Condensed Consolidating Financial Statements

12 Months Ended

Dec. 31, 2011

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

Note 16. Condensed Consolidating Financial Statements

In November 2006, the Company issued senior unsecured notes in the aggregate principal amount of $600 million at fixed interest rates that are guaranteed by its wholly-owned domestic subsidiaries. The accompanying combined and consolidating financial information has been prepared and presented pursuant to Rule 3-10 of SEC Regulation S-X "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries. There are no significant restrictions on the ability of the Company to obtain funds from any of the guarantor subsidiaries by dividends or loan. The supplemental consolidating financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful.

Condensed Consolidating Balance Sheet
As of December 31, 2011
(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	15.1	$	10.8	$	58.7	$	—		$	84.6
Accounts receivable, less allowance for doubtful accounts		69.6		739.1		87.5		—			896.2
Inventories		43.7		1,017.4		151.7		—			1,212.8
Intercompany receivables		0.3		11.6		0.9		(12.8	)		—
Other current assets		108.7		28.0		7.5		(63.1	)		81.1

Total current assets		237.4		1,806.9		306.3		(75.9	)		2,274.7
Investments in subsidiaries		3,217.0		273.9		—		(3,490.9	)		—
Property, plant and equipment, net		100.0		931.5		74.0		—			1,105.5
Goodwill		23.8		1,115.7		104.8		—			1,244.3
Intangible assets, net		13.6		748.0		134.3		—			895.9
Intercompany receivables		1,229.9		35.9		—		(1,265.8	)		—
Other assets		13.7		70.0		1.8		—			85.5

Total assets	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Liabilities & Equity
Accounts payable	$	31.2	$	270.6	$	46.2	$	(12.8	)	$	335.2
Accrued compensation and retirement costs		22.0		81.4		7.6		—			111.0
Other current liabilities		49.3		41.4		15.4		11.9			118.0
Deferred income taxes		—		75.0		—		(75.0	)		—
Current maturities of long-term debt and short-term borrowings		0.2		0.2		11.8		—			12.2

Total current liabilities		102.7		468.6		81.0		(75.9	)		576.4
Long-term debt		1,319.0		—		—		—			1,319.0
Intercompany borrowings		—		1,097.2		168.6		(1,265.8	)		—
Other long-term liabilities		269.8		264.9		23.8		—			558.5
Total Reliance shareholders' equity		3,143.9		3,146.8		344.1		(3,490.9	)		3,143.9
Noncontrolling interests		—		4.4		3.7		—			8.1

Total equity		3,143.9		3,151.2		347.8		(3,490.9	)		3,152.0

Total liabilities and equity	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Condensed Consolidating Balance Sheet
As of December 31, 2010
(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	14.4	$	8.0	$	50.5	$	—		$	72.9
Accounts receivable, less allowance for doubtful accounts		58.1		586.2		52.7		—			697.0
Inventories		33.6		770.4		56.2		—			860.2
Intercompany receivables		0.3		12.4		—		(12.7	)		—
Other current assets		99.8		27.3		5.1		(61.4	)		70.8

Total current assets		206.2		1,404.3		164.5		(74.1	)		1,700.9
Investments in subsidiaries		1,783.2		202.8		—		(1,986.0	)		—
Property, plant and equipment, net		97.5		870.3		57.5		—			1,025.3
Goodwill		23.8		1,028.9		56.9		—			1,109.6
Intangible assets, net		9.8		681.1		64.9		—			755.8
Intercompany receivables		1,956.5		—		—		(1,956.5	)		—
Other assets		4.9		71.4		1.0		—			77.3

Total assets	$	4,081.9	$	4,258.8	$	344.8	$	(4,016.6	)	$	4,668.9

Liabilities & Equity
Accounts payable	$	24.5	$	204.6	$	28.6	$	(12.7	)	$	245.0
Accrued compensation and retirement costs		14.9		64.8		5.4		—			85.1
Other current liabilities		37.6		40.1		5.0		—			82.7
Deferred income taxes		—		71.0		—		(61.4	)		9.6
Current maturities of long-term debt and short-term borrowings		74.4		—		11.8		—			86.2

Total current liabilities		151.4		380.5		50.8		(74.1	)		508.6
Long-term debt		854.9		0.2		—		—			855.1
Intercompany borrowings		—		1,926.9		29.6		(1,956.5	)		—
Other long-term liabilities		251.9		218.2		5.0		—			475.1
Total Reliance shareholders' equity		2,823.7		1,729.5		256.5		(1,986.0	)		2,823.7
Noncontrolling interests		—		3.5		2.9		—			6.4

Total equity		2,823.7		1,733.0		259.4		(1,986.0	)		2,830.1

Total liabilities and equity	$	4,081.9	$	4,258.8	$	344.8	$	(4,016.6	)	$	4,668.9

Condensed Consolidating Statement of Income
For the year ended December 31, 2011
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	706.8		$	7,103.0		$	547.8		$	(222.9	)	$	8,134.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		535.3			5,461.0			375.4			(223.0	)		6,148.7
Warehouse, delivery, selling, general and administrative		72.0			1,187.8			86.8			(66.5	)		1,280.1
Depreciation and amortization		14.3			109.8			9.0			—			133.1

		621.6			6,758.6			471.2			(289.5	)		7,561.9
Operating income		85.2			344.4			76.6			66.6			572.8
Other income (expense):
Interest		(58.9	)		(27.6	)		(2.1	)		28.8			(59.8	)
Other income (expense), net		93.4			2.6			(2.0	)		(95.4	)		(1.4	)

Income before equity in earnings of subsidiaries and income taxes		119.7			319.4			72.5			—			511.6
Equity in earnings of subsidiaries		204.5			32.1			—			(236.6	)		—

Income before income taxes		324.2			351.5			72.5			(236.6	)		511.6
Income tax (benefit) provision		(19.6	)		166.7			15.3			—			162.4

Net income		343.8			184.8			57.2			(236.6	)		349.2
Less: Net income attributable to noncontrolling interests		—			4.6			0.8			—			5.4

Net income attributable to Reliance	$	343.8		$	180.2		$	56.4		$	(236.6	)	$	343.8

Condensed Consolidating Statement of Income
For the year ended December 31, 2010
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	593.7		$	5,550.6		$	338.2		$	(169.7	)	$	6,312.8
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		442.4			4,226.0			229.4			(169.9	)		4,727.9
Warehouse, delivery, selling, general and administrative		116.3			978.7			71.5			(62.9	)		1,103.6
Depreciation and amortization		13.0			101.3			6.3			—			120.6

		571.7			5,306.0			307.2			(232.8	)		5,952.1
Operating income		22.0			244.6			31.0			63.1			360.7
Other income (expense):
Interest		(62.4	)		(33.8	)		(0.8	)		35.8			(61.2	)
Other income (expense), net		51.0			44.8			0.1			(98.9	)		(3.0	)

Income before equity in earnings of subsidiaries and income taxes		10.6			255.6			30.3			—			296.5
Equity in earnings of subsidiaries		144.3			10.7			—			(155.0	)		—

Income before income taxes		154.9			266.3			30.3			(155.0	)		296.5
Income tax (benefit) provision		(39.5	)		130.6			7.5			—			98.6

Net income		194.4			135.7			22.8			(155.0	)		197.9
Less: Net income attributable to noncontrolling interests		—			3.0			0.5			—			3.5

Net income attributable to Reliance	$	194.4		$	132.7		$	22.3		$	(155.0	)	$	194.4

Condensed Consolidating Statement of Income
For the year ended December 31, 2009
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	500.0		$	4,736.5		$	213.3		$	(131.7	)	$	5,318.1
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		343.4			3,544.3			162.7			(131.8	)		3,918.6
Warehouse, delivery, selling, general and administrative		86.8			950.1			53.5			(60.2	)		1,030.2
Depreciation and amortization		13.0			101.4			4.5			—			118.9

		443.2			4,595.8			220.7			(192.0	)		5,067.7
Operating income (loss)		56.8			140.7			(7.4	)		60.3			250.4
Other income (expense):
Interest		(68.5	)		(39.3	)		(0.5	)		40.8			(67.5	)
Other income (expense), net		101.6			7.6			4.5			(101.1	)		12.6

Income (loss) before equity in earnings (losses) of subsidiaries and income taxes		89.9			109.0			(3.4	)		—			195.5
Equity in earnings (losses) of subsidiaries		36.4			(4.1	)		—			(32.3	)		—

Income (loss) before income taxes		126.3			104.9			(3.4	)		(32.3	)		195.5
Income tax (benefit) provision		(21.9	)		68.5			(0.3	)		—			46.3

Net income (loss)		148.2			36.4			(3.1	)		(32.3	)		149.2
Less: Net income attributable to noncontrolling interests		—			1.0			—			—			1.0

Net income attributable to Reliance	$	148.2		$	35.4		$	(3.1	)	$	(32.3	)	$	148.2

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2011
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Operating activities:
Net income	$	343.8		$	184.8		$	57.2		$	(236.6	)	$	349.2
Equity in earnings of subsidiaries		(204.5	)		(34.3	)		—			236.6			(2.2	)
Other operating activities, net		(48.1	)		(37.6	)		(26.5	)		—			(112.2	)

Cash provided by operating activities		91.2			112.9			30.7			—			234.8
Investing activities:
Purchases of property, plant and equipment		(15.0	)		(133.2	)		(8.2	)		—			(156.4	)
Acquisitions of metals service centers, net of cash acquired and debt assumed		(166.2	)		—			(147.1	)		—			(313.3	)
Net advances to subsidiaries		(229.9	)		—			—			229.9			—
Other investing activities, net		(36.8	)		(8.9	)		0.1			40.7			(4.9	)

Cash used in investing activities		(447.9	)		(142.1	)		(155.2	)		270.6			(474.6	)
Financing activities:
Net borrowings (repayments) of debt		389.8			(76.3	)		(29.8	)		—			283.7
Dividends paid		(35.9	)		—			—			—			(35.9	)
Net intercompany borrowings		—			112.0			117.9			(229.9	)		—
Other financing activities, net		3.5			(3.7	)		40.7			(40.7	)		(0.2	)

Cash provided by financing activities		357.4			32.0			128.8			(270.6	)		247.6
Effect of exchange rate changes on cash and cash equivalents		—			—			3.9			—			3.9

Increase in cash and cash equivalents		0.7			2.8			8.2			—			11.7
Cash and cash equivalents at beginning of year		14.4			8.0			50.5			—			72.9

Cash and cash equivalents at end of period	$	15.1		$	10.8		$	58.7		$	—		$	84.6

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2010
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Operating activities:
Net income	$	194.4		$	135.7		$	22.8		$	(155.0	)	$	197.9
Equity in earnings of subsidiaries		(144.3	)		(11.4	)		—			155.0			(0.7	)
Other operating activities, net		173.1			(148.8	)		(7.4	)		—			16.9

Cash provided by (used in) operating activities		223.2			(24.5	)		15.4			—			214.1
Investing activities:
Purchases of property, plant and equipment		(10.7	)		(93.8	)		(6.9	)		—			(111.4	)
Acquisitions of metals service centers, net of cash acquired and debt assumed		(100.3	)		—			—			—			(100.3	)
Net advances to subsidiaries		(99.1	)		—			—			99.1			—
Other investing activities, net		(5.0	)		49.8			0.1			5.0			49.9

Cash used in investing activities		(215.1	)		(44.0	)		(6.8	)		104.1			(161.8	)
Financing activities:
Net borrowings (repayments) of debt		1.8			(23.3	)		3.1			—			(18.4	)
Dividends paid		(29.7	)		—			—			—			(29.7	)
Intercompany borrowings		—			94.7			4.4			(99.1	)		—
Other financing activities, net		25.2			(1.8	)		5.2			(5.0	)		23.6

Cash (used in) provided by financing activities		(2.7	)		69.6			12.7			(104.1	)		(24.5	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2.1			—			2.1

Increase in cash and cash equivalents		5.4			1.1			23.4			—			29.9
Cash and cash equivalents at beginning of period		9.0			6.9			27.1			—			43.0

Cash and cash equivalents at end of period	$	14.4		$	8.0		$	50.5		$	—		$	72.9

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2009
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Operating activities:
Net income (loss)	$	148.2		$	36.4		$	(3.1	)	$	(32.3	)	$	149.2
Equity in (earnings) losses of subsidiaries		(36.4	)		2.7			—			32.3			(1.4	)
Other operating activities, net		(9.4	)		772.8			31.8			—			795.2

Cash provided by operating activities		102.4			811.9			28.7			—			943.0
Investing activities:
Purchases of property, plant and equipment		(10.3	)		(46.2	)		(13.4	)		—			(69.9	)
Net repayments from subsidiaries		748.9			—			—			(748.9	)		—
Other investing activities, net		0.1			(24.0	)		0.2			—			(23.7	)

Cash provided by (used in) investing activities		738.7			(70.2	)		(13.2	)		(748.9	)		(93.6	)
Financing activities:
Net (repayments) borrowings of debt		(829.5	)		(1.9	)		0.2			—			(831.2	)
Dividends paid		(29.4	)		—			—			—			(29.4	)
Intercompany (repayments) borrowings		—			(750.1	)		1.2			748.9			—
Other financing activities, net		5.5			(2.0	)		(2.7	)		—			0.8

Cash used in financing activities		(853.4	)		(754.0	)		(1.3	)		748.9			(859.8	)
Effect of exchange rate changes on cash and cash equivalents		—			—			1.4			—			1.4

(Decrease) increase in cash and cash equivalents		(12.3	)		(12.3	)		15.6			—			(9.0	)
Cash and cash equivalents at beginning of period		21.3			19.2			11.5			—			52.0

Cash and cash equivalents at end of period	$	9.0		$	6.9		$	27.1		$	—		$	43.0