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<SEC-DOCUMENT>0000950137-96-000277.txt : 19960318

<SEC-HEADER>0000950137-96-000277.hdr.sgml : 19960318

ACCESSION NUMBER:     0000950137-96-000277

CONFORMED SUBMISSION TYPE:   10-K

PUBLIC DOCUMENT COUNT:       15

CONFORMED PERIOD OF REPORT:  19951231

FILED AS OF DATE:     19960315

SROS:         NYSE

 

FILER:

 

    COMPANY DATA:

       COMPANY CONFORMED NAME:          ANIXTER INTERNATIONAL INC

       CENTRAL INDEX KEY:           0000052795

       STANDARD INDUSTRIAL CLASSIFICATION:    WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063]

       IRS NUMBER:              941658138

       STATE OF INCORPORATION:         DE

       FISCAL YEAR END:         1231

 

    FILING VALUES:

       FORM TYPE:    10-K

       SEC ACT:      1934 Act

       SEC FILE NUMBER:  001-10212

       FILM NUMBER:      96535521

 

    BUSINESS ADDRESS:

       STREET 1:     4711 GOLF ROAD

       CITY:         SKOKIE

       STATE:        IL

       ZIP:          60076

       BUSINESS PHONE:       3129021515

 

    MAIL ADDRESS:

       STREET 1:     4711 GOLF RD

       CITY:         SKOKIE

       STATE:        IL

       ZIP:          60076

 

    FORMER COMPANY:  

       FORMER CONFORMED NAME:   ITEL CORP

       DATE OF NAME CHANGE:  19920703

 

    FORMER COMPANY:  

       FORMER CONFORMED NAME:   SSI COMPUTER

       DATE OF NAME CHANGE:  19710316

 

    FORMER COMPANY:  

       FORMER CONFORMED NAME:   SSI COMPUTER CORP

       DATE OF NAME CHANGE:  19690727

</SEC-HEADER>

<DOCUMENT>

<TYPE>10-K

<SEQUENCE>1

<DESCRIPTION>FORM 10-K

<TEXT>

 

<PAGE>   1

 

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

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

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

 

                                   FORM 10-K

 

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

   EXCHANGE ACT OF 1934..............FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

 

                                       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)

 

                                    DELAWARE

                        (STATE OR OTHER JURISDICTION OF

                         INCORPORATION OR ORGANIZATION)

 

                                   94-1658138

                                (I.R.S. EMPLOYER

                               IDENTIFICATION NO.)

 

                            2 NORTH RIVERSIDE PLAZA

                                   SUITE 1900

                            CHICAGO, ILLINOIS 60606

             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

 

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

 

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

 

   TITLE OF EACH CLASS              NAME OF EACH EXCHANGE ON WHICH REGISTERED

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

   Common Stock, $1 par value       New York Stock Exchange

 

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.  /X/

 

The aggregate market value of the shares of Registrant's Common Stock, $1 par

value, held by nonaffiliates of Registrant was approximately $705,000,000 as of

March 11, 1996.

 

At March 11, 1996, 52,175,000 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 1996 Annual Meeting

of Stockholders of Anixter International Inc. are incorporated by reference into

Part III. This document consists of 112 pages. Exhibit List begins on page 35.

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

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

<PAGE>   2

 

                               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 Stock and Related Stockholder

                       Matters.............................................................   7

Item 6.              Selected Financial Data...............................................   8

Item 7.              Management's Discussion and Analysis of Financial Condition and

                       Results of Operations...............................................   9

Item 8.              Consolidated Financial Statements and Supplementary Data..............  14

Item 9.              Changes in and Disagreements with Accountants on Accounting and

                       Financial Disclosure................................................  14

PART III.

Item 10.             Directors and Executive Officers of the Registrant....................  34

Item 11.             Executive Compensation................................................  34

Item 12.             Security Ownership of Certain Beneficial Owners and Management........  34

Item 13.             Certain Relationships and Related Transactions........................  34

PART IV.

Item 14.             Exhibits, Financial Statement Schedules and Reports on Form 8-K.......  34

</TABLE>

 

                                        2

<PAGE>   3

 

                                     PART I

 

ITEM 1. BUSINESS OF THE COMPANY.

 

GENERAL

 

     Anixter International Inc. (the "Company"), formerly known as Itel

Corporation, which was incorporated in Delaware in 1967, is engaged in providing

networking and cabling solutions for network infrastructure requirements through

Anixter Inc. and its subsidiaries (collectively "Anixter"). As of December 31,

1995 the Company also owned approximately 31% of ANTEC Corporation and its

subsidiaries (collectively "ANTEC"), a broadband communications technology

company.

 

     In 1995 the Company largely completed its strategy of selling its non-core

businesses and investments including the sale of its 9% investment in the common

stock of Santa Fe Energy Resources, Inc. ("Energy").

 

     In 1994, the Company sold its remaining interests in its rail car leasing

business conducted by Itel Rail Corporation ("Rail"). In 1994, 1993 and 1992,

the Company sold all of its other transportation services assets. In 1991, the

Company sold the distribution services business previously conducted by Itel

Distribution Systems, Inc. ("Itel Distribution") and all the stock of Great

Lakes International, Inc. which together with its subsidiaries (collectively

"Great Lakes") was engaged in heavy marine construction, primarily dredging. For

information about the 1994 and 1993 sales see Item 7--Financial Liquidity and

Capital Resources--Asset Sales and Other Dispositions and Note 3 of the Notes to

the Consolidated Financial Statements.

 

     In 1994, the Company sold its 9% investment in the common stock of Catellus

Development Corporation ("Catellus"). In 1991, the Company sold its 15%

investment in the common stock of Santa Fe Pacific Corporation ("Santa Fe") and

its 21% investment in the common stock of American President Companies, Ltd.

("APC"). The financing operations of Signal Capital Corporation and its

subsidiaries (collectively "Signal Capital") are being held for sale. See Note 3

of the Notes to the Consolidated Financial Statements.

 

     At December 31, 1995, the Company and its subsidiaries employed

approximately 5,100 persons. For information on segment and geographic data see

Note 15 of the Notes to the Consolidated Financial Statements.

 

OPERATIONS

 

     Anixter is a leading supplier of wiring systems, networking and

internetworking products for voice, data and video networks and electrical power

applications in North America, Europe, Asia and Latin America. Anixter stocks

and/or sells a full line of these products from a network of 85 locations in the

United States, 19 in Canada, 17 in the United Kingdom, 28 in Continental Europe,

10 in Latin America, 6 in Australia, and 11 in Asia. Anixter sells approximately

80,000 products to over 60,000 active customers and works with over 2,000

suppliers. Its customers include international, national, regional and local

companies that are end users of these products and engage in manufacturing,

communications, finance, education, health care, transportation, utilities and

government. Also, Anixter sells products to resellers such as contractors,

installers, system integrators, value added resellers, architects, engineers and

wholesale distributors. The average order size is about $1,600.

 

     The products sold by Anixter include communication (voice, data and video)

products used to connect personal computers, peripheral equipment, mainframe

equipment and various networks to each other. The products include an assortment

of transmission media (copper and fiber optic cable) and components, as well as

active data components for networking applications. Anixter sells products that

are incorporated in local area networks ("LANs"), and the internetworking of

LANs to form wide area networks ("WANs"). Anixter's products also include

electrical wiring systems products used for the transmission of electrical

energy and control/monitoring of industrial processes.

 

     Increasingly, the Company's end user customer base is seeking complete

solutions to their network infrastructure needs as opposed to just purchasing

networking products. Therefore, in some circumstances Anixter is providing

network design advice through its sales engineers prior to major sales

commitments as

 

                                        3

<PAGE>   4

 

well as project management, staging and configuration during customer project

implementation, and customer training. On a post sale basis Anixter provides

network trouble shooting, maintenance and warranty services. Anixter service

offerings do not include cable system installation, application software

development or the provision of terminal devices. The Company has designed its

services to be compatible with and not competitive to the principal activities

of its reseller customer base.

 

     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 Europe and in

significant markets in the Pacific Rim (other than Japan and Korea) and Latin

America. While most of the European businesses have achieved operating profits,

the Pacific Rim and Latin American expansion programs are considered to be in

the start-up mode.

 

     An important element of Anixter's business strategy is to develop and

maintain close relationships with its key suppliers, which include the world's

leading manufacturers of networking 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 the Company's purchases in 1995 were from its five largest

suppliers.

 

     Anixter's ability to cost effectively serve its customers' needs is

possible through its proprietary computer system which connects all of its

warehouses and sales offices throughout the world. The system is designed for

sales support, order entry, inventory status, order tracking, credit review and

material management. In addition, the Company operates a series of large modern

hub warehouses in key distribution centers in North America, Europe, Asia and

Latin America which provide for cost effective and reliable storage and delivery

of products to its customers. The hub warehouses store the bulk of the Company's

stock units and are to a certain degree specialized by broad product category.

Some smaller warehouses are also maintained to provide for the local pick up

needs of customers in certain cities. Anixter has also developed close

relationships with certain freight, package delivery and courier services to

minimize transit times between its facilities and customer locations.

 

     The combination of its information systems, distribution network and

delivery partnerships allows Anixter to provide a high level of customer

services while maintaining a reasonable level of investment in inventory and

facilities.

 

     Anixter competes with distributors and manufacturers who sell products

directly or through existing distribution channels to end users or other

resellers. In addition, Anixter's future performance could be subject to

economic downturns and possibly rapid changes in applicable technologies. To

guard against inventory obsolescence, Anixter has negotiated various return and

price protection agreements with its key suppliers. Although Anixter's

relationships with its suppliers are good, the loss of a major supplier could

have a temporary adverse effect on Anixter's business but would not have a

lasting impact since comparable products are available from alternate sources.

 

INVESTMENT IN ANTEC

 

     In 1993, the Company's interest in ANTEC was reduced from 100% to 53% in an

initial public offering of ANTEC common stock. In 1994, the Company's interest

was further reduced to 30% in a second public offering. In 1995, the Company

purchased .4 million shares of ANTEC common stock increasing its investment to

31%.

 

     As of December 31, 1995 and 1994, the Company's interest in ANTEC was

approximately 31% and 30%, respectively. Effective January 1, 1994, the Company

reflects ANTEC as an equity investment in the consolidated financial statements.

As of December 31, 1995, the market value of the Company's 7,113,500 shares of

ANTEC was $128 million compared with a carrying value of $73.7 million. The

Company views ANTEC as a long-term investment, subject to change should future

circumstances warrant.

 

                                        4

<PAGE>   5

 

     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.

 

     Approximately 70% of ANTEC's consolidated sales for the year ended December

31, 1995 came from sales to the domestic cable industry. Demand for these

products depends primarily on capital spending for constructing, rebuilding,

maintaining or upgrading domestic cable television systems. Capital spending in

the cable industry has been cyclical. The amount of capital spending and,

therefore, ANTEC's sales and profits, are affected by a variety of factors,

including general economic conditions, availability and cost of capital, other

demands and opportunities for capital (such as acquisitions), regulation, demand

for cable services competition and technology, and real or perceived trends or

uncertainties in these factors. The impact of the new telecommunications

legislation, which among other things, will allow long-distance carriers, local

phone companies and cable companies to provide similar services across their

networks is not known. Technological developments are occurring rapidly in the

communications industry and, the effects of such developments are uncertain.

 

     The domestic cable industry is highly concentrated with over 75% of U.S.

domestic subscribers being served by approximately twenty-five major

multi-system operators ("MSO's"). In 1995, over 50% of ANTEC's revenues were

obtained from sales to the twenty-five largest MSO's. A significant portion of

ANTEC's revenue is derived from sales to Tele-Communications, Inc. aggregating

$126.8 million, $151.6 million, and $146.1 million for the years ended December

31, 1995, 1994, and 1993, respectively.

 

     All aspects of ANTEC's business are highly competitive. ANTEC competes with

national, regional and local manufacturers, distributors and wholesalers,

including companies larger than ANTEC, such as General Instrument Corporation

and Scientific-Atlanta, Inc. Various manufacturers who are suppliers to ANTEC

sell directly as well as through distributors into the cable marketplace. In

addition, because of the convergence of the cable, telecommunications and

computer industries and rapid technological development, new competitors are

entering the cable market. Many of ANTEC's competitors or potential competitors

are substantially larger and have greater resources than ANTEC. The principal

methods of competition are product differentiation, performance and quality;

price and terms; and service, technical and administrative support.

 

ASSETS HELD FOR SALE

 

     The principal assets held for sale at December 31, 1995 are those of Signal

Capital. The finance business of Signal Capital has been classified as assets

held for sale in the Company's consolidated financial statements since its

acquisition in 1988. Subsequent to the purchase, the Company sold or liquidated

portions of the portfolio including $855 million in 1989, $78 million in 1990,

$157 million in 1991, $82 million in 1992, $82 million in 1993, $60 million in

1994 and $67 million in 1995. The $35 million net portfolio at December 31, 1995

represents approximately 2% of the original acquired Signal Capital portfolio.

The Company continues to liquidate the acquired Signal Capital portfolio in an

orderly manner that maximizes its value to shareholders and no material amounts

of new loans or investments are being made by Signal Capital.

 

ITEM 2. PROPERTIES.

 

     Most of the Company's facilities are leased.

 

ITEM 3. LEGAL PROCEEDINGS.

 

     In the ordinary course of business, the Company and its subsidiaries became

involved as plaintiffs or defendants in various legal proceedings. The claims

and counterclaims in such litigation, including those for punitive damages,

individually in certain cases and in the aggregate, involve amounts which may be

material. However, it is the opinion of the Company's management, based upon the

advice of its counsel, that the ultimate disposition of pending litigation will

not be material.

 

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

 

     During the fourth quarter of 1995, no matters were submitted to a vote of

the security holders.

 

                                        5

<PAGE>   6

 

                      EXECUTIVE OFFICERS OF THE REGISTRANT

 

     The following table lists the name, age as of March 14, 1996, 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>

Kirk Brewer, 40.............  Senior Vice President--Corporate & Investor Relations of the

                              Company since February 1992; Midwest Officer and Managing

                              Director of Georgeson & Co. from 1989 to February 1992.

Rod F. Dammeyer, 55.........  Chief Executive Officer, President and Director of the Company

                              since January 1993; President and Director of the Company from

                              1985 to 1993.

John A. Dul, 35.............  Assistant Secretary of the Company since May 1995; General

                              Counsel and Secretary of Anixter since January 1996; Associate

                              General Counsel and Secretary from July 1994 to January 1996;

                              Associate General Counsel and Assistant Secretary from May 1993

                              to July 1994; Associate General Counsel from January 1990 to

                              May 1993.

James M. Froisland, 45......  Vice President--Controller of the Company since February 1996;

                              Vice President--Corporate Controller of Budget Rent a Car

                              Corporation from March 1992 to February 1996; Vice President

                              Finance and Chief Financial Officer of Allsteel Inc., from

                              August 1990 to March 1992; Corporate Controller and Director of

                              Management Information Systems of the Haagen-Dazs Company, a

                              subsidiary of The Pillsbury Company from October 1988 to August

                              1990.

Robert W. Grubbs Jr., 39....  President and Chief Executive Officer of Anixter since July

                              1994; President Anixter U.S.A. from August 1993 to July 1994;

                              Executive Vice President, Sales and Marketing of Anixter from

                              August 1992 to August 1993; Senior Vice President Southeastern

                              Group of Anixter from May 1989 to August 1992.

James E. Knox, 58...........  Senior Vice President, General Counsel and Secretary of the

                              Company since 1986.

Dennis J. Letham, 44........  Chief Financial Officer, Senior Vice President--Finance of the

                              Company since January 1995; Chief Financial Officer, Executive

                              Vice President of Anixter since July 1993; Chief Financial

                              Officer, Vice President of National Intergroup, Inc. from March

                              1991 to July 1993; Chief Financial Officer, Senior Vice

                              President of FoxMeyer, Inc from September 1990 to July 1993;

                              Vice President--Controller of National Intergroup, Inc. from

                              1989 to March 1991.

James A. Loudon, 52.........  Vice President--Treasurer of the Company and Anixter since

                              February 1996; Vice President--Controller of the Company from

                              March 1995 to February 1996; Vice President--Controller of

                              Anixter from January 1994 to February 1996; Vice

                              President--Treasurer of Anixter from February, 1988 to January,

                              1994.

Philip F. Meno, 37..........  Vice President--Taxes of the Company since May 1993; Director

                              of Taxes from January 1990 to May 1993; Tax Manager from 1986

                              to January 1990.

Samuel Zell, 54.............  Chairman of the Board of Directors of the Company since January

                              1993; Chairman of the Board of Directors and Chief Executive

                              Officer of the Company from 1985 to 1993.

</TABLE>

 

                                        6

<PAGE>   7

 

                                    PART II

 

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

MATTERS.

 

A. MARKET INFORMATION

 

     Anixter International Inc.'s Common Stock is traded on the New York Stock

Exchange under the symbol AXE.

 

B. STOCK PRICES

 

     The following table sets forth the high and low sales prices for the Common

Stock on the NYSE.

 

<TABLE>

<CAPTION>

                                                                     HIGH       LOW

                                                                     ----       ---

          <S>                                                        <C>        <C>

          1994

 

            First Quarter..........................................  $15       $12 3/8

 

            Second Quarter.........................................   15 3/4    11 1/2

 

            Third Quarter..........................................   17 11/16  15 5/8

 

            Fourth Quarter.........................................   18 1/8    15 15/16

 

          1995

 

            First Quarter..........................................  $19 5/16  $16 3/4

 

            Second Quarter.........................................   20 3/16   17 1/4

 

            Third Quarter..........................................   22 1/16   18 9/16

 

            Fourth Quarter.........................................   20 7/8    16 3/4

 

          1996

 

            First Quarter (through March 11, 1996).................  $20       $16 7/8

</TABLE>

 

C. DIVIDENDS ON COMMON STOCK

 

     The Company has not paid cash dividends on its Common Stock since 1979. On

August 10, 1995, the Company's Board of Directors authorized a two-for-one stock

split in the form of a stock dividend paid October 25, 1995, to stockholders of

record September 22, 1995. This transaction increased the number of outstanding

shares from approximately 26.8 million to 53.6 million. All share and per share

data have been adjusted to reflect this split.

 

D. NUMBER OF HOLDERS OF COMMON STOCK

 

     There were approximately 5,700 holders of record of the Common Stock as of

March 11, 1996.

 

                                        7

<PAGE>   8

 

ITEM 6. SELECTED FINANCIAL DATA.

 

<TABLE>

<CAPTION>

                                                                         YEARS ENDED DECEMBER 31,

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

                                                             1995       1994       1993       1992       1991

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

                                                                 (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<S>                                                        <C>        <C>        <C>        <C>        <C>

Results of operations(a):

  Revenues --Anixter.....................................  $2,194.8   $1,732.6   $1,328.6   $1,163.6   $1,025.8

            --ANTEC......................................        --         --      427.6      301.0      258.3

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

  Consolidated revenues..................................  $2,194.8   $1,732.6   $1,756.2   $1,464.6   $1,284.1

                                                           ========   ========   ========   ========   ========

  Operating income--Anixter and all other................  $   99.6   $   69.8   $   45.8   $   30.5   $   25.7

                  --ANTEC................................        --         --       22.4       12.1        7.3

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

  Consolidated operating income..........................  $   99.6   $   69.8   $   68.2   $   42.6   $   33.0

                                                           ========   ========   ========   ========   ========

  Interest expense and other, net........................  $  (21.6)  $  (27.1)  $  (58.9)  $  (77.9)  $  (67.5)

  Equity in income (loss) of ANTEC.......................       (.6)       7.9         --         --         --

  Non-recurring items, net(b)............................        --       59.0       71.8         --         --

  Marketable equity securities losses, principally

    write-downs(c).......................................      (3.0)     (39.6)     (25.0)     (25.0)     (79.4)

  Income (loss) from continuing operations...............      39.1       46.2       28.8      (45.8)     (67.5)

  Income (loss) from discontinued operations.............        --      200.7      (14.0)     (38.1)       3.0

  Extraordinary items, net(d)............................        --         --      (16.0)     (20.4)       8.8

  Net income (loss)......................................  $   39.1   $  246.9   $   (1.2)  $ (104.3)  $  (55.7)

  Income (loss) per common and common equivalent

    share(g):

      Continuing operations..............................  $    .71   $    .72   $    .43   $   (.89)  $  (1.07)

      Before extraordinary items.........................       .71       3.85        .20      (1.55)     (1.03)

      Net income (loss)..................................       .71       3.85       (.07)     (1.90)      (.90)

Financial position at December 31(a):

  Total assets...........................................  $1,184.7   $1,110.9   $1,380.6   $1,436.2   $2,395.8

  Total debt.............................................     333.7      280.5      494.8      725.6    1,426.9

  Stockholders' equity(e)(f).............................     449.0      543.9      405.3      367.3      563.6

  Book value per common and common equivalent

    share(f)(g)..........................................  $   8.77   $   9.25   $   6.14   $   5.05   $   7.48

  Weighted average common and common equivalent

    shares(g)............................................    55.410     64.090     60.264     58.170     68.880

</TABLE>

 

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

Notes:

 

(a) Due to the 1994 sale of 4.0 million shares of ANTEC (see Note 1 of the Notes

    to the Consolidated Financial Statements), all 1995 and 1994 financial

    information reflects ANTEC as an equity investment. All prior financial

    information reflects ANTEC as a consolidated subsidiary of the Company.

 

(b) The non-recurring items in 1994 include a $48.2 million pre-tax gain on the

    May 1994 public offering of shares of common stock of ANTEC and a $10.8

    million pre-tax gain relating to ANTEC's issuance of common stock in

    connection with an acquisition in November 1994. Non-recurring items in 1993

    principally include an $84.5 million pre-tax gain on the 1993 initial public

    offering of shares of common stock of ANTEC and a $6.4 million pre-tax gain

    on other investments offset by a pre-tax loss of approximately $19.1 million

    relating to the liquidation of the Company's equity investment in Q-TEL (see

    Note 4 of the Notes to the Consolidated Financial Statements).

 

(c) In 1994, 1993, 1992 and 1991, the Company wrote down the value of its

    investments in marketable equity securities by $34.4 million, $25.0 million,

    $25.0 million and $50.0 million, respectively. The remaining $5.2 million

    pre-tax charge in 1994 relates to the loss on sale of the Company's

    investment in Catellus. The remaining $29.4 million pre-tax charge in 1991

    relates to the loss on sale of the Company's investment in Santa Fe. The

    remaining marketable securities were sold in 1995 resulting in a pre-tax

    loss of $3 million.

 

(d) Extraordinary items in 1993, 1992 and 1991 represent the gain/(loss), net of

    related income taxes, on early extinguishment of senior and subordinated

    debt at the Company and its subsidiaries.

 

(e) Stockholders' equity reflects treasury stock purchases of $129.2 million,

    $138.9 million, $.3 million, $114.3 million and $147.4 million in 1995,

    1994, 1993, 1992 and 1991, respectively. No dividends on common stock were

    declared or paid during any of the periods shown.

 

(f) Stockholders' equity includes unrealized losses on marketable equity

    securities available-for-sale, net of deferred income tax benefit of $3.9

    million, $23.7 million, $49.1 million and $47.8 million at December 31,

    1994, 1993, 1992 and 1991, respectively. Stockholders' equity at December

    31, 1992 and 1991 included approximately $83 million of Series C convertible

    preferred stock which was converted into 3.8 million shares of Common Stock

    in 1993.

 

(g) All share and per share data has been adjusted to reflect the dividend paid

    in the form of a two-for-one stock split on October 25, 1995.

 

                                        8

<PAGE>   9

 

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

OF OPERATIONS.

 

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

 

Asset Sales and Other Dispositions

 

     Recapitalization Program: In 1990, the Company began a program of modifying

its capital structure by reducing certain senior and subordinated debt and

purchasing Common Stock. Over the last several years, the Company also

implemented a program of selling or otherwise monetizing certain assets to fund

the recapitalization program. Since the program began, the Company has used

proceeds to eliminate all debt at the holding company, temporarily reduce

borrowings at the subsidiary level and to repurchase approximately $719 million

of outstanding Common Stock. The financial liquidity and capital resources in

1995 and 1994 reflect the impact of the Company's recapitalization program.

 

     Sale of Rail Car Leasing Business: In 1994, the Company sold its remaining

interest in its rail cars for an aggregate purchase price of $205.5 million

which was used to: (1) repay $150 million of the Corporate senior bank term loan

("Term Loan"); (2) pay the related income tax liability of approximately $25

million caused by the sale which resulted after utilization of the Company's NOL

and ITC carryforwards; and (3) other general corporate purposes including the

purchase of the Company's Common Stock.

 

     ANTEC Public Offerings: In May 1994, the Company completed a public

offering of shares of common stock of ANTEC for approximately $83 million. As a

result of the ANTEC Offering, the Company's ownership of ANTEC common stock was

reduced from 53% to 33%. In addition, in November 1994, ANTEC issued

approximately 2.0 million shares of ANTEC common stock in connection with an

acquisition which lowered the Company's ownership to approximately 30%. In the

fourth quarter of 1995 the Company purchased .4 million shares of ANTEC stock

increasing its ownership to 31%.

 

     In September 1993, the Company and ANTEC completed an initial public

offering of shares of common stock of ANTEC (the "Initial Offering"). Net

proceeds to the Company of approximately $97 million were used to reduce

indebtedness. As a result of the Initial Offering, the Company's ownership of

ANTEC common stock was reduced to 53%.

 

     Liquidation of Signal Capital: Signal Capital has been classified as assets

held for sale since its acquisition in 1988. Subsequent to the purchase, the

Company sold or liquidated portions of the portfolio including $855 million in

1989, $78 million in 1990, $157 million in 1991, $82 million in 1992, $82

million in 1993; $60 million in 1994 and $67 million in 1995. The $35 million

net portfolio at December 31, 1995 represents approximately 2% of the original

acquired Signal Capital portfolio. Proceeds were used to repay indebtedness. The

Company continues to liquidate the acquired Signal Capital portfolio in an

orderly manner that maximizes its value to the Company's shareholders and no

material amounts of new loans or investments are being made.

 

     Other Dispositions:  In 1995 the Company sold its investment in Energy for

approximately $72.6 million. In 1994, the Company sold its investment in the

marketable equity securities of Catellus for approximately $47.8 million. In

1994, 1993 and 1992, the Company sold all of its other transportation services

assets. Proceeds from these other dispositions were used to reduce debt or to

purchase the Company's Common Stock.

 

Cash Flow

 

     Year ended December 31, 1995: Consolidated net cash used by continuing

operating activities was ($38.3) million for the year ended December 31, 1995

compared to ($35.4) million in 1994. Cash used by continuing operating

activities increased due primarily to increased working capital investment

resulting from a 27% increased sales volume and a decrease in net income from

continuing operations partially offset by non-recurring items and marketable

equity security losses in 1994. Consolidated net cash provided by investing

activities was $108.7 million in 1995 versus $381.8 million in 1994.

Consolidated investing activities in 1995

 

                                        9

<PAGE>   10

 

include approximately $72.6 million of proceeds from the sale of the Company's

investment in Energy. Consolidated investing activities in 1994 include

approximately $82.8 million of proceeds from the Antec Offering and

approximately $60.3 million from the Company's sales of Catellus and Q-TEL. Cash

from discontinued operations, net was $71.2 million in 1995 versus $262.5

million in 1994. Consolidated cash used for net financing activities was ($74.1)

million for the year ended 1995 in comparison to ($363.2) million for the year

ended 1994. 1994 included the paydown of a substantial amount of subordinated

debt. The consolidated net financing activities in 1995 and 1994 also include

$129.2 million and $138.9 million, respectively of treasury stock purchases.

Discontinued operations in 1995 and 1994 include net proceeds from the reduction

of assets at Signal Capital of $67 million and $60 million, respectively and

include net proceeds of $17 million and $10 million, respectively from the sale

of the Company's other transportation assets. Discontinued operations in 1994

include net proceeds of $205.5 million from the sale of the Company's remaining

interest in its rail car leasing business.

 

     Year ended December 31, 1994: Consolidated net cash used by continuing

operating activities was ($35.4) million for the year ended December 31, 1994

compared to ($42.4) million in 1993. Cash used by continuing operating

activities decreased due primarily to significantly improved earnings, after

elimination of non-recurring items and losses on marketable equity securities,

offset somewhat by a $64.5 million net working capital investment by Anixter

used to fund a $400 million increase in sales volume. Consolidated net cash

provided by net investing activities was $381.8 million in 1994 versus $285.7

million in 1993. Consolidated investing activities in 1994 include $262.5

million of cash from discontinued operations, net approximately $82.8 million of

proceeds from the ANTEC Offering, approximately $47.8 million from the sale of

the Company's investment in Catellus and approximately $12.5 million in net

receipts from the liquidation of the Company's equity investment in Q-TEL and

loans due from Q-TEL. Consolidated investing activities in 1993 reflect $156.6

million of proceeds from the ANTEC Initial Offering, $117.4 million from

discontinued operations, net, net receipts from the liquidation of the Company's

equity investment in Q-TEL of $23.7 million and proceeds from the sale of

miscellaneous marketable securities and other investments. Consolidated cash

used for net financing activities was ($363.2) million for the year ended 1994

in comparison to ($234.3) million for the year ended 1993. Both periods include

the paydown of a substantial amount of subordinated debt. The consolidated net

financing activities in 1994 also include $138.9 million of treasury stock

purchases. Cash from discontinued operations, net was $262.5 million in 1994

versus $117.4 million in 1993. Discontinued operations in 1994 include net

proceeds of $205.5 million from the sale of the Company's remaining interest in

its rail car leasing business. Discontinued operations in 1994 and 1993 include

net proceeds from the sale of the Company's other transportation services assets

of $10 million and $46 million, respectively, and cash received from the

reduction of assets at Signal Capital of $60 million and $82 million,

respectively.

 

     Consolidated results in 1993 included ANTEC, while 1995 and 1994

consolidated results present ANTEC as an equity investment. The Company reduced

its interest in ANTEC to approximately 31% and 30% of ANTEC's outstanding shares

in 1995 and 1994, respectively, with a substantial impact on the comparability

of consolidated results. Operating income by the Company's major business

segments in 1995, 1994 and 1993 for Anixter is $99.6 million, $69.8 million and

$45.8 million and in 1993 for ANTEC $22.4 million.

 

     Interest Expense: Consolidated net interest expense and other was $21.6

million, $27.1 million and $58.9 million for the years ended December 31, 1995,

1994 and 1993, respectively. The year ended December 31, 1993 includes $5.0

million of net interest expense and other relating to ANTEC. 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 67% of debt obligations at December

31, 1995 is fixed or capped. The impact of interest rate swaps and caps on

interest expense, net for the years ended December 31, 1995, 1994 and 1993 was

to increase interest expense by approximately $.9 million, $6.0 million and

$10.8 million, respectively.

 

                                       10

<PAGE>   11

 

Financings

 

     In November 1995, the Company terminated its $115 million senior bank term

loan facility ("Corporate Loan"). Effective with this termination, all existing

financing facilities are maintained by the operating subsidiaries of the

Company.

 

     In March 1995, the Company increased Anixter's secured domestic revolving

line of credit to $425 million, lowered the interest rate spreads, and extended

the expiration to 2000.

 

     At December 31, 1995, $193.6 million was available under the bank revolving

lines of credit at Anixter, of which $88 million was available to the Company

for general corporate purposes.

 

Debt Maturities and Repayments

 

     In 1994, the Company repaid the entire $250 million Term Loan with proceeds

from the sale of the Company's rail car leasing business and the ANTEC Offering.

The Term Loan was originally obtained in December 1993 and was secured by the

Company's investments in the capital stock of Anixter, ANTEC and Signal Capital

and its investment in marketable securities.

 

     In 1994 and 1993, respectively, the Company retired $221 million and $337

million of the face value of subordinated debt at the Company.

 

NOL Carryforwards

 

     As of December 31, 1994, the Company had no NOL or ITC carryforwards for

Federal income tax purposes due to the sale in 1994 of the Company's rail car

leasing business which exhausted virtually all of the remaining carryforwards

existing at December 31, 1993. As of December 31, 1993, the Company had

cumulative NOL carryforwards of approximately $345 million that were set to

expire primarily in 1995 through 2007, and ITC carryforwards of approximately

$16 million that were set to expire between 1994 and 2001. Certain of these

carryforwards have not been examined by the IRS and, therefore, may still be

subject to adjustment.

 

     As a result of the 1995 sale of the Energy shares the Company generated a

capital loss of approximately $80 million, most of which will be carried back

and offset against the 1994 gain on the Rail sale. It is anticipated this

carryback will generate cash refunds of $13.6 million in 1996 and will also

cause $9.0 million of the ITC's claimed in 1994 to be available for carryforward

to 1995. Approximately $3.6 million of the ITC's claimed in 1994 may now expire

as a result of the carryback of the Energy loss.

 

     In addition, at December 31, 1995, various foreign subsidiaries of the

Company had aggregate cumulative NOL carryforwards for foreign income tax

purposes of approximately $41 million which are subject to various tax

provisions of each respective country. Approximately half of this amount expires

between 1996 and 2004 and half of which has an indefinite life.

 

     The availability of tax benefits of NOL and ITC carryforwards to reduce the

Company's Federal income tax liability is subject to various limitations under

the Internal Revenue Code.

 

Liquidity Considerations and Other

 

     Certain debt agreements entered into by the Company's operating

subsidiaries contain various restrictions including restrictions on payments to

the Company. Such restrictions have not had nor are expected to have an adverse

impact on the Company's ability to meet its cash obligations.

 

CAPITAL EXPENDITURES

 

     Consolidated capital expenditures were $31.3 million, $17.2 million and

$13.4 million for 1995, 1994 and 1993, respectively.

 

                                       11

<PAGE>   12

 

RESULTS OF OPERATIONS

 

     The Company has experienced increased revenues due to the continued growth

of the market for products and services to support data, voice and video

networking technologies. While the Company continues to believe that its revenue

base will grow and its worldwide expansion will result in both increased

revenues and operating profits, there can be no assurance of future financial

performance. Anixter competes with distributors and manufacturers who sell

products directly or through existing distribution channels to end users or

other resellers. In addition, Anixter's future performance could be subject to

economic downturns and possibly rapid changes in applicable technologies.

 

     In July 1994, the Company sold substantially all its remaining interest in

its fleet of rail cars. Results of operations reflect the rail car leasing

business as discontinued operations.

 

     In May 1994, the Company sold in a public offering 4.0 million shares of

common stock of ANTEC. As a result of the ANTEC Offering, the Company's

ownership of ANTEC common stock was reduced from 53% to approximately 33%. In

addition, in November 1994, ANTEC issued approximately 2.0 million shares of

ANTEC common stock in connection with an acquisition which lowered the Company's

ownership to approximately 30%. In the fourth quarter of 1995 the Company

purchased .4 million shares of ANTEC stock increasing its ownership to 31%. The

Company views ANTEC as a long-term investment, subject to change should future

circumstances warrant. Due to the sale and issuance of ANTEC common stock, all

1995 and 1994 financial information reflects ANTEC as an equity investment. All

prior financial information reflects ANTEC as a consolidated subsidiary of the

Company.

 

     Year ended December 31, 1995: Income from continuing operations was $39.1

million in 1995 compared with $46.2 million in 1994. Results in 1994 include a

$48.2 million pre-tax gain on the ANTEC Offering and a $10.8 million pre-tax

gain relating to ANTEC's issuance of common stock in connection with an

acquisition in November 1994. Results of continuing operations in 1994 include

pre-tax charges associated with the sale and write down of marketable equity

securities of $39.6 million. Net income was $39.1 million and $246.9 million for

the years ended December 31, 1995 and 1994, respectively. Net income from 1995

results includes a ($.3) million after tax loss on the Company's equity interest

in ANTEC, due to the one-time pre-tax reorganization charge of $21.7 million

recorded in the third quarter by ANTEC, versus $7.9 million of income in 1994.

In 1995, the Company also recorded a ($3.0) million loss associated with the

sale of its investment in marketable securities. Income from discontinued

operations in 1994 reflects a $202.0 million after-tax gain from the sale of the

Company's rail car leasing business.

 

     Revenues in 1995 rose 27% to $2.2 billion resulting from the continued

growth of the North American business and the continuing penetration in Europe,

Asia, and Latin America. North America revenues in 1995 increased 23% to $1.7

billion due to strong demand for its communications products and focused

marketing efforts in its electrical wiring systems business. Europe revenues in

1995 increased to $429.1 million from $316.8 million due primarily to continued

expansion and increased market penetration, particularly in networking products,

across all geographic territories. Asia and Latin America revenues increased to

$96.4 million in 1995 due to increased market penetration, strong product demand

and expansion into new territories. Revenues by major markets are presented in

the following table.

 

<TABLE>

<CAPTION>

                                                                     YEARS ENDED DECEMBER 31,

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

                                                                      1995             1994

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

                                                                           (IN MILLIONS)

    <S>                                                             <C>              <C>

    North America.................................................  $1,669.3         $1,360.5

    Europe........................................................     429.1            316.8

    Asia and Latin America........................................      96.4             55.3

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

                                                                    $2,194.8         $1,732.6

                                                                    ========         ========

</TABLE>

 

     Operating income for 1995 increased 43% to $99.6 million due primarily to

significantly improved volume and earnings in North America. North America

operating income increased 36% to $89.7 million in 1995 due to volume related

economies of scale offset by increased spending for new service and logistics

initiatives. Europe operating income in 1995 increased 167% to $17.6 million

from $6.6 million due primarily to

 

                                       12

<PAGE>   13

 

continued expansion and volume related economies of scale. Asia and Latin

America operating losses increased to ($7.7) million from ($2.6) million in 1994

due to geographic expansion, new offices and staff increases. Aggregate gross

start-up losses in expansion markets, which have yet to achieve profitable

operations were $12.6 million through 1995. Operating income (loss) by major

markets is presented in the following table.

 

<TABLE>

<CAPTION>

                                                                             YEARS ENDED

                                                                            DECEMBER 31,

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

                                                                           1995      1994

                                                                           -----     -----

                                                                            (IN MILLIONS)

    <S>                                                                    <C>       <C>

    North America........................................................  $89.7     $65.8

    Europe...............................................................   17.6       6.6

    Asia and Latin America...............................................   (7.7)     (2.6)

                                                                           -----     -----

                                                                           $99.6     $69.8

                                                                           =====     =====

</TABLE>

 

     Consolidated net interest expense and other for 1995 declined to $21.6

million from $27.1 million in 1994 due to the extinguishment of high-cost

corporate debt from the monetization of the Company's non-core assets in the

first half of 1994 partially offset by the cost of funding the stock purchase

program and increased working capital borrowings.

 

     The consolidated tax provision for the year ended December 31, 1995

reflects an effective tax rate of 47.4% based on pre-tax book income adjusted

for goodwill amortization and start up losses in certain international

businesses which are not currently deductible and for which no anticipated

future tax benefit has been recorded. The increase in the effective tax rate

from the prior year period is due to the absence in 1995 of certain

non-recurring tax benefits associated with the secondary offering of ANTEC which

occurred in 1994.

 

     Year ended December 31, 1994: Income from continuing operations was $46.2

million in 1994 compared with $28.8 million in 1993. Results in 1994 include a

$48.2 million pre-tax gain on the ANTEC Offering and a $10.8 million pre-tax

gain relating to ANTEC's issuance of common stock in connection with an

acquisition in November 1994. Results of continuing operations in 1993

principally include an $84.5 million pre-tax gain on the ANTEC Initial Offering

and a $6.4 million pre-tax gain on other investments offset by a pre-tax loss of

approximately $19.1 million relating to the liquidation of the Company's equity

investment in Q-TEL. Results of continuing operations in 1994 and 1993 include

pre-tax charges associated with the sale and write-down of marketable equity

securities of $39.6 million and $25.0 million, respectively. Net income (loss)

was $246.9 million and ($1.2) million for the years ended December 31, 1994 and

1993, respectively. Income from discontinued operations in 1994 reflects a

$202.0 million after-tax gain from the sale of the Company's rail car leasing

business. The Company retired or called for redemption a significant amount of

its subordinated and senior debt resulting in an extraordinary net loss of

($16.0) million in 1993.

 

     Revenues in 1994 rose 30% to $1.7 billion resulting from the continued

growth of the North American business and the continuing penetration in Europe,

Asia, and Latin America. North America revenues in 1994 increased 28% to $1.4

billion due to strong demand for its communications business, focused marketing

efforts in its electrical wiring systems business. Europe revenues in 1994

increased to $316.8 million from $244.6 million due primarily to continued

expansion and increased market penetration, particularly in networking products,

across all geographic territories. Asia and Latin America revenues more than

doubled to $55.3 million in 1994 due to increased market penetration, strong

product demand and expansion into new territories. Revenues by major markets are

presented in the following table.

 

<TABLE>

<CAPTION>

                                                                           YEARS ENDED

                                                                          DECEMBER 31,

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

                                                                        1994         1993

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

                                                                          (IN MILLIONS)

    <S>                                                               <C>          <C>

    North America...................................................  $1,360.5     $1,059.6

    Europe..........................................................     316.8        244.6

    Asia and Latin America..........................................      55.3         24.4

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

                                                                      $1,732.6     $1,328.6

                                                                      ========     ========

</TABLE>

 

                                       13

<PAGE>   14

 

     ANTEC revenues, which were reflected in the consolidated results in 1993,

but not in 1994, increased 29% to $553.5 million in 1994 from $427.6 million in

1993 due to 1994 acquisitions and international growth.

 

     Operating income for 1994 increased 52% to $69.8 million due primarily to

significantly improved volume and earnings in North America. North America

operating income increased 41% to $65.8 million in 1994 due to volume related

economies of scale and termination of the equity participation plan and catalog

business in 1993 somewhat offset by increased spending for new service and

logistics initiatives. Europe operating income in 1994 doubled to $6.6 million

from $3.2 million due primarily to continued expansion and volume related

economies of scale and a positive earnings contribution from Continental Europe.

Asia and Latin America operating loss decreased to ($2.6) million from ($4.1)

million in 1993 due to reduced start-up losses in Asia and Latin America

reaching breakeven volume levels. Aggregate gross start-up losses in expansion

markets, which have yet to achieve profitable operations in their respective

years, were ($6.7) million in 1994 compared to ($8.6) million in 1993. Operating

income (loss) by major markets is presented in the following table.

 

<TABLE>

<CAPTION>

                                                                             YEARS ENDED

                                                                            DECEMBER 31,

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

                                                                           1994      1993

                                                                           -----     -----

                                                                            (IN MILLIONS)

    <S>                                                                    <C>       <C>

    North America........................................................  $65.8     $46.7

    Europe...............................................................    6.6       3.2

    Asia and Latin America...............................................   (2.6)     (4.1)

                                                                           -----     -----

                                                                            69.8      45.8

    ANTEC................................................................     --      22.4

                                                                           -----     -----

                                                                           $69.8     $68.2

                                                                           =====     =====

</TABLE>

 

     ANTEC operating income which was reflected in the consolidated results in

1993 but not in 1994, increased 74% to $39.0 million from $22.4 million in 1993

due to increased volume.

 

     Consolidated net interest expense and other for 1994 declined to $27.1

million from $58.9 million in 1993 due to the use of proceeds from the continued

monetization of the Company's non-core assets to significantly reduce high-cost

subordinated debt.

 

     Impact of Inflation: Inflation has slowed in recent years and is currently

not an important determinant of Anixter's results of operations due, in part, to

rapid inventory turnover.

 

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

<TABLE>

<CAPTION>

                                                                              PAGE

                                                                              ----

          <S>                                                                   <C>

          Report of Independent Auditors......................................   15

          Consolidated Balance Sheets.........................................   16

          Consolidated Statements of Operations...............................   17

          Consolidated Statements of Cash Flows...............................   18

          Consolidated Statements of Stockholders' Equity.....................   19

          Notes to the Consolidated Financial Statements......................   20

          Summary Quarterly Financial Information (Unaudited).................   33

</TABLE>

 

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

FINANCIAL DISCLOSURE.

 

     Not applicable.

 

                                       14

<PAGE>   15

 

                         REPORT OF INDEPENDENT AUDITORS

 

The Board of Directors and Stockholders

Anixter International Inc.

 

     We have audited the accompanying consolidated balance sheets of Anixter

International Inc. as of December 31, 1995 and 1994, and the related

consolidated statements of operations, stockholders' equity and cash flows for

each of the three years in the period ended December 31, 1995. Our audits also

included the financial statement schedules listed in the Index at Item 14(a).

These financial statements and schedules are the responsibility of the Company's

management. Our responsibility is to express an opinion on these financial

statements and schedules based on our audits.

 

     We conducted our audits in accordance with generally accepted auditing

standards. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

 

     In our opinion, the financial statements referred to above present fairly,

in all material respects, the consolidated financial position of Anixter

International Inc. at December 31, 1995 and 1994, and the consolidated results

of its operations and its cash flows for each of the three years in the period

ended December 31, 1995, in conformity with generally accepted accounting

principles. Also, in our opinion, the related financial statement schedules,

when considered in relation to the basic financial statements taken as a whole,

present fairly in all material respects the information set forth therein.

 

                                                    ERNST & YOUNG LLP

 

Chicago, Illinois

February 5, 1996

 

                                       15

<PAGE>   16

 

                           ANIXTER INTERNATIONAL INC.

 

                          CONSOLIDATED BALANCE SHEETS

 

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

 

<TABLE>

<CAPTION>

                                                                             DECEMBER 31,

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

                                                                          1995          1994

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

<S>                                                                    <C>           <C>

                                            ASSETS

Current assets:

  Cash and equivalents................................................ $   10,500    $   14,200

  Accounts receivable (net of allowances for doubtful accounts of

     $9,000 and $6,000, respectively).................................    400,000       325,900

  Inventories, primarily finished goods...............................    364,100       275,800

  Other assets........................................................      6,400         4,900

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

          Total current assets........................................    781,000       620,800

Property, primarily equipment, at cost................................     97,400        68,600

Accumulated depreciation..............................................    (48,200)      (35,200)

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

          Net property................................................     49,200        33,400

Goodwill (net of accumulated amortization of $51,500 and $45,500,

  respectively).......................................................    183,000       187,900

Assets held for sale, net.............................................     42,800       105,400

Marketable equity securities available-for-sale (cost of $75,600 in

  1994)...............................................................         --        64,500

Investment in ANTEC...................................................     73,700        69,500

Other assets..........................................................     55,000        29,400

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

                                                                       $1,184,700    $1,110,900

                                                                       ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Accounts payable.................................................... $  232,400    $  186,200

  Accrued expenses....................................................     99,500        80,300

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

          Total current liabilities...................................    331,900       266,500

Income taxes, net, primarily deferred.................................     29,100           600

Other liabilities.....................................................     11,200        11,200

Long-term debt........................................................    333,700       280,500

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

          Total liabilities...........................................    705,900       558,800

Minority interests....................................................      6,400         8,200

Common stock repurchase commitment....................................     23,400            --

Stockholders' equity:

  Common stock--$1.00 par value, 100,000,000 shares authorized,

     52,488,090 and 29,426,000 shares issued and outstanding,

     respectively.....................................................     52,500        29,400

  Capital surplus.....................................................     99,900       262,500

  Retained earnings...................................................    308,400       269,300

  Cumulative translation adjustments..................................    (11,800)      (10,100)

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

                                                                          449,000       551,100

  Unrealized losses on marketable equity securities available-for-sale

     (net of deferred income tax benefit).............................         --        (7,200)

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

          Total stockholders' equity..................................    449,000       543,900

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

                                                                       $1,184,700    $1,110,900

                                                                       ==========    ==========

</TABLE>

 

        See accompanying notes to the consolidated financial statements.

 

                                       16

<PAGE>   17

 

                           ANIXTER INTERNATIONAL INC.

 

                     CONSOLIDATED STATEMENTS OF OPERATIONS

 

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

<TABLE>

<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,

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

                                                            1995           1994           1993

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

<S>                                                      <C>            <C>            <C>

Revenues--Anixter.....................................   $ 2,194,800    $ 1,732,600    $ 1,328,600

          --ANTEC.....................................            --             --        427,600

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

                                                           2,194,800      1,732,600      1,756,200

Cost of operations:

  Cost of sales.......................................    (1,641,100)    (1,298,300)    (1,324,500)

  Operating expenses..................................      (448,100)      (358,500)      (354,700)

  Amortization of goodwill............................        (6,000)        (6,000)        (8,800)

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

                                                          (2,095,200)    (1,662,800)    (1,688,000)

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

Operating income......................................        99,600         69,800         68,200

Other (expenses) income:

  Interest expense and other..........................       (24,800)       (33,000)       (72,200)

  Interest income and other...........................         3,200          5,900         13,300

  Equity in income (loss) of ANTEC....................          (600)         7,900             --

  Non-recurring items, net............................            --         59,000         71,800

  Marketable equity securities losses, principally

     write-downs......................................        (3,000)       (39,600)       (25,000)

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

Income from continuing operations

  before income taxes.................................        74,400         70,000         56,100

Income tax expense....................................       (35,300)       (23,800)       (27,300)

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

Income from continuing operations.....................        39,100         46,200         28,800

Income (loss) from discontinued operations

  (net of related taxes)..............................            --        200,700        (14,000)

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

Income before extraordinary item......................        39,100        246,900         14,800

Extraordinary item (net of related taxes).............            --             --        (16,000)

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

Net income (loss).....................................        39,100        246,900         (1,200)

Preferred stock dividends and amortization............            --             --         (3,100)

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

Income (loss) applicable to common stock..............   $    39,100    $   246,900    $    (4,300)

                                                         ===========    ===========    ===========

Income (loss) per common and common equivalent share:

  Continuing operations...............................          $.71          $ .72          $ .43

  Before extraordinary item...........................          $.71          $3.85          $ .20

  Net income (loss)...................................          $.71          $3.85          $(.07)

</TABLE>

 

        See accompanying notes to the consolidated financial statements.

 

                                       17

<PAGE>   18

 

                           ANIXTER INTERNATIONAL INC.

 

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

 

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                YEARS ENDED DECEMBER 31,

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

                                                            1995          1994          1993

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

<S>                                                       <C>           <C>           <C>

Operating activities:

  Income from continuing operations.....................  $  39,100     $  46,200     $  28,800

  Adjustments to reconcile income from continuing

     operations to net cash used by continuing operating

     activities:

       Depreciation.....................................     15,700        10,000        10,800

       Amortization of goodwill.........................      6,000         6,000         8,800

       Deferred income tax expense......................     17,000        20,400        20,500

       Non-recurring items, net.........................         --       (59,000)      (71,800)

       Marketable equity securities losses, principally

          write-downs...................................      3,000        39,600        25,000

       Non-cash financing expense.......................        800         3,900         8,100

       Other, net.......................................      3,500          (800)        7,300

       Changes in assets and liabilities:

          Accounts receivable...........................    (75,700)      (99,100)      (50,100)

          Inventories...................................    (88,300)      (35,400)      (55,700)

          Accounts payable and accrued expenses.........     61,600        51,800        34,800

          Other, net....................................    (21,000)      (19,000)       (8,900)

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

            Net cash used by continuing operating

               activities...............................    (38,300)      (35,400)      (42,400)

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

Investing activities:

  Sales of securities...................................     72,600        47,800         3,700

  Purchases of property.................................    (31,300)      (17,200)      (13,400)

  Sale of and net receipts from ANTEC...................         --        82,800       156,600

  Receipts from Q-TEL...................................         --        12,500        23,700

  Proceeds from sales of discontinued operations, net...     71,200       262,500       117,400

  Other, net............................................     (3,800)       (6,600)       (2,300)

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

            Net cash provided by investing activities...    108,700       381,800       285,700

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

Net cash provided before financing activities...........     70,400       346,400       243,300

Financing activities:

  Borrowings............................................    836,400       858,600       915,500

  Reductions in borrowings..............................   (786,300)     (840,700)     (817,400)

  Reductions in subordinated indebtedness...............         --      (246,600)     (344,500)

  Proceeds from issuance of common stock................      8,300         8,600        21,100

  Purchases of treasury stock...........................   (129,200)     (138,900)         (300)

  Other, net............................................     (3,300)       (4,200)       (8,700)

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

            Net cash used in financing activities.......    (74,100)     (363,200)     (234,300)

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

Cash provided (used)....................................     (3,700)      (16,800)        9,000

Cash and equivalents at beginning of year...............     14,200        31,000        22,000

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

Cash and equivalents at end of year.....................  $  10,500     $  14,200     $  31,000

                                                          =========     =========     =========

</TABLE>

 

        See accompanying notes to the consolidated financial statements.

 

                                       18

<PAGE>   19

 

                           ANIXTER INTERNATIONAL INC.

 

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 

                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                              CUMULATIVE   UNREALIZED LOSSES

                                 PREFERRED   COMMON     CAPITAL    RETAINED   TRANSLATION    ON MARKETABLE

                                   STOCK      STOCK     SURPLUS    EARNINGS   ADJUSTMENTS  EQUITY SECURITIES    TOTAL

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

<S>                              <C>         <C>       <C>         <C>        <C>          <C>                <C>

Balance at December 31, 1992.... $  83,600   $28,100   $ 281,200   $ 26,700    $  (3,200)      $ (49,100)     $ 367,300

Net loss........................        --       --           --     (1,200)          --              --         (1,200)

Issuance of common stock and

  other, net....................        --    1,100       23,400         --           --              --         24,500

Foreign currency translation

  adjustments...................        --       --           --         --       (6,700)             --         (6,700)

Preferred stock dividends and

  other.........................       200       --           --     (3,100)          --              --         (2,900)

Conversion of preferred stock...   (83,800)   3,800       78,900         --           --              --         (1,100)

Net change in unrealized losses

  on marketable equity

  securities

  available-for-sale............        --       --           --         --           --          25,400         25,400

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

Balance at December 31, 1993....        --   33,000      383,500     22,400       (9,900)        (23,700)       405,300

Net income......................        --       --           --    246,900           --              --        246,900

Issuance of common stock and

  other, net....................        --      500       13,800         --           --              --         14,300

Foreign currency translation

  adjustments...................        --       --           --         --         (200)             --           (200)

Purchases and retirement of

  treasury stock................        --   (4,100)    (134,800)        --           --              --       (138,900)

Net change in unrealized losses

  on marketable equity

  securities

  available-for-sale............        --       --           --         --           --          16,500         16,500

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

Balance at December 31, 1994....        --   29,400      262,500    269,300      (10,100)         (7,200)       543,900

Net income......................        --       --           --     39,100           --              --         39,100

Issuance of common stock and

  other, net....................        --      500       12,600         --           --              --         13,100

Foreign currency translation

  adjustments...................        --       --           --         --       (1,700)             --         (1,700)

Purchases and retirement of

  treasury stock................        --   (4,200)    (125,000)        --           --              --       (129,200)

Common stock repurchase

  commitment....................        --       --      (23,400)        --           --              --        (23,400)

Two-for-one stock split.........        --   26,800      (26,800)        --           --              --             --

Net change in unrealized losses

  on marketable equity

  securities

  available-for-sale............        --       --           --         --           --           7,200          7,200

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

Balance at December 31, 1995.... $      --   $52,500   $  99,900   $308,400    $ (11,800)      $      --      $ 449,000

                                  ========   =======   =========   ========     ========        ========      =========

</TABLE>

 

        See accompanying notes to the consolidated financial statements.

 

                                       19

<PAGE>   20

 

                           ANIXTER INTERNATIONAL INC.

 

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

     Organization: Anixter International Inc. (the "Company"), formerly known as

Itel Corporation, which was incorporated in Delaware in 1967, is engaged in

providing networking and cabling solutions for network infrastructure

requirements through Anixter Inc. and its subsidiaries (collectively "Anixter").

As of December 31, 1995 the Company also owned approximately 31% of ANTEC

Corporation and its subsidiaries (collectively "ANTEC"), a broadband

communications technology company.

 

     Consolidation: The consolidated financial statements include the accounts

of Anixter International Inc. and its majority-owned subsidiaries (collectively

"the Company") after elimination of intercompany transactions. The preparation

of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect the

amounts reported in the financial statements and accompanying notes. Actual

results could differ from those estimates.

 

     Reclassifications: Certain 1994 and prior information has been reclassified

to conform to the 1995 presentation.

 

     Cash and equivalents: The Company considers all highly liquid investments

with a purchased maturity of three months or less to be cash equivalents. The

carrying amount of cash and equivalents approximates fair value because of the

short maturity of those instruments.

 

     Inventories: Inventories are valued principally at the lower of average,

approximating first-in, first-out, cost or market.

 

     Depreciation: The Company provides for depreciation of property principally

on the straight-line basis over various useful lives including 3 to 10 years for

equipment and the term of the lease for leasehold improvements.

 

     Goodwill: Goodwill relates to the excess of cost over the fair value of the

net tangible assets of businesses acquired. The Company at each balance sheet

date evaluates, for recognition of potential impairment, its recorded goodwill

against the current and undiscounted expected future operating income before

goodwill amortization expense of the entities to which goodwill relates.

Goodwill is amortized on a straight-line basis over 40 years.

 

     Marketable equity securities available-for-sale: Marketable equity

securities available-for-sale are reflected in the balance sheet at fair value

as of the balance sheet date. The difference between cost and market is

reflected in stockholders' equity net of deferred tax benefit. Realized gains

(losses) on dispositions of securities are determined using the average cost

method. Realized pre-tax gains (losses), before related interest carrying costs,

were ($3.0), ($5.2) million and $.3 million in 1995, 1994 and 1993,

respectively. Aggregate unrealized pre-tax losses on marketable equity

securities available-for-sale amounted to $11.1 million at December 31, 1994

(see Note 6).

 

     Investment in ANTEC: Dilution of the Company's ownership position in ANTEC

which results from the issuance of shares of common stock by ANTEC is treated as

if an equivalent percentage of ownership had been disposed of by the Company. To

the extent ANTEC issues shares of common stock at amounts per share in excess of

or less than the Company's average per share carrying value, gains or losses

from such changes in ownership are recorded in income when such issuances occur.

In May 1994, the Company sold 4.0 million shares of ANTEC common stock in a

public offering (the "ANTEC Offering"). As a result of the ANTEC Offering, the

Company's ownership of ANTEC common stock was reduced from 53% to 33%. In

addition, in November 1994, ANTEC issued approximately 2.0 million shares of

ANTEC common stock in connection with an acquisition which lowered the Company's

ownership to approximately 30%. In the fourth quarter of 1995 the Company

purchased .4 million additional shares of ANTEC stock increasing the ownership

to 31%. The Company reflects ANTEC as an equity investment in the 1995 and 1994

consolidated financial statements. As of December 31, 1995, the market value of

the Company's investment in ANTEC was $128 million.

 

                                       20

<PAGE>   21

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

     Interest rate agreements: 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 67% and 45%, of debt obligations at December 31, 1995 and 1994,

respectively, is fixed or capped. At December 31, 1995 and 1994, the Company had

interest rate cap agreements outstanding with notional amounts aggregating $175

million and $125 million, respectively. These interest rate cap agreements

effectively entitle the Company to receive from the banks the amount by which

the Corporation's interest payments on $125 million of its floating rate debt

exceed 6.0% and 6 3/4%, respectively at December 31, 1995 and 1994 and on $50

million exceeding 7.5% in 1995. The $2.3 million and $1.6 million of premiums

paid in 1995 and 1994, respectively, for these interest rate cap agreements are

included in other assets and are being amortized to interest expense over the

life of the respective interest rate cap agreements which expire in 1996 through

1998. Payments received as a result of the interest rate cap agreements are

recognized as a reduction of interest expense. The carrying value of these

interest rate cap agreements is $1.0 million and $1.1 million at December 31,

1995 and 1994, respectively. At December 31, 1995, the Company had an interest

rate swap agreement outstanding with a notional amount of $50 million. This swap

agreement obligates the Company to pay a fixed rate of 5.98% through June 1998.

In 1995 the Company entered into three forward rate agreements with a notional

amount aggregating $100 million. These forward rate agreements obligate the

Company to pay a fixed rate of approximately 6.11% for four years beginning in

July 1996. In 1995 the Company also entered into one forward rate interest

collar agreement with a notional amount of $50 million. This interest rate

agreement entitles the Company to receive from the bank the amount by which

floating rate interest payments exceed 6.50% and for the Company to pay the bank

the difference between 6.30% and the floating rate when interest rates fall

below 5.30%. This interest rate collar starts in January 1996 and matures in

January 2002. The fair value of all of the Company's interest rate agreements at

December 31, 1995 and 1994 is ($4.0) million and $3.6 million, respectively. The

fair value of interest rate agreements is the estimated amount that the Company

would pay to enter into the interest rate agreements at the reporting date,

taking into account current interest rates. The impact of interest rate

agreements on interest expense, net for the years ended December 31, 1995, 1994

and 1993 was to increase interest expense by approximately $.9 million, $6.0

million and $10.8 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 1995, 1994 and 1993. The

forward contracts are revalued at current foreign exchange rates, with the

changes in valuation reflected directly in income. At December 31, 1995, the

Company had approximately $61.9 million in foreign currency forward contracts

outstanding.

 

     Revenue recognition: Sales and related cost of sales are recognized

primarily upon shipment of products.

 

     Advertising and sales promotion: Advertising and sales promotion costs are

expensed as incurred.

 

     Income taxes: Provisions for income taxes include deferred taxes resulting

from temporary differences in determining income for financial and tax purposes

using the liability method. Such temporary differences result primarily from

differences in the carrying value of assets and liabilities.

 

     Income (loss) per common share: Income (loss) per share amounts are based

upon net income, and in 1993, after deducting preferred dividends earned and the

amortization of preferred stock discounts. Weighted average common and common

equivalent shares were 55,410,000, 64,090,000 and 60,264,000 for 1995, 1994 and

1993, respectively. All share and per share data other than amounts displayed on

the balance sheets and consolidated statements of stockholders' equity have been

adjusted to reflect the two-for-one stock split in the form of a stock dividend,

paid October 25, 1995.

 

                                       21

<PAGE>   22

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

NOTE 2. SUPPLEMENTAL CASH FLOW INFORMATION

 

     Continuing operations of the Company paid interest, including that portion

allocated to discontinued operations, of approximately $24.0 million, $52.4

million and $96.7 million for the years ended December 31, 1995, 1994 and 1993,

respectively. Approximately $24.6 million, $27.8 million and $7.0 million was

paid for income taxes for the years ended December 31, 1995, 1994 and 1993,

respectively.

 

NOTE 3. DISCONTINUED AND ASSETS HELD FOR SALE

 

     The finance business of Signal Capital Corporation ("Signal Capital") has

been included as assets held for sale since acquisition in 1988. Subsequent to

the purchase, the Company sold or liquidated portions of the portfolio including

$855 million in 1989, $78 million in 1990, $157 million in 1991, $82 million in

1992, $82 million in 1993, $60 million in 1994 and $67 million in 1995. The $35

million net portfolio at December 31, 1995 represents approximately 2% of the

original acquired Signal Capital portfolio. Proceeds were used to repay

indebtedness and repurchase shares of the Company's common stock. The Company

continues to liquidate the acquired Signal Capital portfolio in an orderly

manner that maximizes its value to shareholders and no material amounts of new

loans or investments are being made by Signal Capital.

 

     On July 25, 1994, the Company sold 99.5% of its remaining interests in its

rail cars for $35.0 million in cash and $169.5 million in notes receivable for

an aggregate purchase price of $204.5 million. The buyer prepaid all the notes

and related interest in October 1994. The Company's remaining interest in the

rail cars was sold in October 1994 for cash of approximately $1.0 million. The

net gain on the sale of the Company's entire interest in rail cars was

approximately $202.0 million. The total cash proceeds of $205.5 million were

used to: (1) repay the $150 million Corporate senior bank term loan ("Term

Loan"); (2) pay the related income tax liability of approximately $25 million

caused by the sale which resulted after utilization of the Company's net

operating loss ("NOL") and investment tax credit ("ITC") carryforwards; and (3)

other general corporate purposes including the purchase of the Company's common

stock.

 

                                       22

<PAGE>   23

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

     The results of operations of the rail car leasing business, the other

transportation services segment, other previously sold businesses and the

results of the acquired Signal Capital portfolio have been included in

discontinued operations net of allocated corporate interest expense. Allocated

corporate interest expense amounted to $6.3 million and $19.0 million for the

years ended December 31, 1994 and 1993, respectively. No interest was allocated

in 1995. Summarized financial results of discontinued operations were as

follows:

 

<TABLE>

<CAPTION>

                                                                    YEARS ENDED DECEMBER 31,

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

                                                                   1995       1994       1993

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

                                                                          (IN MILLIONS)

    <S>                                                            <C>       <C>        <C>

    Revenues:

      Signal Capital.............................................  $ 9.0     $  2.0     $ 21.3

      Rail car leasing...........................................     --       89.3      153.0

      Other discontinued operations, principally transportation

         services................................................     --         .6       49.4

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

                                                                   $ 9.0     $ 91.9     $223.7

                                                                   ======    ======     ======

    Operating income:

      Signal Capital.............................................  $ 3.0     $  4.2     $  8.0

      Rail car leasing...........................................     --       52.3       89.7

      Other discontinued operations, principally transportation

         services................................................   (3.0)        .5        4.9

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

                                                                   $  --     $ 57.0     $102.6

                                                                   ======    ======     ======

    Loss from discontinued operations before gain on sales (net

      of related taxes)..........................................  $  --     $ (1.3)    $(14.0)

    Gain on sales (net of related taxes).........................     --      202.0         --

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

    Income (loss) from discontinued operations (net of related

      tax benefits of $101.1 million and $5.9 million in 1994 and

      1993, respectively.).......................................  $  --     $200.7     $(14.0)

                                                                   ======    ======     ======

</TABLE>

 

     The composition of remaining assets held for sale at December 31, 1995 and

1994 consisted primarily of finance receivables.

 

NOTE 4. NON-RECURRING ITEMS

 

     Non-recurring items in 1994 reflect a $48.2 million pre-tax gain on the

ANTEC Offering relating to the May 1994 public offering of shares of common

stock of ANTEC. The Company sold 4.0 million shares of ANTEC common stock at

$21.75 per share. Net proceeds from the ANTEC Offering were approximately $83

million. Non-recurring items in 1994 also reflect a $10.8 million pre-tax gain

relating to ANTEC's issuance of approximately 2.0 million shares of ANTEC common

stock in connection with an acquisition in November 1994. The Company provided

income taxes relating to the recognized pre-tax book gains.

 

     Non-recurring items in 1993 reflect an $84.5 million pre-tax gain on the

1993 initial public offering of shares of common stock of ANTEC (the "Initial

Offering"). The Company provided income taxes relating to the recognized pre-tax

book gain. The Company and ANTEC sold approximately 4.0 million and 5.4 million

shares of ANTEC common stock, respectively, at $18 per share. Net proceeds from

the Initial Offering to the Company, after considering the redemption by ANTEC

of preferred shares owned by the Company, were approximately $97 million.

Non-recurring items in 1993 also reflect a $6.4 million pre-tax gain on other

investments.

 

     The non-recurring pre-tax gains in 1993 were offset by a pre-tax loss of

approximately $19.1 million relating to the liquidation of the Company's equity

investment in Q-TEL. The remaining written-down equity investment and loans due

from Q-TEL were liquidated during the latter half of 1993 and early 1994.

 

                                       23

<PAGE>   24

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

NOTE 5. SUMMARIZED FINANCIAL INFORMATION OF ANTEC

 

     The Company has an approximately 31% and 30% ownership interest in ANTEC at

December 31, 1995 and 1994, respectively and accounts for ANTEC under the equity

method. The following summarizes the financial information for ANTEC:

 

                               ANTEC CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS

 

<TABLE>

<CAPTION>

                                                                        DECEMBER 31,

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

                                                                   1995              1994

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

                                                                        (IN MILLIONS)

    <S>                                                         <C>               <C>

    Assets:

      Current assets..........................................    $ 232.2           $ 234.2

      Property, net...........................................       25.9              22.4

      Goodwill................................................      171.8             167.4

      Other assets............................................       27.0              14.0

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

                                                                  $ 456.9           $ 438.0

                                                                   ======            ======

    Liabilities and Stockholders' Equity:

      Current liabilities.....................................    $ 101.8           $  83.1

      Long-term debt..........................................      117.9             125.2

      Stockholders' equity....................................      237.2             229.7

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

                                                                  $ 456.9           $ 438.0

                                                                   ======            ======

</TABLE>

 

                               ANTEC CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

<TABLE>

<CAPTION>

                                                                  YEARS ENDED DECEMBER 31,

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

                                                                   1995              1994

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

                                                                        (IN MILLIONS)

    <S>                                                         <C>               <C>

    Revenues..................................................    $ 658.2           $ 553.5

                                                                   ======            ======

    Operating income..........................................    $   9.7           $  39.0

                                                                   ======            ======

    Income (loss) before income tax expense...................    $  (1.3)          $  34.5

                                                                   ======            ======

    Net income (loss).........................................    $  (3.6)          $  18.9

                                                                   ======            ======

</TABLE>

 

     Operating income in 1995 includes a $21.7 million one-time reorganization

charge recorded by ANTEC in the third quarter.

 

NOTE 6. MARKETABLE EQUITY SECURITIES AVAILABLE-FOR-SALE

 

     In 1994 and 1993, the Company wrote down the value of its investments in

marketable equity securities, including Catellus which was sold in 1994, by

$34.4 million and $25.0 million, respectively. The Company has reduced the

pre-tax unrealized losses on marketable equity securities available-for-sale

included in stockholders' equity by $3.9 million at December 31, 1994 to reflect

a deferred tax benefit due to the Company's current ability to either (a)

carryback all December 31, 1994 unrealized capital losses to previously

generated

 

                                       24

<PAGE>   25

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

capital gains or (b) generate capital gains by the future sale of capital assets

to offset December 31, 1994 unrealized capital losses.

 

NOTE 7. EXTRAORDINARY ITEMS

 

     In 1993, the Company retired or called for redemption of the senior and

subordinated debt resulting in pre-tax extraordinary losses of ($26.2) million.

 

NOTE 8. ACCRUED EXPENSES

 

     Accrued expenses consists of the following:

 

<TABLE>

<CAPTION>

                                                                            DECEMBER 31,

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

                                                                          1995       1994

                                                                          -----      -----

                                                                           (IN MILLIONS)

     <S>                                                                  <C>        <C>

     Interest..........................................................   $ 5.6      $  .7

     Wages, salaries and related.......................................    44.0       39.8

     Taxes other than income...........................................    12.5        9.2

     Other.............................................................    37.4       30.6

                                                                          -----      -----

                                                                          $99.5      $80.3

                                                                          =====      =====

</TABLE>

 

NOTE 9. DEBT

 

     Debt is summarized below:

 

<TABLE>

<CAPTION>

                                                                           DECEMBER 31,

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

                                                                         1995        1994

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

                                                                          (IN MILLIONS)

     <S>                                                                <C>         <C>

     Bank revolving lines of credit..................................   $309.4      $260.5

     Other...........................................................     24.3        20.0

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

          Total debt.................................................   $333.7      $280.5

                                                                        ======      ======

</TABLE>

 

     Anixter has various secured revolving bank lines of credit worldwide which

provide for up to $503.0 million of borrowings secured by certain assets. At

December 31, 1995, $309.4 million was borrowed and $193.6 million was available

under the bank revolving lines of credit at Anixter, of which $88 million was

available for general corporate purposes. These lines of credit reduce or mature

at various dates from 1998 through 2000. The $425.0 million domestic revolving

line of credit matures in 2000. Floating and fixed interest rate options, based

on the prime or LIBOR rate, are available under these facilities and the average

interest rate at December 31, 1995 was 6.8%. Commitment fees of 1/8% to 1/2% are

payable on the unused portion of these revolving lines of credit. The commitment

fees paid were insignificant for all years.

 

     Certain debt agreements entered into by the Company's subsidiaries contain

various restrictions including restrictions on payments to the Company. Amounts

available under these debt agreements are secured by certain assets of the

subsidiaries aggregating approximately $730.8 million at December 31, 1995. The

Company has guaranteed certain debt and other obligations of Anixter. Restricted

net assets of subsidiaries were approximately $312 million at December 31, 1995.

 

     Aggregate annual maturities of debt are as follows: 1996--none; 1997--none;

1998--$53.8 million; 1999--none; 2000--$255.6; $24.3 million thereafter.

 

                                       25

<PAGE>   26

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

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

the underlying instruments are at variable rates which reprice frequently.

 

NOTE 10. INCOME TAXES

 

     The Company and its U.S. subsidiaries file their Federal income tax return

on a consolidated basis. As of December 31, 1994, the Company had no NOL or ITC

carryforwards for Federal income tax purposes due to the sale of the Company's

rail car leasing business which exhausted virtually all carryforwards. These

carryforwards have not been examined by the Internal Revenue Service ("IRS")

and, therefore, may still be subject to adjustment. The availability of tax

benefits of NOL and ITC carryforwards to reduce the Company's Federal income tax

liability is subject to various limitations under the Internal Revenue Code of

1986, as amended (the "Code"). In addition, at December 31, 1995, various

foreign subsidiaries of the Company had aggregate cumulative NOL carryforwards

for foreign income tax purposes of approximately $41 million which are subject

to various provisions of each respective country. Approximately half of this

amount expires between 1996 and 2004 and half of which has an indefinite life.

 

     As a result of the 1995 sale of the Santa Fe Energy Resources, Inc.

("Energy") shares the Company generated a capital loss of approximately $80

million, most of which will be carried back and offset against the 1994 gain on

the Rail sale. It is anticipated this carryback will generate cash refunds of

$13.6 million in 1996 and will also cause $9.0 million of the ITC's claimed in

1994 to be available for carryforward to 1995. Approximately $3.6 million of the

ITC's claimed in 1994 may now expire as a result of the carryback of the Energy

loss.

 

     Domestic income from continuing operations before income taxes was $63.3

million, $70.6 million and $68.9 million for the years ended December 31, 1995,

1994 and 1993, respectively. Foreign income (loss) from continuing operations

before income taxes was $11.1 million, ($.6) million and ($12.8) million for the

years ended December 31, 1995, 1994 and 1993, respectively.

 

     Deferred income taxes reflect the impact of temporary differences between

amounts of assets and liabilities for financial reporting purposes and such

amounts as measured by tax laws. Deferred income taxes also result from

differences between the fair value of assets acquired in business combinations

accounted for as purchases and their tax bases.

 

                                       26

<PAGE>   27

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

     Significant components of the Company's deferred tax liabilities and assets

were as follows:

 

<TABLE>

<CAPTION>

                                                                          DECEMBER 31,

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

                                                                         1995      1994

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

                                                                         (IN MILLIONS)

        <S>                                                             <C>       <C>

        Deferred tax liabilities:

          Tax over book depreciation.................................   $  5.4    $  9.4

          Other deferred tax liabilities.............................     76.4      74.7

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

             Total deferred tax liabilities..........................     81.8      84.1

        Deferred tax assets:

          Foreign NOL carryforwards..................................     15.8      15.5

          Unrealized losses on investments...........................       --      30.0

          Other deferred tax assets..................................     42.1      49.3

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

             Total deferred tax assets...............................     57.9      94.8

          Valuation allowance on deferred tax assets.................    (13.5)    (12.5)

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

             Net deferred tax assets.................................     44.4      82.3

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

             Net deferred tax liability..............................   $ 37.4    $  1.8

                                                                        ======    ======

</TABLE>

 

     At December 31, 1995, 1994 and 1993, consolidated valuation allowances for

deferred tax assets were $13.5 million, $12.5 million and $30.1 million,

respectively, including valuation allowances on foreign NOLs.

 

     Income tax (expense) benefit relating to continuing operations was

comprised of:

 

<TABLE>

<CAPTION>

                                                               YEARS ENDED DECEMBER 31,

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

                                                              1995       1994       1993

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

                                                                    (IN MILLIONS)

        <S>                                                  <C>        <C>        <C>

          Current--Foreign.................................  $ (8.5)    $  (.1)    $   .4

                   State...................................    (2.2)      (3.3)      (4.1)

                   Federal.................................    (7.6)        --       (3.1)

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

                                                              (18.3)      (3.4)      (6.8)

          Deferred--Foreign................................     (.7)        --         --

                    State..................................    (3.1)       (.9)        .9

                    Federal................................   (13.2)     (19.5)     (21.4)

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

                                                              (17.0)     (20.4)     (20.5)

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

                                                             $(35.3)    $(23.8)    $(27.3)

                                                             ======     ======     ======

</TABLE>

 

                                       27

<PAGE>   28

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

     Reconciliations of income tax expense in continuing operations to the

statutory corporate Federal tax rate of 35% were as follows:

 

<TABLE>

<CAPTION>

                                                               YEARS ENDED DECEMBER 31,

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

                                                              1995       1994       1993

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

                                                                    (IN MILLIONS)

        <S>                                                  <C>        <C>        <C>

        Statutory tax expense..............................  $(26.0)    $(24.5)    $(19.6)

        Effects of--

          Amortization of goodwill.........................    (1.8)      (2.1)      (3.1)

          Losses on foreign operations.....................    (4.0)       3.0       (3.6)

          State income taxes, net of Federal benefit.......    (3.5)      (2.7)      (2.1)

          Impact of Revenue Reconciliation Act of 1993.....      --         --       (2.7)

          Adjustment to prior years tax accruals...........      --         --        2.4

          Equity accounting, net...........................      --        4.5         --

          Other, net.......................................      --       (2.0)       1.4

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

                                                             $(35.3)    $(23.8)    $(27.3)

                                                             ======     ======     ======

</TABLE>

 

NOTE 11. CONTINGENCIES AND LITIGATION

 

     In the ordinary course of business, the Company and its subsidiaries become

involved as plaintiffs or defendants in various legal proceedings. The claims

and counterclaims in such litigation, including those for punitive damages,

individually in certain cases and in the aggregate, involve amounts which may be

material. However, it is the opinion of the Company's management, based upon the

advice of its counsel, that the ultimate disposition of pending litigation will

not be material.

 

NOTE 12. 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 2007. Minimum

lease commitments under operating leases at December 31, 1995 are as follows:

1996 - $29.4 million; 1997 - $23.4 million; 1998 - $16.3 million; 1999 - $10.4

million; 2000 - $7.5 million; beyond 2000 - $25.6 million. Total rental expense

was $30.0 million, $23.3 million and $21.5 million in 1995, 1994 and 1993,

respectively.

 

NOTE 13. PENSION PLANS, POST-RETIREMENT BENEFITS AND OTHER BENEFITS

 

     The Company's various pension plans are non-contributory and cover

substantially all full-time domestic employees. Retirement benefits are provided

based on compensation as defined in the plans. The Company's policy is to fund

these plans as required by ERISA and the Code.

 

     Assets of the Company's plans at fair value were $45.8 million and $36.7

million at December 31, 1995 and 1994, respectively. Projected benefit

obligations of the Company's plans were $58.3 million and $46.1 million at

December 31, 1995 and 1994, respectively. The accumulated benefit obligations of

the Company's plans were $45.1 million and $35.7 million at December 31, 1995

and 1994, respectively. The weighted-average assumed discount rate used to

measure the projected benefit obligation was 7.25% and 7.8% at December 31, 1995

and 1994, respectively. Pension expense, including the cost of 401(k) plans, for

1995, 1994 and 1993 was insignificant. The Company's liability for

post-retirement benefits other than pensions is insignificant.

 

                                       28

<PAGE>   29

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

NOTE 14. PREFERRED STOCK AND COMMON STOCK

 

     The Company has authority to issue 15 million shares of Preferred Stock,

par value $1.00 per share. In 1993, the outstanding Preferred Stock was

converted into approximately 3.8 million shares of Common Stock. On October 25,

1995 the Company paid a dividend in the form of a two-for-one stock split to

shareholders of record on September 22, 1995 which resulted in the issuance of

26,783,000 shares of stock. At December 31, 1995, 1994 and 1993, 52,490,000,

29,430,000 and 33,010,000 shares of Common Stock, respectively, were issued and

outstanding. In connection with the Company's employee stock plans described

below, 3,284,556 shares were reserved for issuance at December 31, 1995.

 

  Stock options and stock grants--

 

     The Company has Employee Stock Incentive Plans ("ESIP") which at their

inception authorized an aggregate of 11.4 million stock options or restricted

grants. In addition, the Company has a Director Stock Option Plan ("DSOP")

authorizing an aggregate of .4 million stock options. Substantially all options

and grants under these plans have been at fair market value or higher. One-third

of the options granted become exercisable each year after the year of grant

(except in the case of director options which vest fully in six months) and the

options expire ten years after the date of grant.

 

     Additionally, the Company has an Employee Stock Purchase Plan ("ESPP")

covering most employees. Participants can request that up to 10% of their base

compensation be applied toward the purchase of Common Stock under the Company's

ESPP. The exercise price is the lower of 85% of the fair market value of the

Common Stock at the date of grant or at the later exercise date (currently one

year).

 

     Under the ESIP, DSOP and ESPP, total options currently exercisable at

December 31, 1995 and 1994 were 1,025,732 and 829,254, respectively.

 

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

ESPP.

 

<TABLE>

<CAPTION>

                                                     ESIP        DSOP        ESPP         EXERCISE

                                                    OPTIONS     OPTIONS    OPTIONS         PRICE

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

<S>                                                <C>          <C>        <C>         <C>

Balance at December 31, 1994....................   1,252,922    500,000     151,244    $ 4.75-$16.65

Grants during 1995..............................       3,000    100,000     180,544    $16.58-$20.69

Exercised.......................................    (392,296)   (90,000)   (137,680)    $4.75-$16.65

Expirations and terminations....................          --         --     (13,564)       $13.34

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

Balance at December 31, 1995....................     863,626    510,000     180,544    $ 5.19-$20.69

                                                   =========    =======      ======    ==============

</TABLE>

 

     Total stock options exercised for the years ended December 31, 1994 and

1993 were 1,899,834 and 2,268,156, respectively. The purchase price per share

for all stock options exercised ranged from $5.19 to $12.33 in 1994 and $5.19 to

$13.32 in 1993.

 

  Stock option plans of Anixter--

 

     In 1994 and 1995, Anixter granted to key employees of Anixter options to

purchase stock of Anixter. Substantially all options have been at fair market

value. These options vest immediately to four years and terminate one to ten

years from the date of grant. At December 31, 1995, 770,553 options were

exercisable. At

 

                                       29

<PAGE>   30

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

December 31, 1995, the Company owned 99% of the approximately 33.7 million

shares of outstanding Anixter common stock. The following table summarizes the

1995 activity:

 

<TABLE>

<CAPTION>

                                                                     ANIXTER         EXERCISE

                                                                     OPTIONS          PRICE

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

<S>                                                                 <C>           <C>

Balance at December 31, 1994.....................................   1,867,627      $ 9.00-$11.40

Grants during 1995...............................................     419,100             $14.50

Exercised........................................................    (118,076)     $ 9.00-$11.40

Expirations and terminations.....................................     (88,775)     $ 9.00-$11.40

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

Balance at December 31, 1995.....................................   2,079,876      $ 9.00-$14.50

                                                                    =========      =============

</TABLE>

 

  Warrants--

 

     The Company has issued warrants to directors, which are currently

exercisable, to purchase 510,000 shares of Common Stock at prices ranging from

$5.07 to $20.69 per share expiring between 1996 and the year 2005.

 

  Common Stock--

 

     The Company purchased 7,275,000, 8,178,000 and 20,000 shares of Common

Stock in 1995, 1994 and 1993, respectively. All treasury stock was retired.

 

  Common Stock Repurchase Commitment--

 

     On June 27, 1995 the Company agreed to purchase up to 3.8 million shares of

its common stock from Sam Zell, the Company's Chairman, and other related

stockholders. The first 2.5 million shares were purchased on July 10, 1995 at

$18 per share. The remaining 1.3 million shares may be purchased no later than

December 31, 1996 for approximately $19 per share. The purchase of the remaining

shares has been reflected as Common Stock repurchase commitment in the

consolidated financial statements.

 

                                       30

<PAGE>   31

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

NOTE 15. BUSINESS SEGMENTS

 

     The Company in 1995 and 1994 is engaged in one principal area of business:

providing networking and cabling solutions for business information and network

infrastructure requirements. Prior to the 1994 and 1993 ANTEC Offerings, the

Company was also engaged in the development and distribution of products used in

the cable television industry (ANTEC). The Company obtains and coordinates

financing, legal and other related services, certain of which are rebilled to

subsidiaries.

 

     Information for the years ended December 31, 1995, 1994 and 1993 regarding

the Company's major business segments is presented in the following table. ANTEC

is reflected as an equity investment in 1995 and 1994.

 

<TABLE>

<CAPTION>

                                                            ANIXTER    ANTEC     OTHER(A)     TOTAL

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

                                                                          (IN MILLIONS)

<S>                                                         <C>        <C>       <C>         <C>

Revenues:

  1995...................................................   $2,194.8   $  --      $   --     $2,194.8

  1994...................................................    1,732.6      --          --      1,732.6

  1993...................................................    1,328.6   427.6          --      1,756.2

Operating income:

  1995...................................................       99.6      --          --         99.6

  1994...................................................       69.8      --          --         69.8

  1993...................................................       45.8    22.4          --         68.2

Identifiable assets:

  1995...................................................    1,015.9      --       168.8      1,184.7

  1994...................................................      839.6      --       271.3      1,110.9

  1993...................................................      718.3   239.0       423.3      1,380.6

Depreciation and amortization expense:

  1995...................................................       21.7      --          --         21.7

  1994...................................................       16.0      --          --         16.0

  1993...................................................       14.8     4.8          --         19.6

Capital expenditures:

  1995...................................................       31.3      --          --         31.3

  1994...................................................       17.2      --          --         17.2

  1993...................................................       11.4     2.0          --         13.4

</TABLE>

 

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

(a) Identifiable assets are principally comprised of marketable equity

     securities, discontinued rail car leasing assets, other discontinued and

     assets held for sale, and in 1995 and 1994 the Company's investment in

     ANTEC.

 

                                       31

<PAGE>   32

 

                           ANIXTER INTERNATIONAL INC.

 

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 

     The classification of the Company's 1995, 1994 and 1993 foreign operations

in the following table includes all revenues and related items of the Company's

non-U.S. operations. Export sales are insignificant.

 

<TABLE>

<CAPTION>

                                                              WORLDWIDE (NON-U.S.)

                                                                   OPERATIONS

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

                                                           1995       1994       1993

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

                                                          (IN MILLIONS)

          <S>                                             <C>        <C>        <C>

          Revenues:

            Europe......................................  $429.1     $316.8     $244.6

            Other.......................................   285.8      190.8      142.0

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

                                                          $714.9     $507.6     $386.6

                                                          ======     ======     ======

          Operating income (loss):

            Europe......................................  $ 17.6     $  6.6     $  3.2

            Other.......................................  $  4.5        3.6       (4.6)

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

                                                          $ 22.1     $ 10.2     $ (1.4)

                                                          ======     ======     ======

          Identifiable assets:

            Europe......................................  $193.6     $147.2     $119.7

            Other.......................................   136.3      101.2       90.0

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

                                                          $329.9     $248.4     $209.7

                                                          ======     ======     ======

</TABLE>

 

     Foreign operations' revenues were 33%, 29% and 22% of consolidated revenues

in 1995, 1994 and 1993, respectively. Foreign operations' operating income

(loss) were negatively impacted for all years due to economies of scale and

start-up losses in expansion markets. Aggregate start-up losses in expansion

markets were ($9.1) million, ($6.7) million and ($8.6) million in 1995, 1994 and

1993, respectively, as Anixter continues to penetrate new markets in Europe,

Asia and Latin America.

 

                                       32

<PAGE>   33

 

SUMMARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

 

     The following tables summarize the Company's quarterly financial

information.

 

<TABLE>

<CAPTION>

                                                                    QUARTERS ENDED

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

                                        MARCH 31,            JUNE 30,         SEPTEMBER 30,        DECEMBER 31,

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

                                      1995      1994      1995      1994      1995      1994      1995      1994

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

 

                                                       (IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<S>                                  <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>

Revenues...........................  $502.9    $362.8    $542.0    $422.9    $571.1    $456.3    $578.8    $490.6

Operating income...................  $ 23.8    $ 13.7    $ 25.7    $ 16.7    $ 26.3    $ 19.9    $ 23.8    $ 19.5

Income from continuing operations

  before income taxes(a)...........  $ 20.7    $  3.6    $ 17.6    $ 26.8    $ 16.7    $ 17.0    $ 19.4    $ 22.6

Income from continuing

  operations.......................    11.1       2.7       8.9      16.8       9.1      10.7      10.0      16.0

Net income(b)......................    11.1    $  1.8       8.9    $ 16.4       9.1    $215.7      10.0    $ 13.0

                                     ======    ======    ======    ======    ======    ======    ======    ======

Income per common and common

  equivalent share:

  Continuing operations............  $  .19    $  .04    $  .16    $  .26    $  .17    $  .17    $  .19    $  .26

  Net income.......................  $  .19    $  .03    $  .16    $  .25    $  .17    $ 3.44    $  .19    $  .22

                                     ======    ======    ======    ======    ======    ======    ======    ======

Income per common and common

  equivalent share--assuming full

  dilution:

  Continuing operations............  $  .19    $  .04    $  .16    $  .26    $  .17    $  .17    $  .19    $  .26

  Net income.......................  $  .19    $  .03    $  .16    $  .25    $  .17    $ 3.44    $  .19    $  .22

                                     ======    ======    ======    ======    ======    ======    ======    ======

</TABLE>

 

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

(a) Continuing operations in the second quarter of 1995 include a $3.0 million

    pre-tax loss associated with the sale of the Company's investment in Energy.

    Continuing operations in the second quarter of 1994 include a $48.2 million

    pre-tax gain on the ANTEC Offering. Continuing operations in the fourth

    quarter of 1994 include a $10.8 million pre-tax gain relating to ANTEC's

    issuance of common stock in connection with an acquisition in November 1994.

    Continuing operations in the second quarter of 1994 includes pre-tax charges

    of $34.4 million associated with the write-down of the Company's marketable

    equity securities. Continuing operations in the first quarter of 1994

    includes pre-tax charges of $5.2 million associated with the loss on sale of

    the Company's investment in Catellus.

 

(b) Discontinued operations in the third quarter of 1994 include a $202.0

    million pre-tax gain on the sale of the rail car leasing business (see Note

    3 of the Notes to the Consolidated Financial Statements).

 

                                       33

<PAGE>   34

 

                                    PART III

 

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

 

     See Registrant's Proxy Statement for the 1996 Annual Meeting of

Stockholders--"Election of Directors."

 

ITEM 11. EXECUTIVE COMPENSATION.

 

     See Registrant's Proxy Statement for the 1996 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 1996 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 1996 Annual Meeting of

Stockholders--"Certain Relationships and Related Transactions."

 

                                    PART IV

 

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

 

     (a) Exhibits.

         The exhibits listed below in Item 14(a)1, 2 and 3 are filed as part of

         this annual report. Each management contract or compensatory plan

         required to be filed as an exhibit is identified by an asterisk(*).

 

     (b) Reports on Form 8-K.

         None.

 

ITEM 14(A)1 AND 2. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL

STATEMENT SCHEDULES.

 

 Financial Statements.

 

     The following Consolidated Financial Statements of Anixter International

Inc. and Report of Independent Auditors are filed as part of this report.

 

<TABLE>

<CAPTION>

                                                                                        PAGE

                                                                                        ---

    <S>                                                                                 <C>

    Report of Independent Auditors..................................................     15

    Consolidated Balance Sheets at December 31, 1995 and 1994.......................     16

    Consolidated Statements of Operations for the years ended December 31, 1995,

      1994 and 1993.................................................................     17

    Consolidated Statements of Cash Flows for the years ended December 31, 1995,

      1994 and 1993.................................................................     18

    Consolidated Statements of Stockholders' Equity for the years ended December 31,

      1995, 1994 and 1993...........................................................     19

    Notes to the Consolidated Financial Statements..................................     20

</TABLE>

 

                                       34

<PAGE>   35

 

  Financial Statement Schedules.

 

     The following financial statement schedules of Anixter International Inc.

are filed as part of this Report and should be read in conjunction with the

Consolidated Financial Statements of Anixter International Inc.

 

     Consolidated Schedules for the years ended December 31, 1995, 1994 and

1993, except as noted:

 

<TABLE>

<CAPTION>

                                                                                          PAGE

                                                                                          ----

        <C>   <S>                                                                         <C>

          I.  Condensed financial information of Registrant...............................  39

         II.  Valuation and qualifying accounts and reserves..............................  42

</TABLE>

 

     All other schedules are omitted because they are not required or are not

applicable, or the required information is shown in the consolidated financial

statements or notes thereto.

 

ITEM 14(A)3. EXHIBIT LIST. Each management contract or compensation plan

required to be filed as an exhibit is identified by an asterisk(*).

 

<TABLE>

<CAPTION>

            EXHIBIT                                                                       PAGE

              NO.                           DESCRIPTION OF EXHIBIT                       NUMBER

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

    <C>    <S>        <C>                                                                  <C>

      (3)  Articles of Incorporation and by-laws.

           3.1        Restated Certificate of Incorporation of Anixter International

                      Inc., filed with Secretary of State of Delaware on September 29,

                      1987 and Certificate of Amendment thereof, filed with Secretary of

                      Delaware on August 31, 1995........................................

           3.2        By-laws of Anixter International Inc. as amended through November

                      9, 1995............................................................

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

           4.1        (a) Amended and Restated Credit Agreement, dated March 11, 1994,

                      among Anixter Inc., Chemical Bank, as Agent, and the other banks

                      named therein. (Incorporated by reference from Itel Corporation's

                      Annual Report on Form 10-K for the fiscal year ended December 31,

                      1993, Exhibit 4.2.) ...............................................

                      (b) Amendment, dated March 24, 1995, to Amended and Restated Credit

                      Agreement, dated March 11, 1994, among Anixter Inc., Chemical Bank,

                      as Agent, and the other banks named therein. (Incorporated by

                      reference from Itel Corporation's Quarterly Report on Form 10-Q for

                      the quarter ended March 31, 1995, Exhibit 4.1.)....................

     (10)  Material contracts.+

           10.1       Form of the Company's Tax Allocation Agreement, dated January 1,

                      1987. (Incorporated by reference from Itel Corporation's Annual

                      Report on Form 10-K for the fiscal year ended December 31, 1987,

                      Exhibit 10.1.).....................................................

           10.2*      Company's Management Incentive Plan, dated February 9, 1995.

                      (Incorporated by reference from Itel Corporation's Annual Report on

                      Form 10-K for the fiscal year ended December 31, 1994, Exhibit

                      10.2.).............................................................

           10.3*      Company's 1983 Stock Incentive Plan as amended and restated July

                      16, 1992. (Incorporated by reference from Itel Corporation's Annual

                      Report on Form 10-K for the fiscal year ended December 31, 1992,

                      Exhibit 10.3.).....................................................

           10.4*      Warrant Agreement, dated December 5, 1985, between the Company and

                      Harold Haynes, Jerome Jacobson, Melvyn N. Klein and James D. Woods,

                      individually. (Incorporated by reference from Itel Corporation's

                      Annual Report on Form 10-K for the fiscal year ended December 31,

                      1985, Exhibit 10.14.)..............................................

</TABLE>

 

                                       35

<PAGE>   36

 

<TABLE>

<CAPTION>

            EXHIBIT                                                                       PAGE

              NO.                           DESCRIPTION OF EXHIBIT                       NUMBER

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

    <C>    <S>        <C>                                                                <C>

           10.5*      Warrant Agreement, dated June 24, 1986, between the Company and

                      William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome

                      Jacobson, Melvyn N. Klein and James D. Woods, individually.

                      (Incorporated by reference from Itel Corporation's Registration

                      Statement on Form S-1, Registration Number 33-7000, filed July 3,

                      1986, Exhibit 10.17.)..............................................

           10.6 *     Supplemental Pension Agreement, dated November 17, 1986, between

                      the Company and Rod F. Dammeyer. (Incorporated by reference from

                      Itel Corporation's Annual Report on Form 10-K for the fiscal year

                      ended December 31, 1986, Exhibit 10.14.)...........................

           10.7 *     (a) Company's Supplemental Retirement Benefits Plan, dated January

                      1, 1987. (Incorporated by reference from Itel Corporation's Annual

                      Report on Form 10-K for the fiscal year ended December 31, 1987,

                      Exhibit 10.16.)....................................................

           *          (b) Amendment No. 1, dated May 17, 1989 and effective as of January

                      1, 1989, to the Company's Supplemental Retirement Benefits Plan.

                      (Incorporated by reference from Itel Corporation's Annual Report on

                      Form 10-K for the fiscal year ended December 31, 1989, Exhibit

                      10.9(b).)..........................................................

           *          (c) Amendment No. 2, dated October 15, 1992, to the Company's

                      Supplemental Retirement Benefits Plan (Incorporated by reference

                      from Itel Corporation's Annual Report on Form 10-K for the fiscal

                      year ended December 31, 1992, Exhibit 10.7(c).)....................

           *          (d) Amendment No. 3, dated February 25, 1993, to the Company's

                      Supplemental Retirement Benefits Plan. (Incorporated by reference

                      from Itel Corporation's Annual Report on Form 10-K for the fiscal

                      year ended December 31, 1992, Exhibit 10.7(d).)....................

           10.8 *     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.).....................................................

           10.9 *     Warrant Agreement, dated September 10, 1987, between the Company

                      and William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome

                      Jacobson, Melvyn N. Klein and James D. Woods, individually.

                      (Incorporated by reference from Itel Corporation's Annual Report on

                      Form 10-K for the fiscal year ended December 31, 1988, Exhibit

                      10.15.)............................................................

           10.10*     Warrant Agreement, dated July 14, 1988, between the Company and

                      William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome

                      Jacobson, Melvyn N. Klein, Robert H. Lurie, John R. Petty and James

                      D. Woods, individually. (Incorporated by reference from Itel

                      Corporation's Annual Report on Form 10-K for the fiscal year ended

                      December 31, 1989, Exhibit 10.19.).................................

           10.11*     Executive Supplemental Life Plan, dated June 15, 1989, for the

                      Company and participating subsidiaries. (Incorporated by reference

                      from Itel Corporation's Annual Report on Form 10-K for the fiscal

                      year ended December 31, 1989, Exhibit 10.20.)......................

           10.12*     (a) Company's Supplemental Executive Retirement Plan, dated January

                      18, 1990. (Incorporated by reference from Itel Corporation's Annual

                      Report on Form 10-K for the fiscal year ended December 31, 1989,

                      Exhibit 10.23.)....................................................

           *          (b) Amendment No. 1 dated February 25, 1993, to Company's

                      Supplemental Executive Retirement Plan. (Incorporated by reference

                      from Itel Corporation's Annual Report on Form 10-K for the fiscal

                      year ended December 31, 1992, Exhibit 10.13(b).)...................

</TABLE>

 

                                       36

<PAGE>   37

 

<TABLE>

<CAPTION>

            EXHIBIT                                                                       PAGE

              NO.                           DESCRIPTION OF EXHIBIT                       NUMBER

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

    <C>    <S>        <C>                                                                <C>

           10.13*     Warrant Agreement, dated July 13, 1989, between Company and Bernard

                      F. Brennan, William A. Buzick, Jr., F. Philip Handy, Harold Haynes,

                      Jerome Jacobson, Melvyn N. Klein, Robert H. Lurie, John R. Petty

                      and James D. Woods, individually. (Incorporated by reference from

                      Itel Corporation's Annual Report on Form 10-K for the fiscal year

                      ended December 31, 1990, Exhibit 10.21.)...........................

           10.14*     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.)......................

           10.15*     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.).................................

           10.16*     Letter Agreement, dated December 2, 1991, with John Pigott.

                      (Incorporated by reference from Itel Corporation's Annual Report on

                      Form 10-K for the fiscal year ended December 31, 1991, Exhibit

                      10.26.)............................................................

           10.17*     (a) Agreement, dated February 9, 1995, with Rod F. Dammeyer

                      (Incorporated by reference from Itel Corporation's Annual Report on

                      Form 10-K for the fiscal year ended December 31, 1994, Exhibit

                      10.18(d).).........................................................

                      (b) Amended and Restated Agreement dated February 9, 1995 with Rod

                      F. Dammeyer........................................................

           10.18*     Agreement, dated November 1, 1992, with James E. Knox, as

                      amended............................................................

           10.19*     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.)...........................

           10.20      Tax Allocation Agreement with ANTEC Corporation. (Incorporated by

                      reference from Amendment No. 2 to ANTEC Corporation's Registration

                      Statement on Form S-1, Registration Number 33-65488, filed August

                      20, 1993, Exhibit 10.5.)...........................................

           10.21      Registration Rights Agreement with ANTEC Corporation. (Incorporated

                      by reference from Amendment No. 3 to ANTEC Corporation's

                      Registration Statement on Form S-1, Registration Number 33-65488,

                      filed September 13, 1993, Exhibit 10.9.)...........................

           10.22      Directors & Officers Insurance Agreement with ANTEC Corporation.

                      (Incorporated by reference to ANTEC Corporation's Registration

                      Statement on Form S-1, Registration Number 33-65488, filed July 2,

                      1993, Exhibit 10.8.)...............................................

           10.23      Purchase Agreement dated as of June 23, 1994 among the Company,

                      Itel Rail Holdings Corporation and SCAP Associates, L.L.C.

                      (Incorporated by reference from Itel Corporation's Current Report

                      on Form 8-K, November 7, 1994, Exhibit 2.1)........................

           10.24*     Form of Indemnity Agreement with all directors and officers........

           10.25      Agreement, dated June 27, 1995, among Riverside Partners, SZRL

                      Investments, Equity Holdings and Company. (Incorporated by

                      reference from Riverside Partners' Amendment No. 20 to its Schedule

                      13D, filed for an event on June 27, 1995, relating to the shares of

                      Itel Corporation, Exhibit 1.)......................................

           10.26*     Anixter International Inc. 1996 Stock Incentive Plan...............

           10.27*     Form of Stock Option Grant.........................................

           10.28*     Anixter Excess Benefit Plan........................................

</TABLE>

 

                                       37

<PAGE>   38

 

<TABLE>

<CAPTION>

            EXHIBIT                                                                       PAGE

              NO.                           DESCRIPTION OF EXHIBIT                       NUMBER

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

    <C>    <S>        <C>                                                                <C>

           10.29*     Forms of Anixter Stock Option, Stockholder Agreement and Stock

                      Option Plan........................................................

           10.30*     Anixter Deferred Compensation Plan.................................

     (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, Bernard F. Brennan,

                      Rod F. Dammeyer, Robert E. Fowler, Jr., F. Philip Handy, Melvyn N.

                      Klein, John R. Petty, Sheli Rosenberg, Stuart M. Sloan, Thomas C.

                      Theobald and Samuel Zell...........................................

     (27)  Financial data schedule.

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

     (28)  Additional exhibits.

</TABLE>

 

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

Schedules:

 

                 ANIXTER INTERNATIONAL INC. AND SUBSIDIARIES--

                              FINANCIAL SCHEDULES

 

<TABLE>

<CAPTION>

                                                                                           PAGE

    <S>             <C>                                                                    <C>

    Schedule     I-- Condensed financial information of Registrant........................  39

    Schedule    II-- Valuation and qualifying accounts and reserves.......................  42

</TABLE>

 

     All other schedules are omitted because they are not required or are not

applicable, or the required information is included in the consolidated

financial statements or notes thereto.

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

 

+ Copies of other instruments defining the rights of holders of long-term debt

  of the Company and its subsidiaries not filed pursuant to Item 601(b)(4)(iii)

  of Regulation S-K and omitted copies of attachments to plans and material

  contracts will be furnished to the Securities and Exchange Commission upon

  request.

 

     For the purposes of complying with the amendments to the rules governing

Form S-8 (effective July 13, 1990) under the Securities Act of 1933, as amended,

the Registrant hereby undertakes as follows, which undertaking shall be

incorporated by reference into the Registrant's Registration Statement on Form

S-8 Nos. 2-93173 (filed September 30, 1987), 33-13486 (filed April 15, 1987),

33-21656 (filed May 3, 1988) and 33-60676 (filed April 5, 1993):

 

     Insofar as indemnification for liabilities arising under the Securities Act

     of 1933 may be permitted to directors, officers and controlling persons of

     the Registrant pursuant to the foregoing provision, or otherwise, the

     Registrant has been advised that in the opinion of the Securities and

     Exchange Commission such indemnification is against public policy as

     expressed in the Securities Act of 1933, and is, therefore, unenforceable.

     In the event that a claim for indemnification against such liabilities

     (other than the payment by the Registrant of expenses incurred or paid by a

     director, officer or controlling person of the Registrant in the successful

     defense of any action, suit or proceeding) is asserted by such director,

     officer or controlling person in connection with the securities being

     registered, the Registrant will, unless in the opinion of its counsel the

     matter has been settled by controlling precedent, submit to a court of

     appropriate jurisdiction the question whether such indemnification by it is

     against public policy as expressed in the Act and will be governed by the

     final adjudication of such issue.

 

                                       38

<PAGE>   39

 

                           ANIXTER INTERNATIONAL INC.

 

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                  ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

 

                                 BALANCE SHEETS

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                             DECEMBER 31,

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

                                                                           1995         1994

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

<S>                                                                      <C>          <C>

                                            ASSETS

Current assets:

  Cash and equivalents................................................   $  1,000     $  2,600

  Accounts receivable.................................................        400          700

  Amounts currently due from affiliates, net..........................     61,200       98,500

  Other assets........................................................        500          200

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

               Total current assets...................................     63,100      102,000

Investment in ANTEC...................................................     73,700       69,500

Investment in and advances to subsidiaries............................    380,700      361,000

Marketable equity securities available-for-sale.......................         --       64,500

Other assets..........................................................     18,000        1,700

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

                                                                         $535,500     $598,700

                                                                         ========     ========

                             LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses, due currently..................   $ 15,600     $ 41,900

Income taxes, net, primarily deferred.................................     46,100       11,700

Other liabilities.....................................................      1,400        1,200

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

               Total liabilities......................................     63,100       54,800

Common stock repurchase commitment....................................     23,400           --

Stockholders' equity:

  Common stock........................................................     52,500       29,400

  Capital surplus.....................................................     99,900      262,500

  Retained earnings...................................................    308,400      269,300

  Cumulative translation adjustments..................................    (11,800)     (10,100)

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

                                                                          449,000      551,100

  Unrealized losses on marketable equity securities available for sale

     (net of related deferred income tax benefit).....................         --       (7,200)

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

               Total stockholders' equity.............................    449,000      543,900

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

                                                                         $535,500     $598,700

                                                                         ========     ========

</TABLE>

 

                                       39

<PAGE>   40

 

                           ANIXTER INTERNATIONAL INC.

 

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                  ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

 

                            STATEMENTS OF OPERATIONS

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                     YEARS ENDED DECEMBER 31,

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

                                                                   1995        1994        1993

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

<S>                                                               <C>        <C>         <C>

Operating loss.................................................   $(3,500)   $ (4,700)   $ (9,300)

Other (expenses) income:

  Corporate interest expense...................................    (1,300)    (14,900)    (65,200)

  Interest and investment income, including intercompany.......    14,900       6,200      15,600

  Gain on ANTEC Offerings......................................        --      59,000      84,500

  Marketable equity securities losses, principally

     write-downs...............................................    (3,000)    (39,600)    (25,000)

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

                                                                   10,600      10,700       9,900

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

Income from operations before income taxes and equity in

  earnings of subsidiaries.....................................     7,100       6,000         600

Income tax benefit.............................................     6,500       9,100       3,300

Equity in earnings of subsidiaries.............................    25,500     231,800      10,900

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

Income before extraordinary items..............................    39,100     246,900      14,800

Extraordinary items (net of related income taxes)..............        --          --     (16,000)

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

Net income (loss)..............................................   $39,100    $246,900    $ (1,200)

                                                                  ========   ========    ========

</TABLE>

 

                                       40

<PAGE>   41

 

                           ANIXTER INTERNATIONAL INC.

 

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                  ANIXTER INTERNATIONAL INC. (PARENT COMPANY)

 

                            STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                   YEARS ENDED DECEMBER 31,

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

                                                                1995         1994         1993

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

<S>                                                           <C>          <C>          <C>

Operating activities:

  Income before extraordinary items........................   $  39,100    $ 246,900    $  14,800

  Adjustments to reconcile income before extraordinary

     items to net cash used by operating activities:

     Depreciation..........................................          --           --          400

     Income tax benefit....................................      (6,500)      (9,100)      (3,300)

     Gain on ANTEC common stock issuances..................          --      (59,000)     (84,500)

     Marketable equity securities losses, principally

       write-downs.........................................       3,000       39,600       25,000

     Equity in earnings of subsidiaries....................     (25,500)    (231,800)     (10,900)

     Non-cash financing expense............................        (100)       1,900        4,200

     Change in other operating items.......................      (6,600)     (18,100)     (27,000)

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

          Net cash provided (used) by operating

            activities.....................................       3,400      (29,600)     (81,300)

Investing activities:

  Sales of securities......................................      72,600       47,800        3,700

  Proceeds from ANTEC Offerings............................          --       82,800       67,000

  Redemption of ANTEC preferred stock......................          --           --       30,000

  Net dividends from subsidiaries..........................       8,200      219,700      150,300

  Loans from subsidiaries, net.............................      37,300      108,000       95,200

  Other, net...............................................      (4,000)          --       13,700

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

          Net cash provided by investing activities........     114,100      458,300      359,900

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

Net cash provided before financing activities..............     117,500      428,700      278,600

Financing activities:

  Borrowings...............................................      50,000      200,000       93,400

  Reductions in borrowings.................................     (50,000)    (496,600)    (391,300)

  Purchases of treasury stock..............................    (129,200)    (138,900)        (300)

  Preferred stock dividend payments........................          --           --       (2,900)

  Proceeds from issuance of common stock...................      10,100        8,600       21,100

  Other, net...............................................          --           --       (1,400)

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

          Net cash used in financing activities............    (119,100)    (426,900)    (281,400)

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

Cash provided (used).......................................      (1,600)       1,800       (2,800)

Cash and equivalents at beginning of year..................       2,600          800        3,600

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

Cash and equivalents at end of year........................   $   1,000    $   2,600    $     800

                                                              =========    =========    =========

</TABLE>

 

                                       41

<PAGE>   42

 

                           ANIXTER INTERNATIONAL INC.

 

          SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

 

                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                 (IN THOUSANDS)

 

<TABLE>

<CAPTION>

                                                                   ADDITIONS

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

                                             BALANCE AT                   CHARGED TO                  BALANCE AT

                                            BEGINNING OF    CHARGED TO      OTHER                       END OF

               DESCRIPTION                   THE PERIOD       INCOME       ACCOUNTS     DEDUCTIONS    THE PERIOD

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

<S>                                         <C>             <C>           <C>           <C>           <C>

Year ended December 31, 1995:

  Allowance for doubtful accounts........     $  6,000       $  5,800      $  1,200      $ (4,000)     $  9,000

  Unrealized losses on marketable equity

     securities available-for-sale(b)....     $ 11,100             --            --       (11,100)     $     --

  Allowance for deferred tax asset.......     $ 12,500          1,000            --            --      $ 13,500

Year ended December 31, 1994:

  Allowance for doubtful accounts(a).....     $  6,200          5,100           600        (5,900)     $  6,000

  Unrealized losses on marketable equity

     securities available-for-sale(c)....     $ 36,600             --         8,900       (34,400)     $ 11,100

  Allowance for deferred tax asset.......     $ 30,100        (17,600)           --            --      $ 12,500

Year ended December 31, 1993:

  Allowance for doubtful accounts........     $  4,600          5,500         2,300        (6,200)     $  6,200

  Unrealized losses on marketable equity

     securities available-for-sale(c)....     $ 74,400             --       (12,800)      (25,000)     $ 36,600

  Allowance for deferred tax asset.......     $ 33,100             --            --        (3,000)     $ 30,100

</TABLE>

 

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

(a) The deconsolidation of ANTEC resulted in a $1.4 million deduction in

     allowance for doubtful accounts in 1994.

 

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

     million loss.

 

(c) In 1994 and 1993, the Company wrote down its investment in marketable equity

     securities by $34.4 million and $25.0 million, respectively.

 

                                       42

<PAGE>   43

 

                                   SIGNATURES

 

     PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON

ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF

CHICAGO, STATE OF ILLINOIS, ON THE 14TH DAY OF MARCH, 1996.

 

                                        ANIXTER INTERNATIONAL INC.

 

                                                     JAMES E. KNOX

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

                                                     James E. Knox

                                         Senior Vice President, General Counsel

                                                     and Secretary

 

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS

REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE

REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

 

<TABLE>

<S>                                          <C>                                <C>

                                                 Chief Executive Officer

                                                      and President

               ROD F. DAMMEYER                (Principal Executive Officer)      March 14, 1996

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

               Rod F. Dammeyer

                                             Senior Vice President--Finance

              DENNIS J. LETHAM                  (Chief Financial Officer)        March 14, 1996

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

              Dennis J. Letham

                                               Vice President--Controller

             JAMES M. FROISLAND                (Chief Accounting Officer)        March 14, 1996

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

             James M. Froisland

 

              LORD JAMES BLYTH*                         Director                 March 14, 1996

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

              Lord James Blyth

 

             BERNARD F. BRENNAN*                        Director                 March 14, 1996

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

             Bernard F. Brennan

 

               ROD F. DAMMEYER                          Director                 March 14, 1996

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

               Rod F. Dammeyer

 

           ROBERT E. FOWLER, JR.*                       Director                 March 14, 1996

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

            Robert E. Fowler, Jr.

 

              F. PHILIP HANDY*                          Director                 March 14, 1996

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

               F. Philip Handy

 

              MELVYN N. KLEIN*                          Director                 March 14, 1996

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

               Melvyn N. Klein

 

               JOHN R. PETTY*                           Director                 March 14, 1996

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

                John R. Petty

 

             SHELI Z. ROSENBERG*                        Director                 March 14, 1996

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

               Sheli Rosenberg

 

              STUART M. SLOAN*                          Director                 March 14, 1996

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

               Stuart M. Sloan

 

             THOMAS C. THEOBALD*                        Director                 March 14, 1996

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

             Thomas C. Theobald

 

                SAMUEL ZELL*                            Director                 March 14, 1996

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

                 Samuel Zell

</TABLE>

 

*BY            JAMES E. KNOX

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

      James E. Knox (Attorney in fact)

James E. Knox, as attorney in fact for each person indicated.

 

                                       43

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-3.1

<SEQUENCE>2

<DESCRIPTION>CERTIFICATE OF AMENDMENT

<TEXT>

 

<PAGE>   1

 

                                                                     EXHIBIT 3.1

 

                            CERTIFICATE OF AMENDMENT

 

                                     TO THE

 

                     RESTATED CERTIFICATE OF INCORPORATION

 

                                       OF

 

                                ITEL CORPORATION

 

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

 

                     PURSUANT TO SECTION 242 OF THE GENERAL

                    CORPORATION LAW OF THE STATE OF DELAWARE

 

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

 

     ITEL Corporation, a Delaware corporation (hereinafter the "Corporation"),

does hereby certify as follows:

 

          FIRST: The Corporation has capital stock.

 

          SECOND: Article FIRST of the Corporation's Restated Certificate of

     Incorporation is hereby amended to read in its entirety as set forth below:

 

             FIRST: The name of the Corporation shall be Anixter International

        Inc.

 

          THIRD: The foregoing amendment was duly adopted in accordance with

     Section 242 of the General Corporation Law of the State of Delaware.

 

     IN WITNESS WHEREOF, ITEL Corporation has caused this Certificate to be

executed in its corporate name this 31st day of August, 1995.

 

                                          ITEL CORPORATION

 

                                          By: /s/ ROD DAMMEYER

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

                                              Name: Rod Dammeyer

                                              Title: President

 

ATTEST:

 

By: /s/ JAMES E. KNOX

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

    Name: James E. Knox

    Title: Secretary

<PAGE>   2

 

                     RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                                ITEL CORPORATION

 

     ITEL Corporation, a corporation organized and existing under the laws of

the State of Delaware, hereby certifies as follows:

 

     1. The name of the corporation is ITEL Corporation. The date of the filing

of its original Certificate of Incorporation with the Secretary of State of

Delaware was December 6, 1967, and the name under which it was originally so

incorporated was SSI COMPUTER CORPORATION.

 

     2. The test of the Restated Certificate of Incorporation as amended and

restated shall be and read in full as follows:

 

          FIRST: The name of the Corporation shall be ITEL Corporation.

 

          SECOND: The address of its registered office in the State of Delaware

     is 1209 Orange Street, in the City of Wilmington, County of New Castle. The

     name of its registered agent at such address is The Corporation Trust

     Company.

 

          THIRD: The purpose of the Corporation is to engage in any lawful act

     or activity for which corporations may be organized under the General

     Corporation Law of Delaware.

 

          FOURTH: The total number of shares of stock of all classes which the

     Corporation shall have the authority to issue shall be one hundred fifteen

     million (115,000,000) consisting of one hundred million (100,000,000)

     shares of Common Stock, par value $1.00 per share, and fifteen million

     (15,000,000) shares of Class B Preferred Stock, par value $1.00 per share.

 

          FIFTH: The board of directors of the Corporation may, by resolution,

     from time to time issue in one or more series any unissued shares of Class

     B Preferred Stock and may fix, or alter in one or more respects from time

     to time before issuance of such shares, the number and designation of any

     series, liquidation and dividend rights, preference rights, voting rights,

     redemption rights, conversion rights, and any other rights and

     qualifications, limitations or restrictions of, and the terms of any

     purchase, retirement, or sinking fund which may be provided for, such

     shares of Class B Preferred Stock.

 

          SIXTH: The Corporation shall not issue any shares of stock of any

     class or series without voting rights.

 

          SEVENTH: The Corporation is to have perpetual existence.

 

          EIGHTH: In furtherance and not in limitation of the powers conferred

     by statute, the board of directors of the Corporation is expressly

     authorized to make, alter or repeal the by-laws of the Corporation.

 

          NINTH: No director shall be personally liable to the Corporation or

     its stockholders for monetary damages for any breach of fiduciary duty by

     such director as a director. Notwithstanding the foregoing sentence, a

     director shall be liable to the extent provided by applicable law (i) for

     breach of the director's duty of loyalty to the Corporation or its

     stockholders, (ii) for acts or omissions not in good faith or which involve

     intentional misconduct or a knowing violation of law, (iii) pursuant to

     Section 174 of the Delaware General Corporation Law or (iv) for any

     transaction from which the director derived an improper personal benefit.

     No amendment to or repeal of this Article Ninth shall apply to or have any

     effect on the liability or alleged liability of any director of the

     Corporation for or with respect to any acts or omissions of such director

     occurring prior to such amendment or repeal.

 

     3. This Restated Certificate of Incorporation was duly adopted in

accordance with the provisions of Sections 242 and 245 of the General

Corporation Law of the State of Delaware.

 

     IN WITNESS WHEREOF, said ITEL Corporation has caused this certificate to be

executed in its corporate name this 29th day of September, 1987.

 

                                          ITEL CORPORATION

 

                                          By /s/ ROD DAMMEYER

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

                                             President

 

ITEL CORPORATION

CORPORATE SEAL

1967

DELAWARE

 

ATTEST:

 

By /s/ JAMES E. KNOX

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

   Secretary

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-3.2

<SEQUENCE>3

<DESCRIPTION>AMENDED & RESTATED BY-LAWS

<TEXT>

 

<PAGE>   1

 

                                                                     EXHIBIT 3.2

                                                        REVISED NOVEMBER 9, 1995

 

                           ANIXTER INTERNATIONAL INC.

                                    FORMERLY

                                ITEL CORPORATION

 

                          AMENDED AND RESTATED BY-LAWS

 

                                   ARTICLE I

 

                                    OFFICES

 

     Section 1. Registered Office. The registered office shall be in the City of

Wilmington, County of New Castle, State of Delaware.

 

     Section. Other Offices. The corporation may also have office at such other

places both within and without the State of Delaware as the Board of Directors

may from time to time determine or the business of the corporation may require.

 

                                   ARTICLE II

 

                            MEETINGS OF STOCKHOLDERS

 

     Section 1. Place of Meetings. All meetings of the stockholders for the

election of Directors shall be held in the City of San Francisco, State of

California, at such place as may be fixed from time to time by the Board of

Directors, or at such other place either within or without the State of Delaware

as shall be designated from time to time by the Board of Directors and stated in

the notice of the meeting. Meetings of stockholders for any other purpose may be

held at such time and place within or without the State of Delaware, as shall be

stated in the notice of the meeting or in a duly executed waiver of notice

thereof.

 

     Section 2. Annual Meetings. Annual meetings of stockholders shall be held

on the third Thursday of April in each year if not a legal holiday and if a

legal holiday then on the next business day following at 2:30 P.M. or at such

other date and time as shall be designated from time to time by the Board of

Directors and stated in the notice of the meeting. At such meeting the

stockholders shall elect by a plurality vote a Board of Directors and transact

such other business as may properly be brought before the meeting.

 

     Section 3. Notice of Annual Meeting. Written notice of the annual meeting

stating the place, date and hour of the meeting shall be given to each

stockholder entitled to vote at such meeting not less than ten nor more than

fifty days before the date of the meeting.

 

     Section 4. List of Stockholders. The officer who has charge of the stock

ledger of the corporation shall prepare and make, at least ten days before every

meeting of stockholders, a complete list of the stockholders entitled to vote at

the meeting, arranged in alphabetical order, and showing the address of each

stockholder and the number of shares registered in the name of each stockholder.

Such list shall be open to the examination of any stockholder for any purpose

germane to the meeting, during ordinary business hours, for a period of at least

ten days prior to the meeting, either at a place within the city where the

meeting is to be held, which place shall be specified in the notice of meeting,

or if not so specified, at the place where the meeting is to be held. The list

shall also be produced and kept at the time and place of the meeting during the

whole time thereof, and may be inspected by any stockholder who is present.

 

     Section 5. Special Meetings. Special meetings of the stockholders, for any

purpose or purposes, unless otherwise prescribed by statute or by the

Certificate of Incorporation, may be called by the President and shall be called

by the President or Secretary at the request in writing of a majority of the

Board of Directors, or at the request in writing of stockholders owning a

majority in amount of the entire capital stock of the

<PAGE>   2

 

corporation issued and outstanding and entitled to vote. Such request shall

state the purpose or purposes of the proposed meeting.

 

     Section 6. Notice of Special Meeting. Written notice of a special meeting

stating the place, date and hour of the meeting and the purpose or purposes for

which the meeting is called, shall be given not less than ten nor more than

fifty days before the day of the meeting, to each stockholder entitled to vote

at such meeting.

 

     Section 7. Business Transacted at Special Meeting. Business transacted at

any special meeting of stockholders shall be limited to the purposes stated in

the notice.

 

     Section 8. Quorum. The holders of one-half of the stock issued and

outstanding and entitled to vote thereat, present in person or represented by

proxy, shall constitute a quorum at all meetings of the stockholders for the

transaction of business except as otherwise provided by statute or by the

Certificate of Incorporation. If, however, such quorum shall not be present or

represented at any meeting of the stockholders, the stockholders entitled to

vote thereat, present in person or represented by proxy, shall have the power to

adjourn the meeting from time to time, without notice other than announcement at

the meeting, until a quorum shall be present or represented. At such adjourned

meeting at which a quorum shall be present or represented any business may be

transacted which might have been transacted at the meeting as originally

notified. If the adjournment is for more than thirty days, or if after the

adjournment a new record date is fixed for the adjourned meeting, a notice of

the adjourned meeting shall be given to each stockholder of record entitled to

vote at the meeting.

 

     Section 9. Vote Requirements. When a quorum is present at any meeting, the

vote of the holders of a majority of the stock having voting power present in

person or represented by proxy shall decide any question brought before such

meeting, unless the question is one upon which by express provision of the

statutes or of the Certificate of Incorporation, a different vote is required in

which case such express provision shall govern and control the decision of such

question.

 

     Section 10. Vote in Person or by Proxy. Each stockholder shall at every

meeting of the stockholders be entitled to one vote in person or by proxy for

each share of the capital stock having voting power held by such stockholder,

but no proxy shall be voted on after three years from its date, unless the proxy

provides for a longer period.

 

     Section 11. Action without Meeting. Whenever the vote of stockholders at a

meeting thereof is required or permitted to be taken for or in connection with

any corporate action, by any provision of the statutes, the meeting and vote of

stockholders may be dispensed with if all of the stockholders who would have

been entitled to vote upon the action if such meeting were held shall consent in

writing to such corporate action being taken; or if the Certificate of

Incorporation authorizes the action to be taken with the written consent of the

holders of less than all of the stockholders who would have been entitled to

vote upon the action if a meeting were held, then on the written consent of the

stockholders having not less than such percentage of the total number of votes

may be authorized in the Certificate of Incorporation; provided that in no case

shall the written consent be by the holders of stock having less than the

minimum percentage of the total vote required by statute for the proposed

corporate action, and provided that prompt notice must be given to all

stockholders of the taking of corporate action without a meeting and by less

than unanimous written consent.

 

                                  ARTICLE III

 

                                   DIRECTORS

 

     Section 1. Number and Election. The number of Directors which shall

constitute the whole Board shall be the number at any given time determined by

the Board. The Directors shall be elected at the annual meeting of stockholders,

except as provided in Section 2 of this Article, and each Director elected shall

hold office until his successor is elected and qualified. Directors need not be

stockholders.

 

     Section 2. Vacancies. Vacancies and newly created directorships resulting

from any increase in the authorized number of Directors may be filled by a

majority of the Directors then in office though less than a quorum, or by a sole

remaining Director, and the Directors so chosen shall hold office until the next

annual

 

                                        2

<PAGE>   3

 

election and until their successors are duly elected and shall qualify, unless

sooner displaced. If there are no Directors in office, then an election of

Directors may be held in the manner provided by statute. If, at the time of

filling any vacancy or any newly created directorship, the Directors then in

office shall constitute less than a majority of the whole Board (as constituted

immediately prior to any such increase), the Court of Chancery may, upon

application of any stockholder or stockholders holding at least ten percent of

the total number of the shares at the time outstanding having the right to vote

for such Directors, summarily order an election to be held to fill any such

vacancies or newly created directorships, or to replace the Directors chosen by

the Directors then in office.

 

     Section 3. Authority of Board of Directors. The business of the corporation

shall be managed by its Board of Directors which may exercise all such powers of

the corporation and do all such lawful acts and things as are not by statute or

by the Certificate of Incorporation or by these By-laws directed or required to

be exercised or done by the stockholders.

 

     Section 4. Meetings of the Board of Directors. The Board of Directors of

the corporation may hold meetings, both regular and special, either within or

without the State of Delaware. A meeting of the Board of Directors may be held

without notice immediately following the annual meeting of stockholders.

 

     Section 5. Regular Meetings. Regular meetings of the Board of Directors

shall be held at such times as are fixed from time to time by resolution of the

Board but no less than quarterly, commencing in April, 1983, upon not less than

three days' prior notice, on the Thursday subsequent to the third Monday of each

month. Meetings will commence at 9:00 a.m. at the offices of the corporation or

at such other time and at such other place as shall be determined by the Board

of Directors.

 

     Section 6. Special Meetings. Special meetings of the Board of Directors may

be called by the President on not less than three days' prior notice to each

Director, either personally or by mail or by telegram. Special meetings shall be

called by the President or Secretary in like manner and on like notice on the

written request of two Directors.

 

     Section 7. Quorum. At all meetings of the Board of Directors six Directors

shall constitute a quorum for the transaction of business and the act of a

majority of the Directors present at any meeting at which there is a quorum

shall be the act of the Board of Directors, except as may be otherwise

specifically provided by statute or by the Certificate of Incorporation. If a

quorum shall not be present at any meeting of the Board of Directors, the

Directors present thereat may adjourn the meeting from time to time, without

notice other than announcement at the meeting, until a quorum shall be present.

 

     Section 8. Action without Meeting. Unless otherwise restricted by the

Certificate of Incorporation or these By-laws, any action required or permitted

to be taken at any meeting of the Board of Directors or of any Committee thereof

may be taken without a meeting, if all members of the Board or Committee, as the

case may be, consent thereto in writing, and the writing or writings are filed

with the minutes of proceedings of the Board or Committee.

 

     Section 9. Committee of Directors. The Board of Directors may, by

resolution passed by a majority of the whole Board of Directors, designate one

or more Committees, each Committee to consist of two or more of the Directors of

the corporation. The Board of Directors may designate one or more Directors as

alternated members of any Committee, who may replace any absent or disqualified

member at any meeting of the Committee. Any such Committee, to the extent

provided in the resolution, shall have and may exercise the powers of the Board

of Directors in the management of the business and affairs of the corporation,

and may authorize the seal of the corporation to be affixed to all papers which

may require it; provided, however, that in the absence or disqualification of

any member of such Committee or Committees, the member or members thereof

present at any meeting and not disqualified from voting, whether or not he or

they constitute a quorum, may unanimously appoint another member of the Board of

Directors to act at the meeting in the place of any such absent or disqualified

member. Such Committee or Committees shall have such name or names as may be

determined from time to time by resolution adopted by the Board of Directors.

 

                                        3

<PAGE>   4

 

     Section 10. Meeting of Committees. Each Committee may hold meetings,

regular and/or special, either within or without the State of Delaware. Any

regular or special meeting of a Committee shall be held on not less than three

days' prior notices to each member of such Committee.

 

     Section 11. Minutes of Committee Meetings. Each Committee shall keep

regular minutes of its meetings and report the same to the Board of Directors

when required.

 

     Section 12. Compensation of Directors. The Directors may be paid such

compensation as the Board of Directors shall deem advisable.

 

                                   ARTICLE IV

 

                                    NOTICES

 

     Section 1. Form of Notice. Whenever, under the provisions of the statutes

or of the Certificate of Incorporation or of these By-laws, notice is required

to be given to any Director or stockholder, it shall not be construed to mean

personal notice, but such notice may be given in writing by mail, addressed to

such Director or stockholder at his address as it appears on the records of the

corporation, with postage thereon prepaid, and such notice shall be deemed to be

given at the time when the same shall be deposited in the United States mail.

Notice to Directors may also be given by telegram.

 

     Section 2. Waiver of Notice. Whenever any notice is required to be given

under the provisions of the statutes or of the Certificate of Incorporation or

of these By-laws, a waiver thereof in writing, signed by the person or persons

entitled to said notice, whether before or after the time stated therein, shall

be deemed equivalent thereto.

 

                                   ARTICLE V

 

                                    OFFICERS

 

     Section 1. Officers. The officers of the corporation shall be chosen by the

Board of Directors and shall be a Chairman of the Board, President, one or more

Vice-Presidents, a Secretary, a Treasurer, a Controller, and a General Counsel.

The Board of Directors may designate certain Vice-Presidents as executive or

senior Vice-Presidents and may affix such functional designations to

Vice-Presidential titles as it shall deem appropriate. The Board of Directors

may also choose one or more Assistant Secretaries and Assistant Treasurers,

Assistant Controllers, and Associate General Counsels. Any number of officers

may be held by the same person unless the Certificate of Incorporation or these

By-laws otherwise provide. The Board of Directors may authorize and approve the

terms of employment contracts with officers covering the duties, term,

compensation, and other terms of the employment of officers.

 

     Section 2. Appointment of Officers at First Meeting of Newly Elected Board

of Directors. The Board of Directors at its first meeting after each annual

meeting of stockholders shall choose a Chairman, President, one or more

Vice-Presidents, a Secretary, one or more Assistant Secretaries, a Treasurer,

one or more Assistant Treasurers, a Controller, one or more Assistant

Controllers, a General Counsel and one or more Associate General Counsels.

 

     Section 3. Appointment of Officers from Time to Time. The Board of

Directors may appoint such other officers and agents as it shall deem necessary

who shall hold their offices for such terms and shall exercise such powers and

perform such duties as shall be determined from time to time by the Board of

Directors.

 

     Section 4. Compensation of Officers. The compensation of all officers of

the corporation shall be fixed by the Board of Directors.

 

     Section 5. Terms of Office. The officers of the corporation shall hold

office until their successors are chosen and qualify. Any other officer elected

or appointed by the Board of Directors may be removed at any time by the

affirmative vote of a majority of the Board of Directors. Any vacancy occurring

in any office of the corporation shall be filled by the Board of Directors.

 

                                        4

<PAGE>   5

 

     Section 6. The Chairman of the Board. The Chairman of the Board shall be

the Chairman of the Executive Committee, shall have all of the powers ordinarily

exercised by the Chairman of the Board of a corporation and such other powers

and duties as shall from time to time be assigned to him by the Board of

Directors.

 

     Section 7. The President. The President shall be Chief Executive Officer of

the corporation and shall have all powers ordinarily exercised by the President

of the corporation and shall have all powers ordinarily exercised by the

President and Chief Executive Officer of a corporation and such other powers and

duties as shall from time to time be assigned to him by the Board of Directors.

The President may execute on behalf of the corporation stock certificates,

bonds, contracts, deeds, mortgages, or other instruments authorized by the Board

of Directors, except in cases where the signing or execution thereof shall be

expressly delegated by the Board or by these By-Laws to some other officer or

agent of the corporation or such documents or instruments shall be required by

law to be signed or executed otherwise, and the President may affix the seal of

the corporation to any instrument requiring the same. In the absence or

disability of the Chairman of the Board, or in the event that for any reason it

is impracticable for the Chairman to act personally, the President shall have

the powers and duties of the Chairman, including the responsibility to preside

at all meetings of stockholders and of the Board of Directors in the absence of

the Chairman of the Board. In the performance of all the duties hereunder, the

President shall be subject to the supervision of, and shall report to, the Board

of Directors.

 

     Section 8. The Vice-Presidents. In the absence of the President or in the

event of the President's inability or refusal to act, the Vice-President (or in

the event there be more than one Vice-President, the Vice-Presidents in the

order designated, or in the absence of any designation, then in the order of

their election) shall perform the duties of the President, and when so acting,

shall have the powers of and be subject to all the restrictions upon the

President. The Vice-President shall perform such other duties and have such

other powers as the Board of Directors may from time to time prescribe.

 

     Section 9. The Secretary. The Secretary shall attend all meetings of the

Board of Directors and its Committees and all meetings of the stockholders and

record all the proceedings of all such meetings in a book to be kept for that

purpose. The Secretary shall give, or cause to be given, notice of all meetings

of the stockholders and of the Board of Directors and its Committees, and shall

perform such other duties, and have such other powers as may be prescribed by

the Board of Directors or President, under whose supervision he shall be. The

Secretary shall have custody of the corporate seal of the corporation and the

Secretary or Assistant Secretary shall have the authority to affix the same to

any instrument requiring it and when so affixed, it may be attested by the

Secretary's signature or by the signature of such Assistant Secretary. The Board

of Directors may give general authority to any other officer to affix the seal

of the corporation and to attest the affixing by the signature of such officer.

 

     Section 10. The Assistant Secretary. The Assistant Secretary, or if there

may be more than one, the Assistant Secretaries in the order determined by the

Board of Directors (or if there be no such determination, then in the order of

their election), shall, in the absence of the Secretary, or at the Secretary's

request, or in the event of the Secretary's inability or refusal to act, or if

the office of secretary is vacant, perform the duties and exercise the powers of

the Secretary and shall perform such other duties and have such other powers as

the Board of Directors may from time to time prescribe.

 

     Section 11. The Treasurer. The Treasurer shall have the custody of the

corporate funds and securities and shall keep full and accurate accounts of

receipts and disbursements in books belonging to the corporation and shall

deposit all moneys and other valuable effects in the name and to the credit of

the corporation in such depositories as may be designated by the Board of

Directors or its Executive Committee. The Treasurer shall disburse the funds of

the corporation as may be ordered by the Board of Directors or its Executive

Committee, or as he may deem appropriate, taking proper vouchers for such

disbursements, and shall render to the President and the Board of Directors, at

its regular meetings, or when the Board of Directors so requires, an account of

all transactions of the Treasurer.

 

     Section 12. Bonding of Treasurer. If required by the Board of Directors,

the Treasurer shall give the corporation a bond (which shall be renewed every

six years) in such sum and with such surety or sureties as

 

                                        5

<PAGE>   6

 

shall be satisfactory to the Board of Directors for the faithful performance of

the duties of the Treasurer's office and for the restoration of the corporation,

in case of the Treasurer's death, resignation, retirement or removal from

office, of all books, papers, vouchers, money and other property of whatever

kind in the possession or under the control of the Treasurer belonging to the

corporation.

 

     Section 13. The Assistant Treasurer. The Assistant Treasurer, or if there

shall be more than one, the Assistant Treasurers in the order determined by the

Board of Directors (or if there be no such determination, then in the order of

their election), shall, in the absence of the Treasurer, or at the Treasurer's

request, or, in the event of his inability or refusal to act, perform the duties

and exercise the powers of the Treasurer and shall perform such other duties and

have such other powers as the Board of Directors may from time to time

prescribe.

 

     Section 14. The Controller. The Controller shall be the Chief Accounting

Officer of the corporation and shall perform such duties and exercise such

powers as are ordinarily performed or exercised by the Controller of a

corporation and shall perform such other duties and have such other powers as

the Board of Directors may from time to time prescribe.

 

     Section 15. The Assistant Controller. The Assistant Controller, or if there

be more than one, the Assistant Controllers in the order determined by the Board

of Directors (or if there be no such determination, then in order of their

election), shall, in the absence of the Controller or at the Controller's

request, or in the event of his inability or refusal to act, perform the duties

and exercise the powers of the Controller and shall perform such other duties

and have such other powers as the Board of Directors may from time to time

prescribe.

 

     Section 16. The General Counsel. The General Counsel shall be the Chief

Legal Officer of the corporation and shall act as legal advisor to the Board of

Directors and officers. The General Counsel shall perform such duties and

exercise such powers as are ordinarily performed or exercised by the General

Counsel of a corporation and shall perform such other duties and have such other

powers as the Board of Directors may from time to time prescribe.

 

     Section 17. The Associate General Counsel. The Associate General Counsel,

of if there be more than one, the Associate General Counsels either in the order

determined by the Board of Directors (or if there be no such determination, then

in the order of their election) or with such allocations of the duties and

powers to, between or among them as may be fixed in a manner authorized by the

Board of Directors, shall in the absence of the General Counsel, or at the

General Counsel's request, or in the event of his inability or refusal to act,

or if the office of General Counsel is vacant, perform the duties and exercise

the powers of the General Counsel and shall perform such other duties and have

such other powers as the Board of Directors may from time to time prescribe.

 

                                   ARTICLE VI

 

                             CERTIFICATES OF STOCK

 

     Section 1. Certificates. Every holder of stock in the corporation shall be

entitled to have a certificate, signed in the name of the corporation by the

Chairman of the Board of Directors, or the President or a Vice-President and the

Treasurer or an Assistant Treasurer, or the Secretary or Assistant Secretary of

the corporation, certifying the number of shares owned by him in the

corporation.

 

     Section 2. Signatures on Stock Certificates. Where a certificate is

countersigned (i) by a transfer agent other than the corporation or its

employee, or (ii) by a registrar other than the corporation or its employee, the

signatures of the officers of the corporation may be facsimiles. In case any

officer who has signed or whose facsimile signature has been placed upon a

certificate shall have ceased to be such officer before such certificate is

issued, it may be issued by the corporation with the same effect as if he were

such officer at the date of issue.

 

     Section 3. Lost Certificates. The Board of Directors may direct a new

certificate or certificates to be issued in place of any certificate or

certificates theretofore issued by the corporation alleged to have been lost,

stolen or destroyed, upon the making of an affidavit of that fact by the person

claiming the certificate of stock to be lost, stolen or destroyed. When

authorizing such issue of a new certificate or certificates, the Board of

Directors may, in its discretion and as a condition precedent to the issuance

thereof, require the owner of such

 

                                        6

<PAGE>   7

 

lost, stolen or destroyed certificate or certificates, or his legal

representative, to advertise the same in such manner as it shall require and/or

to give the corporation a bond in such sum as it may direct as indemnity against

any claim that may be made against the corporation with respect to the

certificate alleged to have been lost, stolen or destroyed.

 

     Section 4. Transfers of Stock. Upon surrender to the corporation or the

transfer agent of the corporation of a certificate for shares duly endorsed or

accompanied by proper evidence of succession, assignment or authority to

transfer, it shall be the duty of the corporation to issue a new certificate to

the person entitled thereto, cancel the old certificate and record the

transaction upon its books.

 

     Section 5. Fixing Record Date. In order that the corporation may determine

the stockholders entitled to notice of or to vote at any meeting of stockholders

or any adjournment thereof, or to express consent to corporate action in writing

without a meeting, or entitled to receive payment of any dividend or other

distribution or allotment of any rights, or entitled to exercise any rights in

respect of any change, conversion or exchange of stock or for the purpose of any

other lawful action, the Board of Directors may fix, in advance, a record date,

which shall not be more than sixty nor less than ten days before the date of

such meeting, nor more than sixty days prior to any other action. A

determination of stockholders of record entitled to notice of or to vote at a

meeting of stockholders shall apply to any adjournment of the meeting; provided,

however, that the Board of Directors may fix a new record date for the adjourned

meeting.

 

     Section 6. Registered Stockholders. The corporation shall be entitled to

recognize the exclusive right of a person registered on its books as the owner

of shares to receive dividends, and to vote as such owner, and to hold liable

for calls and assessments a person registered on its books as the owner of

shares, and shall not be bound to recognize any equitable or other claim to or

interest in such share or shares on the part of any other person, whether or not

it shall have express or other notice thereof, except as otherwise provided by

the laws of Delaware.

 

                                  ARTICLE VII

 

                               GENERAL PROVISIONS

 

     Section 1. Dividends. Dividends upon the capital stock of the corporation,

subject to the provisions of the Certificate of Incorporation, if any, may be

declared by the Board of Directors at any regular or special meeting, pursuant

to law. Dividends may be paid in cash, in property, or in shares of the capital

stock, subject to the provisions of the Certificate of Incorporation.

 

     Section 2. Payment of Dividends. Before payment of any dividend, there may

be set aside out of any funds of the corporation available for dividends such

sum or sums as the Directors from time to time, in their absolute discretion,

think proper as a reserve or reserves to meet contingencies, or for equalizing

dividends, or for repairing or maintaining any property of the corporation, or

for such other purpose as the Directors shall think conducive to the interest of

the corporation, and the Board of Directors may modify or abolish any such

reserve in the manner in which it was created.

 

     Section 3. Annual Statement. The Board of Directors shall prepare and

furnish to each stockholder prior to each annual meeting an annual report, and

shall present at each annual meeting and at any special meeting of the

stockholders when called for by vote of the stockholders, a full and clear

statement of the business and condition of the corporation.

 

     Section 4. Checks. All checks or demands for money and notes of the

corporation shall be signed by such officer or officers or such other person or

persons as the Board of Directors may from time to time designate.

 

     Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed

by resolution of the Board of Directors.

 

     Section 6. Seal. The corporate seal shall have inscribed thereon the name

of the corporation, the year of its organization and the words "Corporate Seal,

Delaware." The seal may be used by causing it or a facsimile thereof to be

impressed or affixed or reproduced otherwise.

 

                                        7

<PAGE>   8

 

                                  ARTICLE VIII

 

                                   AMENDMENTS

 

     Section 1. Amendment of By-laws. These By-laws may be altered, amended or

repealed or new by-laws may be adopted by the stockholders or by the Board of

Directors at any regular meeting of the stockholders or of the Board of

Directors or at any special meeting of the stockholders or of the Board of

Directors if notice of such alteration, amendment, repeal, or adoption of new

by-laws be contained in the notice of such special meeting.

 

                                   ARTICLE IX

 

                                INDEMNIFICATION

 

     Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than

Those by or in the Right of the Corporation. Subject to Section 3 of this

Article IX, the Corporation shall indemnify any person who was or is a party or

is threatened to be made a party to any threatened, pending or completed action,

suit or proceeding, whether civil, criminal, administrative or investigative

(other than an action by or in the right of the corporation) by reason of the

fact that she or he is or was a director or officer, or is or was serving at the

request of the corporation as a director or officer of another corporation,

partnership, joint venture, trust or other enterprise, against expenses

(including attorneys' fees), judgments, fines and amounts paid in settlement

actually and reasonably incurred by her or him in connection with such action,

suit or proceeding if she or he acted in good faith and in a manner she or he

reasonably believed to be in or not opposed to the best interests of the

corporation, and, with respect to any criminal action or proceeding, had no

reasonable cause to believe her or his conduct was unlawful. The termination of

any action, suit or proceeding by judgment, order, settlement, conviction, or

upon a plea of nolo contendere or its equivalent, shall not, of itself, create a

presumption that the person did not act in good faith and in a manner which she

or he reasonably believed to be in or not opposed to the best interests of the

corporation, and, with respect to any criminal action or proceeding, had

reasonable cause to believe that her or his conduct was unlawful.

 

     Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the

Right of the Corporation. Subject to Section 3 of this Article IX, the

corporation shall indemnify any person who was or is a party or is threatened to

be made a party to any threatened, pending or completed action or suit by or in

the right of the corporation to procure a judgment in its favor by reason of the

fact that she or he is or was a director or officer of the corporation, or is or

was serving at the request of the corporation as a director or officer of

another corporation, partnership, joint venture, trust or other enterprise

against expenses (including attorneys' fees) actually and reasonably incurred by

her or him in connection with the defense or settlement of such action or suit

if she or he acted in good faith and in a manner she or he reasonably believed

to be in or not opposed to the best interests of the corporation; except that no

indemnification shall be made in respect of any claim, issue or matter as to

which such person shall have been adjudged to be liable to the corporation

unless and only to the extent that the Court of Chancery or the court in which

such action or suit was brought shall determine upon application that, despite

the adjudication of liability but in view of all the circumstances of the case,

such person is fairly and reasonably entitled to indemnity for such expenses

which the Court of Chancery or such other court shall deem proper.

 

     Section 3. Authorization of Indemnification. Any indemnification under this

Article IX (unless ordered by a court) shall be made by the corporation only as

authorized in the specific case upon a determination that indemnification of the

director or officer is proper in the circumstances because she or he has met the

applicable standard of conduct set forth in Section 1 or Section 2, of this

Article IX, as the case may be. Such determination shall be made (i) by the

Board of Directors by a majority vote of a quorum consisting of directors who

were not parties to such action, suit or proceeding, or (ii) if such a quorum is

not obtainable, or, even if obtainable a quorum of disinterested directors so

directs, by independent legal counsel in a written opinion, or (iii) by the

stockholders. To the extent, however, that a director or officer of the

corporation has been successful on the merits or otherwise in defense of any

action, suit or proceeding described above, or in defense of any claim, issue or

matter therein, she or he shall be indemnified against expenses (including

 

                                        8

<PAGE>   9

 

attorneys' fees) actually and reasonably incurred by her or him in connection

therewith, without the necessity of authorization in the specific case.

 

     Section 4. Good Faith Defined. For purposes of any determination under

Section 3 of this Article IX, a person shall be deemed to have acted in good

faith and in a manner she or he reasonably believed to be in or not opposed to

the best interests of the corporation, or, with respect to any criminal action

or proceeding, to have had no reasonable cause to believe her or his conduct was

unlawful, if her or his action is based on the records or books of account of

the corporation or another enterprise, or on information supplied to her or him

by the officers of the corporation or another enterprise in the course of their

duties, or on the advice of legal counsel for the corporation or another

enterprise or on information or records given or reports made to the corporation

or another enterprise by an independent certified public accountant or by an

appraiser or other expert selected with reasonable care by the corporation or

another enterprise. The term "another enterprise" as used in this Section 4

shall mean any other corporation or any partnership, joint venture, trust or

other enterprise of which such person is or was serving at the request of the

corporation as a director or officer. The provisions of this Section 4 shall not

be deemed to be exclusive or to limit in any way the circumstances in which a

person may be deemed to have met the applicable standard of conduct set forth in

Section 1 or 2 of this Article IX, as the case may be.

 

     Section 5. Indemnification by a Court. Notwithstanding any contrary

determination in the specific case under Section 3 of this Article IX, and

notwithstanding the absence of any determination thereunder, any director or

officer may apply to any court of competent jurisdiction in the State of

Delaware for indemnification to the extent otherwise permissible under Sections

1 and 2 of this Article IX. The basis of such indemnification by a court shall

be a determination by such court that indemnification of the director or officer

is proper in the circumstances because she or he has met the applicable

standards of conduct set forth in Sections 1 and 2 of this Article IX, as the

case may be. Notice of any application for indemnification pursuant to this

Section 5 shall be given to the corporation promptly upon the filing of such

application.

 

     Section 6. Expenses Payable in Advance. Expenses incurred in defending or

investigating a threatened or pending action, suit or proceeding may be paid by

the corporation in advance of the final disposition of such action, suit or

proceeding upon receipt of an undertaking by or on behalf of the director or

officer to repay such amount if it shall ultimately be determined that she or he

is not entitled to be indemnified by the corporation as authorized in this

Article IX.

 

     Section 7. Non-exclusivity of Indemnification and Advancement of

Expenses. The indemnification and advancement of expenses provided by or granted

pursuant to this Article IX shall not be deemed exclusive of any other rights to

which those seeking indemnification or advancement of expenses may be entitled

under any by-law, agreement, contract, vote of stockholders or disinterested

directors or pursuant to the direction (howsoever embodied) of any court of

competent jurisdiction or otherwise, both as to action in her or his official

capacity and as to action in another capacity while holding such office, it

being the policy of the corporation that indemnification of the persons

specified in Sections 1 and 2 of this Article IX shall be made to the fullest

extent permitted by law. The provisions of this Article IX shall not be deemed

to preclude the indemnification of any person who is not specified in Sections 1

or 2 of this Article IX but whom the corporation has the power of obligation to

indemnify under the provisions of the General Corporation Law of the State of

Delaware, or otherwise.

 

     Section 8. Insurance. The corporation may purchase and maintain insurance

on behalf of any person who is or was a director or officer of the corporation,

or is or was serving at the request of the corporation as a director or officer

of another corporation, partnership, joint venture, trust or other enterprise

against any liability asserted against her or him and incurred by her or him in

any such capacity, or arising out of her or his status as such, whether or not

the corporation would have the power or the obligation to indemnify her or him

against such liability under the provisions of this Article IX.

 

     Section 9. Meaning of "Corporation" for Purposes of Article IX. For

purposes of this Article IX, references to "the corporation" shall include, in

addition to the resulting corporation, any constituent corporation (including

any constituent of a constituent) absorbed in a consolidation or merger which,

if its separate existence had continued, would have had power and authority to

indemnify its directors or officers so

 

                                        9

<PAGE>   10

 

that any person who is or was a director or officer of such constituent

corporation, or is or was serving at the request of such constituent corporation

as a director or officer of another corporation, partnership, joint venture,

trust or other enterprise, shall stand in the same position under the provisions

of this Article IX with respect to the resulting or surviving corporation as she

or he would have with respect to such constituent corporation if its separate

existence had continued.

 

     Section 10. Survival of Indemnification and Advancement of Expenses. The

indemnification and advancement of expenses provided by, or granted pursuant to,

this section shall, unless otherwise provided when authorized or ratified,

continue as to a person who has ceased to be a director or officer shall inure

to the benefit of the heirs, executors and administrators of such a person.

 

                                       10

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-10.17.(B)

<SEQUENCE>4

<DESCRIPTION>AMENDED & RESTATED AGREEMENT

<TEXT>

 

<PAGE>   1

 

                                                                EXHIBIT 10.17(B)

 

                               AMENDED & RESTATED

                                   AGREEMENT

 

     Rod F. Dammeyer ("Executive") and Anixter International Inc. ("Company")

hereby agree as follows:

 

     1. Company will employ Executive and Executive will be employed by Company

as an executive officer of Company and such of its subsidiaries as the Company

shall designate from time to time. Designation of a subsidiary of the Company as

an employer of Executive ("Designated Employer") shall not be affected by

whether that employer continues to be a subsidiary of the Company. Executive

shall be free to engage in other business activities as long as such activities

do not interfere with Executive's performance of his responsibilities under this

Agreement.

 

     2. The term of employment under this Agreement shall begin on January 1,

1995 and shall end on the earlier of (a) the date specified in a written notice

by one party to the other, which date must be at least 2 years after the date

such notice is given, or (b) December 31, 2000.

 

     3. Minimum compensation of Executive shall be as follows:

 

       - Annual salary of $395,000 for 1995 and $325,000 thereafter.

 

       - Annual bonus opportunity of 50% to 112.5% of salary with a target of

         75% of salary.

 

       - Such long-term incentive opportunities as the Compensation Committee of

         the Board of Directors in its good faith judgment shall determine from

         time to time to be appropriate.

 

       - Medical, life insurance, disability, and financial planning benefits

         equal to those currently provided by the Company or its subsidiary,

         Anixter Inc., as those benefits may be modified from time to time,

         provided that Executive's salary shall be deemed to be $625,000 per

         year for purposes of determining the level of his life insurance and

         disability benefits.

 

       - A retirement benefit under the Company's Supplemental Executive

         Retirement Plan provided that Executive's Final Average Compensation

         shall be deemed to be $1,100,000 for purposes of determining the level

         of his benefits under that plan.

 

     4. Offset against the compensation otherwise payable to Executive by the

Company shall be the compensation payable to the Executive by any Designated

Employer.

 

     5. Upon completion of his employment pursuant to this Agreement and the

concurrent or subsequent termination, by resignation or otherwise, of his

employment by the Company, but not otherwise not withstanding the provisions of

the Agreement between the parties, dated January 1, 1992, Executive (a) except

in the case of any option which expressly states it is not subject to this

Agreement, shall be fully vested in all options granted to him by the Company,

shall be protected by adjustment of exercise prices and number of covered shares

against dilution by any extraordinary cash dividends or other actions as

provided in the warrants previously granted directors of the Company, and shall

have until the earlier of the specific expiration date stated in each option