Parent Company Condensed Financial Information

As discussed in Note 11 - "Credit Facilities," 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 and the WHX Pension Plan II. As these subsidiaries' restricted net assets, which totaled approximately $684 million at December 31, 2016, 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. HNH is a holding company with minimal assets or operations, and all its subsidiaries are 100% owned. We may offer debt securities in a registered offering in the future. If we do, and if we offer guarantees of these securities, then we expect the guarantees will be full and unconditional and joint and several. We expect that any subsidiaries of HNH that do not guarantee the securities would be minor.

HANDY & HARMAN LTD. (PARENT ONLY)

Balance Sheets

(in thousands, except par value)



	December 31,			December 31,
	2016			2015
ASSETS
Current Assets:
Cash and cash equivalents	$	17,459		$	16,059
Prepaid and other current assets	71			82
Total current assets	17,530			16,141
Notes receivable from Bairnco	4,627			4,627
Investment in associated company	3,645			6,191
Deferred income tax assets	108,600			101,820
Investments in and advances to subsidiaries, net	425,380			433,588
Total assets	$	559,782		$	562,367
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued liabilities	$	187		$	176
Total current liabilities	187			176
Accrued interest - Handy & Harman	12,193			12,193
Notes payable - Handy & Harman	151,948			135,937
Accrued pension liabilities	228,347			228,998
Other non-current liabilities	512			523
Total liabilities	393,187			377,827
Commitments and Contingencies
Stockholders' Equity:
Common stock - $.01 par value; authorized 180,000 shares; issued 13,627 and 13,579 shares, respectively	136			136
Accumulated other comprehensive loss	(267,007		)	(259,392		)
Additional paid-in capital	587,705			586,693
Treasury stock, at cost - 1,386 and 1,371 shares, respectively	(34,852		)	(34,454		)
Accumulated deficit	(119,387		)	(108,443		)
Total stockholders' equity	166,595			184,540
Total liabilities and stockholders' equity	$	559,782		$	562,367

HANDY & HARMAN LTD. (PARENT ONLY)

Statements of Operations and Comprehensive (Loss) Income

(in thousands)



	Year Ended December 31,
	2016			2015			2014
Equity in (loss) income of subsidiaries, net of tax	$	(284	)	$	117,375		$	39,979
Selling, general and administrative expenses	(4,258		)	(6,483		)	(8,261		)
Pension expense	(10,175		)	(7,989		)	(3,739		)
(Loss) income before tax and equity investment	(14,717		)	102,903			27,979
Tax benefit	5,378			5,352			4,624
Loss from associated company, net of tax	(1,605		)	(1,892		)	(7,433		)
Net (loss) income	(10,944		)	106,363			25,170

Other comprehensive (loss) income, net of tax:
Changes in pension liabilities and other post-retirement benefit obligations	(8,490		)	(35,521		)	(83,887		)
Tax effect of changes in pension liabilities and other post-retirement benefit obligations	3,107			13,571			31,924
Foreign currency translation adjustments	(2,119		)	(1,855		)	(1,928		)
Tax effect of changes in foreign currency translation adjustments	(113		)	235			—
Other comprehensive loss	(7,615		)	(23,570		)	(53,891		)

Comprehensive (loss) income	$	(18,559	)	$	82,793		$	(28,721	)

HANDY & HARMAN LTD. (PARENT ONLY)

Statements of Cash Flows

(in thousands)



	Year ended December 31,
	2016			2015			2014
Cash flows from operating activities:
Net (loss) income	$	(10,944	)	$	106,363		$	25,170
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Equity in loss (income) of subsidiaries, net of tax	284			(117,375		)	(39,979		)
Non-cash stock-based compensation	1,466			3,373			5,105
Non-cash loss from associated company, net of tax	1,605			1,892			7,433
Deferred income taxes	(5,378		)	(5,352		)	(4,624		)
Change in operating assets and liabilities:
Pension payments	(16,009		)	(17,209		)	(20,540		)
Pension expense	10,175			7,989			3,739
Other current assets and liabilities	(410		)	(330		)	487
Net cash used in operating activities	(19,211		)	(20,649		)	(23,209		)
Cash flows from investing activities:
Investments in associated company	—			(7,607		)	(1,499		)
Dividends from subsidiaries	5,000			5,000			85,000
Net cash provided by (used in) investing activities	5,000			(2,607		)	83,501
Cash flows from financing activities:
Notes payable - Handy & Harman	16,009			17,209			20,540
Purchases of treasury stock	(398		)	—			(60,579		)
Net cash provided by (used in) financing activities	15,611			17,209			(40,039		)
Net change for the year	1,400			(6,047		)	20,253
Cash and cash equivalents at beginning of year	16,059			22,106			1,853
Cash and cash equivalents at end of year	$	17,459		$	16,059		$	22,106

Non-cash investing activities:
Issuance of treasury stock in connection with JPS acquisition	$	—		$	48,748		$	—