UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~April 273, ~~2019~~2020


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission ~~File~~file ~~Number:~~number 001-10212

ANIXTER INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Delaware	~~94-1658138~~	94-1658138
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2301 Patriot Blvd.

Glenview, IL 60026

(224) 521-8000

(Address and telephone number of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $1 par value

AXE

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~Yes ☐~~At ~~No ☒~~April 20, 2020, 34,001,490 shares of registrant’s Common Stock, $1 par value, were outstanding.

At October 22, 2019, 33,827,906 shares of registrant’s Common Stock, $1 par value, were outstanding.

TABLE OF CONTENTS

		~~Page~~		Page
	~~PART I. FINANCIAL INFORMATION~~		PART I. FINANCIAL INFORMATION
Item 1.	~~Condensed Consolidated Financial Statements (unaudited)~~	1	Condensed Consolidated Financial Statements (unaudited)	1
Item 2.	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	19	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	~~Quantitative and Qualitative Disclosures About Market Risk~~	31	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	~~Controls and Procedures~~	31	Controls and Procedures	21
	~~PART II. OTHER INFORMATION~~		PART II. OTHER INFORMATION
Item 1.	~~Legal Proceedings~~	32	Legal Proceedings	22
Item 1A.	~~Risk Factors~~	32	Risk Factors	22
Item 6.	~~Exhibits~~	32	Exhibits	22

This report may contain various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “intends”, “anticipates”, “contemplates”, “estimates”, “plans”, “projects”, “should”, “may”, “will” or the negative thereof or other variations thereon or comparable terminology indicating our expectations or beliefs concerning future events. We caution that such statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, a number of which are identified in this report. Other factors could also cause actual results to differ materially from expected results included in these statements. These factors include but are not limited to the impact of the COVID-19 pandemic, general economic conditions, the level of customer demand particularly for capital projects in the markets we serve, changes in supplier or customer relationships, risks associated with nonconforming products and services, political, economic or currency risks related to non-U.S. operations, new or changed competitors, risks associated with inventory and accounts receivable, copper and commodity price fluctuations, risks associated with substantial debt and restrictions contained in financial and operating covenants in our debt agreements, capital project volumes, risks associated with pension expense and funding, compliance with laws and regulations, the impact of investigative and legal proceedings and legal compliance risks, information security risks, disruption or failure of information systems, disruptions to logistics capability or supply chain, the impact and the uncertainty concerning the timing and terms of the withdrawal by the United Kingdom from the European Union, unanticipated changes in our tax provision and tax liabilities related to the enactment of the Tax Cuts and Jobs Act, and risks associated with the integration of acquired companies including, but not limited to, the risk that the acquisitions may not provide us with the synergies or other benefits that were anticipated.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	~~Three Months Ended~~			Three Months Ended			~~Nine Months Ended~~
	September 27, 2019			September 28, 2018			September 27, 2019				September 28, 2018
				April 3,2020					March 29,2019
(In millions, except per share amounts)
Net sales	$	~~2,222.2~~		$	2,~~179~~071.07		$	~~6,593.3~~	$	2,108.5	$	~~6,281.1~~
Cost of goods sold	~~1,775.8~~			1,~~754~~655.93			~~5,278.0~~		1,689.6		~~5,053.1~~
Gross profit	~~446.4~~			~~424~~416.14			~~1,315.3~~		418.9		~~1,228.0~~
Operating expenses	~~344.6~~			~~334~~345.60			~~1,033.2~~		344.3		~~1,005.6~~
Operating income	~~101.8~~			8971.54			~~282.1~~		74.6		~~222.4~~
Other expense:
Interest expense	~~(18.5~~		)	(1916.38)		)	~~(58.3~~		(20.4)		~~(56.5~~		)
Other, net	~~(1.2~~		)	(16.6)		)	~~(0.1~~		)1.8		~~(2.6~~		)
Income before income taxes	~~82.1~~			6848.60			~~223.7~~		56.0		~~163.3~~
Income tax expense	~~22.8~~			2112.03			~~61.8~~		16.9		~~48.8~~
Net income	$	~~59.3~~		$	4735.67		$	~~161.9~~	$	39.1	$	~~114.5~~
Income per share:
Basic	$	~~1.74~~		$	1.4104		$	~~4.75~~	$	1.15	$	~~3.39~~
Diluted	$	~~1.73~~		$	1.4003		$	~~4.73~~	$	1.14	$	~~3.36~~
Basic weighted-average common shares outstanding	~~34.2~~			3334.83			~~34.1~~		33.9		~~33.8~~
Effect of dilutive securities:
Stock options and units	~~0.1~~			0.3			~~0.1~~		0.3		~~0.3~~
Diluted weighted-average common shares outstanding	~~34.3~~			34.16			~~34.2~~		34.2		~~34.1~~
Net income	$	~~59.3~~		$	4735.67		$	~~161.9~~	$	39.1	$	~~114.5~~
Other comprehensive (loss) income:
Foreign currency translation	~~(13.9~~		)	6(65.5)			~~2.1~~		6.9		~~(22.8~~		)
Changes in unrealized pension cost, net of tax	~~0.9~~			01.71			~~2.1~~		0.2		~~1.9~~
Other comprehensive (loss) income	~~(13.0~~		)	7(64.24)			~~4.2~~		7.1		~~(20.9~~		)
Comprehensive income	$	46.3		$	54.8		$	166.1			$	93.6
Comprehensive (loss) income				$	(28.7)				$	46.2

See accompanying notes to the Condensed Consolidated Financial Statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(Unaudited)~~

(Unaudited)

September 27, 2019

December 28, 2018

April 3,2020

January 3,2020

(In millions, except share and per share amounts)

ASSETS

Current assets:

Cash and cash equivalents

~~95.7~~

81282.0

79.6

Accounts receivable, net

~~1,658.3~~

1,~~600~~533.0

1,540.3

Inventories

~~1,339.1~~

1,~~440~~365.42

1,354.7

Other current assets

~~46.3~~

5052.63

63.3

Total current assets

~~3,139.4~~

3,~~172~~232.05

3,037.9

Property and equipment, at cost

~~420.6~~

~~398~~436.45

432.3

Accumulated depreciation

~~(253.5~~

)

(~~235~~261.17)

)

(257.4)

Property and equipment, net

~~167.1~~

~~163~~174.38

174.9

Operating leases

~~252.8~~

—263.5

273.3

Goodwill

~~833.3~~

~~832~~810.0

828.7

Intangible assets, net

~~365.9~~

~~392~~342.9

361.2

Other assets

~~110.0~~

92126.98

132.9

Total assets

~~4,868.5~~

4,~~653~~950.15

4,808.9

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

~~1,266.5~~

1,~~320~~104.08

1,100.3

Accrued expenses

~~315.1~~

~~309~~253.0

330.3

Current operating lease obligations

~~58.6~~

—63.1

62.9

Total current liabilities

~~1,640.2~~

1,~~629~~420.09

1,493.5

Long-term debt

~~1,083.2~~

1,~~252~~316.78

1,059.7

Operating lease obligations

~~201.0~~

—209.2

219.1

Other liabilities

~~192.7~~

~~201~~170.03

175.7

Total liabilities

~~3,117.1~~

3,~~082~~117.72

2,948.0

Stockholders’ equity:

Common stock - $1.00 par value, 100,000,000 shares authorized, 34,194,301 and 33,862,704 shares issued and outstanding at September 27, 2019 and December 28, 2018, respectively

34.2

33.9

Common stock - $1.00 par value, 100,000,000 shares authorized, 34,385,716 and 34,214,795 shares issued and outstanding at April 3, 2020 and January 3, 2020, respectively

34.4

34.2

Capital surplus

~~307.3~~

~~292~~311.71

310.2

Retained earnings

~~1,682.8~~

1,~~513~~819.25

1,783.8

Accumulated other comprehensive loss:

Foreign currency translation

~~(166.5~~

)

(~~168~~211.60)

)

(145.5)

Unrecognized pension liability, net

~~(106.4~~

)

(~~100~~120.87)

)

(121.8)

Total accumulated other comprehensive loss

~~(272.9~~

)

(~~269~~331.47)

)

(267.3)

Total stockholders’ equity

~~1,751.4~~

1,~~570~~833.43

1,860.9

Total liabilities and stockholders’ equity

~~4,868.5~~

4,~~653~~950.15

4,808.9

See accompanying notes to the Condensed Consolidated Financial Statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
				Three Months Ended
	September 27, 2019			September 28, 2018
				April 3,2020			March 29,2019
(In millions)
Operating activities:
Net income	$	~~161.9~~		$	~~114~~35.57		$	39.1
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	~~28.7~~			238.35			9.3
Amortization of intangible assets	~~26.4~~			288.6			8.8
Stock-based compensation	~~14.5~~			154.06			4.1
Deferred income taxes	~~0.1~~			0.15			0.1
Pension plan contributions	~~(5.2~~		)	(52.85)		)	(2.1)
Pension plan expenses	~~4.6~~			31.23			1.4
Changes in current assets and liabilities, net	~~(15.8~~		)	(74115.81)		)	(175.8)
Other, net	~~(8.8~~		)	(17.35		)	0.9
Net cash provided by operating activities	206.4			102.8
Net cash used in operating activities				(50.9)			(114.2)
Investing activities:
Acquisitions of businesses, net of cash acquired	—			(149.9		)
Capital expenditures, net				(6.9)			(5.9)
Capital expenditures, net	(27.5		)	(32.0		)
Net cash used in investing activities				(6.9)			(5.9)
Other	—			9.1
Financing activities:
Net cash used in investing activities	(27.5		)	(172.8		)
Proceeds from borrowings				648.7			1,241.5
Financing activities:
Repayments of borrowings				(393.6)			(1,127.4)
Proceeds from borrowings	3,361.9			2,036.8
Proceeds from stock options exercised				—			1.0
Repayments of borrowings	(3,534.4		)	(2,020.5		)
Other, net				(0.6)			(0.2)
Proceeds from stock options exercised	4.3			1.5
Net cash provided by financing activities				254.5			114.9
Other, net	(1.5		)	—
Increase (decrease) in cash and cash equivalents				196.7			(5.2)
Net cash (used in) provided by financing activities	(169.7		)	17.8
Effect of exchange rate changes on cash balances				5.7			1.2
Increase (decrease) in cash and cash equivalents	9.2			(52.2		)
Cash and cash equivalents at beginning of period				79.6			81.0
Effect of exchange rate changes on cash balances	5.5			6.1
Cash and cash equivalents at end of period				$	282.0		$	77.0
Cash and cash equivalents at beginning of period	81.0			116.0
Cash and cash equivalents at end of period	$	95.7		$	69.9

See accompanying notes to the Condensed Consolidated Financial Statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Three Months Ended September 27, 2019
			Three Months Ended April 3, 2020
	~~Common Stock~~		Common Stock	~~CapitalSurplus~~			~~RetainedEarnings~~		~~Accumulated OtherComprehensive Loss~~						Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss
	~~Shares~~	~~Amount~~	Shares			Amount						~~Total~~									Total
(In millions)
Balance at June 28, 2019	34.1	$	34.1	$	300.2		$	1,623.5	$	(259.9	)	$	1,697.9
Balance at January 3, 2020			34.2			$	34.2			$	310.2				$	1,783.8	$	(267.3)	$	1,860.9
Net income	—	—	—	—		—	~~59.3~~		—	—		~~59.3~~			35.7		—		35.7
Other comprehensive (loss) income:
Foreign currency translation	—	—	—	—		—	—		~~(13.9~~	—	)	~~(13.9~~		)	—		(65.5)		(65.5)
Changes in unrealized pension cost, net of tax	—	—	—	—		—	—		~~0.9~~	—		~~0.9~~			—		1.1		1.1
Stock-based compensation	—	—	—	~~5.2~~		—	—		—	4.6		~~5.2~~			—		—		4.6
Issuance of common stock and related taxes	~~0.1~~	~~0.1~~	0.2	~~1.9~~		0.2	—		—	(3.7)		~~2.0~~			—		—		(3.5)
Balance at September 27, 2019	34.2	$	34.2	$	307.3		$	1,682.8	$	(272.9	)	$	1,751.4
Balance at April 3, 2020			34.4			$	34.4			$	311.1				$	1,819.5	$	(331.7)	$	1,833.3

	Three Months Ended September 28, 2018
			Three Months Ended March 29, 2019
	~~Common Stock~~		Common Stock	~~CapitalSurplus~~				~~RetainedEarnings~~		~~Accumulated OtherComprehensive Loss~~						CapitalSurplus		RetainedEarnings		Accumulated OtherComprehensive Loss
	~~Shares~~	~~Amount~~	Shares				Amount						~~Total~~									Total
(In millions)
Balance at June 29, 2018	33.8	$	33.8	$	288.2			$	1,423.8	$	(238.4	)	$	1,507.4
Balance at December 28, 2018			33.9				$	33.9			$	292.7				$	1,513.2	$	(269.4)	$	1,570.4
Net income	—	—	—	—			—	~~47.6~~		—	—		~~47.6~~			39.1		—		39.1
Other comprehensive income:
Foreign currency translation	—	—	—	—			—	—		~~6.5~~	—		~~6.5~~			—		6.9		6.9
Changes in unrealized pension cost, net of tax	—	—	—	—			—	—		~~0.7~~	—		~~0.7~~			—		0.2		0.2
Stock-based compensation	—	—		3.2				—		—			3.2
Reclassification of tax effects (a)			—				—				—					7.7		(7.7)		—
Issuance of common stock and related taxes	0.1	0.1		(1.4		)		—		—			(1.3		)
Stock-based compensation			—				—				4.1					—		—		4.1
Balance at September 28, 2018	33.9	$	33.9	$	290.0			$	1,471.4	$	(231.2	)	$	1,564.1
Issuance of common stock and related taxes			0.2				0.2				(0.2)					—		—		—
Balance at March 29, 2019			34.1				$	34.1			$	296.6				$	1,560.0	$	(270.0)	$	1,620.7

(a)The Company reclassified $7.7 million of tax benefits from "Accumulated other comprehensive loss" to "Retained earnings" for the tax effects resulting from the December 22, 2017 enactment of the Tax Cuts and Jobs Act in accordance with the adoption of Accounting Standards Update 2018-02, "Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" in the first quarter of 2019.

See accompanying notes to the Condensed Consolidated Financial Statements.

ANIXTER INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY– (Continued)

(Unaudited)

	Nine Months Ended September 27, 2019
	Common Stock			CapitalSurplus		RetainedEarnings		Accumulated OtherComprehensive Loss
	Shares	Amount									Total
(In millions)
Balance at December 28, 2018	33.9	$	33.9	$	292.7	$	1,513.2	$	(269.4	)	$	1,570.4
Net income	—	—		—		161.9		—			161.9
Other comprehensive income:
Foreign currency translation	—	—		—		—		2.1			2.1
Changes in unrealized pension cost, net of tax	—	—		—		—		2.1			2.1
Reclassification of tax effects (a)	—	—		—		7.7		(7.7		)	—
Stock-based compensation	—	—		14.5		—		—			14.5
Issuance of common stock and related taxes	0.3	0.3		0.1		—		—			0.4
Balance at September 27, 2019	34.2	$	34.2	$	307.3	$	1,682.8	$	(272.9	)	$	1,751.4

(a) The Company reclassified $7.7 million of tax benefits from "Accumulated other comprehensive loss" to "Retained earnings" for the tax effects resulting from the December 22, 2017 enactment of the Tax Cuts and Jobs Act in accordance with the adoption of Accounting Standards Update 2018-02, "Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" in the first quarter of 2019.

	Nine Months Ended September 28, 2018
	Common Stock			CapitalSurplus			RetainedEarnings		Accumulated OtherComprehensive Loss
	Shares	Amount										Total
(In millions)
Balance at December 29, 2017	33.7	$	33.7	$	278.7		$	1,356.9	$	(210.3	)	$	1,459.0
Net income	—	—		—			114.5		—			114.5
Other comprehensive (loss) income:
Foreign currency translation	—	—		—			—		(22.8		)	(22.8		)
Changes in unrealized pension cost, net of tax	—	—		—			—		1.9			1.9
Stock-based compensation	—	—		15.0			—		—			15.0
Issuance of common stock and related taxes	0.2	0.2		(3.7		)	—		—			(3.5		)
Balance at September 28, 2018	33.9	$	33.9	$	290.0		$	1,471.4	$	(231.2	)	$	1,564.1

See accompanying notes to the Condensed Consolidated Financial Statements.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation: The unaudited interim Condensed Consolidated Financial Statements of Anixter International Inc. and its subsidiaries (collectively referred to as "Anixter" or the "Company"), sometimes referred to in this Quarterly Report on Form 10-Q as "we", "our", "us", or "ourselves" have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Therefore, certain information and disclosures normally included in financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. Certain prior period amounts have been reclassified to conform to the current year presentation.

These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the consolidated financial statements and related notes included in Anixter's Annual Report on Form 10-K for the year ended ~~December~~January 283, ~~2018~~2020 ("~~2018~~2019 Form 10-K"). The condensed consolidated financial information furnished herein reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Condensed Consolidated Financial Statements for the periods shown.

The Company maintains its financial records on the basis of a fiscal year ending on the Friday nearest December 31, with the fiscal quarters typically spanning thirteen weeks. The first quarter ends on the Friday of the first thirteen-week period, the second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The ~~third~~first quarter of fiscal year ~~2019~~2020 ended on ~~September~~April 273, ~~2019~~2020, and the ~~third~~first quarter of fiscal year ~~2018~~2019 ended on ~~September~~March 2829, ~~2018~~2019.

Recently issued and adopted accounting pronouncements: In ~~February~~June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-0213, ~~Leases,~~Financial ~~which~~Instruments ~~requires~~- ~~lessees~~Credit toLosses, ~~recognize~~which ~~assets~~requires ~~and liabilities on~~ the ~~balance~~measurement ~~sheet for the rights and obligations created by all leases with terms~~ of ~~more~~expected ~~than~~credit 12losses ~~months. The standard is effective~~ for ~~Anixter's~~ financial ~~statements~~instruments ~~issued~~held ~~for~~at ~~fiscal~~the ~~years~~reporting ~~beginning~~date ~~after~~based ~~December~~on ~~15,~~historical ~~2018~~experience, ~~and~~current ~~interim~~conditions ~~periods~~and ~~within~~reasonable ~~those fiscal years~~forecasts. The Inmain ~~July~~objective ~~2018,~~of ~~the~~this ~~FASB~~ASU ~~issued~~is ~~additional~~to ~~authoritative~~provide ~~guidance~~financial ~~providing~~statement ~~companies~~users with anmore ~~optional~~decision-useful ~~transition~~information ~~method~~about tothe ~~use~~expected ~~the~~credit ~~effective~~losses ~~date~~on offinancial ~~ASU~~instruments ~~2016-02~~and asother ~~the~~commitments ~~date~~to ofextend ~~initial~~credit ~~application~~held ofby ~~transition~~a ~~and~~reporting ~~not~~entity ~~restate~~at ~~comparative~~each ~~periods~~reporting date. The ~~Company adopted the~~ standard inis ~~the~~effective ~~first~~for ~~quarter~~Anixter's offinancial ~~2019~~statements ~~using~~issued ~~this~~for ~~optional~~fiscal ~~transition~~years ~~method.~~beginning ~~The~~after ~~Company~~December ~~elected~~15, ~~the package of practical expedients~~2019, ~~which~~and ~~allows~~interim itperiods towithin ~~carry~~those ~~forward~~fiscal ~~historical~~years. ~~lease~~Early ~~classification,~~adoption ~~the~~is ~~practical~~permitted ~~expedient~~for tofiscal ~~not~~years ~~separate~~beginning ~~non-lease~~after ~~components~~December ~~from~~15, ~~lease components~~2018, and ~~the~~interim ~~short-term~~periods ~~lease~~within ~~accounting~~those ~~policy~~fiscal ~~election as defined in ASU 2016-02~~years. The Company ~~implemented~~adopted ~~internal~~this ~~controls~~standard ~~and~~effective athe ~~lease~~first ~~accounting~~quarter ~~information~~of ~~system~~fiscal toyear ~~enable~~2020. ~~the~~The ~~preparation~~adoption of ~~financial~~this ~~information~~standard ondid ~~adoption.~~not ~~The~~have ~~standard had~~ a material impact on the Company's Condensed Consolidated ~~Balance~~Financial ~~Sheet, but did not have an impact on the Condensed Consolidated~~ Statements ~~of Comprehensive Income~~. ~~The~~See ~~most significant impact was~~ the ~~recognition~~section ofbelow ~~right-of-use~~titled ~~assets~~"Receivables ~~of $244.1 million~~ and ~~lease~~expected ~~liabilities~~credit oflosses" ~~$249.6 million~~ for ~~operating~~more ~~leases,~~information ~~while~~on ~~accounting~~the ~~for~~Company's ~~finance~~measurement ~~leases~~of ~~remained~~credit ~~substantially unchanged~~losses.

In ~~February~~January ~~2018~~2017, the FASB issued ASU ~~2018~~2017-0204, ~~Income~~Intangibles ~~Statement~~ - ~~Reporting~~Goodwill ~~Comprehensive~~and ~~Income~~Other: ~~Reclassification~~Simplifying ofthe ~~Certain~~Test ~~Tax~~for ~~Effects~~Goodwill Impairment, which removes step two from ~~Accumulated~~the ~~Other~~goodwill ~~Comprehensive~~impairment ~~Income,~~test. ~~which~~Step ~~will~~two ~~allow~~measures a ~~reclassification~~goodwill ~~from~~impairment ~~accumulated~~loss ~~other~~by ~~comprehensive~~comparing ~~income~~the toimplied ~~retained~~fair ~~earnings~~value ~~for~~of ~~the~~a ~~tax~~reporting ~~effects~~unit's ~~resulting~~goodwill ~~from~~with the ~~December~~carrying ~~22,~~amount ~~2017~~of ~~enactment~~that ofgoodwill. ~~the~~The ~~Tax~~new ~~Cuts~~guidance ~~and~~requires ~~Jobs~~an ~~Act~~entity (to perform its goodwill impairment test by comparing the ~~"Act")~~fair ~~that~~value ~~are~~of ~~stranded~~a inreporting ~~accumulated~~unit ~~other~~with ~~comprehensive~~its ~~income~~carrying amount, including goodwill. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, ~~2018,~~2019. ~~and~~Early adoption is permitted for interim ~~periods~~or ~~within~~annual ~~those~~goodwill ~~fiscal~~impairment ~~years~~tests performed on testing dates after January 1, 2017. The Company adopted this standard effective the first quarter of fiscal year ~~2019 and elected to reclassify $7~~2020.7 ~~million~~The adoption of ~~tax~~this ~~benefits~~standard ~~from~~did ~~"Accumulated~~not ~~other~~have ~~comprehensive~~a ~~loss"~~material toimpact ~~"Retained~~on ~~earnings"~~the ~~within~~Company's ~~its~~ Condensed Consolidated Financial Statements.

In ~~June~~August 2018, the FASB issued ASU 2018-0713, ~~Compensation~~Fair -Value ~~Stock Compensation~~Measurement: ~~Improvements~~Changes to ~~Nonemployee~~the ~~Share-Based~~Disclosure ~~Payment~~Requirements ~~Accounting~~for Fair Value Measurement, which ~~will~~changes ~~expand~~ the ~~scope~~disclosure ofrequirements ~~Topic~~for ~~718~~fair tovalue ~~include~~measurements ~~share-based~~by ~~payment~~removing, ~~transactions~~adding ~~for acquiring goods~~ and ~~services~~modifying ~~from~~certain ~~nonemployees~~disclosures. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, ~~2018,~~2019. ~~and~~Early ~~interim~~adoption ~~periods~~is ~~within those fiscal years~~permitted. The Company adopted this standard effective the first quarter of fiscal year ~~2019~~2020. The ~~result~~adoption of this ~~adoption~~standard did not have a material impact on the ~~Condensed~~Company's ~~Consolidated~~related ~~Financial Statements~~disclosures.

6Recently issued accounting pronouncements not yet adopted: In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The standard is effective for Anixter's financial statements issued for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~Recently issued accounting pronouncements not yet adopted:~~ In ~~June~~December ~~2016~~2019, the FASB issued ASU ~~2016~~2019-1312, ~~Financial~~Income ~~Instruments~~Taxes - ~~Credit~~Simplifying ~~Losses, which requires~~ the ~~measurement~~Accounting ~~of expected credit losses~~ for ~~financial~~Income ~~instruments~~Taxes, ~~held~~which atclarifies ~~the~~existing ~~reporting~~guidance ~~date based on historical experience, current conditions~~ and ~~reasonable~~removes ~~forecasts. The~~certain ~~main~~exceptions ~~objective of this ASU is~~ to ~~provide financial statement users with more decision-useful information about~~ the ~~expected~~general ~~credit~~principles ~~losses~~for onincome ~~financial instruments and other commitments to extend credit held by a reporting entity at each reporting date~~taxes. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, ~~2019, and interim periods within those fiscal years~~2020. Early adoption is permitted ~~for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years~~. The Company is currently evaluating the impact of adoption of this ASU, ~~but it is not expected to have a material effect~~ on ~~the~~its ~~Company's~~ Condensed Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, which removes step two from the goodwill impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The new guidance requires an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently assessing the impact the adoption of this ASU will have on its methodology for evaluating goodwill for impairment subsequent to adoption of this standard.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement, which changes the disclosure requirements for fair value measurements by removing, adding and modifying certain disclosures. The standard is effective for Anixter's financial statements issued for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The standard is effective for Anixter's financial statements issued for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures.

The Company does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on its Condensed Consolidated Financial Statements or disclosures.

~~Revenue~~Receivables ~~recognition:~~and ~~Anixter~~expected iscredit alosses: ~~leading~~The ~~global~~Company ~~distributor~~carries ofits ~~network~~accounts ~~and~~receivable ~~security~~at ~~solutions,~~their ~~electrical~~face ~~and~~amounts ~~electronic~~less ~~solutions~~an ~~and~~allowance ~~utility~~for ~~power~~expected ~~solutions.~~credit ~~Through~~losses, awhich ~~global~~was ~~distribution~~$29.7 ~~network~~million ~~along~~and ~~with~~$30.4 million ~~supply~~as ~~chain~~of April 3, 2020 and ~~technical~~January 3, ~~expertise~~2020, ~~Anixter~~respectively. ~~helps~~Changes ~~customers~~in ~~reduce~~ the ~~risk,~~allowance ~~cost~~were ~~and~~not ~~complexity~~material offor ~~their~~the ~~supply~~three ~~chains.~~months ~~Anixter~~ended isApril 3, a2020. ~~leader~~On ina ~~providing~~regular ~~advanced~~basis, ~~inventory~~Anixter ~~management~~evaluates ~~services~~its ~~including~~accounts ~~procurement,~~receivable ~~just-in-time~~and ~~delivery,~~establishes ~~material~~the ~~management~~allowance ~~programs,~~for ~~turn-key~~expected ~~yard~~credit ~~layout~~losses ~~and~~based ~~management,~~on ~~quality~~a ~~assurance~~combination ~~testing,~~of ~~component~~specific ~~kit~~customer ~~production~~circumstances, ~~storm/event~~as ~~kitting,~~well ~~small~~as ~~component~~history ~~assembly~~of ~~and e~~write-~~commerce~~offs and ~~electronic~~collections, ~~data~~current ~~interchange~~credit toconditions aand ~~broad~~economic ~~spectrum~~forecasts. ofA ~~customers~~receivable ~~with~~is ~~nearly~~considered ~~600,000~~past ~~products.~~due ~~Revenue~~if ~~arrangements~~payments ~~primarily~~have ~~consist~~not ofbeen areceived ~~single~~within ~~performance~~the ~~obligation~~agreed toupon ~~transfer~~invoice ~~promised~~terms. ~~goods~~Receivables orare ~~services.~~written ~~See~~off ~~Note~~and 9.deducted ~~"Business~~from ~~Segments"~~the ~~for~~allowance ~~revenue~~account ~~disaggregated~~when bythe ~~geography~~receivables are deemed uncollectible.

~~Sales~~Revenue torecognition: ~~customers~~Anixter ~~and~~is ~~related~~a ~~cost~~leading ofglobal ~~sales~~distributor ~~are~~of ~~primarily~~network ~~recognized~~and atsecurity ~~the~~solutions, ~~point~~electrical inand ~~time~~electronic ~~when~~solutions ~~control~~and ofutility ~~goods~~power ~~transfers to the customer~~solutions. ~~For~~Through ~~product~~a ~~sales~~global ~~this~~distribution ~~generally~~network ~~occurs~~along ~~upon~~with ~~shipment~~supply ofchain ~~the~~and ~~products,~~technical ~~however~~expertise, ~~this~~Anixter ~~may~~helps ~~occur~~customers atreduce athe ~~later~~risk, ~~date~~cost ~~depending~~and oncomplexity ~~the~~of ~~agreed~~their ~~upon~~supply ~~sales~~chains. ~~terms,~~Anixter ~~such~~is asa ~~delivery~~leader atin ~~the~~providing ~~customer's~~advanced ~~designated~~inventory ~~location,~~management orservices ~~based~~including onprocurement, ~~consignment~~just-in-time ~~terms.~~delivery, Inmaterial ~~instances~~management ~~where~~programs, ~~goods~~turn-key ~~are~~yard ~~not~~layout ~~stocked~~and bymanagement, ~~Anixter~~quality ~~and~~assurance ~~delivery~~testing, ~~times~~component ~~are~~kit ~~critical~~production, ~~product~~storm/event iskitting, ~~purchased~~small ~~from~~component ~~the~~assembly ~~manufacturer~~ and ~~drop~~e-~~shipped~~commerce toand ~~the~~electronic ~~customer.~~data ~~Anixter~~interchange ~~generally~~to ~~takes~~a ~~control~~broad spectrum of ~~the~~customers ~~goods~~with ~~when~~nearly ~~shipped~~600,000 byproducts. ~~the~~Revenue ~~manufacturer~~arrangements ~~and~~primarily ~~then~~consist ~~recognizes revenue when control~~ of ~~the~~a ~~product~~single ~~transfers~~performance obligation to ~~the~~transfer ~~customer.~~promised ~~When~~goods ~~providing~~or services,. ~~sales~~See ~~are~~Note ~~recognized~~7. ~~over~~"Business ~~time~~Segments" asfor ~~control~~revenue ~~transfers~~disaggregated toby ~~the customer, which occurs as services are rendered~~geography.

7Sales to customers and related cost of sales are primarily recognized at the point in time when control of goods transfers to the customer. For product sales, this generally occurs upon shipment of the products, however, this may occur at a later date depending on the agreed upon sales terms, such as delivery at the customer's designated location, or based on consignment terms. In instances where goods are not stocked by Anixter and delivery times are critical, product is purchased from the manufacturer and drop-shipped to the customer. Anixter generally takes control of the goods when shipped by the manufacturer and then recognizes revenue when control of the product transfers to the customer. When providing services, sales are recognized over time as control transfers to the customer, which occurs as services are rendered.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company estimates different forms of variable consideration at the time of sale based on historical experience, current conditions and contractual obligations. Revenue is recorded net of customer discounts, rebates and similar charges. When Anixter offers the right to return product, historical experience is utilized to establish a liability for the estimate of expected returns. Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue. The Company has elected to treat shipping and handling as a fulfillment activity. The practical expedient not to disclose information about remaining performance obligations has also been elected as these contracts have an original duration of one year or less or are contracts where the Company has applied the practical expedient to recognize service revenue in proportion to the amount Anixter has the right to invoice. The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation.

At January 3, 2020, $11.6 million of deferred revenue related to outstanding contracts was reported in "Accrued expenses" in the Company's Condensed Consolidated Balance Sheet. This balance primarily represents prepayments from customers. During the three months ended April 3, 2020, $4.1 million of this deferred revenue was recognized. At April 3, 2020, deferred revenue was $12.1 million. The Company expects to recognize this balance as revenue within the next twelve months.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~Revenue~~Other, isnet: ~~measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.~~ The ~~Company~~following ~~estimates~~represents ~~different forms of variable consideration at~~ the ~~time~~components of ~~sale based on historical experience~~"Other, ~~current conditions and contractual obligations. Revenue is recorded~~ net" of customer discounts, rebates and similar charges. When Anixter offers the right to return product, historical experience is utilized to establish a liability for the estimate of expected returns. Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue. The Company has elected to treat shipping and handling as areflected fulfillment activity. The practical expedient not to disclose information about remaining performance obligations has also been elected as these contacts have an original duration of one year or less or are contracts where the Company has applied the practical expedient to recognize service revenue in ~~proportion to~~ the ~~amount~~Condensed ~~Anixter~~Consolidated ~~has~~Statements ~~the~~of ~~right~~Comprehensive to(Loss) ~~invoice. The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation.~~Income:

At December 28, 2018, $17.2 million of deferred revenue related to outstanding contracts was reported in "Accrued expenses" in the Company's Consolidated Balance Sheet. This balance primarily represents prepayments from customers. During the three and nine months ended September 27, 2019, $3.1 million and $13.5 million, respectively, of this deferred revenue was recognized. At September 27, 2019, deferred revenue was $17.2 million. The Company expects to recognize this balance as revenue within the next twelve months.


	Three Months Ended
(In millions)	April 3, 2020		March 29, 2019
Other, net:
Foreign exchange loss	$	(4.5)	$	(0.5)
Cash surrender value of life insurance policies	(3.0)		1.7
Net periodic pension benefit	1.0		0.8
Other	(0.1)		(0.2)
Total other, net	$	(6.6)	$	1.8

~~Other,~~Certain ~~net:~~subsidiaries ~~The~~of ~~following~~Anixter ~~represents~~conduct business in a currency other than the ~~components~~legal entity’s functional currency. Transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. The increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that is included in "Other, net" ~~as reflected~~ in the Condensed Consolidated Statements of Comprehensive (Loss) Income: .

	Three Months Ended						Nine Months Ended
(In millions)	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Other, net:
Foreign exchange loss	$	(1.9	)	$	(2.5	)	$	(2.7	)	$	(6.2	)
Cash surrender value of life insurance policies	0.3			0.3			3.0			0.1
Net periodic pension benefit	0.7			1.3			2.0			3.9
Other	(0.3		)	(0.7		)	(2.4		)	(0.4		)
Total other, net	$	(1.2	)	$	(1.6	)	$	(0.1	)	$	(2.6	)

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

~~Several~~The ofCompany ~~Anixter's~~does ~~subsidiaries~~not ~~conduct~~hedge ~~business~~100% inof aits foreign currency-denominated ~~other~~accounts. ~~than~~In addition, the ~~legal~~results ~~entity’s~~of ~~functional~~hedging can vary significantly based on various factors, such as the timing of executing the foreign currency. ~~Transactions~~forward ~~may~~contracts ~~produce~~versus ~~receivables~~the ormovement ~~payables~~of ~~that~~the ~~are~~currencies ~~fixed~~as well as the fluctuations in ~~terms~~the account balances throughout each reporting period. The fair value of the ~~amount~~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 ~~that~~forward ~~will~~contracts beis ~~received~~measured orusing ~~paid~~observable market information. AThese ~~change~~inputs would be considered Level 2 in the fair value hierarchy. At April 3, 2020 and January 3, 2020, foreign currency forward contracts were revalued at then-current foreign exchange rates ~~between~~with the ~~functional~~changes ~~currency~~in ~~and~~valuation ~~the~~reflected ~~currency~~directly in ~~which~~"Other, anet" in the Condensed Consolidated Statements of Comprehensive (Loss) Income offsetting the transaction isgain/loss recorded on the foreign currency-denominated ~~increases~~accounts. orAt ~~decreases~~April 3, 2020 and January 3, 2020, the ~~expected~~gross notional amount of ~~functional~~the foreign currency ~~cash~~forward ~~flows~~contracts ~~upon~~outstanding ~~settlement~~was ofapproximately ~~the~~$124.1 ~~transaction~~million and $130.2 ~~The~~million, ~~increase~~respectively. orAt ~~decrease~~April 3, in2020 ~~expected~~and ~~functional~~January 3, 2020, the net notional amount of the foreign currency ~~cash~~forward ~~flows~~contracts isoutstanding awas approximately $124.1 million and $95.4 million, respectively. While all of the Company's foreign currency ~~transaction~~forward ~~gain~~contracts orare ~~loss~~subject ~~that~~to ismaster ~~included~~netting inarrangements ~~"Other~~with its counterparties, ~~net"~~assets inand liabilities related to these contracts are presented on a gross basis within the Condensed Consolidated ~~Statements~~Balance Sheets. The gross fair value of ~~Comprehensive~~assets ~~Income~~and liabilities related to foreign currency forward contracts are immaterial.

The Company purchases foreign currency forward contracts to minimize the effect of fluctuating foreign currency-denominated accounts on its reported income. These contracts are not designated as hedges for accounting purposes. The Company's strategy is to negotiate terms for its foreign currency forward contracts to be highly effective, such that the change in the value of the foreign currency forward contract perfectly offsets the impact of the underlying foreign currency-denominated account. Its counterparties to foreign currency forward contracts have investment-grade credit ratings. Anixter expects the creditworthiness of its counterparties to remain intact through the term of the transactions. The Company regularly monitors the creditworthiness of its counterparties to ensure no issues exist which could affect the value of the foreign currency forward contracts.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company does not hedge 100% of its 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 September 27, 2019 and December 28, 2018, 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 September 27, 2019 and December 28, 2018, the gross notional amount of the foreign currency forward contracts outstanding was approximately $117.2 million and $96.3 million, respectively. At September 27, 2019 and December 28, 2018, the net notional amount of the foreign currency forward contracts outstanding was approximately $76.6 million and $75.7 million, respectively. While all of the Company's foreign currency forward contracts are subject to master netting arrangements with its counterparties, assets and liabilities related to these contracts are presented on a gross basis within the Condensed Consolidated Balance Sheets. The gross fair value of assets and liabilities related to foreign currency forward contracts are immaterial.

The combined effect of changes in both the equity and bond markets resulted in changes in the cash surrender value of the Company's company owned life insurance policies associated with the sponsored deferred compensation program.

~~Leases:~~Accumulated Atother ~~contract~~comprehensive ~~inception~~loss: ~~the~~Unrealized ~~Company~~gains ~~determines~~and iflosses ~~an arrangement is a lease. Operating leases~~ are ~~included~~accumulated in "~~Operating~~Accumulated ~~leases",~~other ~~"Current~~comprehensive ~~operating lease obligations~~loss" ~~and~~ ("~~Operating lease obligations~~AOCI" ~~on the Condensed Consolidated Balance Sheets~~). ~~Finance~~These ~~leases~~changes are ~~included~~also reported in "~~Property~~Other ~~and~~comprehensive ~~equipment,~~(loss) ~~net~~income", ~~"Accrued expenses" and "Long-term debt"~~ on the Condensed Consolidated ~~Balance~~Statements ~~Sheets. The gross amount~~ of ~~the~~Comprehensive ~~balances~~(Loss) ~~recorded~~Income. ~~related~~These toinclude ~~finance~~unrealized ~~leases~~gains ~~was immaterial as of September 27, 2019,~~ and ~~December 28,~~losses ~~2018.~~related ~~Leases~~to ~~with an initial term of 12 months or less are not recorded on~~ the ~~Condensed Consolidated Balance Sheets. Operating lease expense is recognized on a straight-line basis over the lease term. The~~ Company's ~~has~~defined ~~lease~~benefit ~~agreements~~obligations ~~with lease~~ and ~~non-lease~~foreign ~~components~~currency ~~and~~translation. ~~has~~See ~~elected~~Note to5. ~~account~~"Pension Plans" for ~~these~~pension ~~components~~related asamounts areclassified ~~single~~into ~~lease~~net ~~component~~income.

Operating lease assets and liabilities are recognized at the commencement date, based on the present value of the future minimum lease payments. A certain number of these leases contain rent escalation clauses that are factored into the Company's determination of lease payments, either fixed or adjusted periodically for inflation or market rates. Anixter also has variable lease payments that do not depend on a rate or index, primarily for items such as common area maintenance and real estate taxes, which are recorded as variable cost when incurred. The operating lease asset includes advance payments and excludes incentives and initial direct costs incurred. As most of Anixter’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date to discount payments to the present value. Most operating leases contain renewal options, some of which also include options to early terminate the leases. The exercise of these options is at the Company's discretion. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.7

Accumulated other comprehensive loss: Unrealized gains and losses are accumulated in "Accumulated other comprehensive loss" ("AOCI"). These changes are also reported in "Other comprehensive (loss) income" on the Condensed Consolidated Statements of Comprehensive Income. These include unrealized gains and losses related to the Company's defined benefit obligations and foreign currency translation. See Note 7. "Pension Plans" for pension related amounts reclassified into net income.

Investments in several subsidiaries are recorded in currencies other than the U.S. dollar ("USD"). 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 USD 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 USD, are translated into USD 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 AOCI, "Foreign currency translation." In addition, as Anixter's 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.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~Goodwill:~~Investments ~~The~~in ~~Company~~several ~~evaluates~~subsidiaries ~~goodwill~~are ~~for~~recorded ~~impairment~~in ~~annually~~currencies atother than the ~~beginning~~U.S. ofdollar ~~the~~("USD"). ~~third~~As ~~quarter~~these ~~and~~foreign ~~when~~currency ~~events~~denominated orinvestments ~~changes~~are intranslated ~~circumstances~~at ~~indicate~~ the ~~carrying~~end ~~value~~ of ~~reporting~~each ~~units~~period ~~might~~during ~~exceed~~consolidation ~~their~~using ~~current~~period-end ~~fair~~exchange ~~values. The Company assesses goodwill for impairment by first performing a qualitative assessment~~rates, ~~which~~fluctuations ~~considers~~of ~~specific~~exchange ~~factors,~~rates ~~based~~between on the ~~weight~~foreign ofcurrency ~~evidence,~~ and the ~~significance~~USD ofincrease ~~all~~or ~~identified~~decrease ~~events and circumstances in~~ the ~~context~~value of ~~determining~~those ~~whether~~investments. itThe isresults ~~more likely than not that the fair value~~ of aoperations ~~reporting~~for ~~unit~~foreign issubsidiaries, ~~less~~where ~~than~~the ~~its~~functional ~~carrying~~currency ~~amount. If it~~ is ~~determined that it is more likely than~~ not ~~that~~ the ~~fair~~USD, ~~value~~are oftranslated ainto ~~reporting~~USD ~~unit is less than its carrying amount~~ using the ~~qualitative~~average ~~assessment,~~exchange ~~Anixter~~rates ~~performs~~during the ~~two-step~~periods ~~impairment test. From time to time~~reported, ~~the~~while ~~Company may also bypass~~ the ~~qualitative~~assets ~~assessment~~ and ~~proceed~~liabilities ~~directly~~are totranslated ~~the~~using ~~two~~period-~~step~~end ~~impairment~~exchange ~~test~~rates. The ~~first~~assets ~~step~~and ofliabilities ~~the~~related ~~impairment~~translation ~~test~~adjustments isare torecorded ~~identify~~as a ~~potential~~separate ~~impairment~~component ~~by comparing the fair value~~ of aAOCI, ~~reporting~~"Foreign ~~unit~~currency ~~with its carrying amount~~translation." ~~The~~In ~~estimates~~addition, ~~of fair value of a reporting unit are determined using the income approach and/or the market approach~~ as ~~described~~Anixter's ~~below.~~subsidiaries Ifmaintain ~~step~~investments ~~one~~denominated ofin ~~the~~currencies ~~test~~other ~~indicates~~than alocal ~~carrying value above the estimated fair value~~currencies, ~~the~~exchange ~~second~~rate ~~step~~fluctuations ofwill ~~the goodwill impairment test is performed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill~~occur. ~~The~~Borrowings ~~implied~~are ~~residual~~raised ~~value~~in ofcertain ~~goodwill~~foreign iscurrencies ~~determined~~to inminimize the ~~same~~exchange ~~manner~~rate astranslation ~~the~~adjustment ~~amount of goodwill recognized in a business combination~~risk.

~~The~~Supplemental ~~income approach is a quantitative evaluation to determine the fair value of the reporting unit. Under the income approach fair value is determined based on estimated future~~ cash ~~flows~~flow ~~discounted~~information: ~~by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of the reporting unit and the rate of return a market participant would expect to earn.~~ The ~~inputs~~following ~~used~~information ~~for~~discloses ~~the~~supplemental ~~income approach were significant unobservable inputs, or Level 3 inputs, as described in the accounting fair value hierarchy. Estimated future~~ cash ~~flows~~flow ~~were~~information ~~based~~about onleasing ~~internal projection models, industry projections and other assumptions deemed reasonable by management~~activities.

~~The~~During ~~market approach measures~~ the ~~fair~~three ~~value~~months ofended aApril 3, ~~reporting~~2020 ~~unit~~and ~~through the analysis of recent sales~~March 29, ~~offerings~~2019, ~~and~~leased ~~financial~~assets ~~multiples~~obtained ~~(sales~~in orexchange ~~earnings~~for ~~before~~operating ~~interest,~~lease ~~tax,~~obligations ~~depreciation~~were ~~and~~$10.5 ~~amortization~~million ~~("EBITDA"))~~and of$258.3 ~~comparable businesses~~million, ~~which~~respectively. ~~would~~The beoperating ~~considered~~cash ~~Level~~outflow 2for amounts included in the ~~fair~~measurement ~~value~~of ~~hierarchy.~~operating ~~Consideration~~lease isobligations ~~given~~was to$14.6 ~~the~~million ~~financial~~in ~~conditions~~the ~~and~~first ~~operating~~quarter ~~performance~~ of ~~the~~2020 ~~reporting~~compared ~~unit being valued relative~~ to ~~those~~$19.4 ~~publicly-traded~~million ~~companies operating~~ in the ~~same~~prior oryear ~~similar lines of business~~period.

InNOTE connection with the annual assessment of goodwill at the beginning of the third quarter of 2019, the Company bypassed the qualitative assessment and performed a quantitative test for all reporting units and utilized a combination of the income and market approaches2. ~~As a result of this assessment, the Company concluded that no impairment existed and the carrying amount of goodwill to be fully recoverable.~~ DEBT

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 2. RESTRUCTURING CHARGES

The Company considers restructuring activities to be programs whereby Anixter fundamentally changes its operations, such as closing and consolidating facilities, reducing headcount and realigning operations in response to changing market conditions. The following table summarizes activity related to liabilities associated with restructuring activities:

	Restructuring Activity
	Q2 2018 Plan
(In millions)	Employee-Related Costs (a)			Facility Exit and Other Costs (b)		Total
Balance at December 28, 2018	$	6.7		$	0.2	$	6.9
Payments and other	(3.2		)	—		(3.2		)
Balance at September 27, 2019	$	3.5		$	0.2	$	3.7

(a) Employee-related costs primarily consist of severance benefits provided to employees who have been involuntarily terminated.

(b) Facility exit and other costs primarily consist of lease termination costs.

Q2 2018 Restructuring Plan

In the second quarter of 2018, the Company recorded a pre-tax charge of $2.1 million, $1.3 million and $1.1 million in its Network & Security Solutions ("NSS"), Electrical & Electronic Solutions ("EES") and Utility Power Solutions ("UPS") segments, respectively, and an additional $5.4 million at its corporate headquarters, primarily for severance-related expenses associated with a reduction of approximately 260 positions. In the third quarter of 2018, the Company recorded an additional $0.2 million charge at its corporate headquarters. The $10.1 million charge related to the second quarter 2018 plan primarily reflects actions related to facilities consolidation, systems integration and back office functions. This charge was included in "Operating expenses" in the Company's Condensed Consolidated Statements of Comprehensive Income for fiscal year 2018. The majority of the balance included in accrued expenses of $3.7 million as of September 27, 2019 is expected to be paid by the first half of 2020.

NOTE 3. LEASES

The Company adopted ASU 2016-02, Leases, as of December 29, 2018, using the modified retrospective approach. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below.

Substantially all of Anixter's office and warehouse facilities are leased under operating leases. The Company also leases certain equipment and vehicles primarily as operating leases. Lease costs are included within "Operating expenses" in the Company's Condensed Consolidated Statements of Comprehensive Income. During the three and nine months ended September 27, 2019, these costs were as follows:

	Three Months Ended		Nine Months Ended
(In millions)	September 27, 2019		September 27, 2019
Lease cost
Operating lease cost	$	18.6	$	57.6
Variable lease cost	5.6		17.2
Short-term lease cost	0.3		1.0
Total lease cost	$	24.5	$	75.8

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The weighted-average remaining lease term and weighted-average discount rate under operating leases were as follows:

	September 27, 2019
Lease term and discount rate
Weighted-average remaining lease term	6.4 years
Weighted-average discount rate (a)	6.1	%

(a) Upon adoption of ASU 2016-02, the discount rate used for existing leases was established as of December 29, 2018.

Maturities of operating lease liabilities at September 27, 2019 were as follows:

(In millions)
2019 (excluding the nine months ended September 27, 2019)	$	20.1
2020	68.8
2021	52.2
2022	46.6
2023	34.4
2024 and thereafter	95.9
Total lease payments	$	318.0
Less imputed interest	58.4
Present value of lease liabilities	$	259.6

Operating lease payments include $17.3 million related to options to extend lease terms that are reasonably certain of being exercised. As of September 27, 2019, the Company has an additional lease related to facilities that has not yet commenced of $4.2 million. This operating lease will commence in fiscal year 2020 with a lease term of ten years. Anixter subleases certain real estate to third parties. During the three and nine months ended September 27, 2019, the Company recognized income of $0.3 million and $0.8 million, respectively, which was included within "Operating expenses" in the Company's Condensed Consolidated Statements of Comprehensive Income. Aggregate future minimum rentals to be received under non-cancelable subleases at September 27, 2019 were $3.9 million.

During the nine months ended September 27, 2019, leased assets obtained in exchange for operating lease obligations were $312.0 million. The operating cash outflow for amounts included in the measurement of operating lease obligations was $47.0 million.

NOTE 4. DEBT

Debt is summarized below:

(In millions)	~~September 27, 2019~~			~~December~~April 283, ~~2018~~2020			January 3,2020
Long-term debt:
6.00% Senior notes due 2025	$	~~247.2~~		$	~~246~~247.94		$	247.3
5.50% Senior notes due 2023	~~347.8~~			~~347~~348.41			347.9
5.125% Senior notes due 2021	~~398.1~~			~~397~~398.45			398.3
Revolving lines of credit	~~82.0~~			~~260~~310.0			56.0
Finance lease obligations	~~4.1~~			07.9			6.0
Other	~~9.0~~			69.1			8.8
Unamortized deferred financing costs	~~(5.0~~		)	(64.02)		)	(4.6)
Total long-term debt	$	~~1,083.2~~		$	1,~~252~~316.78		$	1,059.7

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Fair Value of Debt

The fair value of Anixter's debt instruments is measured using observable market information which would be considered Level 2 in the fair value hierarchy described in accounting guidance on fair value measurements. The Company's fixed-rate debt consists of Senior notes due 2025, Senior notes due 2023 and Senior notes due 2021.

At ~~September~~April 273, ~~2019~~2020, the Company's total carrying value and estimated fair value of debt outstanding was $1,~~083~~316.28 million and $1,~~166~~317.48 million, respectively. This compares to a carrying value and estimated fair value of debt outstanding at ~~December~~January 283, ~~2018~~2020 of $1,~~252~~059.7 million and $1,~~261~~122.71 million, respectively. The ~~decrease~~increase in the carrying value and estimated fair value is primarily due to ~~lower~~higher outstanding borrowings under Anixter's revolving lines of credit.

NOTE 53. LEGAL CONTINGENCIES

From time to time, Anixter is party to legal proceedings and matters that arise in the ordinary course of business. As of ~~September~~April 273, ~~2019~~2020, the Company does 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, the Company's 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.

~~NOTE 6. INCOME TAXES~~8

~~The~~ANIXTER ~~Company's~~INTERNATIONAL ~~effective tax rate for the third quarter of 2019 was 27~~INC.8% compared to 30.6% in the prior year period. The Company's effective tax rate for the nine months ended September 27, 2019 was 27.7% compared to 29.9% in the prior year period. Income tax expense for the nine months ended September 28, 2018 included a $1.8 million tax benefit related to the reversal of deferred income tax valuation allowances, partially offset by $0.5 million of tax expense related to domestic permanent tax differences. The decrease in the effective tax rate was due primarily to the change in the country mix of earnings, foreign tax credit benefits and other incentives enacted by the recent tax reform.

~~The~~NOTES ~~December~~TO ~~22,~~THE ~~2017~~UNAUDITED ~~Tax~~CONDENSED ~~Cuts~~CONSOLIDATED ~~and~~FINANCIAL ~~Jobs~~STATEMENTS ~~Act~~– ~~subjects U.S. shareholders to tax on Global Intangible Low-Taxed Income~~ (~~“GILTI”~~Continued) earned by certain foreign subsidiaries. The Company recognizes the tax on GILTI as a period expense in the period the tax is incurred. Under this policy, the Company has not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period.

NOTE 4. INCOME TAXES

The Company's effective tax rate for the first quarter of 2020 was 25.7% compared to 30.3% in the prior year period. The decrease in the effective tax rate was due to a change in the country mix of earnings and associated tax benefits from our continued movement to a U.S.-center-led business model, with the major impact coming from a lower U.S. tax rate on foreign derived income and the ability to utilize foreign tax credits.

The December 22, 2017 Tax Cuts and Jobs Act subjects U.S. shareholders to tax on Global Intangible Low-Taxed Income ("GILTI") earned by certain foreign subsidiaries. The Company recognizes the tax on GILTI as a period expense in the period tax is incurred. Under this policy, the Company has not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period.

Anixter considers the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested. Upon distribution of those earnings in the form of dividends or otherwise, Anixter may be subject to withholding taxes payable to the various foreign countries.

NOTE 75. PENSION PLANS

The Company's defined benefit pension plans are the plans in the U.S., 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 these defined benefit pension plans are non-contributory and, with the exception of the U.S. and Canada, 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. The Company's policy is to fund all Domestic Plans as required by the Employee Retirement Income Security Act of 1974 ("ERISA") and the 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 debt securities.

13Components of net periodic pension (benefit) cost were as follows:


	Three Months Ended
	Domestic Plans						Foreign Plans						Total
(In millions)	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
Recorded in operating expenses:
Service cost	$	0.8	$	0.8	$	1.5	$	1.4	$	2.3	$	2.2

Recorded in other, net:
Interest cost	2.4		2.8		1.5		1.7		3.9		4.5
Expected return on plan assets	(3.9)		(3.7)		(2.5)		(2.7)		(6.4)		(6.4)
Net amortization ^(a)	0.2		0.3		1.3		0.8		1.5		1.1
Total recorded in other, net	(1.3)		(0.6)		0.3		(0.2)		(1.0)		(0.8)

Total net periodic pension (benefit) cost	$	(0.5)	$	0.2	$	1.8	$	1.2	$	1.3	$	1.4

(a)Reclassified from AOCI

NOTE 6. STOCKHOLDERS' EQUITY

At April 3, 2020, there were approximately 1.1 million shares reserved for issuance under the 2017 Stock Incentive Plan. Under such plan, the Company pays its 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 units is amortized over the respective vesting period representing the requisite service period, generally three to six years. Director stock units are expensed in the period in which they are granted, as these vest immediately.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~Components~~During the three months ended April 3, 2020, the Company granted 195,284 stock units to employees, with a weighted-average grant-date fair value of ~~net~~$19.0 ~~periodic~~million. ~~pension~~During ~~cost~~the ~~(benefit)~~three ~~were~~months asended ~~follows:~~April 3, 2020, the Company did not issue director stock units.

	Three Months Ended
	Domestic Plans						Foreign Plans						Total
(In millions)	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Recorded in operating expenses:
Service cost	$	0.7		$	0.8		$	1.5		$	1.5		$	2.2		$	2.3
Recorded in other, net:
Interest cost	2.7			2.6			1.7			1.6			4.4			4.2
Expected return on plan assets	(3.6		)	(4.0		)	(2.7		)	(2.4		)	(6.3		)	(6.4		)
Net amortization (a)	0.4			0.2			0.8			0.7			1.2			0.9
Total recorded in other, net	$	(0.5	)	(1.2		)	(0.2		)	(0.1		)	(0.7		)	(1.3		)
Total net periodic pension cost (benefit)	$	0.2		$	(0.4	)	$	1.3		$	1.4		$	1.5		$	1.0

Antidilutive stock options and units are excluded from the calculation of weighted-average shares for diluted earnings per share. For the first quarter of 2020 and 2019, the antidilutive stock options and units were immaterial.

~~(a)~~NOTE ~~Reclassified~~7. ~~from~~BUSINESS ~~AOCI.~~SEGMENTS

	Nine Months Ended
	Domestic Plans						Foreign Plans						Total
(In millions)	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Recorded in operating expenses:
Service cost	$	2.3		$	2.6		$	4.3		$	4.5		$	6.6		$	7.1
Recorded in other, net:
Interest cost	8.2			7.7			5.2			5.1			13.4			12.8
Expected return on plan assets	(10.8		)	(12.0		)	(8.2		)	(7.4		)	(19.0		)	(19.4		)
Net amortization (a)	1.2			0.5			2.4			2.2			3.6			2.7
Total recorded in other, net	$	(1.4	)	$	(3.8	)	$	(0.6	)	$	(0.1	)	$	(2.0	)	$	(3.9	)
Total net periodic pension cost (benefit)	$	0.9		$	(1.2	)	$	3.7		$	4.4		$	4.6		$	3.2

Anixter is a leading distributor of network and security solutions, electrical and electronic wire and cable solutions and utility power solutions. The Company has identified Network & Security Solutions ("NSS"), Electrical and Electronic Solutions ("EES") and Utility Power Solutions ("UPS") as reportable segments. Within its segments, the Company is also organized by geographies. Anixter's geographies consist of North America, which includes the U.S. and Canada, EMEA, which includes Europe, the Middle East and Africa, and Emerging Markets, which includes Asia Pacific and Central and Latin America.

~~(a)~~Corporate ~~Reclassified~~expenses ~~from~~are ~~AOCI~~incurred to obtain and coordinate financing, tax, information technology, legal and other related services, certain of which were rebilled to subsidiaries. The Company also has various corporate assets which are reported in corporate. Segment assets may not include jointly used 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.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 8. STOCKHOLDERS' EQUITY

At the end of the third quarter of 2019, there were 1.3 million shares reserved for issuance under the 2017 Stock Incentive Plan. Under such plan, the Company pays 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 units is amortized over the respective vesting period representing the requisite service period, generally three to six years. Director stock units are expensed in the period in which they are granted, as these vest immediately. The 2019 employee performance-based restricted stock units ("performance units") are issued on the third anniversary of the grant date based on the Company's adjusted EBITDA margin for each of the performance periods with a total shareholder return ("TSR") modifier relative to the TSR of the peer group companies determined by the Company's compensation committee. The fair value of each performance unit tranche is estimated using the Monte Carlo Simulation pricing model at the date of grant.

During the three and nine months ended September 27, 2019, the Company granted 1,510 and 229,647 stock units to employees, respectively, with a weighted-average grant-date fair value of $0.1 million and $13.6 million, respectively. During the three months ended September 27, 2019, the Company did not issue performance units to employees. During the nine months ended September 27, 2019, the Company granted 58,139 performance units to employees with a weighted-average grant-date fair value of $3.6 million.

During the three and nine months ended September 27, 2019, the Company granted directors 11,555 and 36,829 stock units, respectively, with a weighted-average grant-date fair value of $0.7 million and $2.1 million, respectively.

Antidilutive stock options and units are excluded from the calculation of weighted-average shares for diluted earnings per share. For the third quarter of 2019 and 2018, the antidilutive stock options and units were immaterial.

NOTE 9. BUSINESS SEGMENTS

Anixter is a leading distributor of network and security solutions, electrical and electronic wire and cable solutions and utility power solutions. The Company has identified NSS, EES and UPS as reportable segments. Within its segments, the Company is also organized by geographies. Anixter's geographies consist of North America, which includes the U.S. and Canada, EMEA, which includes Europe, the Middle East and Africa, and Emerging Markets, which includes Asia Pacific and Central and Latin America.

Corporate expenses are incurred to obtain and coordinate financing, tax, information technology, legal and other related services, certain of which are rebilled to subsidiaries. The Company also has various corporate assets which are reported in corporate. Segment assets may not include jointly used 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.

The categorization of net sales by end market is determined using a variety of data points including the technical characteristic of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which product will be incorporated. Anixter also has largely specialized its sales organization by segment. As data systems for capturing and tracking this data evolve and improve, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies net sales by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Segment Financial Information

Segment information for the three ~~and nine~~ months ended ~~September~~April 273, ~~2019~~2020 and ~~September~~March 2829, ~~2018~~2019 was as follows:

(In millions)
Third Quarter of 2019	NSS		EES		UPS				Corporate			Total
First Quarter of 2020			NSS				EES					UPS		Corporate		Total
Net sales	$	~~1,179.3~~	$	~~580.~~1,080.6	$	~~462.8~~	$	542.2	$	—		$	~~2,222~~448.29	$	—	$	2,071.7
Operating income (losses)	84.8		35.3		23.7				(42.0		)	101.8
Operating income (loss)			63.2				28.7					22.0		(42.5)		71.4

Third Quarter of 2018	NSS		EES		UPS				Corporate			Total
First Quarter of 2019			NSS				EES					UPS		Corporate		Total
Net sales	$	~~1,138.0~~	$	~~597~~1,112.45	$	~~443.6~~	$	566.0	$	—		$	~~2,179~~430.0	$	—	$	2,108.5
Operating income (losses)	75.0		34.1		19.9				(39.5		)	89.5
Operating income (loss)			70.9				29.1					18.5		(43.9)		74.6

Nine Months of 2019	NSS		EES		UPS		Corporate			Total
Net sales	$	3,491.7	$	1,753.1	$	1,348.5	$	—		$	6,593.3
Operating income (losses)	242.0		102.6		65.3		(127.8		)	282.1

Nine Months of 2018	NSS		EES		UPS		Corporate			Total
Net sales	$	3,229.1	$	1,771.4	$	1,280.6	$	—		$	6,281.1
Operating income (losses)	194.6		101.1		54.2		(127.5		)	222.4

Geographic Information

The following table summarizes net sales by geographic areas for the three ~~and nine~~ months ended ~~September~~April 273, ~~2019~~2020 and ~~September~~March 2829, ~~2018~~2019:

~~Three Months Ended~~

Three Months Ended

~~Nine Months Ended~~

(In millions)

~~September 27, 2019~~

~~September~~April 283, ~~2018~~2020

~~September 27, 2019~~

March 29, 2019

~~September 28, 2018~~

Net sales

North America

~~1,812.4~~

1,~~774~~686.01

~~5,354.6~~

1,697.8

~~5,148.9~~

EMEA

~~155.6~~

~~160~~148.62

~~456.4~~

152.5

~~502.2~~

Emerging Markets

~~254.2~~

~~244~~237.4

~~782.3~~

258.2

~~630.0~~

Total net sales

~~2,222.2~~

2,~~179~~071.07

~~6,593.3~~

2,108.5

~~6,281.1~~

~~Goodwill Assigned to Segments~~ 10

The following table presents the changes in goodwill allocated to the Company's reporting units during the nine months ended September 27, 2019:

(In millions)	NSS			EES		UPS		Total
Balance as of December 28, 2018	$	472.7		$	180.9	$	178.4	$	832.0
Acquisition related	0.2			—		—		0.2
Foreign currency translation	(2.0		)	0.2		2.9		1.1
Balance as of September 27, 2019	$	470.9		$	181.1	$	181.3	$	833.3

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~NOTE~~Goodwill ~~10. SUMMARIZED~~Assigned ~~FINANCIAL~~to ~~INFORMATION~~Segments ~~OF ANIXTER INC.~~

The following table presents the changes in goodwill allocated to the Company's reporting units during the three months ended April 3, 2020:


(In millions)	NSS		EES		UPS		Total
Balance as of January 3, 2020	$	463.6	$	181.3	$	183.8	$	828.7
Foreign currency translation and other	(8.2)		(0.8)		(9.7)		(18.7)
Balance as of April 3, 2020	$	455.4	$	180.5	$	174.1	$	810.0

NOTE 8. SUMMARIZED FINANCIAL INFORMATION OF ANIXTER INC.

Anixter International Inc. guarantees, fully and unconditionally, substantially all of the debt of its subsidiaries, which include Anixter Inc., its 100% owned primary operating subsidiary. Anixter International Inc. has no independent assets or operations and all subsidiaries other than Anixter Inc. are minor. The following summarizes the financial information for Anixter Inc.:

ANIXTER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)	~~September 27, 2019~~		~~December~~April 283, ~~2018~~2020		January 3,2020
Assets:
Current assets	$	~~3,137.1~~	$	3,~~171~~228.68	$	3,035.3
Property and equipment, net	~~172.0~~		~~169~~179.10		179.5
Operating leases	~~244.0~~		—255.7		265.1
Goodwill	~~833.3~~		~~832~~810.0		828.7
Intangible assets, net	~~365.9~~		~~392~~342.9		361.2
Other assets	~~110.0~~		92126.98		132.9
	$	~~4,862.3~~	$	4,~~658~~943.52	$	4,802.7
Liabilities and Stockholder's Equity:
Current liabilities	$	~~1,639.5~~	$	1,~~630~~418.31	$	1,492.8
Long-term debt	~~1,089.9~~		1,~~260~~322.76		1,065.9
Operating lease obligations	~~194.2~~		—205.6		213.0
Other liabilities	~~191.1~~		~~199~~166.60		172.6
Stockholder’s equity	~~1,747.6~~		1,~~567~~830.9		1,858.4
	$	~~4,862.3~~	$	4,~~658~~943.52	$	4,802.7

ANIXTER INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE (LOSS) INCOME

	~~Three Months Ended~~		Three Months Ended		~~Nine Months Ended~~
(In millions)	~~September 27, 2019~~		~~September~~April 283, ~~2018~~2020		~~September 27, 2019~~		March 29,2019		~~September 28, 2018~~
Net sales	$	~~2,222.2~~	$	2,~~179~~071.07	$	~~6,593.3~~	$	2,108.5	$	~~6,281.1~~
Operating income	$	~~103.5~~	$	9172.17	$	~~287.1~~	$	76.1	$	~~227.5~~
Income before income taxes	$	~~83.7~~	$	7049.1	$	~~228.2~~	$	57.4	$	~~167.8~~
Net income	$	~~60.8~~	$	4936.18	$	~~166.3~~	$	40.4	$	~~119.0~~
Comprehensive income	$	47.9	$	56.3	$	170.6			$	98.1
Comprehensive (loss) income			$	(27.6)			$	39.8

1711

ANIXTER INTERNATIONAL INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTE 11. SUBSEQUENT EVENT

On October 30, 2019, the Company, CD&R Arrow Parent, LLC ("Parent"), and CD&R Arrow Merger Sub, Inc. ("Merger Sub") entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”). Parent and Merger Sub are indirectly owned by investment funds managed by Clayton, Dubilier & Rice. At the consummation of the merger, each of the Company's issued and outstanding shares of common stock will be converted into the right to receive $81.00 in cash, less any applicable withholding taxes. The consummation of the merger remains subject to customary closing conditions. As a result of the merger, the Company will cease to be a publicly traded company.

The Merger Agreement provides for a 40 day “go-shop” period, during which the Company and its subsidiaries and representatives will be permitted to actively solicit alternative acquisition proposals and enter into negotiations with other parties, subject to certain conditions regarding non-public information. The Company will have the right to terminate the Merger Agreement to enter into a superior proposal, subject to the terms and conditions of the Merger Agreement. There can be no assurance the “go-shop” period will result in a superior proposal. The Company does not intend to disclose developments about the “go-shop” process unless and until its board of directors has made a decision with respect to any potential superior proposal.

ANIXTER INTERNATIONAL INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following is a discussion of our financial condition and results of operations for the three ~~and nine~~ months ended ~~September~~April 273, ~~2019~~2020 as compared to the corresponding ~~periods~~period in the prior year. This discussion should be read in conjunction with the Condensed Consolidated Financial Statements, including the related notes, set forth in this report under "Condensed Consolidated Financial Statements" and our Annual Report on Form 10-K for the year ended ~~December~~January 283, ~~2018~~2020.

~~Third~~First Quarter 2020 and ~~Year-to-Date~~ 2019 ~~and 2018~~ Consolidated Results of Operations

(In millions, except per share amounts)	~~Three Months Ended~~			Three Months Ended			~~Nine Months Ended~~
	September 27, 2019			September 28, 2018			September 27, 2019				September 28, 2018
				April 3,2020					March 29,2019
Net sales	$	~~2,222.2~~		$	2,~~179~~071.07		$	~~6,593.3~~	$	2,108.5	$	~~6,281.1~~
Gross profit	~~446.4~~			~~424~~416.14			~~1,315.3~~		418.9		~~1,228.0~~
Operating expenses	~~344.6~~			~~334~~345.60			~~1,033.2~~		344.3		~~1,005.6~~
Operating income	~~101.8~~			8971.54			~~282.1~~		74.6		~~222.4~~
Other expense:
Interest expense	~~(18.5~~		)	(1916.38)		)	~~(58.3~~		(20.4)		~~(56.5~~		)
Other, net	~~(1.2~~		)	(16.6)		)	~~(0.1~~		)1.8		~~(2.6~~		)
Income before income taxes	~~82.1~~			6848.60			~~223.7~~		56.0		~~163.3~~
Income tax expense	~~22.8~~			2112.03			~~61.8~~		16.9		~~48.8~~
Net income	~~59.3~~			~~47.6~~$	35.7		~~161.9~~		$	39.1	~~114.5~~
Diluted income per share:	$	1.73		$	1.40		$	4.73			$	3.36
Diluted income per share				$	1.03				$	1.14

Executive Overview

~~Third~~First Quarter Highlights

WeTotal ~~delivered~~company ~~third~~sales ~~quarter~~decreased ~~sales~~1.7% ofto $2,~~222~~071.27 million in the first quarter of 2020, upreflecting ~~2.0%~~growth ~~compared~~in toour ~~the~~Utility ~~prior~~Power ~~year,~~Solutions ~~driven~~("UPS") segment but offset by ~~growth~~declines in our Network and Security Solutions ("NSS") and ~~Utility~~Electrical ~~Power~~and Electronic Solutions ("~~UPS~~EES") ~~businesses~~segments. Excluding the unfavorable impacts from foreign exchange and copper, weour ~~delivered~~results reflect organic sales ~~growth~~decline of 21.63%. InThe ~~addition~~current quarter had 65 billing days compared to 64 billing days in the prior year period. Excluding the favorable impact from the extra billing day, adjusted daily sales ~~growth~~decreased 2.8%. In addition, wethe first quarter of 2020 also ~~delivered~~reflects gross margin of 20.1%, up 6020 basis points from the prior year.

Strategy Update and Business Outlook

WeThe ~~believe~~first ~~that~~quarter of 2020 saw the ~~positive~~global ~~sales~~outbreak ~~trends~~of ~~that~~a novel strain of coronavirus ("COVID-19"), which in the latter part of the quarter created significant economic disruption. While our shipments were consistent with our outlook through February, we ~~realized~~experienced a drop in shipments in the ~~first~~last three ~~quarters~~weeks of ~~2019~~March. ~~will~~Due ~~continue~~to the uncertainty created by COVID-19, ~~based~~we onproactively increased our ~~solid~~cash ~~backlog~~levels ~~and~~to ~~pipeline~~provide ~~trends~~additional flexibility during the March disruption in the financial markets. We believe that our cash on hand, covenant-light debt, and ~~discussions~~current ~~with~~borrowing availability provide sufficient resources and liquidity to manage the challenges caused by the current market conditions. In addition, we have scaled back our ~~customers~~capital expenditure spending projections by approximately 40% and ~~suppliers~~expect lower levels of working capital which will further improve cash flow in these uncertain times. WeFinally, ~~continue~~in order to ~~see~~manage ~~good~~through this unpredictable demand environment, ~~tempered~~we byare ~~macro~~aggressively ~~economic~~reducing ~~uncertainty~~our inoperating ~~certain~~expenses ~~markets~~while still supporting our customers and ~~flat~~their orspecific ~~decelerating~~needs. ~~trends~~We inwill ~~certain~~continue ~~key~~to ~~economic~~actively ~~indicators.~~monitor Wethe situation and may take further actions as may be required by government authorities or that we determine are ~~also~~in ~~continuing~~the tobest ~~progress~~interests ~~with~~of our ~~digital~~employees, ~~innovation~~customers, suppliers and ~~business~~stockholders. ~~transformation~~Although ~~initiative~~we are aggressively managing our response to COVID-19, ~~which~~the ~~will~~impact ~~deliver~~that ~~customer~~COVID-~~facing~~19 ~~technologies~~will have on results in our second quarter and ~~enterprise~~other ~~efficiencies.~~subsequent Weperiods ~~expect~~is ~~our~~dependent ~~investment~~on infuture ~~innovation~~developments towhich ~~deliver~~are ~~significant~~uncertain ~~long-term~~and ~~benefits~~cannot be predicted at this time.

~~During~~Through ~~the~~this ~~second~~challenging ~~quarter~~time ofwe ~~2018,~~continue weto ~~completed~~serve ~~the~~our ~~acquisition~~customer ofand ~~security~~supplier ~~businesses~~partners by operating as an essential business in ~~Australia~~markets such as utility, healthcare, public safety, government, telecommunications, and ~~New~~cloud ~~Zealand~~computing services. ~~These~~We ~~acquisitions~~believe ~~have~~that ~~been~~the ~~accretive~~work from home environment has already and will continue to ~~earnings~~spur higher levels of data center and connectivity related spending which may be positive for our NSS segment later in the ~~first~~year. ~~full~~In ~~year~~addition, our utility and service provider businesses are expected to benefit from remote working. While we have seen a delay in a large number of ~~operation~~capital projects across all segments, ~~exclusive~~we have not yet experienced any cancellations of ~~transaction~~major ~~and~~projects ~~integration~~by ~~costs~~our customers. We believe once current restrictions around the globe are lifted we may see activity pick up based on our solid backlog levels.

1912

ANIXTER INTERNATIONAL INC.

On January 10, 2020, Anixter entered into a merger agreement with WESCO International Inc. ("WESCO") under which WESCO will acquire Anixter in a transaction valued at approximately $4.5 billion. Based on the transaction structure and the number of shares of WESCO and Anixter common stock currently outstanding, it is anticipated that WESCO stockholders will own 84% and Anixter stockholders will own 16% of the combined company. The transaction is currently subject to receipt of regulatory approval in Canada and Mexico, as well as other customary closing conditions.

Items Impacting Comparability of Results

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") above, this report includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission. Specifically, net sales comparisons to the prior corresponding period, both worldwide and in relevant segments, are discussed in this report both on a U.S. GAAP and non-GAAP basis. We believe that by providing non-GAAP organic growth, which adjusts for the impact of acquisitions (when applicable), foreign exchange fluctuations, copper prices and the number of billing days, both management and investors are provided with meaningful supplemental sales information to understand and analyze our underlying trends and other aspects of our financial performance. We calculate the year-over-year organic sales growth impact related to acquisitions by including their comparable period results prior to the acquisitions with our results, as we believe this represents the most accurate representation of organic growth, considering the nature of the companies we acquired and the synergistic revenues that have been or will be achieved. Historically, and from time to time, we may also exclude other items from reported financial results (e.g., impairment charges, inventory adjustments, restructuring charges, tax items, currency devaluations, pension settlements, etc.) in presenting adjusted operating expense, adjusted operating income, adjusted income taxes and adjusted net income so that both management and financial statement users can use these non-GAAP financial measures to better understand and evaluate our performance period over period and to analyze the underlying trends of our business. We have also excluded amortization of intangible assets associated with purchase accounting from acquisitions from the adjusted amounts for comparison of the non-GAAP financial measures period over period.

EBITDA is defined as net income from continuing operations before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange and other non-operating expense and non-cash stock-based compensation, excluding the other items from reported financial results, as defined above. We believe that adjusted operating income, EBITDA and Adjusted EBITDA provide relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business segment performance. Adjusted operating income provides an understanding of the results from the primary operations of our business by excluding the effects of certain items that do not reflect the ordinary earnings of our operations. We use adjusted operating income to evaluate our period over period operating performance because we believe this provides a more comparable measure of our continuing business excluding certain items that are not reflective of expected ongoing operations. This measure may be useful to an investor in evaluating the underlying performance of our business. EBITDA provides us with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA further excludes the effects of foreign exchange and other non-cash stock-based compensation, and certain items that do not reflect the ordinary earnings of our operations and that are also excluded for purposes of calculating adjusted net income, adjusted earnings per share and adjusted operating income. EBITDA and Adjusted EBITDA are used by our management for various purposes including as measures of performance of our operating entities and as a basis for strategic planning and forecasting. Adjusted EBITDA may be useful to an investor because this measure is widely used to evaluate a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending on the accounting methods, book value of assets, capital structure and the method by which the assets were acquired, among other factors. They are not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with U.S. GAAP.

Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and non-GAAP financial measures as reported by us may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the ~~Condensed~~ Consolidated Financial Statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.

Our operating results can be affected by changes in prices of commodities, primarily copper, which are components in some of the electrical wire and cable products sold. Generally, as the costs of inventory purchases increase due to higher commodity prices, our mark-up percentage to customers remains relatively constant, resulting in higher sales revenue and gross profit. In addition, existing inventory purchased at previously lower prices and sold as prices increase may result in a higher gross profit margin. Conversely, a decrease in commodity prices in a short period of time would have the opposite effect, negatively affecting financial results. The degree to which spot market copper prices change affects product prices and the amount of gross profit earned will be affected by end market demand and overall economic conditions. Importantly, however, there is no exact measure of the impact of changes in copper prices, as there are thousands of transactions in any given year, each of which has various factors involved in the individual pricing decisions. Therefore, all references to the effect of copper prices are estimates.13

ANIXTER INTERNATIONAL INC.

~~The~~Our ~~following~~operating ~~summarizes~~results can be affected by changes in prices of commodities, primarily copper, which are components in some of the ~~various~~electrical ~~items~~wire ~~that~~and ~~favorably/(unfavorably)~~cable ~~impact~~products sold. Generally, as the ~~comparability~~costs of inventory purchases increase due to higher commodity prices, our mark-up percentage to customers remains relatively constant, resulting in higher sales revenue and gross profit. In addition, existing inventory purchased at previously lower prices and sold as prices increase may result in a higher gross profit margin. Conversely, a decrease in commodity prices in a short period of time would have the opposite effect, negatively affecting financial results. ~~for~~The degree to which spot market copper prices change affects product prices and the ~~three~~amount of gross profit earned will be affected by end market demand and ~~nine~~overall ~~months~~economic ~~ended~~conditions. ~~September 27~~Importantly, ~~2019~~however, ~~and~~there ~~September 28~~is no exact measure of the impact of changes in copper prices, ~~2018~~as there are thousands of transactions in any given year, each of which has various factors involved in the individual pricing decisions. Therefore, all references to the effect of copper prices are estimates.

Items Impacting Comparability of Results:
(In millions, except per share amounts)	Three Months Ended						Nine Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Items impacting operating expense and operating income:	Favorable / (Unfavorable)
Amortization of intangible assets	$	(8.8	)	$	(9.6	)	$	(26.4	)	$	(28.6	)
Restructuring charge	—			(0.2		)	—			(9.4		)
Acquisition and integration costs	—			(0.3		)	0.3			(2.9		)
CEO retirement agreement expense	—			—			—			(2.6		)
U.K. facility relocation costs	—			(0.2		)	—			(0.8		)
Total of items impacting operating expense and operating income	$	(8.8	)	$	(10.3	)	$	(26.1	)	$	(44.3	)
Items impacting income taxes:
Tax impact of items impacting pre-tax income above	2.3			3.1			6.7			11.1
Reversal of deferred income tax valuation allowances	—			—			—			1.8
Tax expense related to domestic permanent tax differences	—			—			—			(0.5		)
Total of items impacting income taxes	$	2.3		$	3.1		$	6.7		$	12.4
Net income impact of these items	$	(6.5	)	$	(7.2	)	$	(19.4	)	$	(31.9	)
Diluted EPS impact of these items	$	(0.19	)	$	(0.21	)	$	(0.57	)	$	(0.94	)

The following summarizes the various items that favorably/(unfavorably) impact the comparability of the results for the three months ended April 3, 2020 and March 29, 2019.


Items Impacting Comparability of Results:
(In millions, except per share amounts)	Three Months Ended
	April 3, 2020		March 29, 2019
Items impacting operating expense and operating income:	Favorable / (Unfavorable)
Amortization of intangible assets	$	(8.6)	$	(8.8)
Merger costs	(2.9)		—
Acquisition and integration costs	—		0.3
Total of items impacting operating expense and operating income	$	(11.5)	$	(8.5)
Items impacting income taxes:
Tax impact of items impacting pre-tax income above	2.8		2.2
Total of items impacting income taxes	$	2.8	$	2.2
Net income impact of these items	$	(8.7)	$	(6.3)
Diluted EPS impact of these items	$	(0.25)	$	(0.19)

The items impacting operating expense and operating income by segment are reflected in the tables below.

Items Impacting Comparability of Operating Expense and Operating Income by Segment:
	Three Months Ended September 27, 2019
				Three Months Ended April 3, 2020
(In millions)	~~NSS~~			~~EES~~NSS			~~UPS~~		EES		~~Corporate~~		~~Total~~UPS			Corporate		Total
Amortization of intangible assets	$	~~(4.1~~	)	$	(13.49)	)	$	~~(3.3~~	)$	(1.4)	$	—	$	(83.83)	)	$	—	$	(8.6)
Restructuring charge	—			(0.5		)	—				0.5		—
Merger costs				—					—				—			(2.9)		(2.9)
Total of items impacting operating expense and operating income	$	~~(4.1~~	)	$	(13.9)	)	$	~~(3.3~~	)$	(1.4)	$	~~0.5~~	$	(83.83)	)	$	(2.9)	$	(11.5)

	Three Months Ended September 28, 2018
				Three Months Ended March 29, 2019
(In millions)	~~NSS~~			~~EES~~NSS			~~UPS~~		EES		~~Corporate~~			~~Total~~UPS			Corporate		Total
Amortization of intangible assets	$	~~(5.0~~	)	$	(1.4.1)	)	$	~~(3.2~~	)$	(1.4)	$	—		$	(93.63)	)	$	—	$	(8.8)
Restructuring charge	—			—			—		—		~~(0.2~~		)	(0.21		)	(0.1)		—
Acquisition and integration costs	~~(0.2~~		)	—			—		—		~~(0.1~~		)	~~(0.3~~—		)	0.3		0.3
U.K. facility relocation costs	(0.1		)	(0.1		)	—				—			(0.2		)
Total of items impacting operating expense and operating income				$	(4.1)				$	(1.4)				$	(3.2)		$	0.2	$	(8.5)
Total of items impacting operating expense and operating income	$	(5.3	)	$	(1.5	)	$	(3.2	)		$	(0.3	)	$	(10.3	)

2114

ANIXTER INTERNATIONAL INC.

	Nine Months Ended September 27, 2019
U.S. GAAP to Non-GAAP Net Income and EPS Reconciliation:
(In millions)	NSS			EES				UPS			Corporate		Total
(In millions, except per share amounts)		Three Months Ended
Amortization of intangible assets	$	(12.4	)	$	(4.1	)		$	(9.9	)	$	—	$	(26.4	)
		April 3,2020					March 29,2019
Restructuring charge	—			(0.5		)		0.1			0.4		—
Reconciliation to most directly comparable U.S. GAAP financial measure:
Acquisition and integration costs	—			—				—			0.3		0.3
Net income - U.S. GAAP		$	35.7				$	39.1
Total of items impacting operating expense and operating income	$	(12.4	)	$	(4.6	)		$	(9.8	)	$	0.7	$	(26.1	)
Items impacting net income		8.7					6.3
Net income - Non-GAAP		$	44.4				$	45.4
Diluted EPS – U.S. GAAP		$	1.03				$	1.14
Diluted EPS impact of these items		0.25					0.19
Diluted EPS – Non-GAAP		$	1.28				$	1.33

	Nine Months Ended September 28, 2018
(In millions)	NSS			EES			UPS			Corporate			Total
Amortization of intangible assets	$	(13.0	)	$	(5.7	)	$	(9.9	)	$	—		$	(28.6	)
Restructuring charge	(2.1		)	(1.3		)	(0.7		)	(5.3		)	(9.4		)
Acquisition and integration costs	(2.5		)	—			—			(0.4		)	(2.9		)
CEO retirement agreement expense	—			—			—			(2.6		)	(2.6		)
U.K. facility relocation costs	(0.2		)	(0.6		)	—			—			(0.8		)
Total of items impacting operating expense and operating income	$	(17.8	)	$	(7.6	)	$	(10.6	)	$	(8.3	)	$	(44.3	)

U.S. GAAP to Non-GAAP Net Income and EPS Reconciliation:
(In millions, except per share amounts)	Three Months Ended				Nine Months Ended
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Reconciliation to most directly comparable U.S. GAAP financial measure:
Net income - U.S. GAAP	$	59.3	$	47.6	$	161.9	$	114.5
Items impacting net income	6.5		7.2		19.4		31.9
Net income - Non-GAAP	$	65.8	$	54.8	$	181.3	$	146.4
Diluted EPS – U.S. GAAP	$	1.73	$	1.40	$	4.73	$	3.36
Diluted EPS impact of these items	0.19		0.21		0.57		0.94
Diluted EPS – Non-GAAP	$	1.92	$	1.61	$	5.30	$	4.30

ANIXTER INTERNATIONAL INC.

Net Sales

Sales Growth Trends	~~Sales Growth Trends~~
		Three Months Ended September 27, 2019											Three Months Ended September 28, 2018
				Three Months Ended April 3, 2020																						Three Months Ended March 29, 2019		Growth/(Decline)
(In millions)	~~(In millions)~~	~~As Reported~~		As Reported	~~Foreign Exchange Impact~~		~~Copper Impact~~	Foreign Exchange Impact		~~As Adjusted~~		Copper Impact	~~As Reported~~		~~Growth/(Decline)~~	As Adjusted				As Reported						Adjusted 2019 for Billing Days		Adjusted Daily Sales
															~~Actual~~			~~Organic~~												Actual	Organic
Network & Security Solutions (NSS)	~~Network & Security Solutions (NSS)~~
North America	~~North America~~	$	~~885.1~~	$	$805.2	~~0.7~~	$	—$	0.3	$	~~885.8~~	$	$—	~~854.0~~	~~3.6~~	%$	805.5	~~3.7~~	%	$	824.8	(2.4)	%	(2.3)	%	$	837.7	(3.8)	%
EMEA	~~EMEA~~	~~97.8~~		85.5	~~3.2~~		—	1.4		~~101.0~~		—	~~100.6~~		~~(2.7~~	)%86.9		~~0.4~~	%	93.6		(8.7)	%	(7.2)	%	95.1		(8.6)	%
Emerging Markets	~~Emerging Markets~~	~~196.4~~		189.9	~~3.9~~		—	4.8		~~200.3~~		—	~~183.4~~		~~7.1~~	%194.7		~~9.2~~	%	194.1		(2.2)	%	0.3	%	197.1		(1.3)	%
NSS	~~NSS~~	$	~~1,179.3~~	$	$1,080.6	~~7.8~~	$	—$	6.5	$	~~1,187.1~~	$	$—	~~1,138.0~~	~~3.6~~	%$	1,087.1	~~4.3~~	%	$	1,112.5	(2.9)	%	(2.3)	%	$	1,129.9	(3.8)	%
Electrical & Electronic Solutions (EES)	~~Electrical & Electronic Solutions (EES)~~
North America	~~North America~~	$	~~464.5~~	$	$432.0	~~0.8~~	$	~~0.3~~$	0.2	$	~~465.6~~	$	$1.3	~~476.4~~	~~(2.5~~	)%$	433.5	~~(2.3~~	)%	$	443.0	(2.5)	%	(2.1)	%	$	449.9	(3.7)	%
EMEA	~~EMEA~~	~~57.8~~		62.7	~~2.6~~		~~(0.2~~	0.6	)	~~60.2~~		0.5	~~60.0~~		~~(3.6~~	)%63.8		~~0.3~~	%	58.9		6.4	%	8.3	%	59.8		6.6	%
Emerging Markets	~~Emerging Markets~~	~~57.8~~		47.5	~~0.3~~		~~0.6~~	0.6		~~58.7~~		0.6	~~61.0~~		~~(5.4~~	)%48.7		~~(3.7~~	)%	64.1		(25.9)	%	(24.0)	%	65.1		(25.2)	%
EES	~~EES~~	$	~~580.1~~	$	$542.2	~~3.7~~	$	~~0.7~~$	1.4	$	~~584.5~~	$	$2.4	~~597.4~~	~~(2.9~~	)%$	546.0	~~(2.2~~	)%	$	566.0	(4.2)	%	(3.5)	%	$	574.8	(5.0)	%
Utility Power Solutions (UPS)	~~Utility Power Solutions (UPS)~~
North America	~~North America~~	$	~~462.8~~	$	$448.9	~~0.3~~	$	~~(0.1~~$	)0.2	$	~~463.0~~	$	$(0.2)	~~443.6~~	~~4.3~~	%$	448.9	~~4.4~~	%	$	430.0	4.4	%	4.4	%	$	436.7	2.8	%
UPS	~~UPS~~	$	~~462.8~~	$	$448.9	~~0.3~~	$	~~(0.1~~$	)0.2	$	~~463.0~~	$	$(0.2)	~~443.6~~	~~4.3~~	%$	448.9	~~4.4~~	%	$	430.0	4.4	%	4.4	%	$	436.7	2.8	%
Total	~~Total~~	$	~~2,222.2~~	$	$2,071.7	~~11.8~~	$	~~0.6~~$	8.1	$	~~2,234.6~~	$	$2.2	~~2,179.0~~	~~2.0~~	%$	2,082.0	~~2.6~~	%	$	2,108.5	(1.7)	%	(1.3)	%	$	2,141.4	(2.8)	%
Geographic Sales	~~Geographic Sales~~
North America	~~North America~~	$	~~1,812.4~~	$	$1,686.1	~~1.8~~	$	~~0.2~~$	0.7	$	~~1,814.4~~	$	$1.1	~~1,774.0~~	~~2.2~~	%$	1,687.9	~~2.3~~	%	$	1,697.8	(0.7)	%	(0.6)	%	$	1,724.3	(2.1)	%
EMEA	~~EMEA~~	~~155.6~~		148.2	~~5.8~~		~~(0.2~~	2.0	)	~~161.2~~		0.5	~~160.6~~		~~(3.0~~	)%150.7		~~0.4~~	%	152.5		(2.8)	%	(1.2)	%	154.9		(2.7)	%
Emerging Markets	~~Emerging Markets~~	~~254.2~~		237.4	~~4.2~~		~~0.6~~	5.4		~~259.0~~		0.6	~~244.4~~		~~4.0~~	%243.4		~~6.0~~	%	258.2		(8.1)	%	(5.8)	%	262.2		(7.2)	%
Total	~~Total~~	$	~~2,222.2~~	$	$2,071.7	~~11.8~~	$	~~0.6~~$	8.1	$	~~2,234.6~~	$	$2.2	~~2,179.0~~	~~2.0~~	%$	2,082.0	~~2.6~~	%	$	2,108.5	(1.7)	%	(1.3)	%	$	2,141.4	(2.8)	%
Note: There were 65 billing days in the first quarter of 2020 compared to 64 billing days in the first quarter of 2019.

NSS – Sales of $1,~~179~~080.36 million ~~increased~~decreased 32.69% from $1,~~138~~112.05 million in the prior year period. ~~NSS~~The ~~organic~~decrease ~~sales~~reflects ~~increased~~a 4decline in the network infrastructure portion of the business and in all geographies.~~3%,~~ ~~adjusting~~Adjusting for the unfavorable impact from foreign exchange, ~~reflecting~~NSS ~~growth~~organic insales ~~both~~decreased ~~the~~2.3%, ~~network~~a ~~infrastructure~~3.8% ~~and~~decrease ~~security~~on ~~portions~~a ofper ~~the~~day ~~business and in all geographies~~basis. NSS security sales in the ~~third~~three ~~quarter~~months ofended ~~2019~~April 3, 2020 of $~~524~~499.50 million, which represents 4446.52% of total segment sales, increased 83.20% from the prior year period. Adjusted for the $10.52 million favorable currency impact, organic security sales growth was 72.9% compared to the ~~third~~three ~~quarter~~months ofended ~~2018~~March 29, 2019.

EES – Sales of $~~580~~542.12 million decreased 24.92% from $~~597~~566.40 million in the prior year period, ~~weakened~~with bya ~~the~~decline ~~unfavorable~~in ~~impacts~~the ~~from~~commercial ~~foreign exchange~~ and ~~copper.~~industrial ~~EES~~business ~~organic~~partially ~~sales~~offset ~~decreased~~ by ~~2.2%,~~growth ~~reflecting weakness~~ in ~~both~~ the ~~commercial and industrial and~~ original equipment manufacturer ~~portions~~("OEM") portion of the business. ~~and~~Adjusting infor the ~~North~~unfavorable ~~America~~impacts from foreign exchange and ~~Emerging~~copper, ~~Markets~~EES ~~geographies~~organic sales decreased by 3.5%, a 5.0% decrease on a per day basis.

UPS – Sales of $~~462~~448.89 million increased 4.34% from $~~443~~430.60 million in the prior year period, ~~reflecting~~with ~~broad-based~~ growth ~~with~~driven ~~both~~by investor-owned utility ~~and public power~~ customers. ~~UPS~~Adjusting ~~organic sales increased 4.4%, adjusting~~ for the unfavorable impact from foreign exchange and favorable impact from copper, UPS organic sales increased 4.4%, a 2.8% increase on a per day basis.

ANIXTER INTERNATIONAL INC.

Sales Growth Trends
	Nine Months Ended September 27, 2019								Nine Months Ended September 28, 2018
(In millions)	As Reported		Foreign Exchange Impact		Copper Impact		As Adjusted		As Reported		Acquisitions Impact		Adjusted for Acquisitions		Growth/(Decline)
															Actual		Organic
Network & Security Solutions (NSS)
North America	$	2,611.7	$	9.5	$	—	$	2,621.2	$	2,475.4	$	—	$	2,475.4	5.5	%	5.9	%
EMEA	279.7		13.4		—		293.1		303.8		1.7		305.5		(7.9	)%	(4.0	)%
Emerging Markets	600.3		15.2		—		615.5		449.9		46.7		496.6		33.4	%	24.0	%
NSS	$	3,491.7	$	38.1	$	—	$	3,529.8	$	3,229.1	$	48.4	$	3,277.5	8.1	%	7.7	%
Electrical & Electronic Solutions (EES)
North America	$	1,394.4	$	7.5	$	10.5	$	1,412.4	$	1,392.9	$	—	$	1,392.9	0.1	%	1.4	%
EMEA	176.7		10.0		0.9		187.6		198.4		—		198.4		(10.9	)%	(5.4	)%
Emerging Markets	182.0		1.8		1.9		185.7		180.1		—		180.1		1.0	%	3.1	%
EES	$	1,753.1	$	19.3	$	13.3	$	1,785.7	$	1,771.4	$	—	$	1,771.4	(1.0	)%	0.8	%
Utility Power Solutions (UPS)
North America	$	1,348.5	$	4.5	$	0.5	$	1,353.5	$	1,280.6	$	—	$	1,280.6	5.3	%	5.7	%
UPS	$	1,348.5	$	4.5	$	0.5	$	1,353.5	$	1,280.6	$	—	$	1,280.6	5.3	%	5.7	%
Total	$	6,593.3	$	61.9	$	13.8	$	6,669.0	$	6,281.1	$	48.4	$	6,329.5	5.0	%	5.4	%
Geographic Sales
North America	$	5,354.6	$	21.5	$	11.0	$	5,387.1	$	5,148.9	$	—	$	5,148.9	4.0	%	4.6	%
EMEA	456.4		23.4		0.9		480.7		502.2		1.7		503.9		(9.1	)%	(4.6	)%
Emerging Markets	782.3		17.0		1.9		801.2		630.0		46.7		676.7		24.2	%	18.4	%
Total	$	6,593.3	$	61.9	$	13.8	$	6,669.0	$	6,281.1	$	48.4	$	6,329.5	5.0	%	5.4	%

NSS – Sales of $3,491.7 million increased 8.1% from $3,229.1 million in the prior year period. NSS organic sales increased 7.7%, adjusting for the unfavorable impact from foreign exchange and favorable impact from acquisitions, reflecting growth in both the network infrastructure and security portions of the business and in the North America and Emerging Markets geographies. NSS security sales in the nine months ended September 27, 2019 of $1,523.6 million, which represents 43.6% of total segment sales, increased 12.2% from the prior year period. Adjusted for the $48.1 million favorable impact from acquisitions and $6.9 million unfavorable currency impact, organic security sales growth was 8.9% compared to the nine months ended September 28, 2018.

EES – Sales of $1,753.1 million decreased 1.0% from $1,771.4 million in the prior year period, weakened by the unfavorable impacts from foreign exchange and copper. EES organic sales increased by 0.8%, with growth driven by strength in the commercial and industrial business.

UPS – Sales of $1,348.5 million increased 5.3% from $1,280.6 million in the prior year period, reflecting broad-based growth with both investor-owned utility and public power customers. UPS organic sales increased 5.7%, adjusting for the unfavorable impacts from foreign exchange and copper.

Gross Margin

Gross margin of 20.1% in the ~~third~~first quarter of ~~2019~~2020 compares to 19.59% in the ~~third~~first quarter of ~~2018. Gross margin of 19.9% in the nine months ended September 27,~~ 2019 ~~compares to 19~~.6% ~~in the nine months ended September 28, 2018.~~ The higher gross margin in 2020 was primarily driven by margin initiatives implemented across the business.

2416

ANIXTER INTERNATIONAL INC.

Operating Expenses

Operating expenses were $~~344~~345.60 million and $~~334~~344.63 million in the ~~third~~first quarter of ~~2019~~2020 and ~~2018~~2019, respectively. The ~~third~~first quarter of ~~2019~~2020 includes $8.~~8 million of intangible asset amortization. The third quarter of 2018 includes $9.~~6 million of intangible asset amortization, aand ~~restructuring charge of~~ $0.2 ~~million, $0~~.39 million of ~~acquisition~~merger ~~and integration~~ costs ~~and $0~~.2 ~~million of U.K. facility relocation costs.~~ The ~~U.K.~~merger ~~facility relocation~~ costs relate to expenses weassociated ~~incurred~~with tothe ~~move~~merger ~~our~~agreement ~~largest~~entered ~~warehouse~~into inon ~~EMEA~~January 10, 2020. WeThe ~~were~~first ~~forced~~quarter toof ~~move~~2019 ~~this~~includes ~~location~~$8.8 ~~due~~million toof aintangible ~~government-backed~~asset ~~rail~~amortization ~~line~~and ~~that~~a ~~will~~reversal ~~run~~of ~~through~~acquisition ~~our~~and ~~legacy~~integration ~~facility~~costs of $0.3 million. Excluding these items from their related periods, adjusted operating expenses in ~~the~~2020 ~~third~~decreased ~~quarter of 2019 increased 3~~0.67% to $~~335~~333.85 million, or 1516.1% of sales, which compares to prior year adjusted operating expense of $~~324~~335.38 million, or 1415.9% of sales. Further adjusting operating expenses for a favorable $21.24 million impact of foreign currency in the ~~third~~first quarter of ~~2019~~2020, adjusted operating expenses would have ~~increased~~decreased by 40.23%.

Operating expenses were $1,033.2 million and $1,005.6 million in the nine months ended September 27, 2019 and September 28, 2018, respectively. The nine months ended September 27, 2019 includes $26.4 million of intangible asset amortization and a reversal of acquisition and integration costs of $0.3 million. The nine months ended September 28, 2018 includes $28.6 million of intangible asset amortization, a restructuring charge of $9.4 million, $2.9 million of acquisition and integration costs, $2.6 million of CEO retirement agreement expense and $0.8 million of U.K. facility relocation costs. The CEO retirement agreement expense relates to additional stock compensation for a retirement agreement with the previous CEO, which extended the terms of his non-competition and non-solicitation restrictions in exchange for extended vesting and termination provisions of previously granted equity awards. Excluding these items from their related periods, adjusted operating expenses in the nine months ended September 27, 2019 increased 4.8% to $1,007.1 million, or 15.3% of sales, which compares to prior year adjusted operating expense of $961.3 million, or 15.3% of sales. Further adjusting operating expenses for a favorable $10.8 million impact of foreign currency in the nine months ended September 27, 2019, adjusted operating expenses would have increased by 5.9%.

Operating Income

	~~Three Months Ended~~			Three Months Ended
(In millions)	~~NSS~~			~~EES~~NSS			~~UPS~~		EES		~~Corporate~~			~~Total~~UPS			Corporate			Total
Operating income, 2019	$	84.8		$	35.3		$	23.7			$	(42.0	)	$	101.8
Operating income (loss), 2020				$	63.2				$	28.7				$	22.0		$	(42.5)		$	71.4
Operating income, 2018	75.0			34.1			19.9				(39.5		)	89.5
Operating income (loss), 2019				70.9					29.1					18.5			(43.9)			74.6
$ Change	$	~~9.8~~		$	1(7.27)		$	~~3.8~~	$	(0.4)	$	~~(2.5~~	)	$	~~12.~~3.5		$	1.4		$	(3.2)
% Change	~~13.2~~		%	3(10.58)		%	~~19.7~~		%(1.5)		~~(6.8~~%		)%	1318.8		%	3.2		%	(4.3)		%
Items impacting operating income in 2019	$	4.1		$	1.9		$	3.3			$	(0.5	)	$	8.8
Items impacting operating income in 2020				$	3.9				$	1.4				$	3.3		$	2.9		$	11.5
Adjusted operating income, 2019 (Non-GAAP)	$	88.9		$	37.2		$	27.0			$	(42.5	)	$	110.6
Adjusted operating income, 2020 (Non-GAAP)				$	67.1				$	30.1				$	25.3		$	(39.6)		$	82.9
Items impacting operating income in 2018	$	5.3		$	1.5		$	3.2			$	0.3		$	10.3
Items impacting operating income in 2019				$	4.1				$	1.4				$	3.2		$	(0.2)		$	8.5
Adjusted operating income, 2018 (Non-GAAP)	$	80.3		$	35.6		$	23.1			$	(39.2	)	$	99.8
Adjusted operating income, 2019 (Non-GAAP)				$	75.0				$	30.5				$	21.7		$	(44.1)		$	83.1
Adjusted % Change (Non-GAAP)	~~10.7~~		%	4(10.5)		%	~~16.9~~		%(1.3)		~~(8.4~~%		)%	1016.86		%	10.2		%	(0.2)		%
Plus the % impact of:
Foreign exchange	~~1.1~~		%	01.51		%	~~0.2~~		%0.5		~~(0.5~~%		)%	1.0.1		%	(0.1)		%	1.2		%
Copper pricing	—		%	~~0.7~~—		%	~~(0.1~~		)%2.3		—%		%	(0.21)		%	—		%	0.9		%
Organic (Non-GAAP)	~~14.3~~		%	4(9.7)		%	~~19.8~~		%1.3		~~(7.3~~%		)%	1518.08		%	3.1		%	(2.2)		%

25NSS – Operating income was $63.2 million, or 5.8% of sales, in the first quarter of 2020, compared to $70.9 million, or 6.4% of sales, in the first quarter of 2019. The decrease in operating income in 2020 was driven by a decline in sales. NSS delivered adjusted operating income of $67.1 million in the first quarter of 2020 resulting in adjusted operating margin of 6.2%. NSS delivered adjusted operating income of $75.0 million in the first quarter of 2019 resulting in adjusted operating margin of 6.7%.

EES – Operating income was $28.7 million, or 5.3% of sales, in the first quarter of 2020, compared to $29.1 million, or 5.1% of sales, in the first quarter of 2019. The decrease in operating income in 2020 was driven by a decline in sales and partially offset by gross margin improvement. EES delivered adjusted operating income of $30.1 million in the first quarter of 2020 resulting in adjusted operating margin of 5.5%. EES delivered adjusted operating income of $30.5 million in the first quarter of 2019 resulting in adjusted operating margin of 5.4%.

UPS – Operating income was $22.0 million, or 4.9% of sales, in the first quarter of 2020, compared to $18.5 million, or 4.3%, in the first quarter of 2019. The increase in operating income in 2019 was driven by sales growth and gross margin improvement. UPS delivered adjusted operating income of $25.3 million in the first quarter of 2020 resulting in adjusted operating margin of 5.6%. UPS delivered adjusted operating income of $21.7 million in 2019 resulting in adjusted operating margin of 5.1%.

Interest Expense

Interest expense was $16.8 million and $20.4 million in the first quarter of 2020 and 2019, respectively. The decrease in interest expense was driven by lower borrowings under the revolving lines of credit.

ANIXTER INTERNATIONAL INC.

~~NSS – Operating income was $84.8 million~~Other, or 7.2% of sales, in the third quarter of 2019, compared to $75.0 million, or 6.6% of sales, in the third quarter of 2018. The increase in operating income in 2019 was due to sales growth in both the network infrastructure and security portions of the business and gross margin improvement. NSS delivered adjusted operating income of $88.9 million in the third quarter of 2019 resulting in adjusted operating margin of 7.5%. NSS delivered adjusted operating income of $80.3 million in the third quarter of 2018 resulting in adjusted operating margin of 7.0%. Net

~~EES~~Other, –net ~~Operating~~expense ~~income~~of ~~was~~ $356.36 million, ~~or 6.1% of sales,~~ in the ~~third~~first quarter of ~~2019,~~2020 ~~compared~~compares to income of $~~34.~~1.8 million, ~~or 5.7% of sales,~~ in the ~~third~~first quarter of ~~2018~~ 2019. The increase in ~~operating~~expense ~~income in 2019~~ was ~~driven~~due byto ~~gross~~higher ~~margin~~losses ~~improvement.~~on ~~EES~~foreign ~~delivered~~exchange ~~adjusted~~and ~~operating income of $37.2 million in~~ the ~~third~~cash ~~quarter~~surrender ofvalue ~~2019 resulting in adjusted operating margin~~ of ~~6.4%.~~life ~~EES~~insurance ~~delivered adjusted operating income of $35~~policies.~~6 million in the third quarter of 2018 resulting in adjusted operating margin of 6.0%.~~

UPS – Operating income was $23.7 million, or 5.1% of sales, in the third quarter of 2019, compared to $19.9 million, or 4.5% in the third quarter of 2018. The increase in operating income in 2019 was driven by sales growth and gross margin improvement. UPS delivered adjusted operating income of $27.0 million in the third quarter of 2019 resulting in adjusted operating margin of 5.9%. UPS delivered adjusted operating income of $23.1 million in the third quarter of 2018 resulting in adjusted operating margin of 5.2%.

	Nine Months Ended
(In millions)	NSS			EES			UPS			Corporate			Total
Operating income, 2019	$	242.0		$	102.6		$	65.3		$	(127.8	)	$	282.1
Operating income, 2018	194.6			101.1			54.2			(127.5		)	222.4
$ Change	$	47.4		$	1.5		$	11.1		$	(0.3	)	$	59.7
% Change	24.4		%	1.4		%	20.7		%	(0.3		)%	26.9		%
Items impacting operating income in 2019	$	12.4		$	4.6		$	9.8		$	(0.7	)	$	26.1
Adjusted operating income, 2019 (Non-GAAP)	$	254.4		$	107.2		$	75.1		$	(128.5	)	$	308.2
Items impacting operating income in 2018	$	17.8		$	7.6		$	10.6		$	8.3		$	44.3
Adjusted operating income, 2018 (Non-GAAP)	$	212.4		$	108.7		$	64.8		$	(119.2	)	$	266.7
Adjusted % Change (Non-GAAP)	19.8		%	(1.4		)%	15.9		%	(7.8		)%	15.6		%
Plus the % impact of:
Foreign exchange	1.8		%	1.0		%	0.7		%	(0.6		)%	1.8		%
Copper pricing	—		%	2.8		%	0.1		%	—		%	1.3		%
Organic (Non-GAAP)	26.2		%	5.2		%	21.5		%	(0.9		)%	30.0		%

ANIXTER INTERNATIONAL INC.

NSS – Operating income was $242.0 million, or 6.9% of sales, in the nine months ended September 27, 2019, compared to $194.6 million, or 6.0% of sales, in the nine months ended September 28, 2018. The increase in operating income in 2019 was due to sales growth in both the network infrastructure and security portions of the business and gross margin improvement. NSS delivered adjusted operating income of $254.4 million in the nine months ended September 27, 2019, resulting in adjusted operating margin of 7.3%. NSS delivered adjusted operating income of $212.4 million in the nine months September 28, 2018, resulting in adjusted operating margin of 6.6%.

EES – Operating income was $102.6 million, or 5.9% of sales, in the nine months ended September 27, 2019, compared to $101.1 million, or 5.7% of sales, in the nine months ended September 28, 2018. The increase in operating income in 2019 was driven by gross margin improvement, but partially offset by the unfavorable impacts from lower copper prices. EES delivered adjusted operating income of $107.2 million in the nine months ended September 27, 2019, resulting in adjusted operating margin of 6.1%. EES delivered adjusted operating income of $108.7 million in the nine months ended September 28, 2018, resulting in adjusted operating margin of 6.1%.

UPS – Operating income was $65.3 million, or 4.8% of sales, in the nine months September 27, 2019, compared to $54.2 million, or 4.2% in the nine months ended September 28, 2018. The increase in operating income in 2019 was driven by sales growth and gross margin improvement. UPS delivered adjusted operating income of $75.1 million in the nine months ended September 27, 2019, resulting in adjusted operating margin of 5.6%. UPS delivered adjusted operating income of $64.8 million in the nine months ended September 28, 2018, resulting in adjusted operating margin of 5.1%.

Interest Expense and Other

Interest expense was $18.5 million and $19.3 million in the third quarter of 2019 and 2018, respectively. The decrease in interest expense is primarily due to the retirement of the Senior notes due 2019 in the fourth quarter of 2018, which had a maturity value of $350.0 million, and partially offset by the impact from the issuance of the Senior notes due 2025, which have a maturity value of $250.0 million. Interest expense was $58.3 million and $56.5 million in the nine months ended September 27, 2019 and September 28, 2018, respectively. The increase in interest expense was driven by higher borrowings under the revolving lines of credit to support volume-driven higher working capital requirements.

Other, net expense was $1.2 million and $1.6 million in the third quarter of 2019 and 2018, respectively. Other, net expense was $0.1 million and $2.6 million in the nine months ended September 27, 2019 and September 28, 2018, respectively.

Income Taxes

Our effective tax rate for the ~~third~~first quarter of ~~2019~~2020 was 2725.87% compared to 30.63% in the prior year period. ~~Our~~The ~~effective~~decrease ~~tax~~in ~~rate for~~ the ~~nine~~effective ~~months~~tax ~~ended~~rate ~~September 27, 2019~~ was ~~27.7%~~due ~~compared~~ to ~~29.9%~~a change in the ~~prior~~country ~~year~~mix ~~period.~~of ~~The~~earnings ~~nine~~and ~~months~~associated ~~ended~~tax ~~September 28,~~benefits ~~2018~~from ~~included~~our acontinued ~~$1.8~~movement ~~million tax benefit related~~ to ~~the~~a ~~reversal~~U.S.-center-led ofbusiness ~~deferred income tax valuation allowances~~model, ~~partially~~with ~~offset~~the bymajor ~~$0.5~~impact ~~million~~coming offrom ~~tax~~a ~~expense~~lower ~~related to domestic permanent tax differences~~U.S. ~~The decrease in the effective~~ tax rate ~~was~~on ~~due~~foreign ~~primarily~~derived toincome ~~the~~and ~~change in~~ the ~~country~~ability ~~mix~~to ofutilize ~~earnings,~~ foreign tax ~~credit benefits and other incentives enacted by the recent tax reform~~credits.

ANIXTER INTERNATIONAL INC.

EBITDA and Adjusted EBITDA

Q3 EBITDA and Adjusted EBITDA by Segment:
2020 EBITDA and Adjusted EBITDA by Segment:
	Three Months Ended September 27, 2019
			Three Months Ended April 3, 2020
(In millions)	~~NSS~~		~~EES~~NSS		~~UPS~~		EES		~~Corporate~~			~~Total~~UPS		Corporate		Total
Net income (loss)	$	~~84.8~~	$	3563.32	$	~~23.7~~	$	28.7	$	~~(84.5~~	)	$	5922.30	$	(78.2)	$	35.7
Interest expense	—		—		—		—		~~18.5~~			~~18.5~~—		16.8		16.8
Income taxes	—		—		—		—		~~22.8~~			~~22.8~~—		12.3		12.3
Depreciation	~~2.4~~		12.85		~~1.0~~		1.6		~~4.5~~			91.71		3.3		8.5
Amortization of intangible assets	~~4.1~~		13.49		~~3.3~~		1.4		—			83.83		—		8.6
EBITDA	$	~~91.3~~	$	3869.56	$	~~28.0~~	$	31.7	$	~~(38.7~~	)	$	~~119~~26.14	$	(45.8)	$	81.9
Total of items impacting operating income (a)	$	—	$	~~0.5~~—	$	—	$	—	$	~~(0.5~~	)	$	—	$	2.9	$	2.9
Foreign exchange and other non-operating expense	—		—		—		—		~~1.2~~			~~1.2~~—		6.6		6.6
Stock-based compensation	~~0.7~~		0.58		~~0.1~~		0.4		~~3.9~~			50.2		3.2		4.6
Adjusted EBITDA	$	~~92.0~~	$	3970.54	$	~~28.1~~	$	32.1	$	~~(34.1~~	)	$	~~125~~26.56	$	(33.1)	$	96.0

(a) Items impacting operating income excludes amortization of intangible assets in the calculation of adjusted EBITDA as amortization is already added back in the EBITDA calculation ~~above~~.

	Three Months Ended September 28, 2018
(In millions)	NSS		EES		UPS			Corporate			Total
Net income (loss)	$	75.0	$	34.1	$	19.9		$	(81.4	)	$	47.6
Interest expense	—		—		—			19.3			19.3
Income taxes	—		—		—			21.0			21.0
Depreciation	0.9		0.6		1.1			5.6			8.2
Amortization of intangible assets	5.0		1.4		3.2			—			9.6
EBITDA	$	80.9	$	36.1	$	24.2		$	(35.5	)	$	105.7
Total of items impacting operating income (a)	$	0.3	$	0.1	$	—		$	0.3		$	0.7
Foreign exchange and other non-operating expense	—		—		—			1.6			1.6
Stock-based compensation	0.4		0.3		(0.1		)	2.6			3.2
Adjusted EBITDA	$	81.6	$	36.5	$	24.1		$	(31.0	)	$	111.2

(a) Items impacting operating income excludes amortization of intangible assets in the calculation of adjusted EBITDA as amortization is already added back in the EBITDA calculation above.

NSS – NSS adjusted EBITDA of $92.0 million in the third quarter of 2019 compares to $81.6 million in the third quarter of 2018. The increase in adjusted EBITDA was driven by sales growth and gross margin improvement.

EES – EES adjusted EBITDA of $39.5 million in the third quarter of 2019 compares to $36.5 million in the third quarter of 2018. The increase in adjusted EBITDA was driven by gross margin improvement.

UPS – UPS adjusted EBITDA of $28.1 million in the third quarter of 2019 compares to $24.1 million in the third quarter of 2018. The increase in adjusted EBITDA was driven by sales growth and gross margin improvement.

ANIXTER INTERNATIONAL INC.

Q3 YTD EBITDA and Adjusted EBITDA by Segment:
2019 EBITDA and Adjusted EBITDA by Segment:
	Nine Months Ended September 27, 2019
			Three Months Ended March 29, 2019
(In millions)	~~NSS~~		~~EES~~NSS		~~UPS~~		EES		~~Corporate~~			~~Total~~UPS			Corporate		Total
Net income (loss)	$	~~242.0~~	$	~~102~~70.69	$	~~65.3~~	$	29.1	$	~~(248.0~~	)	$	~~161~~18.95		$	(79.4)	$	39.1
Interest expense	—		—		—		—		~~58.3~~			~~58.3~~—			20.4		20.4
Income taxes	—		—		—		—		~~61.8~~			~~61.8~~—			16.9		16.9
Depreciation	~~7.2~~		52.4		~~2.8~~		1.8		~~13.3~~			280.79			4.2		9.3
Amortization of intangible assets	~~12.4~~		4.1		~~9.9~~		1.4		—			263.43			—		8.8
EBITDA	$	~~261.6~~	$	~~112~~77.14	$	~~78.0~~	$	32.3	$	~~(114.6~~	)	$	~~337~~22.17		$	(37.9)	$	94.5
Total of items impacting operating income (a)	$	—	$	~~0.5~~—	$	~~(0.1~~	)$	—	$	~~(0.7~~	)	$	(0.31)	)	$	(0.2)	$	(0.3)
Foreign exchange and other non-operating expense	—		—		—				0.1			0.1
Foreign exchange and other non-operating (income)			—				—					—			(1.8)		(1.8)
Stock-based compensation	~~2.0~~		10.36		~~0.3~~		0.3		~~10.9~~			140.51			3.1		4.1
Adjusted EBITDA	$	~~263.6~~	$	~~113~~78.90	$	~~78.2~~	$	32.6	$	~~(104.3~~	)	$	~~351~~22.47		$	(36.8)	$	96.5

(a) Items impacting operating income excludes amortization of intangible assets in the calculation of adjusted EBITDA as amortization is already added back in the EBITDA calculation ~~above~~.

	Nine Months Ended September 28, 2018
(In millions)	NSS		EES		UPS		Corporate			Total
Net income (loss)	$	194.6	$	101.1	$	54.2	$	(235.4	)	$	114.5
Interest expense	—		—		—		56.5			56.5
Income taxes	—		—		—		48.8			48.8
Depreciation	2.6		1.8		2.9		16.0			23.3
Amortization of intangible assets	13.0		5.7		9.9		—			28.6
EBITDA	$	210.2	$	108.6	$	67.0	$	(114.1	)	$	271.7
Total of items impacting operating income (a)	$	4.8	$	1.9	$	0.7	$	5.7		$	13.1
Foreign exchange and other non-operating expense	—		—		—		2.6			2.6
Stock-based compensation	1.2		1.1		0.4		12.3			15.0
Adjusted EBITDA	$	216.2	$	111.6	$	68.1	$	(93.5	)	$	302.4

NSS – NSS adjusted EBITDA of $70.4 million in the first quarter of 2020 compares to $78.0 million in the first quarter of 2019. The decrease in adjusted EBITDA was driven by a decline in sales.

~~(a)~~EES ~~Items~~– ~~impacting~~EES ~~operating~~adjusted ~~income~~EBITDA ~~excludes amortization~~ of ~~intangible~~$32.1 ~~assets~~million ~~and~~in ~~CEO~~the ~~retirement~~first ~~agreement~~quarter ~~expense~~of in2020 ~~the~~compares ~~calculation~~to of$32.6 ~~adjusted~~million ~~EBITDA~~in asthe ~~amortization~~first isquarter ~~already~~of ~~added~~2019. ~~back~~The decrease in ~~the~~adjusted EBITDA ~~calculation~~was ~~and~~driven ~~CEO~~by ~~retirement~~a ~~agreement~~decline ~~expense~~in issales ~~added~~and ~~back~~partially asoffset ~~part~~by ofgross ~~Stock-based~~margin ~~compensation~~improvement.

~~NSS~~UPS – ~~NSS~~UPS adjusted EBITDA of $~~263~~26.6 million in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 27,~~2020 ~~2019~~ compares to $~~216~~22.27 million in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 28, 2018~~2019. The increase in adjusted EBITDA was driven by ~~gross~~sales ~~margin~~growth ~~improvement~~ and ~~the~~gross ~~favorable~~margin ~~impact from acquisitions~~improvement.

EES – EES adjusted EBITDA of $113.9 million in the nine months ended September 27, 2019 compares to $111.6 million in the nine months ended September 28, 2018. The increase in adjusted EBITDA was driven by gross margin improvement.19

UPS – UPS adjusted EBITDA of $78.2 million in the nine months ended September 27, 2019 compares to $68.1 million in the nine months ended September 28, 2018. The increase in adjusted EBITDA was driven by sales growth and gross margin improvement.

ANIXTER INTERNATIONAL INC.

Financial Liquidity and Capital Resources

Cash Flow

As a distributor, our use of capital is largely for working capital to support our revenue growth. Capital commitments for property and equipment are ~~primarily~~limited ~~for~~to information technology assets, warehouse equipment, office furniture and fixtures and leasehold improvements, because we operate almost entirely from leased facilities. Therefore, in any given reporting period, the amount of cash consumed or generated by operations other than from net earnings will primarily be due to changes in working capital ~~as a result of the rate of increases or decreases in sales~~.

In periods when sales are increasing, the expanded working capital needs will be funded first by cash from operations, ~~then from additional borrowings~~ and ~~lastly~~then from additional ~~equity offerings~~borrowings. In periods when sales are decreasing, we will have improved cash flows due to reduced working capital requirements. During such periods, we will use the expanded cash flow to reduce the amount of leverage in our capital structure until such time as economic conditions improve and growth resumes. Also, we will, from time to time, issue or retire borrowings or equity in an effort to maintain a cost-effective capital structure consistent with our anticipated capital requirements.

Net cash ~~provided~~used byin operations was $~~206~~50.49 million in the ~~nine~~three months ended ~~September~~April 273, ~~2019~~2020 compared to $~~102~~114.82 million of ~~net~~ cash ~~provided~~used byin operations in the prior year period. The ~~increase~~decrease reflects an improvement in working capital efficiencies ~~and growth in net income~~.

Net cash used in investing activities was $276.59 million ~~in the nine months ended September 27, 2019~~ and ~~related to capital expenditures. Net cash used in investing activities was~~ $~~172~~5.89 million in the ~~nine~~three months ended ~~September~~April 283, ~~2018,~~2020 ~~which included $149.9 million for the acquisition of security businesses in Australia~~ and ~~New~~March 29, ~~Zealand and $32.0 million for capital expenditures. Capital expenditures are expected to be approximately $45 - $50 million in~~ 2019 ~~as we continue to invest in warehouse equipment~~, ~~information system upgrades~~respectively, ~~integration of acquired businesses~~ and ~~new~~related ~~software~~ to ~~support~~capital ~~our infrastructure~~expenditures.

Net cash ~~used~~provided inby financing activities was $~~169~~254.75 million inand ~~the nine months ended September 27, 2019 compared to net cash provided by financing activities of~~ $17114.89 million in the ~~nine~~three months ended ~~September~~April 283, ~~2018~~2020 and March 29, 2019, respectively. During the ~~nine~~three months ended ~~September~~April 273, ~~2019~~2020, we had net ~~repayments~~borrowings on our long-term debt of $~~172~~255.51 million. During the ~~nine~~three months ended ~~September~~March 2829, ~~2018~~2019, we had net borrowings on our long-term debt of $16114.31 million.

Liquidity and Capital Resources

At ~~September~~April 273, ~~2019~~2020, our primary liquidity source was the U.S. accounts receivable asset based revolving credit facility in an aggregate committed amount of $600.0 million ("Receivables Facility") and the U.S. inventory asset based revolving credit facility in an aggregate committed amount of $150.0 million ("Inventory Facility"). At ~~September~~April 273, ~~2019~~2020, there was $82310.0 million of borrowings under the Receivables Facility, and there were no borrowings under the Inventory Facility.

Our debt-to-capital ratio ~~decreased~~increased from 4436.43% at ~~December~~January 283, ~~2018~~2020 to 3841.28% at ~~September~~April 273, ~~2019~~2020, below our targeted range of 45-50%.

We are in compliance with all of our covenants and believe that there is adequate margin between the covenant ratios and the actual ratios given the current trends of the business. We believe that our cash on hand and current borrowing availability provide sufficient resources and liquidity to fund necessary capital expenditures and operating cash requirements for the foreseeable future. However, the impact of COVID-19 on the economy and our business is constantly evolving and we will continue to assess our liquidity needs and financial position in light of future developments.

Critical Accounting Policies and Estimates

There were no material changes in our critical accounting policies since the filing of our ~~2018~~2019 Form 10-K. For further information about recently issued accounting pronouncements, see Note 1. "Summary of Significant Accounting Policies" in the Notes to the Condensed Consolidated Financial Statements. As discussed in the ~~2018~~2019 Form 10-K, the preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates.

3020

ANIXTER INTERNATIONAL INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There were no material changes to market risks and related disclosures in Item 7A. of Part II in the Company's Annual Report on Form 10-K for the year ended ~~December~~January 283, ~~2018~~2020, as filed with the Securities and Exchange Commission on February 2120, ~~2019~~2020.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of Anixter's management, including its principal executive officer and principal financial officer, an evaluation was conducted as of ~~September 27~~April 3, ~~2019~~2020 of the effectiveness of the design and operation of disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of ~~September~~April 273, ~~2019~~2020. There was no change in internal control over financial reporting that occurred during the three months ended ~~September 27~~April 3, ~~2019~~2020 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

3121

ANIXTER INTERNATIONAL INC.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Information regarding legal proceedings is contained in Note 53. "Legal Contingencies" in the notes to the Condensed Consolidated Financial Statements contained in this report and is incorporated ~~herein~~ by reference.

ITEM 1A. RISK FACTORS.

~~There~~The ~~were~~disclosure nobelow ~~material~~modifies ~~changes to~~ the risk factors previously disclosed in Item 1A of Part 1 in the Company's Annual Report on Form 10-K for the year ended ~~December~~January 283, ~~2018~~2020, as filed with the Securities and Exchange Commission on February 2120, ~~2019~~2020. The following factor, along with the previously disclosed, could materially adversely affect our operating results and financial condition.

~~ITEM 6~~Our business, results of operations and financial condition have been and may in the future be adversely impacted by the COVID-19 pandemic. ~~EXHIBITS.~~

(31)		Rule 13a — 14(a) /15d — 14(a) Certifications.
31.1		William A. Galvin, President and Chief Executive Officer, Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Theodore A. Dosch, Executive Vice President-Finance and Chief Financial Officer, Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)		Section 1350 Certifications.
32.1		William A. Galvin, President and Chief Executive Officer, Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Theodore A. Dosch, Executive Vice President-Finance and Chief Financial Officer, Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**		Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**		Inline XBRL Taxonomy Extension Schema Document
101.CAL**		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB**		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

The outbreak of COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has created significant volatility, uncertainty and disruption in the U.S. and global economies. The COVID-19 pandemic has resulted and will result in lost or delayed revenue to us and could have a material adverse effect on our business, results of operations and financial condition. In response to recommendations by public health organizations, federal, state, local and foreign governments have adopted various measures in an effort to slow and limit the spread of the COVID-19 virus, including shelter in place and social distancing orders. These and other measures have and may continue to have an adverse impact on our business, as well as those of our suppliers, customers and other business partners, which could disrupt our supply chain or reduce the demand for our products and services.

**The ~~Attached~~extent asto ~~Exhibit~~which ~~101~~the toCOVID-19 ~~this~~pandemic ~~report~~impacts ~~are~~our ~~the~~business, ~~following~~results ~~documents~~of ~~formatted~~operations inand ~~Inline~~financial ~~XBRL~~condition ~~(Extensible~~will ~~Business~~depend ~~Reporting~~on ~~Language):~~various ~~(i) the~~factors ~~Condensed~~which ~~Consolidated~~continue ~~Statements~~to ofevolve ~~Comprehensive~~and ~~Income~~cannot ~~for~~be predicted, including: the ~~three~~scope, duration and ~~nine~~severity ~~months~~of ~~ended~~the ~~September 27,~~pandemic; ~~2019~~the effectiveness of stimulus measures and ~~September 28~~ other actions implemented by federal, ~~2018~~state, ~~(ii)~~ local or foreign governments; the ~~Condensed~~ability ~~Consolidated~~of ~~Balance~~our ~~Sheets~~suppliers atto ~~September 27,~~manufacture ~~2019~~or obtain the products we sell or to meet delivery requirements and ~~December 28,~~commitments; ~~2018,~~disruptions ~~(iii) the~~to ~~Condensed~~our ~~Consolidated~~global ~~Statements~~supply ofchain; ~~Cash~~the ~~Flows~~effect on our customers’ demand for ~~the~~our ~~nine~~services ~~months~~and ~~ended~~products; ~~September 27,~~limitations ~~2019~~on our ability to sell and ~~September 28,~~ ~~2018~~provide our services and products, ~~(iv) the~~due ~~Condensed~~to ~~Consolidated~~the ~~Statements~~inability of ~~Stockholders’~~our ~~Equity~~employees ~~for~~to perform their job due to illness caused by the ~~three~~pandemic or governmental stay at home orders or travel restrictions; reduced availability of ground or air transportation; and ~~nine~~the ~~months~~ability ~~ended~~of ~~September 27,~~our ~~2019~~customers to conduct their business or to pay for our services and ~~September 28,~~ ~~2018,~~products in a timely manner. The long-term financial and ~~(v) Notes~~economic toimpacts of the ~~Condensed~~COVID-19 ~~Consolidated~~pandemic ~~Financial~~may ~~Statements~~continue for ~~the~~a ~~three~~significant period of time, and ~~nine~~cannot ~~months~~be ~~ended~~reliably ~~September 27,~~quantified ~~2019.~~or estimated at this time due to the uncertainty of future developments.

32ITEM 6. EXHIBITS

Exhibit No.

Description of Exhibit

(31) Rule 13a — 14(a) /15d — 14(a) Certifications.

31.1

William A. Galvin, President and Chief Executive Officer, Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Theodore A. Dosch, Executive Vice President-Finance and Chief Financial Officer, Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32) Section 1350 Certifications.

32.1

William A. Galvin, President and Chief Executive Officer, Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Theodore A. Dosch, Executive Vice President-Finance and Chief Financial Officer, Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

ANIXTER INTERNATIONAL INC.

Exhibit No.

Description of Exhibit

(101) Extensible Business Reporting Language.

101.INS**

Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH**

Inline XBRL Taxonomy Extension Schema Document

101.CAL**

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**

Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB**

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

** Attached as Exhibit 101 to this report are the following documents formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended April 3, 2020 and March 29, 2019, (ii) the Condensed Consolidated Balance Sheets at April 3, 2020 and January 3, 2020, (iii) the Condensed Consolidated Statements of Cash Flows for the three months ended April 3, 2020 and March 29, 2019, (iv) the Condensed Consolidated Statements of Stockholders’ Equity for the three months ended April 3, 2020 and March 29, 2019, and (v) Notes to the Condensed Consolidated Financial Statements for the three months ended April 3, 2020.

ANIXTER INTERNATIONAL INC.

SIGNATURES

Pursuant to the requirements 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.

	~~ANIXTER INTERNATIONAL INC.~~		ANIXTER INTERNATIONAL INC.
October 30, 2019	By:	/s/ William A. Galvin
April 28, 2020			By:	/s/ William A. Galvin
		~~William A. Galvin~~		William A. Galvin
		~~President and Chief Executive Officer~~		President and Chief Executive Officer
October 30, 2019	By:	/s/ Theodore A. Dosch
April 28, 2020			By:	/s/ Theodore A. Dosch
		~~Theodore A. Dosch~~		Theodore A. Dosch
		Executive Vice President – Finance and Chief Financial Officer
				Executive Vice President - Finance and Chief Financial Officer

3324

Filing Compare · ANIXTER INTERNATIONAL INC