Ryerson Annual Report 2019

FY2019 Annual Report · Ryerson

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2019 ANNUAL REPORT

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DEAR RYERSON SHAREHOLDERS:

We all want to be inspired and few things inspire like great storytelling in all of its forms.
Great storytelling enables us to examine things as they are in all their complexities and
imperfections. In the movie “8-Mile” and in its signature song that won an Academy
Award named “Lose Yourself,” the artist Eminem lyrically describes the recognition of
life’s most important moments and a person’s or team’s ability to rise to the occasion in
those moments, especially in the face of adversity, complexities, and imperfections. In
the movie’s pivotal scene during the climactic “battle,” the protagonist deftly points out
the critical things his opponent might say about him, thus preempting and blunting the
material that may have been used against him. Eminem delivers a “flow” performance
and wins the “battle” as all the talent, work, and hardship reach a confluence of “flow,”
or what the renowned psychologist Mihaly Csikszentmihalyi described as the
psychology and realization of optimal experience. As part of the manufacturing and the
metals service center industry, we faced our own adversity in 2019 and we faced those
critical competing dynamics with a self-effacing honesty and transparency while
advancing toward that desired state of “flow” as we continued our journey toward the
optimal experience for our customers, employees, and shareholders. Despite adverse
industry conditions throughout 2019, which were characterized by industry demand that
contracted year-over-year and industrial metal commodity indexes that deflated, we
weathered the acute margin compression that ensued from recessed demand and
deflationary price impacts, and we found opportunities to improve our business and
franchise value. We’ll get into those accomplishments shortly, but let’s recap a few
points from prior years to ensure continuity of message and mission.

First, let’s take a moment to revisit a brief summary of the past four shareholder letters.
Our strategy, simply stated, is to create the industry’s best customer experience through
a network of intelligently-connected service centers across our 100 locations. We seek
to execute on this strategy utilizing an organizational DNA based upon our collective
experience, subject matter expertise, culture, speed, scale, value-add, and analytics.
We stay committed and true to our foundational pillars of operational efficiency, margin
expansion, and profitable growth, and affirm our belief in “say yes, and figure it out,”
whereby we determinedly find a way to get it done for our customers with consistency,
value-add, and ease of doing business.

Next, let’s discuss the year 2019 in pictures in a way that helps frame and explain the
industry conditions, our response to those conditions, and the structural advancements
made in the business:

2019 Macro Industry Conditions: A “Downer” exhibited by all three trend lines:

2019 ANNUAL REPORT

2019 Ryerson: Getting more into a “Flow” state despite 2019’s adverse
conditions:

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Reconciliations of gross margin, excluding LIFO and purchase accounting adjustments to gross margin and of
Adjusted EBITDA, excluding LIFO to net income attributable to Ryerson Holding Corporation are included within our
Form 8-K filing filed on March 4, 2020.

2019 ANNUAL REPORT

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What we can plainly see in these charts is that through the volatility and industry cycle,
Ryerson continues its progress in the metrics that count and in the underlying drivers
that provide factual support of what it looks like when getting through the cyclical fire,
rain, and fog. In summary, our market share is growing, book value of equity is
growing, diluted adjusted earnings per share is growing, working capital management is
peer-leading, margins are expanding through the cycle, and same-store expense
metrics are as low as they have been over the past seven years despite non-metal
inflation in the economy at an approximately 1.6 percent compounded rate per annum.
We have achieved these improvements over a “commodity bust” cycle that succeeded
the “commodity boom” cycle of the prior decade. Please keep in mind that as property,
plant, and equipment in the U.S. continue to age to its most extended life since 1938,
and infrastructure investment continues to trend well below its historical ratio to GDP,
these investment deficits will cure, or productivity will decline and economic growth will
slow and likely contract. Simply put, we require more investment in the physical world
vis-à-vis infrastructure, housing, machinery, and equipment. It is always hard to see the
turn because we tend to believe that what is happening now will keep happening when
indicators below the surface portend changes not currently in view. It is more likely than
not that the coming decade will bring increased investments in machinery, equipment,
infrastructure, and housing. As this cycle of necessary investment actuates in the
coming decade, Ryerson will be well-positioned to realize that macro upside while
continuing self-help along the way.

Looking ahead to 2020 and even beyond exogenous events such as the coronavirus
and the imperative response involved in weathering the virus impacts while caring for
the well-being of our colleagues, their families, and our communities, we have excellent
clarity around our mission, purpose, and plan to build sustainable shareholder value.
We will continue on our path of strengthening our balance sheet while making targeted
investments in the digital mapping of our supply chains. We have devised a modular
future state systems plan, which combined with prudent investment in our people,
equipment, and facilities, will further enhance Ryerson’s industry-leading customer
experience. The objective, as we have consistently stated over the years, is to further
modernize our network of intelligently connected service centers while never losing
track of the fundamentals of expense management and working capital efficiency. Put
that all together and the story we are telling as an organization has substance

throughout with the requisite vision and execution ability to reach our desired state of
“flow.”

2019 ANNUAL REPORT

Coming back around to where we started, I recently watched the movie “8-Mile” again
for the first time since it was released in 2002. As I watched, I started to think about
what scenes get into a movie versus what scenes get taken out during final production
and edits. I may be taking some liberties in my interpretation, but I couldn’t help but
notice how much manufacturing was a theme in the movie as many of the scenes take
place at an automotive stamping plant in Detroit. I also couldn’t help but notice that
after winning the climactic “battle,” Eminem’s friends ask him where he is going, and he
says “back to work.” Those scenes to me were a paean to manufacturing and the
recognition of its primacy. Manufacturing will continue to modernize and reinvent itself,
and if you’ve ever wondered if manufacturing matters, the answer is - it matters more
than ever. Manufacturing is decidedly where the physical and digital world intersect in
creating the most opportunity, utility and income. Manufacturing and the family-wage
jobs it creates and the upward mobility it fosters cannot solve every problem that we
know, hear, or read about, but it can solve a multitude that need solving. As Ryerson
moves into its 178th year in business distributing, processing, and manufacturing
industrial metals, we will continue fixing up the past while building the present and future
with solutions our customers value. I want to thank our customers for the opportunity to
serve them, our employees and my teammates for embracing our chosen way forward,
and our shareholders for their continuing support in constructing a Ryerson of higher
and lasting value. In our pursuit of “flow” and developing Ryerson further toward
reaching and sustaining a state of optimal performance, let’s give the final word to Dr.
Csikszentmihalyi, “To improve life one must improve the quality of experience.” Isn’t

that what this letter has been all about: a great customer, shareholder, and employee
experience and finding the joy in the work that overcomes adversity and gets us there
despite the complexities and imperfections? Time to get “back to work.”

2019 ANNUAL REPORT

With Great Optimism,
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Edward J. Lehner
President and Chief Executive Officer

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March 13, 2020
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
(cid:3) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019
OR

(cid:4) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-34735

RYERSON HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

26-1251524
(I.R.S. Employer
Identification No.)

227 W. Monroe St., 27th Floor
Chicago, Illinois 60606
(Address of principal executive offices)
(312) 292-5000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.01 par value, 100,000,000 shares authorized

Trading symbol(s) Name of each exchange on which registered
New York Stock Exchange

RYI

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:3) No (cid:4)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:3) No (cid:4)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90
days. Yes (cid:4) No (cid:3)
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes (cid:4) No (cid:3)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer

Accelerated filer

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Non-accelerated filer

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Smaller reporting company

Emerging growth company

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes (cid:3) No (cid:3)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:4) No (cid:4)
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of a share of the registrant’s
common stock on June 28, 2019 as reported by the New York Stock Exchange on such date was approximately $114,673,729. Shares of the registrant’s common stock
held by each executive officer, director, and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be
affiliates. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.
As of February 28, 2020 there were 37,783,761 shares of our Common Stock, par value $0.01 per share, outstanding.

The information required to be furnished pursuant to Part III of this Form 10-K will be set forth in, and incorporated by reference from, the registrant’s definitive proxy
statement for the annual meeting of stockholders (the “2019 Proxy Statement”), which will be filed with the Securities and Exchange Commission not later than 120
days after the end of the fiscal year ended December 31, 2019.

DOCUMENTS INCORPORATED BY REFERENCE

TABLE OF CONTENTS

Special Note Regarding Forward-Looking Statements

PART I

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

Mine Safety Disclosures

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Item 6.

Selected Financial Data

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

PART III

Item 10.

Directors, Executive Officers, and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accounting Fees and Services

PART IV

Item 15.

Exhibits and Financial Statement Schedules

Signatures

Page

102

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains “forward-looking statements.” Such statements can be identified by the use of forward-looking

terminology such as “objectives,” “goals,” “preliminary,” “range,” “believes,” “expects,” “may,” “estimates,” “will,” “should,”
“plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy.
Readers are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant
risks and uncertainties, and that actual results may vary materially from those anticipated or implied in the forward-looking statements
as a result of various factors. Among the factors that significantly impact the metals distribution industry and our business are:

•

highly cyclical fluctuations resulting from, among others, seasonality, market uncertainty, and costs of goods sold;

remaining competitive and maintaining market share in the highly competitive and fragmented metals distribution
industry;

managing the costs of purchased metals relative to the price at which we sell our products during periods of rapid price
escalation;

our substantial indebtedness and the covenants in instruments governing such indebtedness;

the impairment of goodwill that could result from, among other things, volatility in the markets in which we operate;

the failure to effectively integrate newly acquired operations;

the regulatory and other operational risks associated with our operations located outside of the United States (or “U.S.”);

the management of inventory and other costs and expenses;

the adequacy of our efforts to mitigate cyber security risks and threats;

reduced production schedules, layoffs or work stoppages by our own, our suppliers’, or customers’ personnel;

certain employee retirement benefit plans are underfunded and the actual costs could exceed current estimates;

future funding for postretirement employee benefits may require substantial payments from current cash flow;

prolonged disruption of our processing centers;

the ability to retain and attract management and key personnel;

the ability of management to focus on North American and foreign operations;

the ability to comply with the terms of our asset-based credit facility and our indenture;

the incurrence of substantial costs or liabilities to comply with, or as a result of violations of, environmental laws;

the impact of new or pending litigation against us;

the risk of product liability claims;

our risk management strategies may result in losses;

currency fluctuations in the U.S. dollar versus the Canadian dollar and the Chinese renminbi;

customer, supplier, and competitor consolidation, bankruptcy, or insolvency;

the ownership of a majority of our equity securities by a single investor group;

changes in the method of determining LIBOR or the replacement of LIBOR with an alternative reference rate.

These risks and uncertainties could cause actual results to differ materially from those suggested by the forward-looking
statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth in this
Annual Report under “Risk Factors” and the caption “Industry and Operating Trends” included in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report. Moreover, we caution you not to
place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any
obligation to revise or publicly release any revisions to these forward-looking statements to reflect events or circumstances after the
date of this Annual Report or to reflect the occurrence of unanticipated events.

ITEM 1.

BUSINESS.

PART I

Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is the parent company of Joseph T. Ryerson &
Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC (“Platinum”) own approximately 21,037,500
shares of our common stock, which is approximately 56% of our issued and outstanding common stock.

We are a leading metals service center, value-added processor, and distributor of industrial metals with operations in the United

States through JT Ryerson, in Canada through our indirect wholly-owned subsidiary Ryerson Canada, Inc., a Canadian corporation
(“Ryerson Canada”), and in Mexico through our indirect wholly-owned subsidiary Ryerson Metals de Mexico, S. de R.L. de C.V., a
Mexican corporation (“Ryerson Mexico”). In addition to our North American operations, we also operate in China through an indirect
wholly-owned subsidiary, Ryerson China Limited (“Ryerson China”). Unless the context indicates otherwise, Ryerson Holding, JT
Ryerson, Ryerson Canada, Ryerson China, and Ryerson Mexico together with their subsidiaries, are collectively referred to herein as
“Ryerson,” “we,” “us,” “our,” or the “Company.”

Our Company

We are one of the largest value-add processors and distributors of industrial metals in North America measured in terms of

sales. We have approximately 4,500 employees across 95 facilities in North America and four facilities in China. Through this
network we serve approximately 42,000 customers across a wide range of manufacturing end markets. Our customers range from
local, independently owned fabricators and machine shops to large, international original equipment manufacturers. We carry a full
line of nearly 75,000 products in stainless steel, aluminum, carbon steel, and alloy steels and a limited line of nickel and red metals in
various shapes and forms. In addition to our metals products, we offer numerous value-added processing and fabrication services, and
more than 75% of the products we sell are processed to meet customer requirements.

Our business strategy includes providing a superior level of customer service and responsiveness, technical services, and
inventory management solutions while maintaining low operating costs in order to maximize financial results. Our growth strategy is
based on increasing our operating results through organic growth activities and strategic acquisitions.

To that end, we continue to focus on our interconnected network, systems, and to enhance our value-added services and online
presence to provide increased access, functionality, and flexibility to our customers. Our service centers are strategically located near
our customers, which permits us to quickly process and deliver our products and services, often within the next day of receiving an
order. We own, lease, or contract a fleet of tractors and trailers, allowing us to efficiently meet our customers’ delivery demands. Our
range of products together with our breadth of services allows us to service a diverse customer base and to create long-term
partnerships with our customers and enhances our profitability.

We focus on strategic acquisitions that complement and enhance our product, customer, and geographic diversification. On July

2, 2018, JT Ryerson acquired Central Steel and Wire Company (“CS&W”), a leading metal service center with locations across the
Central and Eastern United States offering a wide selection of products and capabilities, with a commercial portfolio centered on bar,
tube, plate, and steel products. Since our acquisition of CS&W, we have focused on improving their operating performance through
efficiencies by integrating them into our operational model.

Industry Overview

Metals service centers serve as key intermediaries between metal producers and end users of metal products. They purchase in
scale and sell in smaller quantities. End-users often look for “one-stop” suppliers that offer lower order volumes, shorter lead times,
more reliable delivery, and processing services. Metal producers mainly sell metals in the form of standard-sized coils, sheets, plates,
structurals, bars, and tubes in large quantities, with longer lead times, and limited inventory. Metal service centers serve as key
intermediaries closing the gap between metal producers’ supply and end-users’ demand.

By aggregating end-users’ demand and purchasing metal in bulk to take advantage of economies of scale, metals service centers

may purchase, process, and deliver metal to end-users in a more efficient and cost-effective manner than the end-user may achieve by
dealing directly with the primary producer. Further, specialized metals processing equipment is costly and requires high-volume
production to be cost effective. In addition, many customers are not able or willing to invest in the necessary technology, equipment,
and warehousing of inventory to efficiently and effectively perform metal processing for their own operations. Due to this, many
customers have reduced their in-house processing capabilities, opting to source processed metal from service centers like us. This
saves our customers time, labor, and expense, reducing their overall manufacturing costs, while permitting us to focus on value-added
services and increasing our fabrication mix. This supports our capital expenditures on processing equipment to grow annual gross

profit margin. Our industry is highly fragmented with the largest companies accounting for only a small percentage of total market
share. The majority of metals services companies have limited product lines and inventories, with customers located in a specific
geographic area. In general, competition is based on quality, service, price, and geographic proximity. We primarily compete with
other metals service centers and to a lesser extent with metal producers.

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The metals service center industry typically experiences cash flow trends that are counter-cyclical to the revenue and volume

growth of the industry. During an industry downturn, companies generally reduce working capital assets and generate cash as
inventory and accounts receivable balances decline. As a result, operating cash flow and liquidity tend to increase during a downturn,
which typically facilitates industry participants’ ability to cover fixed costs and repay outstanding debt.

Competitive Strengths

Leading Market Position in North America.

Based on sales, we believe we are one of the largest service center companies for carbon, stainless steel, and aluminum in the

North American market where we have a broad geographic presence with 95 facilities.

Our service centers are located near our customer locations, enabling us to provide timely delivery to customers across
numerous geographic markets. Additionally, our widespread network of locations in the United States, Canada, and Mexico helps us
to utilize our expertise to more efficiently serve customers with complex supply chain requirements across multiple manufacturing
locations. We believe this is a key differentiator for customers who need a supplier that can reliably and consistently support them.
Our ability to transfer inventory among our facilities better enables us to more timely and profitably source and process specialized
items at regional locations throughout our network than if we were required to maintain inventory of all products and specialized
equipment at each location.

Broad Geographic Reach Across Attractive End Markets.

Our operations serve a diverse range of industries including commercial ground transportation, metal fabrication and machine

shops, industrial machinery and equipment manufacturing, consumer durable equipment, HVAC manufacturing, construction
equipment manufacturing, food processing and agricultural equipment manufacturing, and oil and gas. We believe this broad range of
industries in which we sell our products and services reduces our risk related to a downturn in a specific industry. We believe that our
ability to quickly adjust our offering based on regional and industry specific trends creates stability while also providing the
opportunity to access specific growth markets.

Established Platform for Organic and Acquisition Growth.

Our growth strategy is based on increasing our operating results through organic growth activities and strategic acquisitions that

enhance our product, customer, and geographic diversification. Our strategies, include investing in value-added processing
capabilities, analytically targeting attractive customers and end markets with our supply chain optimization service model, industry
consolidation through targeted M&A, and providing customers faster and easier solutions to their metal needs, which we believe will
provide us with growth opportunities.

Given the highly fragmented nature of the metals service center industry, we believe there are numerous additional opportunities

to acquire businesses and incorporate them into our existing infrastructure. In addition, due to our large scale and geographic reach,
we believe we can improve operating performance through efficiencies by integrating acquired businesses into our operational model,
thus providing greater purchasing power, improving expense and working capital management, access to additional end markets, and
broadening product mix.

Lean Operating Structure Providing Operating Leverage.

Ryerson has demonstrated the ability to effectively manage expenses through tactical productivity and spending improvements.

In a stronger metals service center environment characterized by increases in demand and/or pricing, we believe that most additional
expenses to service higher revenue and margins would come from variable expenses while further leveraging economies of scale on
our existing fixed expenses. We effectively managed our costs in 2019 with increased volume, as expenses as a percentage of sales
declined from 14.0% in 2018 to 13.7% in 2019.

We also continue to focus on inventory management. While average inventory days excluding LIFO increased from 73 days in

2018 to 76 days in 2019, this increase is due to the acquisition of CS&W in July 2018. On a same-store basis, days of supply
decreased from 71 days in 2018 to 70 days in 2019, within management’s target range of 70 to 75 days.

Extensive Breadth of Products and Services for Diverse Customer Base.

We believe our broad product mix and marketing approach provides customers with a “one-stop shop” solution few other metals

service center companies are able to offer. We provide a broad range of processing and fabrication services to meet the needs of our
approximately 42,000 customers and typically fulfill more than 1,600,000 orders per year. We provide supply chain solutions,
including just-in-time delivery and value-added processing to many original equipment manufacturing customers.

For the year ended December 31, 2019, no single customer, including their subcontractors, accounted for more than 6% of our

sales, and our top 10 customers, including their subcontractors accounted for approximately 15% of our sales.

Strong Relationships with Suppliers.

We are among the largest purchasers of metals in North America and have long-term relationships with many of our North
American suppliers. We believe we are frequently one of the largest customers of our suppliers and that concentrating our orders
among a core group of suppliers is effective for obtaining favorable pricing and service. We believe we have the opportunity to further
leverage this strength through continued focus on price and volume using an analytics-driven approach to procurement. In addition,
we view our strategic suppliers as supply chain partners. We focus on logistics, lead times, rolling schedules, and scrap return
programs to drive value-based buying that is advantageous for us. Metals producers worldwide are consolidating, and large,
geographically diversified customers, such as Ryerson, are desirable partners for these larger suppliers. Our relationships with
suppliers often provide us with access to metals when supply is constrained. Through our knowledge of the global metals marketplace
and capabilities of specific mills we believe we have developed an advantageous global purchasing strategy.

Experienced Management Team with Deep Industry Knowledge.

Our senior management team has extensive industry and operational experience and has been instrumental in optimizing and

implementing our strategy over the last five years. Our senior management has an average of more than 20 years of experience in the
metals or service center industries. Our CEO, Mr. Edward Lehner, who joined the Company in August 2012 as CFO and became CEO
in June 2015, has nearly 30 years of experience, predominantly in the metals industry. Our regional presidents, Mr. Mike Burbach and
Mr. Kevin Richardson each have over 35 years of experience with the Company.

Industry Outlook

The Institute for Supply Management’s Purchasing Managers’ Index (“PMI”) reported growth in January of 2020 with a reading
above 50%, indicating expansion in factory activity, after five months of reported softness. However, PMI has overall reported general
economic expansion for the last three years as readings have exceeded 50% for 31 of the last 36 months. The PMI measures the
economic health of the manufacturing sector and is a composite index based on five indicators: new orders, inventory levels,
production, supplier deliveries, and the employment environment. PMI readings can be a good indicator of industrial activity and
general economic growth.

Additionally, the overall U.S. economy is projected to maintain growth as evidenced by the Federal Reserve’s midrange

forecasted real GDP growth rates of 2.0%, 1.9%, and 1.8% for 2020, 2021, and 2022, respectively.

Steel demand in North America is largely dependent on growth of the automotive, industrial equipment, consumer appliance,
and construction end markets. One of our key end markets is the industrial equipment sector, and according to the latest Livingston
Survey, published by the Federal Reserve Bank of Philadelphia, U.S. industrial production expanded by 0.9% in 2019 and is expected
to grow by 0.8% in 2020, and 1.0% in 2021.

China continues to be a key driver in the growth of global metals demand. According to the International Monetary Fund,

China’s GDP maintained growth of 6.1% in 2019 and is projected to grow 5.6% in 2020 and 5.9% in 2021.

Products and Services

We carry a full line of carbon steel, stainless steel, alloy steels, and aluminum, and a limited line of nickel and red metals. These

materials are stocked in a number of shapes, including coils, sheets, rounds, hexagons, square and flat bars, plates, structurals, and
tubing.

We also provide a wide variety of processing services to meet our customers’ needs. Most of the products that we carry require

expensive specialized equipment for material handling and processing. We believe few of our customers have the capability to process
the metal into the desired sizes, forms, or finishes or they are unwilling to incur the significant capital expenditures to acquire the

necessary equipment. We are growing and diversifying our product mix mainly as a result of our targeted growth strategy to provide
increased levels of value-added processing services. We believe our enhanced processing capabilities will increase our ability to sell
higher-margin metals processing services to a larger group of customers. We expect this, together and with our focus on maintaining
pricing discipline related to our processing services, will increase our gross profit margin.

We had capital expenditures of $154.6 million in the five-year period ended December 31, 2019. We are increasing our
investments in processing equipment due to customers requesting higher levels of value-added processing. We expect this to increase
our profitability. We currently perform processing services on more than 75% of the materials sold by us.

The following table shows our percentage of sales by major product lines for 2019, 2018, and 2017:

Product Line
Carbon Steel Flat
Carbon Steel Plate
Carbon Steel Long
Stainless Steel Flat
Stainless Steel Plate
Stainless Steel Long
Aluminum Flat
Aluminum Plate
Aluminum Long
Other

Total

2019

2018

2017

26%
11
16
15
4
4
15
2
5
2
100%

27%
11
14
16
4
4
15
3
4
2
100%

28%
10
12
18
4
4
15
3
4
2
100%

We are not dependent on any particular customer group or industry because we process and distribute a variety of metals. This
diversity of product type and material reduces our exposure to fluctuations or other weaknesses in the financial or economic stability
of particular customers or industries. We are also less dependent on any particular suppliers as a result of our product diversification.

Customers and Markets

Our customer base is diverse, numbering approximately 42,000 in a variety of industries, including metal fabrication and
machine shops, industrial machinery and equipment, commercial ground transportation, consumer durable, food processing and
agricultural equipment, construction equipment, and HVAC. Although we sell directly to many large original equipment
manufacturers, the majority of our sales are to smaller customers, including small machine shops and fabricators, in small quantities
with frequent deliveries, helping them manage their working capital and credit needs more efficiently.

For the year ended December 31, 2019, no single customer, including their subcontractors, accounted for more than 6% of our
sales, and our top 10 customers, including their subcontractors accounted for approximately 15% of our sales. Substantially all of our
sales are attributable to our U.S. operations and substantially all of our long-lived assets are located in the United States.

The following table shows the Company’s percentage of sales by metal consuming industry for 2019, 2018, and 2017:

Metal Consuming Industry
Metal fabrication and machine shops
Industrial machinery and equipment
Commercial ground transportation
Consumer durable
Food processing and agricultural equipment
Construction equipment
HVAC
Oil & gas
Other

Total

2019

Percentage of Sales
2018

2017

23%
18
16
11
10
8
6
4
4
100%

22%
18
16
11
10
8
6
5
4
100%

20%
18
16
11
10
9
7
5
4
100%

Our customers are primarily located throughout the United States, but we also have international customers. Most customers are
located near to one of our facilities, thus enabling an efficient delivery system capable of handling a high frequency of short lead time

orders. We transport our products directly to customers via our in-house and dedicated truck fleet, which further supports the just-in-
time delivery requirements of our customers, and via third-party trucking firms.

We process our metals to specific customer orders as well as for stocking programs. Many of our larger customers commit to
purchase on a regular basis at agreed upon or indexed prices for periods ranging from three to twelve months. To help mitigate price
volatility risks, these price commitments are generally matched with corresponding supply arrangements, or to a lesser degree by
commodity hedges. Customers notify us of specific release dates for processed products. Customers typically notify us of release dates
anywhere from on a just-in-time basis to one month before the release date. Consequently, we are required to carry sufficient
inventory to meet the short lead time and just-in-time delivery requirements of our customers.

We also have international facilities located in Canada, Mexico and China. Net sales of our international locations (based on
where the shipments originated) accounted for approximately 10.4% of our consolidated 2019 net sales, or $424.8 million. See Note
13 — “Segment information” of Part II, Item 8 “Financial Statements and Supplementary Data” for further information on U.S. and
foreign revenues and assets.

Customer demand may change from time to time based on, among other things, general economic conditions and industry
capacity. Many of the industries in which our customers compete are cyclical in nature. We believe that our various and diverse
offerings, ways-to-markets, and end markets reduce the volatility of our business in the aggregate, thus somewhat reducing earnings
volatility. A portion of our customers experience seasonal slowdowns. Our sales, as measured in tonnage sold, in the months of July,
November, and December traditionally have been lower than in other months because of a reduced number of shipping days and
holiday or vacation closures for some customers. Consequently, our sales in the first two quarters of the year are usually higher than in
the third and fourth quarters.

Suppliers

We purchase the majority of our inventories from key domestic metals suppliers. Because of our total volume of purchases and
our long-term relationships with our suppliers, we believe that we are generally able to purchase inventory at the best prices offered by
our suppliers.

For the year ended December 31, 2019, our top 25 suppliers, including their subcontractors, accounted for approximately 71%

of our purchase dollars. We are generally able to meet our materials requirements because we use many suppliers, there is a
substantial overlap of product offerings from these suppliers, and there are several other suppliers able to provide identical or similar
products. While the metals producing supply base has experienced significant consolidation and supply interruptions due to tariffs
under Section 232 of the Trade Expansion Act, we believe both our size and our long-term relationships with our suppliers will
continue enable us to meet our material requirements.

Sales and Marketing

We maintain our own professional sales force. In addition to our office sales staff, we market and sell our products through the
use of our field sales force that we believe has extensive product and customer knowledge and offers a comprehensive catalog of our
products. Our office and field sales staffs, which together consist of approximately 790 employees, include technical personnel.
Additionally, we offer our customers the ability to purchase our products through our e-commerce website.

Because our business is relationship-based, we operate under many different trade names. Businesses we acquire often have
strong customer relationships and solid reputations, and we will often continue to use the acquired business name to maintain existing
customer relationships.

Capital Expenditures

We continued to focus on organic growth in 2019 by expanding existing facilities and adding processing equipment.
Investments by us in property, plant, and equipment, together with asset retirements for the five years ended December 31, 2019,
excluding the initial purchase price of acquisitions are set forth below. The net capital change during such period aggregated to an
increase of $52.6 million.

2019
2018
2017
2016
2015

Additions

Retirements
or Sales
(In millions)

45.8
38.4
25.1
23.0
22.3

57.5
5.5
24.9
5.0
9.1

Net

(11.7)
32.9
0.2
18.0
13.2

The net reduction in 2019 is related to a sale lease-back transaction. See Part II, Item 8, Note 6: Leases for additional

information. We currently anticipate capital expenditures, excluding acquisitions, of up to approximately $45 million for 2020, much
of which is related to organic growth activities comprised of maintenance, or purchases of, equipment. We expect capital expenditures
will be funded from cash generated by operations and available borrowings. We will continue to evaluate and execute each growth
project in light of the economic conditions and outlook at the time of investment and may significantly reduce our capital expenditures
if economic conditions warrant a more conservative approach to capital allocation.

Employees

As of December 31, 2019, we employed approximately 4,200 persons in North America and 300 persons in China. Our North

American workforce was comprised of approximately 1,800 office employees and approximately 2,400 plant employees. Sixteen
percent of our plant employees were members of various unions, including the United Steel Workers and The International
Brotherhood of Teamsters.

Renewals of four union contracts covering 89 employees were successfully negotiated in 2019. Nine contracts covering 192

employees are currently scheduled to expire in 2020.

Environmental, Health, and Safety Matters

Our facilities and operations are subject to many foreign, federal, state, and local laws and regulations relating to the protection

of the environment and to health and safety. In particular, our operations are subject to extensive requirements relating to waste
disposal, recycling, air and water emissions, the handling of regulated materials, remediation, underground storage tanks, asbestos-
containing building materials, workplace exposure, and other matters. We believe that our operations are currently in substantial
compliance with all such laws and do not presently anticipate substantial expenditures in the foreseeable future in order to meet
environmental, workplace health or safety requirements, or to pay for any investigations, corrective action, or claims. Claims,
enforcement actions, or investigations regarding personal injury, property damage, or violation of environmental laws could result in
substantial costs to us, divert our management’s attention, and result in significant liabilities, fines, or the suspension or interruption of
our facilities.

We continue to analyze and implement safeguards to mitigate any environmental, health, and safety risks we may face. As a

result, additional costs and liabilities may be incurred to comply with future requirements or to address newly discovered conditions,
and these costs and liabilities could have a material adverse effect on the results of operations, financial condition, or cash flows. For
example, there is increasing likelihood that additional regulation of greenhouse gas emissions will occur at the foreign, federal, state,
and local level, which could affect us, our suppliers, and our customers. While the costs of compliance could be significant, given the
uncertain outcome and timing of future action by the U.S. federal government and states on this issue, we cannot accurately predict the
financial impact of future greenhouse gas regulations on our operations or our customers at this time. We do not currently anticipate
any new programs disproportionately impacting us compared to our competitors.

Some of the properties currently or previously owned or leased by us are located in industrial areas or have a long history of

heavy industrial use. We may incur environmental liabilities with respect to these properties in the future including costs of
investigations, corrective action, claims for natural resource damages, claims by third parties relating to property damages, or claims
relating to contamination at sites where we have sent waste for treatment or disposal. Based on currently available information we do
not expect any investigation, remediation matters, or claims related to properties presently or formerly owned, operated, or to which

we have sent waste for treatment or disposal would have a material adverse effect on our financial condition, results of operations, or
cash flows.

In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100

businesses that may be a potentially responsible party (“PRP”) for the Portland Harbor Superfund Site (the “PHS Site”). On January 6,
2017, the EPA issued an initial Record of Decision (“ROD”) regarding the site. The ROD includes a combination of dredging,
capping, and enhanced natural recovery that would take approximately thirteen years to construct plus additional time for monitored
natural recovery, at an estimated present value cost of $1.05 billion. In a change from its prior stance, at a meeting on December 4,
2018, the EPA indicated that it expected PRPs to submit a plan during 2019 to start remediation of the river and harbor per the original
ROD within the next two to three years. The EPA also indicated that it expected allocation of amounts among the parties to be
determined in the same two to three-year time frame. The EPA invited certain PRPs to a May 2, 2019 meeting to discuss starting the
remedial design process. The EPA did not include JT Ryerson in those meetings.

On December 9, 2019, a PRP group met with Administrator Wheeler, the head of the EPA, to discuss updating the ROD as
recent testing indicates that the levels of contamination have “drastically improved” and, thus, remediation should be much less drastic
than that in the current ROD. We have been informed that Administrator Wheeler is requiring regional EPA staff to engage in
discussions with the PRP group before moving forward with any enforcement action. The EPA indicated in a January 2, 2020
“progress update” letter that it is negotiating with certain parties to perform remedial design work at five unspecified areas which
comprise 52% of the overall acreage subject to remediation. It is unclear if any of these areas include the areas where our former
facilities were located. As a result of the ongoing negotiations over the ROD, the EPA’s decision not to meet with smaller parties, and
the December 9, 2019 meeting with Administrator Wheeler, the discussions with the EPA regarding remedial design appear to be
delayed.

The EPA has stated that it is willing to consider de minimis settlements, which JT Ryerson is trying to pursue; however, the

EPA has not begun meeting with any of the smaller parties who have requested de minimis or de micromis status, stating that it does
not have sufficient information to determine whether any parties meet such criteria and does not intend to begin those considerations
until after the remedial design work is completed. It has met with selected parties that we believe to be larger targets. JT Ryerson has
not been invited to meet with the EPA.

The EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT
Ryerson. We do not currently have sufficient information available to us to determine whether the ROD will be executed as currently
stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination, and how much (if any)
of the final plan’s costs might ultimately be allocated to JT Ryerson. Therefore, management cannot predict the ultimate outcome of
this matter or estimate a range of potential loss at this time.

Excluding any potential additional remediation costs resulting from any corrective action for the properties described above, we

expect spending for pollution control projects to remain at historical levels below $500,000 per year.

Our United States operations are also subject to the Department of Transportation Federal Motor Carrier Safety Regulations. We

operate a private trucking motor fleet for making deliveries to some of our customers. Our drivers do not carry any material quantities
of hazardous materials. Our foreign operations are subject to similar regulations. Future regulations could increase maintenance,
replacement, and fuel costs for our fleet. These costs could have a material adverse effect on our results of operations, financial
condition, or cash flows.

Intellectual Property

We own several U.S. and foreign trademarks, service marks, and copyrights. Certain of the trademarks are registered with the

U.S. Patent and Trademark Office and, in certain circumstances, with the trademark offices of various foreign countries. We consider
certain other information owned by us to be trade secrets. We protect our trade secrets by, among other things, entering into
confidentiality agreements with our employees regarding such matters and implementing measures to restrict access to sensitive data
and computer software source code on a need-to-know basis. We believe that these safeguards adequately protect our proprietary
rights and we vigorously defend these rights. While we consider all our intellectual property rights as a whole to be important, we do
not consider any single right to be essential to our operations as a whole.

Corporate Responsibility

Ryerson is committed to operating with a high level of integrity. We are driven by our dedication to support the communities we
serve, deliver products that meet our stringent quality and compliance standards, and maintain a high environmental, health, and safety

standard to protect our people and the places where we operate. We work to continually improve each of these areas to make Ryerson
an even better company for tomorrow.

Below are some highlights of our corporate responsibility programs.

Sustainability

As part of our efforts to operate with a high level of integrity, we continuously monitor and analyze ourselves and our supply-

chain relationships. We strive, and expect our suppliers, to comply with all applicable laws and regulations, and Ryerson's Human
Rights Policy, Conflict Minerals Policy, and Code of Ethics and Business Conduct.

We are committed to mitigating the impact our operations and products have on the environment. As an operator of metals
service centers, our day-to-day business consists of the sale, distribution, and processing of a broad variety of metal products sourced
from numerous primary metal producers. Our operations, by their nature, do not emit significant amounts of carbon dioxide or other
greenhouse gases. Further, according to the Steel Recycling Institute, we believe steel, one of our most significant products, is the
most recycled material on the planet—more than plastic, paper, and glass combined each year—which provides a strong foundation
for our sustainability efforts. The Steel Recycling Institute notes that two out of every three tons of new steel are produced from old
steel. As part of our commitment to environmental sustainability, we:

•

purchase significant volumes of metal that has been produced using recycled materials or scrap melted in electric arc
furnaces;

sell scrap material generated in our operations to recyclers; and

source most of our steel from North American metal producers, which have substantially lower greenhouse gas emissions
than Chinese producers.

We also use propane fuel to operate forklifts and have installed energy efficient lighting in many of our operations and utilize

energy efficient diesel tractors that consume less fuel and reduce emissions for the majority of our trucking fleet to further mitigate our
impact on the environment.

Employee Safety

Upholding a safe workplace is one of our core values and a part of the company's culture. Our safety standards, which go

beyond the minimum requirements required by applicable law, have helped protect the well-being of our people and prevent
workplace injuries that can impact business productivity. We continuously work to maintain a safety performance rating that
outperforms the industry average and have implemented an Environmental, Health, and Safety policy that reinforces the goal of a
zero-injury workplace. Our low recordable injury rate compared to our peers in the metal services industry, based on U.S.
Occupational Safety and Health Administration (“OSHA”) criteria, reflects our effectiveness in protecting our employees. In 2019,
forty-three of our facilities operated with zero OSHA recordable injuries for the entire year, and seventy-three of our facilities
operated with zero OSHA recordable injuries during the fourth quarter. Our 2019 performance at our facilities, measured as the
number of OSHA recordable injuries per 200,000 labor hours, was 2.66, which was almost two times better than the industry average
as reported by the Bureau of Labor Statistics.

Community Relations

We are committed to helping build better communities in the places where we operate. We invest in the community and our

people in a variety of ways, from volunteerism to providing educational resources to help our employees and families advance their
careers:

•

Service & Giving — We support numerous charitable organizations, including those that promote good health, children's
causes, educational advancement, and community programs, through volunteer efforts. We encourage our employees to
give back to the communities they call home through the Ryerson Gives Back program. Employees are encouraged to
volunteer their time from working in food kitchens to participating in community events and trainings. Through our
employees, we are actively involved in building and supporting our local communities. Additionally, as a part of the
Ryerson internship program, each group of interns develop and implement a community service project. Past intern
projects have focused on waste reduction, raising money to benefit charities, feeding the homeless, and elementary
education.

College Scholarship Program and Tuition Reimbursement — For nearly 100 years, we have supported the continuing
education of our employees’ families through a college scholarship program. As part of this program, we awarded last
year approximately $90,000 in academic scholarships to students graduating from high school that are children or

dependents of Ryerson employees. We also support the continuing education of our employees through tuition
reimbursement programs.

Available Information

All periodic and current reports and other filings that we are required to file with the Securities and Exchange Commission
(“SEC”), including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant Section 15(d) of the Securities Exchange Act of 1934, as amended, are available free of
charge from the SEC’s website (www.sec.gov) or through our Investor Relations website at www.ir.ryerson.com. Such documents are
available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these reports (excluding
exhibits) may also be obtained free of charge, upon written request to: Investor Relations, Ryerson Holding Corporation, 227 W.
Monroe St., 27th Floor, Chicago, Illinois 60606.

The Company also posts its Code of Ethics on its website. See “Directors, Executive Officers, and Corporate Governance—

Code of Ethics” for more information regarding our Code of Ethics.

Our website address is included in this report for informational purposes only. Our website and the information contained

therein or connected thereto are not incorporated into this annual report on Form 10-K.

ITEM 1A. RISK FACTORS.

Our business faces many risks. You should carefully consider the risks and uncertainties described below, together with the
other information in this report, including the consolidated financial statements and notes to consolidated financial statements.
We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a
material and adverse impact on our business, results of operations, financial condition, and cash flows.

Risks Related to Our Business and Industry

Weakness in the economy, market trends, and other conditions affecting the profitability and financial stability of our customers
could negatively impact our sales growth and results of operations.

Economic and industry trends affect our business environments. We serve several industries in which the demand for our
products and services is sensitive to the production activity, capital spending, and demand for products and services of our customers.
Many of these customers operate in markets that are subject to highly cyclical fluctuations resulting from seasonality, market
uncertainty, costs of goods sold, currency exchange rates, foreign competition, offshoring of production, oil and natural gas prices,
geopolitical developments, and a variety of other factors beyond our control. Any of these factors could cause customers to idle or
close facilities, delay purchases, reduce production levels, or experience reductions in the demand for their own products or services.

Any of these events could impair the ability of our customers to make full and timely payments or reduce the volume of
products and services these customers purchase from us and could cause increased pressure on our selling prices and terms of sale.

We do not expect the cyclical nature of our industry to change and any downturn in our customers’ industries could reduce our
revenues and profitability or a significant or prolonged slowdown in activity in the United States (U.S.), Canada, or any other major
world economy, or a segment of any such economy, could negatively impact our sales growth and results of operations.

The metals services business is very competitive and increased competition could reduce our revenues and gross margins.

We face competition in all markets we serve, from metals producers that sell directly to certain customers or segments of the

market, to other metal services companies. The metals services industry itself is highly fragmented and competitive. There are a few
large competitors, but most of the market is served by small local and regional competitors. Competition is based principally on price,
service, quality, production capabilities, inventory availability, and timely delivery.

We are experiencing increased pressure from online businesses that compete with price transparency. We expect technological

advancements and the increased use of e-commerce solutions within the industry to continue to evolve at a rapid pace. As a result, our
ability to effectively compete requires us to respond and adapt to new industry trends and developments, and implement new
technology and innovations that may result in unexpected costs or may take longer than expected.

To remain competitive, we must be willing and able to respond to market pressures. These pressures, and the implementation,

timing, and results of our strategic pricing and other responses, could have a material effect on our sales and profitability. If we are
unable to grow sales or reduce costs, among other actions, to wholly or partially offset the effect on profitability of our pricing actions,
our results of operations and financial condition may be adversely affected.

Changing metals prices may have a significant impact on our liquidity, net sales, gross margins, operating income, and net
income.

The metals services industry as a whole is cyclical and, at times, pricing and availability of metal can be volatile due to
numerous factors beyond our control, including general domestic and international economic conditions, labor costs, sales levels,
competition, levels of inventory held by other metals service centers, consolidation of metals producers, higher raw material costs for
the producers of metals, import duties and tariffs, and currency exchange rates. This volatility can significantly affect the availability
and cost of materials for us. Our ability to pass on increases in costs in a timely manner depends on market conditions and may result
in lower gross margins. In addition, higher prices could impact demand for these products, resulting in lower sales volumes.
Moreover, we maintain substantial inventories of metal to accommodate the short lead times and just-in-time delivery requirements of
our customers. Accordingly, we purchase metals in an effort to maintain inventory at levels that we believe to be appropriate to satisfy
the anticipated needs of our customers based upon historic buying practices, contracts with customers, and market conditions.
Commitments for metal purchases are generally at prevailing market prices in effect at the time orders are placed or at the time of
shipment. During periods of rising metal prices, we may be negatively impacted by delays between the time of increases in the cost of
metals to us and increases in the prices that we charge for our products if we are unable to pass these increased costs on to our
customers. In addition, when metal prices decline, this could result in lower selling prices for our products and, as we use existing
inventory that we purchased at higher metal prices, lower gross profit margins. Declines in prices or further reductions in sales
volumes could adversely impact our ability to maintain our liquidity and to remain in compliance with certain financial covenants
under our $1 billion revolving credit facility (the “Ryerson Credit Facility”), as well as result in us incurring inventory or goodwill
impairment charges. Consequently, changing metals prices could significantly impact our liquidity, net sales, gross margins, operating
income, and net income.

Changes in inflation may adversely affect gross margins.

Inflation impacts the costs at which we can procure product and the ability to increase prices to customers over time. Prolonged

periods of deflation could adversely affect the degree to which we are able to increase sales through price increases.

Unexpected product shortages could negatively impact customer relationships, resulting in an adverse impact on results of
operations.

Disruptions could occur due to factors beyond our control, including economic downturns, political unrest, port slowdowns,

trade issues, including increased export or import duties or trade restrictions, health crises, and other factors, any of which could
adversely affect a supplier’s ability to manufacture or deliver products to us. For example, China has suffered health crises related to
the outbreak of avian influenza and coronavirus strains. Public health problems may result in quarantines, business closures,
transportation restrictions, import and export complications, and otherwise cause shortages in the supply of materials, higher costs for
available supplies, or cause other disruptions within our operations and supply chain. Public health problems currently cause and may
continue to cause increased costs of certain supplies and disruptions and delays within our supply chain, and public health problems
may expose us to unanticipated liability or require us to change our business practices.

Any disruption resulting from these events could cause significant delays in shipments of products or difficulties in obtaining
products, any of which may expose us to unanticipated liability or require us to change our business practices in a manner materially
adverse to our business, results of operations, and financial condition. For our sources of lower cost products from Asia and other
areas of the world, the effect of disruptions is typically increased due to the additional lead time required and distances involved.
Further, the risk of disruption is increased due to the current political climate seeking trade reform. In addition, we have strategic
relationships with a number of vendors. In the event we are unable to maintain those relations, there might be a loss of competitive
pricing advantages which could, in turn, adversely affect results of operations.

Changes in customer or product mix could cause the gross margin percentage to decline.

From time to time, we experience changes in customer and product mix that affect gross margin. Changes in customer and

product mix result primarily from business acquisitions, changes in customer demand, customer acquisitions, selling and marketing
activities, and competition. If rapid growth with lower margin customers occurs, we will face pressure to maintain current gross
margins, as these customers receive more discounted pricing due to their higher sales volume. There can be no assurance that we will
be able to maintain historical gross margins in the future.

The volatility of the market could result in a material impairment of goodwill.

We evaluate goodwill annually on October 1 and whenever events or changes in circumstances indicate potential impairment.

Events or changes in circumstances that could trigger an impairment review include significant underperformance relative to our
historical or projected future operating results, significant changes in the manner or the use of our assets or the strategy for our overall
business, and significant negative industry or economic trends. We test for impairment of goodwill by assessing various qualitative
factors with respect to development in our business and the overall economy and calculating the fair value of a reporting unit using a
combination of an income approach based on discounted future cash flows and a market approach at the date of valuation. Under the
discounted cash flow method, the fair value of each reporting unit is estimated based on expected future economic benefits discounted
to a present value at a rate of return commensurate with the risk associated with the investment. Projected cash flows are discounted to
present value using an estimated weighted average cost of capital, which considers both returns to equity and debt investors. Please
refer to the Section titled “Critical Accounting Estimates - Goodwill,” of Item 7, “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations,” and Note 1 — “Summary of Accounting and Financial Policies” of Part II, Item 8 "Financial
Statements and Supplementary Data" for further information.

We may not be able to successfully consummate and complete the integration of future acquisitions, and if we are unable to do so,
it could disrupt operations and cause unanticipated increases in costs and/or decreases in revenues and results of operations.

We have grown through a combination of internal expansion, acquisitions, and joint ventures. We intend to continue to grow

through selective acquisitions, but we may not be able to identify appropriate acquisition candidates, obtain financing on satisfactory
terms, consummate acquisitions, or integrate acquired businesses effectively and profitably into our existing operations. Restrictions
contained in the agreements governing our notes, the Ryerson Credit Facility, or our other existing or future debt may also inhibit our
ability to make certain investments, including acquisitions, and participations in joint ventures.

Acquisitions, partnerships, joint ventures, and other business combination transactions, both foreign and domestic, involve
various inherent risks, such as uncertainties in assessing value, strengths, weaknesses, liabilities, and potential profitability. There is
also risk relating to our ability to achieve identified operating and financial synergies anticipated to result from the transactions.
Additionally, problems could arise from the integration of acquired businesses, including unanticipated changes in the business or
industry or general economic conditions that affect the assumptions underlying the acquisition. Our future success will depend on our
ability to complete the integration of these future acquisitions successfully into our operations. Specifically, after any acquisition,
customers may choose to diversify their supply chains to reduce reliance on a single supplier for a portion of their metals needs. We
may not be able to retain all of our and an acquisition’s customers, which may adversely affect our business and sales. Integrating
acquisitions, particularly large acquisitions, requires us to enhance our operational and financial systems and employ additional
qualified personnel, management, and financial resources, and may adversely affect our business by diverting management away from
day-to-day operations. Further, failure to successfully integrate acquisitions may adversely affect our profitability by creating
significant operating inefficiencies that could increase our operating expenses as a percentage of sales and reduce our operating
income. In addition, we may not realize expected cost savings from acquisitions. Any one or more of these factors could cause us to
not realize the benefits anticipated or have a negative impact on the fair value of the reporting units. Accordingly, goodwill and
intangible assets recorded as a result of acquisitions could become impaired.

We may not be able to retain or expand our customer base if the North American manufacturing industry continues to erode
through moving offshore or through acquisition and merger or consolidation activity in our customers’ industries.

Our customer base primarily includes manufacturing and industrial firms. Some of our customers operate in industries that are

undergoing consolidation through acquisition and merger activity; some are considering or have considered relocating production
operations overseas or outsourcing particular functions overseas; and some customers have closed as they were unable to compete
successfully with overseas competitors. Our facilities are predominately located in the United States and Canada. To the extent that
our customers cease U.S. operations, relocate or move operations overseas to regions in which we do not have a presence, we could
lose their business. Acquirers of manufacturing and industrial firms may have suppliers of choice that do not include us, which could
impact our customer base and market share.

Certain of our operations are located outside of the United States, which subjects us to risks associated with international activities.

Certain of our operations are located outside of the United States, primarily in Canada, China, and Mexico. We are subject to thet

Foreign Corrupt Practices Act (“FCPA”), which generally prohibits U.S. companies and their intermediaries from making corrupt
payments or otherwise corruptly giving anything of value to foreign officials for the purpose of obtaining or keeping business or
otherwise obtaining favorable treatment, and requires companies to maintain adequate record-keeping and internal accounting
practices. The FCPA applies to covered companies, individual directors, officers, employees, and agents. Under the FCPA, U.S.
companies may be held liable for some actions taken by strategic or local partners or representatives. If we or our intermediaries fail to

comply with the requirements of the FCPA, governmental authorities in the United States could seek to impose civil and/or criminal
penalties.

We may be adversely affected by currency fluctuations in the U.S. dollar versus the Canadian dollar and the Chinese renminbi.

We have significant operations in Canada which incur the majority of their metal supply costs in U.S. dollars but earn the

majority of their sales in Canadian dollars. Additionally, we have significant assets in China. We may from time to time experience
losses when the value of the U.S. dollar strengthens against the Canadian dollar or the Chinese renminbi, which could have a material
adverse effect on our results of operations. In addition, we are subject to translation risk when we consolidate our Canadian and
Chinese subsidiaries’ net assets into our balance sheet. Fluctuations in the value of the U.S. dollar versus the Canadian dollar or
Chinese renminbi could reduce the value of these assets as reported in our financial statements, which could, as a result, reduce our
stockholders’ equity.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities,
particularly with regards to the land our facilities are located on.

The Chinese government has exercised and continues to exercise substantial control over the Chinese economy through
regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those
relating to taxation, import and export tariffs, environmental regulations, land use rights, property, and other matters. We believe that
our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local
governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations
that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.
Moreover, the Chinese court system does not provide the same property and contract right guarantees as do courts in the United States
and, accordingly, disputes may be protracted and resolution of claims may result in significant economic loss.

Additionally, there is no private ownership of land in China and all land ownership is held by the government of China, its
agencies, and collectives, which issue land use rights that are generally renewable. We lease the land where our Chinese facilities are
located from the Chinese government. If the Chinese government decided to terminate our land use rights agreements, our assets could
become impaired and our ability to meet customer orders could be impacted.

Damage to our information technology infrastructure could harm our business.

The unavailability of any of our computer-based systems for any significant period of time could have a material adverse effect

on our operations. In particular, our ability to manage inventory levels successfully largely depends on the efficient operation of our
computer hardware and software systems. We use management information systems to track inventory information at individual
facilities, communicate customer information, and aggregate daily sales, margin, and promotional information. Difficulties associated
with upgrades, installations of major software or hardware, and integration with new systems could have a material adverse effect on
results of operations. We could be required to expend substantial resources to integrate our information systems with the systems of
companies we have acquired. The integration of these systems may disrupt our business or lead to operating inefficiencies. In addition,
these systems are vulnerable to, among other things, damage or interruption from fire, flood, tornado, and other natural disasters,
power loss, computer system and network failures, operator negligence, physical and electronic loss of data, or security breaches and
computer viruses.

We are subject to cybersecurity risks and may incur increasing costs in an effort to minimize those risks.

We depend on the proper functioning and availability of our information technology platform, including communications and

data processing systems, in operating our business. These systems include software programs that are integral to the efficient operation
of our business. We have established security measures, controls, and procedures, including established recovery procedures for
critical systems and business functions, to safeguard our information technology systems and to prevent unauthorized access to such
systems and any data processed or stored in such systems, and we periodically evaluate and test the adequacy of such systems,
measures, controls, and procedures; however, there can be no guarantee that such systems, measures, controls, and procedures will be
effective. Security breaches could expose us to a risk of loss or misuse of our information, litigation, and potential liability. In
addition, cyber incidents that impact the availability, reliability, speed, accuracy, or other proper functioning of these systems could
have a significant impact on our operations, and potentially on our results. We may not have the resources or technical sophistication
to anticipate or prevent rapidly evolving types of cyberattacks. A significant cyber incident, including system failure, security breach,
disruption by malware, or other damage could interrupt or delay our operations, result in a violation of applicable privacy and other
laws, damage our reputation, cause a loss of customers, or give rise to monetary fines and other penalties, which could be significant.

Any significant work stoppages can harm our business.

As of December 31, 2019, we employed approximately 4,200 persons in North America and 300 persons in China. Our North

Renewals of four union contracts covering 89 employees were successfully negotiated in 2019. Nine union contracts covering

192 employees are currently scheduled to expire in 2020.

Certain employee retirement benefit plans are underfunded and the actual cost of those benefits could exceed current estimates,
which would require us to fund the shortfall.

As of December 31, 2019, our pension plan had an unfunded liability of $140 million. Our actual costs for benefits required to

be paid may exceed those projected and future actuarial assessments to the extent that those costs exceed the current assessment.
Under those circumstances, the adjustments required to be made to our recorded liability for these benefits could have a material
adverse effect on our results of operations and financial condition and cash payments to fund these plans could have a material adverse
effect on our cash flows. We may be required to make substantial future contributions to improve the plan’s funded status.

Future funding for postretirement employee benefits other than pensions also may require substantial payments from current cash
flow.

We provide postretirement life insurance and medical benefits to certain eligible retired employees. Our unfunded

postretirement benefit obligation as of December 31, 2019 was $69 million. Our actual costs for benefits required to be paid may
exceed those projected and future actuarial assessments to the extent that those costs exceed the current assessment. Under those
circumstances, adjustments will be required to be made to our recorded liability for these benefits.

Any prolonged disruption of our processing centers could harm our business.

We have dedicated processing centers that permit us to produce standardized products in large volumes while maintaining low

operating costs. We may suffer prolonged disruption in the operations of any of these facilities, whether due to labor or technical
difficulties, destruction, or damage to any of the facilities or otherwise, which could adversely affect our operating results.

If we are unable to retain, attract, and motivate management and key personnel, it may adversely affect our business.

In order to compete and have continued growth, we must attract, retain, and motivate executives and other key employees,

including those in managerial, technical, sales, marketing, and support positions. We believe that our success is due, in part, to our
experienced management team. Losing the services of one or more members of our management team such as our CEO, Edward J.
Lehner, could adversely affect our business and possibly prevent us from improving our operational, financial, and information
management systems and controls. We compete to hire employees and then must train them and develop their skills and competencies.
In the future, we may need to retain and hire additional qualified sales, marketing, administrative, operating, and technical personnel,
and to train and manage new personnel. Our ability to implement our business plan is dependent on our ability to retain, hire, and train
a large number of qualified employees each year. Our results of operations could be adversely affected by increased costs due to
increased competition for employees, higher employee turnover, or increased employee benefit costs.

Our international operations and potential joint ventures may cause us to incur costs and risks that may distract management from
effectively operating our North American business, and such operations or joint ventures may not be profitable.

We maintain foreign operations in Canada, China, and Mexico. International operations are subject to certain risks inherent in
conducting business in, and with, foreign countries, including price controls, exchange controls, export controls, economic sanctions,
duties, tariffs, limitations on participation in local enterprises, nationalization, expropriation and other governmental action, and
changes in currency exchange rates. In addition, we may be subject to business disruptions created by health crises and outbreaks of
communicable diseases, especially in China, including the recent outbreak of coronavirus. While we believe that our current
arrangements with local partners provide us with experienced business partners in foreign countries, events or issues, including
disagreements with our partners, may occur that require attention of our senior executives and may result in expenses or losses that
erode the profitability of our foreign operations or cause our capital investments abroad to be unprofitable.

Lead time and the cost of our products could increase if we were to lose one of our primary suppliers.

If, for any reason, our primary suppliers of aluminum, carbon steel, stainless steel, or other metals should curtail or discontinue

their delivery of such metals in the quantities needed and at prices that are competitive, our business could suffer. The number of
available suppliers could be reduced by factors such as industry consolidation and bankruptcies affecting steel and metal producers.
For the year ended December 31, 2019, our top 25 suppliers represented approximately 71% of our purchases. We could be
significantly and adversely affected if delivery were disrupted from a major supplier. If, in the future, we were unable to obtain
sufficient amounts of the necessary metals at competitive prices and on a timely basis from our traditional suppliers, we may not be
able to obtain such metals from alternative sources at competitive prices to meet our delivery schedules, which could have a material
adverse effect on our sales and profitability.

Global metal overcapacity and imports of metal products into the United States have adversely affected, and may again adversely
affect, United States metal prices, which could impact our sales and results of operations.

Global metal production capacity currently exceeds global consumption of metal products. Such excess capacity sometimes

results in metal manufacturers in certain countries exporting steel at prices that are lower than prevailing domestic prices and
sometimes at or below their cost of production. Excessive imports of metal into the United States, such as in recent years, have exerted
and may exert in the future, downward pressure on United States steel prices which may negatively affect our results of operations.

The U.S. government enacted several trade actions in 2018 and 2019 including tariffs on imported steel and aluminum products

under Section 232 of the Trade Expansion Act. It is expected that these trade actions, while in effect, will limit metal imports from
nonexempt countries. If these trade actions are relaxed, repealed, or if relatively higher U.S. metal prices make it attractive for foreign
metal producers to export their products to the U.S., despite the presence of duties or tariffs, the resurgence of substantial imports of
foreign steel could create downward pressure on U.S. metal prices which could have a material adverse effect on sales prices and
future results of operations. To the extent these tariffs and other trade actions result in a decrease in international demand for steel and
aluminum, or products manufactured therefrom and, produced in the United States, or otherwise negatively impact demand for our
products, our business may be adversely impacted.

We could incur substantial costs related to environmental, health, and safety laws.

Our operations are subject to increasingly stringent environmental, health, and safety laws. These include laws that impose
limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage, and disposal of
regulated materials, and the investigation and remediation of contaminated soil, surface water, and groundwater. Failure to maintain or
achieve compliance with these laws or with the permits required for our operations could result in substantial increases in operating
costs and capital expenditures. In addition, we may be subject to fines and civil or criminal sanctions, third party claims for property
damage or personal injury, worker’s compensation or personal injury claims, cleanup costs, or temporary or permanent discontinuance
of operations. Certain of our facilities are located in industrial areas, have a history of heavy industrial use, and have been in operation
for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled, and disposed of
hazardous and other regulated wastes. Environmental liabilities could exist, including cleanup obligations at these facilities or at off-
site locations where materials from our operations were disposed of, which could result in future expenditures that cannot be currently
quantified and which could have a material adverse effect on our financial position, results of operations, or cash flows. Such
liabilities may be imposed without regard to fault or the legality of a party’s conduct and may, in certain circumstances, be joint and
several. Future changes to environmental, health, and safety laws, including those related to climate change, could result in material
liabilities and costs, constrain operations, or make such operations more costly for us, our suppliers, and our customers.

In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100

businesses that may be a potentially responsible party for the Portland Harbor Superfund Site. See Item 3 “Legal Proceedings.”

The EPA has not yet allocated responsibility for the contamination among the potentially responsible parties, including JT

Ryerson. We do not currently have sufficient information available to us to determine whether the Record of Decision will be
executed as currently stated, whether and to what extent JT Ryerson may be held responsible for any of the identified contamination,
and how much (if any) of the final plan’s costs might ultimately be allocated to JT Ryerson. Therefore, management cannot predict the
ultimate outcome of this matter or estimate a range of potential loss at this time.

Regulations related to conflict-free minerals may force us to incur additional expenses and place us at a competitive disadvantage.

On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”),

the United States SEC adopted new requirements for reporting companies that use certain minerals and metals, known as “conflict
minerals”, in their products, whether or not these products are manufactured by third parties. These requirements require companies to

diligence, disclose, and report whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries.
Since our supply chain is complex, we may not be able to conclusively verify the origins for all metals used in our products and we
may face reputational challenges with our customers. Additionally, as there may be only a limited number of suppliers offering
“conflict free” metals, we cannot be sure that we will be able to obtain necessary metals from such suppliers in sufficient quantities or
at competitive prices. Accordingly, we could incur significant cost related to the compliance process, including potential difficulty or
added costs in satisfying the disclosure requirements. Moreover, we may encounter challenges to satisfy those customers who require
that all of the components of our products be certified as conflict free which could place us at a competitive disadvantage if we are
unable to do so.

Tax changes could affect our effective tax rate, the value of our deferred tax assets, and future profitability.

Our future results could be adversely affected by changes in the effective tax rate or changes in the treatment of deferred tax

assets as a result of changes in Ryerson’s overall profitability, changes in the mix of earnings in countries with differing statutory tax
rates, changes in tax legislation, the results of the examination of previously filed tax returns, and continuing assessment of the
Company’s tax exposures. In particular, although the passage of the Tax Cut and Jobs Act of 2017 reduced the U.S. tax rate to 21%,
our future earnings could be negatively impacted by changes in tax legislation including changing tax rates and tax base such as
limiting, phasing-out, or eliminating deductions or tax credits, changing rules for earnings repatriations, and changing other tax laws in
the U.S. or other countries. In addition, it is uncertain if, and to what extent, various states will conform to the new tax law and if
foreign countries will react by adopting tax legislation or taking other actions that could adversely affect our business.

We are subject to litigation that could strain our resources and distract management.

From time to time, we are involved in a variety of claims, lawsuits, and other disputes arising in the ordinary course of business.

These suits concern issues including product liability, contract disputes, employee-related matters, and personal injury matters. It is
not feasible to predict the outcome of all pending suits and claims, and the ultimate resolution of these matters as well as future
lawsuits that could have a material adverse effect on our business, financial condition, results of operations, cash flows, or reputation.

We may face product liability claims that are costly and create adverse publicity.

If any of the products that we sell cause harm to any of our customers, we could be exposed to product liability lawsuits. If we

were found liable under product liability claims, we could be required to pay substantial monetary damages. Further, even if we
successfully defended ourselves against this type of claim, we could be forced to spend a substantial amount of money in litigation
expenses, our management could be required to spend valuable time in the defense against these claims, and our reputation could
suffer.

Our risk management strategies may result in losses.

From time to time, we may use fixed-price and/or fixed-volume supplier contracts to offset contracts with customers. Some of

our existing supply agreements have required minimum purchase quantities. Under adverse economic conditions, those minimums
may exceed our needs. Absent exceptions for force majeure and other circumstances affecting the legal enforceability of the
agreements, these minimum purchase requirements may compel us to purchase quantities of raw materials that could significantly
exceed our anticipated needs or pay damages to the supplier for shortfalls. In these circumstances, we would attempt to negotiate
agreements for new purchase quantities. There is a risk, however, that we would not be successful in reducing purchase quantities,
either through negotiation or litigation. If that occurred, we would likely be required to purchase more of a particular raw material in a
particular year than we need, negatively affecting our results of operations and cash flows.

Additionally, we may use commodity contracts, foreign exchange contracts, and interest rate swaps to manage our exposure to

commodity price risk, foreign currency exchange risk, and interest rate risk. These risk management strategies pose certain risks,
including the risk that losses on a hedge position may exceed the amount invested in such instruments. Moreover, a party in a hedging
transaction may be unavailable or unwilling to settle our obligations, which could cause us to suffer corresponding losses. A hedging
instrument may not be effective in eliminating all of the risks inherent in any particular position. Our profitability may be adversely
affected during any period as a result of use of such instruments.

Changes in the method of determining the London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with an
alternative reference rate, may adversely affect interest rates on our outstanding variable rate indebtedness.

Certain of our variable rate debt, including the Ryerson Credit Facility, currently uses LIBOR as a benchmark for establishing

certain interest rates. LIBOR is the subject of recent proposals for reform and on July 27, 2017, the U.K. Financial Conduct Authority
announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Federal Reserve Bank

of New York has begun publishing a Secured Overnight Funding Rate (“SOFR”), which is intended to replace U.S. dollar LIBOR, and
central banks in several other jurisdictions have also announced plans for alternative reference rates for other currencies. These
reforms may cause LIBOR to perform differently than in the past or to disappear entirely. The consequences of these developments
with respect to LIBOR cannot be entirely predicted but may result in an increase in the interest cost of our variable rate indebtedness.
In the future, we may need to renegotiate our outstanding indebtedness or incur other indebtedness, and the phase-out of LIBOR may
negatively impact the terms of such indebtedness. In addition, the overall financial market may be disrupted as a result of the phase-
out or replacement of LIBOR. Disruption in the financial market could have a material adverse effect on our financial position, results
of operations, and liquidity.

Risks Related to Ownership of Our Common Stock

The market price for our common stock may be volatile.

Historically, there has been volatility in the market price for our common stock. Furthermore, the market price of our common

stock could fluctuate substantially in the future in response to a number of factors, including, but not limited to, the risk factors
described herein. Examples include:

•

changes in commodity prices, especially metals;

announcement of our quarterly operating results or the operating results of other metals service centers;

changes in financial estimates or recommendations by stock market analysts regarding us or our competitors;

the operating and stock performance of other companies that investors may deem comparable;

press releases, earnings releases, or publicity relating to us or our competitors or relating to trends in the metals service
center industry;

inability to meet securities analysts’ and investors’ quarterly or annual estimates or targets of our performance;

sales of our common stock by large or controlling shareholders;

the amount of shares acquired for short-term investments;

general domestic or international economic, market, and political conditions; and

announcements by us or our competitors of significant acquisitions, dispositions or joint ventures, or other material events
impacting the domestic or global metals industry.

In the past, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant
effect on the market prices of securities issued by many companies for reasons unrelated to their specific operating performance.
These factors may adversely affect the trading price of our common stock, regardless of actual operating performance.

In addition, stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or

disproportionate to the operating performance of companies. In the past, some shareholders have brought securities class action
lawsuits against companies following periods of volatility in the market price of their securities. We may in the future be the target of
similar litigation. Securities litigation, regardless of whether our defense is ultimately successful, could result in substantial costs and
divert management’s attention and resources.

We have a substantial amount of indebtedness, which could adversely affect our financial position and prevent us from fulfilling
our financial obligations.

We currently have a substantial amount of indebtedness. As of December 31, 2019, our total indebtedness was approximately

$981.8 million and we had approximately $348 million of unused capacity under the Ryerson Credit Facility. Our substantial
indebtedness may:

•

make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on
our outstanding notes and our other indebtedness;

limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general
corporate purposes;

limit our ability to use our cash flow for future working capital, capital expenditures, acquisitions, or other general
corporate purposes;

•

require us to use a substantial portion of our cash flow from operations to make debt service payments;

limit our flexibility to plan for, or react to, changes in our business and industry;

place us at a competitive disadvantage compared to our less leveraged competitors; and

increase our vulnerability to the impact of adverse economic and industry conditions.

We may also incur additional indebtedness in the future. The terms of the Ryerson Credit Facility and the indenture governing

our outstanding notes restrict but do not prohibit us from doing so, and the indebtedness incurred in compliance with these restrictions
could be substantial. If new indebtedness is added to our current debt levels, the related risks that we now face could intensify.

The covenants in the Ryerson Credit Facility and the indenture governing our notes impose, and covenants contained in
agreements governing indebtedness that we incur in the future may impose, restrictions that may limit our operating and financial
flexibility.

The Ryerson Credit Facility and the indenture governing our outstanding notes contain a number of significant restrictions and

covenants that limit our ability and the ability of our restricted subsidiaries, including JT Ryerson, to:

•

incur additional debt;

pay dividends on our capital stock or repurchase our capital stock;

make certain investments or other restricted payments;

create liens or use assets as security in other transactions;

merge, consolidate, transfer, or dispose of substantially all of our assets; and

engage in transactions with affiliates.

The terms of the Ryerson Credit Facility require that, in the event availability under the facility declines to a certain level, we

maintain a minimum fixed charge coverage ratio at the end of each fiscal quarter. Total credit availability is limited by the amount of
eligible accounts receivable, inventory, and qualified cash pledged as collateral under the agreement insofar as the Company is subject
to a borrowing base comprised of the aggregate of these three amounts, less applicable reserves. As of December 31, 2019, total credit
availability was $348 million. See discussion regarding the Ryerson Credit Facility in the “Liquidity and Capital Resources” section of
Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Additionally, subject to certain exceptions, the indenture governing the outstanding notes restricts JT Ryerson’s ability to pay
Ryerson Holding dividends. Our future indebtedness may contain covenants more restrictive in certain respects than the restrictions
contained in the Ryerson Credit Facility and the indenture governing the notes. Operating results below current levels or other adverse
factors, including a significant increase in interest rates, could result in our being unable to comply with financial covenants that are
contained in the Ryerson Credit Facility or that may be contained in any future indebtedness. In addition, complying with these
covenants may also cause us to take actions that are not favorable to holders of our notes and may make it more difficult for us to
successfully execute our business strategy and compete against companies that are not subject to such restrictions.

We may not be able to generate sufficient cash to service all of our indebtedness.

We are highly leveraged. Our ability to make payments on our indebtedness depends on our ability to generate cash in the

future. Our outstanding notes, the Ryerson Credit Facility, and our other outstanding indebtedness are expected to account for
significant cash interest expenses. Accordingly, we will have to generate significant cash flows from operations to meet our debt
service requirements. If we do not generate sufficient cash flow to meet our debt service and working capital requirements, we may be
required to sell assets, seek additional capital, reduce capital expenditures, restructure or refinance all or a portion of our existing
indebtedness, or seek additional financing. Moreover, insufficient cash flow may make it more difficult for us to obtain financing on
terms that are acceptable to us, or at all.

The right to receive payment on the 2022 Notes and the guarantees will be subordinated to the liabilities of non-guarantor
subsidiaries.

The notes and related guarantees are structurally subordinated to all indebtedness of our subsidiaries that are non-guarantors of

the 2022 Senior Secured Notes (the “2022 Notes”). While the indenture governing the 2022 Notes limits the indebtedness and
activities of these non-guarantor subsidiaries, holders of indebtedness of, and trade creditors of, non-guarantor subsidiaries, including

lenders under bank financing agreements, are entitled to payments of their claims from the assets of such subsidiaries before those
assets are made available for distribution to any guarantor, as direct or indirect shareholder. While the non-guarantor subsidiaries have
agreed under the indenture not to pledge or encumber their assets (other than with respect to permitted liens) without equally and
ratably securing the notes, they will not guarantee the 2022 Notes notwithstanding any such pledge or encumbrance in favor of thet
2022 Notes.

The non-guarantor subsidiaries represented, respectively, 9.5% and 6.5% of our net sales and EBITDA for the fiscal year ended

December 31, 2019. In addition, these non-guarantor subsidiaries represented respectively, 10.9% and 7.6% of our assets and
liabilities, as of December 31, 2019.

Accordingly, in the event that any of the non-guarantor subsidiaries or joint venture entities become insolvent, liquidates, or

otherwise reorganizes:

•

the creditors of the guarantors (including the holders of the 2022 Notes) will have no right to proceed against such
subsidiary’s assets; and

the creditors of such non-guarantor subsidiary, including trade creditors, will generally be entitled to payment in full from
the sale or other disposal of assets of such subsidiary, as direct or indirect shareholder, and will be entitled to receive any
distributions from such subsidiary.

Because a portion of our indebtedness bears interest at rates that fluctuate with changes in certain prevailing short-term interest
rates, we are vulnerable to interest rate increases.

A portion of our indebtedness, including the Ryerson Credit Facility, bears interest at rates that fluctuate with changes in certain
short-term prevailing interest rates. As of December 31, 2019, we had approximately $377.7 million of outstanding borrowings under
the Ryerson Credit Facility, with an additional $348 million available for borrowing under such facility. Assuming a consistent level
of debt through-out 2019, a 100 basis point change in the interest rate on our floating rate debt effective from the beginning of the year
would increase or decrease our interest expense under the Ryerson Credit Facility by approximately $2.6 million on an annual basis. If
interest rates increase dramatically, we could be unable to service our debt, which could have a material adverse effect on our
business, financial condition, results of operations, or cash flows.

Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs.

Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as

conditions affecting our industry generally or the introduction of new rating practices and methodologies. We cannot provide
assurances that our current credit ratings will remain in effect or that the ratings will not be lowered, suspended, or withdrawn entirely
by the rating agencies. If rating agencies lower, suspend, or withdraw the ratings, the market price or marketability of our securities
may be adversely affected. In addition, any negative change in ratings could make it more difficult for us to raise capital on acceptable
terms, impact the ability to obtain adequate financing, and result in higher interest costs for our existing credit facilities, including the
Ryerson Credit Facility, or on future financings.

Platinum owns a significant percentage of our stock and has the right to nominate a majority of the members of the Corporation’s ’
board and will be able to exert control over matters subject to stockholder approval.

Platinum owns approximately 21,037,500 shares of our common stock, which is approximately 56% of our issued and
outstanding common stock. Therefore, Platinum may be able to determine all matters requiring stockholder approval. For example,
Platinum may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale
of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our
common stock that our stockholders may believe are in their best interest as stockholders.

The Company is party to an investor rights agreement (the “Investor Rights Agreement”) with certain affiliates of Platinum
which provides, among other things, that for so long as Platinum collectively beneficially owns (i) at least 30% of the voting power of
the outstanding capital stock of the Company, Platinum will have the right to nominate for election to the board of directors of the
Company no fewer than that number of directors that would constitute a majority of the number of directors if there were no vacancies
on the board, (ii) at least 15% but less than 30% of the voting power of the outstanding capital stock of the Company, Platinum willm
have the right to nominate two directors, and (iii) at least 5% but less than 15% of the voting power of the outstanding capital stock of
the Company, Platinum will have the right to nominate one director. The agreement also provides that if the size of the board of
directors is increased or decreased at any time, Platinum’s nomination rights will be proportionately increased or decreased,
respectively, rounded up to the nearest whole number. As a result of Platinum’s ownership of a majority of the Company’s
outstanding capital stock as well its board nomination rights pursuant to the Investor Rights Agreement, Platinum may significantly

influence or effectively control our policies and operations, including the appointment of management, future issuances of our
common stock or other securities, and the payment of dividends. In addition, Platinum has significant control over our decisions to
enter into any other corporate transaction.

The interests of Platinum may not in all cases be aligned with the interests of the other holders of our common stock. For

example, a sale of a substantial number of shares of stock in the future by Platinum could cause our stock price to decline. Further,
Platinum could cause us to make acquisitions that increase the amount of the indebtedness that is secured or senior to the Company’s
existing debt or sell revenue-generating assets, impairing our ability to make payments under such debt. Additionally, Platinum is in
the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete
directly or indirectly with us. Accordingly, Platinum may also pursue acquisition opportunities that may be complementary to our
business, and as a result, those acquisition opportunities may not be available to us. In addition, Platinum may have an interest in
pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their equity investment, even though
such transactions might involve risks to holders of our common stock.

We are exempt from certain corporate governance requirements because we are a “controlled company” within the meaning of the
NYSE rules and, as a result, our stockholders do not have the protections afforded by these corporate governance requirements.

Because Platinum controls more than 50% of the voting power of our common stock, we are considered to be a “controlled

company” for purposes of the New York Stock Exchange (“NYSE”) listing requirements. Under the NYSE rules, a “controlled
company” may elect not to comply with certain NYSE corporate governance requirements, including (1) the requirement that a
majority of our Board of Directors consist of independent directors, (2) the requirement that the nominating and corporate governance
committee of our Board of Directors be composed entirely of independent directors, (3) the requirement that the compensation
committee of our Board of Directors be composed entirely of independent directors, and (4) the requirement for an annual
performance evaluation of the nomination/corporate governance and compensation committees. Given that Platinum controls a
majority of the voting power of our common stock, we are permitted, and have elected, to opt out of compliance with certain NYSE
corporate governance requirements. Accordingly, holders of our common stock do not have the same protections afforded to
stockholders of companies that are subject to all of the NYSE corporate governance requirements.

Our corporate documents and Delaware law contain provisions that could discourage, delay, or prevent a change in control of the
Company.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the

acquisition of our company more difficult without the approval of our Board of Directors. These provisions:

•
•

•

establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time;
authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which
may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other
rights or preferences superior to the rights of the holders of common stock;
provide that the Board of Directors is expressly authorized to make, alter, or repeal our amended and restated bylaws;
prohibit stockholders from acting by written consent if less than a majority of the voting power of our outstanding stock is
controlled by Platinum; and
establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that
can be acted upon by stockholders at stockholder meetings.

These anti-takeover provisions and other provisions under Delaware law could discourage, delay, or prevent a transaction

involving a change in control of our company, even if doing so would benefit our stockholders. These provisions could also
discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take
other corporate actions they desire.

Any issuance of preferred stock could make it difficult for another company to acquire us or could otherwise adversely affect
holders of our common stock, which could depress the price of our common stock.

Our Board of Directors will have the authority to issue preferred stock and to determine the preferences, limitations, and relative

rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without
any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend, and other rights
superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us,
discouraging bids for our common stock at a premium over the market price, and adversely affect the market price and the voting and
other rights of the holders of our common stock.

We have not paid cash dividends since our initial public offering in 2014 and any future dividend payments are at the discretion of
our Board of Directors.

We have not declared or paid cash dividends on our common stock or any other equity security since our initial public offering
in 2014. The amounts that may be available to us to pay cash dividends are restricted under our debt agreements. Any payment of cash
dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend upon our results of
operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions, and other factors deemed
relevant by our Board of Directors. Therefore, you should not rely on dividend income from shares of our common stock. For more
information, see “Dividend Policy.” Your only opportunity to achieve a return on your investment in us may be if the market price of
our common stock appreciates and you sell your shares at a profit, but there is no guarantee that the market price for our common
stock will ever exceed the price that you pay for our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2.

PROPERTIES.

As of December 31, 2019, the Company’s facilities are set forth below:

Operations in the United States

JT Ryerson maintains 82 operational facilities, including 6 locations that are dedicated to administration services. All of our
metals service center facilities are in good condition and are adequate for JT Ryerson’s existing operations. Approximately 50% of
these facilities are leased. The lease terms expire at various times through 2032. JT Ryerson’s properties and facilities are adequate to
serve its present and anticipated needs.

Location
Birmingham, AL
Mobile, AL
Fort Smith, AR
Hickman, AR**
Little Rock, AR**
Phoenix, AZ
Dos Palos, CA
Fresno, CA
Livermore, CA
Vernon, CA
Commerce City, CO
South Windsor, CT
Wilmington, DE
Jacksonville, FL
Tampa Bay, FL
Lavonia, GA
NNorcross, GA
NNorcross, GA**
Des Moines, IA
Eldridge, IA**
Marshalltown, IA
Chicago, IL (Headquarters)*
Chicago, IL
Chicago, IL
Chicago, IL
Dekalb, IL
Elgin, IL
Lisle, IL*
Burns Harbor, IN
Indianapolis, IN
Portage, IN**
Wichita, KS
Shelbyville, KY**
Shreveport, LA
St. Rose, LA
Devens, MA
Detroit, MI*
Grand Rapids, MI*
Lansing, MI
Minneapolis, MN
Plymouth, MN
Maryland Heights, MO
NNorth Kansas City, MO
Jackson, MS
Charlotte, NC**
Charlotte, NC
Greensboro, NC (2)
Pikeville, NC
Youngsville, NC
Omaha, NE
Lancaster, NY
Cincinnati, OH
Columbus, OH
Hamilton, OH*
Hilliard, OH

Own/Lease
Owned
Owned
Owned
Leased
Leased
Leased
Leased
Leased
Leased
Owned
Owned
Leased/Vacated
Owned
Owned
Owned
Leased
Leased/Vacated
Owned
Owned
Leased
Owned
Leased
Owned
Leased/Vacated
Leased/Vacated
Leased
Leased
Leased
Owned
Owned
Leased
Leased
Owned
Owned
Owned
Owned
Leased
Leased
Leased
Owned
Owned
Leased
Owned
Owned
Owned
Leased
Owned
Leased
Leased
Owned
Leased
Owned
Leased
Leased
Leased

Streetsboro, OH
Strongsville, OH
Oklahoma City, OK
Tulsa, OK
Tigard, OR
Ambridge, PA**
Fairless Hills, PA**
Charleston, SC**
Greenville, SC
Wellford, SC
Chattanooga, TN
Chattanooga, TN
Gallatin, TN
Knoxville, TN*
Memphis, TN
Dallas, TX
El Paso, TX
Houston, TX
Houston, TX (2)
McAllen, TX
Odessa, TX
Salt Lake City, UT
Pounding Mill, VA
Richmond, VA
Renton, WA
Spokane, WA
Green Bay, WI
Green Bay, WI
Hammond, WI
Milwaukee, WI

*
**

Office space only
Processing centers

Operations in Canada

Leased
Leased
Owned
Owned
Leased
Owned
Leased
Owned
Owned
Owned
Owned
Leased
Leased
Leased
Owned
Leased
Leased
Owned
Leased
Leased
Leased/Vacated
Leased
Leased
Owned
Owned
Leased
Owned
Leased
Leased
Owned

Ryerson Canada, a wholly-owned indirect Canadian subsidiary of Ryerson Holding, has nine operational facilities in Canada.

All of the metals service center facilities are in good condition and are adequate for Ryerson Canada’s existing and anticipated
operations. Four facilities are leased. The lease terms expire at various times through 2025.

Location
Calgary, AB
Edmonton, AB
Richmond, BC
Winnipeg, MB
Winnipeg, MB
Saint John, NB
Brampton, ON
Burlington, ON (includes Canadian Headquarters)
Vaudreuil, QC

Operations in China

Own/Lease
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Leased
Leased

Ryerson China, an indirect wholly owned subsidiary of Ryerson Holding, has four service and processing centers in China, in

Guangzhou, Dongguan, Kunshan, and Tianjin, performing coil processing, sheet metal fabrication, and plate processing. Ryerson

China’s headquarters office building is located in Kunshan. We own all of our China facilities and have purchased the related land use
rights. All of the facilities are in good condition and are adequate for Ryerson China’s existing and anticipated operations.

Operations in Mexico

Ryerson Mexico, an indirect wholly owned subsidiary of Ryerson Holding, has four facilities in Mexico. We have service

centers in Monterrey, Tijuana, Hermosillo, and Queretaro, all of which are leased. The facilities are in good condition and are
adequate for Ryerson Mexico’s existing and anticipated operations.

ITEM 3.

LEGAL PROCEEDINGS.

In October 2011, the United States Environmental Protection Agency (the “EPA”) named JT Ryerson as one of more than 100

The EPA has stated that it is willing to consider de minimis settlements, which JT Ryerson is trying to pursue; however, the

There are various other claims and pending actions against the Company. The amount of liability, if any, for those claims and
actions as of December 31, 2019 is not determinable but, in the opinion of management, such liability, if any, will not have a material
adverse effect on the Company’s financial position, results of operations, or cash flows. We maintain liability insurance coverage to
assist in protecting our assets from losses arising from or related to activities associated with business operations.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND

ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information for Common Stock

Our common stock has been listed on the New York Stock Exchange under the symbol “RYI” and was first traded on

August 13, 2014.

Holders

As of February 29, 2020, there were 2 stockholders of record of our common stock. Because many shares of our common stock

are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial
stockholders represented by these record holders.

Dividend Policy

We have not declared any cash dividends for the past two years. Any payment of cash dividends on our common stock in the

future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital
requirements, financial condition, future prospects, contractual restrictions, including under the Ryerson Credit Facility and our
outstanding notes, and other factors deemed relevant by our Board of Directors.

Performance Graph

The following graph and accompanying table show the cumulative total return to stockholders of Ryerson Holding’s common

stock relative to the cumulative total returns of the S&P 500 and a metals service center peer group (the “Peer Group”). The graph
tracks the performance of a $100 investment in each of the indices (with reinvestment of dividends) from December 31, 2014 to
December 31, 2019. While there is no nationally-recognized industry index consisting of metals service center companies, Ryerson
considers its Peer Group to consist of Reliance Steel & Aluminum Co. and Olympic Steel Inc., each of which has securities listed for
trading on the NASDAQ; and Russel Metals Inc., which has securities listed for trading on the Toronto Stock Exchange. The returns
of each member of the Peer Group are weighted according to that member’s stock market capitalization. The stock price performance
included in this graph is not necessarily indicative of future stock price performance.

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2019

$200.00

$180.00

$160.00

$140.00

$120.00

$100.00

$80.00

$60.00

$40.00

$20.00

12/31/2015

12/31/2016

12/31/2017

12/31/2018

12/31/2019

Ryerson Holding

S&P 500

Peer Group

This graph is not deemed to be “filed” with the U.S. Securities and Exchange Commission (“SEC”) or subject to the liabilities

of Section 18 of the Securities Exchange Act of 1934 (“the Exchange Act”), and should not be deemed to be incorporated by reference
into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act.

Ryerson Holding
S&P 500
Peer Group

12/31/14

12/31/15

12/31/16

12/31/17

12/31/18

12/31/19

$
$
$

100.00 $
100.00 $
100.00 $

47.03 $
101.38 $
87.54 $

134.44 $
113.07 $
129.53 $

104.73 $
136.56 $
142.67 $

63.85 $
131.07 $
119.66 $

119.13
169.06
190.73

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Recent Sale of Unregistered Securities and Use of Proceeds

None.

ITEM 6.

SELECTED FINANCIAL DATA.

The following table sets forth our selected historical consolidated financial information. Our selected historical Consolidated

Statements of Operations data for the years ended December 31, 2017, 2018, and 2019 and the summary historical balance sheet data
as of December 31, 2018 and 2019 have been derived from our audited consolidated financial statements included in Item 8.
“Financial Statements and Supplementary Data.” The selected historical Consolidated Statements of Operations data for the years
ended December 31, 2015 and 2016 and the summary historical balance sheet data as of December 31, 2015, 2016, and 2017 were
derived from the audited financial statements and related notes thereto, which are not included in this Form 10-K.

The following consolidated financial information should be read together with Item 7. “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the audited Consolidated Financial Statements of Ryerson Holding Corporation
and the Notes thereto included in Item 8. “Financial Statements and Supplementary Data.”

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA AND OPERATING RESULTS
(Dollars in millions, except per ton and per share data)

Statements of Operations Data:
NNet sales

Cost of materials sold

Gross profit

Warehousing, delivery, selling, general, and administrative (1)
Gain on sale of assets
Gain on insurance settlement
Restructuring and other charges
Impairment charges on assets

Operating profit

Other income and (expense), net (2)
Interest and other expense on debt (3)

Income before income taxes

Provision (benefit) for income taxes

NNet income (loss)
Less: Net income (loss) attributable to noncontrolling interest
NNet income (loss) attributable to Ryerson Holding Corporation

Earnings (loss) per share of common stock:

Basic earnings (loss) per share

Diluted earnings (loss) per share

Weighted average shares outstanding — Basic
Weighted average shares outstanding — Diluted
Balance Sheet Data (at period end):
Cash and cash equivalents
Restricted cash
Working capital
Property, plant, and equipment, net
Total assets
Long-term debt, including current maturities
Total equity (deficit)
Other Financial Data:
Cash flows provided by (used in) operations
Cash flows provided by (used in) investing activities
Cash flows provided by (used in) financing activities
Capital expenditures
Depreciation and amortization
Volume and Per Ton Data:
Tons shipped (000)
Average selling price per ton
Gross profit per ton
Operating expenses per ton
Operating profit per ton

2019

Year Ended December 31,
2017

2016

2018

2015

4,501.6
3,673.7
827.9
636.8
(20.6)
(1.5)
2.4
—
210.8
(2.4)
(93.2)
115.2
32.5
82.7
0.3
82.4

2.19

2.17

37.7
38.0

11.0
48.8
788.1
439.7
2,021.5
981.8
178.6

193.1
26.4
(183.8)
45.8
58.4

2,381
1,891
348
259
89

4,408.4
3,650.3
758.1
614.7
—
—
4.2
—
139.2
76.7
(99.2
116.7
10.3
106.4
0.4
106.0

2.84

2.81

37.3
37.7

23.2
1.1
844.1
489.0
2,086.3
1,153.3
75.9

57.4
(200.2)
92.9
38.4
52.9

2,268
1,944
334
273
61

3,364.7
2,782.2
582.5
481.4
—
—
—
—
101.1
6.6
(91.0)
16.7
(1.3)
18.0
0.9
17.1

0.46

37.2
37.3

77.4
1.1
701.2
422.9
1,711.9
1,045.7
(7.4)

(2.5) $
(70.3)
65.7
25.1
47.1

2,000
1,682
291
241
50

2,859.7
2,289.1
570.6
447.5
—
—
1.0
—
122.1
(6.1)
(89.9)
26.1
7.2
18.9
0.2
18.7

0.55

0.54

34.3
34.4

80.7
1.0
665.4
388.2
1,558.7
963.5
(49.3)

24.8
(19.8)
11.4
23.0
42.5

1,903
1,503
300
236
64

3,167.2
2,599.5
567.7
451.9
(1.9)
—
2.5
7.7
107.5
(9.3)
(96.3)
1.9
3.7
(1.8)
(1.3)
(0.5)

(0.02)

32.1
32.1

63.2
1.2
643.0
400.3
1,545.2
1,023.5
(140.9)

258.9
(18.0)
(232.0)
22.3
43.7

1,897
1,670
299
243
56

(1)
that were adopted at the end of the year which altered the timing of accrual recognition.

The year ended December 31, 2019 includes a reduction of $11.0 million of accrued vacation expense resulting from changes to our vacation policy

The year ended December 31, 2018 includes a $70.0 million gain on bargain purchase related to our Central Steel and Wire Company acquisition.

(2)
The year ended December 31, 2017 includes an other-than-temporary impairment charge of $0.2 million related to an equity investment. The year ended
December 31, 2016 includes an other-than-temporary impairment charge of $4.7 million related to an equity investment and a $8.7 million loss on the
retirement of debt related to the purchases and retirement of our 9.0% Senior Notes due 2017 (the “2017 Notes”) and 11.25% Senior Notes due 2018 (the
“2018 Notes”). The year ended December 31, 2015 includes an other-than-temporary impairment charge of $12.3 million related to an equity investment and
a $0.3 million gain on the retirement of debt related to the purchases of a portion of our 2017 Notes and 2018 Notes.

The year ended December 31, 2019 includes a $0.1 million write off of debt issuance costs related to the repurchase of the 2022 Notes. The year
(3)
ended December 31, 2018 includes a $0.5 million write off of debt issuance costs related to the repurchase of the 2022 Notes. The year ended December 31,
2015 includes a $2.9 million write off of debt issuance costs associated with our prior credit facility upon entering into a new revolving credit facility on July
24, 2015.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS.

The following discussion and analysis should be read in conjunction with Item 6. “Selected Financial Data” and the audited

Consolidated Financial Statements of Ryerson Holding Corporation and Subsidiaries and the Notes thereto in Item 8. “Financial
Statements and Supplementary Data.” This discussion contains forward-looking statements that involve risks and uncertainties. See
the section entitled “Special Note Regarding Forward-Looking Statements.” Our actual results and the timing of selected events could
differ materially from those discussed in these forward-looking statements as a result of certain factors, including those discussed in
Item 1A. “Risk Factors” and elsewhere in this Form 10-K.

This section of this Form 10-K generally discusses 2019 and 2018 items and year-over-year comparisons between 2019 and

2018. Discussions of 2017 items and year-over-year comparisons between 2018 and 2017 that are not included in this Form 10-K can
be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Business

Overview

We are a leading metals service center, value-added processor, and distributor of industrial metals with operations in the United

States through JT Ryerson, in Canada through our indirect wholly-owned subsidiary Ryerson Canada, Inc., a Canadian corporation
(“Ryerson Canada”), and in Mexico through our indirect wholly-owned subsidiary Ryerson Metals de Mexico, S. de R.L. de C.V., a
Mexican corporation (“Ryerson Mexico”). In addition to our North American operations, we also operate in China through an indirect
wholly-owned subsidiary, Ryerson China Limited (“Ryerson China”). Unless the context indicates otherwise, Ryerson Holding,
JT Ryerson, Ryerson Canada, Ryerson China, and Ryerson Mexico, together with their subsidiaries, are collectively referred to herein
as “Ryerson,” “we,” “us,” “our,” or the “Company.”

Industry and Operating Trends

We are a metals service center providing value-added processing and distribution of industrial metals with operations in the
United States, Canada, Mexico, and China. We purchase large quantities of metal products from primary producers and sell these
materials in smaller quantities to a wide variety of metals-consuming industries. More than 75% of the metals products sold are
processed by us by bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding,
laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping,
tapping, threading, welding, or other techniques to process materials to a specified thickness, length, width, shape, and surface quality
pursuant to specific customer orders.

Similar to other metals service centers, we maintain substantial inventories of metals to accommodate the short lead times and

just-in-time delivery requirements of our customers. Accordingly, we purchase metals to maintain our inventory at levels that we
believe to be appropriate to satisfy the anticipated needs of our customers based upon customer forecasts, historic buying practices,
supply agreements with customers, mill lead times, and market conditions. Our commitments to purchase metals are generally at
prevailing market prices in effect at the time we place our orders. At the request of our customers, we have entered into swaps in order
to mitigate our customers’ risk of volatility in the price of metals and we have entered into metals hedges to mitigate our own risk of
volatility in the price of metals. We have no long-term, fixed-price metals purchase contracts. When metals prices decline, customer
demands for lower prices and our competitors’ responses to those demands could result in lower sale prices and, consequently, lower
gross profits and earnings as we sell existing metals inventory. When metals prices increase, competitive conditions will influence
how much of the price increase we may pass on to our customers.

The metals service center industry is cyclical and volatile in both demand and pricing, and difficult to predict. In 2019, when

excluding Central Steel and Wire Company (“CS&W”) which was acquired on July 2, 2018, we saw recessed demand when viewed
against the year ago period. According to the Metal Service Center Institute, U.S. service center volumes decreased by more than
seven percent compared to the year-ago period. In 2019, we experienced year-over-year growth in shipment volumes in several end
markets, most notably in the metal fabrication and machine shop and food and agricultural equipment sectors. We saw year-over-year
shipment declines only in the oil & gas and consumer durable sectors.

Overall, commodity prices for carbon and aluminum products trended lower in 2019, while nickel prices increased due to supply

constraint induced by the Indonesian export ban. By the end of 2019, CRU hot-rolled carbon steel prices declined 27% and Midwest
aluminum prices declined 11%, while the London Metal Exchange Nickel Cash Average increased by 27% compared to the end of
2018. Decreased commodity prices resulted in a per ton pricing decrease of 2.7% in 2019 compared to 2018, which, after excluding
LIFO income or expense, resulted in lower gross margins in 2019.

Industry Developments

On March 1, 2018, the White House announced a 25% tariff on all imported steel products and 10% tariff on all imported
aluminum products for an indefinite amount of time under Section 232 of the Trade Expansion Act. Subsequently, the White House
announced steel quotas, in lieu of tariffs, with South Korea. On May 1, 2018, the White House further announced agreements-in-
principle with Argentina, Australia, and Brazil for permanent exemptions from the tariffs in exchange for export quotas or voluntary
export restraints, with the exception of Australia which has not agreed to quotas at the time of this release. In August 2018, steel tariffs
were increased to 50% for Turkey intended to offset the weakening Turkish Lira.

Further trade actions announced by the U.S. under Section 301 of the Trade Act of 1974 imposed various levels of tariffs and

duties on imported Chinese goods with China reciprocating in kind on American goods.

On January 15, 2020, the United States and China signed a phase one trade agreement in which the U.S. agreed not to proceed

with tariffs that had been scheduled to take effect December 15, 2019 and cut Section 301 duties related to tariffs imposed on
September 1, 2019 on $120 billion in Chinese goods in half, from 15% to 7.5%, effective February 14, 2020. In return, China has
agreed to increase its purchases of U.S. manufactured goods, agricultural products, energy, and services by a total of $200 billion over
2017 levels in the two years through December 2021. However, negotiations with China are ongoing and the U.S. will maintain 25%
tariffs on another $250 billion of Chinese products while China maintains retaliatory tariffs on some U.S. goods.

On January 29, 2020, President Trump signed the U.S.-Mexico-Canada-Agreement (“USMCA”), which is designed to replace

the North American Free Trade Agreement. Once approved by the Canadian parliament, the USMCA would be implemented. Ryerson
expects that passage of the USMCA will support demand for North American steel through strengthening of rules of origin for steel-
intensive goods as well as continue to provide tariff-free trade access in North American markets.

Acquisitions

On April 2, 2018, we acquired Fanello Industries (“Fanello”), a privately-owned metal service company located in Lavonia,
Georgia. Fanello is a processor and service provider that supplies blanking, stamping, laser cutting, bending, and machining metal
solutions to a diverse group of industries in the Southeastern United States.

On July 2, 2018, JT Ryerson acquired CS&W. CS&W is a leading metal service center with locations across the Central and

Eastern United States offering a wide selection of products and capabilities, with a commercial portfolio centered on bar, tube, plate,
and steel products. Our combined commercial, operational, and processing strengths will provide a broader and deeper array of
products to our customers in the Midwest and Northeast United States. The fair value of the consideration totaled $163.5 million.
Included in the 2019 financial results is $576.3 million of revenue and a net loss of $13.1 million. Included in the 2018 financial
results is $347.5 million of revenue and $58.3 million, including a $70.0 million bargain purchase gain, of net income from CS&W
since the acquisition date. Please refer to Note 2 — “Acquisitions” of Part II, Item 8 "Financial Statements and Supplementary Data"
for further information on our 2018 acquisition of CS&W. While the integration progressed in 2019 with approximately $35 million
achieved in annualized expense take-outs and $12 million realized in cumulative proceeds from real estate sales for operations that
were consolidated into existing facilities, this was masked by hot-rolled coil price deflation, which incurred out-sized inventory
holding losses at CS&W compared to the legacy service centers due to CS&W’s eighty-five percent carbon steel product mix, which
effectively amplified the persistent and acute gross margin compression.

Components of Results of Operations

We generate substantially all of our revenue from sales of our metals products. The majority of revenue is recognized upon
delivery of product to customers. The timing of shipment is substantially the same as the timing of delivery to customers given the
proximity of our distribution sites to our customers. Revenues associated with products which we believe have no alternative use, and
where the Company has an enforceable right to payment, are recognized on an over-time basis. Over-time revenues are recorded in
proportion with the progress made toward completing the performance obligation.

Sales, cost of materials sold, gross profit, and operating expense control are the principal factors that impact our profitability:

Net Sales. Our sales volume and pricing are driven by market demand, which is largely determined by overall industrial

production and conditions in specific industries in which our customers operate. Sales prices are also primarily driven by market
factors such as overall demand and availability of product. Our net sales include revenue from product sales, net of returns,
allowances, customer discounts, and incentives.

Cost of materials sold. Cost of materials sold includes metal purchase and in-bound freight costs, third-party processing costs,

and direct and indirect internal processing costs. The cost of materials sold fluctuates with our sales volume and our ability to purchase
metals at competitive prices. Increases in sales volume generally enable us both to improve purchasing leverage with suppliers, as we
buy larger quantities of metals inventories.

Gross profit. Gross profit is the difference between net sales and the cost of materials sold. Our sales prices to our customers are
subject to market competition. Achieving acceptable levels of gross profit is dependent on our acquiring metals at competitive prices,
our ability to manage the impact of changing prices, and efficiently managing our internal and external processing costs.

Operating expenses. Optimizing business processes and asset utilization to lower fixed expenses such as employee, facility, and

truck fleet costs, which cannot be rapidly reduced in times of declining volume, and maintaining low fixed cost structure in times of
increasing sales volume, have a significant impact on our profitability. Operating expenses include costs related to warehousing and
distributing our products as well as selling, general, and administrative expenses.

The following table sets forth our condensed consolidated statements of income data:

Results of Operations

% of Net
Sales

Year Ended
December 31,
2018
4,408.4
3,650.3
758.1

% of Net
Sales

Year Ended
December 31,
2017
3,364.7
2,782.2
582.5

100.0% $
82.8
17.2

100.0% $
81.6
18.4

14.1
(0.5)
—
0.1
4.7
(2.1)
2.6
0.8
1.8
—

1.8% $
$
$

614.7
—
—
4.2
139.2
(22.5)
116.7
10.3
106.4
0.4

106.0
2.84
2.81

13.9
—
—
0.1
3.2
(0.6)
2.6
0.2
2.4
—

2.4% $
$
$

481.4
—
—
—
101.1
(84.4)
16.7
(1.3)
18.0
0.9

17.1
0.46
0.46

% of Net
Sales

100.0%
82.7
17.3

14.3
—
—
—
3.0
(2.5)
0.5
—
0.5
—

0.5%

NNet sales
Cost of materials sold
Gross profit
Warehousing, delivery, selling, general, and
administrative expenses
Gain on sale of assets
Gain on insurance settlement
Restructuring and other charges
Operating profit
Other expenses
Income before income taxes
Provision (benefit) for income taxes
NNet income
Less: Net income attributable to noncontrolling interest
NNet income attributable to Ryerson Holding
Corporation
Basic earnings per share
Diluted earnings per share

Year Ended
December 31,
2019
4,501.6
3,673.7
827.9

636.8
(20.6)
(1.5)
2.4
210.8
(95.6)
115.2
32.5
82.7
0.3

82.4
2.19
2.17

$
$
$

The following table shows the Company’s percentage of sales by major product line:

Product Line
Carbon Steel Flat
Carbon Steel Plate
Carbon Steel Long
Stainless Steel Flat
Stainless Steel Plate
Stainless Steel Long
Aluminum Flat
Aluminum Plate
Aluminum Long
Other

Total

2019

2018

2017

26%
11
16
15
4
4
15
2
5
2
100%

27%
11
14
16
4
4
15
3
4
2
100%

28%
10
12
18
4
4
15
3
4
2
100%

Comparison of the year ended December 31, 2019 with the year ended December 31, 2018

Net Sales

NNet sales
NNet sales, same-store

Tons sold
Tons sold, same-store

Average selling price per ton sold
Average selling price per ton sold, same-
store

Year Ended December 31,

4,501.6
3,925.3

$
$

Year Ended December 31,

2019

2,381
2,042

2018
($ in millions)
4,408.4
4,060.9

2018
(in thousands)
2,268
2,081

Dollar
change

Percentage
change

$
$

93.2
(135.6)

2.1%
(3.3)%

Tons
change

Percentage
change

113
(39)

5.0%
(1.9)%

Year Ended December 31,

2019

2018

Price
change

Percentage
change

1,891

1,922

1,944

1,951

(53)

(29)

(2.7)%

(1.5)%

$
$

Revenue for the year ended December 31, 2019 increased from the same period a year ago due to the acquisition of CS&W on

July 2, 2018. Excluding CS&W (same-store results), tons sold and average selling price per ton decreased in 2019 reflecting
weakening economic conditions in the metals market. Same-store tons sold decreased in 2019 for most of our product lines with thet
largest decreases in our aluminum plate, carbon plate, and stainless flat products. Prices decreased for most of our product lines in
2019 compared to 2018 as metal producers expanded supply in response to market price increases in 2018. Excluding CS&W, the
largest decreases in 2019 in average selling price per ton were in our carbon flat and stainless plate product lines, partially offset by
increases in the average selling price per ton of our aluminum plate and aluminum flat product lines. Tons sold per ship day were
9,448 in 2019 as compared to 9,000 in 2018. Excluding CS&W, tons sold per ship day were 8,103 and 8,258 in 2019 and 2018,
respectively.

Cost of Materials Sold

Cost of materials sold

$ 3,673.7

81.6% $ 3,650.3

82.8% $

23.4

0.6%

Year Ended December 31,

2019

% of Net
Sales

2018

% of Net
Sales

Dollar
change

Percentage
change

($ in millions)

Average cost of materials per ton sold

Year Ended December 31,

2019

2018

Dollar

change

Percentage

change

1,543

1,610

(67)

(4.2)%

The increase in cost of materials sold in 2019 compared to 2018 was primarily due to the increase in tons sold resulting from thet

acquisition of CS&W partially offset by a decrease in the average cost of materials sold per ton. The average cost of materials sold
decreased during 2019 for our carbon flat, carbon plate, and stainless plate product lines, offset by increases in the average cost of
materials sold for our aluminum flat and aluminum plate products lines.

During 2019, LIFO income was $69 million related to decreases in pricing for all product lines. During 2018, LIFO expense

was $90 million related to increases in pricing for all product lines.

Gross Profit

Year Ended December 31,

2019

% of Net
Sales

2018

% of Net
Sales

Dollar change

Percentage
change

($ in millions)

Gross profit

827.9

18.4% $

758.1

17.2% $

69.8

9.2%

Gross profit dollars increased in 2019 compared to 2018 due to the increase in tons sold due to the acquisition of CS&W. While

our revenue per ton decreased during 2019, our cost of materials sold decreased at a faster pace resulting in higher gross margins
compared to the prior year.

Operating Expenses

Year Ended December 31,

2019

% of Net
Sales

2018

% of Net
Sales

$
($ in millions)

Dollar
change

Percentage
change

Warehousing, delivery, selling, general, and administrative
expenses
Warehousing, delivery, selling, general, and administrative
expenses, same-store
Gain on sale of assets
Gain on insurance settlement
Restructuring and other charges

$ 636.8

14.1% $ 614.7

13.9% $

22.1

3.6%

$ 517.3
$ (20.6)
(1.5)
$
2.4
$

13.2% $ 548.4
(0.5)% $ —
— $ —
4.2
0.1% $

13.5% $ (31.1)
— $ (20.6)
(1.5)
— $
(1.8)
0.1% $

(5.7)%
—
—
(42.9)%

Total operating expenses in 2019 were $1.8 million lower than in 2018. The inclusion of a full year of CS&W expenses after the

acquisition of CS&W on July 2, 2018 increased operating expenses $50.7 million. Excluding CS&W, operating expenses decreased
$52.5 million in 2019 primarily due to lower incentive compensation expense of $33.0 million, a gain on the sale of assets in 2019 of
$20.6 million related to a sale and leaseback transaction for nine of our service center real estate assets, and a reduction of $11.0
million in accrued vacation expense after changes to our vacation policy were adopted in 2019 such that vacation is accrued as it is
earned instead of in advance of work performed as under the prior policy. In addition, expenses were impacted by changes in the
following categories:

•

higher facility expenses, primarily depreciation and rent expense, of $5.9 million;

higher consultant fees of $5.7 million;

a restructuring charge of $2.4 million in 2019 compared to a charge of $4.2 million in 2018. Charges in both periods
included severance costs for corporate staff reductions while the 2018 charge also included costs for two facility closures;
and

a gain on an insurance settlement in 2019 of $1.5 million.

On a per ton basis, operating expenses decreased to $259 per ton in 2019 from $273 per ton in 2018.

Operating Profit

Year Ended December 31,

2019

% of Net
Sales

2018

% of Net
Sales

Dollar change

Percentage
change

($ in millions)

Operating profit

210.8

4.7% $

139.2

3.2% $

71.6

51.4%

Our operating profit increased in 2019 compared to 2018 primarily due to the increase in tons sold and gross margin discussed

above.

Other Expenses

Year Ended December 31,

2019

% of Net
Sales

2018

% of Net
Sales

Dollar
change

Percentage
change

($ in millions)

Interest and other expense on debt
Other income and (expense), net

(93.2)
(2.4)

(2.1)% $

—

(99.2)
76.7

(2.3)% $
1.7

6.0
(79.1)

(6.0)%

(103.1)

Interest and other expense on debt decreased in 2019 compared to 2018, primarily due to a $62.1 million decrease in the
outstanding amount of our 11.00% Notes due in 2022 (the “2022 Notes”) which were repurchased in the fourth quarter of 2018 and
the first quarter of 2019, and from a lower level of credit facility borrowings outstanding in 2019 compared to 2018 due to lower
working capital requirements resulting from a slowing metals market. The other expense in 2019 included $1.1 million of foreign
currency losses, $1.0 million of expense from net periodic benefit cost other than service cost, and a $0.2 million loss on the
redemption of debt. The other income in 2018 includes a $70.0 million gain on the bargain purchase of CS&W, a $6.2 million credit
from net periodic benefit cost other than service cost, and $2.5 million of foreign currency gains, partially offset by a $1.7 million loss
on the redemption of debt.

Provision for Income Taxes

The $32.5 million income tax provision in 2019 primarily represents taxes at federal and local statutory rates where the
Company operates, but generally excludes any tax benefit for losses in jurisdictions with historical losses. During 2019, the Company
recorded benefits of $0.4 million to reduce valuation allowances previously recorded against certain foreign deferred tax assets.

The $10.3 million income tax provision in 2018 primarily represents taxes at federal and local statutory rates where the
Company operates, but generally excludes any tax benefit for losses in jurisdictions with historical losses. During 2018, the Company
recorded benefits of $1.3 million and $3.6 million to reduce valuation allowances previously recorded against certain foreign deferred
tax assets and state net operating losses, respectively. This benefit was offset by additional tax expense of $1.5 million from them
revaluation of deferred tax assets and liabilities at our new state tax rates resulting from our acquisition of CS&W.

Noncontrolling Interest

In both 2019 and 2018, Ryerson China’s results of operations was income and the portion attributable to the noncontrolling

interest was $0.3 million and $0.4 million, respectively.

Earnings Per Share

Basic earnings per share was $2.19 in 2019 and $2.84 in 2018. Diluted earnings per share was $2.17 in 2019 and $2.81 in 2018.

The changes in earnings per share are due to the results of operations discussed above.

Liquidity and Capital Resources

The Company’s primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowing
availability under the $1.0 billion revolving credit facility (the “Ryerson Credit Facility”) that matures on November 16, 2021. Its
principal source of operating cash is from the sale of metals and other materials. Its principal uses of cash are for payments associated
with the procurement and processing of metals and other materials inventories, costs incurred for the warehousing and delivery of
inventories and the selling and administrative costs of the business, capital expenditures, and for interest payments on debt.

The following table summarizes the Company’s cash flows:

2019

Year Ended December 31,
2018
(In millions)

2017

NNet cash provided by (used in) operating activities
NNet cash provided by (used in) investing activities
NNet cash provided by (used in) financing activities
Effect of exchange rates on cash
NNet increase (decrease) in cash, cash equivalents, and restricted cash

193.1
26.4
(183.8)
(0.2)
35.5

57.4
(200.2)
92.9
(4.3)
(54.2) $

(2.5)
(70.3)
65.7
3.9
(3.2)

The Company had cash and cash equivalents at December 31, 2019 of $11.0 million, compared to $23.2 million at

December 31, 2018, and $77.4 million at December 31, 2017. The Company had $982 million, $1,153 million, and $1,046 million of
total debt outstanding, a debt-to-capitalization ratio of 85%, 94%, and 101%, and $348 million, $392 million, and $264 million
available under the Ryerson Credit Facility at December 31, 2019, 2018, and 2017, respectively. The Company had total liquidity
(defined as cash and cash equivalents, restricted cash from sales of property, plant, and equipment, marketable securities, and
availability under the Ryerson Credit Facility and foreign debt facilities) of $439 million, $441 million, and $338 million at
December 31, 2019, 2018, and 2017, respectively. Total liquidity is not a U.S. generally accepted accounting principles (“GAAP”)
financial measure. We believe that total liquidity provides additional information for measuring our ability to fund our operations.
Total liquidity does not represent, and should not be used as a substitute for, net income or cash flows from operations as determined
in accordance with GAAP and total liquidity is not necessarily an indication of whether cash flow will be sufficient to fund our cash
requirements.

Below is a reconciliation of cash and cash equivalents to total liquidity:

Cash and cash equivalents
Less: Qualified cash pledged as collateral
Restricted cash from sales of property, plant, and equipment
Availability under Ryerson Credit Facility and foreign debt facilities

Total liquidity

11
—
48
380
439

23
—
—
418
441

77
(28)
—
289
338

December 31, 2019

December 31, 2018
(In millions)

December 31, 2017

Of the total cash and cash equivalents as of December 31, 2019, $6 million was held in subsidiaries outside the United States

which is deemed to be permanently reinvested. Ryerson does not currently foresee a need to repatriate funds from its non-U.S.
subsidiaries. Although the Company has historically satisfied needs for more capital in the U.S. through debt or equity issuances, it
could elect to repatriate funds held in foreign jurisdictions which could result in higher effective tax rates. The Company has not
recorded a deferred tax liability for the effect of a possible repatriation of these assets as management intends to permanently reinvest
these assets outside of the U.S. Specific plans for reinvestment include funding for future international acquisitions and funding of
existing international operations.

Net cash provided by operating activities was $193.1 million in 2019 compared to net cash provided by operating activities of

$57.4 million in 2018, and net cash used in operating activities of $2.5 million in 2017. Net income was $82.7 million, $106.4 million,
and $18.0 million in 2019, 2018, and 2017, respectively. Cash provided by operating activities of $193.1 million during the year ended
December 31, 2019 was primarily due to the net income of $82.7 million, a decrease in accounts receivable of $92.5 million resulting
from lower sales levels at year-end 2019 compared to year-end 2018, a decrease in inventory of $65.9 million as we reduced inventory
levels as metal pricing weakened during the year, and non-cash depreciation and amortization expense of $58.4 million, partially
offset by a decrease in accounts payable of $78.2 million reflecting a lower cost of materials purchased at year-end 2019 compared to
year-end 2018, and pension contributions of $25.7 million. Cash provided by operating activities of $57.4 million during the year
ended December 31, 2018 was primarily due to an increase in accounts payable of $58.4 million reflecting a higher cost of materials
purchased at year-end 2018 compared to year-end 2017, and non-cash depreciation and amortization expense of $52.9 million,
partially offset by a non-cash gain on the bargain purchase of CS&W of $70.0 million, an increase in accounts receivable of $64.8
million resulting from higher sales levels at year-end 2018 compared to year-end 2017, and pension contributions of $27.0 million.
Cash used in operating activities of $2.5 million during the year ended December 31, 2017 was primarily due to an increase in
accounts receivable $44.0 million resulting from higher sales levels at year-end 2017 compared to year-end 2016, an increase in
inventory of $42.9 million reflecting higher costs of materials purchased at year-end 2017 compared to year-end 2016, pension
contributions of $21.7 million, an increase in deferred income taxes of $9.2 million, and the payment of $7.9 million of retiree medical
costs, partially offset by an increase in accounts payable of $58.1 million reflecting a higher cost of materials purchased at year-end
2017 compared to year-end 2016, non-cash depreciation and amortization expense of $47.1 million and net income of $18.0 million.

Net cash provided by investing activities was $26.4 million in 2019, and net cash used in investing activities was $200.2 million
and $70.3 million in 2018 and 2017, respectively. In December 2019, we sold and leased back a group of properties for net proceeds
of approximately $61.5 million. During 2018, we paid $169.7 million, net of cash acquired, to purchase CS&W and Fanello
Industries. During 2017, the Company paid $49.2 million, net of cash acquired, to acquire all of the issued and outstanding capital
stock of The Laserflex Corporation and Guy Metals, Inc. Capital expenditures for the years ended December 31, 2019, 2018, and
2017, were $45.8 million, $38.4 million, and $25.1 million, respectively. The Company sold property, plant, and equipment, including
the properties sold and leased back in 2019 noted above, and assets held for sale, generating cash proceeds of $70.4 million, $5.9
million, and $3.8 million during the years ended December 31, 2019, 2018, and 2017, respectively.

Net cash used in financing activities was $183.8 million for the year ended December 31, 2019. In 2019, net cash used in

financing activities was primarily due to a decrease in credit facility borrowings of $164.6 million resulting from working capital
reductions, the net income generated in 2019, and the proceeds from assets sales, partially offset by capital expenditures. In addition,
cash was used in 2019 to make $13.6 million of principle payments under finance lease obligations, and repurchase $11.8 million of
the 2022 Notes, while proceeds of $8.3 million were provided by failed sale-leaseback transactions. Net cash provided by financing
activities was $92.9 million for the year ended December 31, 2018. In 2018, net cash provided by financing activities was primarily
due to an increase in credit facility borrowings of $149.9 million, largely to finance the acquisitions of CS&W and Fanello Industries,
an increase in book overdrafts of $6.3 million, and proceeds of $4.5 million from failed sale-leaseback transactions, partially offset by
a $52.2 million repurchase of the 2022 Notes, and $13.7 million of principal payments under finance lease obligations. Net cash
provided by financing activities was $65.7 million for the year ended December 31, 2017. In 2017, net cash provided by financing
activities was primarily related to net proceeds of $74.3 million from credit facility borrowings and proceeds of $24.9 million from
failed sale leaseback transactions, partially offset by a $18.0 million net decrease in book overdrafts, and $14.4 million of principle
payments under finance lease obligations.

As market conditions warrant and subject to our contractual restrictions, liquidity position, and other factors, we may from time
to time seek to repurchase or retire our outstanding debt through cash purchases and/or exchanges for other debt or equity securities in
open market transactions, privately negotiated transactions, by tender offer, or otherwise. Any such cash repurchases by us may be
funded by cash on hand or incurring new debt. The amounts involved in any such transactions, individually or in the aggregate, may
be material. Furthermore, any such repurchases or exchanges may result in our acquiring and retiring a substantial amount of such
indebtedness, which would impact the trading liquidity of such indebtedness.

Total Debt

Total debt at December 31, 2019 decreased $171.5 million to $981.8 million from $1,153.3 million at December 31, 2018 as a

result of bond repurchases and net cash provided by operating activities.

Total debt outstanding as of December 31, 2019 consisted of the following amounts: $377.7 million borrowing under the
Ryerson Credit Facility, $587.9 million under the 2022 Notes, $13.2 million of foreign debt, and $9.5 million of other debt, less $6.5
million of unamortized debt issuance costs. Availability under the Ryerson Credit Facility was $348 million and $392 million at
December 31, 2019 and December 31, 2018, respectively. Discussion of our outstanding debt follows.

Ryerson Credit Facility

On November 16, 2016, Ryerson entered into an amendment with respect to its $1.0 billion revolving credit facility (as

amended, the “Old Credit Facility”), to reduce the total facility size from $1.0 billion to $750 million, reduce the interest rate on
outstanding borrowings by 25 basis points, reduce commitment fees on amounts not borrowed by 2.5 basis points, and to extend the
maturity date to November 16, 2021. The Old Credit Facility was amended a second time on June 28, 2018, to increase the facility
size from $750 million to $1.0 billion. On September 23, 2019, a third amendment was entered into to supplement the facility and add
a U.S. “first-in, last-out” sub-facility of $67.9 million (the “FILO Facility”). The FILO facility is equal in subordination with the other
borrowings under the Ryerson Credit Facility and has a maturity date of June 30, 2020. The FILO facility supplements our borrowing
capacity by providing additional collateral on eligible accounts receivable and inventory. The aggregate facility size of $1.0 billion
remains unchanged.

At December 31, 2019, Ryerson had $377.7 million of outstanding borrowings, including $34.3 million under the FILO Facility,

$11 million of letters of credit issued, and $348 million available under the Ryerson Credit Facility compared to $535.9 million of
outstanding borrowings, $12 million of letters of credit issued, and $392 million available at December 31, 2018. Total credit
availability is limited by the amount of eligible accounts receivable, inventory, and qualified cash pledged as collateral under the
agreement insofar as Ryerson is subject to a borrowing base comprised of the aggregate of these three amounts, less applicable
reserves. Eligible accounts receivable, at any date of determination, is comprised of the aggregate value of all accounts directly created
by a borrower (and in the case of Canadian accounts, the Canadian borrower) in the ordinary course of business arising out of the sale
of goods or the rendering of services, each of which has been invoiced, with such receivables adjusted to exclude various ineligible
accounts, including, among other things, those to which a borrower (or guarantor, as applicable) does not have sole and absolute title
and accounts arising out of a sale to an employee, officer, director, or affiliate of a borrower (or guarantor, as applicable). Eligible
inventory, at any date of determination, is comprised of the net orderly liquidation value of all inventory owned by a borrower (and in
the case of Canadian accounts, the Canadian borrower). Qualified cash consists of cash in an eligible deposit account that is subject to
customary restrictions and liens in favor of the lenders.

The Ryerson Credit Facility has an allocation of $940 million to the Company’s subsidiaries in the United States and an

allocation of $60 million to Ryerson Holding’s Canadian subsidiary that is a borrower. Amounts outstanding under the Ryerson Credit
Facility bear interest at (i) a rate determined by reference to (A) the base rate (the highest of the Federal Funds Rate plus 0.50%, Bank
of America, N.A.’s prime rate, and the one-month LIBOR rate plus 1.00%), or (B) a LIBOR rate or, (ii) for Ryerson Holding’s
Canadian subsidiary that is a borrower, (A) a rate determined by reference to the Canadian base rate (the greatest of the Federal Funds
Rate plus 0.50%, Bank of America-Canada Branch’s “base rate” for commercial loans in U.S. Dollars made at its “base rate”, and the
30 day LIBOR rate plus 1.00%), (B) the prime rate (the greater of Bank of America-Canada Branch’s “prime rate” for commercial
loans made by it in Canada in Canadian Dollars and the one-month Canadian bankers’ acceptance rate plus 1.00%), or (C) the
bankers’ acceptance rate. The spread over the base rate and prime rate is between 0.25% and 0.50% and the spread over the LIBOR
for the bankers’ acceptances is between 1.25% and 1.50%, depending on the amount available to be borrowed under the Ryerson
Credit Facility. Amounts outstanding under the FILO Facility bear interest at the same rates as listed above for U.S. borrowings,
however the spread over the base rate is between 1.25% and 1.50% and the spread over the LIBOR rate is between 2.25% and 2.50%,
depending on the amount available to be borrowed under the Ryerson Credit Facility. Ryerson also pays commitment fees on amounts
not borrowed at a rate of 0.23%. Overdue amounts and all amounts owed during the existence of a default bear interest at 2% above
the rate otherwise applicable thereto. Loans advanced under the FILO Facility may only be prepaid if all then outstanding revolving
loans are repaid in full.

We attempt to minimize interest rate risk exposure through the utilization of interest rate swaps, which are derivative financial

instruments. In March 2017, we entered into an interest rate swap to fix interest on $150 million of our floating rate debt under the
Ryerson Credit Facility at a rate of 1.658% through March 2020. In June 2019, we entered into a second interest rate swap to fix
interest on $60 million of our floating rate debt under the Ryerson Credit Facility at a rate of 1.729% through June 2022. In November
2019, we entered into a third interest rate swap to fix interest on $100 million of our floating rate debt under the Ryerson Credit
Facility at a rate of 1.539% through November 2022. All of the swaps have reset dates and critical terms that match our existing debt
and the anticipated critical terms of future debt. The weighted average interest rate on the outstanding borrowings under the Ryerson
Credit Facility including the interest rate swap was 3.2% and 3.5% at December 31, 2019 and 2018, respectively.

Borrowings under the Ryerson Credit Facility are secured by first-priority liens on all of the inventory, accounts receivables,

lockbox accounts, and related assets of the borrowers and the guarantors.

The Ryerson Credit Facility also contains covenants that, among other things, restrict Ryerson Holding and its restricted
subsidiaries with respect to the incurrence of debt, the creation of liens, transactions with affiliates, mergers and consolidations, sales
of assets, and acquisitions. The Ryerson Credit Facility also requires that, if availability under the Ryerson Credit Facility declines to a
certain level, Ryerson maintain a minimum fixed charge coverage ratio as of the end of each fiscal quarter, and includes defaults upon
(among other things) the occurrence of a change of control of Ryerson and a cross-default to other financing arrangements.

The Ryerson Credit Facility contains events of default with respect to, among other things, default in the payment of principal

when due or the payment of interest, fees, and other amounts due thereunder after a specified grace period, material
misrepresentations, failure to perform certain specified covenants, certain bankruptcy events, the invalidity of certain security
agreements or guarantees, material judgments, and the occurrence of a change of control of Ryerson. If such an event of default
occurs, the lenders under the Ryerson Credit Facility will be entitled to various remedies, including acceleration of amounts
outstanding under the Ryerson Credit Facility and all other actions permitted to be taken by secured creditors.

The lenders under the Ryerson Credit Facility could reject a borrowing request if any event, circumstance, or development has

occurred that has had or could reasonably be expected to have a material adverse effect on the Company. If Ryerson Holding, JT
Ryerson, any of the other borrowers, or any restricted subsidiaries of JT Ryerson becomes insolvent or commences bankruptcy
proceedings, all amounts borrowed under the Ryerson Credit Facility will become immediately due and payable.

Net proceeds of short-term borrowings that are reflected in the Consolidated Statements of Cash Flows represent borrowings
Net proceeds of short-term borrowings that are reflected in the Consolidated Statements of Cash Flows represent borrowings

under the Ryerson Credit Facility with original maturities less than three months
.

2022 Notes

On May 24, 2016, JT Ryerson issued $650 million in aggregate principal amount of the 2022 Notes (the “2022 Notes”). The

2022 Notes bear interest at a rate of 11.00% per annum. The 2022 Notes are fully and unconditionally guaranteed on a senior secured
basis by all of our existing and future domestic subsidiaries that are co-borrowers or that have guarantee obligations under the Ryerson
Credit Facility.

The 2022 Notes and the related guarantees are secured by a first-priority security interest in substantially all of JT Ryerson’

s and
d
each guarantor’s present and future assets located in the United States (other than receivables, inventory, cash, deposit accounts and
d
related general intangibles, certain other assets, and proceeds thereof), subject to certain exceptions and customary permitted liens.
The 2022 Notes and the related guarantees are also secured on a second-priority basis by a lien on the assets that secure JT Ryerson’s
and the Company’s obligations under the Ryerson Credit Facility.

The 2022 Notes are redeemable at the following redemption prices: if redeemed prior to May 15, 2020, 105.50%, and if
f
redeemed during the twelve months beginning May 15, 2020, 102.75%, and May 15, 2021 and thereafter, 100.00%. JT Ryerson may
be required to make an offer to purchase the 2022 Notes upon the sale of assets or upon a change of control.
be required to make an offer to purchase the 2022 Notes upon the sale of assets or upon a change of control.

The 2022 Notes contain customary covenants that, among other things, limit, subject to certain exceptions, our ability, and the

During 2019, a principal amount of $11.6 million of the 2022 Notes were repurchased for $11.8 million and retired, resulting in

the recognition of a $0.2 million loss within other income and (expense), net on the Consolidated Statement of Operations.

During 2018, a principal amount of $50.5 million of the 2022 Notes were repurchased for $52.2 million and retired, resulting in

the recognition of a $1.7 million loss within other income and (expense), net on the Consolidated Statement of Operations.

Foreign Debt

At December 31, 2019, Ryerson China’s total foreign borrowings were $13.2 million, which were owed to banks in Asia at a

weighted average interest rate of 4.3% per annum and secured by inventory and property, plant, and equipment. At December 31,
2018, Ryerson China’s total foreign borrowings were $19.5 million, which were owed to banks in Asia at a weighted average interest
rate of 4.3% per annum and secured by inventory and property, plant, and equipment.

Availability under Ryerson China’s credit facility was $32 million and $26 million at December 31, 2019 and December 31,

2018, respectively. Letters of credit issued by our foreign subsidiaries totaled $3 million at December 31, 2019 and 2018.

Pension Funding

The Company made contributions of $25.7 million in 2019, $27.0 million in 2018, and $21.7 million in 2017 to improve the

Company’s pension plans funded status. At December 31, 2019, as reflected in Note 11 to the Consolidated Financial Statements,
pension liabilities exceeded plan assets by $140 million. The Company anticipates that it will have a minimum required pension
contribution of approximately $19.9 million in 2020 under the Employee Retirement Income Security Act of 1974 (“ERISA”),
Pension Protection Act in the U.S., and the Ontario Pension Benefits Act in Canada. Future contribution requirements depend on the
investment returns on plan assets, the impact of discount rates on pension liabilities, and changes in regulatory requirements. The
Company is unable to determine the amount or timing of any such contributions required by ERISA or whether any such contributions
would have a material adverse effect on the Company’s financial position or cash flows. The Company believes that cash flow from
operations and the Ryerson Credit Facility described above will provide sufficient funds to make the minimum required contribution
in 2020.

The Company received income tax refunds of $6.6 million in 2019, and made income tax payments of $2.1 million and $1.7

million in 2018 and 2017, respectively.

Income Tax Payments

Off-Balance Sheet Arrangements

In the normal course of business with customers, vendors, and others, we have entered into off-balance sheet arrangements, such

as letters of credit, which totaled $14 million as of December 31, 2019. We do not have any other material off-balance sheet financing
arrangements. Our off-balance sheet arrangements are not likely to have a material effect on our current or future financial condition,
results of operations, liquidity, or capital resources.

The following table presents contractual obligations at December 31, 2019:

Contractual Obligations

Payments Due by Period

Contractual Obligations (1)(2)

Total

Less than
1 year

2022 Notes
Ryerson Credit Facility
Foreign Debt
Other Debt
Interest on 2022 Notes, Foreign Debt, Other Debt, and Ryerson
Credit Facility (3)
Purchase Obligations (4)
Operating Leases (5)
Pension Withdrawal Liability
Finance Lease Obligations (5)

Total

588
378
13
9

176
8
154
1
33
1,360

1 – 3
years
(In millions)
588
344
—
3

— $
34
13
2

77
8
26
—
14
174

99
—
44
—
14
1,092

4 – 5
years

After
5
years

— $
—
—
4

—
—
33
—
5
42

—
—
—
—

—
—
51
1
—
52

(1)

(2)

(3)

(4)
(5)

The contractual obligations disclosed above do not include our potential future pension funding obligations (see previous discussion under “Pension
Funding” caption).
Due to uncertainty regarding the completion of tax audits and possible outcomes, we do not know when our obligations related to unrecognized tax
benefits will occur, if at all. See Note 17 “Income Taxes” of the notes to our consolidated financial statements for additional detail.
Interest payments related to the variable rate debt were estimated using the weighted average interest rate for the Ryerson Credit Facility, including the
effect of the interest rate swap.
The purchase obligations with suppliers are entered into when we receive firm sales commitments with certain of our customers.
Future lease payments are undiscounted.

Capital expenditures during 2019, 2018, and 2017 totaled $45.8 million, $38.4 million, and $25.1 million, respectively. Capital

expenditures were primarily for machinery and equipment.

Capital Expenditures

The Company anticipates capital expenditures, excluding acquisitions, to be approximately $45 million in 2020. The spending
includes maintenance expenditures and improvements to maintain, upgrade, and add to the Company’s North American processing
capabilities.

2019

Restructuring

In 2019, the Company recorded a $2.1 million charge for employee-related costs primarily for severance costs for corporate
staff reductions. The Company paid $1.2 million for employee costs related to these actions. In addition, the Company paid $0.3
million related to 2018 staff reductions. The remaining $1.0 million of employee-related costs are expected to be paid in 2020.

During 2019, the Company also recorded a $0.3 million charge to increase the reserve for tenancy-related costs for a facility
closed in 2013. The Company paid $0.9 million in 2019 for costs related to facilities closed in prior years. The remaining $0.9 million
of tenancy-related costs are expected to be paid through 2025.

2018

In 2018, the Company recorded a $3.6 million charge for employee-related costs primarily for severance costs for corporate

staff reductions and two facility closures. The Company paid $3.2 million of the employee costs related to these actions.

During 2018, the Company also recorded a $0.6 million charge to increase the reserve for tenancy-related costs for a facility

closed in 2013. The Company paid $0.8 million in costs related to this facility closure.

2017

In 2017, the Company recorded an $0.8 million charge in warehousing, delivery, selling, general, and administrative expense in
the Consolidated Statements of Operations to increase the reserve for tenancy-related costs for a facility closed in 2013. The Company
paid $0.4 million in costs related to this facility closure and also reclassified an existing $0.1 million liability for future lease payments
to the restructuring reserve. In addition, the Company paid $0.1 million in costs related to a facility closed in 2016.

During 2017, the Company recorded a $0.2 million reduction to the reserve for employee-related costs and credited

warehousing, delivery, selling, general, and administrative expense in the Consolidated Statements of Operations. This action fully
utilized the remaining reserve for employee-related costs.

Deferred Tax Amounts

At December 31, 2019, the Company had a net deferred tax liability of $65 million comprised primarily of a deferred tax asset
of $38 million related to pension liabilities, a deferred tax asset related to postretirement benefits other than pensions of $18 million,
$12 million of Alternative Minimum Tax (“AMT”) credit carryforwards, and deferred tax assets of $39 million related to federal,
local, and foreign tax loss carryforwards, offset by a valuation allowance of $14 million and deferred tax liabilities of $64 million
related to fixed assets and $115 million related to inventory. The Company’s deferred tax assets include $20 million related to U.S.
federal net operating loss (“NOL”) carryforwards, $16 million related to state NOL carryforwards, and $3 million related to foreign
NOL carryforwards at December 31, 2019.

The U.S. Tax Cuts and Jobs Act (the “Act”), enacted on December 22, 2017, significantly changed U.S. corporate income tax
laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system
with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Under ASC Topic 740, “Income Taxes
”
the effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the new legislation is
enacted. As a result of the Act, we recorded a benefit for the revaluation of our deferred tax assets of $10.6 million during the fourth
quarter of 2017 within the provision (benefit) for income taxes line in the Consolidated Statement of Operations.

“

In accordance with ASC 740 the Company assesses the realizability of its deferred tax assets. The Company records a valuation
allowance when, based upon the evaluation of all available evidence, it is more-likely-than-not that all or a portion of the deferred tax
assets will not be realized. In making this determination, we analyze, among other things, our recent history of earnings, the nature and
timing of reversing book-tax temporary differences, tax planning strategies, and future income. After considering both the positive and
negative evidence available, in the second quarter of 2009, the Company determined that it was more-likely-than-not that it would not
realize a portion of its U.S. deferred tax assets. As a result, the Company established a valuation allowance against a portion of its U.S.
deferred tax assets. The Company released a portion of the valuation allowance related to one of its U.S. subsidiaries, JT Ryerson,
during 2012. The Company released most of the remaining U.S. related valuation allowance during 2013. In 2018, the Company

further reduced its valuation allowance related to state and foreign net operating losses. As of December 31, 2018, the Company had a
valuation allowance of $29.3 million. As of December 31, 2019, the Company had a valuation allowance of $13.7 million, a decrease
of $15.6 million from the prior year mainly related to expiring NOLs and changes to U.S. foreign tax credits previously recorded.

As described in Note 1 to the Consolidated Financial Statements, the Company assesses the need for a valuation allowance
considering all available positive and negative evidence, including past operating results, projections of future taxable income, and the
feasibility of ongoing tax planning strategies.

The Company will continue to maintain a valuation allowance on certain U.S. federal and state deferred tax assets until such

time as in management’s judgment, considering all available positive and negative evidence, the Company determines that these
deferred tax assets are more likely than not realizable.

Critical Accounting Estimates

Preparation of this Form 10-K requires us to make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of sales and
expenses during the reporting period. Our critical accounting policies, including the assumptions and judgments underlying them, are
disclosed in Item 8 within Note 1: “Summary of Accounting and Financial Policies”. These policies have been consistently applied
and address such matters as revenue recognition, depreciation methods, inventory valuation, asset impairment recognition, and
pension and postretirement expense. While policies associated with estimates and judgments may be affected by different assumptions
or conditions, we believe our estimates and judgments associated with the reported amounts are appropriate in the circumstances.
Actual results may differ from those estimates.

We consider the policies discussed below as critical to an understanding of our financial statements, as application of these
policies places the most significant demands on management’s judgment, with financial reporting results relying on estimation of
matters that are uncertain.

Provision for allowances, claims, and doubtful accounts: We perform ongoing credit evaluations of customers and set credit

limits based upon review of the customers’ current credit information and payment history. We monitor customer payments and
maintain a provision for estimated credit losses based on historical experience and specific customer collection issues that we have
identified. Estimation of such losses requires adjusting historical loss experience for current economic conditions and judgments about
the probable effects of economic conditions on certain customers. We cannot guarantee that the rate of future credit losses will be
similar to past experience. Provisions for allowances and claims are based upon historical rates, expected trends, and estimates of
potential returns, allowances, customer discounts, and incentives. We consider all available information when assessing the adequacy
of the provision for allowances, claims, and doubtful accounts.

Inventory valuation: Our inventories are stated at the lower of cost or market. The valuation of our inventories at the lower of
cost or market could be subject to certain estimates; however, the measurement is primarily based on historical purchasing and sales
information rather than forecasted metals pricing. Inventory costs reflect metal and in-bound freight purchase costs, third-partyrr
processing costs, and internal direct and allocated indirect processing costs. Cost is primarily determined by the LIFO method. We
regularly review inventory on hand and record provisions for obsolete and slow-moving inventory based on historical and current
sales trends. Changes in product demand and our customer base may affect the value of inventory on hand which may require higher
provisions for obsolete inventory.

Income Taxes: Our income tax expense, deferred tax assets and liabilities, and reserve for uncertain tax positions reflect our best

estimate of taxes to be paid. The Company is subject to income taxes in the U.S. and several foreign jurisdictions. The determination
of the consolidated income tax expense requires judgment and estimation by management. It is possible that actual results could differ
from the estimates that management has used to determine its consolidated income tax expense.

We record operating loss and tax credit carryforwards and the estimated effect of temporary differences between the tax basis of

assets and liabilities and the reported amounts in the Consolidated Balance Sheet. We follow detailed guidelines in each tax
jurisdiction when reviewing tax assets recorded on the balance sheet and provide for valuation allowances as required. Deferred tax
assets are reviewed for recoverability based on historical taxable income, the expected reversals of existing temporary differences, tax
planning strategies, and on forecasts of future taxable income. The forecasts of future taxable income require assumptions regarding
volume, selling prices, margins, expense levels, and industry cyclicality. If we are unable to generate sufficient future taxable income
in certain tax jurisdictions, we may be required to record additional valuation allowances against our deferred tax assets related to
those jurisdictions.

The Company’s income tax provisions are based on calculations and assumptions that are subject to examination by the Internal
Revenue Service and other tax authorities. Although the Company believes that the positions taken on filed tax returns are reasonable,
it has established tax and interest reserves in recognition that various taxing authorities may challenge the positions taken. For
uncertain tax positions, the Company applies the provisions of relevant authoritative guidance, which requires application of a “more
a
likely than not” threshold to the recognition and derecognition of tax positions. The Company’s ongoing assessments of the more
likely than not outcomes of tax authority examinations and related tax positions require significant judgment and can increase or
decrease the Company’s effective tax rate.

Long-lived Assets and Other Intangible Assets: Long-lived assets held and used are reviewed for impairment whenever events or

changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We estimate the future cash flows
expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying amount of the asset, an impairment is recognized. Determining whether an
impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows
are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s
residual value, if any. Any related impairment loss is calculated based upon comparison of the fair value to the carrying value of the
asset. Separate intangible assets that have finite useful lives are amortized over their useful lives. An impaired long-lived or intangible
asset would be written down to fair value, based on various available valuation techniques, including the discounted cash flow
method.

Goodwill: We assess the recoverability of the carrying value of recorded goodwill annually in the fourth quarter of each year or

whenever indicators of potential impairment exist. We test for impairment of goodwill by assessing various qualitative factors with
respect to developments in our business and the overall economy and calculating the fair value of a reporting unit using the discounted
cash flow method, as necessary. Factors that may be considered indicators of impairment include: deterioration in general economic
conditions; declines in the market conditions of our products, including metals prices; a sustained significant decline in our share price
and market capitalization; reduced future cash flow estimates; and slower growth rates in our industry, among others. If we determine
that it is more likely than not that the fair value of a reporting unit is less than the carrying value based on our qualitative assessment,
we will proceed to the goodwill impairment test. We compare the fair value of the reporting unit in which goodwill resides to its
carrying value. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess, not
to exceed the carrying amount of the goodwill. The fair value of the reporting units is estimated using a combination of an income
approach and a market approach as this combination is deemed to be the most indicative of our fair value in an orderly transaction
between market participants. An income approach based on discounted future cash flows requires us to estimate income from
operations based on projected results and discount rates based on a weighted average cost of capital of comparable companies. A
market approach estimates fair value using market multiples of various financial measures of comparable public companies. If these
estimates or their related assumptions for commodity prices and demand change in the future, we may be required to record
impairment charges for these assets.

Based on the impairment test performed on October 1, 2019, the Company concluded that the fair value of the reporting unit
tested for impairment exceeded the carrying value. The discount rate for the reporting unit was estimated to be 14.0% at October 1,
2019. The Company determines a discount rate based on an estimate of a reasonable risk-adjusted return an investor would expect to
t
realize on an investment in the reporting unit. The reporting unit’s fair value exceeded its carrying value by more than 25%.
Deterioration in market conditions in our industry or products, changes in expected future cash flows, expected growth rates or to
discount rates could result in impairment charges in future periods.

Purchase Price Accounting: Business combinations are accounted for using the acquisition method of accounting. This method
requires the Company to record assets and liabilities of the business acquired at their estimated fair market values as of the acquisition
date. Any excess of the cost of the acquisition over the fair value of the net assets acquired is recorded as goodwill. Any shortfall in
the cost of the acquisition compared to the fair value of the net assets acquired is recorded in the Statement of Operations as a bargain
gain. The Company uses valuation specialists, where necessary, to perform appraisals and assist in the determination of the fair values
of the assets acquired and liabilities assumed. These valuations require management to make estimates and assumptions that are
critical in determining the fair values of the assets and liabilities.

Pension and postretirement benefit plan assumptions: We sponsor various benefit plans covering a portion of our employees for

pension and postretirement medical costs. Statistical methods are used to anticipate future events when calculating expenses and
liabilities related to the plans. The statistical methods include assumptions about, among other things, the discount rate, expected
return on plan assets, rate of increase of health care costs, and the rate of future compensation increases. Our actuarial consultants also
use subjective factors such as withdrawal and mortality rates when estimating expenses and liabilities. The discount rate used for U.S.
plans reflects the market rate for high-quality fixed-income investments on our annual measurement date (December 31) and is subject
to change each year. The discount rate was determined by matching, on an approximate basis, the coupons and maturities for a

portfolio of corporate bonds (rated Aa or better by Moody’s Investor Services or AA or better by Standard and Poor’s) to the expected
plan benefit payments defined by the projected benefit obligation. The discount rates used for plans outside the U.S. are based on the
yield of long term high quality corporate bonds, the duration of the liability, and appropriate judgment.

When calculating pension expense for 2019, we assumed the pension plans’ assets would generate a long-term rate of return of
6.35% for the JT Ryerson plan and 4.00% for the CS&W plan, and between 3.50% and 5.25% for the Canadian plans. The expected
long-term rate of return assumption was developed based on historical experience and input from the trustee managing the plans’
assets. The expected long-term rate of return on plan assets is based on a target allocation of assets, which is based on a goal of
earning the highest rate of return while maintaining risk at acceptable levels. Our projected long-term rate of return for the JT Ryerson
pension plan is slightly higher than some market indices due to the active management of our plans’ assets, and is supported by the
historical returns on our plans’ assets. The plans strive to have assets sufficiently diversified so that adverse or unexpected results from
one security class will not have an unduly detrimental impact on the entire portfolio. We regularly review actual asset allocation and
the pension plans’ investments are periodically rebalanced to the targeted allocation when considered appropriate. Pension expense
increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return on plan assets by 50
basis points would have increased 2019 pension expense by approximately $3 million.

Future pension obligations for the U.S. plans were discounted using rates between of 3.15% and 3.53% at December 31, 2019.

Future pension obligations for the Canadian plans were discounted using rates between 3.00% and 3.01% at December 31, 2019.
Lowering the discount rate by 50 basis points would increase the pension liability at December 31, 2019 by approximately
$43 million.

The calculation of other postretirement benefit expense and obligations requires the use of a number of assumptions, including

the assumed discount rate for measuring future payment obligations and the health care cost trend rate. A one percentage point
increase or decrease in assumed health care trend rates would increase or decrease our total service and interest cost for the year ended
December 31, 2019 by $0.2 million. A decrease in the weighted average discount rate of 50 basis points would increase the
postretirement benefit liability by approximately $3 million.

The assumptions used in the actuarial calculation of expenses and liabilities may differ materially from actual results due to
changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. These
differences may result in a significant impact on the amount of pension or postretirement benefit expense we may record in the future.

Legal contingencies: We are involved in a number of legal and regulatory matters including those discussed in Note 12 in the
Consolidated Financial Statements. We determine whether an estimated loss from a loss contingency should be accrued by assessing
whether a loss is deemed probable and can be reasonably estimated. We analyze our legal matters based on available information to
assess potential liability. We consult with outside counsel involved in our legal matters when analyzing potential outcomes. We cannot
determine at this time whether any potential liability related to this litigation would materially affect our financial position, results of
operations, or cash flows.

Recent accounting pronouncements are discussed within Note 1 in the Consolidated Financial Statements.

Recent Accounting Pronouncements

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our primary areas of market risk include changes in interest rates, foreign currency exchange rates, and commodity prices. We

continually monitor these risks and develop strategies to manage them.

Interest rate risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. We are exposed
to market risk related to our fixed-rate and variable-rate long-term debt. Changes in interest rates may affect the market value of our
fixed-rate debt. The estimated fair value of our long-term debt and the current portions thereof using quoted market prices of
Company debt securities recently traded and market-based prices of similar securities for those securities not recently traded was
$1,014.4 million at December 31, 2019 and $1,158.5 million at December 31, 2018 as compared with the carrying value of $981.8
million and $1,153.3 million at December 31, 2019 and 2018, respectively. We manage interest rate risk in our capital structure by
using a combination of variable and fixed-rate debt. At December 31, 2019, 40% of our debt is valued with variable interest rates. The
remaining 60% of our debt was at fixed interest rates. A hypothetical 1% increase in interest rates on variable rate debt would have
increased interest expense in 2019 by approximately $2.6 million.

We use interest rate swaps to manage our exposure to interest rate changes. As of December 31, 2019, we have three receive

variable, pay fixed, interest rate swaps to manage the exposure to variable interest rates of the Ryerson Credit Facility. In March
2017, we entered into a forward agreement for $150 million of “pay fixed” interest at 1.658%, in June 2019, we entered into a forward
agreement for $60 million of “pay fixed” interest at 1.729%, and in November 2019, we entered into a forward agreement for $100
million of “pay fixed” interest at 1.539%. We account for these interest rate swaps as cash flow hedges of floating-rate borrowings
with changes in fair value being recorded in accumulated other comprehensive income.
The fair value of the interest rate swaps as of
December 31, 2019 was a net liability of $0.2 million. After considering the effects of our interest rate swaps, 92% of our debt was a
fixed interest rates as of December 31, 2019.

Foreign exchange rate risk

We are subject to foreign currency risks primarily through our operations in Canada, Mexico, and China and we use foreign

currency exchange contracts to reduce our exposure to currency price fluctuations. Foreign currency contracts are principally used to
purchase U.S. dollars. We had foreign currency contracts with a U.S. dollar notional amount of $2.0 million outstanding at December
31, 2019 and a value of zero. We do not currently account for these contracts as hedges but rather mark these contracts to market with
a corresponding offset to current earnings. For the year ended December 31, 2019, the Company recognized a loss of $0.1 million
associated with its foreign currency contracts. A hypothetical strengthening or weakening of 10% in the foreign exchange rates
underlying the foreign currency contracts from the market rate as of December 31, 2019 would decrease or increase the fair value of
the foreign currency contracts by $0.2 million.

The currency effects of translating the financial statements of our foreign subsidiaries are included in accumulated other
comprehensive loss and will not be recognized in the statement of operations until there is a liquidation or sale of those foreign
subsidiaries.

Commodity price risk

In general, we purchase metals in an effort to maintain our inventory at levels that we believe to be appropriate to satisfy the
anticipated needs of our customers based upon historic buying practices, customer contracts, and market conditions. Our commitments
to purchase metals are generally at prevailing market prices in effect at the time we place our orders.

Metal prices can fluctuate significantly due to several factors including changes in foreign and domestic production capacity,

raw material availability, metals consumption, and foreign currency rates. Derivative financial instruments have been used to manage
a limited portion of our exposure to fluctuations in the cost of certain commodities. No derivatives are held for trading purposes.

As of December 31, 2019, we had 420,000 tons of iron ore swap contracts with a net liability value of $5.0 million, 47,155 tons

of hot roll coil swap contracts with a net liability value of $0.4 million, 23,949 tons of aluminum swap contracts with a net liability
value of $0.7 million, 3,164 tons of nickel swap contracts with a net asset value of $1.7 million, and 38,000 barrels of crude oil swap
contracts with a net asset value of $0.1 million. We do not currently account for these contracts as hedges, but rather mark these
contracts to market with a corresponding offset to current earnings. For the year ended December 31, 2019, the Company recognized a
loss of $8.4 million associated with its commodity derivatives.

A hypothetical strengthening or weakening of 10% in the commodity prices underlying the commodity derivative contracts from

the market rate as of December 31, 2019 would increase or decrease the fair value of the commodity derivative contracts by $0.6
million.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements

Financial Statements

Management’s Report on Internal Control over Financial Reporting
Reports of Independent Registered Public Accounting Firm
Consolidated Statements of Operations for the years ended December 31, 2019, 2018, and 2017
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018, and 2017
Consolidated Balance Sheets at December 31, 2019 and 2018
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018, and 2017
Notes to Consolidated Financial Statements

Financial Statements Schedule

I—Condensed Financial Information of Registrant
II—Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable. The required information is shown in the Financial

Statements or Notes thereto.

Page

47
48
50
51
52
53
54
55

88
93

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Ryerson Holding Corporation (“the Company”) is responsible for establishing and maintaining adequate internal
control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the
Company’s management and Board of Directors regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements under all potential
conditions. Therefore, effective internal control over financial reporting provides only reasonable, and not absolute, assurance with
respect to the preparation and presentation of financial statements.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31,
2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) (the COSO criteria). Based on its assessment under that framework and the criteria
established therein, the Company’s management concluded that the Company’s internal control over financial reporting was effective
as of December 31, 2019.

Ernst & Young LLP, an independent registered public accounting firm, has audited the Company’s internal control over financial
reporting as of December 31, 2019, as stated in their report, which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders’ and the Board of Directors of Ryerson Holding Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ryerson Holding Corporation and subsidiaries (the Company) as of
December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedules listed
in the Index at 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the
results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.
generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework,
and our report dated March 4, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on thet
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

Chicago, Illinois
March 4, 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders’ and the Board of Directors of Ryerson Holding Corporation

Opinion on Internal Control over Financial Reporting

We have audited Ryerson Holding Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2019,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of thet
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Ryerson Holding Corporation and subsidiaries (the
Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on
the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the 2019 consolidated financial statements of the Company and our report dated March 4, 2020 expressed an unqualified
opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Chicago, Illinois
March 4, 2020

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)

NNet sales

Cost of materials sold

Gross profit

Warehousing, delivery, selling, general, and administrative
Gain on sale of assets
Gain on insurance settlement
Restructuring and other charges

Operating profit
Other expense:

Other income and (expense), net
Interest and other expense on debt

Income before income taxes
Provision (benefit) for income taxes
NNet income
Less: Net income attributable to noncontrolling interest
NNet income attributable to Ryerson Holding Corporation
Basic earnings per share
Diluted earnings per share

2019

Year Ended December 31,
2018

2017

$
$
$

4,501.6
3,673.7
827.9
636.8
(20.6)
(1.5)
2.4
210.8

(2.4)
(93.2)
115.2
32.5
82.7
0.3
82.4
2.19
2.17

$
$
$

4,408.4
3,650.3
758.1
614.7
—
—
4.2
139.2

76.7
(99.2)
116.7
10.3
106.4
0.4
106.0
2.84
2.81

$
$
$

3,364.7
2,782.2
582.5
481.4
—
—
—
101.1

6.6
(91.0)
16.7
(1.3)
18.0
0.9
17.1
0.46
0.46

See Notes to Consolidated Financial Statements

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)

NNet income
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments
Gain (loss) on intra-entity foreign currency transactions
Unrealized loss on equity securities
Other-than-temporary impairment on equity securities
(Gain) loss on cash flow hedges
Changes in defined benefit pension and other
post-retirement benefit plans

Other comprehensive income (loss), before tax
Income tax provision (benefit) related to items of other
comprehensive income (loss)
Comprehensive income, after tax

Less: Comprehensive income attributable to the
noncontrolling interest

Comprehensive income attributable to Ryerson
Holding Corporation

2019

Year Ended December 31,
2018

2017

82.7

106.4

18.0

4.3
—
—
—
(1.8)

14.0
16.5

2.6
96.6

0.4

(8.2)
(3.0)
—
—
0.5

(22.3)
(33.0)

(4.5)
77.9

0.4

96.2

77.5

5.6
3.2
(0.3)
0.2
1.0

18.0
27.7

6.0
39.7

1.1

38.6

See Notes to Consolidated Financial Statements

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

2019

Year Ended December 31,
2018

2017

82.7

106.4

Operating activities:
Net income
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:

Depreciation and amortization
Stock-based compensation
Deferred income taxes
Provision for allowances, claims, and doubtful accounts
Restructuring and other charges
Other-than-temporary impairment charge on equity securities
Gain on bargain purchase
Loss on retirement of debt
Gain on sale of assets
Non-cash loss from derivatives
Gain on insurance settlement
Pension settlement loss
Other items
Change in operating assets and liabilities, net of effects of acquisitions:

Receivables
Inventories
Other assets
Accounts payable
Accrued liabilities
Accrued taxes payable/receivable
Deferred employee benefit costs
Net adjustments
Net cash provided by (used in) operating activities

Investing activities:

Acquisitions, net of cash acquired
Capital expenditures
Proceeds from sale of property, plant, and equipment
Proceeds from insurance settlement
Other investing activities

Net cash provided by (used in) investing activities

Financing activities:

Repayment of debt
Net proceeds (repayments) of short-term borrowings
Purchase of subsidiary shares from noncontrolling interest
Credit facility issuance costs
Net increase (decrease) in book overdrafts
Principal payments on finance lease obligations
Contingent payment related to acquisitions
Proceeds from sale leaseback transactions

Net cash provided by (used in) financing activities
NNet increase (decrease) in cash, cash equivalents, and restricted cash
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
Net change in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash—beginning of period
Cash, cash equivalents, and restricted cash—end of period

Supplemental disclosures:
Cash paid (received) during the period for:

Interest paid to third parties
Income taxes, net

Noncash investing activities:

Asset additions under adoption of accounting principal ASC 842
Asset additions under operating leases
Asset additions under finance leases and failed sale-leasebacks
Asset additions under financing arrangements

Noncash financing activities:

Short term debt converted to finance lease

See Notes to Consolidated Financial Statements

58.4
3.1
48.0
3.5
2.4
—
—
0.2
(20.6)
0.6
(1.5)
1.6
1.2

92.5
65.9
4.9
(78.2)
(34.6)
(7.6)
(29.4)
110.4
193.1

—
(45.8)
70.4
1.8
—
26.4

(12.7)
(164.6)
—
—
0.1
(13.6)
(1.3)
8.3
(183.8)
35.7
(0.2)
35.5
24.3
59.8

88.3
(6.6)

82.3
64.8
2.2
2.2

7.6

52.9
3.3
7.8
3.7
4.2
—
(70.0)
1.7
—
2.7
—
—
(0.5)

(64.8)
(21.4)
(7.3)
58.4
16.8
2.2
(38.7)
(49.0)
57.4

(169.7)
(38.4)
5.9
2.0
—
(200.2)

(52.4)
149.9
(0.2)
(0.6)
6.3
(13.7)
(0.9)
4.5
92.9
(49.9)
(4.3)
(54.2)
78.5
24.3

92.8
2.1

—
—
12.9
4.6

—

18.0

47.1
2.2
(9.2)
1.5
—
0.2
—
—
—
3.0
—
—
(0.7)

(44.0)
(42.9)
(8.3)
58.1
4.6
6.3
(38.4)
(20.5)
(2.5)

(49.2)
(25.1)
3.8
—
0.2
(70.3)

(0.2)
74.3
—
—
(18.0)
(14.4)
(0.9)
24.9
65.7
(7.1)
3.9
(3.2)
81.7
78.5

84.9
1.7

—
—
42.8
3.0

—

RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS
(In millions, except shares and per share data)

At December 31,

2019

2018

Assets

Current assets:

Cash and cash equivalents
Restricted cash (Note 3)
Receivables less provisions of $3.5 in 2019 and $2.5 in 2018
Inventories (Note 4)
Prepaid expenses and other current assets

Total current assets

Property, plant, and equipment, net of accumulated depreciation (Note 5)
Operating lease assets (Note 6)
Other intangible assets (Note 7)
Goodwill (Note 8)
Deferred charges and other assets

Total assets

Liabilities

Current liabilities:

Accounts payable
Accrued liabilities:

Salaries, wages, and commissions
Interest on debt
Other accrued liabilities

Short-term debt (Note 10)
Current portion of operating lease liabilities (Note 6)
Current portion of deferred employee benefits (Note 11)

Total current liabilities

Long-term debt (Note 10)
Deferred employee benefits (Note 11)
Noncurrent operating lease liabilities (Note 6)
Deferred income taxes (Note 17)
Other noncurrent liabilities

Total liabilities

Commitments and contingencies (Note 12)
Equity

Ryerson Holding Corporation stockholders’ equity:

Preferred stock, $0.01 par value; 7,000,000 shares authorized and no shares issued
at 2019 and 2018
Common stock, $0.01 par value; 100,000,000 shares authorized and 37,996,261
shares issued at 2019; 100,000,000 shares authorized and 37,656,505 issued at
2018
Capital in excess of par value
Retained earnings
Treasury stock at cost – Common stock of 212,500 shares in 2019 and 2018
Accumulated other comprehensive loss

Total Ryerson Holding Corporation stockholders’ equity

Noncontrolling interest

Total equity
Total liabilities and equity

See Notes to Consolidated Financial Statements

11.0
48.8
425.1
742.9
52.2
1,280.0
439.7
128.2
50.6
120.3
2.7
2,021.5

311.5

35.3
9.4
58.6
49.2
20.9
7.0
491.9
932.6
217.5
112.8
65.2
22.9
1,842.9

23.2
1.1
521.0
806.3
61.5
1,413.1
489.0
—
58.1
120.3
5.8
2,086.3

390.2

66.6
9.9
67.1
27.3
—
7.9
569.0
1,126.0
258.4
—
13.3
43.7
2,010.4

—

0.4
381.2
99.6
(6.6)
(302.0)
172.6
6.0
178.6
2,021.5

0.4
381.0
14.2
(6.6)
(315.8)
73.2
2.7
75.9
2,086.3

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F

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Accounting and Financial Policies

Business Description and Basis of Presentation. Ryerson Holding Corporation (“Ryerson Holding”), a Delaware corporation, is

the parent company of Joseph T. Ryerson & Son, Inc. (“JT Ryerson”), a Delaware corporation. Affiliates of Platinum Equity, LLC
(“Platinum”) own approximately 21,037,500 shares of our common stock, which is approximately 56% of our issued and outstanding
common stock. We are a leading value-added processor and distributor of industrial metals with operations in the United States
through JT Ryerson, in Canada through our indirect wholly-owned subsidiary Ryerson Canada, Inc., a Canadian corporation
(“Ryerson Canada”), and in Mexico through our indirect wholly-owned subsidiary Ryerson Metals de Mexico, S. de R.L. de C.V., a
Mexican corporation (“Ryerson Mexico”). In addition to our North American operations, we conduct materials processing and
distribution operations in China through an indirect wholly-owned subsidiary, Ryerson China Limited (“Ryerson China”). Unless the
context indicates otherwise, Ryerson Holding, JT Ryerson, Ryerson Canada, Ryerson China, and Ryerson Mexico together with their
subsidiaries, are collectively referred to herein as “Ryerson,” “we,” “us,” “our,” or the “Company.”

Principles of Consolidation. The Company consolidates entities in which it owns or controls more than 50% of the voting

shares. All significant intercompany balances and transactions have been eliminated in consolidation.

Business Segments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280,

“Segment Reporting” (“ASC 280”), establishes standards for reporting information on operating segments in interim and annual
financial statements. Our Chief Executive Officer, together with our Board of Directors, serve as our Chief Operating Decision Maker
(“CODM”). Our CODM reviews our financial information for purposes of making operational decisions and assessing financial
performance. The CODM views our business globally as metals service centers. We have one operating and reportable segment, metal
service centers, in accordance with the criteria set forth in ASC 280.

Use of Estimates. The preparation of financial statements in conformity with Generally Accepted Accounting Principles

(“GAAP”) in the United States requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and related notes to the financial statements. Changes in such estimates may affect amounts reported
in future periods.

Revenue Recognition. Revenue is recognized in accordance with FASB ASC 606, “Revenue from Contracts with Customers”

(“ASC 606”). Revenue is recognized based on the consideration expected to be received for delivery of as-is or processed metal
products when, or as, the Company satisfies its contractual obligation to transfer control of a product to a customer, which we refer to
as a performance obligation. See Note 16: Revenue Recognition for further details.

Provision for allowances, claims, and doubtful accounts. We perform ongoing credit evaluations of customers and set credit

limits based upon review of the customers’ current credit information and payment history. The Company monitors customer
payments and maintains a provision for estimated credit losses based on historical experience and specific customer collection issues
that the Company has identified. Estimation of such losses requires adjusting historical loss experience for current economic
conditions and judgments about the probable effects of economic conditions on certain customers. The Company cannot guarantee
that the rate of future credit losses will be similar to past experience. Provisions for allowances and claims are based upon historical
rates, expected trends, and estimates of potential returns, allowances, customer discounts, and incentives. The Company considers all
available information when assessing the adequacy of the provision for allowances, claims, and doubtful accounts.

Shipping and Handling Fees and Costs. Shipping and handling fees billed to customers are classified in net sales in our
Consolidated Statement of Operations. Shipping and handling costs, primarily distribution costs, are classified in warehousing,
delivery, selling, general, and administrative expenses in our Consolidated Statement of Operations. These costs totaled $126.7
million, $112.3 million, and $84.8 million for the years ended December 31, 2019, 2018, and 2017, respectively. In accordance with
ASC 606, the Company has elected to treat shipping and handling costs as an activity necessary to fulfill the performance obligation
to transfer product to the customer and not as a separate performance obligation. Shipping and handling costs are estimated at quarter
end in proportion to revenue recognized for transactions where actual costs are not yet known.

Benefits for Retired Employees. The Company recognizes the funded status of its defined benefit pension and other
postretirement plans in the Consolidated Balance Sheets, with changes in the funded status recognized through accumulated other
comprehensive income (loss), net of tax, in the year in which the changes occur. Service cost is included in warehousing, delivery,
selling, general, and administrative expenses and all other components of net benefit costs are recognized in other income and
(expense), net, in the Consolidated Statement of Operations. The estimated cost of the Company’s defined benefit pension plan and its
postretirement medical benefits are determined annually after considering information provided by consulting actuaries. Key factors

used in developing estimates of these liabilities include assumptions related to discount rates, rates of return on investments, future
compensation costs, healthcare cost trends, benefit payment patterns, and other factors. The cost of these benefits for retirees is
accrued during their term of employment. Pensions are funded primarily in accordance with the requirements of the Employee
Retirement Income Security Act (“ERISA”) of 1974 and the Pension Protection Act of 2006. Costs for retired employee medical
benefits are funded when claims are submitted. Certain employees are covered by a defined contribution plan, for which the cost is
expensed in the period earned.

Cash Equivalents. Cash equivalents reflected in the financial statements are highly liquid, short-term investments with original

maturities of three months or less. Checks issued in excess of funds on deposit at the bank represent “book” overdrafts. We
reclassified $57.6 million and $57.5 million to accounts payable at December 31, 2019 and 2018, respectively.

Inventory Valuation. Inventories are stated at the lower of cost or market value. We primarily use the last-in, first-out (“LIFO”)
method for valuing our domestic inventories. We use the moving average cost and the specific cost methods for valuing our foreign
inventories.

Property, Plant, and Equipment. Property, plant, and equipment, including land use rights and capital lease assets, are

depreciated for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. The provision
for depreciation in all periods presented is based on the following estimated useful lives of the assets:

Land improvements
Buildings
Machinery and equipment
Furniture and fixtures
Transportation equipment
Land use rights

20 years
45 years
10-15 years
10 years
3-6 years
50 years

Expenditures for normal repairs and maintenance are charged against income in the period incurred.

Leases. For the year ended December 31, 2019 leases are recognized in accordance with FASB ASC 842, “Leases

“

” (“ASC

842”). In the years ended December 31, 2018 and 2017 leases are recognized in accordance with FASB ASC 840, “Leases” (“ASC
840”). The Company leases various assets including real estate, trucks, trailers, mobile equipment, processing equipment, and IT
equipment. See discussion of the adoption of ASC 842 within Recent Accounting Pronouncements below and Note 6: Leases, for
further details on accounting treatment.

Goodwill. In accordance with FASB ASC 350, “Intangibles – Goodwill and Other

“

” (“ASC 350”), goodwill is reviewed at least

annually for impairment or whenever indicators of potential impairment exist. We test for impairment of goodwill by assessing
various qualitative factors with respect to developments in our business and the overall economy and calculating the fair value of a
reporting unit using the discounted cash flow method, as necessary. If we determine that it is more likely than not that the fair value of
a reporting unit is less than the carrying value based on our qualitative assessment, we will proceed to the quantitative goodwill
impairment test, in which we compare the fair value of the reporting unit where the goodwill resides to its carrying value. If the
carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized in an amount equal to that excess, not to
exceed the carrying amount of the goodwill. The fair value of the reporting unit is estimated using a combination of an income
approach and a market approach as this combination is deemed to be the most indicative of fair value in an orderly transaction
between market participants.

Long-lived Assets and Other Intangible Assets. Long-lived assets held and used by the Company are reviewed for impairment

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company
estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment is
recognized. Any related impairment loss is calculated based upon comparison of the fair value to the carrying value of the asset.
Separate intangible assets that have finite useful lives are amortized over their useful lives. An impaired intangible asset would be
written down to fair value, using the discounted cash flow method.

Accrued Vacation Liability. In 2019, the Company changed its vacation policy such that employees earn their vacation for the

current year as work is performed throughout the year. Under the previous policy, vacation was earned in advance of work being
performed for the subsequent year. As a result of this policy change, the Company recorded a reduction of $11.0 million to accrued
vacation expense. The adjustment is included within warehousing, delivery, general, and administrative expense within the
Consolidated Statement of Operations in 2019.

Deferred Financing Costs. Deferred financing costs associated with the issuance of debt are being amortized using the effective

interest method over the life of the debt. Deferred financing costs related to a recognized debt liability are presented in the balance
sheet as a direct deduction from the carrying amount of the related debt liability.

Foreign Currency. The Company translates assets and liabilities of its foreign subsidiaries, where the functional currency is the

local currency, into U.S. dollars at the current rate of exchange on the last day of the reporting period. Revenues and expenses are
translated at the average monthly exchange rates prevailing during the year.

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange

rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a
foreign exchange transaction gain or loss results which is included in determining net income (loss) for the year. The Company
recognized a $2.4 million exchange loss, a $3.0 million exchange gain, and a $2.8 million exchange loss for the years ended
December 31, 2019, 2018 and 2017, respectively. These amounts are primarily classified in “Other income and (expense), net” in our
Consolidated Statements of Operations.

Income Taxes. Deferred tax assets or liabilities reflect temporary differences between amounts of assets and liabilities for
financial and tax reporting. Such amounts are adjusted, as appropriate, to reflect changes in enacted tax rates expected to be in effect
when the temporary differences reverse. A valuation allowance is established to offset any deferred tax assets if, based upon the
available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The determination of the
amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and
amount of the reversal of taxable temporary differences, (2) expected future taxable income, (3) the impact of tax planning strategies,
and (4) the ability to carry back tax losses to offset prior taxable income. In assessing the need for a valuation allowance, the Company
considers all available positive and negative evidence, including past operating results, projections of future taxable income, and the
feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions
regarding volume, pricing, costs, and industry cyclicality.

Significant judgment is required in determining income tax provisions and in evaluating tax positions. In the normal course of
business, the Company and its subsidiaries are examined by various federal, state, and foreign tax authorities. The Company records
the impact of a tax position, if that position is more likely than not to be sustained in audit, based on the technical merits of the
position. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or
prior years in determining the adequacy of our provision for income taxes. The Company continually assesses the likelihood and
amount of potential adjustments and adjusts the income tax provision, the current tax liability, and deferred taxes in the period in
which the facts that give rise to a revision become known.

The Company recognizes the benefit of tax positions when a benefit is more likely than not (i.e., greater than 50% likely) to be

sustained on its technical merits. Recognized tax benefits are measured at the largest amount that is more likely than not to be
sustained, based on cumulative probability, in final settlement of the position. The Company recognizes interest and penalties related
to unrecognized tax benefits as a component of income tax expense.

Earnings Per Share Data. Basic earnings per share (“EPS”) is computed by dividing net earnings available to common

stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by
giving effect to all dilutive potential common shares that were outstanding during the period, unless inclusion of the potential common
shares would have an antidilutive effect. Basic earnings per share excludes the dilutive effect of common stock equivalents such as
stock options and warrants, while diluted earnings per share, assuming dilution, includes such dilutive effects.

Recent Accounting Pronouncements

Impact of Recently Issued Accounting Standards–Adopted

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases

“

” codified in ASC 842. The

02 and subsequently issued amendments requires lessees to recognize assets and liabilities on the balance

guidance in ASU 2016-
for the rights and obligations created by all leases with terms of more than twelve months. The amendment also requires disclosures
designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. These
disclosures include qualitative and quantitative information.

sheet

We adopted the standard effective January 1, 2019 using the alternative modified retrospective transition method, which allows

for application of the guidance at the beginning of the period in which it is adopted, rather than at the beginning of the earliest
comparative period presented.

Adoption of the new standard resulted in the recording of operating lease assets and liabilities of $82.3 million and $87.6 million

within our Consolidated Balance Sheet, respectively, as of January 1, 2019. As part of the adoption, we recorded an adjustment tot
retained earnings of $3.0 million related to the reassessment of a failed sale-leaseback under ASC 842. The standard had no impact on
our Consolidated Statements of Operations or our Consolidated Statements of Cash Flows. See Note 6: Leases for further details.

In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other

Comprehensive Income.” The guidance allows a reclassification from accumulated other comprehensive income to retained earnings
for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (“U.S. Tax Act”). It also requires certain disclosures about
stranded tax effects. However, the underlying guidance that requires that the effect of a change in tax laws or rates be included in
income from continuing operations is not affected. The guidance is effective for interim and annual reporting periods beginning after
December 15, 2018 and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the
effect of the change in the U.S. federal corporate income tax rate in the U.S. Tax Act is recognized. Adoption of this standard had no
impact on our Consolidated Financial Statements. We have elected not to reclassify stranded tax effects from accumulated other
comprehensive income to retained earnings related to the U.S. Tax Act as the balances are not material to our consolidated financial
statements.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair

“

Value Measurement.” The guidance amends the fair value measurement disclosures by modifying the disclosure requirements in
Topic 820, Fair Value Measurement. The update is effective for interim and annual reporting periods beginning after December 15,
2019. The guidance allows for early adoption to remove or modify disclosures upon issuance of this amendment, and for delayed
adoption of the additional disclosures until their effective date. We adopted this amendment effective September 30, 2019. There was
no impact to our consolidated financial statements or disclosures.

In August 2018, the FASB issued ASU 2018-14, “Disclosure Framework – Changes to the Disclosure Requirements for
Defined Benefit Plans.” The amendment removes certain employee benefit plan disclosures that no longer are considered cost-
beneficial, clarifies the specific requirements of certain disclosures, and adds certain disclosure requirements identified as relevant.
The update is effective for annual reporting periods beginning after December 15, 2020 and should be applied on a retrospective basis
to all periods presented. We adopted this amendment effective September 30, 2019. There was no impact to our consolidated
financial statements or quarterly disclosures. Our annual disclosures are updated for the period ended December 31, 2019.

“

Impact of Recently Issued Accounting Standards–Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on

Financial Instruments.” The guidance in ASU 2016-13 and subsequently issued amendments requires financial assets measured at
amortized cost basis to be presented at the net amount expected to be collected, thus eliminating the probable initial recognition
threshold and instead reflecting the current estimate of all expected credit losses. The guidance also requires that credit losses relating
to available-for-sale debt securities be recorded through an allowance for credit losses rather than a write-down, thus enabling the
ability to record reversals of credit losses in current period net income. The update is effective for interim and annual reporting periods
beginning after December 15, 2019. An entity will apply the amendment through a cumulative-effect adjustment to retained earnings
as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). A
prospective transition approach is required for debt securities for which an-other-than-temporary impairment had been recognized
before the effective date. The effect of the prospective transition approach is to maintain the same amortized cost basis before and
after the effective date of this update. We will adopt this guidance for our fiscal year beginning January 1, 2020. Adoption of this
guidance will not have a material impact to our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud

Computing Arrangement That Is a Service Contract.” The guidance aligns the requirements for capitalizing implementation costs
incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to
develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the
guidance requires an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to
determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The
guidance is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied either
retrospectively or prospectively to all implementation costs incurred after the date of adoption. We will adopt this standard effective
January 1, 2020 on a prospective basis. Adoption of this guidance will not have a material effect on our financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes – Simplifying the Accounting for Income Taxes

“

.” The

guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intraperiod allocation,
and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including
recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group, among others. The amendments

in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim
periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial
statements have not yet been issued. We are still assessing the impact of adoption on our consolidated financial statements.

q
Note 2: Acquisitions

On July 2, 2018 (“the acquisition date”) JT Ryerson purchased Central Steel and Wire Company (“CS&W”). CS&W is a

leading metal service center with locations across the Central and Eastern United States offering a wide selection of products and
capabilities, with a commercial portfolio centered on bar, tube, plate, and steel products. Our combined commercial, operational, and
processing strengths will provide a broader and deeper array of products to our customers in the Midwest and Northeast United States.
The fair value of the consideration totaled $163.5 million on the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date.

Cash and cash equivalents
Receivables, less provisions
Inventories
Prepaid expenses and other current assets
Property, plant, and equipment
Other intangible assets
Total identifiable assets acquired
Accounts payable
Salaries, wages, and commissions
Other accrued liabilities
Deferred income taxes
Deferred employee benefits
Total liabilities assumed
Net identifiable assets acquired
Bargain purchase gain
Total purchase price

At July 2,

2018

(In millions)

10.0
80.0
179.8
1.7
66.5
16.1
354.1
(49.7)
(4.9)
(6.5)
(27.7)
(31.8)
(120.6)
233.5
(70.0)
163.5

The Company used third-party valuation firms to estimate the fair values of property, plant, and equipment and intangible assets

as well as to remeasure the deferred employee benefits liabilities. Inventory was valued by the Company using acquisition date fair
values of the metals.

The fair value of accounts receivables acquired was $80.0 million, with a gross amount of $81.8 million. The Company

expected $1.8 million to be uncollectible.

The $16.1 million of acquired intangible assets is related to a trademark acquired with a useful life of 10 years.

The transaction resulted in a bargain purchase gain primarily due to higher inventory and property, plant, and equipment fair
values compared to book values. The Company believes that the bargain purchase gain was primarily the result of the decision by
majority stockholders of CS&W to sell their interests as CS&W had been experiencing increasing net losses. The agreed upon
purchase price reflected the fact the seller would have needed to incur significant costs on future integration initiatives and to upgrade
their infrastructure and computer systems in order to restore CS&W to a profitable basis. With our existing nationwide service center
operations, we believe that our infrastructure will allow the necessary operational improvements to be implemented more efficiently
than the seller. The gain of $70.0 million was included in Other income and (expense), net in the Consolidated Statements of
Operations in 2018. The Company recognized $1.6 million in acquisition-related fees, which was included in Warehousing, delivery,
selling, general, and administrative expense in the Consolidated Statements of Operations in 2018.

Included in the year ended December 31, 2019 financial results is revenue of $576.3 million and a net loss of $13.1 million from

CS&W. Included in the year ended December 31, 2018 financial results is $347.5 million of revenue and $58.3 million (includes the
$70.0 million bargain purchase gain) of net income from CS&W since the acquisition date.

The following unaudited pro forma information presents consolidated results of operations for the year ended December 31,

2019 and 2018 as if the acquisition of CS&W on July 2, 2018 had occurred on January 1, 2018:

Pro Forma
For the Year Ended December 31,

2019

2018

NNet sales
NNet income attributable to Ryerson Holding Corporation

4,501.6
82.4

4,767.7
15.2

The 2018 supplemental pro forma net income attributable to Ryerson Holding Corporation was adjusted to exclude the $70.0

million CS&W bargain purchase gain realized in 2018 as it is a nonrecurring item.

Ryerson Holding acquired Fanello Industries, LLC (“Fanello”), a privately owned metal service company
On April 2, 2018, Ryerson Holding acquired Fanello Industries, LLC (“Fanello”), a privately owned metal service company

located in Lavonia, Georgia. The acquisition is not material to our consolidated financial statements.

On February 15, 2017, Ryerson Holding acquired Guy Metals, Inc. (“Guy Metals”), a privately-owned metal service center
r

company located in Hammond, Wisconsin. The acquisition is not material to our consolidated financial statements.

, Ryerson Holding acquired The Laserflex Corporation (“Laserflex”), a privately-owned metal fabricator
January 19, 2017, Ryerson Holding acquired The Laserflex Corporation (“Laserflex”), a privately-owned metal fabricator
specializing in laser fabrication metal processing and welding with locations in Columbus, Ohio and Wellford, South Carolina. The
acquisition is not material to our consolidated financial statements.
Pro forma information related to the acquisitions of Fanello, Guy
Metals, and Laserflex is not provided above as the impact on the Consolidated Statements of Operations is not material.

Note 3: Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated

Balance Sheets that sum to the total of the beginning and ending cash balances shown in the Consolidated Statements of Cash Flows:

At December 31,

2019

2018

Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash

(In millions)
11.0
48.8
59.8

23.2
1.1
24.3

As part of the indenture for our $650 million senior secured notes due in 2022 (the “2022 Notes”), proceeds from the sale of

property, plant, and equipment that is collateral are deposited into a restricted cash account. Cash can be withdrawn from this
restricted account upon meeting certain requirements, to fund activities such as debt repayment and future capital expenditures. In
December 2019, we signed and closed a sale-leaseback transaction for a group of service center properties. See Note 6: Leases for
additional detail on this transaction. The balance in the restricted account for property, plant, and equipment sales was $47.6 million at
December 31, 2019 compared to zero at December 31, 2018. We also have $1.2 million and $1.1 million of cash restricted for the
purposes of covering letters of credit that can be presented for potential insurance claims at December 31, 2019 and 2018,
respectively.

Note 4: Inventories

Inventories, at stated LIFO value, were classified at December 31, 2019 and 2018 as follows:

In process and finished products

At December 31,

2019

2018

(In millions)

742.9

806.3

If current cost had been used to value inventories, such inventories would have been $51 million lower and $18 million higher

than reported at December 31, 2019 and 2018, respectively. Approximately 91% of inventories are accounted for under the LIFO
method at December 31, 2019 and 2018. Non-LIFO inventories consist primarily of inventory at our foreign facilities using the
moving average cost and the specific cost methods. Substantially all of our inventories consist of finished products.

The Company has consignment inventory at certain customer locations, which totaled $5.6 million and $9.3 million at

December 31, 2019 and 2018, respectively.

Note 5: Property, Plant, and Equipment

q p

Property, plant, and equipment consisted of the following at December 31, 2019 and 2018:

At December 31,

2019

2018

Land and land improvements
Buildings and leasehold improvements
Machinery, equipment, and other
Finance leases
Construction in progress

Total

Less: Accumulated depreciation

Net property, plant, and equipment

(In millions)
89.4
199.0
432.3
73.2
12.6
806.5
(366.8)
439.7

101.2
238.1
406.7
76.6
15.8
838.4
(349.4)
489.0

The Company recorded impairment charges related to fixed assets of zero, $0.2 million, and $0.1 million for the years ended
December 31, 2019, 2018, and 2017, respectively. The impairment charges recorded in all periods related to certain assets held for
sale in order to recognize the assets at their fair value less cost to sell, in accordance with FASB ASC 360-10-35-43, “Property, Plant,
and Equipment – Other Presentation Matters.” The Company recognized gains on the sale of assets classified as held for sale of $0.4
million, zero, and $0.5 million for the years ended December 31, 2019, 2018, and 2017 respectively. The Company had $1.5 million
and $7.8 million of assets held for sale classified within “Prepaid expenses and other current assets” on the Consolidated Balances
Sheets as of December 31, 2019 and 2018, respectively. In December 2019, the Company signed and closed a sale-leaseback
In December 2019, the Company signed and closed a sale-leaseback
transaction for a group of service center properties that resulted in the recognition of a gain on sale of assets of $20.6 million, with
total net proceeds of $61.5 million. See Note 6: Leases for further details.

“

Note 6: Leases

The Company leases various assets including real estate, trucks, trailers, mobile equipment, processing equipment, and IT
equipment. The Company has noncancelable operating leases expiring at various times through 2032, and finance leases expiring at
various times through 2025.

Policy Elections & Practical Expedients

The Company has made an accounting policy election not to record leases with an initial term of twelve months or less (“short

term leases”) on the balance sheet as allowed within ASC 842. Short term lease expense is recognized on a straight-line basis over the
lease term. The Company has elected to apply the practical expedient that allows for the combination of lease and non-lease
components for all asset classes. In addition, the Company elected the package of practical expedients permitted under the transition
guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification
for leases that existed at the transition date.

Significant Judgments

Many of our real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one
to 5 years or more. To determine the expected lease term, we include any noncancelable periods within the lease agreement as well as
any periods covered by an option to extend the lease if we are reasonably certain to exercise the option. The equipment leases do not
typically include options for renewal but do include options for purchase at the end of the lease. We determine the likelihood of
exercising the option for purchase by assessing the option price versus the estimated fair value at the end of the lease term to
determine if the option price is low enough that we are reasonably certain to exercise it. The depreciable life of finance lease assets
and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably
certain of exercise.

Lease payments include fixed payments, the exercise price of a purchase option that is reasonably certain of exercise, variable
payments based on a known index, and the amount probable that the Company will owe under a residual value guarantee. Variable
lease payments that are not based on a known index are not included in lease payments and are expensed as incurred.

The discount rate used to determine the amount of right of use assets, lease liabilities, and lease classification is the interest rate

implicit in the lease, when known. If the rate implicit in the lease is not known, the Company will use its incremental borrowing rate
defined as the interest rate swap rate that approximates the lease term plus the long-term expected spread on the $1.0 billion revolving
credit facility amended as of September 23, 2019 (the “Ryerson Credit Facility”).

In December 2019, we sold and leased back a group of service center properties located in Arizona, Arkansas, Georgia, New

York, Ohio, Texas, Virginia, and Washington for net proceeds of approximately $61.5 million. The total annual rent for the properties
is approximately $4.3 million for the first year and is subject to annual rent escalations over the 12-year lease term. Under the terms of
the lease agreement, the Company is responsible for all taxes, insurance, and utilities and is required to adequately maintain the
properties for the lease term. The lease includes two renewal options for five years each.

The transaction met the requirements for sale leaseback accounting under ASC 842 and ASC 606. Accordingly, the Company

recognized the sale of the properties, which resulted in a gain of approximately $20.6 million recorded in the Consolidated Statements
of Operations. The related land and buildings were removed from property, plant, and equipment and operating lease assets and
liabilities of $47.8 million, respectively, were recorded in the Consolidated Balance Sheets.

The following table summarizes the location and amount of lease assets and lease liabilities reported in our Consolidated

Balance Sheet as of December 31, 2019:

Leases

Balance Sheet Location

Assets
Operating lease assets
Finance lease assets
Total lease assets
Liabilities
Current

Operating
Finance
NNoncurrent
Operating
Finance

Total lease liabilities

Operating lease assets
Property, plant, and equipment, net(a)

Current portion of operating lease liabilities
Other accrued liabilities

NNoncurrent operating lease liabilities
Other noncurrent liabilities

At December 31,
2019
(In millions)

128.2
54.2
182.4

20.9
12.4

112.8
18.7
164.8

(a) Finance lease assets are recorded net of accumulated amortization of $19.0 million as of December 31, 2019.

Rental expense under operating leases totaled $26.8 million, $27.9 million, and $28.5 million for the years ended December 31,

2019, 2018, and 2017, respectively. The following table summarizes the location and amount of lease expense reported in our
Consolidated Statements of Operations for the twelve months ended December 31, 2019:

Lease Expense

Location of Lease Expense Recognized in Income

Operating lease expense

Finance lease expense

Amortization of lease assets

Interest on lease liabilities

Variable lease expense

Short-term lease expense

Total lease expense

Warehousing, delivery, selling, general, and
administrative

Warehousing, delivery, selling, general, and
administrative
Interest and other expense on debt
Warehousing, delivery, selling, general, and
administrative
Warehousing, delivery, selling, general, and
administrative

Year Ended December 31,
2019
(In millions)

20.7

6.9
1.6

3.1

3.0
35.3

The following table presents maturity analysis of lease liabilities at December 31, 2019:

Maturity of Lease Liabilities

Operating Leases(a)

Finance Leases

2020
2021
2022
2023
2024
After 2024
Total lease payments
Less: Interest(b)
Present value of lease liabilities(c)

(In millions)
25.5
23.6
20.1
16.9
15.8
51.3
153.2
(19.5)
133.7

13.6
8.7
5.5
3.0
2.5
0.2
33.5
(2.4)
31.1

(a) There were no operating leases with options to extend lease terms that are reasonably certain of being exercised and the operating lease payments exclude

$0.3 million of legally binding minimum lease payments for leases signed but not yet commenced.

(b) Calculated using the discount rate for each lease.
(c) Includes the current portion of $20.9 million for operating leases and $12.4 million for finance leases.

The following table presents the future minimum lease commitments under ASC 840 at December 31, 2018:

Future Minimum Lease Commitments

Operating Leases

Capital Leases

2019
2020
2021
2022
2023
After 2023
Total lease payments

(In millions)
21.7
19.2
17.0
13.3
10.5
19.9
101.6

13.7
11.2
5.7
2.5
0.6
0.1
33.8

The following table shows the weighted-average remaining lease term and discount rate for operating and finance leases,

respectively, at December 31, 2019:

Lease Term and Discount Rate

Weighted-average remaining lease term (years)

Operating leases
Finance leases

Weighted-average discount rate

Operating leases
Finance leases

At December 31,
2019

7.9
2.8

3.6%
4.8%

Information reported in our Consolidated Statement of Cash Flows for the twelve months ended December 31, 2019 is

summarized below:

Other Information

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

Assets obtained in exchange for lease obligations:

Adoption of accounting principal ASC 842
Operating leases
Finance leases

Year Ended December 31, 2019
(In millions)

21.4
1.6
13.6

82.3
64.8
2.2

Note 7: Definite-Lived Intangible Assets

The following summarizes the components of definite-lived intangible assets at December 31, 2019 and 2018:

Weighted
Average
Amortizable
Life in
Years

At December 31, 2019

At December 31, 2018

Gross
Carrying
Amount

Accumulated
Amortization

Net

Gross
Carrying
Amount

(In millions)

Accumulated
Amortization

Net

Amortizable intangible assets
Customer relationships
Developed technology / product
know-how
NNon-compete agreements
Trademarks
Licenses
Total definite-lived intangible
assets

14.2

58.1

(37.9) $

20.2

58.1

(33.8) $

24.3

10.0
5.0
13.6
7.0

4.6
0.6
42.3
0.5

(2.7)
(0.4)
(14.0)
(0.5)

1.9
0.2
28.3
—

4.6
0.9
42.3
0.5

(2.5)
(0.6)
(10.9)
(0.5)

2.1
0.3
31.4
—

106.1

(55.5) $

50.6

106.4

(48.3) $

58.1

Amortization expense related to intangible assets reported in warehousing, delivery, selling, general, and administrative expense
in our Consolidated Statements of Operations for the years ended December 31, 2019, 2018, and 2017 was $7.5 million, $6.9 million,
and $6.1 million, respectively.

Estimated amortization expense related to intangible assets at December 31, 2019, for each of the years in the five year period

ending December 31, 2024 and thereafter is as follows:

For the year ended December 31, 2020
For the year ended December 31, 2021
For the year ended December 31, 2022
For the year ended December 31, 2023
For the year ended December 31, 2024
For the years ended thereafter

Estimated
Amortization Expense
(In millions)

7.4
6.4
6.3
5.1
5.1
20.3

Note 8: Goodwill

The following is a summary of changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018:

Balance at January 1, 2018
Acquisitions
Balance at December 31, 2018
Acquisitions
Balance at December 31, 2019

Cost

Accumulated
Impairment
(In millions)

Carrying
Amount

123.6
5.0
128.6
—
128.6

(8.3) $
— $
(8.3) $

—

(8.3) $

115.3
5.0
120.3
—
120.3

In 2018, the Company recognized $5.0 million of goodwill within the US Reporting unit related to the Fanello acquisition,

which is deductible for income tax purposes.

Pursuant to ASC 350, “Intangibles – Goodwill and Other,

“

” we review the recoverability of goodwill annually as of October 1 or

whenever significant events or changes occur which might impair the recovery of recorded amounts. Based on our October 1, annual
goodwill impairment test, we determined there was no goodwill impairment in 2019.

g
Note 9: Restructuring and Other Charges

The following summarizes restructuring accrual activity for the years ended December 31, 2019, 2018, and 2017:

Employee
Related
Costs

Tenancy
and Other
Costs
(In millions)

Total
Restructuring
Costs

Balance at January 1, 2017
Restructuring charges
Cash payments
Reclassification
Reduction to reserve
Balance at December 31, 2017
Restructuring charges
Cash payments
Balance at December 31, 2018
Restructuring charges
Cash payments
Balance at December 31, 2019

2019

0.2
—
—
—
(0.2)

— $
3.6
(3.2)
0.4
2.1
(1.5)
1.0

1.3
0.8
(0.5)
0.1
—
1.7
0.6
(0.8)
1.5
0.3
(0.9)
0.9

1.5
0.8
(0.5)
0.1
(0.2)
1.7
4.2
(4.0)
1.9
2.4
(2.4)
1.9

In 2019, the Company recorded a $2.1 million charge for employee-related costs primarily for severance costs for corporate
staff reductions. The Company paid $1.2 million of the employee costs related to these actions. In addition, the Company paid $0.3
million related to 2018 staff reductions. The remaining $1.0 million of employee-related costs are expected to be paid in 2020.

During 2019, the Company also recorded a $0.3 million charge to increase the reserve for tenancy-related costs for a facility

closed in 2013. The Company paid $0.9 million in 2019 for costs related to facilities closed in prior years. The remaining $0.9 million
of tenancy-related costs are expected to be paid through 2025.

2018

In 2018, the Company recorded a $3.6 million charge for employee-related costs primarily for severance costs for corporate

staff reductions and two facility closures. The Company paid $3.2 million of the employee costs related to these actions.

During 2018, the Company also recorded a $0.6 million charge to increase the reserve for tenancy-related costs for a facility

closed in 2013. The Company paid $0.8 million in costs related to this facility closure.

2017

During 2017, the Company recorded a $0.2 million reduction to the reserve for employee-related costs and credited

warehousing, delivery, selling, general, and administrative expense in the Consolidated Statements of Operations. This action fully
utilized the remaining reserve for employee-related costs.

Note 10: Debt

Long-term debt consisted of the following at December 31, 2019 and 2018:

Ryerson Credit Facility
11 % Senior Secured Notes due 2022
Foreign debt
Other debt
Unamortized debt issuance costs and discounts

Total debt

Less:
Ryerson Credit Facility - "first in, last out" subfacility
Short-term foreign debt
Other short-term debt

Total long-term debt

At December 31,

2019

2018

(In millions)

377.7
587.9
13.2
9.5
(6.5)
981.8

34.3
13.2
1.7
932.6

535.9
599.5
19.5
8.3
(9.9)
1,153.3

—
19.5
7.8
1,126.0

The principal payments required to be made on debt during the next five fiscal years are shown below:

Amount
(In millions)

49.2
345.1
589.7
1.9
2.4
—