ANIXTER INTERNATIONAL INC, 10-K, 2000-03-08

ANIXTER INTERNATIONAL INC
10-K, 2000-03-08
ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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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 DECEMBER 31, 1999 OR

[ ] 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)

<TABLE>
<S> <C>
DELAWARE 94-1658138
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>

4711 GOLF ROAD
SKOKIE, ILLINOIS 60076
(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code: (847) 677-2600

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

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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<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. Yes [ ] No [X]

The aggregate market value of the shares of Registrant's Common Stock, $1
par value, held by nonaffiliates of Registrant was approximately $683,477,000 as
of March 1, 2000.

At March 1, 2000, 35,390,392 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 1999 Annual
Meeting of Stockholders of Anixter International Inc. are incorporated by
reference into Part III. This document consists of 42 pages. Exhibit List begins
on page 33.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I
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........................ 6

PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters......................................... 7
Item 6. Selected Financial Data..................................... 7
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8
Item 7A. Quantitative and Qualitative Disclosures about Market
Risk........................................................ 13
Item 8. Consolidated Financial Statements and Supplementary Data.... 13
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 13

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.

(A) GENERAL DEVELOPMENT OF BUSINESS

Anixter International Inc. (the "Company"), formerly known as Itel
Corporation, which was incorporated in Delaware in 1967, is engaged in the
distribution of communications and specialty wire and cable products through
Anixter Inc. and its subsidiaries (collectively "Anixter").

In the fourth quarter of 1998, the Company decided to exit its Integration
segment and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. The European Integration business was
sold in the fourth quarter of 1998. In 1999, the Company completed the disposal
of the Integration segment with North America Integration being sold in the
first quarter of 1999 followed by the sale of Asia Pacific Integration in the
fourth quarter of 1999.

In 1998, the Company sold its remaining 19% interest in ANTEC Corporation
and its subsidiaries (collectively "ANTEC"), a broadband communications
technology company. As of January 2, 1998, the Company owned approximately 19%
of ANTEC, which was reduced from 31% in February 1997, by the issuance of
additional stock by ANTEC in connection with a merger.

In June 1998, the Company purchased 100% of the outstanding common stock of
Pacer Electronics, Inc., a distributor of wire and cable products along with
value added services to original equipment manufacturers in the electronic
industry.

In August 1997, the Company purchased approximately 93% of the outstanding
common stock of Accu-Tech Corporation, a networking and wiring systems
specialist distributing products for data, voice, video and electrical
applications.

In 1996, the Company changed its fiscal year end from a calendar year
ending December 31 to the Friday nearest December 31 and included 52 weeks in
1999, 1998, 1997, and 53 weeks in 1996. This change did 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").

(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

For certain financial information concerning the Registrant's business
segments, see Note 12 "Business Segments" of the Notes to the Consolidated
Financial Statements of this report.

Anixter is a leading global distributor of communication products used in
building enterprise and Service Provider (companies that offer
telecommunications services, including internet service providers, cable
companies and wireless communications providers), data, voice and video
networks. In addition, Anixter is a leading distributor of specialty wire and
cable products to original equipment manufacturers ("OEM") and to industrial
companies for maintenance and repair operations ("MRO"). Anixter stocks and/or
sells a full line of these products from a network of 86 locations in the United
States, 19 in Canada, 10 in the United Kingdom, 27 in Continental Europe, 17 in
Latin America, 4 in Australia, and 13 in Asia. Anixter sells approximately
65,000 products to 85,000 active customers and works with over 1,000 active
suppliers. Its customers include international, national, regional and local
companies that are end users of these products and engage in manufacturing,
telecommunications, Internet service, finance, education, health care,
transportation, utilities and government. Also, Anixter sells products to
resellers such as contractors, installers, system

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integrators, value added resellers, architects, engineers and wholesale
distributors. The average order size is approximately $1,700.

The products distributed 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. In the Enterprise
Network Communications market, Anixter sells products that are incorporated in
local area networks ("LANs"), the internetworking of LANs to form wide area
networks ("WANs") and enterprise networks. In the service provider market,
Anixter provides the installation-related materials that support central
switching offices, web hosting sites and remote transmission sites. Anixter's
products also include electrical wiring system products used for the
transmission of electrical energy and control/monitoring of industrial
processes.

Anixter also provides contractual supply chain management of installation
and repair-related materials for customers who install and/or maintain
communication equipment ("Integrated Supply"). Such contracts are generally for
time periods in excess of one year and include interfacing of Anixter and
customer information systems, the procurement, warehousing and delivery of goods
by Anixter, and in certain cases, the maintenance of dedicated warehouse
facilities.

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 Latin
America.

An important element of Anixter's overall 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 47% of Anixter's dollar volume
purchases in 1999 were from its five largest suppliers.

Anixter cost-effectively serves its customers' needs 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, Anixter 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 service while maintaining a
reasonable level of investment in inventory and facilities.

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

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INVESTMENT IN ANTEC

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.

During the first half of 1998, the Company sold its remaining 7.1 million
shares of ANTEC stock, resulting in net after tax proceeds of approximately $100
million. 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 resulted in
the cessation of equity method accounting for this investment after February 6,
1997.

MISCELLANEOUS

At December 31, 1999, the Company and its subsidiaries employed
approximately 5,200 people. Backlog orders are not material as a significant
amount of orders are shipped within 24 to 48 hours of receipt.

(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

For information concerning foreign and domestic operations and export
sales, see Note 9 "Income Taxes" and Note 12 "Business Segments" of this report.

ITEM 2. PROPERTIES.

Substantially all 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 1999, no matters were submitted to a vote of
the security holders.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table lists the name, age as of March 7, 2000, 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, 59............... Vice Chairman of the Company since February 1998; Chief
Executive Officer and President of the Company from January
1993 to February 1998.
John A. Dul, 39................... General Counsel of the Company since May 1998; 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.
Robert W. Grubbs Jr., 43.......... President and Chief Executive Officer of the Company since
February 1998; President and Chief Executive Officer of
Anixter since July 1994.
Lisa Kearns Lanz, 47.............. Vice President--Controller of the Company since July 1999;
Vice President--Treasurer of the Company from August 1997 to
July 1999; Vice President--Treasurer of Premark
International Inc. from May 1994 to June 1996.
James E. Knox, 62................. Senior Vice President--Law and Secretary of the Company
since 1986.
Dennis J. Letham, 48.............. Chief Financial Officer, Senior Vice President--Finance of
the Company since January 1995; Chief Financial Officer,
Executive Vice President of Anixter since July 1993.
Philip F. Meno, 41................ Vice President--Taxes of the Company since May 1993.
Rod Shoemaker, 42................. Vice President--Treasurer of the Company and Anixter since
July 1999; Assistant Treasurer of the Company and Anixter
from October 1994 to July 1999.
Samuel Zell, 58................... Chairman of the Board of Directors of the Company since
January 1993.
</TABLE>

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PART II

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

Anixter International Inc.'s Common Stock is traded on the New York Stock
Exchange under the symbol AXE. Stock price information is set forth in Note 14
("Quarterly Summary (unaudited)") of this report. As of March 1, 2000, the
Registrant had 4,221 shareholders of record.

ITEM 6. SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>
FISCAL YEAR
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1999 1998 1997 1996 1995
---- ---- ---- ---- ----
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Results of operations:
Sales....................................... $2,670.0 $2,348.5 $2,090.9 $1,816.5 $1,659.1
Operating income............................ 112.8 87.0 91.1 62.2 51.6
Interest expense and other, net............. (34.6) (34.8) (28.5) (24.0) (19.2)
Gain on ANTEC investment.................... -- 24.3 2.2 4.1 (0.6)
Loss on sale of marketable equity
securities............................... -- -- -- -- (3.0)
Income from continuing operations (a)....... 69.7 44.7 37.4 22.6 11.7
Income from discontinued operations......... 54.5 20.9 7.9 13.5 27.4
Net income.................................. 124.2 65.6 45.3 36.1 39.1
Basic income per share (b):
Continuing operations.................... $ 1.86 $ 1.00 $ 0.79 $ 0.46 $ 0.21
Net income per share..................... 3.31 1.46 0.95 0.73 0.71
Diluted income per share (b):
Continuing operations.................... $ 1.83 $ 0.99 $ 0.78 $ 0.45 $ 0.21
Net income per share..................... 3.26 1.45 0.95 0.72 0.70
Financial position at year-end:
Total assets................................ $1,434.7 $1,335.1 $1,333.6 $1,182.5 $1,131.4
Total debt.................................. $ 468.0 $ 543.6 $ 468.8 $ 468.4 $ 333.7
Stockholders' equity (c) (d)................ $ 456.4 $ 411.5 $ 477.0 $ 435.5 $ 449.0
Diluted book value per share (b)............ $ 11.99 $ 9.09 $ 9.98 $ 8.72 $ 8.05
Diluted shares (in thousands) (b)........... 38,078 45,263 47,775 49,949 55,784
Year end outstanding shares (in
thousands)............................... 35,924 41,878 47,297 48,007 52,488
</TABLE>

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Notes:

(a) In the third quarter of 1999, the Company recorded a $24.3 million tax
benefit in continuing operations for the reversal of previously established
tax reserves determined to be no longer necessary.

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

(c) Stockholders' equity reflects treasury stock purchases, including, in 1995,
common stock repurchase commitments, of $91.9 million, $101.8 million, $14.2
million, $52.1 million and $152.6 million in 1999, 1998, 1997, 1996, and
1995, respectively.

(d) Stockholders' equity includes unrealized after-tax gains on marketable
equity securities available-for-sale of $19.8 million at January 2, 1998.

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

The following Management's Discussion and Analysis of Financial Condition
and Results of Operations may contain various "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which can be
identified by the use of forward-looking terminology such as "believes",
"expects", "prospects", "estimated", "should", "may" or the negative thereof or
other variations thereon or comparable terminology indicating the Company's
expectations or beliefs concerning future events. The Company cautions that such
statements are qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements, a number of
which are identified in the discussion which follows. Other factors could also
cause actual results to differ materially from expected results included in
these statements.

In the fourth quarter of 1998, the Company decided to exit its Integration
segment and accordingly, the Integration segment is reflected as a discontinued
operation in these financial statements. The information contained in this
financial review should be read in conjunction with the consolidated financial
information on pages 16 to 32 of this Report.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Asset Sales and Other Dispositions

ANTEC Investment: During the first half of 1998, the Company sold its
remaining 7.1 million shares of ANTEC stock, resulting in net after tax proceeds
of approximately $100 million. As of January 2, 1998, the Company's interest in
ANTEC was approximately 19%. 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
resulted in the cessation of equity method accounting for this investment after
February 6, 1997.

Discontinued Operations and Assets held for Sale: In the fourth quarter of
1998, the Company decided to exit its Integration segment and accordingly, the
Integration segment is reflected as a discontinued operation in these financial
statements. The European Integration business was sold in the fourth quarter of
1998. In 1999, the Company completed the disposal of the Integration segment.
The North America Integration business was sold in the first quarter of 1999 and
the Asia Pacific Integration business was sold in the fourth quarter of 1999.
Total proceeds received from the sale of the Integration business were $238
million, resulting in an after-tax gain of $50.6 million. (Loss)/Income from
discontinued operations was $(2.5) million, $7.7 million and $7.9 million in
1999, 1998 and 1997, respectively. See Note 3 "Discontinued Operations" in the
Notes to the Consolidated Financial Statements for further information.

The Company sold certain other assets for $25.1 million and $43.0 million,
resulting in an after-tax loss/(gain) of $2.0 million and ($13.2) million in
1999 and 1998, respectively.

Cash Flow

Year ended December 31, 1999: Consolidated net cash provided by continuing
operating activities was $3.8 million in 1999 compared to $44.0 million used in
1998. Cash provided by continuing operating activities increased primarily as a
result of an increase in operating income and timing of inventory payments.
Consolidated net cash used by investing activities was $15.9 million in 1999
versus $39.4 million provided in 1998. The decline in proceeds from investing
activities resulted from the sale of the Company's remaining investment in ANTEC
for $104.3 million in 1998. This was partially offset in 1998 by the acquisition
of Pacer Electronics, Inc. for $38.1 million. In the fourth quarter of 1999, the
Company acquired a small specialty wire and cable company in Europe for $2.6
million. Capital expenditures were $13.8 million and $26.4 million in 1999 and
1998, respectively. Capital expenditures are expected to be approximately
$15-$18 million in 2000. Consolidated net cash used by financing activities was
$160.3 million for 1999 in comparison to $30.0 million

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in 1998. The change primarily resulted from a net paydown of long term debt of
$73.0 million in 1999 versus net proceeds from the issuance of long-term debt of
$73.3 million in 1998. Proceeds of $238 million received from the sale of the
Integration business were used to paydown long term debt and purchase treasury
stock.

Year ended January 1, 1999: Consolidated net cash used by continuing
operating activities was $44.0 million in 1998 compared to $48.1 million
provided in 1997. Cash used by continuing operating activities increased
primarily as the result of the timing of inventory payments and a decline in
operating net income. Consolidated net cash provided by investing activities was
$39.4 million in 1998 versus $51.1 million used in 1997. The increase in
proceeds by investing activities resulted from the sale of the investment in
ANTEC for $104.3 million. This was partially offset by the acquisition of Pacer
Electronics, Inc. for $38.1 million. In 1997, the Company purchased Accu-Tech
for $27.6 million in cash and assumed $15.2 million of additional debt. Capital
expenditures were $26.4 million and $22.5 million in 1998 and 1997,
respectively. Consolidated net cash used by financing activities was $30.0
million for 1998 in comparison to $22.3 million in 1997. The change resulted
from $101.8 million being used to purchase treasury stock in 1998 compared to
$14.2 million in 1997. Net proceeds from the issuance of long-term debt was
$73.3 million in 1998 versus a net paydown of $10.1 million in 1997. Proceeds
were used to fund higher working capital requirements.

Interest Expense: Interest expense from continuing operations was $34.9
million, $31.7 million and $27.9 million for 1999, 1998 and 1997, 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 65% of debt
obligations at December 31, 1999, is fixed or capped. The impact of interest
rate swaps and caps for 1999, 1998 and 1997, was to increase interest expense by
$1.3 million, $.5 million and $.8 million, respectively.

Financings

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. 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.

At December 31, 1999, $202 million was available under the bank revolving
lines of credit at Anixter and Accu-Tech, of which $25.4 million was available
to the Company for general corporate purposes.

Income Taxes

During the third quarter of 1998, the Internal Revenue Service completed
its examination for the years 1993 to 1995, which included an examination of net
operating losses and credit carryforwards dating back to 1979. As a result of
the lapsing, during the third quarter of 1999, of all relevant statutes of
limitations on assessment relating to that 17-year period of time, the Company
recorded a $24.3 million tax benefit in continuing operations for the reversal
of previously established tax reserves determined to be no longer necessary.

Various foreign subsidiaries of the Company had aggregate cumulative NOL
carryforwards for foreign income tax purposes of approximately $163.6 million at
December 31, 1999, which are subject to various tax provisions of each
respective country. Approximately $52.7 million of this amount expires between
2000 and 2009 and $110.9 million of the amount has an indefinite life. Of the
$163.6 million NOL carryforwards of foreign subsidiaries, $84.9 million relates
to losses that have already provided a tax benefit in the U.S. due to rules
permitting flow-through of such losses in certain circumstances. Without such
losses included, the cumulative NOL carryforwards at December 31, 1999 are
approximately $78.7 million, which are subject to various provisions of each
respective country. Approximately $39.5 million of this amount expires between
2000 and 2009 and $39.2 million of the amount has an indefinite life. The
deferred tax asset, and valuation

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allowance, relating to foreign NOL carryforwards have been adjusted to reflect
only the carryforwards in which the Company has not taken a tax benefit in the
U.S.

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.

RESULTS OF OPERATIONS

The Company has experienced increased sales due to the continued growth of
the North American communications and electrical wire and cable businesses,
along with its continuing worldwide expansion. The Company competes with
distributors and manufacturers who sell products directly or through existing
distribution channels to end users or other resellers. The Company's future
performance could be affected by economic downturns, possible rapid changes in
applicable technologies or regulatory changes that substantially change the cost
and/or availability of public networking bandwidth.

Year ended December 31, 1999: Income from continuing operations was $69.7
million in 1999 compared with $44.7 million in 1998. The comparative results
were favorably impacted by a 14% growth in sales and lower operating expenses as
a percentage of sales. 1998 results were favorably impacted by a $24.3 million
gain realized on the sale of the Company's investment in ANTEC. In 1999, the
Company repurchased 6.5 million of its outstanding shares for $91.9 million.
Excluding the repurchases, diluted income per share from continuing operations
would have been $1.63 as compared to $1.83 reported.

Net sales grew by 14% to $2.7 billion. The North American sales from
continuing operations experienced 19% growth to $2.0 billion from $1.7 billion
in 1998. Improvement was a result of strong growth in the core Enterprise
Network Communications and Electrical Wire and Cable product sets along with
over $100 million of new volume from the Service Provider sector and a 72%
increase in Integrated Supply. Improvement in Electrical Wire and Cable resulted
from both volume increases and higher copper prices. In Europe, sales of $518.7
million were flat compared to last year. Excluding the effect of changes in
exchange rates, sales improved 3%. Europe was negatively impacted by soft
networking product sales and a stronger dollar. Asia Pacific and Latin America
net sales were down 4% to $141.2 million in 1999 from $147.2 million in 1998.
The decline is a result of soft economic conditions along with weaker local
currencies for the first three quarters of 1999. Asia Pacific and Latin America
ended the year with sales up 12% in the fourth quarter over 1998.

Net sales by major market are presented in the following table:

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
North America............................................ $2,010.1 $1,683.2
Europe................................................... 518.7 518.1
Asia and Latin America................................... 141.2 147.2
-------- --------
$2,670.0 $2,348.5
======== ========
</TABLE>

In 1999, operating income increased to $112.8 million from $87.0 million in
1998. Gross margin declined to 23.5% in 1999 from 24.5% in 1998. The very strong
sales growth of the Service Provider and Logistic Service businesses, both of
which have lower gross margins, have reduced the overall gross margin rate.
Operating expenses as a percent of sales decreased from 20.5% in 1998 to 19.0%
in 1999. The lower gross margins in the Service Provider and Logistic Service
businesses corresponds with the higher operating productivity that is inherent
in the nature of those businesses. 1999 expenses include $3.0 million for
headcount reductions and the write-down of inventory to net realizable value for
the Latin American operations. In 1998, the Company incurred $3.2 million of
expenses for the consolidation and relocation of

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certain distribution and office facilities in Europe, while Asia Pacific
incurred $1.0 million in costs primarily relating to headcount reductions.

In North America, operating margins declined to 5.3% in 1999 from 5.6% in
1998. The slight decline resulted primarily from higher spending on Year 2000
compliance efforts and retained overhead costs associated with the North
American Integration business. Europe operating margins improved from 2.5% in
1998 to 4.0% in 1999. Excluding the $3.2 million consolidation and relocation
costs noted above, 1998 operating margin was 3.1%. The improvement resulted from
realizing the benefits of the 1998 restructuring and continued aggressive
expense management in light of the weak sales growth. As noted above, excluding
the 1999 $3.0 million of costs for Latin America and the 1998 $1.0 million of
costs for Asia Pacific, the operating loss for Asia and Latin America was
reduced by 44%. The improvement primarily resulted from Asia, where the Company
realized the benefits from the 1998 restructuring and expense reduction efforts.

Operating income (loss) by major market is presented in the following
table:

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
North America............................................ $106.2 $94.7
Europe................................................... 20.6 12.9
Asia and Latin America................................... (14.0) (20.6)
------ -----
$112.8 $87.0
====== =====
</TABLE>

Consolidated interest expense increased to $34.9 million in 1999 from $31.7
million in 1998. The increase resulted from higher working capital requirements.
Foreign exchange and other expense declined from $3.1 million expense in 1998 to
$.3 million income in 1999. The expense in 1998 primarily relates to the third
quarter devaluation of the Mexican peso.

Excluding the $24.3 million tax benefit previously discussed in "Financial
Liquidity and Capital Resources", the 1999 effective income tax rate on
continuing operations was 42.0% as compared with 41.6% in 1998. The effective
tax rate exceeds the combined federal and state rate of approximately 40%
primarily as a result of non-tax-deductible goodwill amortization and start-up
losses in some foreign countries where there is no current year benefit.

Year ended January 1, 1999: Income from continuing operations was $44.7
million in 1998 compared with $37.4 million in 1997. The 1998 results were
favorably impacted by a 12% growth in sales and the $24.3 million gain on the
sale of the Company's investment in ANTEC.

Net sales grew by 12% to $2.3 billion. The North American continuing
operations experienced a 16% growth to $1.7 billion from $1.5 billion in 1997.
Improvement was a result of continued growth in demand for all major product
sets. In addition, $93 million of the $227 million overall increase in 1998
sales is attributed to the inclusion of a full year for Accu-Tech, which was
acquired in August 1997, and Pacer Electronics, Inc., which was purchased in
June 1998. Lower copper prices resulted in lower sales prices, hindering the
growth of the Wire and Cable business. In Europe, sales of $518.1 million
represented growth of 6% as compared to 14% in 1997. The slowdown in sales
growth is largely attributed to soft sales growth in the U.K. Asia Pacific and
Latin America net sales were essentially flat to last year at $147.2 million.
Excluding the effect of changes in exchange rates, net sales grew 10%.
Significant volume growth in Latin America was offset by a decline in Asia
Pacific, which was negatively impacted by poor economic conditions in Southeast
Asia.

11
<PAGE> 12

Net sales by major market are presented in the following table:

<TABLE>
<CAPTION>
YEARS ENDED
-----------------------
JANUARY 1, JANUARY 2,
1999 1998
---------- ----------
(IN MILLIONS)
<S> <C> <C>
North America.............................................. $1,683.2 $1,456.4
Europe..................................................... 518.1 487.0
Asia and Latin America..................................... 147.2 147.5
-------- --------
$2,348.5 $2,090.9
======== ========
</TABLE>

In 1998, operating income decreased to $87.0 million from $91.1 million in
1997. Gross margin declined to 24.5% in 1998 from 25.0% in 1997. The decline was
primarily a result of unfavorable inventory costing adjustments in Latin
America, poor economic conditions in Southeast Asia and planned price reductions
in North American communications in pursuit of greater market share. Operating
expenses as a percent of sales increased slightly from 20.3% in 1997 to 20.5% in
1998. In 1998, the Company incurred $3.2 million of expenses for the
consolidation and relocation of certain distribution and office facilities in
Europe to improve future productivity and lower costs. In addition, in 1997,
$7.1 million of income was realized on the sale of an investment in a start-up
telecommunications company and management fees relating to the collection of
certain receivables. Excluding these unusual items, operating expenses as a
percentage of sales continued to improve, declining from 20.7% in 1997 to 20.4%
in 1998. Improvement primarily relates to headcount reductions in Asia Pacific
and Europe, partially offset by increased operating expenses in North America.

In North America, operating margins declined to 5.6% in 1998 from 6.8% in
1997. Excluding the $7.1 million increase noted in the paragraph above, 1997
operating margin was 6.3%. North American communications margins declined,
resulting from the effects of lower copper prices on electrical wire and cable
products, higher facility costs and increased headcount in pursuing greater
market share. Europe operating margins improved from 2.2% in 1997 to 2.5% in
1998. Excluding the $3.2 million consolidation and relocation costs noted above,
1998 operating margin was 3.1%. The improvement resulted from reductions in
headcount and improved gross margins due to lower costs and favorable inventory
adjustments. Asia and Latin America continued to operate at a loss on flat sales
due to the poor economy in Southeast Asia and unfavorable year end inventory
adjustments in Latin America.

Operating income (loss) by major market is presented in the following
table:

<TABLE>
<CAPTION>
YEARS ENDED
-----------------------
JANUARY 1, JANUARY 2,
1999 1998
---------- ----------
(IN MILLIONS)
<S> <C> <C>
North America.............................................. $94.7 $99.0
Europe..................................................... 12.9 10.7
Asia and Latin America..................................... (20.6) (18.6)
----- -----
$87.0 $91.1
===== =====
</TABLE>

Consolidated interest expense increased to $31.7 million in 1998 from $27.9
million in 1997. The increase resulted from higher working capital requirements.
Foreign exchange and other expense rose to $3.1 million in 1998 from $.6 million
in 1997. The increase primarily relates to the third quarter devaluation of the
Mexican peso.

The 1998 effective income tax rate on continuing operations was 41.6% as
compared with 42.3% in 1997. The effective tax rate exceeds the combined federal
and state rate of approximately 40% primarily as a result of non-tax-deductible
goodwill amortization and start-up losses in some foreign countries where there
is no current year benefit.

Impact of Year 2000: In 1999, the Company completed upgrading the mainframe
operating system and modified software so that computer systems would function
properly with respect to dates in the year 2000 and thereafter. The Company also
completed the assessment of PC hardware and software systems and non-

12
<PAGE> 13

information technology systems for Year 2000 compliance. Over the life of the
project, the Company incurred and expensed approximately $4.5 million, primarily
for assessment of the Year 2000 issue, mainframe operating system upgrades and
code modifications. The time and expense of the project did not have a material
impact on the Company's financial condition. As a result of these modifications,
the Company did not incur any significant problems relating to Year 2000 issues.
There was no interruption of business with key suppliers or downturn in economic
activity caused by problems with Year 2000 issues. As of March 1, 2000, the
Company has not been notified of any warranty issues relating to Year 2000 for
the products it has sold and therefore, the Company believes it should have no
material exposure to contingencies related to the Year 2000 issue for the
products it has sold. The Company will continue to monitor its computer
applications and those of its suppliers and vendors throughout the year 2000 to
ensure that any latent Year 2000 matters that may arise are addressed promptly.

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to the impact of interest rate changes and
fluctuations in foreign currencies, as well as changes in the market value of
its financial instruments. The Company periodically enters into derivatives in
order to minimize these risks, but not for trading purposes.

The Company has entered into interest rate agreements which effectively fix
or cap the LIBOR component of the interest rate on a portion of its floating
rate obligations. As a result, the interest rate on approximately 65% and 40% of
debt obligations at December 31, 1999 and January 1, 1999, respectively, is
fixed or capped. See Note 1, "Interest Rate Agreements," and Note 7, "Debt," of
the consolidated financial statements for further detail on interest agreements
and debt obligations outstanding.

The Company prepared sensitivity analyses of its derivatives and other
financial instruments assuming a 1 percentage point adverse change in interest
rates and a 10 percent adverse change in the foreign currency contracts
outstanding. Holding all other variables constant, the hypothetical adverse
changes would increase interest expense by $2.8 million and foreign exchange
losses by $2.5 million. The effect of the interest change on the fair market
value of the outstanding debt is insignificant. These analyses did not consider
the effects of the reduced level of economic activity that could exist in such
an environment and certain other factors. Further, in the event of a change of
such magnitude, management would likely take actions to further mitigate its
exposure to possible changes. However, due to the uncertainty of the specific
actions that would be taken and their possible effects, the sensitivity analyses
assume no changes in the Company's financial structure.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. 14
Consolidated Statement of Operations........................ 15
Consolidated Balance Sheet.................................. 16
Consolidated Statement of Cash Flows........................ 17
Consolidated Statement of Stockholders' Equity.............. 18
Notes to the Consolidated Financial Statements.............. 19
Selected Quarterly Financial Data (Unaudited)............... 32
</TABLE>

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

Not applicable.

13
<PAGE> 14

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 December 31, 1999, and January 1, 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1999. 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 auditing standards generally
accepted in the United States. 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 December 31, 1999, and January 1, 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States. 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 7, 2000

14
<PAGE> 15

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
<S> <C> <C> <C>
Net sales................................................. $2,670.0 $2,348.5 $2,090.9
Cost of operations:
Cost of products sold.................................. 2,042.7 1,772.9 1,568.6
Operating expenses..................................... 507.1 481.5 424.9
Amortization of goodwill............................... 7.4 7.1 6.3
-------- -------- --------
Total costs and expenses.......................... 2,557.2 2,261.5 1,999.8
-------- -------- --------
Operating income.......................................... 112.8 87.0 91.1
Other (expenses) income:
Interest expense....................................... (34.9) (31.7) (27.9)
Gain on ANTEC investment............................... -- 24.3 2.2
Other.................................................. 0.3 (3.1) (0.6)
-------- -------- --------
Income before income taxes................................ 78.2 76.5 64.8
Income tax expense........................................ 8.5 31.8 27.4
-------- -------- --------
Income from continuing operations......................... 69.7 44.7 37.4
Discontinued operations:
(Loss) Income from discontinued operations, net of
tax.................................................. (2.5) 7.7 7.9
Gain on disposal of discontinued operations, net of
tax.................................................. 57.0 13.2 --
-------- -------- --------
Net income................................................ $ 124.2 $ 65.6 $ 45.3
======== ======== ========
Basic income per share:
Continuing operations..................................... $1.86 $1.00 $0.79
Discontinued operations................................... 1.45 0.46 0.16
-------- -------- --------
Net income................................................ $3.31 $1.46 $0.95
======== ======== ========
Diluted income per share:
Continuing operations..................................... $1.83 $0.99 $0.78
Discontinued operations................................... 1.43 0.46 0.17
-------- -------- --------
Net income................................................ $3.26 $1.45 $0.95
======== ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

15
<PAGE> 16

ANIXTER INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEET
(IN MILLIONS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 17.5 $ 20.5
Accounts receivable, (less allowances of $10.3 in 1999 and
$11.0 in 1998)......................................... 537.5 455.9
Inventories............................................... 536.4 417.2
Deferred income taxes..................................... 18.2 13.3
Income taxes receivable................................... -- 5.1
Other assets.............................................. 11.5 8.4
-------- --------
Total current assets................................. 1,121.1 920.4
Property and equipment, at cost............................. 158.6 144.1
Accumulated depreciation.................................... (105.5) (86.5)
-------- --------
Net property & equipment............................. 53.1 57.6
Goodwill (less accumulated amortization of $78.4 in 1999 and
$71.0 in 1998)............................................ 229.1 233.8
Net assets of discontinued operations....................... -- 87.3
Other assets................................................ 31.4 36.0
-------- --------
$1,434.7 $1,335.1
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 340.4 $ 246.7
Accrued expenses.......................................... 149.1 94.3
Income taxes payable...................................... 6.0 --
-------- --------
Total current liabilities............................ 495.5 341.0
Deferred income taxes....................................... -- 28.3
Other liabilities........................................... 14.8 10.7
Long-term debt.............................................. 468.0 543.6
-------- --------
Total liabilities.................................... 978.3 923.6
Stockholders' equity:
Common stock -- $1.00 par value, 100,000,000 shares
authorized, 35,924,240 and 41,877,659 shares issued and
outstanding in 1999 and 1998, respectively............. 35.9 41.8
Accumulated other comprehensive income.................... (37.6) (39.7)
Retained earnings......................................... 458.1 409.4
-------- --------
Total stockholders' equity........................... 456.4 411.5
-------- --------
$1,434.7 $1,335.1
======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

16
<PAGE> 17

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
<S> <C> <C> <C>
Operating activities:
Net Income................................................ $ 124.2 $ 65.6 $ 45.3
Adjustments to reconcile income from continuing operations
to net cash provided by (used in) continuing operating
activities:
Income from discontinued operations.................... (54.5) (20.9) (7.9)
Gain on ANTEC investment............................... -- (24.3) (2.2)
Depreciation and amortization.......................... 26.0 26.8 26.1
Deferred income taxes.................................. (28.6) (7.4) (13.8)
Changes in assets and liabilities:
Accounts receivable.................................. (70.3) (41.7) (64.1)
Inventory............................................ (115.4) (17.8) (46.3)
Accounts payable and accruals........................ 124.9 (10.0) 110.9
Other, net........................................... (2.5) (14.3) 0.1
------- ------- -------
Net cash provided by (used in) continuing
operating activities............................ 3.8 (44.0) 48.1
------- ------- -------
Investing activities:
Capital expenditures...................................... (13.8) (26.4) (22.5)
Acquisition of businesses................................. (2.6) (38.1) (28.6)
Proceeds from sale of ANTEC............................... -- 104.3 --
Other, net................................................ 0.5 (0.4) --
------- ------- -------
Net cash (used in) provided by continuing
investing activities............................ (15.9) 39.4 (51.1)
------- ------- -------
Financing activities:
Proceeds from long-term borrowings........................ 897.2 945.8 801.7
Repayment of long-term borrowings......................... (970.2) (872.5) (811.8)
Proceeds from issuance of common stock.................... 10.5 3.1 3.5
Purchase of treasury stock................................ (91.9) (101.8) (14.2)
Other, net................................................ (5.9) (4.6) (1.5)
------- ------- -------
Net cash used in continuing financing
activities...................................... (160.3) (30.0) (22.3)
------- ------- -------
Cash provided by discontinued operations.................... 169.4 44.5 17.7
------- ------- -------
Cash (used) provided........................................ (3.0) 9.9 (7.6)
Cash at beginning of year................................... 20.5 10.6 18.2
------- ------- -------
Cash at end of year......................................... $ 17.5 $ 20.5 $ 10.6
======= ======= =======
</TABLE>

See accompanying notes to the consolidated financial statements.

17
<PAGE> 18

ANIXTER INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN MILLIONS)

<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME
------------------------
UNREALIZED
GAINS ON
CUMULATIVE MARKETABLE
COMMON CAPITAL RETAINED TRANSLATION EQUITY COMPREHENSIVE
STOCK SURPLUS EARNINGS ADJUSTMENTS SECURITIES INCOME
------ ------- -------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 3, 1997......... $48.0 $ 57.1 $344.6 $(14.1) $ --
Net income......................... -- -- 45.3 -- -- $ 45.3
Other comprehensive income:
Foreign currency translation
adjustments...................... -- -- -- (13.0) -- (13.0)
Change in unrealized gain on
marketable equity securities (net
of tax of $12.2 million)......... -- -- -- -- 19.8 19.8
------
Comprehensive income............... $ 52.1
======
Issuance of common stock and
related tax benefits............. 0.3 3.2 -- -- --
Purchase and retirement of treasury
stock............................ (1.0) (13.2) -- -- --
----- ------ ------ ------ ------
Balance at January 2, 1998......... 47.3 47.1 389.9 (27.1) 19.8
Net income......................... -- -- 65.6 -- -- $ 65.6
Other comprehensive income:
Foreign currency translation
adjustments...................... -- -- -- (12.6) -- (12.6)
Change in unrealized gain on
marketable equity securities (net
of tax of $12.2 million)......... -- -- -- -- (19.8) (19.8)
------
Comprehensive income............... $ 33.2
======
Issuance of common stock and
related tax benefits............. 0.1 3.0 -- -- --
Purchase and retirement of treasury
stock............................ (5.6) (50.1) (46.1) -- --
----- ------ ------ ------ ------
Balance at January 1, 1999......... 41.8 -- 409.4 (39.7) --
Net income......................... -- -- 124.2 -- -- $124.2
Other comprehensive income:
Foreign currency translation
adjustments...................... -- -- -- 2.1 -- 2.1
------
Comprehensive income............... $126.3
======
Issuance of common stock and
related tax benefits............. 0.6 9.9 -- -- --
Purchase and retirement of treasury
stock............................ (6.5) (9.9) (75.5) -- --
----- ------ ------ ------ ------
Balance at December 31, 1999....... $35.9 $ -- $458.1 $(37.6) $ --
===== ====== ====== ====== ======
</TABLE>

See accompanying notes to the consolidated financial statements.

18
<PAGE> 19

ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION: Anixter International Inc., 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").

BASIS OF PRESENTATION: 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
Company's fiscal year ends on the Friday nearest December 31 and included 52
weeks in 1999, 1998 and 1997.

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.

Certain amounts for prior years have been reclassified to conform to the
current year presentation.

INVENTORIES: Inventories, consisting primarily of finished goods, are
stated at the lower of cost or market. Cost is determined using the average-cost
method.

PROPERTY AND EQUIPMENT: Capital expenditures, primarily equipment, are
recorded at cost and depreciated on the straight-line method over their
estimated useful lives ranging from 3 to 10 years. Leasehold improvements are
depreciated over the term of the related lease. Upon sale or retirement, the
cost and related depreciation are removed from the respective accounts, and any
gain or loss is included in income. Maintenance and repair costs are expensed as
incurred.

GOODWILL: Goodwill primarily relates to the excess of cost over the fair
value of the net tangible assets of businesses acquired. The Company continually
reviews goodwill to assess recoverability from estimated undiscounted future
cash flows at the aggregate business unit level. Goodwill is amortized on a
straight-line basis over periods ranging from 20 to 40 years.

INVESTMENT IN ANTEC: In 1998, the Company sold its remaining 7.1 million
shares of ANTEC stock which resulted in net after tax proceeds of approximately
$100 million and an after-tax gain of $14.6 million. 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 resulted in the cessation of equity method accounting
for this investment after that date. As a result of this change, the Company
recorded a $1.2 million after-tax gain. As of January 2, 1998, the market value
of the Company's investment in ANTEC was $112.0 million. The Company reported
its investment in ANTEC at fair value. All unrealized gains and losses, net of
taxes, were recorded in stockholders' equity until realized.

INTEREST RATE AGREEMENTS: In addition to the fixed rate 8.0% Senior Notes,
the Company has entered into interest rate agreements which effectively fix or
cap, for a period of time, the LIBOR component of an interest rate on a portion
of its floating rate obligations. As a result, the interest rate on
approximately 65% and 40%, of debt obligations at December 31, 1999 and January
1, 1999, respectively, is fixed or capped. At December 31, 1999 and January 1,
1999, the Company had an interest rate swap agreement outstanding with a
notional amount of $25 million. This swap agreement obligated the Company to pay
a fixed rate of approximately 6.1% through January 2003. At December 31, 1999
and January 1, 1999, the Company also had one interest rate collar agreement
with a notional amount of $50 million which entitled the Company to receive from
the bank the amount by which the LIBOR component of the floating rate interest
payments exceed 6.5%. In addition, the Company is required to pay the bank the
difference between 6.3% and the floating rate when it is below 5.3%. This
interest rate collar matures in January 2002. At December 31, 1999 and January
1, 1999, the

19
<PAGE> 20
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company had three additional interest rate swap agreements outstanding with a
notional amount aggregating $100 million that obligated the Company to pay a
fixed rate of approximately 6.1% through July 2000. At December 31, 1999, the
Company had an interest rate swap agreement outstanding with a notional amount
of $25 million. This swap agreement obligated the Company to pay a fixed rate of
6.1% through July 2002. At December 31, 1999, the Company had a cancelable
interest rate swap agreement outstanding with a notional amount of $50 million.
This swap agreement obligated the Company to pay a fixed rate of 5.7% through
August 2002. However, the counterparty exercised their right to cancel the swap
in February 2000. The fair value, which is the estimated amount at the current
interest rate that the Company would receive or pay to enter into similar
interest rate agreements on the reporting date, of all of the Company's interest
rate agreements at December 31, 1999, and January 1, 1999, would be to receive
$1.4 million and pay $3.8 million, respectively. The impact of these interest
rate agreements for fiscal years 1999, 1998 and 1997, was to increase interest
expense by $1.3 million, $.5 million and $.8 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 1999, 1998 and 1997. The
forward contracts are revalued at current foreign exchange rates, with the
changes in valuation reflected directly in income. At December 31, 1999, and
January 1, 1999, the Company had approximately $24.3 million and $32.7 million,
respectively, in foreign currency forward contracts outstanding.

REVENUE RECOGNITION: Sales and related cost of sales are recognized upon
shipment of products.

ADVERTISING AND SALES PROMOTION: Advertising and sales promotion costs are
expensed as incurred. Advertising and promotion costs were $11.1 million, $13.3
million and $13.7 million in 1999, 1998 and 1997, respectively.

STOCK BASED COMPENSATION: In accordance with the Accounting Principles
Board Opinion 25, "Accounting for Stock Issued to Employees", compensation cost
of stock options is measured as the excess, if any, of the quoted market price
of the Company's stock at the date of the grant over the option exercise price
and is charged to operations over the vesting period. Income tax benefits
attributable to stock options exercised are credited to capital in excess of
par.

INCOME TAXES: Using the liability method, provisions for income taxes
include deferred taxes resulting from temporary differences in determining
income for financial and tax purposes. Such temporary differences result
primarily from differences in the carrying value of assets and liabilities.

NEW ACCOUNTING PRONOUNCEMENTS

Accounting for Derivatives Instruments and Hedging Activities: In June
1998, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in the first quarter of fiscal year 2001. Because of the
Company's minimal use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on earnings or the
financial position of the Company.

20
<PAGE> 21
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2. INCOME PER SHARE

The following table sets forth the computation of basic and diluted income
per share from continuing operations:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Numerator (in millions):
Income from continuing operations......................... $ 69.7 $ 44.7 $ 37.4
====== ====== ======
Denominator (in thousands):
Basic shares outstanding.................................. 37,507 44,877 47,533
Effect of dilutive securities:
Stock options and warrants................................ 571 386 242
------ ------ ------
Dilutive potential shares................................... 38,078 45,263 47,775
====== ====== ======
Basic income per share from continuing operations........... $ 1.86 $ 1.00 $ 0.79
Diluted income per share from continuing operations......... $ 1.83 $ 0.99 $ 0.78
</TABLE>

NOTE 3. DISCONTINUED OPERATIONS

The Company recorded an after-tax gain from the sale of discontinued assets
of $57.0 million and $13.2 million in 1999 and 1998, respectively. Included in
the fiscal year 1999 gain on sale of assets, is a tax benefit of $8.4 million
resulting from the reversal of certain tax reserves associated with prior years'
reported sales of discontinued assets. Total proceeds received from the sale of
the Integration business was $238 million.

Net sales and income from discontinued operations are as follows:

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Net sales................................................... $196.3 $735.2 $714.3
Costs and expenses.......................................... (199.5) (710.0) (694.3)
------ ------ ------
Operating (loss) income..................................... (3.2) 25.2 20.0
Gain on sale of assets...................................... 81.1 22.0 --
Net interest expense and other.............................. (1.0) (4.8) (5.3)
Income tax expense.......................................... (22.4) (21.5) (6.8)
------ ------ ------
Income from discontinued operations......................... $ 54.5 $ 20.9 $ 7.9
====== ====== ======
</TABLE>

NOTE 4. ACQUISITION OF PACER ELECTRONICS, INC. AND ACCU-TECH CORPORATION

In June 1998, the Company purchased Pacer Electronics, Inc. ("Pacer") for
approximately $38 million. Pacer is an electrical and data cabling distributor
largely centered in the Northeast portion of the United States, with additional
locations in North Carolina and Florida. The majority of Pacer's sales come from
the

21
<PAGE> 22
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

sale of wire, cable, connectors and related products and value added services to
original equipment manufacturers in the electronics industry.

In August 1997, the Company purchased approximately 93% of the outstanding
common stock of Accu-Tech Corporation for $27.6 million in cash and assumed
$15.2 million of debt. Accu-Tech Corporation is a networking and wiring
specialist distributing products for data, voice, video and electrical
applications.

Both the Pacer acquisition and the Accu-Tech Corporation acquisition were
accounted for using the purchase method of accounting. Had these acquisitions
occurred at the beginning of their respective years of acquisition, the impact
on the Company's operating results would not have been significant.

NOTE 5. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.

At December 31, 1999, and January 1, 1999, the Company had an ownership
interest of approximately 99% in Anixter Inc., which is included in the
consolidated financial statements of the Company. The following summarizes the
financial information of Anixter Inc. and reflects the Integration segment of
the Company as a discontinued operation:

ANIXTER INC.
CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Assets:
Current assets............................................ $1,117.9 $ 872.3
Property, net............................................. 53.1 54.6
Goodwill.................................................. 229.1 212.1
Net assets of discontinued operations..................... -- 98.3
Other assets.............................................. 31.2 28.9
-------- --------
$1,431.3 $1,266.2
======== ========
Liabilities and Stockholders' Equity:
Current liabilities....................................... $ 486.4 $ 333.8
Other liabilities......................................... 9.9 8.7
Long-term debt............................................ 468.0 524.1
Subordinated notes payable to parent...................... 19.1 7.0
Stockholders' equity...................................... 447.9 392.6
-------- --------
$1,431.3 $1,266.2
======== ========
</TABLE>

ANIXTER INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATION

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Net sales................................................... $2,644.9 $2,240.2
Operating income............................................ $ 114.6 $ 84.3
Income before income tax expense............................ $ 79.9 $ 46.7
Income from continuing operations........................... $ 43.6 $ 15.7
Net income.................................................. $ 91.7 $ 25.0
</TABLE>

22
<PAGE> 23
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6. ACCRUED EXPENSES

Accrued expenses consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Interest.................................................... $ 7.4 $ 5.9
Salaries and fringe benefits................................ 70.3 60.3
Other....................................................... 71.4 28.1
------ -----
$149.1 $94.3
====== =====
</TABLE>

NOTE 7. DEBT

Debt is summarized below:

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Bank revolving lines of credit.............................. $362.8 $435.9
8% Senior notes............................................. 100.0 100.0
Other....................................................... 5.2 7.7
------ ------
Total debt............................................. $468.0 $543.6
====== ======
</TABLE>

Anixter has various revolving bank lines of credit worldwide which provide
for up to $565 million of borrowings of which $550 million is domestic. At
December 31, 1999, approximately $363 million was borrowed and $202 million was
available under the bank revolving lines of credit, of which $25.4 million was
available for general corporate purposes. These lines of credit reduce or mature
at various dates from 2001 through 2002. 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. The weighted
average interest rate at December 31, 1999, and January 1, 1999, was 6.7% and
6.1%, respectively. Facility fees of .2% payable on the revolving lines of
credit were insignificant.

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.

Certain debt agreements entered into by the Company's subsidiaries contain
various restrictions including restrictions on payments to the Company. The
Company has guaranteed substantially all of the debt of its subsidiaries.
Restricted net assets of subsidiaries were approximately $372.9 million and
$362.5 million at December 31, 1999 and January 1, 1999, respectively.

Aggregate annual maturities of debt are as follows: 2000 - none; 2001 -
$362.8 million; 2002 - none; 2003 - $100.0 million; 2004 - none; and $5.2
million thereafter.

Interest paid in 1999, 1998, and 1997 was $34.5 million, $36.6 million, and
$31.0 million, respectively.

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

23
<PAGE> 24
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8. 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 December 31, 1999 are as follows:
2000 -- $41.8 million; 2001 -- $32.1 million; 2002 -- $25.6 million;
2003 -- $16.4 million; 2004 -- $11.9 million; beyond 2004 -- $54.4 million.
Total rental expense was $41.9 million, $39.6 million and $35.6 million in 1999,
1998 and 1997, respectively.

NOTE 9. INCOME TAXES

The Company and its U.S. subsidiaries file their federal income tax return
on a consolidated basis. As of December 31, 1999, the Company had no NOL or ITC
carryforwards for federal income tax purposes. During the third quarter of 1998,
the Internal Revenue Service completed its examination for the years 1993 to
1995, which included an examination of net operating losses and credit
carryovers dating back to 1979. As a result of the lapsing, during the third
quarter of 1999, of all relevant statutes of limitations on assessment relating
to that 17-year period of time, the Company recorded a $24.3 million tax benefit
in continuing operations for the reversal of previously established tax reserves
which were determined to be no longer necessary.

At December 31, 1999, various foreign subsidiaries of the Company had
aggregate cumulative NOL carryforwards for foreign income tax purposes of
approximately $163.6 million, which are subject to various provisions of each
respective country. Approximately $52.7 million of this amount expires between
2000 and 2009 and $110.9 million of the amount has an indefinite life.

Of the $163.6 million NOL carryforwards of foreign subsidiaries mentioned
above, $84.9 million relates to losses that have already provided a tax benefit
in the U.S. due to rules permitting flow-through of such losses in certain
circumstances. Without such losses included, the cumulative NOL carryforwards at
December 31, 1999 are approximately $78.7 million, which are subject to various
provisions of each respective country. Approximately $39.5 million of this
amount expires between 2000 and 2009 and $39.2 million of the amount has an
indefinite life. The deferred tax asset and valuation allowance, shown below
relating to foreign NOL carryforwards, have been adjusted to reflect only the
carryforwards for which the Company has not taken a tax benefit in the U.S.

Domestic income from continuing operations before income taxes was $76.0
million, $84.0 million and $62.5 million for 1999, 1998 and 1997, respectively.
Foreign income (loss) from continuing operations before income taxes was $2.2
million, $(7.5) million and $2.3 million for 1999, 1998 and 1997, respectively.

The Company paid income taxes in 1999, 1998 and 1997 of $64.9 million,
$63.8 million and $35.3 million, respectively.

24
<PAGE> 25
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
(IN MILLIONS)
<S> <C> <C>
Gross deferred tax liabilities.............................. $(17.8) $(51.4)
Foreign NOL carryforwards................................... 29.9 26.1
Deferred compensation....................................... 9.4 9.3
Assets held for sale........................................ -- 6.4
Inventory reserves.......................................... 8.4 2.9
Investment reserves......................................... 4.5 5.3
Depreciation................................................ 5.1 2.5
Other....................................................... 6.6 7.9
------ ------
Gross deferred tax assets................................... 63.9 60.4
Valuation allowance......................................... (26.3) (24.0)
------ ------
Net deferred tax asset (liability).......................... $ 19.8 $(15.0)
====== ======
</TABLE>

Income tax expense (benefit) was comprised of:

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Current -- Foreign.......................................... $ 7.6 $ 7.6 $10.1
State........................................... 4.5 1.9 3.4
Federal......................................... 25.0 22.4 22.9
------ ----- -----
37.1 31.9 36.4
Deferred -- Foreign......................................... (1.5) 4.5 (0.7)
State.......................................... (1.1) 3.1 0.2
Federal........................................ (26.0) (7.7) (8.5)
------ ----- -----
(28.6) (.1) (9.0)
------ ----- -----
$ 8.5 $31.8 $27.4
====== ===== =====
</TABLE>

Reconciliation of income tax expense to the statutory corporate federal tax
rate of 35% are as follows:

<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory tax expense....................................... $27.4 $26.8 $22.7
Increase (reduction) in taxes resulting from:
Amortization of goodwill.................................. 2.2 2.1 1.9
Losses on foreign operations.............................. 2.5 8.4 2.4
State income taxes........................................ 2.3 3.2 2.3
Adjustment to prior year tax accounts..................... (24.3) (9.4) (3.0)
Other, net................................................ (1.6) 0.7 1.1
----- ----- -----
$ 8.5 $31.8 $27.4
===== ===== =====
</TABLE>

25
<PAGE> 26
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10. 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 and certain employees in other
countries. 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. Plan assets consist primarily of equity securities and mutual fund
investments.

In 1999, the Company completed the disposal of the Integration segment
which resulted in a curtailment gain of $4.4 million, and accordingly, is
classified as a gain on disposal of discontinued operations.

<TABLE>
<CAPTION>
PENSION BENEFITS
---------------------
1999 1998
---- ----
(IN MILLIONS)
<S> <C> <C>
Change in projected benefit obligation:
Beginning balance......................................... $ 110.4 $ 92.6
Service cost.............................................. 8.4 8.0
Interest cost............................................. 7.2 6.7
Actuarial (gain)loss...................................... (13.0) 5.5
Curtailment gain.......................................... (4.8) --
Benefits paid............................................. (4.0) (2.4)
------- -------
Ending balance............................................ $ 104.2 $ 110.4
======= =======
Change in plan assets at fair value:
Beginning balance......................................... $ 92.4 $ 85.8
Actual return on plan assets.............................. 9.3 6.6
Company contributions..................................... 0.1 2.4
Benefits paid............................................. (4.0) (2.4)
------- -------
Ending balance............................................ $ 97.8 $ 92.4
======= =======
Reconciliation of funded status:
Projected benefit obligation.............................. $(104.2) $(110.4)
Plan assets at fair value................................. 97.8 92.4
------- -------
Funded status............................................. (6.4) (18.0)
Unrecognized net actuarial gain........................... (15.8) (1.3)
Unrecognized prior service cost........................... 2.1 2.3
Unrecognized transition obligation........................ (1.2) (1.5)
------- -------
Accrued benefit cost...................................... $ (21.3) $ (18.5)
======= =======
Weighted average assumptions:
Discount rate............................................. 7.15% 7.17%
Expected return on plan assets............................ 8.63% 8.72%
Salary growth rate........................................ 5.26% 5.54%
</TABLE>

<TABLE>
<CAPTION>
PENSION COSTS
-----------------------------
1999 1998 1997
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Components of net periodic cost:
Service cost...................................... $ 8.4 $ 8.0 $ 6.9
Interest cost..................................... 7.2 6.7 5.9
Expected return on plan assets.................... (7.9) (7.5) (6.1)
Net amortization.................................. 0.2 (0.9) (0.5)
----- ----- -----
Periodic benefit cost prior to curtailment........ 7.5 6.3 6.2
Curtailment gain.................................. (4.4) -- --
----- ----- -----
Net periodic benefit cost......................... $ 3.1 $ 6.3 $ 6.2
===== ===== =====
</TABLE>

26
<PAGE> 27
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has several plans where the fair value of assets are in excess
of the projected benefit obligation. The fair value of the plans' assets were
$8.7 million and $7.3 million, and had projected benefit obligations of $6.4
million and $5.7 million in 1999 and 1998, respectively.

The Company has several savings plans. The Company's contributions to these
plans are based upon various levels of employee participation. The total cost of
these plans was $1.5 million in 1999, $1.9 million in 1998 and $1.7 million in
1997. The Company's liability for post-retirement benefits other than pensions
is not material.

NOTE 11. PREFERRED STOCK AND COMMON STOCK

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
1999 and 1998.

Stock Options and Stock Grants--

At December 31, 1999, the Company has stock incentive plans which authorize
2.0 million shares for additional stock option awards or stock grants. Options
granted under these plans have been granted with exercise prices at or higher
than the fair market value of the common stock on the date of grant. One-fourth
of the employee options granted become exercisable each year after the year of
grant. Employee restricted stock vests over a four year period. 2000 will be the
first year in which restricted stock will be issued. The director options fully
vest in one year. All options expire ten years after the date of grant.

The following table summarizes the 1999, 1998 and 1997 activity under the
employee and director option plans.

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EMPLOYEE EXERCISE DIRECTOR EXERCISE
(OPTIONS IN THOUSANDS) OPTIONS PRICE OPTIONS PRICE
---------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at January 3, 1997................................ 2,168.1 $16.28 490.0 $13.57
Granted................................................... 1,144.1 15.55 -- --
Exercised................................................. (7.0) 12.04 (60.0) 10.91
Canceled.................................................. (97.5) 17.13 -- --
------- ------ ----- ------
Balance at January 2, 1998................................ 3,207.7 16.00 430.0 13.94
Granted................................................... 1,772.0 17.46 -- --
Exercised................................................. (34.1) 17.80 (40.0) 9.94
Canceled.................................................. (262.4) 17.09 -- --
------- ------ ----- ------
Balance at January 1, 1999................................ 4,683.2 16.48 390.0 14.35
Granted................................................... 1,115.5 12.70 -- --
Exercised................................................. (452.0) 13.35 (30.0) 11.63
Canceled.................................................. (163.1) 16.96 -- --
------- ------ ----- ------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
Balance at December 31, 1999.............................. 5,183.6 $15.92 360.0 $14.57
======= ====== ===== ======
Options Exercisable at year-end
1997.................................................... 1,160.2 $13.63 430.0 $13.94
1998.................................................... 1,660.9 $14.78 390.0 $14.35
1999.................................................... 2,679.3 $16.49 360.0 $14.57
</TABLE>

27
<PAGE> 28
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information relating to options outstanding
and exercisable at December 31, 1999, using various ranges of exercise prices:

EMPLOYEE OPTIONS

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------- ----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
RANGE OF EXERCISE REMAINING EXERCISE
EXERCISE PRICES OUTSTANDING PRICE YEARS EXERCISABLE PRICE
--------------- ----------- -------- --------- ----------- --------
(OPTIONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
$5.19-$9.11................. 271.3 $ 8.56 1.9 271.3 $ 8.56
$12.69-$15.75............... 2,266.0 $13.99 7.4 855.0 $15.08
$17.44-$21.13............... 2,646.3 $18.34 7.1 1,553.0 $18.66
</TABLE>

DIRECTOR OPTIONS

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
RANGE OF OUTSTANDING & EXERCISE REMAINING
EXERCISE PRICES EXERCISABLE PRICE YEARS
--------------- ------------- -------- ---------
(OPTIONS IN THOUSANDS)
<S> <C> <C> <C>
$8.38-$9.00.................................... 130.0 $ 8.56 1.2
$15.00-$20.69.................................. 230.0 $17.97 3.3
</TABLE>

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 purchase price is the lower of 85% of the fair market value of the
common stock at the beginning of the ESPP year, July 1, 1999, or at the end of
the ESPP year, June 30, 2000. Under the ESPP, the Company sold 123,700 shares,
175,900 shares, and 217,600 shares to employees in 1999, 1998 and 1997,
respectively.

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 with
exercise prices at the fair market value of the common stock on the date of
grant. These options vest over four years and terminate seven to ten years from
the date of grant.

28
<PAGE> 29
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1999, the Company owned 99% of the approximately 32.6 million
shares of outstanding Anixter common stock. The following table summarizes the
1999, 1998 and 1997 option activity:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
OPTIONS PRICE
(OPTIONS IN THOUSANDS) ------- --------
<S> <C> <C>
Balance at January 3, 1997................................ 1,720.0 $10.99
Exercised................................................. (284.0) 9.48
Canceled.................................................. (107.6) 11.14
-------
Balance at January 2, 1998................................ 1,328.4 11.33
Exercised................................................. (253.8) 10.13
Canceled.................................................. (92.3) 11.77
-------
Balance at January 1, 1999................................ 982.3 11.57
Exercised................................................. (586.6) 11.21
Canceled.................................................. (26.2) 12.28
-------
Balance at December 31, 1999.............................. 369.5 $12.08
Options exercisable at year-end
1997................................................... 1,209.6 $10.99
1998................................................... 982.3 $11.57
1999................................................... 369.5 $12.08
</TABLE>

Exercise prices for options outstanding as of December 31, 1999, range from
$9.00 to $14.50 per share and have a weighted average remaining life of 2.0
years.

Units--

The Company adopted a director stock unit plan ("DSUP") to pay its
non-employee directors annual retainer 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. Stock units were granted to nine directors in 1999,
having an aggregate value at grant date of $540 thousand.

The following table summarizes the 1999, 1998, and 1997 activity under the
DSUP.

<TABLE>
<CAPTION>
DSUP
STOCK UNITS
-----------
<S> <C>
Balance at January 3, 1997................................ 35.2
Granted................................................... 28.3
Exercised................................................. (1.0)
Canceled.................................................. (2.9)
-----
Balance at January 2, 1998................................ 59.6
Granted................................................... 25.9
Exercised................................................. (3.9)
-----
Balance at January 1, 1999................................ 81.6
Granted................................................... 29.7
Exercised................................................. (3.5)
-----
Balance at December 31, 1999.............................. 107.8
=====
</TABLE>

29
<PAGE> 30
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Accounting for Stock Based Compensation--

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation". Accordingly, no compensation expense has been recognized in the
income statement for the stock option plans. Had compensation costs for the
plans been determined based on the fair value at the grant date for awards
beginning in 1995 and amortized over the respective vesting period, the
Company's income from continuing operations would have been reduced to the pro
forma amounts indicated below:

<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Income from continuing operations
--as reported........................................ $69.7 $44.7 $37.4
--pro forma.......................................... $64.0 $40.1 $34.0
Basic income per share from continuing operations
--as reported........................................ $1.86 $1.00 $0.79
--pro forma.......................................... $1.71 $0.89 $0.71
Diluted income per share from continuing operations
--as reported........................................ $1.83 $0.99 $0.78
--pro forma.......................................... -- -- --
</TABLE>

Pro forma diluted income per share has not been presented for 1999, 1998
and 1997 as the conversion of stock options and warrants would have had an
anti-dilutive effect.

The fair value for the Company's stock options (which was $5.50 per share
in 1999, $7.63 per share in 1998 and $6.69 per share in 1997) was estimated at
the date of grant using the Black-Scholes option pricing model with the
following assumptions for 1999, 1998 and 1997, respectively: expected stock
price volatility of 39%, 42% and 37%; expected dividend yield of zero; risk-free
interest rate of 5.6%, 4.9% and 6.6% and an expected 5 year life.

The pro forma effect on income from continuing operations for 1997 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 used 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 12. BUSINESS SEGMENTS

The Company is engaged in the distribution of communications and specialty
wire and cable products from top suppliers to contractors and installers and to
end users, including manufacturers, natural resources companies, utilities and
OEM's. The Company obtains and coordinates financing, legal and other related
services, certain of which are rebilled to subsidiaries.

The following table is a geographic breakdown of the Company's operations.
Sales to a single customer did not exceed 10 percent of total sales. Export
sales are insignificant.

<TABLE>
<CAPTION>
WORLDWIDE OPERATIONS
------------------------------
1999 1998 1997
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Net sales
United States............................................. $1,806.8 $1,500.2 $1,263.2
Europe.................................................... 518.7 518.1 487.0
Canada, Asia Pacific and Latin America.................... 344.5 330.2 340.7
-------- -------- --------
$2,670.0 $2,348.5 $2,090.9
======== ======== ========
Operating income
United States............................................. $ 93.3 $ 85.3 $ 84.2
Europe.................................................... 20.6 12.9 10.7
Canada, Asia Pacific and Latin America.................... (1.1) (11.2) (3.8)
-------- -------- --------
$ 112.8 $ 87.0 $ 91.1
======== ======== ========
Tangible long-lived assets
United States............................................. $ 65.3 $ 64.5 $ 51.9
Europe.................................................... 8.6 9.9 12.2
Canada, Asia Pacific and Latin America.................... 8.9 11.2 12.2
-------- -------- --------
$ 82.8 $ 85.6 $ 76.3
======== ======== ========
</TABLE>

NOTE 13. 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.

31
<PAGE> 32
ANIXTER INTERNATIONAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited interim results of operations
and the price range of the common stock composite for each quarter in the years
ended December 31, 1999, and January 1, 1999. The Company has not paid cash
dividends on its common stock since 1979.

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER* QUARTER QUARTER* QUARTER
-------- ------- -------- -------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Net sales................................................... $595.1 $658.5 $710.4 $706.0
Cost of sales............................................... (445.8) (502.6) (548.5) (545.8)
Operating income............................................ 22.0 28.5 33.2 29.1
Income before income taxes.................................. 13.3 21.0 24.2 19.7
Income from continuing operations........................... 7.7 12.2 38.3 11.5
Net income.................................................. 52.1 13.2 44.2 14.7
Basic income per share:
Continuing................................................ 0.19 0.33 1.06 0.32
Net income................................................ 1.25 0.36 1.23 0.41
Diluted income per share:
Continuing................................................ 0.19 0.33 1.04 0.31
Net income................................................ 1.25 0.36 1.20 0.40
Composite stock price range:
High...................................................... 19.81 18.69 23.25 23.44
Low....................................................... 11.13 13.56 18.13 19.00
Close..................................................... 12.38 18.69 23.25 20.63
YEAR ENDED JANUARY 1, 1999
Net sales................................................... $562.1 $584.6 $617.3 $584.5
Cost of sales............................................... (421.0) (440.8) (465.4) (445.7)
Operating income............................................ 23.3 22.4 28.9 12.4
Gain on ANTEC investment.................................... 8.4 15.9 -- --
Income before income taxes.................................. 24.7 30.5 15.9 5.4
Income from continuing operations........................... 14.4 17.8 9.3 3.2
Net income.................................................. 26.7 21.5 13.0 4.4
Basic income per share:
Continuing................................................ 0.31 0.38 0.21 0.07
Net income................................................ 0.57 0.46 0.30 0.10
Diluted income per share:
Continuing................................................ 0.30 0.38 0.21 0.07
Net income................................................ 0.56 0.46 0.29 0.10
Composite stock price range:
High...................................................... 20.25 22.13 19.88 20.31
Low....................................................... 15.75 17.19 15.56 11.88
Close..................................................... 19.44 19.00 15.75 20.31
</TABLE>

- ---------------
* In the first quarter of 1999, the Company realized a $45.9 million net gain on
the disposal of discontinued operations from the sale of its North American
and European Integration business. In the third quarter of 1999, the Company
recorded a $24.3 million tax benefit in continuing operations for the reversal
of previously established tax reserves determined to be no longer necessary.

32
<PAGE> 33

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

See Registrant's Proxy Statement for the 2000 Annual Meeting of
Stockholders -- "Election of Directors."

ITEM 11. EXECUTIVE COMPENSATION.

See Registrant's Proxy Statement for the 2000 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 2000 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 2000 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.

(A) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES.

(1) 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.............................. 14
Consolidated Statement of Operations for the years ended
December 31, 1999, January 1, 1999 and January 2, 1998.... 15
Consolidated Balance Sheet at December 31, 1999 and January
1, 1999................................................... 16
Consolidated Statement of Cash Flows for the years ended
December 31, 1999, January 1, 1999 and January 2, 1998.... 17
Consolidated Statement of Stockholders' Equity for the years
ended December 31, 1999, January 1, 1999 and January 2,
1998...................................................... 18
Notes to the Consolidated Financial Statements.............. 19
</TABLE>

33
<PAGE> 34

(2) 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.:

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
I. Condensed financial information of Registrant............... 37
II. Valuation and qualifying accounts and reserves.............. 40
</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.

(3) Exhibit List.

Each management contract or compensation plan required to be filed as an
exhibit is identified by an asterisk(*).

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
(3) Articles of Incorporation and by-laws.
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)
3.1
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)
3.2
(4) Instruments defining the rights of security holders, including
indentures.
(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.)
4.1
(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)
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)
4.2
(10) Material contracts.
(a) Asset Purchase Agreement, dated February 22, 1999
(Incorporated by reference from Anixter International Inc.
Current Report on Form 8-K dated April 2, 1999)
10.1
(b) First Amendment to Asset Purchase Agreement, dated March
29, 1999 (Incorporated by reference from Anixter
International Inc. Current Report on Form 8-K dated
April 2, 1999)
</TABLE>

34
<PAGE> 35

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
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.)
10.2 *
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.)
10.3 *
Anixter International Inc. 1998 Stock Incentive Plan
(Incorporated by reference from Anixter International Inc.
Registration Statement on Form S-8, file number 333-56935.
Exhibit 4a.)
10.4 *
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.)
10.5 *
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.)
10.6 *
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.)
10.7 *
(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).)
10.8 *
(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))
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.)
10.9 *
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)
10.10*
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)
10.11*
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)
10.12*
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)
10.13*
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)
10.14*
(a) 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)
10.15*
(b) Anixter 1999 Restated Deferred Compensation Plan
Anixter International Inc. Enhanced Management Incentive
Plan for 1999-2000 (Incorporated by reference from Anixter
International Inc. Quarterly Report on Form 10-Q for the
quarterly period ended July 2, 1999, Exhibit 10.20)
10.16*
</TABLE>

35
<PAGE> 36

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
Financial Advisory Agreement, dated August 4, 1999
(Incorporated by reference from Anixter International Inc.
Quarterly Report on Form 10-Q for the quarterly period ended
October 1, 1999, Exhibit 10.21)
10.17*
Employment Agreement with Robert W. Grubbs, dated July 22,
1999 (Incorporated by reference from Anixter International
Inc. Quarterly Report on Form 10-Q for the quarterly period
ended October 1, 1999, Exhibit 10.22)
10.18*
Employment Agreement with Dennis J. Letham, dated July 22,
1999 (Incorporated by reference from Anixter International
Inc. Quarterly Report on Form 10-Q for the quarterly period
ended October 1, 1999, Exhibit 10.23)
10.19*
</TABLE>

<TABLE>
<CAPTION>
<C> <S> <C>
(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, Melvyn
N. Klein, John R. Petty, Sheli Rosenberg, Thomas C.
Theobald, and Samuel Zell
(27) Financial data schedule.
27.1 Financial data schedule
</TABLE>

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.

36
<PAGE> 37

ANIXTER INTERNATIONAL INC.

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

STATEMENT OF OPERATION
(IN MILLIONS)

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------
DECEMBER 31, JANUARY 1, JANUARY 2,
1999 1999 1998
------------ ---------- ----------
<S> <C> <C> <C>
Operating (loss) income..................................... $ (2.5) $(1.5) $ 3.9
Other income:
Gain on ANTEC investment............................... -- 24.3 2.2
Interest and investment income, including intercompany...... 3.1 7.2 6.0
------ ----- -----
Income from operations before income taxes and equity in
earnings of subsidiaries.................................. 0.6 30.0 12.1
Income tax benefit.......................................... 27.4 4.2 8.7
Equity in earnings of subsidiaries.......................... 96.2 31.4 24.5
------ ----- -----
Net income.................................................. $124.2 $65.6 $45.3
====== ===== =====
</TABLE>

37
<PAGE> 38

ANIXTER INTERNATIONAL INC.

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

BALANCE SHEET
(IN MILLIONS)

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1999 1999
------------ ----------
<S> <C> <C>
Current assets:
Cash...................................................... $ 0.4 $ 3.3
Accounts receivable....................................... -- 1.7
Amounts currently due from affiliates, net................ 6.3 4.5
Other assets.............................................. 0.1 0.4
------ ------
Total current assets.............................. 6.8 9.9
Investment in and advances to subsidiaries.................. 449.9 430.4
Other assets................................................ 12.3 14.3
------ ------
469$.0.... $454.6
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses, due currently........ $ 9.7 $ 10.1
Income taxes, net, primarily deferred....................... 2.9 33.0
------ ------
Total liabilities................................. 12.6 43.1
Stockholders' equity:
Common stock.............................................. 35.9 41.8
Accumulated other comprehensive income.................... (37.6) (39.7)
Retained earnings......................................... 458.1 409.4
------ ------
Total stockholders' equity........................ 456.4 411.5
------ ------
$469.0 $454.6
====== ======
</TABLE>

38
<PAGE> 39

ANIXTER INTERNATIONAL INC.

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

STATEMENT OF CASH FLOWS
(IN MILLIONS)

39
<PAGE> 40

ANIXTER INTERNATIONAL INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED DECEMBER 31, 1999, JANUARY 1, 1999 AND JANUARY 2, 1998
(IN MILLIONS)

<TABLE>
<CAPTION>
ADDITIONS
-------------------
BALANCE AT CHARGED CHARGED BALANCE AT
BEGINNING OF TO TO OTHER END OF
DESCRIPTION THE PERIOD INCOME ACCOUNTS DEDUCTIONS THE PERIOD
----------- ------------ ------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1999:
Allowance for doubtful accounts........... $11.0 $ 5.7 $(0.9) $(5.5) $10.3
Allowance for deferred tax asset.......... $24.0 $ 2.3 -- -- $26.3
Year ended January 1, 1999:
Allowance for doubtful accounts........... $10.0 $ 4.2 $ 0.2 $(3.4) $11.0
Allowance for deferred tax asset.......... $16.7 $ 7.3 -- -- $24.0
Year ended January 2, 1998:
Allowance for doubtful accounts........... $ 7.9 $ 7.1 $(0.6) $(4.4) $10.0
Allowance for deferred tax asset.......... $21.0 $(4.3) -- -- $16.7
</TABLE>

40
<PAGE> 41

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 Skokie,
State of Illinois, on the 7th day of March 7, 2000.

ANIXTER INTERNATIONAL INC.

By: /s/ DENNIS J. LETHAM
------------------------------------
Dennis J. Letham
Senior Vice President -- Finance

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.

/s/ ROBERT W. GRUBBS Chief Executive Officer and President March 7, 2000
- ------------------------------------ (Principal Executive Officer)
Robert W. Grubbs

/s/ DENNIS J. LETHAM Senior Vice President -- Finance March 7, 2000
- ------------------------------------ (Chief Financial Officer)
Dennis J. Letham

/s/ LISA KEARNS LANZ Vice President -- Controller March 7, 2000
- ------------------------------------ (Chief Accounting Officer)
Lisa Kearns Lanz

/s/ LORD JAMES BLYTH* Director March 7, 2000
- ------------------------------------
Lord James Blyth

Director March 7, 2000
- ------------------------------------
Robert L. Crandall

/s/ ROD F. DAMMEYER* Director March 7, 2000
- ------------------------------------
Rod F. Dammeyer

/s/ ROBERT E. FOWLER, JR.* Director March 7, 2000
- ------------------------------------
Robert E. Fowler, Jr.

/s/ ROBERT W. GRUBBS Director March 7, 2000
- ------------------------------------
Robert W. Grubbs

Director March 7, 2000
- ------------------------------------
F. Philip Handy

/s/ MELVYN N. KLEIN* Director March 7, 2000
- ------------------------------------
Melvyn N. Klein

/s/ JOHN R. PETTY* Director March 7, 2000
- ------------------------------------
John R. Petty
</TABLE>

41
<PAGE> 42
<TABLE>
<C> <C> <S>
/s/ SHELI Z. ROSENBERG* Director March 7, 2000
- ------------------------------------
Sheli Z. Rosenberg

Director March 7, 2000
- ------------------------------------
Stuart M. Sloan

/s/ THOMAS C. THEOBALD* Director March 7, 2000
- ------------------------------------
Thomas C. Theobald

/s/ SAMUEL ZELL* Director March 7, 2000
- ------------------------------------
Samuel Zell

*By /s/ DENNIS J. LETHAM
-------------------------------
Dennis J. Letham
(Attorney in fact)
</TABLE>

Dennis J. Letham, as attorney in fact for each person indicated.

<PAGE> 1
EXHIBIT 10.15b

ANIXTER INC.

DEFERRED COMPENSATION PLAN

1999 RESTATEMENT

<PAGE> 2

TABLE OF CONTENTS

PAGE
---------

ARTICLE I--PURPOSE; effective date..........................................1

1.1 Purpose.............................................................1
1.2 Effective Date......................................................1

ARTICLE II--DEFINITIONS.....................................................1

2.1 Account.............................................................1
2.2 Affiliate...........................................................1
2.3 Beneficiary.........................................................1
2.4 Board...............................................................1
2.5 Bonus...............................................................2
2.6 Change in Control...................................................2
2.7 Code................................................................3
2.8 Committee...........................................................3
2.9 Company.............................................................3
2.10 Compensation........................................................3
2.11 Deferral Commitment.................................................3
2.12 Deferral Period.....................................................3
2.13 Determination Date..................................................3
2.14 Disability..........................................................3
2.15 Earnings............................................................3
2.16 Earnings Rate.......................................................4
2.17 Financial Hardship..................................................4
2.18 Parent Company......................................................4
2.19 Participant.........................................................4
2.20 Participating Employer..............................................4
2.21 Participation Agreement.............................................4
2.22 Plan................................................................4
2.23 Qualified 401(k) Plan...............................................4
2.24 Qualified Pension Plan..............................................5
2.25 Retirement..........................................................5
2.26 Salary..............................................................5
2.27 Valuation Date......................................................5

ARTICLE III--ELIGIBILITY AND DEFERRAL COMMITMENTS...........................5

3.1 Eligibility and Participation........................................5
3.2 Deferral Election....................................................5
3.3 Modification of Deferral Commitment..................................6

(i)
<PAGE> 3

TABLE OF CONTENTS

PAGE
----

ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS AND INTEREST....................6

4.1 Accounts............................................................6
4.2 Matching Contribution...............................................6
4.3 Pension Makeup......................................................6
4.4 Determination of Accounts...........................................6
4.5 Vesting of Accounts.................................................7
4.6 Tax Withholding.....................................................7
4.7 Statement of Account................................................7

ARTICLE V--PLAN BENEFITS...................................................7

5.1 Retirement Benefit..................................................7
5.2 Disability Benefit..................................................8
5.3 Change-in-Control Benefit...........................................8
5.4 Termination Benefit.................................................9
5.5 Death Benefit......................................................10
5.6 Withholding on Benefit Payments....................................11
5.7 Payment to Guardian................................................11

ARTICLE VI--OTHER DISTRIBUTIONS...........................................11

6.1 Early Withdrawals..................................................11
6.2 Financial Hardship Distributions...................................12
6.3 Accelerated Distribution...........................................12

ARTICLE VII--BENEFICIARY DESIGNATION......................................12

7.1 Beneficiary Designation............................................12
7.2 Changing Beneficiary...............................................13
7.3 No Beneficiary Designation.........................................13
7.4 Effect of Payment..................................................13

ARTICLE VIII--ADMINISTRATION..............................................14

8.1 Committee; Duties..................................................14
8.2 Agents.............................................................14
8.3 Binding Effect of Decisions........................................14
8.4 Indemnity of Committee.............................................14

ARTICLE IX--CLAIMS PROCEDURE..............................................14

9.1 Claim..............................................................14
9.2 Denial of Claim....................................................14
9.3 Review of Claim....................................................15
9.4 Final Decision.....................................................15

(ii)
<PAGE> 4

TABLE OF CONTENTS

PAGE
----
ARTICLE X--AMENDMENT AND TERMINATION OF THE PLAN..............................15

10.1 Amendment.............................................................15
10.2 Participating Employer's Right to Terminate...........................15

ARTICLE XI--MISCELLANEOUS.....................................................16

11.1 Unfunded Plan.........................................................16
11.2 Unsecured General Creditor............................................16
11.3 Trust Fund............................................................16
11.4 Nonassignability......................................................17
11.5 Not a Contract of Employment..........................................17
11.6 Protective Provisions.................................................17
11.7 Governing Law.........................................................17
11.8 Validity..............................................................17
11.9 Notice................................................................17
11.10 Successors............................................................18

APPENDIX A--CALCULATION OF EARNINGS USING AVERAGE DAILY BALANCE................1

(iii)

<PAGE> 5

ANIXTER INC.

DEFERRED COMPENSATION PLAN

1999 RESTATEMENT

ARTICLE I--PURPOSE; EFFECTIVE DATE

1.1 Purpose

Anixter Inc. (the "Company") adopts this Deferred Compensation Plan
(the "Plan") to provide, in a tax-efficient manner, supplemental funds for
retirement or death for certain employees of the Company and its Affiliates. It
is intended that the Plan will aid in attracting and retaining employees of
exceptional ability by providing them with this benefit.

1.2 Effective Date

The Plan, effective as of January 1, 1995, is amended and restated
effective January 1, 1999.

ARTICLE II--DEFINITIONS

Whenever used in this document, the following terms shall have the
meanings indicated, unless a contrary or different meaning is expressly
provided:

2.1 Account

"Account" means the record or records maintained by a Participating
Employer for each Participant in accordance with Article IV with respect to any
deferral of Compensation pursuant to this Plan.

2.2 Affiliate

"Affiliate" means the Parent Company or any other company designated as
an Affiliate by the Board.

2.3 Beneficiary

"Beneficiary" means the person, persons or entity entitled under
Article VII to receive any Plan benefits payable after a Participant's death.

2.4 Board

"Board" means the Board of Directors of the Company.

PAGE 1 - DEFERRED COMPENSATION PLAN

<PAGE> 6

2.5 Bonus

"Bonus" means the remuneration earned in a Deferral Period, including
amounts thereof deferred under an agreement entered into pursuant to either Code
Section 125 or Code Section 401(k), regular or special performance bonus amounts
and commissions, but excluding base and overtime pay, car allowances, cost of
living allowances, other extraordinary payments and any amounts received under a
stock option, phantom stock option or similar long-term incentive plan.

2.6 Change in Control

"Change in Control" means:

(a) With respect to the Parent Company, a change in control of a
nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Act"), as amended or any successor thereto;
provided that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Act) other than the Parent Company
controls more than twenty-five percent (25%) of the Company's Voting
Securities and the securities so controlled are greater in number than
those controlled by the Parent Company; (ii) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Act) other than Samuel Zell,
B. Ann Lurie and Sheli Rosenberg controls more than twenty-five percent
(25%) of the Parent Company's Voting Securities and the securities so
controlled are greater in number than those controlled by Mr. Zell and
Mmes. Lurie and Rosenberg; (iii) during any period of two (2)
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Parent Company, together with
any new directors whose election, or nomination for election by the
shareholders, was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who were either directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors of the Parent Company; or (iv) the
stockholders of the Parent Company approve a merger or consolidation of
the Parent Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Parent
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least fifty percent (50%) of the
total voting power represented by the Voting Securities of the Parent
Company or such surviving entity outstanding immediately after such
merger or consolidation, or the stockholders of the Parent Company
approve a plan of complete liquidation of the Parent Company or an
agreement for the sale or disposition by the Parent Company (in one (1)
transaction or a series of transactions) of all or substantially all of
the Parent Company's assets to a person or entity which is not a
subsidiary of the Parent Company; unless, with respect to clauses (i)
and (ii) above, such person is a trustee or other fiduciary holding
securities under an employee benefit plan of either the Company or the
Parent Company. As used herein, "Voting Securities" shall mean any
securities which vote generally in the election of directors.

(b) With respect to the Company, a change in control shall mean
any acquisition of more than fifty percent (50%) of the outstanding
voting capital stock of the Company, but excludes (i) a "spin-off"
distribution by the Parent Company to its stockholders, pro rata, of
any or all of its shares of the capital stock of the Company prior to
any such change in control; or (ii) a public stock offering of the
Company's stock; or (iii) a sale of the Parent Company's eq-

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<PAGE> 7

uity interest in the Company to a group of investors which includes
members of management of the Company at the time of such purchase.

2.7 Code

"Code" means the Internal Revenue Code, as amended from time to time.

2.8 Committee

"Committee" means the Anixter Employee Benefits Administrative
Committee which has been appointed by the Board to administer the Plan pursuant
to Article VIII.

2.9 Company

"Company" means Anixter Inc., a Delaware corporation, and its
successors and assigns.

2.10 Compensation

"Compensation" means the Salary and Bonuses payable by a Participating
Employer to the Participant, determined before reduction for amounts deferred
under this Plan.

2.11 Deferral Commitment

"Deferral Commitment" means a commitment made by a Participant pursuant
to Article III and for which a Participation Agreement has been submitted by the
Participant to the Committee.

2.12 Deferral Period

"Deferral Period" means the period during which a Participant has
elected to defer a portion of the Participant's Compensation earned during such
period. The Deferral Period shall be a calendar year.

2.13 Determination Date

"Determination Date" means the last day of each calendar month.

2.14 Disability

"Disability" means a physical or mental condition which, in the opinion
of the Committee, prevents the Participant from satisfactorily performing the
Participant's usual duties for a Participating Employer. The Committee shall
determine the existence of the Disability and may rely on advice from a medical
examiner, medical reports, and other evidence satisfactory to the Committee in
making the determination.

2.15 Earnings

"Earnings" means the amount of growth that is credited to an Account on
each Determination Date in a calendar year based on the Earnings Rate. Earnings
shall be calculated as set forth in Appendix A.

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2.16 Earnings Rate

"Earnings Rate" means a rate equal to the nominal annual yield of the
average of the ten (10) year Treasury note yield for United States Government
securities for the three (3) months of the previous quarter, as published by the
Federal Reserve Board (or any substantially similar index selected by the
Board), times one hundred forty percent (140%).

2.17 Financial Hardship

"Financial Hardship" means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent of the Participant, loss of the Participant's
property due to casualty, or other extraordinary and unforeseeable circumstances
whether similar or dissimilar to the foregoing. Financial Hardship shall be
determined by the Committee on the basis of information supplied by the
Participant in accordance with the standards set forth by the Committee.

2.18 Parent Company

"Parent Company" means Anixter International Inc., a Delaware
Corporation, and its successors and assigns.

2.19 Participant

"Participant" means an eligible executive under Article III who has
elected to defer Compensation during any Deferral Period under this Plan and who
has not yet received full benefits hereunder.

2.20 Participating Employer

"Participating Employer" means the Company and any subsidiary or
affiliate of the Company designated by the Board as a Participating Employer
under the Plan, as long as such designation has become effective and continues
in effect. The designation as a Participating Employer shall become effective
only upon the acceptance of such designation and the formal adoption of the Plan
by a Participating Employer. A Participating Employer may revoke its acceptance
of designation as a Participating Employer at any time, but until it makes such
revocation, all of the provisions of this Plan and any amendments thereto shall
apply to the Participants and Beneficiaries of the Participating Employer.

2.21 Participation Agreement

"Participation Agreement" means the agreement submitted by a
Participant to the Committee pursuant to Article III prior to the beginning of
the Deferral Period, specifying a Deferral Commitment made for such Deferral
Period.

2.22 Plan

"Plan" means this Deferred Compensation Plan as amended from time to
time.

2.23 Qualified 401(k) Plan

"Qualified 401(k) Plan" means the Anixter Employee Savings Plan, or any
successor defined contribution plan maintained by the Company that qualifies
under Code Section 401(a).

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<PAGE> 9

2.24 Qualified Pension Plan

"Qualified Pension Plan" means the Anixter Inc. Pension Plan, or any
successor defined benefit plan maintained by the Company that qualifies under
Code Section 401(a).

2.25 Retirement

"Retirement" means a Participant's voluntary termination of employment
with a Participating Employer on or after the Participant's attainment of age
fifty-five (55).

2.26 Salary

"Salary" means the base remuneration and overtime paid to a Participant
by a Participating Employer during a Deferral Period, including amounts thereof
deferred under an agreement entered into pursuant to either Code Section 125 or
Code Section 401(k), but excluding regular or special performance bonus amounts,
commissions, car allowances, cost of living allowances, other extraordinary
payments and any amounts received under a stock option, phantom stock option or
similar long-term incentive plan.

2.27 Valuation Date

"Valuation Date" means the last day of the month in which Retirement,
Disability, termination or death occurs or, in the case of Participants affected
by Section 5.3(d), the last day of the month in which the Participant attains
age fifty-five (55).

ARTICLE III--ELIGIBILITY AND DEFERRAL COMMITMENTS

3.1 Eligibility and Participation

(a) ELIGIBILITY. All executives designated by a Participating
Employer and approved by the Board shall be entitled to participate.

(b) PARTICIPATION. An eligible executive may elect to participate
in the Plan with respect to any Deferral Period by submitting a
Participation Agreement to the Committee by the last day of the month
immediately preceding the beginning of the Deferral Period.

(c) PART-YEAR PARTICIPATION. If an executive first becomes
eligible to participate during a Deferral Period, a Participation
Agreement may be submitted to the Committee within thirty (30) days
following notification to the executive of eligibility to participate.
The Participation Agreement shall be effective only with regard to
Compensation earned following such submission.

3.2 Deferral Election

(a) ELECTION BY PARTICIPANT. A Participant may elect to defer
receipt of a certain percentage, not to exceed fifty percent (50%), of
Salary payable to the Participant and/or a certain percentage, not to
exceed one hundred percent (100%), of any Bonuses earned by the
Participant during the Deferral Period but before the Participant's
termination of employment for any

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<PAGE> 10

reason. Notwithstanding any provision to the contrary contained in this
Plan or in any Participation Agreement, no deferral shall operate to
reduce any amount payable to the Company under any arrangement
providing for or which would permit such amounts to be withheld from
Salary or Bonuses otherwise due to a Participant (e.g., repayment of a
loan at the rate of fifty percent (50%) of net annual Bonuses would
result in the Company withholding fifty percent (50%) of such Bonus
after tax but without regard to amounts deferred under this Plan or
otherwise deferred or committed).

(b) MINIMUM DEFERRAL. The minimum deferral amount shall be two
thousand four hundred dollars ($2,400) per Deferral Period, which
amount may consist of Salary, Bonus or any combination thereof.

3.3 Modification of Deferral Commitment

Deferral Commitments shall be irrevocable except that the Committee
may, in its sole discretion, reduce the amount to be deferred or waive the
remainder of the Deferral Commitment upon a finding that the Participant has
suffered a Financial Hardship.

ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS AND INTEREST

4.1 Accounts

For record-keeping purposes only, the Participating Employer shall
maintain an Account for each Participant who elects to have the receipt of
Compensation deferred under this Plan. Deferrals made in each Deferral Period
shall be maintained in separate accounts. The existence of these accounts shall
not require any segregation of assets. The combined values of the separate
accounts for each Participant shall constitute an Account.

4.2 Matching Contribution

If a Participant defers the maximum elective percentage into the
Qualified 401(k) Plan, the Participating Employer shall credit a matching
contribution to the Participant's Account equal to any matching contribution
which would have been credited to the Participant's Qualified 401(k) Plan but
for the Participant's participation in this Plan.

4.3 Pension Makeup

The Participating Employer shall restore an amount equal to any
reduction in a Participant's Qualified Pension Plan benefits resulting from
deferrals under this Plan to the extent that the Qualified Pension Plan benefits
are not restored by any other plan or agreement provided by the Participating
Employer.

4.4 Determination of Accounts

Each Account shall be adjusted as of each Determination Date and shall
consist of:

(a) The balance of the Account as of the immediately preceding
Determination Date; and

PAGE 6 - DEFERRED COMPENSATION PLAN
<PAGE> 11

(b) Any Compensation deferred and credited to the Account
since the immediately preceding Determination Date; and

The total of (a), (b) and (c) shall be reduced by any distributions
from the Account since the immediately preceding Determination Date.

4.5 Vesting of Accounts

Each Participant shall be one hundred percent (100%) vested at all
times in all amounts credited to the Participant's Account and all Earnings
thereon.

4.6 Tax Withholding

Any withholding of taxes or other amounts with respect to deferred
Compensation that is required by state, federal, or local law shall be withheld
from the Participant's corresponding nondeferred compensation to the maximum
extent possible and any remaining amount required to be withheld shall reduce
the amount credited to the Participant's Account.

4.7 Statement of Account

A statement shall be issued on a quarterly basis by the Participating
Employer to each Participant setting forth the Participant's Account balance
under the Plan as of the immediately preceding Determination Date.

ARTICLE V--PLAN BENEFITS

5.1 Retirement Benefit

(a) BENEFIT AMOUNT. If a Participant terminates employment
with all Participating Employers due to Retirement, the Participating
Employer shall pay to the Participant a benefit equal to the balance in
the Participant's Account.

(b) FORM OF BENEFIT. The Retirement benefit attributable to the
elective deferrals for any Deferral Period shall be paid in one (1) of
the forms set out below, as elected by the Participant in the
Participation Agreement for that year. Forms of payment are:

(i) A lump-sum payment;

(ii) Monthly installments, the number of such
installments not to exceed one hundred twenty (120); or

(iii) A combination of (i) and (ii) above.

(c) COMMENCEMENT. The amount of the benefit shall be based on the
value of the Participant's Account on the Valuation Date and shall be
paid on the settlement date. The date on

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<PAGE> 12

which lump-sum payments are made and on which installment payments
commence shall be the settlement date. If a combination of lump sum and
installments is elected, the lump sum and the first installment payment
shall be paid on the settlement date. The settlement date shall be no
more than sixty-five (65) days after the Valuation Date. Earnings shall
continue to accrue on the Participant's Account to the settlement date,
and Earnings on any remaining Account balance after the settlement date
shall continue to accrue and be included in all payments made under
this Section 5.1. All payments shall be made as of the first day of the
month.

(d) SMALL ACCOUNTS. On the Valuation Date, if the Participant's
Account is less than the Participant's Salary rate in effect at the
Participant's Retirement, the benefit may, at the Participating
Employer's option, be paid in a lump sum.

(e) INSTALLMENTS. If payment is by installments, the amount of
the installments shall be redetermined each January 1 based upon the
remaining Account balance, the remaining number of installments and an
Earnings Rate equal to the rate in effect for the preceding quarter.

(f) CHANGE IN FORM OF PAYMENT. Notwithstanding (b) above, a
Participant may elect to file a change of payment designation which
shall supersede the prior form of payment designation in the
Participation Agreement for any one (1) or more Deferral Periods. If
the Participant's most recent change of payment designation has not
been filed two (2) calendar years prior to the year of Retirement, the
prior election shall be used to determine the form of payment (e.g., if
a Participant were to retire in 1998, the last day to file a change of
payment designation would be December 31, 1996).

5.2 Disability Benefit

(a) BENEFIT AMOUNT. If a Participant terminates employment with
all Participating Employers due to Disability, the Participating
Employer shall pay to the Participant a benefit equal to the balance in
the Participant's Account.

(b) FORM OF BENEFIT. The benefit payable under this Section 5.2
shall be paid in a lump sum.

(c) COMMENCEMENT. The amount of the lump sum shall be based on
the value of the Participant's Account on the Valuation Date. The date
on which payment is made shall be the settlement date. Earnings shall
continue to accrue on the Participant's Account to the settlement date.
The settlement date shall be no more than sixty-five (65) days after
the Valuation Date. All payments shall be made as of the first day of
the month.

5.3 Change-in-Control Benefit

(a) BENEFIT AMOUNT. If a Participant terminates employment with
all Participating Employers within forty-eight (48) months following a
Change in Control, the Participating Employer shall pay to the
Participant a benefit equal to the balance in the Participant's
Account.

(b) FORM OF BENEFIT. Prior to the consummation of the Change in
Control, each Participant shall elect in writing to receive payment in
one (1) of the following forms:

(i) A lump-sum payment;

PAGE 8 - DEFERRED COMPENSATION PLAN
<PAGE> 13

(ii) Monthly installments, the number of such installments
not to exceed one hundred twenty (120); or

(iii) A combination of (i) and (ii) above.

(c) COMMENCEMENT. The amount of the benefit shall be based on the
value of the Participant's Account on the Valuation Date and shall be
paid on the settlement date. The date on which lump-sum payments are
made and on which installment payments commence shall be the settlement
date. If a combination of lump sum and installments is elected, the
lump sum and the first installment payment shall be paid on the
settlement date. The settlement date shall be no more than sixty-five
(65) days after the Valuation Date. Earnings shall accrue from the
Valuation Date to the settlement date at the Earnings Rate,
substituting a multiplier of one hundred twenty percent (120%) for one
hundred forty percent (140%). Earnings (calculated with the one hundred
twenty percent (120%) multiplier) on any remaining Account balance
after the settlement date shall continue to accrue and be included in
all payments made under this subsection (c). All payments shall be made
as of the first day of the month.

(d) SMALL ACCOUNTS. On the Valuation Date, if the Participant's
Account is less than the Participant's Salary rate in effect on the
Participant's termination date, the benefit may, at the Participating
Employer's option, be paid in a lump sum.

(e) INSTALLMENTS. If payment is by installments, the amount of
the installments shall be redetermined each January 1 based upon the
remaining Account balance, the remaining number of installments and an
Earnings Rate (calculated with the one hundred twenty percent (120%)
multiplier) equal to the rate in effect for the preceding quarter.

(f) CHANGE IN FORM OF PAYMENT. Notwithstanding (b) above, a
Participant may elect to file a change of payment designation which
shall supersede the prior form of payment designation. If the
Participant's most recent change of payment designation has not been
filed two (2) calendar years prior to the Participant's termination
date, the prior election shall be used to determine the form of payment
(e.g., if a Participant terminates in 2010, the last day to file a
change of payment designation would be December 31, 2008).

5.4 Termination Benefit

(a) BENEFIT AMOUNT. If a Participant terminates employment with
all Participating Employers for any other reason, the Participating
Employer shall pay to the Participant benefits equal to the balance in
the Participant's Account.

(b) FORM OF BENEFIT. The termination benefit payable under this
Section 5.3 shall be paid in a lump sum.

(c) COMMENCEMENT. The amount of the lump sum shall be based on
the value of the Participant's Account on the Valuation Date. The date
on which payment is made shall be the settlement date. Earnings shall
accrue from the Valuation Date to the settlement date at the Earnings
Rate without the one hundred forty percent (140%) multiplier. The
settlement date shall be the

PAGE 9 - DEFERRED COMPENSATION PLAN
<PAGE> 14

first business day in January following the date the amounts deferred
were held by the Participating Employer for five (5) years.

(d) SALE OF DIVISION.

(i) Notwithstanding the above, if the Company sells one
(1) or more of its divisions to a buyer that does not elect to
continue the Plan for that division's Participants, such
Participants shall, prior to the date the sale closes,
irrevocably elect in writing to commence payment in accordance
with either subsection (c) above or this subsection (d).

(ii) Participants electing to be paid under this
subsection (d) shall further elect to receive their benefit
payments upon their attainment of age fifty-five (55) in one (1)
of the following forms:

(A) A lump-sum payment;

(B) Monthly installments, the number of such
installments not to exceed one hundred twenty (120); or

(iii) The first day of the month following the
Participant's attainment of age fifty-five (55) shall be the
settlement date. The amount of the benefit shall be based on the
value of the Participant's Account on the Valuation Date. Any
lump sum and first installment payment elected shall be paid on
the settlement date. Earnings shall accrue from the Valuation
Date to the settlement date at the Earnings Rate, substituting a
multiplier of one hundred twenty percent (120%) for one hundred
forty percent (140%). Earnings (calculated with the one hundred
twenty percent (120%) multiplier) on any remaining Account
balance after the settlement date shall continue to accrue and be
included in all payments made under this subsection (d). All
payments shall be made as of the first day of the month.

(iv) If payment is by installments, the amount of the
installments shall be redetermined each January 1 based upon the
remaining Account balance, the remaining number of installments
and an Earnings Rate (calculated with the one hundred twenty
percent (120%) multiplier) equal to the rate in effect for the
preceding quarter.

(v) Notwithstanding (ii) above, a Participant may elect to
file a change of payment designation which shall supersede the
prior form of payment designation for any one (1) or more
Deferral Periods. If the Participant's most recent change of
payment designation has not been filed two (2) calendar years
prior to the Participant's attainment of age fifty-five (55), the
prior election shall be used to determine the form of payment
(e.g., if a Participant attains age fifty-five (55) in 2010, the
last day to file a change of payment designation would be
December 31, 2008).

5.5 Death Benefit

(a) PRERETIREMENT/POSTTERMINATION.

PAGE 10 - DEFERRED COMPENSATION PLAN
<PAGE> 15

(i) BENEFIT AMOUNT. If a Participant terminates employment
with all Participating Employers due to death, or if a
Participant dies following the Participant's termination of
employment with all Participating Employers but prior to
Retirement, the Participating Employer shall pay to the
Participant's Beneficiary a benefit equal to the balance in the
Participant's Account.

(ii) FORM OF BENEFIT. The benefit payable under this
subsection shall be paid in a lump sum.

(iii) COMMENCEMENT. The amount of the lump sum shall be
based on the value of the Participant's Account on the Valuation
Date. The date on which payment is made shall be the settlement
date. Earnings shall continue to accrue on the Participant's
Account to the settlement date. The settlement date shall be no
more than sixty-five (65) days after the Valuation Date. All
payments shall be made as of the first day of the month.

(b) POSTRETIREMENT. If a Participant dies following the
Participant's Retirement from a Participating Employer, the
Participating Employer shall continue to pay benefits to the
Participant's Beneficiary in the form previously elected by the
Participant for Retirement benefits.

5.6 Withholding on Benefit Payments

The Participating Employer shall withhold from payments made hereunder
any taxes required to be withheld from such payments under federal, state or
local law. A Beneficiary, however, may elect not to have withholding of federal
income tax pursuant to Section 3405(a)(2) of the Internal Revenue Code, or any
successor provision thereto.

5.7 Payment to Guardian

If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of property,
the Committee may direct payment of such Plan benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Committee may require proof of incompetency, minority, incapacity
or guardianship as it may deem appropriate prior to distribution of the Plan
benefit. Such distribution shall completely discharge the Committee and the
Participating Employer from all liability with respect to such benefit.

ARTICLE VI--OTHER DISTRIBUTIONS

6.1 Early Withdrawals

A Participant's Account may be distributed to the Participant before
termination of employment as follows:

(a) EARLY WITHDRAWALS. A Participant may elect in a Participation
Agreement to withdraw all or any portion of the amount deferred by that
Participation Agreement plus Earnings thereon as of a date specified in
the election. Such date shall not be sooner than five (5) years after
the date the Deferral Period commences.

(b) FORM OF PAYMENT. Early withdrawals shall be paid in a
lump sum and shall be charged to the Participant's Account as a
distribution.

PAGE 11 - DEFERRED COMPENSATION PLAN
<PAGE> 16

If a Participant retires, dies or otherwise terminates employment with
a Participating Employer for any reason prior to the designated early withdrawal
date in the Participation Agreement, the Participating Employer shall disregard
such early withdrawal date and pay the Participant or the Participant's
Beneficiary the benefit due under Article V.

6.2 Financial Hardship Distributions

Notwithstanding any other provision of the Plan, payment from the
Participant's Account may be made to the Participant or the Participant's
Beneficiary in the sole discretion of the Committee by reason of Financial
Hardship. A payment based upon the Participant's, or the Participant's
Beneficiary's, Financial Hardship may not exceed the amount required to meet the
immediate financial need created by the hardship and not reasonably available
from other sources of the Participant or the Participant's Beneficiary. If such
a distribution is made, the Participant's deferrals into this Plan shall be
suspended for twelve (12) calendar months following the distribution. Resumption
of the Participant's deferrals into the Plan shall be made only at the election
of the Participant in accordance with Article III herein.

6.3 Accelerated Distribution

Notwithstanding any other provision of the plan, a Participant may
request an accelerated distribution as follows:

(a) A Participant, at any time, shall be entitled to receive,
upon written request to the Committee, a lump-sum distribution equal to
ninety percent (90%) of the Account balance as of the Determination
Date immediately preceding the date on which the Committee receives
notice pursuant to Section 11.9. The remaining balance of ten percent
(10%) shall be forfeited by the Participant. A Participant who receives
a distribution under this subsection shall be suspended from
participation in the Plan for twelve (12) months.

(b) If a Participant who is no longer employed by the
Participating Employer is entitled to a benefit under Section 4.3 of
this Plan, the Participant shall be entitled to receive, upon written
request to the Committee, a lump-sum distribution equal to ninety
percent (90%) of the actuarial equivalent vested accrued pension
make-up benefit under Section 4.3 as of the Determination Date
immediately preceding the date on which the Committee receives notice
pursuant to Section 11.9. The remaining balance of ten percent (10%)
shall be forfeited by the Participant.

(c) The amount payable under this section shall be paid in a lump
sum within forty-five (45) days following the Committee's receipt of
notice by the Participant. Following the death of a Participant, the
Participant's Beneficiary may, at any time, request an accelerated
distribution under this section.

ARTICLE VII--BENEFICIARY DESIGNATION

7.1 Beneficiary Designation

Each Participant shall have the right, at any time, to designate a
Beneficiary (both primary as well as contingent) to whom benefits under this
Plan shall be paid in the event of a Participant's death

PAGE 12 - DEFERRED COMPENSATION PLAN
<PAGE> 17

prior to complete distribution to the Participant of the benefits due under the
Plan. Each Beneficiary designation shall be in a written form prescribed by the
Committee and will be effective only when filed with the Committee during the
Participant's lifetime.

7.2 Changing Beneficiary

Any Beneficiary designation may be changed by a Participant without the
consent of the previously named Beneficiary by the filing of a new designation
with the Committee. The filing of a new Beneficiary designation shall cancel all
designations previously filed.

7.3 No Beneficiary Designation

If any Participant fails to designate a Beneficiary in the manner
provided above, if the designation is void, or if the Beneficiary designated by
a deceased Participant dies before the Participant or before complete
distribution of the Participant's benefits, the Participant's Beneficiary shall
be the person in the first of the following classes in which there is a
survivor:

(a) The Participant's surviving spouse;

(b) The Participant's children in equal shares, except that if
any of the children predeceases the Participant but leave issue
surviving, then such issue shall take by right of representation the
share the parent would have taken if living;

7.4 Effect of Payment

Payment to the Beneficiary shall completely discharge the Participating
Employer's obligations under this Plan.

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<PAGE> 18

ARTICLE VIII--ADMINISTRATION

8.1 Committee; Duties

This Plan shall be administered by the Committee. The Committee shall
have such powers and duties as may be necessary to discharge its
responsibilities. These powers shall include, but not be limited to,
interpreting the Plan provisions; determining amounts due to any Participant,
the rights of any Participant or Beneficiary under this Plan and the amounts
credited to a Participant's Account and the Earnings thereon; enforcing the
right to require any necessary information from any Participant; and any other
activities deemed necessary or helpful. Members of the Committee may be
Participants under the Plan.

8.2 Agents

The Committee may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit, and may from time to time
consult with counsel who may be counsel to the Company.

8.3 Binding Effect of Decisions

The decision or action of the Committee with respect to any question
arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in
the Plan.

8.4 Indemnity of Committee

To the extent permitted by applicable law, the Participating Employer
shall indemnify, hold harmless and defend the members of the Committee against
any and all claims, loss, damage, expense or liability arising from any action
or failure to act with respect to the Plan on account of such member's service
on the Committee.

ARTICLE IX--CLAIMS PROCEDURE

9.1 Claim

Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the
request in writing to the Committee or its delegatee, which shall respond in
writing as soon as practicable.

9.2 Denial of Claim

If the claim or request is denied, the written notice of denial shall
state:

(a) The reasons for denial, with specific reference to the
Plan provisions on which the denial is based,

PAGE 14 - DEFERRED COMPENSATION PLAN
<PAGE> 19

(b) A description of any additional material or information
required and an explanation of why it is necessary, and

9.3 Review of Claim

Any person whose claim or request is denied or who has not received a
response within thirty (30) days may request review by notice given in writing
to the Committee. The claim or request shall be reviewed by the Committee which
may, but shall not be required to, grant the claimant a hearing. On review, the
claimant may have representation, examine pertinent documents, and submit issues
and comments in writing.

9.4 Final Decision

The decision on review shall normally be made within sixty (60) days.
If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the
reasons and the relevant Plan provisions. All decisions on review shall be final
and bind all parties concerned.

ARTICLE X--AMENDMENT AND TERMINATION OF THE PLAN

10.1 Amendment

The Board may, at any time, amend the Plan in whole or in part
provided, however, that no amendment shall be effective to decrease or restrict
the amount credited to any Account maintained under the Plan as of the date of
amendment, nor shall any amendment be effective to decrease the Earnings Rate at
which amounts are credited to any Account balance existing as of the date of
amendment. Changes in the definition of "Earnings Rate" shall not become
effective before the first day of the Deferral Period which follows the adoption
of the amendment and at least thirty (30) days written notice of the amendment
has been given to each Participant.

10.2 Participating Employer's Right to Terminate

The board of directors of each Participating Employer may at any time
partially or completely terminate the Plan for that Participating Employer if,
in its judgment, the tax, accounting, or other effects of the continuance of the
Plan, or potential payments thereunder, would not be in the best interests of
the Participating Employer.

(a) PARTIAL TERMINATION. The board of directors of each
Participating Employer may partially terminate the Plan by instructing
the Committee not to accept any additional Deferral Commitments. If
such a partial termination occurs, the Plan shall continue to operate
and be effective with regard to Deferral Commitments entered into prior
to the effective date of such partial termination.

(b) COMPLETE TERMINATION. The board of directors of each
Participating Employer may completely terminate the Plan by instructing
the Committee not to accept any additional

PAGE 15 - DEFERRED COMPENSATION PLAN
<PAGE> 20

Deferral Commitments, and to terminate all ongoing Deferral
Commitments. If such a complete termination occurs, the Committee
shall pay out to each Participant the balance in the Participant's
Account at such time and in such manner as the Committee, in its sole
discretion, determines, except that the Participants' Accounts shall
continue to accrue Earnings at the Earnings Rate and all payments made
under this section shall include such Earnings. The Plan shall cease
to operate when the Account balances have been fully paid.

ARTICLE XI--MISCELLANEOUS

11.1 Unfunded Plan

This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301, and 401
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and therefore to be exempt from the provisions of Parts 2, 3 and 4 of Title I of
ERISA. Accordingly, the Board may terminate the Plan and no further benefits
shall accrue hereunder, or the Board may remove certain employees as
Participants, if it is determined by the United States Department of Labor, a
court of competent jurisdiction or an opinion of counsel that the Plan
constitutes an employee pension benefit plan within the meaning of Section 3(2)
of ERISA (as currently in effect or hereafter amended) which is not so exempt.
If the Plan is terminated under this Section 11.1, all ongoing Deferral
Commitments shall terminate, no additional Deferral Commitments will be accepted
by the Committee, and the amount of each Participant's Account balance shall be
distributed to such Participant at such time and in such manner as the
Committee, in its sole discretion, determines.

11.2 Unsecured General Creditor

Participants and their Beneficiaries, heirs, successors and assigns
shall have no secured legal or equitable rights, interest or claims in any
property or assets of a Participating Employer, nor shall they be Beneficiaries
of, or have any rights, claims or interests in any life insurance policies,
annuity contracts or the proceeds therefrom owned or which may be acquired by a
Participating Employer. Except as may be provided in Section 11.3, such
policies, annuity contracts or other assets of a Participating Employer shall
not be held under any trust for the benefit of the Participants, their
Beneficiaries, heirs, successors or assigns, or held in any way as collateral
security for the fulfilling of the obligations of a Participating Employer under
this Plan. Any and all of a Participating Employer's assets and policies shall
be and remain unrestricted by this Plan. A Participating Employer's obligation
under the Plan shall be that of an unfunded and unsecured promise to pay money
in the future.

11.3 Trust Fund

Each Participating Employer shall be responsible for the payment of all
benefits provided under the Plan to Participants in its employ. At its
discretion, the Participating Employer may establish one (1) or more trusts,
with such trustees as the Participating Employer may approve, for the purpose of
providing for the payment of such benefits. Although such trust or trusts may be
irrevocable, the assets thereof shall be subject to the claims of all the
Participating Employer's creditors in the event of insolvency. To the extent any
benefits provided under the Plan are paid from any such trust, the Participating
Employer shall have no further obligation to pay such benefits. If not paid from
a trust, any benefits provided under the Plan shall remain the obligation of,
and shall be paid by, the Participating Employer.

PAGE 16 - DEFERRED COMPENSATION PLAN
<PAGE> 21

11.4 Nonassignability

Neither a Participant nor any other person shall have the right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, hereby expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.

11.5 Not a Contract of Employment

The terms and conditions of this Plan shall not constitute a contract
of employment between the Participating Employer and the Participant, and the
Participant (or the Participant's Beneficiary) shall have no rights against the
Participating Employer except as may otherwise be specifically provided herein.
Nothing in this Plan shall be deemed to give a Participant the right to be
retained in the service of a Participating Employer or to interfere with the
absolute and unrestricted right of a Participating Employer to discipline or
discharge a Participant at any time.

11.6 Protective Provisions

A Participant will cooperate with the Participating Employer by
furnishing any and all information requested by the Participating Employer in
order to facilitate the payment of benefits hereunder, by taking such physical
examinations as the Participating Employer may deem necessary and by taking such
other actions as may be requested by such Participating Employer.

11.7 Governing Law

The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Illinois, without reference to its
conflicts of laws provisions, except as preempted by federal law.

11.8 Validity

If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provisions had never been inserted herein.

11.9 Notice

Any notice or filing required or permitted under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified
mail, to any member of the Committee. Such notice shall be deemed given as of
the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark on the receipt for registration or certification. Mailed notice to
the Committee shall be directed to the Company's corporate headquarters address.
Mailed notice to a Participant or Beneficiary shall be directed to the
individual's last known address in the Participating Employer's records.

PAGE 17 - DEFERRED COMPENSATION PLAN
<PAGE> 22

11.10 Successors

The provisions of this Plan shall bind and inure to the benefit of each
Participating Employer and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of a Participating Employer, and
successors of any such corporation or other business entity.

ANIXTER INC.

By:
-----------------------------------
Its

Dated:
-----------------------------------

PAGE 18 - DEFERRED COMPENSATION PLAN

<PAGE> 23

APPENDIX A--CALCULATION OF EARNINGS USING
AVERAGE DAILY BALANCE

- --------------------------------------------------------------------------------

ADB FACTOR* = [Days in Month - Day of Month + 1]
----------------------------------
Days in Month
(Round to 10 Decimal Places)
- --------------------------------------------------------------------------------

EARNINGS FACTOR = [1 + Earnings Rate]1/12 - 1
(Round to 10 Decimal Places)
- --------------------------------------------------------------------------------

EARNINGS = Earnings Factor x
[Account Balance at Beginning of Month +
Transaction 1 x ADB Factor 1 +
Transaction 2 x ADB Factor 2 +
Transaction 3 x ADB Factor 3] (Round to 2
Decimal Places)
- --------------------------------------------------------------------------------

ACCOUNT BALANCE AT END OF = Account Balance at Beginning of Month +
MONTH Deferrals During
Month + Earnings - Distributions
================================================================================

NOTE
- ----------------------------

*Separate ADB Factor for each transaction. The term "transaction" includes
Participant and Employer deferrals, benefit payments, withdrawals, and any other
type of distribution.

<PAGE> 24

APPENDIX A--CALCULATION OF EARNINGS USING
AVERAGE DAILY BALANCE

EXAMPLE

ASSUMPTIONS

- ----------------------------------------------------------------------

MARCH 31 ACCOUNT BALANCE $10,000.
- ----------------------------------------------------------------------

APRIL 14 DEFERRAL $1,000.
- ----------------------------------------------------------------------

APRIL EARNINGS RATE 10.98%.
======================================================================

Step 1. Calculate Earnings for April on the most recent Account balance.

A. Calculate the monthly Earnings factor (Earnings Rate/12)

.1098/12 = .00915

B. Calculate the monthly Earnings (balance x factor)

10,000 x .00915 = 91.50

Step 2. Calculate Earnings during April on any deferrals.

A. Calculate the average daily balance (ADB) for the deferral
[deferral x (Days in the month - Deferral date + 1)]
-------------------------------------
Days in the month

1,000 x (30 - 14 + 1) = 566.67
-----------
30

B. Calculate the Earnings on the deferral (ADB x Earnings factor)

566.67 x .00915 = 5.19

Step 3. Calculate the Account balance as of April 30 (prior balance +
deferrals + Earnings) 10,000 + 1,000 + 91.50 + 5.19
= 11,096.69

<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 Cables y Manufacturas, S.A. de C.V. Mexico
Anixter Canada Inc. Canada
WireXpress Ltd. Canada
Anixter Colombia S.A. Colombia
Anixter Costa Rica S.A. Costa Rica
Anixter del Peru, S.R.L. Peru
Anixter de Mexico, S.A. de C.V. Mexico
Anixter Holdings, Inc. Delaware
Anixter Argentina S.A. Argentina
Anixter Korea Limited Korea
Anixter Venezuela Inc. Delaware
Anixter Financial Inc. Delaware
Anixter Chile S.A. Chile
Anixter Communications (Malaysia) Sdn Bhd Malaysia
Anixter Europe Holdings B.V. Netherlands
Anixter Austria GmbH Austria
Anixter Belgium N.V. Belgium
Anixter (CIS) L.L.C. (Russia) Russia
Anixter Danmark 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 Hungary Ltd. Hungary
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. United Kingdom
Anixter U.K. Ltd. United Kingdom
Anixter Logistics, Europe N.V. Belgium
Anixter Nederland B.V. Netherlands
Anixter Norge A.N.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
Anixter Singapore Pte Ltd. Singapore
Anixter Hong Kong Limited Hong Kong
Anixter Thailand Inc. Delaware
Anixter Philippines Inc. Delaware
Anixter Australia Pty. Ltd. Australia
Anixter Puerto Rico, Inc. Delaware
Anixter do Brasil Ltda. Brazil
Anixter-Real Estate Inc. Illinois
Anixter Information Systems Corporation Illinois
Anixter (Barbados), Inc. Barbados
Accu-Tech Corporation Georgia
Wallace Electronics, Inc. Georgia
B.E.L. Corporation Delaware
GL Holding of Delaware, Inc. Delaware
Itel Corporation California
Itel Container Corporation International California
Itel Container Ventures 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

</TABLE>

<PAGE> 2

<S> <C>
McCloud River Railroad Company California
Rex Railways, Inc. New Jersey
Rex Leasing, Inc. New Jersey
Signal Capital Corporation Delaware
Richdale, Ltd. Delaware
Signal Capital Projects, Inc. Delaware
Signal Capital Norwalk, Inc. Delaware
Railcar Services Corporation Delaware
Seacoast Capital Corp. Delaware
Seacoast Capital Corp. II 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 of Stock
Option Plan, the Registration Statement (Form S-8 No. 33-05907) pertaining to
the Anixter International Inc. 1996 Stock Incentive Plan, the Registration
Statement (Form S-8 No. 333-56815) pertaining to the Anixter International Inc.
1998 Mid-level Stock Option Plan and the Registration Statement (Form S-8 No.
333-56935) pertaining to the Anixter International Inc. 1998 Stock Incentive
Plan of our report dated February 7, 2000, 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 December 31, 1999.

ERNST & YOUNG LLP

Chicago, Illinois
March 6, 2000

<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, James E. Knox, and Lisa Kearns Lanz,
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 18th day of February 2000.

/s/ James Blyth /s/ John R. Petty

/s/ Rod F. Dammeyer /s/ Sheli Z. Rosenberg

/s/ Robert E. Fowler, Jr. /s/ Thomas C. Theobald

/s/ Robert W. Grubbs /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

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 17,500,000
<SECURITIES> 0
<RECEIVABLES> 547,800,000
<ALLOWANCES> 10,300,000
<INVENTORY> 536,400,000
<CURRENT-ASSETS> 1,121,100,000
<PP&E> 158,600,000
<DEPRECIATION> 105,500,000
<TOTAL-ASSETS> 1,434,700,000
<CURRENT-LIABILITIES> 495,500,000
<BONDS> 0
0
0
<COMMON> 35,900,000
<OTHER-SE> 420,500,000
<TOTAL-LIABILITY-AND-EQUITY> 1,434,700,000
<SALES> 2,670,000,000
<TOTAL-REVENUES> 2,670,000,000
<CGS> 2,042,700,000
<TOTAL-COSTS> 2,557,200,000
<OTHER-EXPENSES> (300,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,900,000
<INCOME-PRETAX> 78,200,000
<INCOME-TAX> 8,500,000
<INCOME-CONTINUING> 69,700,000
<DISCONTINUED> 54,500,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124,200,000
<EPS-BASIC> 3.31
<EPS-DILUTED> 3.26

</TABLE>