<TOTAL-REVENUES> 2,475,300
<CGS> 1,852,600
<TOTAL-COSTS> 2,386,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,700
<INCOME-PRETAX> 64,800
<INCOME-TAX> 28,700
<INCOME-CONTINUING> 36,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,100
<EPS-PRIMARY> .73
<EPS-DILUTED> .73

</TABLE>