NOTE 13: CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS

On October 19, 2007, Ryerson issued the Ryerson Notes. The Ryerson Notes are fully and unconditionally guaranteed on a senior secured basis by each of Ryerson's existing and future domestic subsidiaries that are co-borrowers or guarantee our obligations under the Ryerson Credit Facility. Each guarantor of the Ryerson Notes is 100% owned by Ryerson and the guarantees are joint and several. Subject to certain exceptions, Ryerson may only pay dividends to Ryerson Holding to the extent of 50% of future net income, once prior losses are offset.

The following are condensed consolidating financial information of Ryerson and its guarantor and non-guarantor subsidiaries and affiliates as of September 30, 2011 and December 31, 2010 and for the three-month and nine-month periods ended September 30, 2011 and 2010:

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED SEPTEMBER 30, 2011

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Net sales	$	—		$	1,056.5		$	164.0		$	(1.7	)	$	1,218.8
Cost of materials sold		—			903.6			143.2			(1.7	)		1,045.1

Gross profit		—			152.9			20.8			—			173.7
Warehousing, delivery, selling, general and administrative		1.3			115.2			21.8			—			138.3
Restructuring and other charges		—			0.4			—			—			0.4
Impairment charge on fixed assets		—			2.2			—			—			2.2

Operating profit (loss)		(1.3	)		35.1			(1.0	)		—			32.8
Other income and (expense), net		(0.2	)		—			1.4			—			1.2
Interest and other expense on debt		(19.4	)		—			(0.9	)		—			(20.3	)
Intercompany transactions:
Interest expense on intercompany loans		(9.8	)		—			—			9.8			—
Interest income on intercompany loans		—			9.8			—			(9.8	)		—

Income (loss) before income taxes		(30.7	)		44.9			(0.5	)		—			13.7
Provision (benefit) for income taxes		(0.2	)		2.7			1.0			—			3.5
Equity in earnings of subsidiaries		(42.6	)		(0.4	)		—			43.0			—

Net income (loss)		12.1			42.6			(1.5	)		(43.0	)		10.2
Less: Net loss attributable to noncontrolling interest		—			—			(1.9	)		—			(1.9	)

Net income attributable to Ryerson Inc.	$	12.1		$	42.6		$	0.4		$	(43.0	)	$	12.1

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED SEPTEMBER 30, 2010

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Net sales	$	—		$	891.8		$	141.0		$	(1.1	)	$	1,031.7
Cost of materials sold		—			769.9			123.8			(1.1	)		892.6

Gross profit		—			121.9			17.2			—			139.1
Warehousing, delivery, selling, general and administrative		1.2			107.6			19.9			—			128.7
Impairment charge on fixed assets		—			0.2			—			—			0.2

Operating profit (loss)		(1.2	)		14.1			(2.7	)		—			10.2
Other income and (expense), net		—			—			(1.9	)		—			(1.9	)
Interest and other expense on debt		(17.6	)		(0.3	)		(0.9	)		—			(18.8	)
Intercompany transactions:
Interest expense on intercompany loans		(14.1	)		—			(0.1	)		14.2			—
Interest income on intercompany loans		—			14.2			—			(14.2	)		—

Income (loss) before income taxes		(32.9	)		28.0			(5.6	)		—			(10.5	)
Provision (benefit) for income taxes		(7.6	)		13.8			(1.1	)		—			5.1
Equity in (earnings) loss of subsidiaries		(10.8	)		3.2			—			7.6			—

Net income (loss)		(14.5	)		11.0			(4.5	)		(7.6	)		(15.6	)
Less: Net loss attributable to noncontrolling interest		—			—			(1.1	)		—			(1.1	)

Net income (loss) attributable to Ryerson Inc.	$	(14.5	)	$	11.0		$	(3.4	)	$	(7.6	)	$	(14.5	)

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2011

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Net sales	$	—		$	3,192.3		$	508.8		$	(6.3	)	$	3,694.8
Cost of materials sold		—			2,770.9			435.9			(6.3	)		3,200.5

Gross profit		—			421.4			72.9			—			494.3
Warehousing, delivery, selling, general and administrative		3.9			346.0			63.4			—			413.3
Restructuring and other charges		—			1.3			—			—			1.3
Impairment charge on fixed assets		—			4.7			—			—			4.7

Operating profit (loss)		(3.9	)		69.4			9.5			—			75.0
Other income and (expense), net		(0.2	)		5.9			0.5			—			6.2
Interest and other expense on debt		(57.9	)		—			(2.5	)		—			(60.4	)
Intercompany transactions:
Interest expense on intercompany loans		(31.4	)		—			—			31.4			—
Interest income on intercompany loans		—			31.4			—			(31.4	)		—

Income (loss) before income taxes		(93.4	)		106.7			7.5			—			20.8
Provision (benefit) for income taxes		(1.8	)		7.6			4.2			—			10.0
Equity in earnings of subsidiaries		(105.9	)		(6.8	)		—			112.7			—

Net income		14.3			105.9			3.3			(112.7	)		10.8
Less: Net loss attributable to noncontrolling interest		—			—			(3.5	)		—			(3.5	)

Net income attributable to Ryerson Inc.	$	14.3		$	105.9		$	6.8		$	(112.7	)	$	14.3

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2010

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Net sales	$	—		$	2,516.9		$	410.6		$	(4.1	)	$	2,923.4
Cost of materials sold		—			2,169.7			352.3			(4.1	)		2,517.9

Gross profit		—			347.2			58.3			—			405.5
Warehousing, delivery, selling, general and administrative		3.7			316.4			53.5			—			373.6
Gain on insurance settlement		(2.6	)		—			—			—			(2.6	)
Impairment charge on fixed assets		—			1.2			—			—			1.2

Operating profit (loss)		(1.1	)		29.6			4.8			—			33.3
Other income and (expense), net		—			—			(2.0	)		—			(2.0	)
Interest and other expense on debt		(52.3	)		(1.3	)		(3.0	)		—			(56.6	)
Intercompany transactions:
Interest expense on intercompany loans		(42.0	)		—			(0.4	)		42.4			—
Interest income on intercompany loans		—			42.4			—			(42.4	)		—

Income (loss) before income taxes		(95.4	)		70.7			(0.6	)		—			(25.3	)
Provision (benefit) for income taxes		(17.5	)		26.7			2.2			—			11.4
Equity in (earnings) loss of subsidiaries		(42.5	)		1.1			—			41.4			—

Net income (loss)		(35.4	)		42.9			(2.8	)		(41.4	)		(36.7	)
Less: Net income (loss) attributable to noncontrolling interest		—			—			(1.3	)		—			(1.3	)

Net income (loss) attributable to Ryerson Inc.	$	(35.4	)	$	42.9		$	(1.5	)	$	(41.4	)	$	(35.4	)

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2011

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Operating activities:
Net income	$	14.3		$	105.9		$	3.3		$	(112.7	)	$	10.8

Non-cash expenses		(5.2	)		38.4			3.1			—			36.3
Equity in earnings of subsidiaries		(105.9	)		(6.8	)		—			112.7			—
Changes in working capital		401.5			(522.9	)		(27.0	)		—			(148.4	)

Net adjustments		290.4			(491.3	)		(23.9	)		112.7			(112.1	)

Net cash provided by (used in) operating activities		304.7			(385.4	)		(20.6	)		—			(101.3	)

Investing activities:
Net cash provided by (used in) investing activities		8.2			360.4			(7.7	)		(387.2	)		(26.3	)

Financing activities:
Net cash provided by (used in) financing activities		(312.8	)		19.3			8.7			387.2			102.4

Net increase (decrease) in cash and cash equivalents		0.1			(5.7	)		(19.6	)		—			(25.2	)
Effect of exchange rate changes on cash and cash equivalents		—			—			1.1			—			1.1

Net change in cash and cash equivalents		0.1			(5.7	)		(18.5	)		—			(24.1	)
Beginning cash and cash equivalents		0.5			15.7			46.0			—			62.2

Ending cash and cash equivalents	$	0.6		$	10.0		$	27.5		$	—		$	38.1

RYERSON INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2010

(In millions)


	Parent			Guarantor			Non-guarantor			Eliminations			Consolidated
Operating activities:
Net income (loss)	$	(35.4	)	$	42.9		$	(2.8	)	$	(41.4	)	$	(36.7	)

Non-cash expenses		(66.8	)		143.8			3.4			—			80.4
Equity in (earnings) loss of subsidiaries		(42.5	)		1.1			—			41.4			—
Changes in working capital		47.4			(249.4	)		(18.1	)		—			(220.1	)

Net adjustments		(61.9	)		(104.5	)		(14.7	)		41.4			(139.7	)

Net cash used in operating activities		(97.3	)		(61.6	)		(17.5	)		—			(176.4	)

Investing activities:
Net cash provided by (used in) investing activities		(3.7	)		39.7			(1.4	)		(76.4	)		(41.8	)

Financing activities:
Net cash provided by (used in) financing activities		101.1			30.8			(57.5	)		76.4			150.8

Net increase (decrease) in cash and cash equivalents		0.1			8.9			(76.4	)		—			(67.4	)
Effect of exchange rate changes on cash		—			—			3.1			—			3.1

Net change in cash and cash equivalents		0.1			8.9			(73.3	)		—			(64.3	)
Beginning cash and cash equivalents		—			4.6			110.3			—			114.9

Ending cash and cash equivalents	$	0.1		$	13.5		$	37.0		$	—		$	50.6

RYERSON INC.

CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)

SEPTEMBER 30, 2011

(In millions)


	Parent		Guarantor		Non-guarantor		Eliminations			Consolidated
Assets
Current assets	$	1,279.3	$	1,239.0	$	253.0	$	(1,247.9	)	$	1,523.4
Property, plant and equipment, net of accumulated depreciation		—		413.3		68.7		—			482.0
Other noncurrent assets		905.9		1,347.8		14.4		(2,109.9	)		158.2

Total Assets	$	2,185.2	$	3,000.1	$	336.1	$	(3,357.8	)	$	2,163.6

Liabilities and Equity
Current liabilities	$	43.5	$	1,731.8	$	100.1	$	(1,247.9	)	$	627.5
Noncurrent liabilities		2,078.9		425.2		23.1		(1,066.5	)		1,460.7
Ryerson Inc. stockholders' equity		62.8		843.1		200.3		(1,043.4	)		62.8
Noncontrolling interest		—		—		12.6		—			12.6

Total Liabilities and Equity	$	2,185.2	$	3,000.1	$	336.1	$	(3,357.8	)	$	2,163.6

RYERSON INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2010

(In millions)


	Parent		Guarantor		Non-guarantor		Eliminations			Consolidated
Assets
Current assets	$	1,668.7	$	1,142.0	$	239.4	$	(1,629.3	)	$	1,420.8
Property, plant and equipment net of accumulated depreciation		—		425.8		64.6		—			490.4
Other noncurrent assets		806.4		1,731.3		13.6		(2,401.2	)		150.1

Total Assets	$	2,475.1	$	3,299.1	$	317.6	$	(4,030.5	)	$	2,061.3

Liabilities and Equity
Current liabilities	$	19.2	$	2,089.7	$	78.5	$	(1,629.3	)	$	558.1
Noncurrent liabilities		2,393.4		462.1		24.0		(1,453.7	)		1,425.8
Ryerson Inc. stockholders' equity		62.5		747.3		200.2		(947.5	)		62.5
Noncontrolling interest		—		—		14.9		—			14.9

Total Liabilities and Equity	$	2,475.1	$	3,299.1	$	317.6	$	(4,030.5	)	$	2,061.3