Document and Entity Information

3 Months Ended

Apr. 4, 2014

Apr. 22, 2014

Entity Information [Line Items]

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Apr. 04, 2014

Document Fiscal Year Focus

2014

Document Fiscal Period Focus

Q1

Trading Symbol

AXE

Entity Registrant Name

ANIXTER INTERNATIONAL INC

Entity Central Index Key

0000052795

Current Fiscal Year End Date

--01-02

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

32,667,812

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Net sales

$ 1,523.8

$ 1,490.9

Cost of goods sold

1,170.2

1,152.7

Gross profit

353.6

338.2

Operating expenses

267.9

257.2

Operating income

85.7

81.0

Other expense:

Interest expense

(11.2)

(13.6)

Other, net

(10.3)

(2.0)

Income before income taxes

64.2

65.4

Income tax expense

16.8

22.9

Net income

47.4

42.5

Income per share:

Basic

$ 1.44

$ 1.30

Diluted

$ 1.43

$ 1.27

Basic weighted-average common shares outstanding

32.9

32.6

Effect of dilutive securities:

Stock options and units

0.4

0.3

Convertible notes due 2013 (shares)

0

0.6

Diluted weighted-average common shares outstanding

33.3

33.5

Foreign currency translation

(6.4)

(8.1)

Changes in unrealized pension cost, net of tax

(0.2)

(0.1)

Other comprehensive loss

(6.6)

(8.2)

Comprehensive income

$ 40.8

$ 34.3

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)

In Millions, unless otherwise specified

Apr. 4, 2014

Jan. 3, 2014

Current assets:

Cash and cash equivalents

$ 89.8

$ 57.3

Accounts receivable (Includes $487.0 and $524.2 at April 4, 2014 and January 3, 2014, respectively, associated with securitization facility)

1,207.5

1,182.8

Inventories

951.5

959.8

Deferred income taxes

33.0

32.8

Other current assets

44.8

43.0

Total current assets

2,326.6

2,275.7

Property and equipment, at cost

327.6

328.0

Accumulated depreciation

(220.3)

(224.0)

Net property and equipment

107.3

104.0

Goodwill

343.3

342.1

Other assets

142.5

139.0

Total assets

2,919.7

2,860.8

Current liabilities:

Accounts payable

697.6

691.9

Accrued expenses

181.9

210.5

Total current liabilities

879.5

902.4

Long-term debt (Includes $225.0 and $145.0 at April 4, 2014 and January 3, 2014, respectively, associated with securitization facility)

869.6

836.0

Other liabilities

98.1

95.0

Total liabilities

1,847.2

1,833.4

Stockholders’ equity:

Common stock - $1.00 par value, 100,000,000 shares authorized, 32,972,642 and 32,853,702 shares issued and outstanding at April 4, 2014 and January 3, 2014, respectively

33.0

32.9

Capital surplus

220.4

216.3

Retained earnings

852.3

804.8

Accumulated other comprehensive income (loss):

Foreign currency translation

(6.0)

0.4

Unrecognized pension liability, net

(27.4)

(27.2)

Unrealized gain on derivatives, net

0.2

Total accumulated other comprehensive loss

(33.2)

(26.6)

Total stockholders’ equity

1,072.5

1,027.4

Total liabilities and stockholders’ equity

$ 2,919.7

$ 2,860.8

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)

In Millions, except Share data, unless otherwise specified

Apr. 4, 2014

Jan. 3, 2014

Accounts receivable

$ 487.0

$ 524.2

Long-term debt

869.6

836.0

Common stock, par value

$ 1.00

Common stock, shares authorized

100,000,000

Common stock, shares issued

32,972,642

32,853,702

Common stock, shares outstanding

32,972,642

32,853,702

Accounts receivable securitization facility [Member]

Long-term debt

$ 225.0

$ 145.0

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Operating activities:

Net income

$ 47.4

$ 42.5

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

5.6

Stock-based compensation

3.3

Amortization of intangible assets

2.0

1.9

Deferred income taxes

(3.8)

0.3

Amortization of deferred financing costs

0.6

0.7

Accretion of debt discount

0.1

2.4

Excess income tax benefit from employee stock plans

(2.7)

(1.2)

Changes in current assets and liabilities, net

(41.1)

(4.6)

Other, net

(3.4)

0.3

Net cash provided by operating activities

8.0

51.2

Investing activities:

Capital expenditures, net

(9.0)

(9.1)

Net cash used in investing activities

(9.0)

(9.1)

Financing activities:

Proceeds from borrowings

330.4

774.0

Repayment of borrowings

(263.6)

(554.4)

Retirement of Notes due 2014

(32.3)

0

Excess income tax benefit from employee stock plans

2.7

1.2

Proceeds from stock options exercised

0.5

5.8

Retirement of Notes due 2013

0

(300.0)

Other

(1.7)

(1.3)

Net cash provided by (used in) financing activities

36.0

(74.7)

Increase (decrease) in cash and cash equivalents

35.0

(32.6)

Effect of Exchange Rate on Cash and Cash Equivalents

(2.5)

1.9

Cash and cash equivalents at beginning of period

57.3

89.4

Cash and cash equivalents at end of period

$ 89.8

$ 58.7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation: Anixter International Inc. and its subsidiaries (collectively referred to as “Anixter” or the “Company”) are sometimes referred to in this Quarterly Report on Form 10-Q as “we”, “our”, “us”, or “ourselves.” The condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals), which are, in the opinion of management, necessary for a fair presentation of the Condensed Consolidated Financial Statements for the periods shown. Certain prior period amounts have been reclassified to conform to the current year presentation. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

Recently issued and adopted accounting pronouncements: In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, updating guidance to limit the scope of the balance sheet offsetting disclosures to derivatives, repurchase agreements and securities lending transactions to the extent they are offset in the financial statements or subject to an enforceable master netting arrangement or similar arrangement. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.

While our derivatives are all subject to master netting arrangements, we present our assets and liabilities related to derivative instruments on a gross basis within the Condensed Consolidated Balance Sheets. The gross amount of our derivative assets and liabilities are immaterial.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures.

Foreign currency translation: Our investments in several subsidiaries are recorded in currencies other than the U.S. dollar. As these foreign currency denominated investments are translated at the end of each period during consolidation using period-end exchange rates, fluctuations of exchange rates between the foreign currency and the U.S. dollar increase or decrease the value of those investments. These fluctuations and the results of operations for foreign subsidiaries, where the functional currency is not the U.S. dollar, are translated into U.S. dollars using the average exchange rates during the periods reported, while the assets and liabilities are translated using period-end exchange rates. The assets and liabilities-related translation adjustments are recorded as a separate component of Stockholders’ Equity, “Foreign currency translation,” which is a component of accumulated other comprehensive income (loss) ("AOCI"). In addition, as our subsidiaries maintain investments denominated in currencies other than local currencies, exchange rate fluctuations will occur. Borrowings are raised in certain foreign currencies to minimize the exchange rate translation adjustment risk.

We also accumulate items in AOCI for prior service costs and actuarial gains/losses related to our defined benefit obligations and certain immaterial derivative transactions that have been designated as cash flow hedges. See Note 4. "Pension Plans" for pension related amounts reclassified into net income.

Foreign currency transactions: The increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that is included in “Other, net” in the Condensed Consolidated Statements of Comprehensive Income. In the first quarter of 2014 and 2013, we recorded foreign exchange losses of $10.1 million and $1.8 million, respectively. In the first quarter of 2014, the Venezuelan government changed its policy regarding the bolivar, which we believe will now require us to use the Complementary System for the Administration of Foreign Currency ("SICAD") rate of 49.0 bolivars to one U.S. Dollar ("USD") to repatriate cash from Venezuela. In the first quarter of 2014, the Argentina peso was also devalued from 6.5 pesos to one USD to approximately 8.0 pesos to one USD after the central bank scaled back its intervention in a bid to preserve USD cash reserves. As a result of these devaluations, we recorded foreign exchange losses in these two countries of $8.0 million in the first quarter of 2014.

We purchase foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on our reported income. The foreign currency forward contracts are not designated as hedges for accounting purposes. Our strategy is to negotiate terms for our derivatives and other financial instruments to be highly effective, such that the change in the value of the derivative perfectly offsets the impact of the underlying hedged item (e.g., various foreign currency-denominated accounts). Our counterparties to foreign currency forward contracts have investment-grade credit ratings. We expect the creditworthiness of our counterparties to remain intact through the term of the transactions. We regularly monitor the creditworthiness of our counterparties to ensure no issues exist which could affect the value of the derivatives.

We do not hedge 100% of our foreign currency-denominated accounts. In addition, the results of hedging can vary significantly based on various factors, such as the timing of executing the foreign currency forward contracts versus the movement of the currencies as well as the fluctuations in the account balances throughout each reporting period. The fair value of the foreign currency forward contracts is based on the difference between the contract rate and the current exchange rate. The fair value of the foreign currency forward contracts is measured using observable market information. These inputs would be considered Level 2 in the fair value hierarchy. At April 4, 2014 and January 3, 2014, foreign currency forward contracts were revalued at then-current foreign exchange rates with the changes in valuation reflected directly in “Other, net” in the Condensed Consolidated Statements of Comprehensive Income offsetting the transaction gain/loss recorded on the foreign currency-denominated accounts. At April 4, 2014 and January 3, 2014, the gross notional amount of foreign currency forward contracts outstanding was approximately $212.6 million and 217.4 million, respectively. All of our foreign currency forward contracts are subject to master netting arrangements with our counterparties. As a result, at April 4, 2014 and January 3, 2014, the net notional amount of the foreign currency forward contracts outstanding was approximately $150.3 million and $152.0 million, respectively.

INCOME TAXES

The income tax provision for the first quarter of 2014 was $16.8 million compared to $22.9 million in the corresponding period of last year. During the first quarter of 2014, we recorded a tax benefit of $4.9 million primarily related to the reversal of deferred income tax valuation allowances in Europe. Our effective tax rate for the first quarter of 2014 was 26.1% as compared to 35.0% in the prior year period. Our effective tax rate was different from the statutory rate primarily due to the reversal of the income tax valuation allowance in Europe and changes in the tax rate related to country mix of income.

DEBT

Debt is summarized below:



	April 4, 2014		January 3, 2014
(In millions)
Long-term debt:
Senior notes due 2019	$	350.0	$	350.0
Accounts receivable securitization facility	225.0		145.0
Senior notes due 2015	200.0		200.0
Revolving lines of credit	90.0		101.5
Senior notes due 2014	—		32.1
Other	4.6		7.4
Total long-term debt	$	869.6	$	836.0

At April 4, 2014, our total carrying value and estimated fair value of debt outstanding was $869.6 million and $906.3 million, respectively. This compares to a carrying value and estimated fair value at January 3, 2014 of $836.0 million and $867.9 million, respectively. The estimated fair value of our debt instruments is measured using observable market information which would be considered Level 2 inputs as described in the fair value accounting guidance on fair value measurements. Our weighted-average cost of borrowings was 4.8% and 5.8% for the three months ended April 4, 2014 and March 29, 2013, respectively.

In the first quarter of 2014, we retired our Senior notes due 2014 upon maturity for $32.3 million. Available borrowings under existing long-term financing agreements were used to settle the maturity value.

In the first quarter of 2013, our Senior notes due 2013 matured and, pursuant to the terms of the indenture, we settled our conversion obligations up to the $300 million principal amount of the notes in cash. Available borrowings under long-term credit facilities were used to retire the Senior notes due 2013.

Under our accounts receivable securitization program, we sell, on an ongoing basis without recourse, a portion of our accounts receivables originating in the United States to Anixter Receivables Corporation (“ARC”), which is considered a wholly-owned, bankruptcy-remote variable interest entity (“VIE”). We have the authority to direct the activities of the VIE and, as a result, we have concluded that we maintain control of the VIE, are the primary beneficiary (as defined by accounting guidance) and, therefore, consolidate the account balances of ARC. As of April 4, 2014 and January 3, 2014, $487.0 million and $524.2 million of our receivables were sold to ARC, respectively. ARC in turn assigns a collateral interest in these receivables to a financial institution for proceeds up to $300 million. The assets of ARC are not available to us until all obligations of ARC are satisfied in the event of bankruptcy or insolvency proceedings.

PENSION PLANS

We have various defined benefit and defined contribution pension plans. Our defined benefit pension plans are the plans in the United States, which consist of the Anixter Inc. Pension Plan, the Executive Benefit Plan and the Supplemental Executive Retirement Plan (“SERP”) (together the “Domestic Plans”) and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together the “Foreign Plans”). The majority of our defined benefit pension plans are non-contributory and cover substantially all full-time domestic employees and certain employees in other countries. Retirement benefits are provided based on compensation as defined in both the Domestic Plans and the Foreign Plans. Our policy is to fund all Domestic Plans as required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Service (“IRS”) and all Foreign Plans as required by applicable foreign laws. The Executive Benefit Plan and SERP are the only two plans that are unfunded. Assets in the various plans consist primarily of equity securities and fixed income investments.

In the fourth quarter of 2012, we took two actions related to the Anixter Inc. Pension Plan in the United States that reduced expenses and funding requirements. We offered a one-time lump sum payment option to terminated vested participants and we made changes to our existing U.S. defined benefit plan, as of December 31, 2013, that froze benefits provided to employees hired on or before June 1, 2004. As part of the transition to the new pension plan, we provided a one-time transition credit equal to five percent of pay for employees at least 50 years old as of December 31, 2013 and whose combined age and years of service equals 70 or more. The amount of the transition credit for employees eligible was credited in the first quarter of 2014 to the employee’s individual 401(k) account or deferred compensation account. Accordingly, in the fourth quarter of 2013, we recorded a $2.5 million defined contribution charge related to this funding.

Components of net periodic pension cost are as follows (in millions):



	Three Months Ended
	Domestic						Foreign						Total
	April 4, 2014			March 29, 2013			April 4, 2014			March 29, 2013			April 4, 2014			March 29, 2013
Service cost	$	1.2		$	2.2		$	1.5		$	1.7		$	2.7		$	3.9
Interest cost	2.6			2.4			2.7			2.3			5.3			4.7
Expected return on plan assets	(3.5		)	(3.0		)	(3.2		)	(2.6		)	(6.7		)	(5.6		)
Net amortization ^(a)	(0.6		)	0.8			0.3			0.4			(0.3		)	1.2
Net periodic (benefit) cost	$	(0.3	)	$	2.4		$	1.3		$	1.8		$	1.0		$	4.2

(a) Reclassified into operating expenses from AOCI.

SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.

We guarantee, fully and unconditionally, substantially all of the debt of our subsidiaries, which include Anixter Inc., our primary operating subsidiary. We have no independent assets or operations and all subsidiaries other than consolidated Anixter Inc. are minor. The following summarizes the financial information for Anixter Inc.:

ANIXTER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



	April 4, 2014		January 3, 2014
(In millions)
Assets:
Current assets	$	2,324.9	$	2,275.1
Property, equipment and capital leases, net	118.6		115.6
Goodwill	343.3		342.1
Other assets	142.5		139.1
	$	2,929.3	$	2,871.9
Liabilities and Stockholder’s Equity:
Current liabilities	$	876.9	$	898.9
Subordinated notes payable to parent	—		1.0
Long-term debt	884.6		851.3
Other liabilities	95.4		93.0
Stockholder’s equity	1,072.4		1,027.7
	$	2,929.3	$	2,871.9

ANIXTER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended
	April 4, 2014		March 29, 2013
(In millions)
Net sales	$	1,523.8	$	1,490.9
Operating income	$	87.1	$	82.4
Income before income taxes	$	65.3	$	69.1
Net income	$	48.2	$	44.9
Comprehensive income	$	41.6	$	36.7

STOCKHOLDERS' EQUITY

At the end of the first quarter of 2014, there were approximately 1.9 million shares reserved for issuance under various incentive plans. Under these plans, we pay non-employee directors annual retainer fees and, at their election, meeting fees in the form of stock units. Employee and director stock units are included in common stock outstanding on the date of vesting, and stock options are included in common stock outstanding upon exercise by the participant. The fair value of employee stock options and units is amortized over the respective vesting period representing the requisite service period, generally three to four years for stock units and four years for stock options. Director stock units are expensed in the period in which they are granted, as these vest immediately.

During the first quarter of 2014, we granted 124,998 stock units to employees with a weighted-average grant-date fair value of $13.4 million. During the three months ended April 4, 2014, we granted directors 4,913 stock units, with a weighted-average grant-date fair value of $0.5 million. We exclude antidilutive stock options and units from the calculation of weighted-average shares for diluted earnings per share. For the first quarter of 2014 and 2013, the antidilutive stock options and units were immaterial.

LEGAL CONTINGENCIES

From time to time, we are party to legal proceedings and matters that arise in the ordinary course of business. As of April 4, 2014, we do not believe there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.

BUSINESS SEGMENTS

We are a leading distributor of enterprise cabling and security solutions, electrical and electronic wire and cable products, and OEM Supply fasteners and other small parts (“C” Class inventory components). We have identified Enterprise Cabling and Security Solutions (“ECS”), Electrical and Electronic Wire and Cable (“W&C”) and OEM Supply - Fasteners ("Fasteners") as reportable segments. We incur corporate expenses to obtain and coordinate financing, tax, information technology, legal and other related services, certain of which are rebilled to subsidiaries. These corporate expenses are allocated to the segments based primarily on projected sales and estimated use of time. Also, we have various corporate assets which are not allocated to the segments. Segment assets may not include jointly used assets or unallocated assets, but segment results include depreciation expense or other allocations related to those assets as such allocation is made for internal reporting. Interest expense and other non-operating items are not allocated to the segments or reviewed on a segment basis. Intercompany transactions are not significant.

Segment Financial Information

Segment information for the three months ended April 4, 2014 and March 29, 2013 are as follows (in millions):



First Quarter of 2014	ECS		W&C		Fasteners		Total
Net sales	$	760.1	$	514.2	$	249.5	$	1,523.8
Operating income	36.0		36.9		12.8		85.7



First Quarter of 2013	ECS		W&C		Fasteners		Total
Net sales	$	745.1	$	517.8	$	228.0	$	1,490.9
Operating income	34.8		41.3		4.9		81.0

Goodwill Assigned to Segments

The following table presents the changes in goodwill allocated to our reportable segments during the three months ended April 4, 2014 (in millions):



	Reportable Segments
	ECS		W&C			Fasteners		Total
Balance at January 3, 2014	$	162.5	$	179.6		$	—	$	342.1
Acquisition related (a)	—		1.4			—		1.4
Foreign currency translation	0.2		(0.4		)	—		(0.2		)
Balance at April 4, 2014	$	162.7	$	180.6		$	—	$	343.3


(a)	In the first quarter of 2014, we recorded an immaterial reclassification between goodwill and deferred tax liability related to the purchase price allocation for the acquisition of Jorvex, S.A.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

Basis of presentation

Basis of presentation: Anixter International Inc. and its subsidiaries (collectively referred to as “Anixter” or the “Company”) are sometimes referred to in this Quarterly Report on Form 10-Q as “we”, “our”, “us”, or “ourselves.” The condensed consolidated financial information furnished herein reflects all adjustments (consisting of normal recurring accruals), which are, in the opinion of management, necessary for a fair presentation of the Condensed Consolidated Financial Statements for the periods shown. Certain prior period amounts have been reclassified to conform to the current year presentation. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

Recently issued and adopted accounting pronouncements

Recently issued and adopted accounting pronouncements: In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, updating guidance to limit the scope of the balance sheet offsetting disclosures to derivatives, repurchase agreements and securities lending transactions to the extent they are offset in the financial statements or subject to an enforceable master netting arrangement or similar arrangement. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.

While our derivatives are all subject to master netting arrangements, we present our assets and liabilities related to derivative instruments on a gross basis within the Condensed Consolidated Balance Sheets. The gross amount of our derivative assets and liabilities are immaterial.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures.

Foreign Currency Translation

Foreign currency translation: Our investments in several subsidiaries are recorded in currencies other than the U.S. dollar. As these foreign currency denominated investments are translated at the end of each period during consolidation using period-end exchange rates, fluctuations of exchange rates between the foreign currency and the U.S. dollar increase or decrease the value of those investments. These fluctuations and the results of operations for foreign subsidiaries, where the functional currency is not the U.S. dollar, are translated into U.S. dollars using the average exchange rates during the periods reported, while the assets and liabilities are translated using period-end exchange rates. The assets and liabilities-related translation adjustments are recorded as a separate component of Stockholders’ Equity, “Foreign currency translation,” which is a component of accumulated other comprehensive income (loss) ("AOCI"). In addition, as our subsidiaries maintain investments denominated in currencies other than local currencies, exchange rate fluctuations will occur. Borrowings are raised in certain foreign currencies to minimize the exchange rate translation adjustment risk.

We also accumulate items in AOCI for prior service costs and actuarial gains/losses related to our defined benefit obligations and certain immaterial derivative transactions that have been designated as cash flow hedges. See Note 4. "Pension Plans" for pension related amounts reclassified into net income.

Foreign currency transaction

Foreign currency transactions: The increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that is included in “Other, net” in the Condensed Consolidated Statements of Comprehensive Income. In the first quarter of 2014 and 2013, we recorded foreign exchange losses of $10.1 million and $1.8 million, respectively. In the first quarter of 2014, the Venezuelan government changed its policy regarding the bolivar, which we believe will now require us to use the Complementary System for the Administration of Foreign Currency ("SICAD") rate of 49.0 bolivars to one U.S. Dollar ("USD") to repatriate cash from Venezuela. In the first quarter of 2014, the Argentina peso was also devalued from 6.5 pesos to one USD to approximately 8.0 pesos to one USD after the central bank scaled back its intervention in a bid to preserve USD cash reserves. As a result of these devaluations, we recorded foreign exchange losses in these two countries of $8.0 million in the first quarter of 2014.

We purchase foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on our reported income. The foreign currency forward contracts are not designated as hedges for accounting purposes. Our strategy is to negotiate terms for our derivatives and other financial instruments to be highly effective, such that the change in the value of the derivative perfectly offsets the impact of the underlying hedged item (e.g., various foreign currency-denominated accounts). Our counterparties to foreign currency forward contracts have investment-grade credit ratings. We expect the creditworthiness of our counterparties to remain intact through the term of the transactions. We regularly monitor the creditworthiness of our counterparties to ensure no issues exist which could affect the value of the derivatives.

We do not hedge 100% of our foreign currency-denominated accounts. In addition, the results of hedging can vary significantly based on various factors, such as the timing of executing the foreign currency forward contracts versus the movement of the currencies as well as the fluctuations in the account balances throughout each reporting period. The fair value of the foreign currency forward contracts is based on the difference between the contract rate and the current exchange rate. The fair value of the foreign currency forward contracts is measured using observable market information. These inputs would be considered Level 2 in the fair value hierarchy. At April 4, 2014 and January 3, 2014, foreign currency forward contracts were revalued at then-current foreign exchange rates with the changes in valuation reflected directly in “Other, net” in the Condensed Consolidated Statements of Comprehensive Income offsetting the transaction gain/loss recorded on the foreign currency-denominated accounts. At April 4, 2014 and January 3, 2014, the gross notional amount of foreign currency forward contracts outstanding was approximately $212.6 million and 217.4 million, respectively. All of our foreign currency forward contracts are subject to master netting arrangements with our counterparties. As a result, at April 4, 2014 and January 3, 2014, the net notional amount of the foreign currency forward contracts outstanding was approximately $150.3 million and $152.0 million, respectively.

DEBT (Tables)

Debt

Debt is summarized below:



	April 4, 2014		January 3, 2014
(In millions)
Long-term debt:
Senior notes due 2019	$	350.0	$	350.0
Accounts receivable securitization facility	225.0		145.0
Senior notes due 2015	200.0		200.0
Revolving lines of credit	90.0		101.5
Senior notes due 2014	—		32.1
Other	4.6		7.4
Total long-term debt	$	869.6	$	836.0

PENSION PLANS (Tables)

Components of Net Periodic Cost

Components of net periodic pension cost are as follows (in millions):



	Three Months Ended
	Domestic						Foreign						Total
	April 4, 2014			March 29, 2013			April 4, 2014			March 29, 2013			April 4, 2014			March 29, 2013
Service cost	$	1.2		$	2.2		$	1.5		$	1.7		$	2.7		$	3.9
Interest cost	2.6			2.4			2.7			2.3			5.3			4.7
Expected return on plan assets	(3.5		)	(3.0		)	(3.2		)	(2.6		)	(6.7		)	(5.6		)
Net amortization ^(a)	(0.6		)	0.8			0.3			0.4			(0.3		)	1.2
Net periodic (benefit) cost	$	(0.3	)	$	2.4		$	1.3		$	1.8		$	1.0		$	4.2

(a) Reclassified into operating expenses from AOCI.

SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. (Tables)

CONDENSED CONSOLIDATED BALANCE SHEETS

ANIXTER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



	April 4, 2014		January 3, 2014
(In millions)
Assets:
Current assets	$	2,324.9	$	2,275.1
Property, equipment and capital leases, net	118.6		115.6
Goodwill	343.3		342.1
Other assets	142.5		139.1
	$	2,929.3	$	2,871.9
Liabilities and Stockholder’s Equity:
Current liabilities	$	876.9	$	898.9
Subordinated notes payable to parent	—		1.0
Long-term debt	884.6		851.3
Other liabilities	95.4		93.0
Stockholder’s equity	1,072.4		1,027.7
	$	2,929.3	$	2,871.9

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

ANIXTER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended
	April 4, 2014		March 29, 2013
(In millions)
Net sales	$	1,523.8	$	1,490.9
Operating income	$	87.1	$	82.4
Income before income taxes	$	65.3	$	69.1
Net income	$	48.2	$	44.9
Comprehensive income	$	41.6	$	36.7

BUSINESS SEGMENTS (Tables)

Segment Information

Segment information for the three months ended April 4, 2014 and March 29, 2013 are as follows (in millions):



First Quarter of 2014	ECS		W&C		Fasteners		Total
Net sales	$	760.1	$	514.2	$	249.5	$	1,523.8
Operating income	36.0		36.9		12.8		85.7



First Quarter of 2013	ECS		W&C		Fasteners		Total
Net sales	$	745.1	$	517.8	$	228.0	$	1,490.9
Operating income	34.8		41.3		4.9		81.0

Changes in Goodwill

The following table presents the changes in goodwill allocated to our reportable segments during the three months ended April 4, 2014 (in millions):



	Reportable Segments
	ECS		W&C			Fasteners		Total
Balance at January 3, 2014	$	162.5	$	179.6		$	—	$	342.1
Acquisition related (a)	—		1.4			—		1.4
Foreign currency translation	0.2		(0.4		)	—		(0.2		)
Balance at April 4, 2014	$	162.7	$	180.6		$	—	$	343.3


(a)	In the first quarter of 2014, we recorded an immaterial reclassification between goodwill and deferred tax liability related to the purchase price allocation for the acquisition of Jorvex, S.A.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Apr. 4, 2014

Net [Member]

Jan. 3, 2014

Net [Member]

Apr. 4, 2014

gross [Member]

Jan. 3, 2014

gross [Member]

Apr. 4, 2014

Venezuela bolivar [Member]

Apr. 4, 2014

Argentina Peso [Member]

Jan. 3, 2014

Argentina Peso [Member]

Summary Of Significant Accounting Policies [Line Items]

Foreign Currency Transaction Loss, before Tax

$ 10.1

$ 1.8

Foreign currency exchange rate

49.0

8.0

6.5

Foreign exchange losses due to devaluation

8.0

Rate of foreign currency denominated accounts not hedged

100.00%

Derivative, Notional Amount

$ 150.3

$ 152.0

$ 212.6

$ 217.4

INCOME TAXES - Additional information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Income Tax Disclosure [Abstract]

Income tax provision

$ 16.8

$ 22.9

Income Loss From Continuing Operations Tax Benefit Related To Reversal Of Valuation Allowance

$ 4.9

Effective income tax rate

26.10%

35.00%

DEBT- Debt (Detail) (USD $)

In Millions, unless otherwise specified

Apr. 4, 2014

Jan. 3, 2014

Debt Instrument [Line Items]

Total long-term debt

$ 869.6

$ 836.0

Total debt

869.6

836.0

Senior notes due 2019 [Member]

Debt Instrument [Line Items]

Total long-term debt

350.0

Accounts receivable securitization facility [Member]

Debt Instrument [Line Items]

Total long-term debt

225.0

145.0

Senior notes due 2015 [Member]

Debt Instrument [Line Items]

Total long-term debt

200.0

Revolving Credit Facility [Member]

Debt Instrument [Line Items]

Total long-term debt

90.0

101.5

Senior notes due 2014 [Member]

Debt Instrument [Line Items]

Total long-term debt

0

32.1

Other debt [Member]

Debt Instrument [Line Items]

Total long-term debt

$ 4.6

$ 7.4

DEBT - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Jan. 3, 2014

Debt Instrument [Line Items]

Long-term debt, carrying value

$ 869.6

$ 836.0

Long-term debt, fair value

906.3

867.9

Weighted average cost of borrowings

4.80%

5.80%

Retirement of Notes due 2014

32.3

0

Retirement of Notes due 2013

0

300.0

Receivables Sold

487.0

524.2

Maximum [Member]

Debt Instrument [Line Items]

Line of credit facility maximum borrowing capacity

$ 300

PENSION PLANS - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Jan. 3, 2014

Compensation and Retirement Disclosure [Abstract]

General discussion of pension and other postretirement benefits

We have various defined benefit and defined contribution pension plans. Our defined benefit pension plans are the plans in the United States, which consist of the Anixter Inc. Pension Plan, the Executive Benefit Plan and the Supplemental Executive Retirement Plan (“SERP”) (together the “Domestic Plans”) and various defined benefit pension plans covering employees of foreign subsidiaries in Canada and Europe (together the “Foreign Plans”). The majority of our defined benefit pension plans are non-contributory and cover substantially all full-time domestic employees and certain employees in other countries. Retirement benefits are provided based on compensation as defined in both the Domestic Plans and the Foreign Plans. Our policy is to fund all Domestic Plans as required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Service (“IRS”) and all Foreign Plans as required by applicable foreign laws. The Executive Benefit Plan and SERP are the only two plans that are unfunded. Assets in the various plans consist primarily of equity securities and fixed income investments.In the fourth quarter of 2012, we took two actions related to the Anixter Inc. Pension Plan in the United States that reduced expenses and funding requirements. We offered a one-time lump sum payment option to terminated vested participants and we made changes to our existing U.S. defined benefit plan, as of December 31, 2013, that froze benefits provided to employees hired on or before June 1, 2004. As part of the transition to the new pension plan, we provided a one-time transition credit equal to five percent of pay for employees at least 50 years old as of December 31, 2013 and whose combined age and years of service equals 70 or more. The amount of the transition credit for employees eligible was credited in the first quarter of 2014 to the employee’s individual 401(k) account or deferred compensation account. Accordingly, in the fourth quarter of 2013, we recorded a $2.5 million defined contribution charge related to this funding.

Percentofpayofonetimetransitioncredit

5.00%

Agerequiredtoreceivedtransitioncredit

50 years

Combinedageandyearsofservicerequiredtoreceivetransitioncredit

70 years

Defined Contribution Plan, Employer Discretionary Contribution Amount

$ 2.5

PENSION PLANS - Components of Net Periodic Cost (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Defined Benefit Plan Disclosure [Line Items]

Service cost

$ 2.7

$ 3.9

Interest cost

5.3

4.7

Expected return on plan assets

(6.7)

(5.6)

Net amortization

(0.3)¹

1.2 ¹

Net periodic cost

1.0

4.2

Pension Plans, Domestic [Member]

Defined Benefit Plan Disclosure [Line Items]

Service cost

1.2

2.2

Interest cost

2.6

2.4

Expected return on plan assets

(3.5)

(3.0)

Net amortization

(0.6)¹

0.8 ¹

Net periodic cost

(0.3)

2.4

Pension Plans, Foreign [Member]

Defined Benefit Plan Disclosure [Line Items]

Service cost

1.5

1.7

Interest cost

2.7

2.3

Expected return on plan assets

(3.2)

(2.6)

Net amortization

0.3 ¹

0.4 ¹

Net periodic cost

$ 1.3

$ 1.8

[1] (a) Reclassified into operating expenses from AOCI.

SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. - Additional Information (Detail)

3 Months Ended

Apr. 4, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Description of guarantees given by parent company

We guarantee, fully and unconditionally, substantially all of the debt of our subsidiaries, which include Anixter Inc., our primary operating subsidiary. We have no independent assets or operations and all subsidiaries other than consolidated Anixter Inc. are minor. The following summarizes the financial information for Anixter Inc.:

SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC - CONDENSED CONSOLIDATED BALANCE SHEETS (Details) (USD $)

In Millions, unless otherwise specified

Apr. 4, 2014

Jan. 3, 2014

Assets:

Current assets

$ 2,326.6

$ 2,275.7

Property, equipment and capital leases, net

107.3

104.0

Goodwill

343.3

342.1

Other assets

142.5

139.0

Total assets

2,919.7

2,860.8

Liabilities and Equity:

Current liabilities

879.5

902.4

Long-term debt

869.6

836.0

Other liabilities

98.1

95.0

Stockholder's equity

1,072.5

1,027.4

Total liabilities and stockholders’ equity

2,919.7

2,860.8

Anixter Inc. [Member]

Assets:

Current assets

2,324.9

2,275.1

Property, equipment and capital leases, net

118.6

115.6

Goodwill

343.3

342.1

Other assets

142.5

139.1

Total assets

2,929.3

2,871.9

Liabilities and Equity:

Current liabilities

876.9

898.9

Subordinated notes payable to parent

0

1.0

Long-term debt

884.6

851.3

Other liabilities

95.4

93.0

Stockholder's equity

1,072.4

1,027.7

Total liabilities and stockholders’ equity

$ 2,929.3

$ 2,871.9

SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC - CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Condensed Financial Statements, Captions [Line Items]

Net sales

$ 1,523.8

$ 1,490.9

Operating income

85.7

81.0

Income from continuing operations before income taxes

64.2

65.4

Net income

47.4

42.5

Comprehensive income

40.8

34.3

Anixter Inc. [Member]

Condensed Financial Statements, Captions [Line Items]

Net sales

1,523.8

1,490.9

Operating income

87.1

82.4

Income from continuing operations before income taxes

65.3

69.1

Net income

48.2

44.9

Comprehensive income

$ 41.6

$ 36.7

STOCKHOLDERS' EQUITY - Additional Information (Detail) (USD $)

In Millions, except Share data, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of shares reserved for issuance under various incentive plans

1,900,000

Stock Option [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Vesting period over which fair value is amortized

4 years

Minimum [Member] |
Stock Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Vesting period over which fair value is amortized

3 years

Maximum [Member] |
Stock Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Vesting period over which fair value is amortized

4 years

Employee stock units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of stock units granted

124,998

Weighted-average grant-date fair value

$ 13.4

Director Stock Units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of stock units granted

4,913

Weighted-average grant-date fair value

$ 0.5

BUSINESS SEGMENTS - Segment Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Mar. 29, 2013

Segment Reporting Information [Line Items]

Net sales

$ 1,523.8

$ 1,490.9

Operating income

85.7

81.0

Enterprise Cabling And Security [Member]

Segment Reporting Information [Line Items]

Net sales

760.1

745.1

Operating income

36.0

34.8

Wire And Cable [Member]

Segment Reporting Information [Line Items]

Net sales

514.2

517.8

Operating income

36.9

41.3

Fasteners [Member]

Segment Reporting Information [Line Items]

Net sales

249.5

228.0

Operating income

$ 12.8

$ 4.9

BUSINESS SEGMENTS - Changes in Goodwill (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Apr. 4, 2014

Goodwill [Roll Forward]

Balance at January 3, 2014

$ 342.1

Goodwill, Purchase Accounting Adjustments

1.4 ¹

Foreign currency translation

(0.2)

Balance at April 4, 2014

343.3

Enterprise Cabling And Security [Member]

Goodwill [Roll Forward]

Balance at January 3, 2014

162.5

Goodwill, Purchase Accounting Adjustments

0 ¹

Foreign currency translation

0.2

Balance at April 4, 2014

162.7

Wire And Cable [Member]

Goodwill [Roll Forward]

Balance at January 3, 2014

179.6

Goodwill, Purchase Accounting Adjustments

1.4 ¹

Foreign currency translation

(0.4)

Balance at April 4, 2014

180.6

Fasteners [Member]

Goodwill [Roll Forward]

Balance at January 3, 2014

0

Goodwill, Purchase Accounting Adjustments

0 ¹

Foreign currency translation

0

Balance at April 4, 2014

$ 0

[1] (a)In the first quarter of 2014, we recorded an immaterial reclassification between goodwill and deferred tax liability related to the purchase price allocation for the acquisition of Jorvex, S.A.