A reconciliation of diluted EPS to adjusted diluted EPS is provided below.

(Dollars and shares in millions, except per share data) 2022 Leather Laser Engraving

Adjusted net income attributable to Ryerson Holding Corporation

On May 31, 2022, JT Ryerson paid $2.9 million to acquire Ford Tool Steels, Inc. ("FTS"), a tool steel processor located in St. Louis, Missouri. FTS serves customers across the Midwest U.S. with tool steel and alloys, as well as cut-to-length sawing, plate sawing, and grinding and milling services.

On August 31, 2022, JT Ryerson acquired Howard Precision Metals, Inc. ("Howard"), one of the largest aluminum distributors in the Midwest. Based in Milwaukee, Wisconsin, Howard specializes in value-added processing services including high-quality precision-cut aluminum plate and saw-cut extruded aluminum bar distribution. The total amount paid by JT Ryerson for the acquisition amounted to $19.2 million.

Components of Results of Operations

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

The following table sets forth our Consolidated Statements of Operations data (certain percentages may not calculate due to rounding):

Net income attributable to Ryerson

The following charts show the Company's percentage of sales by major product lines for 2022 and 2021:

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Gross profit dollars increased in 2022 compared to 2021 as average selling price increased faster than the increase in the average cost of materials sold resulting in an increase in gross margin.

higher selling, general, and administrative expenses of $16.9 million resulting from higher consulting fees and higher travel and entertainment expenses;

higher delivery expenses of $14.2 million due to increased fuel and delivery costs;

higher operating expenses of $11.1 million primarily due to higher repair & maintenance costs, higher operating supplies, higher rent expense after the leaseback of facilities sold in 2021 and the new lease on the Centralia, Washington facility which began in the third quarter of 2022, and higher information technology costs;

higher reorganization costs of $3.4 million primarily due to increased system implementation activity;

higher depreciation and amortization expense of $2.9 million from increased capital expenditures in 2022; and

partially offset by lower compensation expenses of $22.6 million, which comprises lower sales incentive expense of $35.4 million, partially offset by an increase of $12.8 million in salaries and wage expense due to compensation increases and increased headcount resulting from acquisitions.

Our operating profit increased in 2022 compared to 2021 primarily due to increases in average selling prices and higher gross margins.

Loss on retirement of debt $ (21.3 ) (0.4 )% $ (5.5 )

The $131.4 million income tax provision in 2022 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.

recorded a $1.6 million benefit as a result of releasing valuation allowances on certain state and foreign net operating losses, and a $0.8 million benefit related to the statute of limitations expiring on an uncertain tax position.

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

Below is a reconciliation of total debt to net debt:

The following table summarizes the Company's cash flows:

Total debt at December 31, 2022 decreased $272.3 million to $367.0 million from $639.3 million at December 31, 2021, mainly due to cash flow generated from operating activities in 2022.

months. Including leases signed but not yet commenced as of December 31, 2022, total lease payments are $445 million. Please refer to Part II, Item 8 - Financial Statements and Supplementary Data, Note 6: Leases for further information.

Purchase obligations with suppliers are entered into when we receive firm sales commitments with certain of our customers. As of December 31, 2022, we had outstanding purchase obligations of approximately $19 million expiring in 2023.

During 2022, the Company paid $0.1 million of tenancy-related costs for a facility closed in 2015. The remaining reserve balance of $0.6 million is expected to be paid through 2025.

During 2021, the Company paid the remaining $0.5 million of employee-related costs related to prior year staff reductions.

The Company will continue to maintain a valuation allowance on certain U.S. federal and foreign 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.

asset would be written down to fair value, based on various available valuation techniques, including the discounted cash flow method.

Recent accounting pronouncements are discussed within Note 1: Summary of Accounting and Financial Policies in Part II, Item 8 Financial Statements and Supplementary Data.

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