Note 17. 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 Consolidating Balance Sheet
As of December 31, 2014
(in millions)

	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating 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 Consolidating Balance Sheet
As of December 31, 2013
(in millions)

	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Assets
Cash and cash equivalents	$	19.7	$	(0.8	)	$	64.7	$	—		$	83.6
Accounts receivable, net		64.4		1,170.9			101.3		(353.1	)		983.5
Inventories		52.6		1,344.8			142.6		—			1,540.0
Income taxes receivable		34.4		—			—		(0.5	)		33.9
Other current assets		124.8		40.8			8.9		(76.6	)		97.9

Total current assets		295.9		2,555.7			317.5		(430.2	)		2,738.9
Investments in subsidiaries		4,647.7		312.4			—		(4,960.1	)		—
Property, plant and equipment, net		100.8		1,298.7			204.4		—			1,603.9
Goodwill		23.8		1,555.7			112.1		—			1,691.6
Intangible assets, net		17.4		1,077.8			118.6		—			1,213.8
Intercompany receivables		1,219.4		22.4			394.3		(1,636.1	)		—
Other assets		20.8		66.6			5.4		—			92.8

Total assets	$	6,325.8	$	6,889.3		$	1,152.3	$	(7,026.4	)	$	7,341.0


Liabilities & Equity
Accounts payable	$	29.1	$	185.8		$	418.5	$	(353.1	)	$	280.3
Accrued compensation and retirement costs		21.1		85.9			12.5		—			119.5
Other current liabilities		53.5		63.1			22.4		(1.9	)		137.1
Deferred income taxes		—		75.2			—		(75.2	)		—
Current maturities of long-term debt and short-term borrowings		25.3		—			11.2		—			36.5

Total current liabilities		129.0		410.0			464.6		(430.2	)		573.4
Long-term debt		2,019.2		5.7			47.6		—			2,072.5
Intercompany borrowings		—		1,550.6			85.5		(1,636.1	)		—
Other long-term liabilities		303.0		466.5			41.2		—			810.7
Total Reliance shareholders' equity		3,874.6		4,450.1			510.0		(4,960.1	)		3,874.6
Noncontrolling interests		—		6.4			3.4		—			9.8

Total equity		3,874.6		4,456.5			513.4		(4,960.1	)		3,884.4

Total liabilities and equity	$	6,325.8	$	6,889.3		$	1,152.3	$	(7,026.4	)	$	7,341.0

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2014
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	750.2		$	9,110.2		$	825.9		$	(234.7	)	$	10,451.6
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		557.0			6,885.4			623.0			(234.8	)		7,830.6
Warehouse, delivery, selling, general and administrative		157.3			1,545.9			140.9			(54.3	)		1,789.8
Depreciation and amortization		19.8			174.0			20.0			—			213.8

		734.1			8,605.3			783.9			(289.1	)		9,834.2
Operating income		16.1			504.9			42.0			54.4			617.4
Other income (expense):
Interest		(78.1	)		(28.3	)		(5.7	)		30.2			(81.9	)
Other income (expense), net		67.7			(2.7	)		30.4			(84.6	)		10.8

Income before equity in earnings of subsidiaries and income taxes		5.7			473.9			66.7			—			546.3
Equity in earnings of subsidiaries		325.1			21.2			—			(346.3	)		—

Income before income taxes		330.8			495.1			66.7			(346.3	)		546.3
Income tax (benefit) provision		(40.7	)		190.1			20.6			—			170.0

Net income		371.5			305.0			46.1			(346.3	)		376.3
Less: Net income attributable to noncontrolling interests		—			4.4			0.4			—			4.8

Net income attributable to Reliance	$	371.5		$	300.6		$	45.7		$	(346.3	)	$	371.5


Comprehensive income attributable to Reliance	$	367.5		$	280.4		$	27.7		$	(346.3	)	$	329.3

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2013
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	704.5		$	8,021.6		$	710.1		$	(212.4	)	$	9,223.8
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		509.7			5,999.2			529.7			(212.4	)		6,826.2
Warehouse, delivery, selling, general and administrative		200.7			1,385.5			117.8			(65.6	)		1,638.4
Depreciation and amortization		17.5			158.6			16.3			—			192.4
Impairment charge		—			14.9			—			—			14.9

		727.9			7,558.2			663.8			(278.0	)		8,671.9
Operating (loss) income		(23.4	)		463.4			46.3			65.6			551.9
Other income (expense):
Interest		(74.7	)		(19.9	)		(4.2	)		21.3			(77.5	)
Other income, net		75.7			5.5			9.6			(86.9	)		3.9

(Loss) income before equity in earnings of subsidiaries and income taxes		(22.4	)		449.0			51.7			—			478.3
Equity in earnings of subsidiaries		300.3			12.4			—			(312.7	)		—

Income before income taxes		277.9			461.4			51.7			(312.7	)		478.3
Income tax (benefit) provision		(43.7	)		181.0			16.3			—			153.6

Net income		321.6			280.4			35.4			(312.7	)		324.7
Less: Net income attributable to noncontrolling interests		—			2.8			0.3			—			3.1

Net income attributable to Reliance	$	321.6		$	277.6		$	35.1		$	(312.7	)	$	321.6


Comprehensive income attributable to Reliance	$	318.9		$	293.5		$	16.7		$	(312.7	)	$	316.4

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

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			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			122.2			12.5			—			149.0
Impairment charge		—			2.5			—			—			2.5

		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


Comprehensive income attributable to Reliance	$	404.2		$	350.4		$	64.3		$	(408.1	)	$	410.8

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2014
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash provided by operating activities	$	118.4		$	193.2		$	44.4		$	—		$	356.0
Investing activities:
Purchases of property, plant and equipment		(18.2	)		(159.2	)		(13.0	)		—			(190.4	)
Acquisitions, net of cash acquired		—			(92.0	)		(116.2	)		—			(208.2	)
Net advances to subsidiaries		(119.7	)		—			—			119.7			—
Other investing activities, net		(0.8	)		(3.6	)		38.0			—			33.6

Cash used in investing activities		(138.7	)		(254.8	)		(91.2	)		119.7			(365.0	)
Financing activities:
Net short-term debt borrowings		—			—			1.7			—			1.7
Proceeds from long-term debt borrowings		719.0			—			—			—			719.0
Principal payments on long-term debt		(549.3	)		(2.0	)		(0.9	)		—			(552.2	)
Dividends paid		(108.7	)		—			—			—			(108.7	)
Net intercompany borrowings		—			64.4			55.3			(119.7	)		—
Other financing activities, net		(18.5	)		(8.3	)		—			—			(26.8	)

Cash provided by financing activities		42.5			54.1			56.1			(119.7	)		33.0
Effect of exchange rate changes on cash and cash equivalents		—			—			(1.4	)		—			(1.4	)

Increase (decrease) in cash and cash equivalents		22.2			(7.5	)		7.9			—			22.6
Cash and cash equivalents at beginning of year		19.7			(0.8	)		64.7			—			83.6

Cash and cash equivalents at end of year	$	41.9		$	(8.3	)	$	72.6		$	—		$	106.2

Condensed Consolidating Cash Flow Statement
For the year ended December 31, 2013
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash provided by operating activities	$	102.8		$	458.5		$	72.0		$	—		$	633.3
Investing activities:
Purchases of property, plant and equipment		(14.0	)		(139.9	)		(14.1	)		—			(168.0	)
Acquisitions, net of cash acquired		(821.1	)		—			—			—			(821.1	)
Net advances to subsidiaries		(85.3	)		—			—			85.3			—
Other investing activities, net		0.1			2.8			7.2			—			10.1

Cash used in investing activities		(920.3	)		(137.1	)		(6.9	)		85.3			(979.0	)
Financing activities:
Net short-term debt (repayments) borrowings		—			(473.8	)		0.8			—			(473.0	)
Proceed from long-term debt borrowings		2,297.9			—			—			—			2,297.9
Principal payments on long-term debt		(1,452.8	)		(0.6	)		(1.1	)		—			(1,454.5	)
Dividends paid		(96.9	)		—			—			—			(96.9	)
Intercompany borrowings (repayments)		—			141.4			(56.1	)		(85.3	)		—
Other financing activities, net		60.9			(2.3	)		—			—			58.6

Cash provided by (used in) financing activities		809.1			(335.3	)		(56.4	)		(85.3	)		332.1
Effect of exchange rate changes on cash and cash equivalents		—			—			(0.4	)		—			(0.4	)

(Decrease) increase in cash and cash equivalents		(8.4	)		(13.9	)		8.3			—			(14.0	)
Cash and cash equivalents at beginning of year		28.1			13.1			56.4			—			97.6

Cash and cash equivalents at end of year	$	19.7		$	(0.8	)	$	64.7		$	—		$	83.6

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

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
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, 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