Anixter International Inc. Financial Statement Analysis
ANIXTER INTERNATIONAL INC.
Contractual Cash Obligations and Commitments
At the end of fiscal 2019, we have various contractual cash obligations and commitments and the following table
represents the associated payments due by period. The amounts due by period will not necessarily correlate to amounts reflected
as short-term and long-term liabilities on our Consolidated Balance Sheets at the end of any given period. This is due to the
difference in the recognition of liabilities of non-cancellable obligations for accounting purposes at the end of a given period as
well giving consideration to our intent and ability to settle such contractual commitments that might be considered short term.
Purchase Obligations (c)
(In millions)
Payments due by period
2020
2021
2022
2023
2024
Beyond 2024
Total
Debt (a)
$
8.8
$
398.3 $
403.9 $
247.3 $ 1,058.3
(b)
Contractual Interest
58.1
53.0
37.6
21.0
15.0
13.8
198.5
685.3
40.8
37.2
38.6
26.2
19.5
847.6
75.4
59.2
54.4
40.8
32.0
81.6
343.4
3.8
4.7
4.2
3.2
3.1
26.6
45.6
7.7
7.7
$
839.1 $ 556.0 $ 133.4 $
Operating Leases
Deferred Compensation
Liability
(d)
Pension Plans (e)
Total Obligations
507.5 $ 76.3 $ 388.8 $ 2,501.1
Liabilities related to unrecognized tax benefits of $2.2 million were excluded from the table above, as we cannot
reasonably estimate the timing of cash settlements with taxing authorities. Various of our foreign subsidiaries had aggregate
cumulative net operating loss ("NOL") carryforwards for foreign income tax purposes of approximately $89.7 million at
January 3, 2020, which are subject to various provisions of each respective country. Approximately $71.9 million of the NOL
carryforwards may be carried forward indefinitely. The remaining NOL carryforwards expire at various times between 2020
and 2028. See Note 7. "Income Taxes" in the Notes to the Consolidated Financial Statements for further information related to
unrecognized tax benefits.
(a)
(b)
(c)
(d)
The Notes due 2021, the Notes due 2023 and the Notes due 2025 require payments upon retirement of $400.0 million in 2021, $350.0
million in 2023 and $250.0 million in 2025, respectively. The $56.0 million outstanding on our revolving lines of credit requires
payment in 2023.
Interest payments on debt outstanding at January 3, 2020 through maturity. For variable rate debt, we computed contractual interest
payments based on the borrowing rate at January 3, 2020.
Purchase obligations primarily consist of purchase orders for products sourced from unaffiliated third party suppliers, in addition to
commitments related to various capital expenditures. Many of these obligations may be canceled with limited or no financial
penalties.
A non-qualified deferred compensation plan was implemented on January 1, 1995. The plan provides for benefit payments upon
retirement, death, disability, termination or other scheduled dates determined by the participant. At January 3, 2020, the deferred
compensation liability was $45.6 million. In an effort to ensure that adequate resources are available to fund the deferred
compensation liability, we have purchased variable, separate account life insurance policies on the plan participants with benefits
accruing to us. At January 3, 2020, the cash surrender value of these company-owned life insurance policies was $41.4 million.
The majority of our various 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 the plans. Our policy is to fund these plans as required by the Employee Retirement Income Security Act, the Internal
Revenue Service and local statutory law. At January 3, 2020, the current portion of our net pension liability of $71.0 million was
$1.1 million. We currently estimate that we will contribute $7.7 million to our foreign and domestic pension plans in 2020, which
includes $1.1 million of benefit payments directly to participants of our two domestic unfunded non-qualified pension plans. Due to
the future impact of various market conditions, rates of return and changes in plan participants, we cannot provide a meaningful
estimate of our future contributions beyond 2020.
Critical Accounting Policies and Estimates
We believe that the following are critical areas of accounting that either require significant judgment by management or
may be affected by changes in general market conditions outside the control of management. As a result, changes in estimates
and general market conditions could cause actual results to differ materially from future expected results. Historically, with the
exception of any goodwill and related long-lived asset impairment charges, our estimates in these critical areas have not
differed materially from actual results.
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