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 June 30, 2015

(in millions)

					Non-
			Guarantor		Guarantor		Consolidating
	Parent		Subsidiaries		Subsidiaries		Adjustments			Consolidated

Assets
Cash and cash equivalents	$	44.1	$	1.7	$	86.1	$	—		$	131.9
Accounts receivable, net	79.1		887.6		170.4		(20.0		)	1,117.1
Inventories	53.6		1,367.3		251.9		—			1,672.8
Income taxes receivable	63.2		—		—		(48.5		)	14.7
Other current assets	126.7		36.1		16.3		(76.7		)	102.4

Total current assets	366.7		2,292.7		524.7		(145.2		)	3,038.9

Investments in subsidiaries	4,895.5		299.9		—		(5,195.4		)	—
Property, plant and equipment, net	104.0		1,330.9		213.7		—			1,648.6
Goodwill	23.8		1,570.9		137.7		—			1,732.4
Intangible assets, net	15.1		1,034.6		146.2		—			1,195.9
Intercompany receivables	1,120.2		33.7		23.2		(1,177.1		)	—
Other assets	25.1		44.6		5.7		—			75.4

Total assets	$	6,550.4	$	6,607.3	$	1,051.2	$	(6,517.7	)	$	7,691.2


Liabilities & Equity
Accounts payable	$	36.6	$	269.5	$	84.9	$	(20.0	)	$	371.0
Accrued compensation and retirement costs	17.8		79.1		9.9		—			106.8
Other current liabilities	54.3		61.7		59.8		(49.4		)	126.4
Deferred income taxes	—		75.2		0.6		(75.8		)	—
Current maturities of long-term debt and short-term borrowings	50.0		—		57.1		—			107.1

Total current liabilities	158.7		485.5		212.3		(145.2		)	711.3
Long-term debt	2,043.5		5.7		45.1		—			2,094.3
Intercompany borrowings	—		1,023.4		153.7		(1,177.1		)	—
Other long-term liabilities	315.9		454.9		52.5		—			823.3
Total Reliance stockholders’ equity	4,032.3		4,631.2		564.2		(5,195.4		)	4,032.3
Noncontrolling interests	—		6.6		23.4		—			30.0

Total equity	4,032.3		4,637.8		587.6		(5,195.4		)	4,062.3

Total liabilities and equity	$	6,550.4	$	6,607.3	$	1,051.2	$	(6,517.7	)	$	7,691.2

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	16.1		1,056.7			154.6		—			1,227.4
Intercompany receivables	1,361.7		26.1			18.2		(1,406.0		)	—
Other assets	22.7		52.5			5.9		—			81.1

Total assets	$	6,731.4	$	6,747.4		$	1,033.0	$	(6,689.4	)	$	7,822.4


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	2,156.6		5.7			45.8		—			2,208.1
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 stockholders’ 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	$	6,731.4	$	6,747.4		$	1,033.0	$	(6,689.4	)	$	7,822.4

Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2015

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	185.6		$	2,069.2		$	219.4		$	(50.5	)	$	2,423.7

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	128.4			1,521.4			168.6			(50.6		)	1,767.8
Warehouse, delivery, selling, general and administrative	41.5			379.9			37.2			(17.8		)	440.8
Depreciation and amortization	3.9			45.3			5.7			—			54.9

	173.8			1,946.6			211.5			(68.4		)	2,263.5

Operating income	11.8			122.6			7.9			17.9			160.2

Other income (expense):
Interest	(20.6		)	(5.1		)	(1.8		)	6.0			(21.5		)
Other income (expense), net	18.5			(0.7		)	3.3			(23.9		)	(2.8		)

Income before equity in earnings of subsidiaries and income taxes	9.7			116.8			9.4			—			135.9
Equity in earnings of subsidiaries	74.0			2.6			—			(76.6		)	—

Income before income taxes	83.7			119.4			9.4			(76.6		)	135.9
Income tax (benefit) provision	(6.5		)	45.7			5.1			—			44.3

Net income	90.2			73.7			4.3			(76.6		)	91.6
Less: Net income attributable to noncontrolling interests	—			1.3			0.1			—			1.4

Net income attributable to Reliance	$	90.2		$	72.4		$	4.2		$	(76.6	)	$	90.2

Comprehensive income attributable to Reliance	$	97.6		$	76.8		$	6.3		$	(83.1	)	$	97.6

Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Three Months Ended June 30, 2014

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	191.8		$	2,311.4		$	173.6		$	(60.0	)	$	2,616.8

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	136.0			1,738.6			128.9			(60.0		)	1,943.5
Warehouse, delivery, selling, general and administrative	42.6			387.6			31.1			(16.4		)	444.9
Depreciation and amortization	5.0			42.9			4.8			—			52.7

	183.6			2,169.1			164.8			(76.4		)	2,441.1

Operating income	8.2			142.3			8.8			16.4			175.7

Other income (expense):
Interest	(19.3		)	(7.6		)	(1.3		)	8.0			(20.2		)
Other income (expense), net	23.1			0.4			(0.4		)	(24.4		)	(1.3		)

Income before equity in earnings of subsidiaries and income taxes	12.0			135.1			7.1			—			154.2
Equity in earnings of subsidiaries	76.5			3.8			—			(80.3		)	—

Income before income taxes	88.5			138.9			7.1			(80.3		)	154.2
Income tax (benefit) provision	(8.0		)	61.4			3.0			—			56.4

Net income	96.5			77.5			4.1			(80.3		)	97.8
Less: Net income attributable to noncontrolling interests	—			1.2			0.1			—			1.3

Net income attributable to Reliance	$	96.5		$	76.3		$	4.0		$	(80.3	)	$	96.5

Comprehensive income attributable to Reliance	$	110.7		$	84.8		$	17.5		$	(102.3	)	$	110.7

Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2015

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	377.7		$	4,306.3		$	457.3		$	(103.2	)	$	5,038.1

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	283.5			3,182.3			349.0			(103.3		)	3,711.5
Warehouse, delivery, selling, general and administrative	81.4			765.3			74.6			(34.4		)	886.9
Depreciation and amortization	9.0			89.8			11.4			—			110.2

	373.9			4,037.4			435.0			(137.7		)	4,708.6

Operating income	3.8			268.9			22.3			34.5			329.5

Other income (expense):
Interest	(40.2		)	(11.0		)	(3.3		)	12.4			(42.1		)
Other income (expense), net	37.4			(0.4		)	9.0			(46.9		)	(0.9		)

Income before equity in earnings of subsidiaries and income taxes	1.0			257.5			28.0			—			286.5
Equity in earnings of subsidiaries	172.8			6.1			—			(178.9		)	—

Income before income taxes	173.8			263.6			28.0			(178.9		)	286.5
Income tax (benefit) provision	(17.7		)	100.7			9.0			—			92.0

Net income	191.5			162.9			19.0			(178.9		)	194.5
Less: Net income attributable to noncontrolling interests	—			2.7			0.3			—			3.0

Net income attributable to Reliance	$	191.5		$	160.2		$	18.7		$	(178.9	)	$	191.5

Comprehensive income attributable to Reliance	$	174.1		$	146.9		$	0.5		$	(147.4	)	$	174.1

Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Six Months Ended June 30, 2014

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net sales	$	374.2		$	4,556.3		$	361.2		$	(121.9	)	$	5,169.8

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	282.1			3,417.2			271.9			(121.9		)	3,849.3
Warehouse, delivery, selling, general and administrative	87.7			768.7			62.3			(32.8		)	885.9
Depreciation and amortization	9.5			85.8			9.3			—			104.6

	379.3			4,271.7			343.5			(154.7		)	4,839.8

Operating (loss) income	(5.1		)	284.6			17.7			32.8			330.0

Other income (expense):
Interest	(38.5		)	(13.8		)	(2.5		)	14.4			(40.4		)
Other income (expense), net	43.6			0.2			2.1			(47.2		)	(1.3		)

Income before equity in earnings of subsidiaries and income taxes	—			271.0			17.3			—			288.3
Equity in earnings of subsidiaries	161.2			6.6			—			(167.8		)	—

Income before income taxes	161.2			277.6			17.3			(167.8		)	288.3
Income tax (benefit) provision	(22.5		)	118.2			6.9			—			102.6

Net income	183.7			159.4			10.4			(167.8		)	185.7
Less: Net income attributable to noncontrolling interests	—			1.9			0.1			—			2.0

Net income attributable to Reliance	$	183.7		$	157.5		$	10.3		$	(167.8	)	$	183.7

Comprehensive income attributable to Reliance	$	189.1		$	158.5		$	14.7		$	(173.2	)	$	189.1

Condensed Unaudited Consolidating Cash Flow Statement

For the Six Months Ended June 30, 2015

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net cash provided by operating activities	$	130.1		$	304.2		$	29.6		$	—		$	463.9

Investing activities:
Purchases of property, plant and equipment	(7.4		)	(65.0		)	(4.7		)	—			(77.1		)
Net repayments from subsidiaries	241.5			—			—			(241.5		)	—
Other investing activities, net	—			(1.5		)	—			—			(1.5		)

Net cash provided by (used in) investing activities	234.1			(66.5		)	(4.7		)	(241.5		)	(78.6		)

Financing activities:
Net short-term debt borrowings	—			—			6.8			—			6.8
Proceeds from long-term debt borrowings	412.0			—			—			—			412.0
Principal payments on long-term debt	(520.8		)	(1.0		)	—			—			(521.8		)
Dividends and dividend equivalents paid	(61.4		)	—			—			—			(61.4		)
Share repurchases	(200.0		)	—			—			—			(200.0		)
Net intercompany repayments	—			(226.7		)	(14.8		)	241.5			—
Other financing activities, net	8.2			—			(1.9		)	—			6.3

Net cash used in financing activities	(362.0		)	(227.7		)	(9.9		)	241.5			(358.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(1.5		)	—			(1.5		)

Increase in cash and cash equivalents	2.2			10.0			13.5			—			25.7
Cash and cash equivalents at beginning of year	41.9			(8.3		)	72.6			—			106.2

Cash and cash equivalents at end of period	$	44.1		$	1.7		$	86.1		$	—		$	131.9

Condensed Unaudited Consolidating Cash Flow Statement

For the Six Months Ended June 30, 2014

(in millions)

							Non-
				Guarantor			Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated

Net cash provided by (used in) operating activities	$	167.8		$	(63.2	)	$	4.9		$	—		$	109.5

Investing activities:
Purchases of property, plant and equipment	(10.4		)	(72.7		)	(3.8		)	—			(86.9		)
Net advances to subsidiaries	(123.0		)	—			—			123.0			—
Other investing activities, net	0.1			(9.1		)	26.2			—			17.2

Net cash (used) in provided by investing activities	(133.3		)	(81.8		)	22.4			123.0			(69.7		)

Financing activities:
Net short-term debt repayments	—			—			(3.6		)	—			(3.6		)
Proceeds from long-term debt borrowings	297.0			—			—			—			297.0
Principal payments on long-term debt	(269.5		)	(0.8		)	—			—			(270.3		)
Dividends and dividend equivalents paid	(54.4		)	—			—			—			(54.4		)
Net intercompany borrowings (repayments)	—			137.5			(14.5		)	(123.0		)	—
Other financing activities, net	22.1			(1.9		)	—			—			20.2

Net cash (used in) provided by financing activities	(4.8		)	134.8			(18.1		)	(123.0		)	(11.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			1.2			—			1.2

Increase (decrease) in cash and cash equivalents	29.7			(10.2		)	10.4			—			29.9
Cash and cash equivalents at beginning of year	19.7			(0.8		)	64.7			—			83.6

Cash and cash equivalents at end of period	$	49.4		$	(11.0	)	$	75.1		$	—		$	113.5