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 certain of our 100%-owned domestic subsidiaries that also guarantee borrowings under the Credit Agreement. 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 March 31, 2015

(in millions)

						Non-
			Guarantor			Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated

Assets
Cash and cash equivalents	$	26.6	$	(3.5	)	$	78.5	$	—		$	101.6
Accounts receivable, net	85.8		975.9			169.9		(17.5		)	1,214.1
Inventories	59.7		1,502.1			241.5		—			1,803.3
Income taxes receivable	21.3		—			—		(21.3		)	—
Other current assets	118.9		36.1			17.6		(76.6		)	96.0
Total current assets	312.3		2,510.6			507.5		(115.4		)	3,215.0

Investments in subsidiaries	5,004.5		286.1			—		(5,290.6		)	—
Property, plant and equipment, net	103.1		1,325.6			215.2		—			1,643.9
Goodwill	23.8		1,570.9			135.6		—			1,730.3
Intangible assets, net	28.9		1,045.6			145.7		—			1,220.2
Intercompany receivables	1,187.1		29.6			26.5		(1,243.2		)	—
Other assets	23.4		49.4			5.4		—			78.2
Total assets	$	6,683.1	$	6,817.8		$	1,035.9	$	(6,649.2	)	$	7,887.6

Liabilities & Equity
Accounts payable	$	36.1	$	323.1		$	75.7	$	(17.5	)	$	417.4
Accrued compensation and retirement costs	13.5		72.7			8.9		—			95.1
Other current liabilities	69.1		56.6			68.5		(22.1		)	172.1
Deferred income taxes	—		75.2			0.6		(75.8		)	—
Current maturities of long-term debt and short-term borrowings	50.0		—			50.2		—			100.2
Total current liabilities	168.7		527.6			203.9		(115.4		)	784.8
Long-term debt	2,217.4		5.7			45.4		—			2,268.5
Intercompany borrowings	—		1,083.5			159.7		(1,243.2		)	—
Other long-term liabilities	316.3		455.6			51.8		—			823.7
Total Reliance shareholders’ equity	3,980.7		4,738.7			551.9		(5,290.6		)	3,980.7
Noncontrolling interests	—		6.7			23.2		—			29.9
Total equity	3,980.7		4,745.4			575.1		(5,290.6		)	4,010.6
Total liabilities and equity	$	6,683.1	$	6,817.8		$	1,035.9	$	(6,649.2	)	$	7,887.6

Condensed Unaudited Consolidating Balance Sheet
As of December 31, 2014

(in millions)

						Non-
			Guarantor			Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated

Assets
Cash and cash equivalents	$	41.9	$	(8.3	)	$	72.6	$	—		$	106.2
Accounts receivable, net	72.7		923.1			164.8		(16.0		)	1,144.6
Inventories	57.6		1,454.2			240.3		—			1,752.1
Other current assets	139.3		38.5			16.1		(75.7		)	118.2
Total current assets	311.5		2,407.5			493.8		(91.7		)	3,121.1

Investments in subsidiaries	4,891.8		299.9			—		(5,191.7		)	—
Property, plant and equipment, net	103.8		1,333.7			218.9		—			1,656.4
Goodwill	23.8		1,571.0			141.6		—			1,736.4
Intangible assets, net	30.3		1,056.7			154.6		—			1,241.6
Intercompany receivables	1,361.7		26.1			18.2		(1,406.0		)	—
Other assets	22.7		52.5			5.9		—			81.1
Total assets	$	6,745.6	$	6,747.4		$	1,033.0	$	(6,689.4	)	$	7,836.6

Liabilities & Equity
Accounts payable	$	29.2	$	212.3		$	60.6	$	(15.6	)	$	286.5
Accrued compensation and retirement costs	23.9		89.9			14.6		—			128.4
Other current liabilities	65.2		26.1			62.6		0.1			154.0
Deferred income taxes	—		75.1			0.6		(75.7		)	—
Current maturities of long-term debt and short-term borrowings	43.8		—			50.1		—			93.9
Total current liabilities	162.1		403.4			188.5		(91.2		)	662.8
Long-term debt	2,170.8		5.7			45.8		—			2,222.3
Intercompany borrowings	—		1,242.5			163.5		(1,406.0		)	—
Other long-term liabilities	313.7		456.2			54.1		(0.4		)	823.6
Total Reliance shareholders’ equity	4,099.0		4,633.4			558.4		(5,191.8		)	4,099.0
Noncontrolling interests	—		6.2			22.7		—			28.9
Total equity	4,099.0		4,639.6			581.1		(5,191.8		)	4,127.9
Total liabilities and equity	$	6,745.6	$	6,747.4		$	1,033.0	$	(6,689.4	)	$	7,836.6

Condensed Unaudited Consolidating Statement of Comprehensive Income
For the three months ended March 31, 2015
(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	192.1		$	2,237.1		$	237.9		$	(52.7	)	$	2,614.4

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	155.1			1,660.9			180.4			(52.7		)	1,943.7
Warehouse, delivery, selling, general and administrative	39.9			385.4			37.4			(16.6		)	446.1
Depreciation and amortization	5.1			44.5			5.7			—			55.3
	200.1			2,090.8			223.5			(69.3		)	2,445.1

Operating (loss) income	(8.0		)	146.3			14.4			16.6			169.3

Other income (expense):
Interest	(19.6		)	(5.9		)	(1.5		)	6.4			(20.6		)
Other income, net	18.9			0.3			5.7			(23.0		)	1.9
(Loss) income before equity in earnings of subsidiaries and income taxes	(8.7		)	140.7			18.6			—			150.6
Equity in earnings of subsidiaries	98.8			3.5			—			(102.3		)	—
Income before income taxes	90.1			144.2			18.6			(102.3		)	150.6
Income tax (benefit) provision	(11.2		)	55.0			3.9			—			47.7
Net income	101.3			89.2			14.7			(102.3		)	102.9
Less: Net income attributable to noncontrolling interests	—			1.4			0.2			—			1.6
Net income attributable to Reliance	$	101.3		$	87.8		$	14.5		$	(102.3	)	$	101.3
Comprehensive income (loss) attributable to Reliance	$	76.5		$	70.1		$	(5.8	)	$	(64.3	)	$	76.5

Condensed Unaudited Consolidating Statement of Comprehensive Income
For the three months ended March 31, 2014

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	182.4		$	2,244.9		$	187.6		$	(61.9	)	$	2,553.0

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	146.1			1,678.6			143.0			(61.9		)	1,905.8
Warehouse, delivery, selling, general and administrative	45.1			381.1			31.2			(16.4		)	441.0
Depreciation and amortization	4.5			42.9			4.5			—			51.9
	195.7			2,102.6			178.7			(78.3		)	2,398.7

Operating (loss) income	(13.3		)	142.3			8.9			16.4			154.3

Other income (expense):
Interest	(19.2		)	(6.2		)	(1.2		)	6.4			(20.2		)
Other income (expense), net	20.5			(0.2		)	2.5			(22.8		)	—
(Loss) income before equity in earnings of subsidiaries and income taxes	(12.0		)	135.9			10.2			—			134.1
Equity in earnings of subsidiaries	84.7			2.8			—			(87.5		)	—
Income before income taxes	72.7			138.7			10.2			(87.5		)	134.1
Income tax (benefit) provision	(14.5		)	56.8			3.9			—			46.2
Net income	87.2			81.9			6.3			(87.5		)	87.9
Less: Net income attributable to noncontrolling interests	—			0.7			—			—			0.7
Net income attributable to Reliance	$	87.2		$	81.2		$	6.3		$	(87.5	)	$	87.2
Comprehensive income (loss) attributable to Reliance	$	78.4		$	73.7		$	(2.8	)	$	(70.9	)	$	78.4

Condensed Unaudited Consolidating Cash Flow Statement
For the three months ended March 31, 2015

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net cash (used in) provided by operating activities	$	(41.0	)	$	189.0		$	23.4		$	—		$	171.4

Investing activities:
Purchases of property, plant and equipment	(3.1		)	(25.1		)	(3.1		)	—			(31.3		)
Net repayments from subsidiaries	174.6			—			—			(174.6		)	—
Other investing activities, net	—			4.1			—			—			4.1
Net cash provided by (used in) investing activities	171.5			(21.0		)	(3.1		)	(174.6		)	(27.2		)

Financing activities:
Net short-term debt borrowings	—			—			1.1			—			1.1
Proceeds from long-term debt borrowings	363.0			—			—			—			363.0
Principal payments on long-term debt	(310.3		)	(0.7		)	—			—			(311.0		)
Dividends paid	(31.7		)	—			—			—			(31.7		)
Share repurchases	(171.2		)	—			—			—			(171.2		)
Net intercompany repayments	—			(162.5		)	(12.1		)	174.6			—
Other financing activities, net	4.4			—			(0.6		)	—			3.8
Net cash used in financing activities	(145.8		)	(163.2		)	(11.6		)	174.6			(146.0		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2.8		)	—			(2.8		)
(Decrease) increase in cash and cash equivalents	(15.3		)	4.8			5.9			—			(4.6		)
Cash and cash equivalents at beginning of year	41.9			(8.3		)	72.6			—			106.2
Cash and cash equivalents at end of period	$	26.6		$	(3.5	)	$	78.5		$	—		$	101.6

Condensed Unaudited Consolidating Cash Flow Statement
For the three months ended March 31, 2014

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net cash provided by (used in) operating activities	$	164.6		$	(94.5	)	$	(1.3	)	$	—		$	68.8

Investing activities:
Purchases of property, plant and equipment	(3.3		)	(23.7		)	(1.9		)	—			(28.9		)
Net advances to subsidiaries	(134.6		)	—			—			134.6			—
Other investing activities, net	0.1			(9.2		)	—			—			(9.1		)
Net cash used in investing activities	(137.8		)	(32.9		)	(1.9		)	134.6			(38.0		)

Financing activities:
Net short-term debt borrowings	—			—			0.3			—			0.3
Proceeds from long-term debt borrowings	160.0			—			—			—			160.0
Principal payments on long-term debt	(141.3		)	(0.4		)	—			—			(141.7		)
Dividends paid	(27.1		)	—			—			—			(27.1		)
Net intercompany borrowings	—			119.1			15.5			(134.6		)	—
Other financing activities, net	8.7			—			—			—			8.7
Net cash provided by financing activities	0.3			118.7			15.8			(134.6		)	0.2
Effect of exchange rate changes on cash and cash equivalents	—			—			(1.0		)	—			(1.0		)
Increase (decrease) in cash and cash equivalents	27.1			(8.7		)	11.6			—			30.0
Cash and cash equivalents at beginning of year	19.7			(0.8		)	64.7			—			83.6
Cash and cash equivalents at end of period	$	46.8		$	(9.5	)	$	76.3		$	—		$	113.6