11. Condensed Consolidating Financial Statements

In November 2006 and April 2013, we issued senior unsecured notes in the aggregate principal amount of $1.1 billion, at fixed interest rates that are guaranteed by our named 100%-owned domestic subsidiaries that also guarantee our credit facility. The accompanying 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 our ability to obtain funds from any of the guarantor subsidiaries by dividends or loans. 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 Unaudited Consolidating Balance Sheet

As of June 30, 2013

(in millions)

	Parent		Guarantor Subsidiaries				Non- Guarantor Subsidiaries			Consolidating Adjustments				Consolidated

Assets
Cash and cash equivalents	$	47.7		$	(7.8	)		$	60.9		$	—			$	100.8
Accounts receivable, less allowance for doubtful accounts	76.6			967.0				99.9			—				1,143.5
Inventories	58.3			1,369.5				159.3			—				1,587.1
Intercompany receivables	0.6			18.2				2.8			(21.6		)		—
Income taxes receivable	57.2			—				—			(39.6		)		17.6
Other current assets	109.1			41.2				11.4			(78.2		)		83.5
Total current assets	349.5			2,388.1				334.3			(139.4		)		2,932.5

Investments in subsidiaries	4,399.0			1,139.3				—			(5,538.3		)		—
Property, plant and equipment, net	99.9			1,274.5				211.9			—				1,586.3
Goodwill	23.8			1,525.5				109.5			—				1,658.8
Intangible assets, net	19.0			1,172.7				122.2			—				1,313.9
Intercompany receivables	1,461.0			18.1				871.6			(2,350.7		)		—
Other assets	18.6			61.8				3.7			—				84.1
Total assets	$	6,370.8		$	7,580.0			$	1,653.2		$	(8,028.4	)		$	7,575.6

Liabilities & Equity
Accounts payable	$	41.6		$	305.7			$	93.6		$	(21.6	)		$	419.3
Accrued compensation and retirement costs	13.5			74.3				10.8			—				98.6
Income taxes payable	—			33.5				6.1			(39.6		)		—
Other current liabilities	52.2			133.9				36.5			(78.3		)		144.3
Current maturities of long-term debt and short-term borrowings	100.3			—				14.3			—				114.6
Total current liabilities	207.6			547.4				161.3			(139.5		)		776.8
Long-term debt	2,165.6			5.7				48.6			—				2,219.9
Intercompany borrowings	—			2,269.4				81.3			(2,350.7		)		—
Other long-term liabilities	284.1			526.1				45.9			—				856.1
Total Reliance shareholders’ equity	3,713.5			4,225.3				1,312.9			(5,538.2		)		3,713.5
Noncontrolling interests	—			6.1				3.2			—				9.3
Total equity	3,713.5			4,231.4				1,316.1			(5,538.2		)		3,722.8
Total liabilities and equity	$	6,370.8		$	7,580.0			$	1,653.2		$	(8,028.4	)		$	7,575.6

Condensed Unaudited Consolidating Balance Sheet
As of December 31, 2012

(in millions)

	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments				Consolidated

Assets
Cash and cash equivalents	$	28.1		$	13.1		$	56.4		$	—			$	97.6
Accounts receivable, less allowance for doubtful accounts	67.4			658.3			82.0			—				807.7
Inventories	50.3			1,068.4			153.6			—				1,272.3
Intercompany receivables	0.2			16.7			2.4			(19.3		)		—
Income taxes receivable	28.2			—			0.2			—				28.4
Other current assets	113.3			26.5			6.8			(75.2		)		71.4
Total current assets	287.5			1,783.0			301.4			(94.5		)		2,277.4

Investments in subsidiaries	3,722.7			257.8			—			(3,980.5		)		—
Property, plant and equipment, net	100.8			1,044.1			95.8			—				1,240.7
Goodwill	23.7			1,183.9			107.0			—				1,314.6
Intangible assets, net	11.0			794.6			130.9			—				936.5
Intercompany receivables	969.7			26.2			3.7			(999.6		)		—
Other assets	18.3			68.1			2.1			—				88.5
Total assets	$	5,133.7		$	5,157.7		$	640.9		$	(5,074.6	)		$	5,857.7

Liabilities & Equity
Accounts payable	$	25.7		$	195.2		$	54.0		$	(19.3	)		$	255.6
Accrued compensation and retirement costs	22.8			84.0			6.0			—				112.8
Other current liabilities	48.5			146.8			6.1			(75.2		)		126.2
Current maturities of long-term debt and short-term borrowings	75.3			—			8.3			—				83.6
Total current liabilities	172.3			426.0			74.4			(94.5		)		578.2
Long-term debt	1,123.8			—			—			—				1,123.8
Intercompany borrowings	—			864.3			135.3			(999.6		)		—
Other long-term liabilities	279.2			284.0			25.1			—				588.3
Total Reliance shareholders’ equity	3,558.4			3,577.4			403.1			(3,980.5		)		3,558.4
Noncontrolling interests	—			6.0			3.0			—				9.0
Total equity	3,558.4			3,583.4			406.1			(3,980.5		)		3,567.4
Total liabilities and equity	$	5,133.7		$	5,157.7		$	640.9		$	(5,074.6	)		$	5,857.7

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2013

(in millions)

	Parent			Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Consolidating Adjustments				Consolidated

Net sales	$	183.6			$	2,139.2			$	177.5			$	(52.0	)		$	2,448.3

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	129.3				1,617.6				131.8				(52.0		)		1,826.7
Warehouse, delivery, selling, general and administrative	58.6				349.8				31.4				(13.8		)		426.0
Depreciation and amortization	5.1				40.9				4.1				—				50.1
	193.0				2,008.3				167.3				(65.8		)		2,302.8

Operating (loss) income	(9.4		)		130.9				10.2				13.8				145.5

Other income (expense):
Interest	(21.2		)		(4.9		)		(0.8		)		4.8				(22.1		)
Other income (expense), net	18.5				(0.2		)		(0.3		)		(18.6		)		(0.6		)
(Loss) income before equity in earnings of subsidiaries and income taxes	(12.1		)		125.8				9.1				—				122.8
Equity in earnings of subsidiaries	82.1				3.2				—				(85.3		)		—
Income before income taxes	70.0				129.0				9.1				(85.3		)		122.8
Income tax (benefit) provision	(11.0		)		49.5				2.4				—				40.9
Net income	81.0				79.5				6.7				(85.3		)		81.9
Less: Net income attributable to noncontrolling interests	—				0.8				0.1				—				0.9
Net income attributable to Reliance	$	81.0			$	78.7			$	6.6			$	(85.3	)		$	81.0

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Consolidating Adjustments				Consolidated

Net sales	$	189.7			$	1,924.1			$	154.3			$	(58.4	)		$	2,209.7

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	132.9				1,457.1				108.7				(58.4		)		1,640.3
Warehouse, delivery, selling, general and administrative	16.2				326.2				24.4				(20.1		)		346.7
Depreciation and amortization	3.4				29.8				3.3				—				36.5
	152.5				1,813.1				136.4				(78.5		)		2,023.5

Operating income	37.2				111.0				17.9				20.1				186.2

Other income (expense):
Interest	(14.8		)		(4.7		)		(0.5		)		5.0				(15.0		)
Other income (expense), net	22.8				(0.7		)		(0.5		)		(25.1		)		(3.5		)
Income before equity in earnings of subsidiaries and income taxes	45.2				105.6				16.9				—				167.7
Equity in earnings of subsidiaries	60.1				7.9				—				(68.0		)		—
Income before income taxes	105.3				113.5				16.9				(68.0		)		167.7
Income tax (benefit) provision	(3.5		)		57.4				3.6				—				57.5
Net income	108.8				56.1				13.3				(68.0		)		110.2
Less: Net income attributable to noncontrolling interests	—				1.4				—				—				1.4
Net income attributable to Reliance	$	108.8			$	54.7			$	13.3			$	(68.0	)		$	108.8

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2013

(in millions)

	Parent			Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Consolidating Adjustments				Consolidated

Net sales	$	363.0			$	3,877.9			$	341.2			$	(108.5	)		$	4,473.6

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	267.4				2,909.0				255.3				(108.5		)		3,323.2
Warehouse, delivery, selling, general and administrative	109.5				649.4				54.7				(29.9		)		783.7
Depreciation and amortization	9.1				74.5				7.6				—				91.2
	386.0				3,632.9				317.6				(138.4		)		4,198.1

Operating (loss) income	(23.0		)		245.0				23.6				29.9				275.5

Other income (expense):
Interest	(34.3		)		(7.4		)		(1.3		)		7.8				(35.2		)
Other income (expense), net	36.8				3.7				(0.5		)		(37.7		)		2.3
(Loss) income before equity in earnings of subsidiaries and income taxes	(20.5		)		241.3				21.8				—				242.6
Equity in earnings of subsidiaries	164.7				8.0				—				(172.7		)		—
Income before income taxes	144.2				249.3				21.8				(172.7		)		242.6
Income tax (benefit) provision	(20.5		)		91.7				5.0				—				76.2
Net income	164.7				157.6				16.8				(172.7		)		166.4
Less: Net income attributable to noncontrolling interests	—				1.6				0.1				—				1.7
Net income attributable to Reliance	$	164.7			$	156.0			$	16.7			$	(172.7	)		$	164.7

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	382.4		$	3,896.3		$	345.9		$	(126.6	)	$	4,498.0

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	286.6			2,944.9			245.9			(126.6		)	3,350.8
Warehouse, delivery, selling, general and administrative	31.2			670.7			49.2			(46.7		)	704.4
Depreciation and amortization	6.9			59.0			6.1			—			72.0
	324.7			3,674.6			301.2			(173.3		)	4,127.2

Operating income	57.7			221.7			44.7			46.7			370.8

Other income (expense):
Interest	(29.2		)	(8.6		)	(1.2		)	9.5			(29.5		)
Other income, net	56.7			2.0			0.5			(56.2		)	3.0
Income before equity in earnings of subsidiaries and income taxes	85.2			215.1			44.0			—			344.3
Equity in earnings of subsidiaries	128.1			17.8			—			(145.9		)	—
Income before income taxes	213.3			232.9			44.0			(145.9		)	344.3
Income tax (benefit) provision	(11.7		)	119.6			8.3			—			116.2
Net income	225.0			113.3			35.7			(145.9		)	228.1
Less: Net income attributable to noncontrolling interests	—			2.9			0.2			—			3.1
Net income attributable to Reliance	$	225.0		$	110.4		$	35.5		$	(145.9	)	$	225.0

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2013

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Cash provided by operating activities	$	94.8		$	186.4		$	2.7		$	—		$	283.9

Investing activities:
Purchases of property, plant and equipment	(6.2		)	(62.6		)	(5.5		)	—			(74.3		)
Acquisitions, net of cash acquired	(794.7		)	—			—			—			(794.7		)
Net advances to subsidiaries	(326.9		)	—			—			326.9			—
Other investing activities, net	0.1			8.3			0.1			—			8.5
Cash used in investing activities	(1,127.7		)	(54.3		)	(5.4		)	326.9			(860.5		)

Financing activities:
Net short-term debt (repayments) borrowings	—			(473.8		)	4.5			—			(469.3		)
Proceeds from long-term debt borrowings	2,257.9			—			—			—			2,257.9
Principal (payments) borrowings on long-term debt	(1,191.2		)	(0.5		)	0.1			—			(1,191.6		)
Dividends paid	(46.0		)	—			—			—			(46.0		)
Net intercompany borrowings	—			322.7			4.2			(326.9		)	—
Other financing activities, net	31.8			(1.4		)	—			—			30.4
Cash provided by (used in) financing activities	1,052.5			(153.0		)	8.8			(326.9		)	581.4
Effect of exchange rate changes on cash and cash equivalents	—			—			(1.6		)	—			(1.6		)
Increase (decrease) in cash and cash equivalents	19.6			(20.9		)	4.5			—			3.2
Cash and cash equivalents at beginning of year	28.1			13.1			56.4			—			97.6
Cash and cash equivalents at end of period	$	47.7		$	(7.8	)	$	60.9		$	—		$	100.8

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Cash provided by (used in) operating activities	$	111.0		$	(99.5	)	$	9.7		$	—		$	21.2

Investing activities:
Purchases of property, plant and equipment	(7.6		)	(72.0		)	(7.2		)	—			(86.8		)
Acquisitions, net of cash acquired	(65.9		)	(16.4		)	—			—			(82.3		)
Net advances to subsidiaries	(209.4		)	—			—			209.4			—
Other investing activities, net	0.1			1.7			—			—			1.8
Cash used in investing activities	(282.8		)	(86.7		)	(7.2		)	209.4			(167.3		)

Financing activities:
Net short-term debt (repayments) borrowings	—			(29.5		)	0.1			—			(29.4		)
Proceeds from long-term debt borrowings	458.0			—			—			—			458.0
Principal payments on long-term debt	(258.0		)	(1.5		)	—			—			(259.5		)
Dividends paid	(22.5		)	—			—			—			(22.5		)
Net intercompany borrowings (repayments)	—			221.6			(12.2		)	(209.4		)	—
Other financing activities, net	9.9			(1.4		)	—			—			8.5
Cash provided by (used in) financing activities	187.4			189.2			(12.1		)	(209.4		)	155.1
Effect of exchange rate changes on cash and cash equivalents	—			—			—			—			—
Increase (decrease) in cash and cash equivalents	15.6			3.0			(9.6		)	—			9.0
Cash and cash equivalents at beginning of year	15.1			10.8			58.7			—			84.6
Cash and cash equivalents at end of period	$	30.7		$	13.8		$	49.1		$	—		$	93.6