Parent Company Condensed Financial Information

As discussed in Note 11 - "Debt," certain of the Company's subsidiaries have long-term debt outstanding which place restrictions on distributions of funds to HNH, subject to certain exceptions including required pension payments to the WHX Pension Plan. As these subsidiaries' restricted net assets, which totaled approximately $353 million at December 31, 2014, represent a significant portion of the Company's consolidated total assets, the Company is presenting the following parent company condensed financial information. The HNH parent company condensed financial information is prepared on the same basis of accounting as the HNH consolidated financial statements, except that the HNH subsidiaries are accounted for under the equity method of accounting.

HANDY & HARMAN LTD. (PARENT ONLY)

Balance Sheets

(in thousands, except par value)



	December 31,			December 31,
	2014			2013
ASSETS
Current Assets:
Cash and cash equivalents	$	22,106		$	1,853
Deferred income tax assets - current	10,037			4,062
Prepaid and other current assets	82			92
Total current assets	32,225			6,007
Notes receivable from Bairnco	4,627			4,627
Investment in associated company	1,661			33,983
Deferred income tax assets	84,109			64,088
Investments in and advances to subsidiaries, net	266,399			278,730
Total assets	$	389,021		$	387,435
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables	$	—		$	61
Accrued liabilities	380			718
Total current liabilities	380			779
Accrued interest - Handy & Harman	12,193			12,193
Notes payable to Handy & Harman	118,728			98,188
Accrued pension liability	208,331			142,403
Total liabilities	339,632			253,563
Commitments and Contingencies
Stockholders' Equity:
Common stock - $.01 par value; authorized 180,000 shares;
issued 13,580 and 13,444 shares, respectively	136			134
Accumulated other comprehensive loss	(235,822		)	(181,931		)
Additional paid-in capital	570,256			565,441
Treasury stock, at cost - 2,800 and 458 shares, respectively	(70,375		)	(9,796		)
Accumulated deficit	(214,806		)	(239,976		)
Total stockholders' equity	49,389			133,872
Total liabilities and stockholders' equity	$	389,021		$	387,435

HANDY & HARMAN LTD. (PARENT ONLY)

Statements of Income and Comprehensive (Loss) Income

(in thousands)



	Year Ended December 31,
	2014			2013			2012
Equity in income of subsidiaries, net of tax	$	39,979		$	44,275		$	35,498
Selling, general and administrative expenses	(8,261		)	(7,790		)	(7,720		)
Pension expense	(3,739		)	(5,206		)	(3,195		)
Other:
Interest expense - Handy & Handy notes payable	—			—			(4,087		)
Interest income - Bairnco notes receivable	—			—			560
Other income	—			—			15
Income before tax and equity investment	27,979			31,279			21,071
Tax benefit	4,624			4,744			5,410
(Loss) gain from associated company, net of tax	(7,433		)	6,006			—
Net income	25,170			42,029			26,481
Other comprehensive (loss) income, net of tax:
Changes in pension liability and other post-retirement benefit obligations	(83,887		)	68,328			(43,702		)
Tax effect of changes in pension liability and other post-retirement benefit obligations	31,924			(25,653		)	14,455
Change in market value of securities	—			7,113			(14,948		)
Tax effect of change in market value of securities	—			(3,041		)	6,054
Foreign currency translation adjustments	(1,928		)	(2,510		)	362
Other comprehensive (loss) income	(53,891		)	44,237			(37,779		)
Comprehensive (loss) income	$	(28,721	)	$	86,266		$	(11,298	)

HANDY & HARMAN LTD. (PARENT ONLY)

Statements of Cash Flows

(in thousands)



	Year ended December 31,
	2014			2013			2012
Cash flows from operating activities:
Net income	$	25,170		$	42,029		$	26,481
Adjustments to reconcile net income to net cash
used in operating activities:
Equity in income of subsidiaries, net of tax	(39,979		)	(44,275		)	(35,498		)
Payment in kind interest expense - Handy & Harman	—			—			4,087
Payment in kind interest income - Bairnco	—			—			(560		)
Non-cash stock-based compensation	5,105			4,860			4,476
Non-cash loss (gain) from associated company, net of tax	7,433			(6,006		)	—
Deferred income taxes	(4,624		)	(5,945		)	(5,410		)
Change in operating assets and liabilities:
Pension payments - WHX Pension Plan	(20,540		)	(13,106		)	(15,919		)
Pension expense	3,739			5,206			3,195
Other current assets and liabilities	487			45			(1,047		)
Net cash used in operating activities	(23,209		)	(17,192		)	(20,195		)
Cash flows from investing activities:
Investments in associated company	(1,499		)	—			(6,321		)
Dividends from subsidiaries	85,000			10,000			6,321
Net cash provided by investing activities	83,501			10,000			—
Cash flows from financing activities:
Notes payable - Handy & Harman	20,540			18,106			19,419
Purchases of treasury stock	(60,579		)	(9,796		)	—
Net cash (used in) provided by financing activities	(40,039		)	8,310			19,419
Net change for the year	20,253			1,118			(776		)
Cash and cash equivalents at beginning of year	1,853			735			1,511
Cash and cash equivalents at end of year	$	22,106		$	1,853		$	735