Note 17. Condensed Consolidating Financial Statements

In November 2006, we issued senior unsecured notes in the aggregate principal amount of $600 million at fixed interest rates that are guaranteed by our 100%-owned domestic subsidiaries. The accompanying combined and 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 loan. 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 Consolidating Balance Sheet
As of December 31, 2012
(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations & Reclassifications			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		71.6		6.1		—			126.2
Deferred income taxes		—		75.2		—		(75.2	)		—
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 Consolidating Balance Sheet
As of December 31, 2011
(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations & Reclassifications			Consolidated

Assets
Cash and cash equivalents	$	15.1	$	10.8	$	58.7	$	—		$	84.6
Accounts receivable, less allowance for doubtful accounts		69.6		739.1		87.5		—			896.2
Inventories		43.7		1,017.4		151.7		—			1,212.8
Intercompany receivables		0.3		11.6		0.9		(12.8	)		—
Other current assets		108.7		28.0		7.5		(63.1	)		81.1

Total current assets		237.4		1,806.9		306.3		(75.9	)		2,274.7
Investments in subsidiaries		3,217.0		273.9		—		(3,490.9	)		—
Property, plant and equipment, net		100.0		931.5		74.0		—			1,105.5
Goodwill		23.8		1,115.7		104.8		—			1,244.3
Intangible assets, net		13.6		748.0		134.3		—			895.9
Intercompany receivables		1,229.9		35.9		—		(1,265.8	)		—
Other assets		13.7		70.0		1.8		—			85.5

Total assets	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Liabilities & Equity
Accounts payable	$	31.2	$	270.6	$	46.2	$	(12.8	)	$	335.2
Accrued compensation and retirement costs		22.0		81.4		7.6		—			111.0
Other current liabilities		49.3		41.4		15.4		11.9			118.0
Deferred income taxes		—		75.0		—		(75.0	)		—
Current maturities of long-term debt and short-term borrowings		0.2		0.2		11.8		—			12.2

Total current liabilities		102.7		468.6		81.0		(75.9	)		576.4
Long-term debt		1,319.0		—		—		—			1,319.0
Intercompany borrowings		—		1,097.2		168.6		(1,265.8	)		—
Other long-term liabilities		269.8		264.9		23.8		—			558.5
Total Reliance shareholders' equity		3,143.9		3,146.8		344.1		(3,490.9	)		3,143.9
Noncontrolling interests		—		4.4		3.7		—			8.1

Total equity		3,143.9		3,151.2		347.8		(3,490.9	)		3,152.0

Total liabilities and equity	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Condensed Consolidating Statement of Income
For the year ended December 31, 2012
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	726.3		$	7,298.4		$	640.2		$	(222.6	)	$	8,442.3
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		534.9			5,463.2			460.0			(222.7	)		6,235.4
Warehouse, delivery, selling, general and administrative		188.1			1,164.5			96.4			(52.8	)		1,396.2
Depreciation and amortization		14.3			124.7			12.5			—			151.5

		737.3			6,752.4			568.9			(275.5	)		7,783.1
Operating (loss) income		(11.0	)		546.0			71.3			52.9			659.2
Other income (expense):
Interest		(57.7	)		(14.4	)		(2.2	)		15.9			(58.4	)
Other income, net		73.9			3.4			0.1			(68.8	)		8.6

Income before equity in earnings of subsidiaries and income taxes		5.2			535.0			69.2			—			609.4
Equity in earnings of subsidiaries		379.2			28.9			—			(408.1	)		—

Income before income taxes		384.4			563.9			69.2			(408.1	)		609.4
Income tax (benefit) provision		(19.1	)		206.0			14.2			—			201.1

Net income		403.5			357.9			55.0			(408.1	)		408.3
Less: Net income attributable to noncontrolling interests		—			4.6			0.2			—			4.8

Net income attributable to Reliance	$	403.5		$	353.3		$	54.8		$	(408.1	)	$	403.5

Condensed Consolidating Statement of Income
For the year ended December 31, 2011
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	706.8		$	7,103.0		$	547.8		$	(222.9	)	$	8,134.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		535.3			5,461.0			375.4			(223.0	)		6,148.7
Warehouse, delivery, selling, general and administrative		72.0			1,187.8			86.8			(66.5	)		1,280.1
Depreciation and amortization		14.3			109.8			9.0			—			133.1

		621.6			6,758.6			471.2			(289.5	)		7,561.9
Operating income		85.2			344.4			76.6			66.6			572.8
Other income (expense):
Interest		(58.9	)		(27.6	)		(2.1	)		28.8			(59.8	)
Other income (expense), net		93.4			2.6			(2.0	)		(95.4	)		(1.4	)

Income before equity in earnings of subsidiaries and income taxes		119.7			319.4			72.5			—			511.6
Equity in earnings of subsidiaries		204.5			32.1			—			(236.6	)		—

Income before income taxes		324.2			351.5			72.5			(236.6	)		511.6
Income tax (benefit) provision		(19.6	)		166.7			15.3			—			162.4

Net income		343.8			184.8			57.2			(236.6	)		349.2
Less: Net income attributable to noncontrolling interests		—			4.6			0.8			—			5.4

Net income attributable to Reliance	$	343.8		$	180.2		$	56.4		$	(236.6	)	$	343.8

Condensed Consolidating Statement of Income
For the year ended December 31, 2010
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	593.7		$	5,550.6		$	338.2		$	(169.7	)	$	6,312.8
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		442.4			4,226.0			229.4			(169.9	)		4,727.9
Warehouse, delivery, selling, general and administrative		116.3			978.7			71.5			(62.9	)		1,103.6
Depreciation and amortization		13.0			101.3			6.3			—			120.6

		571.7			5,306.0			307.2			(232.8	)		5,952.1
Operating income		22.0			244.6			31.0			63.1			360.7
Other income (expense):
Interest		(62.4	)		(33.8	)		(0.8	)		35.8			(61.2	)
Other income (expense), net		51.0			44.8			0.1			(98.9	)		(3.0	)

Income before equity in earnings of subsidiaries and income taxes		10.6			255.6			30.3			—			296.5
Equity in earnings of subsidiaries		144.3			10.7			—			(155.0	)		—

Income before income taxes		154.9			266.3			30.3			(155.0	)		296.5
Income tax (benefit) provision		(39.5	)		130.6			7.5			—			98.6

Net income		194.4			135.7			22.8			(155.0	)		197.9
Less: Net income attributable to noncontrolling interests		—			3.0			0.5			—			3.5

Net income attributable to Reliance	$	194.4		$	132.7		$	22.3		$	(155.0	)	$	194.4

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2012
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating activities:
Net income	$	403.5		$	357.9		$	55.0		$	(408.1	)	$	408.3
Equity in earnings of subsidiaries		(379.2	)		(31.1	)		—			408.1			(2.2	)
Other operating activities, net		(1.0	)		186.1			10.7			—			195.8

Cash provided by operating activities		23.3			512.9			65.7			—			601.9
Investing activities:
Purchases of property, plant and equipment		(16.0	)		(171.1	)		(26.9	)		—			(214.0	)
Acquisitions of metals service centers, net of cash acquired		(117.5	)		(49.4	)		—			—			(166.9	)
Net advances from subsidiaries		260.2			—			—			(260.2	)		—
Other investing activities, net		1.8			(2.7	)		0.1			—			(0.8	)

Cash provided by (used in) investing activities		128.5			(223.2	)		(26.8	)		(260.2	)		(381.7	)
Financing activities:
Net short-term debt repayments		—			(59.4	)		(3.8	)		—			(63.2	)
Proceed from long-term debt borrowings		641.0			—			—			—			641.0
Principal payments on long-term debt		(761.3	)		(1.7	)		—			—			(763.0	)
Dividends paid		(60.2	)		—			—			—			(60.2	)
Net intercompany repayments		—			(223.2	)		(37.0	)		260.2			—
Other financing activities, net		41.7			(3.1	)		(0.8	)		—			37.8

Cash used in financing activities		(138.8	)		(287.4	)		(41.6	)		260.2			(207.6	)
Effect of exchange rate changes on cash and cash equivalents		—			—			0.4			—			0.4

Increase (decrease) in cash and cash equivalents		13.0			2.3			(2.3	)		—			13.0
Cash and cash equivalents at beginning of year		15.1			10.8			58.7			—			84.6

Cash and cash equivalents at end of year	$	28.1		$	13.1		$	56.4		$	—		$	97.6

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2011
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating activities:
Net income	$	343.8		$	184.8		$	57.2		$	(236.6	)	$	349.2
Equity in earnings of subsidiaries		(204.5	)		(34.3	)		—			236.6			(2.2	)
Other operating activities, net		(48.1	)		(37.6	)		(26.5	)		—			(112.2	)

Cash provided by operating activities		91.2			112.9			30.7			—			234.8
Investing activities:
Purchases of property, plant and equipment		(15.0	)		(133.2	)		(8.2	)		—			(156.4	)
Acquisitions of metals service centers, net of cash acquired		(166.2	)		—			(147.1	)		—			(313.3	)
Net advances to subsidiaries		(229.9	)		—			—			229.9			—
Other investing activities, net		(36.8	)		(8.9	)		0.1			40.7			(4.9	)

Cash used in investing activities		(447.9	)		(142.1	)		(155.2	)		270.6			(474.6	)
Financing activities:
Net short-term debt repayments		—			(74.9	)		(29.8	)		—			(104.7	)
Proceed from long-term debt borrowings		995.0			—			—			—			995.0
Principal payments on long-term debt		(605.2	)		(1.4	)		—			—			(606.6	)
Dividends paid		(35.9	)		—			—			—			(35.9	)
Net intercompany borrowings		—			112.0			117.9			(229.9	)		—
Other financing activities, net		3.5			(3.7	)		40.7			(40.7	)		(0.2	)

Cash provided by (used in) financing activities		357.4			32.0			128.8			(270.6	)		247.6
Effect of exchange rate changes on cash and cash equivalents		—			—			3.9			—			3.9

Increase in cash and cash equivalents		0.7			2.8			8.2			—			11.7
Cash and cash equivalents at beginning of year		14.4			8.0			50.5			—			72.9

Cash and cash equivalents at end of year	$	15.1		$	10.8		$	58.7		$	—		$	84.6

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2010
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Operating activities:
Net income	$	194.4		$	135.7		$	22.8		$	(155.0	)	$	197.9
Equity in earnings of subsidiaries		(144.3	)		(11.4	)		—			155.0			(0.7	)
Other operating activities, net		173.1			(148.8	)		(7.4	)		—			16.9

Cash provided by (used in) operating activities		223.2			(24.5	)		15.4			—			214.1
Investing activities:
Purchases of property, plant and equipment		(10.7	)		(93.8	)		(6.9	)		—			(111.4	)
Acquisitions of metals service centers, net of cash acquired		(100.3	)		—			—			—			(100.3	)
Net advances to subsidiaries		(99.1	)		—			—			99.1			—
Other investing activities, net		(5.0	)		49.8			0.1			5.0			49.9

Cash used in investing activities		(215.1	)		(44.0	)		(6.8	)		104.1			(161.8	)
Financing activities:
Net short-term debt borrowings		—			—			3.2			—			3.2
Proceed from long-term debt borrowings		539.0			—			—			—			539.0
Principal payments on long-term debt		(537.3	)		(23.3	)		—			—			(560.6	)
Dividends paid		(29.7	)		—			—			—			(29.7	)
Intercompany borrowings		—			94.7			4.4			(99.1	)		—
Other financing activities, net		25.3			(1.8	)		5.1			(5.0	)		23.6

Cash (used in) provided by financing activities		(2.7	)		69.6			12.7			(104.1	)		(24.5	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2.1			—			2.1

Increase in cash and cash equivalents		5.4			1.1			23.4			—			29.9
Cash and cash equivalents at beginning of year		9.0			6.9			27.1			—			43.0

Cash and cash equivalents at end of year	$	14.4		$	8.0		$	50.5		$	—		$	72.9