Reliance Steel & Aluminum (RS) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.4

PNA GROUP HOLDING CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except share amounts)

	December 31,			June 30,
	2007			2008
Assets
Current assets
Cash and cash equivalents	$	15,471		$	5,860
Restricted cash		2,096			1,786
Accounts receivable, less allowance for doubtful accounts of $4,985 and $6,463, respectively		185,932			309,959
Inventories, net		392,110			513,791
Receivables from affiliates		487			686
Other current assets		18,950			16,778
Total current assets		615,046			848,860
Property, plant and equipment, net		72,104			90,841
Goodwill		32,667			32,454
Intangible assets, net		34,380			30,048
Deferred financing costs, net		15,466			15,022
Equity investments		8,941			9,723
Other noncurrent assets		2,215			4,792
Total assets	$	780,819		$	1,031,740
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable	$	136,218		$	213,022
Payables to affiliates		1,237			1,421
Other payables		45,689			54,697
Income taxes payable		673			18,041
Total current liabilities		183,817			287,181
Long term debt, net of current maturities		688,940			772,318
Deferred income taxes		947			6,746
Accrued pension costs		3,316			3,232
Total liabilities		877,020			1,069,477
Commitments and contingencies
Minority interest		1,483			1,909
Stockholders’ deficit
Common stock: $.01 par value - 10,000,000 shares authorized; 8,750,000 shares issued and outstanding		88			88
Additional paid-in capital		—			—
Accumulated deficit		(97,980	)		(39,942	)
Accumulated other comprehensive income		208			208
Total stockholders’ deficit		(97,684	)		(39,646	)
Total liabilities and stockholders’ deficit	$	780,819		$	1,031,740

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PNA GROUP HOLDING CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands of dollars, except share and per share amounts)

	Six Months Ended June 30,
	2007			2008
Net sales	$	821,995		$	1,114,182
Cost and expenses:
Cost of materials sold (exclusive of items shown below)		674,231			865,696
Processing		16,285			22,495
Distribution		11,381			13,745
Selling, general and administrative		60,268			76,719
Amortization of intangibles		2,750			4,457
Depreciation		2,967			3,885
Total operating costs and expenses		767,882			986,997
Operating income		54,113			127,185
Interest expense		28,754			33,279
Income from equity investments		(1,139	)		(782	)
Income before minority interest and income tax expense		26,498			94,688
Minority interest		1,114			1,749
Income before income tax expense		25,384			92,939
Income tax expense		9,676			34,901
Net income	$	15,708		$	58,038
Basic and fully diluted earnings per share	$	1.80		$	6.63
Basic and fully diluted number of shares outstanding (see Note 14)		8,750,000			8,750,000
Cash dividends per share	$	19.07		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PNA GROUP HOLDING CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
SIX MONTHS ENDED JUNE 30, 2008

(in thousands of dollars, except shares)

										Accumulated
					Additional					Other
	Common Stock				Paid-in		Accumulated			Comprehensive
	Shares		Value		Capital		Deficit			Income		Total
Balances at December 31, 2007		8,750,000	$	88	$	—	$	(97,980	)	$	208	$	(97,684	)
Net income		—		—		—		58,038			—		58,038
Balances at June 30, 2008		8,750,000	$	88	$	—	$	(39,942	)	$	208	$	(39,646	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PNA GROUP HOLDING CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

	Six Months Ended June 30,
	2007			2008
Cash flows from operating activities
Net income	$	15,708		$	58,038
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		5,717			8,342
Amortization of deferred financing costs and original issue discount		925			1,155
Provision for bad debts		427			1,823
Deferred income taxes		1,652			(155	)
Gain on disposal of fixed assets		(517	)		8
Minority interests		1,114			2,464
Income from equity investments		(1,139	)		(1,496	)
Dividends received from equity investments		630			—
(Increase) decrease in
Accounts receivable		(19,178	)		(110,296	)
Receivables from/payables to affiliates		345			(15	)
Inventories		17,034			(88,621	)
Other assets		4,096			752
Increase (decrease) in
Payables		5,060			66,599
Accruals		(10,868	)		4,076
Income tax payable		(11,301	)		18,330
Accrued pension cost		(998	)		(84	)
Net cash provided by (used in) operating activities		8,707			(39,080	)
Cash flows from investing activities
(Increase) decrease in restricted cash		(1,164	)		310
Purchase of property, plant and equipment		(8,271	)		(12,510	)
Proceeds from disposals of property, plant and equipment		1,084			48
Acquisition of MSC, net of cash acquired		(5,300	)		—
Acquisition of Sugar Steel, net of cash acquired		—			(39,760	)
Net cash used in investing activities		(13,651	)		(51,912	)
Cash flows from financing activities
Proceeds from Floating Rate Note issue		167,025			—
Net proceeds on revolving credit facility		3,035			84,638
Other long-term debt		(278	)		(223	)
Payment on Preussag North America, Inc. seller note		(1,000	)		(1,000	)
Deferred financing costs		(5,188	)		(711	)
Initial public offering costs		(959	)		—
Dividend paid to minority interest holders		(833	)		(1,323	)
Dividends paid to stockholders		(166,870	)		—
Net cash (used in) provided by financing activities		(5,068	)		81,381
Net decrease in cash and cash equivalents		(10,012	)		(9,611	)
Cash and cash equivalents at beginning of period		12,891			15,471
Cash and cash equivalents at end of period	$	2,879		$	5,860
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	27,938		$	32,483
Income taxes	$	19,380		$	17,097

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

Note 1. Description of Business

Description of Business

PNA Group Holding Corporation (“PNA Group Holding”), formerly known as Travel Holding Corporation, is owned by Platinum Equity Capital Partners and its affiliates (together referred to as “Platinum”) and is a holding company which owns all the outstanding stock of its two subsidiaries, PNA Intermediate Holding Corporation (“PNA Intermediate”) and Travel Main Corporation (“Travel Main”). PNA Intermediate is a holding company which owns all the outstanding stock of its subsidiary, PNA Group, Inc. (“PNA”). PNA is a holding company which provides management services to and conducts business through six operating subsidiaries. PNA Group Holding and its subsidiaries are referred to collectively herein as the “Company” or “Successor Company”, “we”, “us” or “our”.

PNA Group Holding was incorporated in February 2006 in the state of Delaware for the purpose acquiring PNA. Prior to 2006, PNA was owned by Preussag North America, Inc., a holding company which was the U.S. subsidiary of a German corporation. PNA Group Holding completed the acquisition of PNA on May 9, 2006. PNA Intermediate was incorporated in Delaware on January 25, 2007 as a wholly owned subsidiary of PNA Group Holding for the purposes of issuing the Floating Rate Notes (see Note 8,Long-term Debt). The capital stock of PNA was contributed by PNA Group Holding to PNA Intermediate on January 29, 2007. As a result, PNA became a wholly-owned subsidiary of PNA Intermediate.

The Company, through its indirect wholly-owned subsidiary, PNA, is a leading national steel service center group that distributes steel products and provides value-added steel processing services to our customers, which are largely comprised of fabricators and original equipment manufacturers, across a diversified group of industries, including the non-residential construction, machinery and equipment, manufacturing, oil and gas, telecommunications and utilities markets. The Company distributes a variety of steel products, including a full line of structural and long products, plate, flat rolled coil, tubulars and sheet, as well as performs a variety of value-added processing services for our customers.

During 2007, PNA operated its business through four operating subsidiaries: Infra-Metals Co. (“Infra-Metals”), Delta Steel, LP (“Delta”), Feralloy Corporation (“Feralloy”) and Metals Supply Company, Ltd. (“Metals Supply” or “MSC”). PNA completed the acquisition of Precision Flamecutting & Steel, L.P. (“Precision Flamecutting”) on December 24, 2007, and on March 14, 2008, PNA acquired all the capital interests of Sugar Steel Corporation and its affiliate, S&S Steel Warehouse, Inc. (together referred to as “Sugar Steel”). See Note 2,Business Combinationsfor further discussion of the 2007 and 2008 acquisitions.

On June 16, 2008, PNA Group Holding and its stockholders entered into a Stock Purchase Agreement with a subsidiary of Reliance Steel & Aluminum Co., a California corporation (“Reliance”) that is a New York Stock Exchange listed company. On August 1, 2008, that subsidiary acquired all the issued and outstanding shares of capital stock of PNA Group Holding. See Note 16,Sale of PNA Group Holding Corporationfor further discussion.

Basis of Presentation

Interim Financial Reporting

In the opinion of management, the interim condensed consolidated financial statements include all adjustments (consisting of only normally recurring accruals) and disclosures considered necessary for a fair presentation of the consolidated financial position and results of operations of the Company and its subsidiaries as of and for the interim periods presented herein. The condensed consolidated balance sheet as of December 31, 2007 has been derived from the Company’s audited consolidated financial statements as of that date. The accompanying unaudited interim condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The consolidated results of operations and of cash flows for the six months ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year. These interim statements should be read in conjunction with the December 31, 2007 audited consolidated financial statements and notes thereto included in our Registration Statement on Form S-1 (Amendment No. 5).

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Significant intercompany balances and transactions within the consolidated group have been eliminated in consolidation.

Equity Investments

The equity method of accounting is used where the Company’s investment in voting stock gives it the ability to exercise significant influence over the investee, generally 20% to 50%. The equity method is used to account for Feralloy’s investments in Indiana Pickling and Processing Company (45% interest), Acero Prime S. de R.L. de C.V. (40% interest) and Oregon Feralloy Partners LLC (40% interest). The Company had $5,738 and $6,467 of undistributed earnings in equity investments at December 31, 2007 and June 30, 2008, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on historical experience and information that is available to management about current events and actions the Company may take in the future. Significant items subject to estimates and assumptions include the evaluation of the recoverability of the carrying value of long-lived assets and goodwill; valuation allowances for receivables, inventories and deferred income tax assets; legal and environmental liabilities; and assets and obligations related to employee benefit plans. Actual results could differ from those estimates and the differences could be material.

Significant Accounting Policies

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (“FAS”) No. 157, Fair Value Measurements (“FAS 157”). FAS 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. FAS 157 also expands financial statement disclosure requirements about a company’s use of fair value measurements, including the effect of such measures on earnings. FAS 157 is effective for fiscal years beginning after November 15, 2007. The Company adopted the provisions of FAS 157 related to its financial assets and liabilities effective January 1, 2008, which did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

The fair value hierarchy for disclosure of fair value measurements under FAS 157 is as follows:

Level 1 -	Quoted prices in active markets for identical assets or liabilities
Level 2 -	Quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 -	Inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The following table summarizes assets and liabilities measured at fair value on a recurring basis at June 30, 2008, as required by FAS 157:

	Level 1		Level 2		Level 3
Assets	$	—	$	—	$	—
Liabilities
Interest rate swap	$	—	$	1,130	$	—

See Note 15,Derivative Financial Instrumentsfor further discussion of the interest rate swaps and determination of their fair value. In conjunction with the sale of PNA Group Holding, these interest rate swaps were terminated in July 2008. See Note 16,Sale of PNA Group Holding Corporation.

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

In February 2008, the FASB issued FSP 157-1 and 157-2. FSP 157-1 amends FAS 157 to exclude FAS No. 13, “Accounting for Leases,” (“FAS 13”) and its related interpretive accounting pronouncements that address leasing transactions, while FSP 157-2 delays the effective date of the application of FAS 157 to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. Non-recurring nonfinancial assets and nonfinancial liabilities include those measured at fair value in goodwill impairment testing, indefinite lived intangible assets measured at fair value for impairment testing, asset retirement obligations initially measured at fair value, and those assets and liabilities initially measured at fair value in a business combination.

In February 2007, the FASB issued FAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities—including an amendment to FASB Statement No. 115, (“FAS 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. We adopted FAS 159 as of January 1, 2008. The adoption of FAS 159 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued FAS No. 141 (revised 2007),Business CombinationsFAS 141(R) which replaces FAS No.141,Business Combination. FAS 141(R) retains the underlying concepts of FAS 141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting but FAS 141(R) changed the method of applying the acquisition method in a number of significant aspects. FAS 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. FAS 141(R) amends FAS 109 such that adjustments made to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of FAS 141(R) would also apply the provisions of FAS 141(R). Early adoption is not allowed. The provisions of FAS 141R will only impact the Company if it is a party to a business combination after the pronouncement has been adopted.

In December 2007, the FASB issued FAS No. 160,Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB 51(“FAS 160”). FAS 160 amends ARB 51 to establish new standards that will govern the accounting for and reporting of (1) noncontrolling interest in partially owned consolidated subsidiaries and (2) the loss of control of subsidiaries. FAS 160 is effective on a prospective basis for all fiscal years, and interim periods within those fiscal years beginning, on or after December 15, 2008, except for the presentation and disclosure requirements, which will be applied retrospectively. Early adoption is not allowed. The Company is currently in the process of evaluating what, if any, impact FAS 160 will have on its financial condition, results of operation and cash flows.

In February 2008, the FASB issued FAS No. 161Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133(“FAS 161”), which requires enhanced disclosures about derivative and hedging activities. Companies will be required to provide enhanced disclosures about (a) how and why a company uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under FAS No. 133 and related interpretations, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. FAS 161 is effective for financial statements issued for fiscal and interim periods beginning after November 15, 2008. Accordingly, the Company will ensure that it meets the enhanced disclosure provisions of FAS 161 upon the effective date thereof.

Note 2. Business Combinations

2007 Acquisition

Precision Flamecutting

Effective December 24, 2007, PNA completed the acquisition of Precision Flamecutting pursuant to which PNA acquired all outstanding interests in the partnership for cash consideration of $47,063 paid at closing to the former owners, costs associated with the transaction of $280 and refinancing of $7,325 of Precision Flamecutting’s then existing indebtedness. The acquisition was financed through additional borrowings under PNA’s revolving credit facility of $54,388. The purchase agreement provided for a holdback of $4,706 of the purchase price which is

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

currently held in escrow to fund any indemnity claim by PNA as well as a working capital adjustment which was settled resulting in a receivable of $1,389 collected in 2008.

Precision Flamecutting, a Texas limited partnership operating one facility in Houston, is in the business of processing and distributing carbon, alloy, and high strength, low alloy steel plate, including plasma-cutting, flame-cutting, and beveling services, as well as machining, rolling, forming, heat-treating, coating, and general machining and fabrication services. The acquisition provided the Company the opportunity to broaden its value-added processing capabilities and product offerings and expand and diversify its customer base as well as increase its market share in one of the Company’s strategic locations. The acquisition of Precision Flamecutting represents an addition to the Company’s long products and plate business segment (see Note 13,Business Segment Information).

The Company performed an initial allocation of the purchase price based on valuations and estimates of the fair value of the assets acquired, including identifiable intangible assets, and liabilities assumed. The purchase price allocation was refined upon the settlement of the working capital adjustment. There was not a significant difference between the initial purchase price allocation entry and the amount recorded upon the final working capital adjustment settlement. The purchase price allocation resulted in the recording of goodwill totaling $22,568, all of which is expected to be deductible for tax purposes. Other intangible assets acquired and their respective recorded amounts were as follows: customer relationships — $13,780, non-compete agreement — $6,564 and backlog — $63. The useful lives of the acquired intangible assets are 15 years, 2 years, and 1 month for customer relationships, non-compete agreement and backlog, respectively.

2008 Acquisition

Sugar Steel

Effective March 14, 2008, PNA completed the acquisition of all the outstanding capital stock and ownership interests of Sugar Steel for an initial aggregate purchase price of approximately $44,826 subject to certain post-closing working capital and other settlement adjustments. The purchase price included cash consideration paid at closing to the former owners of $24,926, refinancing of $16,100 of Sugar Steel’s then existing indebtedness and approximately $300 in transaction costs. The settlement of certain working capital and other adjustments resulted in the Seller repaying $1,000 of the purchase price in June 2008. In addition, the purchase agreement provided for a holdback of $3,500 of the purchase price to fund any indemnity claim by PNA and which will be paid over the two years following closing. The acquisition was financed through additional borrowings under PNA’s revolving credit facility.

Sugar Steel was founded in 1966 and is a general line metals service center company serving the greater Chicago area and adjacent states. Sugar Steel specializes primarily in carbon structural products such as beams, angles, tubes, squares, channels, pipes, bars and basement columns, and provides value-added processing services such as sawing, shearing, flame cutting, plasma cutting, angle cutting, cambering, splitting and shot blasting. The acquisition provided PNA the ability to expand its long products and plate segment in this strategic market. The acquisition of Sugar Steel represents an addition to the Company’s long products and plate business segment (see Note 13,Business Segment Information).

The Company performed an initial allocation of the purchase price based on initial valuations and estimates of the fair value of the assets acquired, including identifiable intangible assets, and liabilities assumed. The purchase price allocation was refined upon completion of the final valuation and upon finalizing the working capital and other settlement adjustments. The purchase price allocation resulted in an estimated fair value of net assets acquired of $48,290, which exceeded the purchase price by $4,464. This estimated fair value of net assets acquired in excess of the purchase price was allocated as a pro rata reduction of long-lived assets in accordance with FAS No. 141,Business Combinations.

The operating results of Precision Flamecutting and Sugar Steel are included in the Company’s Consolidated Statements of Income from their respective dates of acquisition.

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

Note 3. Inventories

Inventories consist of the following:

	December 31,		June 30,
	2007		2008
Raw materials	$	374,027	$	494,301
Finished goods		18,083		19,490
	$	392,110	$	513,791

Note 4. Other Current Assets

Other current assets consist of the following:

	December 31,		June 30,
	2007		2008
Other receivables	$	9,131	$	4,952
Prepaid expenses and other		1,696		3,289
Deferred income taxes		8,123		8,537
	$	18,950	$	16,778

Note 5. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	Estimated	December 31,			June 30,
	Useful Life	2007			2008
Land		$	5,998		$	7,511
Buildings and improvements	25-40 years		28,434			34,420
Equipment	5-10 years		45,169			51,641
Construction in progress			2,173			10,637
			81,774			104,209
Less: accumulated depreciation			(9,670	)		(13,368	)
		$	72,104		$	90,841

Depreciation expense was $2,967 and $3,885 for the six months ended June 30, 2007 and 2008, respectively.

Note 6. Intangible Assets

Intangible assets consist of the following as of December 31, 2007:

	Amortization	Gross Carrying		Accumulated			Net Carrying
	Period	Amount		Amortization			Amount
Customer relationships	15-20 years	$	30,237	$	(3,867	)	$	26,370
Non-competition agreements	2 years		12,446		(4,656	)		7,790
Backlog	1-3 months		797		(734	)		63
Proprietary software	3 years		352		(195	)		157
		$	43,832	$	(9,452	)	$	34,380

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

Intangible assets consist of the following as of June 30, 2008:

	Amortization	Gross Carrying		Accumulated			Net Carrying
	Period	Amount		Amortization			Amount
Customer relationships	15-20 years	$	30,237	$	(6,125	)	$	24,112
Non-competition agreements	2 years		12,572		(6,734	)		5,838
Backlog	1-3 months		797		(797	)		—
Proprietary software	3 years		352		(254	)		98
		$	43,958	$	(13,910	)	$	30,048

Amortization expense was $2,750 and $4,457 for the six months ended June 30, 2007 and 2008, respectively.

Note 7. Other Payables

Other payables consist of the following:

	December 31,		June 30,
	2007		2008
Current maturities of long-term debt	$	1,846	$	1,883
Accrued bonuses		12,262		16,878
Accrued interest		13,830		12,949
Deferred consideration payable		—		3,500
Accrued expenses and other		17,751		19,487
	$	45,689	$	54,697

Note 8. Long-Term Debt

Long-term debt consists of the following:

	December 31,			June 30,
	2007			2008
Revolver loan	$	213,374		$	298,012
Senior notes		250,000			250,000
Floating rate notes		167,338			167,531
Real estate mortgages		49,074			48,658
Preussag North America, Inc. seller note		11,000			10,000
		690,786			774,201
Less: current maturities of long-term debt		(1,846	)		(1,883	)
	$	688,940		$	772,318

The Company has two long-term debt obligations, the PNA revolving credit facility and the Floating Rate Notes, for which interest accrued at a floating rate. Outstanding borrowings under PNA’s revolving credit facility totaled $213,374 and $298,012 as of December 31, 2007 and June 30, 2008, respectively. Interest rates on these lines of credit ranged from 6.375% to 6.75% at December 31, 2007 and 4.438% to 5.5% at June 30, 2008. Cash interest accrued on the Floating Rate Notes at a rate per annum, reset quarterly, equal to the three-month LIBOR plus 7.0%. The interest rate was 11.87% as of December 31, 2007 and 9.68% as of June 30, 2008.

Under the terms of PNA’s revolving credit facility in place as of December 31, 2007, PNA was permitted to borrow up to $375 million based on a borrowing capacity calculation equal to 65% of eligible inventory plus 85% of eligible

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

accounts receivable, whereas the inventory portion of our capacity calculation was limited to $230 million. On March 11, 2008, PNA entered into an amendment with its senior secured lenders to increase the revolving credit facility from $375 million to $425 million and to increase the borrowing limit on inventory from $230 million to $260 million. Other terms of the amendment provide PNA with increased flexibility with regard to certain restrictive operating covenants including an increase in annual capital expenditure limits, the ability to make certain acquisitions without prior consent and approval to incur other indebtedness in specific circumstances. On August 1, 2008, Reliance paid off and terminated the PNA revolving credit facility. Reliance will provide an inter-company loan to PNA for its working capital and general corporate needs.

The indenture governing the Senior Notes contained restrictions on payment of dividends or other payments by the Company to PNA Intermediate. The Floating Rate Notes were issued pursuant to that Indenture dated as of February 12, 2007 with The Bank of New York Mellon (formerly The Bank of New York) as trustee. The indenture governing the Floating Rate Notes contained similar restrictions on dividends payable by PNA Intermediate to our parent, PNA Group Holding, to those contained in the indenture governing the Senior Notes.

On July 1, 2008, Reliance announced tender offers and consent solicitations with respect to the Senior Notes and the Floating Rate Notes in connection with the acquisition of PNA Group Holding by Reliance. All of the Senior Notes and the Floating Rate Notes were validly tendered and not withdrawn by the termination date. Reliance settled the purchase of the Senior Notes and the Floating Rate Notes on August 4, 2008 and retired and cancelled the Floating Rate Notes as of the same date. The Senior Notes were amended by a Supplemental Indenture to eliminate substantially all of the restrictive covenants, and the Senior Notes remain outstanding as obligations of PNA for the benefit of Reliance. See Note 16,Sale of PNA Group Holding Corporation.

The real estate mortgages relate to the properties owned by Travel Main and leased to PNA operating entities. These mortgages were distributed to the PNA Group Holding stockholders prior to Reliance’s acquisition of PNA Group Holding.

Note 9. Retirement Benefits and Compensation Plans

The Company has two noncontributory, defined benefit pension plans and a nonqualified, unfunded retirement plan (together, the “Plans”). Of the noncontributory, defined benefit pension plans, one covers substantially all Feralloy nonunion employees who have attained age 21 (the “Non-Union Pension Plan”) and the other covers all union employees at Feralloy’s Midwest, Southern and St. Louis divisions. Feralloy also has a nonqualified, unfunded retirement plan (the “Supplemental Executive Retirement Plan”, or “SERP”) to provide supplemental benefits to certain of its executive employees. To provide for the SERP, Feralloy purchased Company-owned life insurance contracts on the related employees.

Effective December 31, 2006, the Company adopted a change to freeze the benefits under the Company’s Non-Union Pension Plan, a defined benefit pension plan and instituted a new defined contribution plan effective January 1, 2007. On October 30, 2006, Feralloy’s Board of Directors authorized a change to freeze benefits under its SERP.

Implementation of the changes to the SERP was effective March 1, 2007 to allow for appropriate notice to affected employees and provide time necessary for essential actuarial studies and analysis with respect to the design change and preparation of operative documents. As a result, in accordance with Statement of Financial Accounting Standard No. 88,Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, the Company recognized a curtailment gain of $2,210 in the fourth quarter of fiscal year 2006 related to freezing benefits of its Non-Union Pension Plan and $700 for the six months ended June 30, 2007 related to freezing benefits of its SERP.

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

The components of the Plans’ net periodic pension cost (benefit) consist of the following:

	Six Months Ended June 30,
	2007			2008
Components of net periodic pension (benefit) cost and total pension expense
Interest cost	$	602		$	584
Expected return on plan assets		(638	)		(648	)
Curtailments		(700	)		—
Net periodic pension benefit	$	(736	)	$	(64	)

The Company also has adopted a Participation Plan effective May 17, 2007 for the purpose of providing incentive compensation to key employees. The incentive compensation is awarded in the form of non-equity performance units, the value of which is related to the appreciation in our value. Performance units are payable to participants upon the occurrence of a “qualifying event”, which include the sale of PNA Group Holding stock. See Note 16,Sale of PNA Group Holding Corporation.

Note 10. Related Parties

Receivables from affiliates represent an amount due from our Mexican joint-venture, Acero Prime S. de R.L. de C.V. Payables to affiliates represent amounts due to two domestic joint ventures who are parties to the group cash management system and who have positive cash balances with the Company. Dividends paid to minority interest holders totaled $833 and $1,323 for the six months ended June 30, 2007 and 2008, respectively.

During the six months ended June 30, 2008, the Company recorded interest on the seller note due to Preussag North America, Inc., (see Note 1,Description of Businessand Note 8,Long-Term Debt), of $427. Interest on the seller note accrues at a rate of 8.0% per annum and is payable at the end of each fiscal quarter. Therefore, there is no accrued interested owed at December 31, 2007 or June 30, 2008.

PNA paid Platinum $2,500 and $2,500 during the six months ended June 30, 2007 and 2008, respectively, related to its annual monitoring fee pursuant to a corporate advisory services agreement with Platinum (the “Corporate Advisory Services Agreement”).

Note 11. Commitments and Contingencies

The Company is involved in several other legal proceedings, claims and litigation arising in the ordinary course of business. Management presently believes that the outcome of each such pending proceeding, claim or litigation will not have a material adverse effect on the consolidated financial position of the Company or on the consolidated results of operations. Should any losses be sustained in connection with any proceeding or claim in excess of provisions, the amount will be charged to income in the future.

The Company had purchase commitments of approximately $483,374 for inventory at June 30, 2008. These commitments were made to assure the Company a normal supply of stock and, in management’s opinion, will be sold to obtain normal profit margins.

The consolidated group leases real estate, office space, data processing equipment automobiles and trucks. Several of the leases require the lessee to pay taxes, maintenance and other operating expenses.

Note 12. Income Taxes

PNA Group Holding files a consolidated federal income tax return that includes PNA Intermediate, PNA, its wholly owned subsidiaries and their respective subsidiaries.

Income tax expense was $9,676 and $34,901 for the six months ended June 30, 2007 and 2008, respectively, resulting in effective tax rates of 38.1% and 37.6% for the respective periods. The effective tax rate differs from that

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

computed at the federal statutory rate of 35% principally because of the effect of state income taxes, as well as other permanent differences between taxable income and book income.

Note 13. Business Segment Information

The Company has two reportable segments based along product lines — the long products and plate segment and the flat rolled segment. The long products and plate segment distributes numerous products including structural beams, tubing, plates and pipes and provides some value-added steel processing capabilities that includes saw-cutting and T-splitting. The flat rolled segment offers hot rolled, hot rolled pickled and oiled, cold rolled and galvanized and other coated coil and sheet products. Virtually all of the steel sold by the flat rolled segment receives value-added processing such as temper-passing, leveling or slitting. Through this segment, the Company also performs tolling, in which it processes customer owned steel for a fee but does not take title to the inventory.

As discussed in Note 1,Description of Business, the Company conducts its steel services business through six operating subsidiaries: Infra-Metals, Delta, Feralloy, MSC, Precision Flamecutting and Sugar Steel. The operations of Feralloy comprise the flat rolled segment products while Infra-Metals, Delta, MSC, Precision Flamecutting and Sugar Steel are aggregated to constitute the long products and plate segment based on the entities’ product lines and their exhibiting similar economic characteristics, products, customers and delivery methods. The primary measures used by management in evaluating the segments’ performance are net sales and operating income.

The results of the Travel Main Subsidiaries, which do not constitute a reportable segment, are combined with holding company revenue and expenses and consolidation eliminations and reclassifications and are disclosed as Corporate and Other for purposes of reconciling segment reporting disclosures to the condensed consolidated financial statements.

The Company uses the same accounting policies to generate segment results as it does for its consolidated results. None of the operating business segments relies on any one major customer. All of the Company’s goodwill is included as part of the long products and plate segment total assets. All investments in unconsolidated equity method entities are part of the flat rolled segment.

	Long Products		Flat		Corporate
	and Plate		Rolled		and Other			Total
Six months ended June 30, 2007
Net sales to external customers	$	597,358	$	224,637	$	—		$	821,995
Operating costs and expenses		545,493		216,494		5,895			767,882
Operating income (loss)		51,865		8,143		(5,895	)		54,113
Capital spending		3,196		5,075		—			8,271
Total segment assets		508,739		179,304		58,913			746,956
Depreciation and amortization		4,229		1,198		290			5,717
Income from equity investments		—		1,139		—			1,139
Interest expense		15,296		6,575		6,883			28,754
Six months ended June 30, 2008
Net sales to external customers	$	830,599	$	283,583	$	—		$	1,114,182
Operating costs and expenses		721,792		259,160		6,045			986,997
Operating income (loss)		108,807		24,423		(6,045	)		127,185
Capital spending		10,872		1,624		14			12,510
Total segment assets		772,160		214,136		45,444			1,031,740
Depreciation and amortization		6,663		1,389		290			8,342
Income from equity investments		—		782		—			782
Interest expense		14,210		5,989		13,080			33,279

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

Intersegment net sales were not significant. Travel Main charges rent to the operating subsidiaries of PNA. Rent charged by Travel Main to the long products and plate segment totaled $2,352 and $2,411 for the six months ended June 30, 2007 and June 30, 2008, respectively. Rent charged by Travel Main to the flat rolled segment totaled $786 and $805 for the six months ended June 30, 2007 and June 30, 2008, respectively.

Note 14. Common Stock

In February 2006, PNA Group Holding (formerly known as Travel Holding Corporation) was capitalized with 8,750,000 shares of $.01 par value common stock by Platinum Equity, LLC. On May 9, 2006, Platinum closed on the purchase of PNAG whereby Travel Merger, then a wholly owned subsidiary of PNA Group Holding, merged with and into PNAG with PNAG being the surviving corporation. For periods prior to May 10, 2006, PNAG had 1,000 shares of no par value common stock outstanding with no dilution. Thus, for periods subsequent to May 9, 2006, PNA Group Holding had 8,750,000 shares outstanding with no dilution. All shares outstanding are common shares and have equal voting, liquidation and preference rights.

Basic earnings per share (“EPS”) attributable to PNA Group Holding’s common stock is determined based on earnings for the period divided by the weighted average number of common shares outstanding during the period. Diluted EPS attributable to PNA Group Holding’s common stock considers the effect of potential common shares, unless inclusion of the potential common shares would have an antidilutive effect. PNA Group Holding does not have any securities or other items that are convertible into common shares, therefore basic and fully diluted EPS are the same.

On August 1, 2008, Reliance purchased 100% of the outstanding capital of PNA Group Holding.

Note 15. Derivative Financial Instruments

As required by our senior secured credit facility, the Company entered into three interest rate swap agreements for a total of $50,000 in June 2006 for a three year period commencing October 1, 2006 with each of Bank of America, N.A., Wachovia Bank, N.A. and LaSalle Bank, N.A. These agreements were entered into to reduce the impact of changes in interest rates on our floating rate revolving credit facility.

The fair market value of interest rate swaps is determined in accordance with SFAS 157 using Level 2 inputs, which are defined as “significant other observable” inputs including quotes from counterparties that are corroborated with market sources. Our interest rate swap agreements are traded in the over the counter market. Fair values are based on quoted market prices for similar liabilities or determined using inputs that use as their basis readily observable market data that are actively quoted and can be validated through external sources, including third-party pricing services, brokers, and market transactions and represent the estimated amount the Company would receive or pay to terminate the swap agreement at the reporting date, taking into account current and expected interest rates.

The fair values of the outstanding swap agreements were determined to be liabilities of approximately $1,117 at December 31, 2007 and $1,130 at June 30, 2008. These liabilities are recorded in other current payables in the accompanying unaudited condensed consolidated Balance Sheets. Changes in the value of the swap agreements are recorded to interest expense in the unaudited condensed consolidated Statements of Income and resulted in gains of $292 for the six months ended June 30, 2007 and a loss of $13 for the six months ended June 30, 2008. PNA and its subsidiaries are jointly and severally liable for the performance under the interest rate swap agreements.

The interest rate swap agreements were terminated in July 2008 in conjunction with the purchase of PNA Group Holding by Reliance. See Note 16,Sale of PNA Group Holding Corporation.

Note 16. Sale of PNA Group Holding Corporation

As discussed in Note 1,Description of Business, on June 16, 2008, PNA Group Holding and its stockholders entered into a Stock Purchase Agreement with RSAC Management Corp., a California corporation that is a subsidiary of Reliance Steel & Aluminum Co., a California corporation (“Reliance”). Reliance is a New York Stock Exchange listed company. Pursuant to the Stock Purchase Agreement, on August 1, 2008, Reliance acquired all the issued and outstanding shares of capital stock of PNA Group Holding for cash consideration of $340,000, plus the

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PNA GROUP HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008

(dollars in thousands)

repayment or financing of debt in the amount of approximately $725,000. In connection with the closing of that transaction, Travel Main was distributed to the stockholders of PNA Group Holding and certain payments were made to key employees under the Company’s Participation Plan since the change of control was a “qualifying event”.

On July 1, 2008, Reliance commenced tender offers to purchase for cash any and all of the Floating Rate Notes and the Senior Notes. All of the holders of the Senior Notes validly tendered and did not withdraw the Senior Notes prior to the termination date. On August 4, 2008, Reliance settled the purchase of the Senior Notes. Following the settlement, we and our subsidiary guarantors entered into a Fourth Supplemental Indenture dated as of August 1, 2008. Under that Fourth Supplemental Indenture, the Company continues to be obligated to pay the Senior Notes, as an intra-company debt for the benefit of Reliance.

In connection with the closing of Reliance’s acquisition of PNA Group Holding, Reliance repaid and terminated PNA’s revolving credit facility. The total amount paid was approximately $296,000.

Prior to the completion of the sale of PNA Group Holding to Reliance, PNA Group Holding distributed the stock of Travel Main to stockholders of PNA Group Holding. The distribution is expected to result in a gain to PNA for tax return purposes resulting in a tax liability payable in cash by PNA of approximately $7,900 in the current year.

Also prior to completion of the sale of PNA Group Holding to Reliance, PNA cancelled its interest rate swap agreements that had been entered into to reduce the impact of changes in interest rates on PNA’s floating rate revolving credit facility (see Note 15,Derivative Financial Instrument). The agreements were terminated in July 2008.

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