UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2011~~March 31, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-13122

RELIANCE STEEL & ALUMINUM CO.

(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of
incorporation or organization)

95-1142616

~~(State or other jurisdiction of~~

~~incorporation or organization)~~

(I.R.S. Employer

Identification No.)

350 South Grand Avenue, Suite 5100

Los Angeles, California 90071

(213) 687-7700

(Address of principal executive offices and telephone number)

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of ~~October 31, 2011, 74,972,573~~April 30, 2012, 75,135,657 shares of the registrant’s common stock, no par value, were outstanding.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PART I — FINANCIAL INFORMATION			1

	Item 1.	Unaudited Consolidated Balance Sheets at ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~2011	1

		Unaudited Consolidated Statements of Income for the Three Months Ended March 31, 2012 and ~~Nine Months Ended September 30,~~ 2011 ~~and 2010~~	2

		Unaudited Consolidated Statements of ~~Cash Flows~~Comprehensive Income for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~	3

		Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011	4

		Notes to Unaudited Consolidated Financial Statements	45

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2017

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2723

	Item 4.	Controls and Procedures	2723

PART II — OTHER INFORMATION			2824

	Item 1A.	Risk Factors	2824

	Item 6.	Exhibits	2824

SIGNATURES				2925

EXHIBIT INDEX				3026

Table of Contents

PART I — FINANCIAL INFORMATION

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

		September 30, 2011			December 31, 2010				March 31, 2012			December 31, 2011*
ASSETS	ASSETS							ASSETS

Current assets:
Cash and cash equivalents		$	91.1		$	72.9			$	70.0		$	84.6
Accounts receivable, less allowance for doubtful accounts of $23.4 at September 30, 2011 and $17.2 at December 31, 2010		1,019.5			697.0
Accounts receivable, less allowance for doubtful accounts of $23.3 at March 31, 2012 and $22.2 at December 31, 2011									1,044.2			896.2
Inventories		1,276.6			860.2				1,399.4			1,212.8
Prepaid expenses and other current assets		42.5			42.5				38.9			47.8
Income taxes receivable		¾			28.3
Deferred income taxes									33.4			33.3
Total current assets		2,429.7			1,700.9				2,585.9			2,274.7
Property, plant and equipment:
Land		142.7			137.1				147.5			145.8
Buildings		634.3			594.3				660.9			656.8
Machinery and equipment		969.3			898.1				1,013.9			982.9
Accumulated depreciation		(658.7		)	(604.2		)		(701.7		)	(680.0		)
		1,087.6			1,025.3				1,120.6			1,105.5

Goodwill		1,231.6			1,109.6				1,249.6			1,244.3
Intangible assets, net		909.8			755.8				890.9			895.9
Cash surrender value of life insurance policies, net		34.6			42.0				40.3			41.9
Investments in unconsolidated entities		16.8			18.3				16.4			16.2
Other assets		17.9			17.0				28.1			27.4
Total assets		$	5,728.0		$	4,668.9			$	5,931.8		$	5,605.9

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY							LIABILITIES AND EQUITY

Current liabilities:
Accounts payable		$	412.7		$	245.0			$	433.7		$	335.2
Accrued expenses		66.9			45.7				62.6			54.0
Accrued compensation and retirement costs		100.1			85.1				73.6			111.0
Accrued insurance costs		36.3			37.0				44.1			42.1
Current maturities of long-term debt and short-term borrowings		14.2			86.2				12.1			12.2
Income taxes payable		4.7			¾				49.6			21.9
Deferred income taxes		9.6			9.6
Total current liabilities		644.5			508.6				675.7			576.4
Long-term debt		1,463.9			855.1				1,419.0			1,319.0
Long-term retirement costs		72.0			74.7				91.5			88.6
Other long-term liabilities		29.2			27.8				29.0			30.1
Deferred income taxes		425.7			372.6				442.1			439.8
Commitments and contingencies
Equity:
Preferred stock, no par value:
Authorized shares — 5,000,000 None issued or outstanding		¾			¾				¾			¾
Common stock, no par value:
Authorized shares — 100,000,000 Issued and outstanding shares — 74,967,048 at September 30, 2011 and 74,639,223 at December 31, 2010, stated capital		650.7			624.7
Authorized shares — 100,000,000 Issued and outstanding shares — 75,122,110 at March 31, 2012 and 75,007,694 at December 31, 2011, stated capital									666.6			657.1
Retained earnings		2,437.3			2,188.7				2,599.8			2,495.6
Accumulated other comprehensive (loss) income		(3.3		)	10.3
Accumulated other comprehensive loss									(1.0		)	(8.8		)
Total Reliance shareholders’ equity		3,084.7			2,823.7				3,265.4			3,143.9
Noncontrolling interests		8.0			6.4				9.1			8.1
Total equity		3,092.7			2,830.1				3,274.5			3,152.0
Total liabilities and equity		$	5,728.0		$	4,668.9			$	5,931.8		$	5,605.9

* Amounts were derived from audited financial statements.

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts)

													Three Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,						March 31,
	2011			2010			2011			2010			2012			2011

Net sales	$	2,138.6		$	1,653.8		$	6,100.8		$	4,728.5		$	2,288.3		$	1,912.7

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	1,644.7			1,257.6			4,589.8			3,537.4			1,710.5			1,406.4
Warehouse, delivery, selling, general and administrative	319.6			278.2			951.8			819.6			357.7			318.5
Depreciation and amortization	34.2			29.8			98.7			88.9			35.5			33.0
	1,998.5			1,565.6			5,640.3			4,445.9			2,103.7			1,757.9

Operating income	140.1			88.2			460.5			282.6			184.6			154.8

Other income (expense):
Interest	(15.0		)	(15.3		)	(45.1		)	(46.0		)	(14.5		)	(14.6		)
Other (expense) income, net	(6.5		)	0.5			(2.2		)	(0.6		)
Other income, net													6.5			0.2
Income before income taxes	118.6			73.4			413.2			236.0			176.6			140.4
Income tax provision	32.3			24.1			133.1			78.9			58.7			46.8
Net income	86.3			49.3			280.1			157.1			117.9			93.6
Less: Net income attributable to noncontrolling interests	1.4			0.6			4.2			2.2			1.7			1.3
Net income attributable to Reliance	$	84.9		$	48.7		$	275.9		$	154.9		$	116.2		$	92.3

Earnings per share:
Diluted earnings per common share attributable to Reliance shareholders	$	1.13		$	0.65		$	3.68		$	2.08		$	1.54		$	1.23

Basic earnings per common share attributable to Reliance shareholders	$	1.13		$	0.65		$	3.69		$	2.09		$	1.55		$	1.24

Cash dividends per share	$	0.12		$	0.10		$	0.36		$	0.30		$	0.15		$	0.12

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMPREHENSIVE INCOME

(in millions)

Nine Months Ended
September 30,

2011

2010

Operating activities:

Net income

$
280.1

$
157.1

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

98.7

88.9

Deferred income tax benefit

(3.8
)
(2.9
)
(Gain) loss on sales of property, plant and equipment

(2.6
)
0.8

Equity in earnings of unconsolidated entities

(1.6
)
(0.2
)
Dividends received from unconsolidated entities

2.5

0.3

Share based compensation expense

16.4

12.7

Tax deficit (excess benefit) from share based compensation

0.2

(3.3
)
Net loss from life insurance policies

3.8

0.9

Changes in operating assets and liabilities (excluding effect of businesses acquired):

Accounts receivable

(270.7
)
(227.2
)
Inventories

(294.6
)
(200.6
)
Prepaid expenses and other assets

29.3

38.5

Accounts payable and other liabilities

159.6

182.7

Net cash provided by operating activities

17.3

47.7

Investing activities:

Purchases of property, plant and equipment

(112.7
)
(65.8
)
Acquisition of a metals service center, net of cash acquired

(306.5
)
¾

Proceeds from sales of property, plant and equipment

9.1

1.1

Net proceeds from redemption of life insurance policies

3.6

3.9

Net cash used in investing activities

(406.5
)
(60.8
)

Financing activities:

Net short-term debt (repayments) borrowings

(102.8
)
3.9

Proceeds from long-term debt borrowings

913.0

427.0

Principal payments on long-term debt

(379.5
)
(272.8
)
Debt issuance costs

(7.3
)
¾

Payments to noncontrolling interest holders

(2.6
)
(1.0
)
Capital contributions from noncontrolling interests

¾

0.2

Dividends paid

(26.9
)
(22.2
)
(Tax deficit) excess benefit from share based compensation

(0.2
)
3.3

Exercise of stock options

9.6

17.4

Net cash provided by financing activities

403.3

155.8

Effect of exchange rate changes on cash

4.1

0.8

Increase in cash and cash equivalents

18.2

143.5

Cash and cash equivalents at beginning of year

72.9

43.0

Cash and cash equivalents at end of period

$
91.1

$
186.5

Supplemental cash flow information:

Interest paid during the period

$
33.8

$
33.0

Income taxes paid during the period

$
111.5

$
47.1

Non-cash investing and financing activities:

Debt assumed in connection with an acquisition of a metals service center

$
104.8

$
¾

	Three Months Ended
	March 31,
	2012			2011

Net income	$	117.9		$	93.6

Other comprehensive income:
Foreign currency translation gain	7.6			6.6
Unrealized gain on investments, net of tax	0.2			0.1
Total other comprehensive income	7.8			6.7
Comprehensive income	125.7			100.3
Less: comprehensive income attributable to noncontrolling interests	(1.7		)	(1.3		)
Comprehensive income attributable to Reliance	$	124.0		$	99.0

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNUAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended March 31,
	2012			2011

Operating activities:
Net income	$	117.9		$	93.6
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense	35.5			33.0
Deferred income tax benefit	(1.2		)	(1.2		)
Gain on sales of property, plant and equipment	(0.1		)	¾
Equity in earnings of unconsolidated entities	(0.5		)	(0.7		)
Dividends received from unconsolidated entities	0.3			0.3
Share-based compensation expense	4.9			4.8
Tax deficit from share-based compensation	0.1			¾
Net (gain) loss from life insurance policies	(1.2		)	1.6
Changes in operating assets and liabilities (excluding effect of business acquired):
Accounts receivable	(143.6		)	(215.1		)
Inventories	(182.2		)	(228.2		)
Prepaid expenses and other assets	9.0			34.6
Accounts payable and other liabilities	97.9			175.9
Net cash used in operating activities	(63.2		)	(101.4		)

Investing activities:
Purchases of property, plant and equipment	(34.6		)	(35.8		)
Acquisition of a metals service center, net of cash acquired	(10.0		)	¾
Proceeds from sales of property, plant and equipment	0.2			0.9
Net proceeds from redemption of life insurance policies	2.8			0.1
Net cash used in investing activities	(41.6		)	(34.8		)

Financing activities:
Net short-term debt repayments	(0.4		)	¾
Proceeds from long-term debt borrowings	221.0			197.0
Principal payments on long-term debt	(122.2		)	(52.0		)
Payments to noncontrolling interest holders	(0.7		)	(0.8		)
Dividends paid	(11.2		)	(9.0		)
Tax deficit from share-based compensation	(0.1		)	¾
Exercise of stock options	4.6			3.9
Net cash provided by financing activities	91.0			139.1
Effect of exchange rate changes on cash	(0.8		)	1.0
(Decrease) increase in cash and cash equivalents	(14.6		)	3.9
Cash and cash equivalents at beginning of year	84.6			72.9
Cash and cash equivalents at end of period	$	70.0		$	76.8

Supplemental cash flow information:
Interest paid during the period	$	5.2		$	2.9
Income taxes paid during the period	$	32.6		$	4.2

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements, have been included. The results of operations for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 are not necessarily indicative of the results for the full year ending December 31, ~~2011.~~2012. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, ~~2010,~~2011, included in Reliance Steel & Aluminum Co.’s (“We”, “Reliance” or the “Company”) Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in ~~the Company’s~~our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

~~The Company’s~~Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. ~~The Company’s~~Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated.

2. Impact of Recently Issued Accounting Guidance

Accounting Guidance Recently Adopted

On January 1, ~~2011, the Company~~2012, we adopted changes issued by the Financial Accounting Standards Board (“FASB”) related to the calculation of the carrying amount of a reporting unit when performing the first step of a goodwill impairment test. More specifically, the changes require an entity to use an equity premise when performing the first step of a goodwill impairment test. If a reporting unit has a zero or negative carrying amount, the entity must assess and consider qualitative factors and whether it is more likely than not that a goodwill impairment exists. The adoption of these changes did not have a material impact on the Company’s financial position, results of operations or cash flows.

~~Impact of Recently Issued Accounting Standards — Not Yet Adopted~~

In September 2011, the FASB amended its guidance regarding the disclosure requirements for employers participating in multiemployer pension and other postretirement benefit plans (“multiemployer plans”) to improve transparency and increase awareness of the commitments and risks involved with participation in multiemployer plans. The new accounting guidance requires employers participating in multiemployer plans to provide additional quantitative and qualitative disclosures to provide users with more detailed information regarding an employer’s involvement in multiemployer plans. The new guidance is effective for the Company’s interim and annual reporting periods beginning in the fourth quarter of 2011, with early adoption permitted. The Company is currently evaluating this guidance, but does not expect the adoption will have a material effect on its consolidated financial statements.

In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. This guidance will allow companies to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. This new guidance is effective for the Company beginning January 1, 2012, with early adoption permitted. The Company is currently evaluating this guidance, but does not expect the adoption will have a material effect on its consolidated financial statements.

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In June 2011, the FASB issued accounting guidance,~~, which requires companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. We elected to adopt the two-statement option. The new guidance ~~eliminates~~eliminated the option to present the components of other comprehensive income as part of the statement of equity. Other than the change in presentation, the adoption of these changes had no material impact on our consolidated financial statements. The new guidance is effective for the Company’s interim and annual reporting periods beginning in the first quarter of 2012 and will be applied retrospectively, with early adoption permitted. The Company is currently evaluating how it will reportalso required entities to present reclassification adjustments from accumulated other comprehensive income ~~but either method permitted will constitute a change~~by component in both the ~~Company’s financial~~ statement ~~presentation.~~

~~In May~~in which net income is presented and the statement in which other comprehensive income is presented. However, in December 2011, the FASB issued ~~accounting~~ guidance which indefinitely defers the guidance related to the presentation of reclassification adjustments.

On January 1, 2012, we adopted changes issued by the FASB to provide a consistent definition of fair value and to ensure that the fair value measurement and disclosure requirements are similar between U.S. generally accepted accounting principles ~~in the United States~~ and International Financial Reporting Standards. The new guidance ~~changes~~changed certain fair value measurement principles and ~~enhances~~enhanced the disclosure requirements particularly for level 3 fair value measurements. The ~~new guidance is effective for the Company’s interim and annual reporting periods beginning in the first quarter~~adoption of ~~2012 and will be applied prospectively. The Company is currently evaluating the impact of adopting the new guidance, but currently believes there will be no significant~~these changes did not have a material impact on ~~its~~our consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. Acquisitions

2012 Acquisition

Effective February 1, 2012, through our wholly-owned subsidiary Diamond Manufacturing Company, we acquired McKey Perforating Co., Inc. (“McKey”), headquartered in New Berlin, Wisconsin and its subsidiary, McKey Perforated Products Co., Inc., located in Manchester, Tennessee. McKey was founded in 1867 and is a contract manufacturer that provides a full range of metal perforating and fabrication services to customers located primarily in the U.S. McKey had net sales of $3.6 million for the two months ended March 31, 2012.

2011 Acquisition

Effective August 1, 2011, ~~the Company~~we acquired all the outstanding capital securities of Continental Alloys & Services, Inc. (“Continental”), headquartered in Houston, Texas, and certain affiliated ~~companies. The acquisition was funded with proceeds from our revolving credit facility.~~companies for a combined transaction value of approximately $440.8 million. Continental is a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies and has 12 locations in seven countries including Canada, Malaysia, Mexico, Singapore, the U.A.E., the United ~~States, Canada,~~Kingdom, and the United ~~Kingdom, Singapore, Malaysia, U.A.E.~~States. This acquisition aligns well with our diversification strategy by increasing our exposure to the fast growing energy market, including the addition of Oil Country Tubular Goods (“OCTG”) products, new processing capabilities, and ~~Mexico.~~entry into new international markets. Continental and its affiliates had combined net sales of ~~$88.4~~approximately $125.0 million for the ~~two~~three months ended ~~September 30, 2011.~~March 31, 2012.

~~The allocation of the total preliminary purchase price of Continental to the fair value of the assets acquired and liabilities assumed is as follows (in millions):~~

Cash

$
22.8

Accounts receivable

55.7

Inventories

126.7

Property, plant and equipment

30.5

Goodwill

126.3

Intangible assets subject to amortization

95.9

Intangible assets not subject to amortization

84.3

Other current and long-term assets

1.8

Total assets acquired

544.0

Current and long-term debt

(104.8
)
Deferred taxes

(58.5
)
Other current and long-term liabilities

(51.4
)
Total liabilities assumed

(214.7
)
Net assets acquired

$
329.3

~~2010 Acquisitions~~

On December 1, 2010, through our subsidiary American Metals Corporation, we acquired all of the outstanding capital stock of Lampros Steel, Inc. (“LSI”) and a related interest in Lampros Steel Plate Distribution, LLC (“LSPD”). LSI specializes in structural steel shapes with a facility located in Portland, Oregon. LSPD owned a 50% interest in an unconsolidated partnership, LSI Plate, that is a distributor of carbon steel plate with locations in California and Oregon. Effective March 2011, the business conducted by LSI Plate was moved to LSI in order to achieve certain operational efficiencies. Net sales of LSI during the nine months ended September 30, 2011 were $29.9 million.

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

On October 1, 2010, we acquired all of the outstanding capital stock of Diamond Consolidated Industries, Inc. and affiliated companies (“Diamond”), which now operate under the corporate name Diamond Manufacturing Company. The operating divisions consist of Diamond Manufacturing Company located in Wyoming, Pennsylvania and Diamond Manufacturing Midwest in Michigan City, Indiana, both of which specialize in the manufacture and sale of specialty engineered perforated materials; Perforated Metals Plus, a distributor of perforated metals located in Charlotte, North Carolina; and Dependable Punch, a manufacturer of custom punches for tools and dies also located in Wyoming, Pennsylvania. This acquisition expanded our product and processing offerings with the addition of perforated metals. An operating division of Diamond was opened near Dallas, Texas in early 2011 to expand Diamond’s geographic reach. Net sales of Diamond during the nine months ended September 30, 2011 were $77.2 million.

~~Purchase price allocations~~

The acquisitions discussed in this note have been accounted for under the acquisition method of accounting and, accordingly, the respective purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of each acquisition. The accompanying consolidated statements of income include the revenues and expenses of each acquisition since its respective acquisition date. The consolidated balance sheets reflect the allocation of each acquisition’s purchase price as of September 30, 2011, as applicable. The purchase price allocation for ~~the~~ Continental ~~acquisition is~~and McKey are preliminary and isare pending the completion of ~~certain purchase price adjustments based on audited closing balance sheet amounts, tangible and intangible asset valuations and~~ various pre- and post-acquisition period income tax returns.

4. Goodwill

The change in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 is as ~~follows (in millions):~~follows:

Balance as of December 31, 2010

$
1,109.6

Acquisition

126.3

Purchase price allocation adjustments

0.2

Effect of foreign currency translation

(4.5
)
Balance as of September 30, 2011

$
1,231.6

	(in millions)
Balance as of December 31, 2011	$	1,244.3
Acquisition	3.1
Effect of foreign currency translation	2.2
Balance as of March 31, 2012	$	1,249.6

~~The Company~~We had no accumulated impairment losses related to goodwill as of ~~September 30, 2011.~~March 31, 2012.

5. Intangible Assets, net

The following table summarizes ~~the Company’s~~our intangible assets, net:

	September 30, 2011					December 31, 2010					March 31, 2012					December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
	(in millions)										(in millions)
Intangible assets subject to amortization:
Covenants not to compete	$	7.4	$	(6.9	)	$	7.1	$	(6.7	)	$	7.6	$	(7.0	)	$	7.3	$	(6.9	)
Loan fees	31.2		(17.4		)	23.9		(14.1		)	31.2		(18.3		)	31.2		(17.6		)
Customer lists/relationships	470.5		(104.9		)	379.3		(83.7		)	480.7		(123.6		)	477.7		(114.2		)
Software — internal use	8.1		(4.5		)	8.1		(3.8		)
Software – internal use											8.1		(4.9		)	8.1		(4.7		)
Other	4.9		(2.0		)	4.9		(1.7		)	6.7		(2.2		)	6.6		(2.2		)
	522.1		(135.7		)	423.3		(110.0		)	534.3		(156.0		)	530.9		(145.6		)
Intangible assets not subject to amortization:
Trade names	523.4		—			442.5		—			512.6		—			510.6		—
	$	1,045.5	$	(135.7	)	$	865.8	$	(110.0	)	$	1,046.9	$	(156.0	)	$	1,041.5	$	(145.6	)

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Intangible assets recorded in connection with the ~~Continental~~McKey acquisition were ~~$180.2~~$2.3 million (see Note 3). A total of $84.3 million was allocated to the trade names acquired, none of which is subject to amortization. Additionally, the Company recorded other identifiable assets related to customer relationships and covenants not to compete of $95.6 million and $0.3 million, respectively, with weighted average lives of 10 years and 5 years, respectively. The Company also recorded $7.3 million of intangible assets in connection with the amendment of its syndicated credit agreement (see Note 7). The CompanyWe recognized amortization expense for intangible assets of ~~$25.9~~$10.2 million and ~~$21.7~~$7.9 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ respectively. Other changes in intangible assets, net during the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 are due to foreign currency translation ~~losses~~gains of ~~$7.6~~$2.9 million.

The following is a summary of estimated aggregated amortization expense for the remaining ~~three~~nine months of ~~2011~~2012 and each of the succeeding five ~~years (in millions):~~years:

2011	$	9.9
			(in millions)
2012	39.5		$	30.6
2013	39.4		40.7
2014	37.4		38.7
2015	35.8		37.1
2016	34.2		35.4
2017			30.0

6. Income Taxes

~~The Company’s~~Our effective income tax rates for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 were 33.2% and ~~2010 were 32.2% and 33.4%~~33.3%, respectively. ~~The decrease in the~~Permanent items that impacted our effective income tax ~~rate was primarily due~~rates were not materially different in amounts during these periods and relate mainly to ~~favorable state law changes to apportionment weights, statute expirations~~company-owned life insurance policies and settlements for uncertain tax positions, and the Continental acquisition, which caused a shift in our state apportionment rates that lowered our state income tax rates as well as increased our foreign income levels that are taxed at lower rates.domestic production activities deductions.

7. Debt

Debt consists of the following:

	September 30,			December 31,			March 31,			December 31,
	2011			2010			2012			2011
	(in millions)						(in millions)

Unsecured revolving credit facility due July 26, 2016	$	790.0		$	—		$	745.0		$	645.0
Unsecured revolving credit facility due November 9, 2012	—			195.0
Senior unsecured notes due from July 1, 2011 to July 2, 2013	75.0			135.0
Senior unsecured notes due July 2, 2013							75.0			75.0
Senior unsecured notes due November 15, 2016	350.0			350.0			350.0			350.0
Senior unsecured notes due November 15, 2036	250.0			250.0			250.0			250.0
Other notes and revolving credit facilities	14.8			13.1			12.7			12.8
Total	1,479.8			943.1			1,432.7			1,332.8
Less: unamortized discount	(1.7		)	(1.8		)	(1.6		)	(1.6		)
Less: amounts due within one year and short-term borrowings	(14.2		)	(86.2		)	(12.1		)	(12.2		)
Total long-term debt	$	1,463.9		$	855.1		$	1,419.0		$	1,319.0

Unsecured Revolving Credit Facility

On July 26, 2011, ~~the Company~~we amended and restated the existing syndicated credit agreement to increase the borrowing limit from $1.1 billion to $1.5 billion, and to extend the maturity date of the credit facility for a five-year term to July 26, 2016. The amended and restated revolving credit facility has 26 banks as lenders. Interest on borrowings from the amended and restated revolving credit facility is at variable rates based on LIBOR plus 1.50% or the bank prime rate plus 0.50% as of ~~September 30, 2011.~~March 31, 2012. The amended and restated revolving credit facility includes a commitment fee on the unused portion, at an annual rate of 0.25% as of ~~September 30, 2011.~~March 31, 2012. The applicable margin over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on ~~the Company’s~~our leverage ratio, as defined.

Weighted average rates on borrowings outstanding on the revolving credit facility were 1.74% and 1.78% as of March 31, 2012 and December 31, 2011, respectively. As of March 31, 2012, we had $35.5 million of letters of credit outstanding under the revolving credit facility with availability to issue an additional $214.5 million of letters of credit.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

Weighted average rates on borrowings outstanding on the revolving credit facility were 1.74% and 3.54% as of September 30, 2011 and December 31, 2010, respectively. As of September 30, 2011, the Company had $41.3 million of letters of credit outstanding under the revolving credit facility with availability to issue an additional $208.7 million of letters of credit.(UNAUDITED)

Revolving Credit Facilities — Foreign Operations

Various other separate revolving credit facilities with a combined credit limit of approximately ~~$24.0~~$24.2 million are in place for operations in Asia and Europe with combined outstanding balances of ~~$13.7~~$11.6 million and $11.8 million as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, respectively.

Senior Unsecured Notes — Private Placements

~~The Company has~~We have $75.0 million of outstanding senior unsecured notes issued in private placements of debt as of ~~September 30, 2011.~~March 31, 2012. At ~~September 30, 2011,~~March 31, 2012, the outstanding senior notes bear interest at a fixed rate of 5.35% and have a remaining life of ~~1.8~~1.3 years, maturing in July 2013.

Senior Unsecured Notes — Publicly Traded

On November 20, 2006, ~~the Company~~we entered into an Indenture (the “Indenture”), for the issuance of $600 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, maturing on November 15, 2016 and (b) $250 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036. The notes are senior unsecured obligations of Reliance and rank equally with all other existing and future unsecured and unsubordinated debt obligations of Reliance. The senior unsecured notes include provisions that, in the event of a change in control and a downgrade of ~~the Company’s~~our credit rating, require ~~the Company~~us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued interest.

Covenants

The amended and restated revolving credit facility and the senior unsecured note agreements collectively require ~~the Company~~us to maintain a minimum net worth and interest coverage ratio and a maximum leverage ratio and include a change of control provision, among other things. ~~The Company’s~~Our interest coverage ratio for the twelve-month period ended ~~September 30, 2011~~March 31, 2012 was approximately ~~8.8~~10.1 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as net income attributable to Reliance plus interest expense and provision for income taxes and plus or minus any non-operating non-recurring loss or gain, respectively, divided by interest expense). ~~The Company’s~~Our leverage ratio as of ~~September 30, 2011~~March 31, 2012 calculated in accordance with the terms of the revolving credit facility was ~~33.0%~~31.0% compared to the financial covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of capital lease obligations and outstanding letters of credit, divided by Reliance shareholders’ equity plus total debt). The minimum net worth requirement as of ~~September 30, 2011~~March 31, 2012 was ~~$999.2 million~~$1.09 billion compared to Reliance shareholders’ equity balance of ~~$3.08~~$3.27 billion as of ~~September 30, 2011.~~March 31, 2012.

Additionally, all of our wholly-owned domestic subsidiaries, which constitute the substantial majority of our subsidiaries, guarantee the borrowings under the revolving credit facility, the Indenture and the private placement notes. The subsidiary guarantors, together with Reliance, are required collectively to account for at least 80% of ~~the Company’s~~our consolidated EBITDA and 80% of consolidated tangible assets. Reliance and the subsidiary guarantors accounted for approximately 86% of our total consolidated EBITDA for the last twelve months and approximately 89% of total consolidated tangible assets as of ~~September 30, 2011.~~March 31, 2012.

~~The Company was~~We were in compliance with all debt covenants as of ~~September 30, 2011.~~March 31, 2012.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8. Equity

Common Stock

During the ~~nine~~three months ended ~~September 30, 2011, the Company~~March 31, 2012, we issued ~~225,746~~114,416 shares of common stock in connection with the exercise of stock options for total proceeds of approximately ~~$9.6~~$4.6 million.

Share Based Compensation

On ~~August 8, 2011, the Company~~March 16, 2012, we granted ~~86,000 shares of~~391,050 restricted stock units (“RSUs”) to ~~certain officers of the Company~~key employees pursuant to the Amended and Restated Stock Option and Restricted Stock ~~Plan (the “Plan”), which was approved by~~Plan. Each RSU has a service condition and cliff vests at December 31, 2014 and consists of the ~~shareholders in May 2006. The awards include~~right to receive one share of our common stock and dividend equivalent rights, subject to forfeiture, equal to the accrued cash or stock dividends where the record date for such dividends is after the grant date but before the shares vest. In addition to the service criteria, 138,700 of the RSUs also have performance goals and vest ~~20% on each anniversary date through 2016.~~only upon the satisfaction of the service and performance criteria. The fair value of the restricted stock units granted was ~~$37.29 per share, determined based on the fair value of the Company’s common stock on the grant date.~~

On May 18, 2011, pursuant to the May 2011 Directors Equity Plan, which has been approved by the shareholders, 16,079 shares of restricted stock were automatically granted to the non-employee members of the Board of Directors. The awards include dividend rights and vest immediately upon grant. The recipients are restricted from trading the restricted stock for one year from date of grant. The fair value of the restricted stock granted was $52.24$57.42 per share, determined based on the closing price of ~~the Company’s~~our common stock on the grant date.

On February 23, 2011, pursuant to the Plan, the Company granted 1,037,250 options to acquire its common stock to key employees with an exercise price equal to the fair market value as of the date of the grant. The stock options vest ratably over a period of four years and expire seven years after the date of grant. The fair value of stock options granted of $26.98 per share was estimated using the Black-Scholes option-pricing model with the following assumptions: Expected life — 4.8 years; Expected volatility — 60.2%; Dividend yield — 0.9%; Risk-free interest rate — 2.2%; Exercise price - $55.73.

Share Repurchase Program

~~Under the Company’s current stock repurchase program~~As of March 31, 2012, 7,883,033 shares of common stock remain authorized for repurchase ~~as of September 30, 2011.~~under our stock repurchase program. No shares were repurchased in ~~2011~~2012 or ~~2010.~~2011. Repurchased shares are redeemed and treated as authorized but unissued shares.

~~Other Comprehensive (Loss) Income~~

~~Other comprehensive (loss) income included the following:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2011

2010

2011

2010

(in millions)

Net income

$
86.3

$
49.3

$
280.1

$
157.1

Other comprehensive (loss) income:

Foreign currency translation (loss) gain

(19.8
)
5.4

(13.4
)
4.5

Unrealized (loss) gain on investments, net of tax

(0.3
)
0.1

(0.2
)
—

Total other comprehensive (loss) income

(20.1
)
5.5

(13.6
)
4.5

Comprehensive income

66.2

54.8

266.5

161.6

Comprehensive income attributable to noncontrolling interests

(1.4
)
(0.6
)
(4.2
)
(2.2
)
Comprehensive income attributable to Reliance

$
64.8

$
54.2

$
262.3

$
159.4

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

Accumulated Other Comprehensive ~~(Loss) Income~~Loss

Accumulated other comprehensive ~~(loss) income~~loss included the following:

	September 30,			December 31,			March 31,			December 31,
	2011			2010			2012			2011
	(in millions)						(in millions)
Foreign currency translation gain	$	6.9		$	20.3		$	18.0		$	10.4
Unrealized loss on investments, net of tax	(0.4		)	(0.2		)	(0.2		)	(0.4		)
Minimum pension liability, net of tax	(9.8		)	(9.8		)	(18.8		)	(18.8		)
Total accumulated other comprehensive (loss) income	$	(3.3	)	$	10.3
Total accumulated other comprehensive loss							$	(1.0	)	$	(8.8	)

Foreign currency translation adjustments are not generally adjusted for income taxes as they relate to indefinite investments in foreign subsidiaries. Unrealized loss on investments and minimum pension liability are net of taxes of ~~$0.3~~$0.1 million and ~~$6.6~~$11.5 million, respectively, as of ~~September 30, 2011~~March 31, 2012 and ~~$0.1 million and $6.6 million, respectively, as of~~ December 31, ~~2010.~~2011.

9. Commitments and Contingencies

~~The Company is~~We are currently involved with certain environmental remediation projects related to activities at former manufacturing operations of our wholly-owned subsidiary Earle M. Jorgensen Company (“EMJ”)~~, a wholly-owned subsidiary of the Company,~~ that were sold many years prior to ~~the Company’s~~our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ had insurance policies in place at the time they owned the manufacturing operations that are expected to cover the majority of the related costs. ~~The Company does~~We do not expect that these obligations will have a material adverse impact on ~~its~~our financial position, results of operations or cash flows.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. Earnings Per Share

Basic earnings per share exclude any dilutive effects of options, restricted stock, warrants and convertible securities. Diluted earnings per share are calculated including the dilutive effects of options, restricted stock, warrants and convertible securities, if any.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2011		2010		2011		2010		2012		2011
	(in millions, except share and per share amounts)								(in millions except for share and per share amounts)
Numerator:
Net income attributable to Reliance	$	84.9	$	48.7	$	275.9	$	154.9	$	116.2	$	92.3

Denominator:
Denominator for basic earnings per share:
Weighted average shares	74,826,968		74,292,161		74,740,921		74,126,497
Denominator for basic earnings per share — Weighted average shares									74,922,487		74,619,804

Effect of dilutive securities:
Stock options and restricted stock	136,159		108,198		305,768		242,579		504,065		404,062
Denominator for diluted earnings per share:

Denominator for dilutive earnings per share:
Adjusted weighted average shares and assumed conversions	74,963,127		74,400,359		75,046,689		74,369,076		75,426,552		75,023,866

Net income per share attributable to Reliance shareholders — diluted	$	1.13	$	0.65	$	3.68	$	2.08	$	1.54	$	1.23

Net income per share attributable to Reliance shareholders — basic	$	1.13	$	0.65	$	3.69	$	2.09	$	1.55	$	1.24

The computations of earnings per share for the three months ended March 31, 2012 and 2011 do not include 2,475,395 and 3,098,100 shares reserved for issuance upon exercise of stock options or vesting of restricted shares, respectively, because their inclusion would have been anti-dilutive.

11. Subsequent Events

Effective April, 27, 2012, through our wholly-owned subsidiary Precision Strip, Inc., we acquired the assets of the Worthington Steel Vonore, Tennessee plant, a processing facility owned by Worthington Industries, Inc. The Vonore plant operates as a Precision Strip, Inc. location which processes and delivers carbon steel, aluminum and stainless steel products on a “toll” basis, processing the metal for a fee without taking ownership of the metal.

Effective April 4, 2012, we acquired all the outstanding limited liability company interests of National Specialty Alloys, LLC (“NSA”), a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas. NSA was founded in 1985 and has additional locations in Anaheim, California, Buford, Georgia and Tulsa, Oklahoma. Net sales of NSA for the twelve months ended October 31, 2011 were approximately $96.0 million.

We funded these acquisitions with borrowings of approximately $101.9 million on our revolving credit facility.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

The computations of earnings per share for the three months ended September 30, 2011 and 2010 do not include 3,859,485 and 3,954,200 shares reserved for issuance upon exercise of stock options, respectively, because their inclusion would have been anti-dilutive.

The computations of earnings per share for the nine months ended September 30, 2011 and 2010 do not include 3,347,503 and 2,759,308 shares reserved for issuance upon exercise of stock options, respectively, because their inclusion would have been anti-dilutive.(UNAUDITED)

~~11.~~12. Condensed Consolidating Financial Statements

In November 2006, ~~the Company~~we issued senior unsecured notes in the aggregate principal amount of $600 million at fixed interest rates that are guaranteed by ~~its~~our wholly-owned domestic subsidiaries. The accompanying consolidating financial information has been prepared and presented pursuant to Rule 3-10 of SEC Regulation S-X “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries. There are no significant restrictions on ~~the~~our ability ~~of the Company~~ to obtain funds from any of the guarantor subsidiaries by dividends or loans. The supplemental consolidating financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful.

Condensed Unaudited Consolidating Balance Sheet
As of March 31, 2012

(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	15.0	$	11.3	$	43.7	$	—		$	70.0
Accounts receivable, less allowance for doubtful accounts	84.0		860.0		100.2		—			1,044.2
Inventories	57.1		1,173.2		169.1		—			1,399.4
Intercompany receivables	0.4		12.4		2.2		(15.0		)	—
Other current assets	123.1		28.3		9.9		(89.0		)	72.3
Total current assets	279.6		2,085.2		325.1		(104.0		)	2,585.9

Investments in subsidiaries	3,292.2		292.5		—		(3,584.7		)	—
Property, plant and equipment, net	99.9		943.7		77.0		—			1,120.6
Goodwill	23.8		1,119.0		106.8		—			1,249.6
Intangible assets, net	12.9		742.4		135.6		—			890.9
Intercompany receivables	1,342.4		36.6		—		(1,379.0		)	—
Other assets	14.4		68.7		1.7		—			84.8
Total assets	$	5,065.2	$	5,288.1	$	646.2	$	(5,067.7	)	$	5,931.8

Liabilities & Equity
Accounts payable	$	40.3	$	355.2	$	53.2	$	(15.0	)	$	433.7
Accrued compensation and retirement costs	9.7		58.4		5.5		—			73.6
Other current liabilities	60.0		98.4		11.9		(14.0		)	156.3
Deferred income taxes	—		75.0		—		(75.0		)	—
Current maturities of long-term debt and short-term borrowings	0.3		0.2		11.6		—			12.1
Total current liabilities	110.3		587.2		82.2		(104.0		)	675.7
Long-term debt	1,419.0		—		—		—			1,419.0
Intercompany borrowings	—		1,214.4		164.6		(1,379.0		)	—
Other long-term liabilities	270.5		267.7		24.4		—			562.6
Total Reliance shareholders’ equity	3,265.4		3,213.6		371.1		(3,584.7		)	3,265.4
Noncontrolling interests	—		5.2		3.9		—			9.1
Total equity	3,265.4		3,218.8		375.0		(3,584.7		)	3,274.5
Total liabilities and equity	$	5,065.2	$	5,288.1	$	646.2	$	(5,067.7	)	$	5,931.8

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Condensed ~~Unaudited~~ Consolidating Balance Sheet
As of ~~September 30,~~December 31, 2011

(in millions)

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations & Reclassifications			Consolidated		Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Assets
Cash and cash equivalents	$	29.3	$	8.5	$	53.3	$	—		$	91.1	$	15.1	$	10.8	$	58.7	$	—		$	84.6
Accounts receivable, less allowance for doubtful accounts	76.0		841.0		102.5		—			1,019.5		69.6		739.1		87.5		—			896.2
Inventories	55.6		1,079.5		141.5		—			1,276.6		43.7		1,017.4		151.7		—			1,212.8
Intercompany receivables	0.3		31.2		5.8		(37.3		)	—		0.3		11.6		0.9		(12.8		)	—
Other current assets	94.5		29.9		9.2		(91.1		)	42.5		108.7		28.0		7.5		(63.1		)	81.1
Total current assets	255.7		1,990.1		312.3		(128.4		)	2,429.7		237.4		1,806.9		306.3		(75.9		)	2,274.7

Investments in subsidiaries	2,157.1		261.0		—		(2,418.1		)	—		3,217.0		273.9		—		(3,490.9		)	—
Property, plant and equipment, net	97.3		918.3		72.0		—			1,087.6		100.0		931.5		74.0		—			1,105.5
Goodwill	23.8		1,110.5		97.3		—			1,231.6		23.8		1,115.7		104.8		—			1,244.3
Intangible assets, net	13.8		754.9		141.1		—			909.8		13.6		748.0		134.3		—			895.9
Intercompany receivables	2,351.3		36.1		—		(2,387.4		)	—		1,229.9		35.9		—		(1,265.8		)	—
Other assets	5.2		62.3		1.8		—			69.3		13.7		70.0		1.8		—			85.5
Total assets	$	4,904.2	$	5,133.2	$	624.5	$	(4,933.9	)	$	5,728.0	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Liabilities & Equity
Accounts payable	$	41.0	$	343.8	$	65.2	$	(37.3	)	$	412.7	$	31.2	$	270.6	$	46.2	$	(12.8	)	$	335.2
Accrued compensation and retirement costs	17.1		75.8		7.2		—			100.1		22.0		81.4		7.6		—			111.0
Other current liabilities	49.0		45.8		8.4		—			103.2		49.3		41.4		15.4		11.9			118.0
Income taxes payable	—		20.9		9.3		(25.5		)	4.7
Deferred income taxes	—		75.2		—		(65.6		)	9.6		—		75.0		—		(75.0		)	—
Current maturities of long-term debt and short-term borrowings	0.3		0.2		13.7		—			14.2		0.2		0.2		11.8		—			12.2
Total current liabilities	107.4		561.7		103.8		(128.4		)	644.5		102.7		468.6		81.0		(75.9		)	576.4
Long-term debt	1,463.9		—		—		—			1,463.9		1,319.0		—		—		—			1,319.0
Intercompany borrowings	—		2,226.4		161.0		(2,387.4		)	—		—		1,097.2		168.6		(1,265.8		)	—
Deferred taxes and other long-term liabilities	248.2		252.7		26.0		—			526.9
Other long-term liabilities												269.8		264.9		23.8		—			558.5
Total Reliance shareholders’ equity	3,084.7		2,088.0		330.1		(2,418.1		)	3,084.7		3,143.9		3,146.8		344.1		(3,490.9		)	3,143.9
Noncontrolling interests	—		4.4		3.6		—			8.0		—		4.4		3.7		—			8.1
Total equity	3,084.7		2,092.4		333.7		(2,418.1		)	3,092.7		3,143.9		3,151.2		347.8		(3,490.9		)	3,152.0
Total liabilities and equity	$	4,904.2	$	5,133.2	$	624.5	$	(4,933.9	)	$	5,728.0	$	4,835.4	$	4,981.9	$	621.2	$	(4,832.6	)	$	5,605.9

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

~~Condensed Consolidating Balance Sheet~~
~~As of December 31, 2010~~

~~(in millions)~~

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations &
Reclassifications

Consolidated

Assets

Cash and cash equivalents

$
14.4

$
8.0

$
50.5

$
—

$
72.9

Accounts receivable, less allowance for doubtful accounts

58.1

586.2

52.7

—

697.0

Inventories

33.6

770.4

56.2

—

860.2

Intercompany receivables

0.3

12.4

—

(12.7
)
—

Other current assets

99.8

27.3

5.1

(61.4
)
70.8

Total current assets

206.2

1,404.3

164.5

(74.1
)
1,700.9

Investments in subsidiaries

1,783.2

202.8

—

(1,986.0
)
—

Property, plant and equipment, net

97.5

870.3

57.5

—

1,025.3

Goodwill

23.8

1,029.0

56.8

—

1,109.6

Intangible assets, net

9.8

681.1

64.9

—

755.8

Intercompany receivables

1,956.5

—

—

(1,956.5
)
—

Other assets

4.9

71.4

1.0

—

77.3

Total assets

$
4,081.9

$
4,258.9

$
344.7

$
(4,016.6
)
$
4,668.9

Liabilities & Equity

Accounts payable

$
24.5

$
204.6

$
28.6

$
(12.7
)
$
245.0

Accrued compensation and retirement costs

14.9

64.8

5.4

—

85.1

Other current liabilities

37.6

40.2

4.9

—

82.7

Deferred income taxes

—

71.0

—

(61.4
)
9.6

Current maturities of long-term debt and short-term borrowings

74.4

—

11.8

—

86.2

Total current liabilities

151.4

380.6

50.7

(74.1
)
508.6

Long-term debt

854.9

0.2

—

—

855.1

Intercompany borrowings

—

1,926.9

29.6

(1,956.5
)
—

Deferred taxes and other long-term liabilities

251.9

218.2

5.0

—

475.1

Total Reliance shareholders’ equity

2,823.7

1,729.5

256.5

(1,986.0
)
2,823.7

Noncontrolling interests

—

3.5

2.9

—

6.4

Total equity

2,823.7

1,733.0

259.4

(1,986.0
)
2,830.1

Total liabilities and equity

$
4,081.9

$
4,258.9

$
344.7

$
(4,016.6
)
$
4,668.9

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~(UNAUDITED)

Condensed Unaudited Consolidating Statement of Income
For the three months ended ~~September 30, 2011~~March 31, 2012
(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	178.9		$	1,858.3		$	157.3		$	(55.9	)	$	2,138.6		$	192.7		$	1,972.1		$	191.6		$	(68.1	)	$	2,288.3

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	144.2			1445.9			110.5			(55.9		)	1,644.7			153.7			1,487.8			137.2			(68.2		)	1,710.5
Warehouse, delivery, selling, general and administrative	19.7			289.1			22.6			(11.8		)	319.6			15.0			344.4			24.8			(26.5		)	357.7
Depreciation and amortization	4.4			27.1			2.7			—			34.2			3.5			29.2			2.8			—			35.5
	168.3			1,762.1			135.8			(67.7		)	1,998.5			172.2			1,861.4			164.8			(94.7		)	2,103.7

Operating income	10.6			96.2			21.5			11.8			140.1			20.5			110.7			26.8			26.6			184.6

Other income (expense):
Interest	(14.8		)	(4.6		)	(1.1		)	5.5			(15.0		)	(14.4		)	(3.9		)	(0.7		)	4.5			(14.5		)
Other income (expense), net	16.0			(3.9		)	(1.3		)	(17.3		)	(6.5		)
Other income, net																33.9			2.7			1.0			(31.1		)	6.5
Income before equity in earnings of subsidiaries and income taxes	11.8			87.7			19.1			—			118.6			40.0			109.5			27.1			—			176.6
Equity in earnings of subsidiaries	64.1			8.0			—			(72.1		)	—			68.0			9.9			—			(77.9		)	—
Income before income taxes	75.9			95.7			19.1			(72.1		)	118.6			108.0			119.4			27.1			(77.9		)	176.6
Income tax (benefit) provision	(9.0		)	37.2			4.1			—			32.3			(8.2		)	62.2			4.7			—			58.7
Net income	84.9			58.5			15.0			(72.1		)	86.3			116.2			57.2			22.4			(77.9		)	117.9
Less: Net income attributable to noncontrolling interests	—			1.2			0.2			—			1.4			—			1.5			0.2			—			1.7
Net income attributable to Reliance	$	84.9		$	57.3		$	14.8		$	(72.1	)	$	84.9		$	116.2		$	55.7		$	22.2		$	(77.9	)	$	116.2

1413

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Condensed Unaudited Consolidating Statement of Income
For the three months ended ~~September 30, 2010~~March 31, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Net sales	$	155.0		$	1,449.3		$	89.3		$	(39.8	)	$	1,653.8		$	175.7		$	1,683.9		$	109.3		$	(56.2	)	$	1,912.7

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	119.0			1,119.4			59.0			(39.8		)	1,257.6			139.1			1,253.2			70.3			(56.2		)	1,406.4
Warehouse, delivery, selling, general and administrative	26.6			248.2			17.8			(14.4		)	278.2			19.6			303.6			20.2			(24.9		)	318.5
Depreciation and amortization	3.3			24.8			1.7			—			29.8			3.4			27.9			1.7			—			33.0
	148.9			1,392.4			78.5			(54.2		)	1,565.6			162.1			1,584.7			92.2			(81.1		)	1,757.9

Operating income	6.1			56.9			10.8			14.4			88.2			13.6			99.2			17.1			24.9			154.8

Other income (expense):
Interest	(15.6		)	(4.4		)	(0.2		)	4.9			(15.3		)	(14.5		)	(6.6		)	(0.4		)	6.9			(14.6		)
Other (expense) income, net	(28.9		)	48.2			0.5			(19.3		)	0.5
(Loss) income before equity in earnings of subsidiaries and income taxes	(38.4		)	100.7			11.1			—			73.4
Other income, net																32.0			—			—			(31.8		)	0.2
Income before equity in earnings of subsidiaries and income taxes																31.1			92.6			16.7			—			140.4
Equity in earnings of subsidiaries	63.5			5.0			—			(68.5		)	—			53.1			7.8			—			(60.9		)	—
Income before income taxes	25.1			105.7			11.1			(68.5		)	73.4			84.2			100.4			16.7			(60.9		)	140.4
Income tax (benefit) provision	(23.6		)	45.2			2.5			—			24.1			(8.1		)	51.0			3.9			—			46.8
Net income	48.7			60.5			8.6			(68.5		)	49.3			92.3			49.4			12.8			(60.9		)	93.6
Less: Net income (loss) attributable to noncontrolling interests	—			0.8			(0.2		)	—			0.6
Less: Net income attributable to noncontrolling interests																—			1.0			0.3			—			1.3
Net income attributable to Reliance	$	48.7		$	59.7		$	8.8		$	(68.5	)	$	48.7		$	92.3		$	48.4		$	12.5		$	(60.9	)	$	92.3

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Condensed Unaudited Consolidating Cash Flow Statement
For the three months ended March 31, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Operating activities:
Net income	$	116.2		$	57.2		$	22.4		$	(77.9	)	$	117.9
Equity in earnings of subsidiaries	(68.0		)	(10.4		)	—			77.9			(0.5		)
Other operating activities, net	(26.5		)	(125.1		)	(29.0		)	—			(180.6		)
Cash provided by (used in) operating activities	21.7			(78.3		)	(6.6		)	—			(63.2		)

Investing activities:
Purchases of property, plant and equipment	(2.7		)	(28.7		)	(3.2		)	—			(34.6		)
Acquisition of a metal service center, net of cash acquired	—			(10.0		)	—			—			(10.0		)
Net advances to subsidiaries	(112.5		)	—			—			112.5			—
Other investing activities, net	—			3.0			—			—			3.0
Cash used in investing activities	(115.2		)	(35.7		)	(3.2		)	112.5			(41.6		)

Financing activities:
Net short-term debt repayments	—			—			(0.4		)	—			(0.4		)
Proceeds from long-term debt borrowings	221.0			—			—			—			221.0
Principal payments on long-term debt	(120.9		)	(1.3		)	—			—			(122.2		)
Dividends paid	(11.2		)	—			—			—			(11.2		)
Net intercompany borrowings (repayments)	—			116.5			(4.0		)	(112.5		)	—
Other financing activities, net	4.5			(0.7		)	—			—			3.8
Cash provided by (used in) financing activities	93.4			114.5			(4.4		)	(112.5		)	91.0
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.8		)	—			(0.8		)
(Decrease) increase in cash and cash equivalents	(0.1		)	0.5			(15.0		)	—			(14.6		)
Cash and cash equivalents at beginning of year	15.1			10.8			58.7			—			84.6
Cash and cash equivalents at end of period	$	15.0		$	11.3		$	43.7		$	—		$	70.0

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Condensed Unaudited Consolidating Cash Flow Statement ~~of Income~~
For the ~~nine~~three months ended ~~September 30,~~March 31, 2011

(in millions)

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated

Net sales

$
537.4

$
5,346.2

$
383.0

$
(165.8
)
$
6,100.8

Costs and expenses:

Cost of sales (exclusive of depreciation and amortization shown below)

412.5

4,085.5

257.6

(165.8
)
4,589.8

Warehouse, delivery, selling, general and administrative

59.1

886.4

63.5

(57.2
)
951.8

Depreciation and amortization

11.3

81.2

6.2

—

98.7

482.9

5,053.1

327.3

(223.0
)
5,640.3

Operating income

54.5

293.1

55.7

57.2

460.5

Other income (expense):

Interest

(44.6
)
(23.2
)
(1.5
)
24.2

(45.1
)
Other income (expense), net

78.3

2.2

(1.3
)
(81.4
)
(2.2
)
Income before equity in earnings of subsidiaries and income taxes

88.2

272.1

52.9

—

413.2

Equity in earnings of subsidiaries

168.8

23.7

—

(192.5
)
—

Income before income taxes

257.0

295.8

52.9

(192.5
)
413.2

Income tax (benefit) provision

(18.9
)
140.1

11.9

—

133.1

Net income

275.9

155.7

41.0

(192.5
)
280.1

Less: Net income attributable to noncontrolling interests

—

3.5

0.7

—

4.2

Net income attributable to Reliance

$
275.9

$
152.2

$
40.3

$
(192.5
)
$
275.9

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Operating activities:
Net income	$	92.3		$	49.4		$	12.8		$	(60.9	)	$	93.6
Equity in earnings of subsidiaries	(53.1		)	(8.5		)	—			60.9			(0.7		)
Other operating activities, net	(0.9		)	(175.4		)	(18.0		)	—			(194.3		)
Cash provided by (used in) operating activities	38.3			(134.5		)	(5.2		)	—			(101.4		)

Investing activities:
Purchases of property, plant and equipment	(1.8		)	(33.7		)	(0.3		)	—			(35.8		)
Net advances to subsidiaries	(178.2		)	—			—			178.2			—
Other investing activities, net	—			1.0			—			—			1.0
Cash used in investing activities	(180.0		)	(32.7		)	(0.3		)	178.2			(34.8		)

Financing activities:
Proceeds from long-term debt borrowings	197.0			—			—			—			197.0
Principal payments on long-term debt	(51.1		)	(0.9		)	—			—			(52.0		)
Dividends paid	(9.0		)	—			—			—			(9.0		)
Net intercompany borrowings	—			177.9			0.3			(178.2		)	—
Other financing activities, net	3.9			(0.8		)	—			—			3.1
Cash provided by financing activities	140.8			176.2			0.3			(178.2		)	139.1
Effect of exchange rate changes on cash and cash equivalents	—			—			1.0			—			1.0
(Decrease) increase in cash and cash equivalents	(0.9		)	9.0			(4.2		)	—			3.9
Cash and cash equivalents at beginning of year	14.4			8.0			50.5			—			72.9
Cash and cash equivalents at end of period	$	13.5		$	17.0		$	46.3		$	—		$	76.8

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Condensed Unaudited Consolidating Statement of Income~~
~~For the nine months ended September 30, 2010~~

~~(in millions)~~

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated

Net sales

$
448.0

$
4,164.6

$
244.4

$
(128.5
)
$
4,728.5

Costs and expenses:

Cost of sales (exclusive of depreciation and amortization shown below)

339.5

3,159.5

166.9

(128.5
)
3,537.4

Warehouse, delivery, selling, general and administrative

75.1

745.0

51.9

(52.4
)
819.6

Depreciation and amortization

9.6

74.7

4.6

—

88.9

424.2

3,979.2

223.4

(180.9
)
4,445.9

Operating income

23.8

185.4

21.0

52.4

282.6

Other income (expense):

Interest

(46.9
)
(26.2
)
(0.5
)
27.6

(46.0
)
Other income (expense), net

31.3

47.7

0.4

(80.0
)
(0.6
)
Income before equity in earnings of subsidiaries and income taxes

8.2

206.9

20.9

—

236.0

Equity in earnings of subsidiaries

113.6

9.6

—

(123.2
)
—

Income before income taxes

121.8

216.5

20.9

(123.2
)
236.0

Income tax (benefit) provision

(33.1
)
107.9

4.1

—

78.9

Net income

154.9

108.6

16.8

(123.2
)
157.1

Less: Net income attributable to noncontrolling interests

—

2.2

—

—

2.2

Net income attributable to Reliance

$
154.9

$
106.4

$
16.8

$
(123.2
)
$
154.9

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Condensed Unaudited Consolidating Cash Flow Statement~~
~~For the nine months ended September 30, 2011~~

~~(in millions)~~

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated

Operating activities:

Net income

$
275.9

$
155.7

$
41.0

$
(192.5
)
$
280.1

Equity in earnings of subsidiaries

(168.8
)
(25.3
)
—

192.5

(1.6
)
Other operating activities, net

4.6

(244.5
)
(21.3
)
—

(261.2
)
Cash provided by (used in) operating activities

111.7

(114.1
)
19.7

—

17.3

Investing activities:

Purchases of property, plant and equipment

(9.5
)
(99.9
)
(3.3
)
—

(112.7
)
Acquisition of a metal service center, net of cash acquired

(306.5
)
—

—

—

(306.5
)
Net advances to subsidiaries

(294.7
)
—

—

294.7

—

Other investing activities, net

3.9

8.7

0.1

—

12.7

Cash used in investing activities

(606.8
)
(91.2
)
(3.2
)
294.7

(406.5
)

Financing activities:

Net borrowings (repayments) of debt

534.8

(76.1
)
(28.0
)
—

430.7

Dividends paid

(26.9
)
—

—

—

(26.9
)
Net intercompany borrowings

—

284.5

10.2

(294.7
)
—

Other financing activities, net

2.1

(2.6
)
—

—

(0.5
)
Cash provided by (used in) financing activities

510.0

205.8

(17.8
)
(294.7
)
403.3

Effect of exchange rate changes on cash and cash equivalents

—

—

4.1

—

4.1

Increase in cash and cash equivalents

14.9

0.5

2.8

—

18.2

Cash and cash equivalents at beginning of year

14.4

8.0

50.5

—

72.9

Cash and cash equivalents at end of period

$
29.3

$
8.5

$
53.3

$
—

$
91.1

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Condensed Unaudited Consolidating Cash Flow Statement~~
~~For the nine months ended September 30, 2010~~

~~(in millions)~~

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated

Operating activities:

Net income

$
154.9

$
108.6

$
16.8

$
(123.2
)
$
157.1

Equity in earnings of subsidiaries

(113.6
)
(9.8
)
—

123.2

(0.2
)
Other operating activities, net

21.3

(118.9
)
(11.6
)
—

(109.2
)
Cash provided by (used in) operating activities

62.6

(20.1
)
5.2

—

47.7

Investing activities:

Purchases of property, plant and equipment

(6.9
)
(53.5
)
(5.4
)
—

(65.8
)
Net advances to subsidiaries

(81.4
)
—

—

81.4

—

Other investing activities, net

(5.0
)
4.8

0.1

5.1

5.0

Cash used in investing activities

(93.3
)
(48.7
)
(5.3
)
86.5

(60.8
)

Financing activities:

Net borrowings (repayments) of debt

154.7

(0.5
)
3.9

—

158.1

Dividends paid

(22.2
)
—

—

—

(22.2
)
Net intercompany borrowings

—

80.1

1.3

(81.4
)
—

Other financing activities, net

20.8

(1.0
)
5.2

(5.1
)
19.9

Cash provided by financing activities

153.3

78.6

10.4

(86.5
)
155.8

Effect of exchange rate changes on cash and cash equivalents

—

—

0.8

—

0.8

Increase in cash and cash equivalents

122.6

9.8

11.1

—

143.5

Cash and cash equivalents at beginning of year

9.0

6.9

27.1

—

43.0

Cash and cash equivalents at end of period

$
131.6

$
16.7

$
38.2

$
—

$
186.5

~~Table of Contents~~

~~RELIANCE STEEL & ALUMINUM CO.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q may contain forward-looking statements relating to future financial results. Actual results may differ materially as a result of factors over which Reliance Steel & Aluminum Co. has no control. These risk factors and additional information are included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011.

2012 Acquisitions

2011 Acquisition

~~2010 Acquisitions~~

On December 1, 2010, through our subsidiary American Metals Corporation, we acquired all of the outstanding capital stock of Lampros Steel, Inc. (“LSI”) and a related interest in Lampros Steel Plate Distribution, LLC (“LSPD”). LSI specializes in structural steel shapes with a facility located in Portland, Oregon. LSPD owned a 50% interest in an unconsolidated partnership, LSI Plate, that is a distributor of carbon steel plate with locations in California and Oregon. Effective March ~~2011, the business conducted by LSI Plate was moved to LSI in order to achieve certain operational efficiencies. Net sales of LSI during the nine months ended September 30, 2011 were $29.9 million.~~

2017

Table of Contents

Three Months ~~and Nine Months~~ Ended ~~September 30, 2011~~March 31, 2012 Compared to Three Months ~~and Nine Months~~ Ended ~~September 30, 2010~~March 31, 2011

The following table sets forth certain income statement data for the three-month ~~and nine-month~~ periods ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (dollars are shown in millions and certain amounts may not calculate due to rounding):

	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended March 31,
	2011				2010				2011				2010				2012				2011
			% of				% of				% of				% of		$		% of Net Sales		$		% of Net Sales
	$		Net Sales		$		Net Sales		$		Net Sales		$		Net Sales
Net sales	$	2,138.6	100.0	%	$	1,653.8	100.0	%	$	6,100.8	100.0	%	$	4,728.5	100.0	%	$	2,288.3	100.0	%	$	1,912.7	100.0	%

Cost of sales (exclusive of depreciation and amortization expense shown below)	1,644.7		76.9		1,257.6		76.0		4,589.8		75.2		3,537.4		74.8		1,710.5		74.7		1,406.4		73.5

Gross profit (1)	493.9		23.1		396.2		24.0		1,511.0		24.8		1,191.1		25.2		577.8		25.3		506.3		26.5

S,G&A expenses	319.6		14.9		278.2		16.8		951.8		15.6		819.6		17.3
Warehouse, delivery, selling, general and administrative expenses																	357.7		15.6		318.5		16.7

Depreciation expense	24.1		1.1		22.5		1.4		72.8		1.2		67.2		1.4		25.3		1.1		25.1		1.3

Amortization expense	10.1		0.5		7.3		0.4		25.9		0.4		21.7		0.5		10.2		0.4		7.9		0.4

Operating income	$	140.1	6.6	%	$	88.2	5.3	%	$	460.5	7.5	%	$	282.6	6.0	%	$	184.6	8.1	%	$	154.8	8.1	%

(1) Gross profit, calculated as ~~Net~~net sales less ~~Cost~~cost of sales, and ~~Gross~~gross profit margin, calculated as ~~Gross~~gross profit divided by ~~Net~~net sales, are non-GAAP financial measures as they exclude depreciation and amortization expense associated with the corresponding sales. The majority of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first-stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, are not significant and are excluded from our ~~Cost~~cost of sales. Therefore, our ~~Cost~~cost of sales is primarily comprised of the cost of the material we sell. ~~The Company uses Gross~~We use gross profit and ~~Gross~~gross profit margin as shown above as measures of operating performance. Gross profit and ~~Gross~~gross profit margin are important operating and financial measures, as fluctuations in our ~~Gross~~gross profit and ~~Gross~~gross profit margin can have a significant impact on our earnings. Gross profit and ~~Gross~~gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.

Net Sales

September 30,

Dollar

Percentage

2011

2010

Change

Change

(in millions)

Net sales (three months ended)

$
2,138.6

$
1,653.8

$
484.8

29.3
%
Net sales (nine months ended)

$
6,100.8

$
4,728.5

$
1,372.3

29.0
%
Net sales, same-store (three months ended)

$
2,012.4

$
1,653.8

$
358.6

21.7
%
Net sales, same-store (nine months ended)

$
5,905.2

$
4,728.5

$
1,176.7

24.9
%

	Three Months Ended
	March 31,				Dollar		Percentage
	2012		2011		Change		Change
	(in millions)
Net sales	$	2,288.3	$	1,912.7	$	375.6	19.6	%
Net sales, same-store	$	2,159.7	$	1,912.7	$	247.0	12.9	%

September 30,

Tons

Percentage

2011

2010

Change

Change

(in thousands)

Tons sold (three months ended)

1,083.7

959.3

124.4

13.0
%
Tons sold (nine months ended)

3,157.8

2,828.8

329.0

11.6
%
Tons sold, same-store (three months ended)

1,039.2

959.3

79.9

8.3
%
Tons sold, same-store (nine months ended)

3,081.9

2,828.8

253.1

8.9
%

	Three Months Ended
	March 31,		Tons	Percentage
	2012	2011	Change	Change
	(in thousands)
Tons sold	1,173.7	1,031.7	142.0	13.8	%
Tons sold, same-store	1,136.8	1,031.7	105.1	10.2	%

September 30,

Price/Ton

Percentage

2011

2010

Change

Change

Average selling price per ton sold (three months ended)

$
1,973

$
1,709

$
264

15.4
%
Average selling price per ton sold (nine months ended)

$
1,931

$
1,661

$
270

16.3
%
Average selling price per ton sold, same-store (three months ended)

$
1,936

$
1,709

$
227

13.3
%
Average selling price per ton sold, same-store (nine months ended)

$
1,915

$
1,661

$
254

15.3
%

	Three Months Ended
	March 31,				Price/Ton		Percentage
	2012		2011		Change		Change
Average selling price per ton sold	$	1,953	$	1,854	$	99	5.3	%
Average selling price per ton sold, same-store	$	1,903	$	1,854	$	49	2.6	%

Tons sold and average selling price per ton sold amounts exclude our toll processing sales. Same-store amounts exclude the results of our ~~2011~~2012 and ~~2010~~2011 acquisitions.

We have continued to see steady improvement in our tons sold in ~~2011. In September 2011, we had our highest monthly tons shipped per day since November 2008, including on a same-store basis.~~2012. In general, business activity in most all of our markets served is better in ~~2011~~2012 than in the same ~~periods~~period in ~~2010.~~2011. In ~~2011,~~2012, our strongest markets continue to be energy, oil and gas, aerospace, farm and heavy equipment, auto (through our toll processing businesses), general manufacturing and semiconductor and electronics. We have ~~been~~seen improvements again in our non-residential construction related business mainly through industrial construction projects, but it still lags the growth we have seen in other areas.

2118

Table of Contents

energy, oil and gas, aerospace, farm and heavy equipment, mining, general manufacturing and semiconductor and electronics. Non-residential construction, our largest end market, continues to be our weakest, however, we have seen some improvements in demand so far in 2011 for certain non-residential construction related products in certain areas around the country.

~~As a result of increased mill prices, most of the products we sell had higher average selling prices during the 2011 periods compared to the same periods in 2010.~~ Our major commodity selling prices ~~increased~~changed during the three-month period ended ~~September 30, 2011~~March 31, 2012 from the same period in ~~2010~~2011 as follows: carbon steel up ~~18.0%~~5.1%; aluminum up ~~8.1%~~1.8%; stainless steel ~~up 10.9%~~down 3.5%; and alloy up ~~14.8%~~9.6%. ~~Our selling~~Mill prices for carbon, alloy and aluminum products were generally higher in the ~~2011 nine-month period trended similarly~~2012 first quarter as compared to the ~~same period in 2010: carbon~~2011 first quarter, allowing us to increase our selling prices to our customers. The stainless steel ~~up 19.4%; aluminum up 7.0%; stainless up 15.0%; and alloy up 12.8%. The 2011 mill~~ price ~~increases over 2010 levels have primarily been~~decline was mainly due to ~~rises~~fluctuations in ~~scrap~~the nickel surcharge, which is primarily driven by global market price for nickel. In general, fluctuations in mill prices for our products in 2011 and ~~other input~~so far in 2012 have mainly been driven by raw material costs at the mills.

Cost of Sales

September 30,

2011

2010

$

% of
Net Sales

$

% of
Net Sales

Dollar
Change

Percentage
Change

Cost of sales (three months ended)

$
1,644.7

76.9
%
$
1,257.6

76.0
%
$
387.1

30.8
%
Cost of sales (nine months ended)

$
4,589.8

75.2
%
$
3,537.4

74.8
%
$
1,052.4

29.8
%

	Three Months Ended March 31,
	2012				2011
	$		% of Net Sales		$		% of Net Sales		Dollar Change		Percentage Change
Cost of sales	$	1,710.5	74.7	%	$	1,406.4	73.5	%	$	304.1	21.6	%

The ~~increases~~increase in cost of sales in the ~~three- and nine-month periods~~three-month period ended ~~September 30, 2011 are~~March 31, 2012 is due to ~~increases~~increase in tons sold, as well as increased costs for most products we sell ~~from~~compared to the same period in ~~2010~~2011 (see “Net Sales” above for trends in both demand and costs of our products).

Our LIFO reserve adjustment, which is included in our cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in a charge, or expense, of ~~$22.5~~$7.5 million in the three-month period ended ~~September 30, 2011~~March 31, 2012 compared to a charge, or expense, of ~~$9.8~~$20.0 million in the same period in ~~2010. Our LIFO reserve adjustment in the 2011 nine-month period resulted in a charge, or expense, of $67.5 million compared to a charge, or expense, of $24.8 million in the 2010 nine-month period.~~2011.

We currently estimate our full year ~~2011~~2012 LIFO adjustment to be a charge, or expense, of ~~$90.0~~$30.0 million as we expect that both our quantities and our average cost of inventory at December 31, ~~2011~~2012 will be higher than at ~~December 31, 2010.~~January 1, 2012.

Gross Profit

September 30,

2011

2010

$

% of
Net Sales

$

% of
Net Sales

Dollar
Change

Percentage
Change

Gross profit (three months ended)

$
493.9

23.1
%
$
396.2

24.0
%
$
97.7

24.7
%
Gross profit (nine months ended)

$
1,511.0

24.8
%
$
1,191.1

25.2
%
$
319.9

26.9
%

	Three Months Ended March 31,
	2012				2011
	$		% of Net Sales		$		% of Net Sales		Dollar Change		Percentage Change
Gross profit	$	577.8	25.3	%	$	506.3	26.5	%	$	71.5	14.1	%

Our gross profit margin for the three-month period ended ~~September 30, 2011~~March 31, 2012 was lower than our gross profit margin ~~decreased compared to~~in the ~~same~~three-month period ~~in 2010~~ended March 31, 2011 due to ~~mills announcing~~an environment of steady and significant price ~~decreases for many of our products during this~~increases experienced in the 2011 three-month period. This type of pricing environment ~~puts negative pressure on~~allows us to enhance our gross profit margins as we ~~may have~~were able to ~~lower~~increase our selling prices ~~prior to~~in advance of receiving the ~~lower~~higher cost ~~inventory~~material. Although mills did announce price increases in the 2012 first quarter for certain of our products, they were smaller in scale and faced some resistance in the market, which pressured our ability to pass the increases on ~~hand.~~to our customers. See also “Cost of Sales” above for discussion of our LIFO reserve adjustments.

Our gross profit margin decline in the 2011 nine-month period was less than the gross profit margin decline in the 2011 three-month period because mill prices were steadily increasing during the first five months of 2011 for most of our products, which allowed us to expand our gross profit margins during that time. In a period of increasing prices, we are typically able to increase our selling price before we receive the higher cost inventory.

~~Table of Contents~~

Expenses

September 30,

2011

2010

$

% of
Net Sales

$

% of
Net Sales

Dollar
Change

Percentage
Change

S,G&A expenses (three months ended)

$
319.6

14.9
%
$
278.2

16.8
%
$
41.4

14.9
%
S,G&A expenses (nine months ended)

$
951.8

15.6
%
$
819.6

17.3
%
$
132.2

16.1
%
Depreciation & amortization expenses (three months ended)

$
34.2

1.6
%
$
29.8

1.8
%
$
4.4

14.8
%
Depreciation & amortization expenses (nine months ended)

$
98.7

1.6
%
$
88.9

1.9
%
$
9.8

11.0
%

	Three Months Ended March 31,
	2012				2011
	$		% of Net Sales		$		% of Net Sales		Dollar Change		Percentage Change
S,G&A expense	$	357.7	15.6	%	$	318.5	16.7	%	$	39.2	12.3	%
S,G&A expense, same-store	$	344.7	16.0	%	$	318.5	16.7	%	$	26.2	8.2	%
Depreciation & amortization expenses	$	35.5	1.6	%	$	33.0	1.7	%	$	2.5	7.6	%

Our ~~2011 three- and nine-month periods~~three-month period ended ~~September 30, 2011~~March 31, 2012 warehouse, delivery, selling, general and administrative expense (“S,G~~&A”~~&A expense”) ~~expenses~~ as a percent of net sales decreased as compared to the same period in 2011 because of our higher sales volumes and pricing on a relatively consistent cost ~~structure, as compared to the same periods in 2010.~~structure. The additional expenses of our ~~2011~~2012 and ~~2010~~2011 acquisitions, increases in variable compensation expenses due to both increased volume and profits, and increases in certain warehouse and delivery expenses that resulted from improved demand and increased fuel costs accounted for most of the increase in S,G&A ~~expenses~~expense during the ~~2011 three- and nine-month periods~~three-month period ended March 31, 2012 compared to the same ~~periods~~period in ~~2010.~~2011.

The increase in depreciation and amortization expense was mainly due to our ~~2011~~2012 and ~~2010~~2011 acquisitions and depreciation expense from our recent capital expenditures.

Table of Contents

Operating Income

September 30,

2011

2010

$

% of
Net Sales

$

% of
Net Sales

Dollar
Change

Percentage
Change

Operating income (three months ended)

$
140.1

6.6
%
$
88.2

5.3
%
$
51.9

58.8
%
Operating income (nine months ended)

$
460.5

7.5
%
$
282.6

6.0
%
$
177.9

63.0
%

	Three Months Ended March 31,
	2012				2011
	$		% of Net Sales		$		% of Net Sales		Dollar Change		Percentage Change
Operating income	$	184.6	8.1	%	$	154.8	8.1	%	$	29.8	19.3	%

The higher gross profit dollars generated on higher sales offset by only moderate increases in S,G&A ~~expenses~~expense significantly improved our operating income level in the ~~three- and nine-month~~three-month period ended March 31, 2012. Our operating income margins, however, were consistent in both periods ~~ended September 30, 2011.~~as the impact of lower gross profit margins in the three month period March 31, 2012 was offset by a decrease in our SG&A expense as a percent of net sales due to our ability to effectively leverage our cost structure with improved demand for our products.

Income Tax Rate

Our effective income tax rate in the ~~2011 nine-month~~three-month period ended March 31, 2012 was ~~32.2%~~33.2% compared to our ~~2010 nine-month~~2011 three-month rate of ~~33.4%~~33.3%. ~~The decrease in the~~Permanent items that impacted our effective income tax ~~rate was primarily due~~rates were not materially different in amounts during these periods and relate mainly to ~~favorable state law changes to apportionment weights, statute expirations~~company-owned life insurance policies and settlements for uncertain tax positions, and the Continental acquisition, which caused a shift in our state apportionment rates that lowered our state income tax rates as well as increased our foreign income levels that are taxed at lower rates.domestic production activities deductions.

Our annualized effective income tax rate as of September 30, 2011 of 32.2% was down from our June 30, 2011 annualized rate estimate of 34.2%, which resulted in a quarterly effective rate of 27.2% as compared to our 2010 third quarter rate of 32.9%. The rate decrease was mainly attributable to the Continental acquisition and statute expirations and settlements of various uncertain tax positions.

~~Table of Contents~~

Net Income Attributable to Reliance

September 30,

2011

2010

$

% of
Net Sales

$

% of
Net Sales

Dollar
Change

Percentage
Change

Net income attributable to Reliance (three months ended)

$
84.9

4.0
%
$
48.7

2.9
%
$
36.2

74.3
%
Net income attributable to Reliance (nine months ended)

$
275.9

4.5
%
$
154.9

3.3
%
$
121.0

78.1
%

	Three Months Ended March 31,
	2012				2011
	$		% of Net Sales		$		% of Net Sales		Dollar Change		Percentage Change
Net income attributable to Reliance	$	116.2	5.1	%	$	92.3	4.8	%	$	23.9	25.9	%

The increase in net income attributable to Reliance in the ~~three- and nine- month periods~~three-month period ended ~~September 30, 2011~~March 31, 2012 was primarily the result of a more favorable demand ~~and pricing environment~~ for our products, which has allowed us to generate increased gross profit dollars with relatively lower increases in our operating ~~expenses.~~expenses, and from our 2011 and 2012 acquisitions.

Liquidity and Capital Resources

Operating Activities

Net cash ~~provided by~~used in operating activities was ~~$17.3~~$63.2 million ~~for~~in the ~~nine months~~three-month period ended ~~September 30, 2011~~March 31, 2012 as compared to ~~$47.7~~$101.4 million ~~for~~in the ~~nine months ended September 30, 2010.~~same period in 2011. As a result of increased demand levels and higher mill prices from December 31, ~~2010,~~2011, our working capital, primarily accounts receivable and inventories, has increased ~~somewhat.~~from year-end levels. However, we were able to fund these increases partially with our profitable business ~~activities.~~activities, increases in our accounts payable and accrued expenses and borrowings on our $1.5 billion revolving credit facility. Our receivables and FIFO inventories increased by ~~$270.7~~$143.6 million and ~~$362.1~~$189.7 million, respectively, from December 31, ~~2010~~2011 levels, offset with increases in our accounts payable and accrued expenses of approximately ~~$143.6~~$97.9 million.

To manage our working capital, we focus on our days sales outstanding and on our inventory turnover rate, as receivables and inventory are the two most significant elements of our working capital. ~~As of September 30, 2011~~At March 31, 2012 our days sales outstanding rate was approximately ~~41.3~~41.2 days compared to 41.6 days at December 31, ~~2010. (We calculate our days sales outstanding as an average of the most recent two-month period.)~~2011. Our inventory turn rate (based on dollars) during the ~~2011 nine-month~~three-month period ended March 31, 2012 was about ~~4.5~~4.3 times (or ~~2.7~~2.8 months on hand), compared to our ~~2010~~2011 annual rate of ~~4.8~~4.4 times (or ~~2.5~~2.7 months on hand). Our turns were impacted by the Continental ~~acquisition.~~acquisition in August 2011. Excluding Continental, ~~who turned their inventories at 3.2 times in the two months that we owned them,~~ our ~~2011~~2012 inventory turn rate (based on dollars) was ~~4.7 times.~~4.6 times (or 2.6 months on hand).

Investing Activities

Capital expenditures were ~~$112.7~~$34.6 million for the ~~nine months~~three-month period ended ~~September 30, 2011~~March 31, 2012 compared to ~~$65.8~~$35.8 million during the same period in ~~2010. Our 2011~~2011. The majority of our 2012 capital expenditures ~~include the~~relate to growth initiatives to expand or relocate existing facilities, purchase ~~of three of our existing warehouses~~properties that wewere previously leased ~~the purchase of three new buildings~~and to ~~replace expiring leased locations and the building and expansion of new and existing facilities.~~add or upgrade equipment in addition to meeting ongoing maintenance requirements. Our ~~2011~~2012 capital expenditures ~~were~~are budgeted at approximately $200 million, which included several internal growth activities. At this point, we expect our full year 2011 capital expenditures to be below our budgeted amount. However, we have not curtailed our growth activities, as certain$250 million.

Table of ~~these projects will continue into 2012.~~Contents

Financing Activities

The increase in our working capital, ~~and~~our 2012 capital expenditures ~~during the 2011 nine-month period as well as~~and the acquisition of ~~Continental was~~McKey were largely funded by our cash from operations and net borrowings of ~~$430.7~~$100.0 million on our credit facility. We paid dividends to our shareholders of ~~$26.9~~$11.2 million during the ~~2011 nine-month period.~~three-month period ended March 31, 2012. On ~~October 26, 2011,~~February 14, 2012, our Board of Directors declared a 25% increase in the regular quarterly cash dividend from $0.12 per share to $0.15 per share, effective with our first quarter 2012 dividend. On April 24, 2012, our Board of Directors declared the ~~2011 fourth~~2012 second quarter ~~regular~~ cash dividend of ~~$0.12~~$0.15 per ~~share of common stock.~~share. We have paid regular quarterly dividends to our shareholders for 5253 consecutive years.

Liquidity

Our primary sources of liquidity are our internally generated funds from operations and our $1.5 billion revolving credit facility. Our total outstanding debt at ~~September 30, 2011~~March 31, 2012 was ~~$1.48~~$1.43 billion, up from ~~$941.3 million~~$1.33 billion at December 31, ~~2010.~~2011. At ~~September 30, 2011,~~March 31, 2012, we had ~~$790.0~~$745.0 million in outstanding borrowings on our $1.5 billion revolving credit facility.

~~Table of Contents~~

term to July 26, 2016. The amended and restated revolving credit facility has 26 banks as lenders. Interest on borrowings from the amended and restated revolving credit facility is at variable rates based on LIBOR plus 1.50% or the bank prime rate plus 0.50% as of ~~September 30, 2011.~~March 31, 2012. The amended and restated revolving credit facility includes a commitment fee on the unused portion, at an annual rate of 0.25% as of ~~September 30, 2011.~~March 31, 2012. The applicable margin over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on ~~the Company’s~~our leverage ratio, as defined.

We also have various other separate revolving credit facilities in place for our operations in Asia and Europe with a combined credit limit of approximately ~~$24.0~~$24.2 million and with combined outstanding balances of ~~$13.7~~$11.6 million and $11.8 million as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, respectively.

Capital Resources

On November 20, 2006 we entered into an Indenture (the “Indenture”), for the issuance of $600 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, maturing on November 15, 2016 and (b) $250 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036. The notes are senior unsecured obligations and rank equally with all of our other existing and future unsecured and unsubordinated debt obligations. The senior unsecured notes include provisions that, in the event of a change in control and a downgrade of ~~the Company’s~~our credit rating, require ~~the Company~~us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued interest.

At ~~September 30, 2011,~~March 31, 2012, we also had $75.0 million of outstanding senior unsecured notes issued in private placements of debt. The outstanding senior notes bear interest at a fixed rate of 5.35% and have a remaining life of ~~1.8~~1.3 years, maturing in July 2013.

Our net debt-to-total capital ratio was ~~31.0%~~29.4% at ~~September 30, 2011;~~March 31, 2012; up from our ~~2010~~2011 year-end rate of ~~23.5%~~28.4% (net debt-to-total capital is calculated as total debt, net of cash, divided by Reliance shareholders’ equity plus total debt, net of cash).

As of ~~September 30, 2011,~~March 31, 2012, we had ~~$89.8~~$87.7 million of debt obligations coming due before our new $1.5 billion revolving credit facility expires on July 26, 2016. We are comfortable that we will have adequate cash flow and capacity on our revolving credit facility to fund our debt obligations as well as our working capital, capital expenditure, growth and other needs. We expect to continue our acquisition and other growth activities in the future and anticipate that we will be able to fund such activities with cash from operations and borrowings under our revolving credit ~~facility.~~facility in the near term.

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Covenants

Our amended and restated revolving credit facility and senior notes collectively require that we maintain a minimum net worth and interest coverage ratio, and a maximum leverage ratio and include change of control provisions, among other things. The interest coverage ratio for the twelve month period ended ~~September 30, 2011~~March 31, 2012 was approximately ~~8.8~~10.1 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as net income attributable to Reliance plus interest expense and provision for income taxes and plus or minus any non-operating non-recurring loss or gain, respectively, divided by interest expense). The leverage ratio at ~~September 30, 2011,~~March 31, 2012, calculated in accordance with the terms of the credit agreement, was ~~33.0%~~31.0% compared to the debt covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of capital lease obligations and outstanding letters of credit, divided by Reliance shareholders’ equity plus total debt). The minimum net worth requirement at ~~September 30, 2011~~March 31, 2012 was ~~$999.2 million~~$1.09 billion compared to the Reliance shareholders’ equity balance of ~~$3.08~~$3.27 billion at ~~September 30, 2011.~~March 31, 2012.

We were in compliance with all debt covenants at ~~September 30, 2011.~~

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Off-Balance-Sheet Arrangements

We had no material changes in commitments for capital expenditures, operating lease obligations or purchase obligations as of ~~September 30, 2011,~~March 31, 2012, as compared to those disclosed in our table of contractual obligations included in our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011.

Inflation

Our operations have not been, and we do not expect them to be, materially affected by general inflation. Historically, we have been successful in adjusting prices to our customers to reflect changes in metal prices.

Seasonality

Some of our customers are in seasonal businesses, especially customers in the construction industry and related businesses. As a result of our geographic, product and customer diversity, however, our operations have not shown any material seasonal trends. Revenues in the months of July, November and December traditionally have been lower than in other months because of a reduced number of working days for shipments of our products, resulting from vacation and holiday closures at some of our customers. We cannot assure you that period-to-period fluctuations will not occur in the future. Results of any one or more quarters are therefore not necessarily indicative of annual results.

Goodwill and Other Intangible Assets

Effective January 1, 2012, we revised our internal reporting package for our Chief Operation Decision Maker (our Chief Executive Officer) and our Board of Directors in order to better align internal reporting with the way performance is measured and key resource allocation decisions are made, which are primarily based on enterprise level data. As part of the segment reassessment process triggered by this change, we concluded that we have one operating segment and also one reporting unit for goodwill impairment purposes. There was no change in our reportable segments; we have one reportable segment, metals service centers.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to ~~$1.23~~$1.25 billion at ~~September 30, 2011,~~March 31, 2012, or approximately ~~21.5%~~21.1% of total assets, or ~~39.9%~~38.3% of Reliance shareholders’ equity. Additionally, other intangible assets, net amounted to ~~$909.8~~$890.9 million at ~~September 30, 2011,~~March 31, 2012, or approximately ~~15.9%~~15.0% of total assets, or ~~29.5%~~27.3% of Reliance shareholders’ equity. We review the recoverability of goodwill and other intangible assets deemed to have indefinite lives annually or whenever significant events or changes occur, which might impair the recovery of recorded amounts. Our most recently completed annual impairment tests of goodwill were performed as of November 1, ~~2010~~2011 and ~~it was~~updated for any significant developments or changes through December, 31, 2011. We determined that the recorded amounts for goodwill ~~are~~were recoverable and that no impairment existed. Our ~~2011~~2012 annual impairment tests of goodwill will be performed as of November 1, ~~2011.~~2012. Other intangible assets with finite useful lives continue to be

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amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and the current changing market conditions may impact our assumptions as to commodity prices, demand and future growth rates or other factors that may result in changes in our estimates of future cash flows. Although we believe the assumptions used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a significantly different result. Furthermore, significant declines in the market conditions for our products as well as significant decreases in the price of our common stock could also impact our impairment analysis. However, as of ~~September 30, 2011,~~March 31, 2012, we have noted no indications of impairment.

Critical Accounting Policies

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our unaudited Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. When we prepare these financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to accounts receivable, inventories, deferred tax assets, goodwill and intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

For further information regarding the accounting policies that we believe to be critical accounting policies and that affect our more significant judgments and estimates used in preparing our consolidated financial statements see our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011. We do not believe that any of the new accounting guidance implemented during ~~2011~~2012 changed our critical accounting policies.

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New Accounting Guidance

See Notes to Unaudited Consolidated Financial Statements for disclosure on new accounting guidance issued or implemented.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

In the ordinary course of business, we are exposed to various market risk factors, including fluctuations in interest rates, changes in general economic conditions, domestic and foreign competition, foreign currency exchange rates, metals pricing, demand and availability. There have been no significant changes in our market risk exposures since December 31, ~~2010.~~2011. Please refer to Item 7A - Quantitative and Qualitative Disclosures About Market Risk, contained in our Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011 for further discussion on quantitative and qualitative disclosures about market risk.

Item 4. Controls And Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to and as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered in this report, the Company’s disclosure controls and procedures are effective.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~September 30, 2011,~~March 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011.

Item 6. Exhibits

~~Item 6.~~10.01	~~Exhibits~~Forms of Restricted Stock Unit Agreements.

	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

	32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	101.INS	XBRL Instance Document. (1)

	101.SCH	XBRL Taxonomy Extension Schema Document. (1)

	101.CAL	XBRL Taxonomy Calculation Linkbase Document. (1)

	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (1)

	101.LAB	XBRL Taxonomy Label Linkbase Document. (1)

	101.PRE	XBRL Taxonomy Presentation Linkbase Document. (1)

(1) Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RELIANCE STEEL & ALUMINUM CO.


Dated: ~~November~~May 4, ~~2011~~2012	By:	/s/	David H. Hannah
			David H. Hannah
			Chairman and
			Chief Executive Officer

By:	/s/	Karla R. Lewis
		Karla R. Lewis
		Executive Vice President and
		Chief Financial Officer

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Exhibit Index

Exhibit No.		Description

10.01		Forms of Restricted Stock Unit Agreements.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document. (1)

101.SCH		XBRL Taxonomy Extension Schema Document. (1)

101.CAL		XBRL Taxonomy Calculation Linkbase Document. (1)

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. (1)

101.LAB		XBRL Taxonomy Label Linkbase Document. (1)

101.PRE		XBRL Taxonomy Presentation Linkbase Document. (1)

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Cash	$	22.8
Accounts receivable	55.7
Inventories	126.7
Property, plant and equipment	30.5
Goodwill	126.3
Intangible assets subject to amortization	95.9
Intangible assets not subject to amortization	84.3
Other current and long-term assets	1.8
Total assets acquired	544.0
Current and long-term debt	(104.8		)
Deferred taxes	(58.5		)
Other current and long-term liabilities	(51.4		)
Total liabilities assumed	(214.7		)
Net assets acquired	$	329.3

Balance as of December 31, 2010	$	1,109.6
Acquisition	126.3
Purchase price allocation adjustments	0.2
Effect of foreign currency translation	(4.5		)
Balance as of September 30, 2011	$	1,231.6