Anixter International Inc. Financial Statement Analysis
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
In the fourth quarter of 2017, the Company paid off the Canadian Term Loan in full.
The retirement of debt did not have a significant impact on the Company's Consolidated Statements of Income.
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 January 3, 2020, the Company's total carrying value and estimated fair value of debt outstanding was $1,059.7 million
and $1,122.1 million, respectively. This compares to a carrying value and estimated fair value of debt outstanding at
December 28, 2018 of $1,252.7 million and $1,261.7 million, respectively. The decrease in the carrying value and estimated
fair value is primarily due to lower outstanding borrowings under Anixter's revolving lines of credit.
NOTE 6. COMMITMENTS AND CONTINGENCIES
As of January 3, 2020, the Company had $56.1 million in outstanding letters of credit and guarantees.
From time to time, Anixter is party to legal proceedings and matters that arise in the ordinary course of business. As of
January 3, 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 7. INCOME TAXES
Income Before Tax Expense: Domestic income before income taxes was $244.2 million, $167.8 million and $178.1
million for 2019, 2018 and 2017, respectively. Foreign income before income taxes was $49.2 million, $55.4 million and $59.5
million for 2019, 2018 and 2017, respectively.
Tax Provisions and Reconciliation to the Statutory Rate: The components of Anixter's tax expense and the reconciliation
to the statutory federal rate are identified below. Income tax expense was comprised of:
(In millions)
Current:
Foreign
State
Federal
Years Ended
January 3,
2020
December 28,
2018
December 29,
2017
21.7 $
24.2
$
21.7
10.3
9.4
8.3
39.9
34.2
99.4
71.9
67.8
129.4
Deferred:
Foreign
State
Federal
(3.5)
(2.5)
0.2
0.5
0.2
2.0
(38.4)
1.4
(3.0)
(41.4)
(0.9)
(0.8)
Income tax expense
$
30.5 $
66.9
$
128.6
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