UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, ~~2020~~2021

☐	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

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

95-1142616

(I.R.S. Employer

Identification No.)

350 South Grand Avenue, Suite 5100

Los Angeles, California

90071

(Address of principal executive offices, including zip code)

(213) 687-7700

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	RS	New York Stock Exchange

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 ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No ◻

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

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of April ~~27, 2020, 63,640,761~~23, 2021, 63,707,842 shares of the registrant’s common stock, $0.001 par value, were outstanding.

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION			1

	Item 1.	Financial Statements

		Unaudited Consolidated Balance Sheets	1

		Unaudited Consolidated Statements of Income	2

		Unaudited Consolidated Statements of Comprehensive Income	3

		Unaudited Consolidated Statements of Equity	4

		Unaudited Consolidated Statements of Cash Flows	5

		Notes to Unaudited Consolidated Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2423

	Item 4.	Controls and Procedures	2423

PART II — OTHER INFORMATION			2523

	Item 1.	Legal Proceedings	2523

	Item 1A.	Risk Factors	2523

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2623

	Item 3.	Defaults Upon Senior Securities	2623

	Item 4.	Mine Safety Disclosures	2623

	Item 5.	Other Information	2723

	Item 6.	Exhibits	2824

SIGNATURES			2925

Table of Contents

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions, except number of shares which are reflected in thousands and par value)


	March 31,		December 31,		March 31,		December 31,
	2020		2019*		2021		2020*
ASSETS	ASSETS				ASSETS
Current assets:
Cash and cash equivalents	$	172.1	$	174.3	$	760.3	$	683.5
Accounts receivable, less allowance for doubtful accounts of $20.6 at March 31, 2020 and $17.8 at December 31, 2019		1,216.1		1,067.8
Accounts receivable, less allowance for credit losses of $22.8 at March 31, 2021 and $19.0 at December 31, 2020						1,272.3		926.3
Inventories		1,630.0		1,645.7		1,477.0		1,420.4
Prepaid expenses and other current assets		68.2		85.2		75.1		80.5
Income taxes receivable		—		37.2		—		2.1
Total current assets		3,086.4		3,010.2		3,584.7		3,112.8
Property, plant and equipment:
Land		239.5		239.8		255.5		260.1
Buildings		1,211.5		1,195.1		1,233.0		1,240.0
Machinery and equipment		2,062.5		2,044.4		2,137.8		2,107.8
Accumulated depreciation		(1,721.8)		(1,684.1)		(1,856.6)		(1,815.7)
Property, plant and equipment, net		1,791.7		1,795.2		1,769.7		1,792.2

Operating lease right-of-use assets		201.5		201.5		201.9		204.0
Goodwill		1,998.8		2,003.8		1,935.7		1,935.2
Intangible assets, net		928.0		1,031.1		938.0		947.1
Cash surrender value of life insurance policies, net		35.2		42.7		39.5		43.7
Other assets		43.9		46.6		79.5		71.8
Total assets	$	8,085.5	$	8,131.1	$	8,549.0	$	8,106.8

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY				LIABILITIES AND EQUITY

Current liabilities:
Accounts payable	$	347.0	$	275.0	$	361.0	$	259.3
Accrued expenses		85.8		67.4		122.6		88.9
Accrued compensation and retirement costs		127.9		172.1		156.8		165.8
Accrued insurance costs		46.5		43.4		45.5		42.0
Current maturities of long-term debt and short-term borrowings		64.8		64.9		5.2		6.0
Current maturities of operating lease liabilities		52.4		52.5		51.1		51.0
Income taxes payable		11.2		—		81.5		—
Total current liabilities		735.6		675.3		823.7		613.0
Long-term debt		1,772.3		1,523.6		1,639.7		1,638.9
Operating lease liabilities		149.7		149.5		152.0		154.1
Long-term retirement costs		81.2		87.0		101.9		95.8
Other long-term liabilities		12.6		12.3		26.5		26.7
Deferred income taxes		434.8		469.3		456.2		455.6
Commitments and contingencies
Equity:
Preferred stock, $0.001 par value:
Authorized shares — 5,000
None issued or outstanding		—		—		—		—
Common stock and additional paid-in capital, $0.001 par value:
Authorized shares — 200,000
Issued and outstanding shares — 63,641 at March 31, 2020 and 66,854 at December 31, 2019		0.1		122.2
Issued and outstanding shares — 63,707 at March 31, 2021 and 63,600 at December 31, 2020						6.6		0.1
Retained earnings		5,028.6		5,189.5		5,415.3		5,193.2
Accumulated other comprehensive loss		(136.5)		(105.1)		(79.1)		(77.9)
Total Reliance stockholders’ equity		4,892.2		5,206.6		5,342.8		5,115.4
Noncontrolling interests		7.1		7.5		6.2		7.3
Total equity		4,899.3		5,214.1		5,349.0		5,122.7
Total liabilities and equity	$	8,085.5	$	8,131.1	$	8,549.0	$	8,106.8

* 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 number of shares which are reflected in thousands and per share amounts)


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
Net sales	$	2,572.9	$	2,956.6	$	2,838.4	$	2,572.9

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		1,792.2		2,089.7		1,884.7		1,792.2
Warehouse, delivery, selling, general and administrative		522.7		532.1		518.5		522.7
Depreciation and amortization		57.0		54.0		56.9		57.0
Impairment of long-lived assets		97.7		—		—		97.7
		2,469.6		2,675.8		2,460.1		2,469.6

Operating income		103.3		280.8		378.3		103.3

Other expense:
Interest expense		16.9		24.2		15.7		16.9
Other expense, net		3.3		1.1		3.6		3.3
Income before income taxes		83.1		255.5		359.0		83.1
Income tax provision		20.2		63.9		90.8		20.2
Net income		62.9		191.6		268.2		62.9
Less: Net income attributable to noncontrolling interests		1.2		1.5		1.3		1.2
Net income attributable to Reliance	$	61.7	$	190.1	$	266.9	$	61.7

Earnings per share attributable to Reliance stockholders:
Diluted	$	0.92	$	2.80	$	4.12	$	0.92
Basic	$	0.93	$	2.83	$	4.19	$	0.93

Shares used in computing earnings per share:
Diluted		67,248		67,926		64,711		67,248
Basic		66,337		67,127		63,645		66,337

Cash dividends per share	$	0.625	$	0.55	$	0.6875	$	0.625

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020
Net income	$	62.9	$	191.6	$	268.2	$	62.9
Other comprehensive (loss) income:
Foreign currency translation (loss) gain		(31.4)		6.8
Total other comprehensive (loss) income		(31.4)		6.8
Other comprehensive loss:
Foreign currency translation loss						(1.2)		(31.4)
Total other comprehensive loss						(1.2)		(31.4)
Comprehensive income		31.5		198.4		267.0		31.5
Less: Comprehensive income attributable to noncontrolling interests		1.2		1.5		1.3		1.2
Comprehensive income attributable to Reliance	$	30.3	$	196.9	$	265.7	$	30.3

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except number of shares which are reflected in thousands and per share amounts)

Reliance Stockholders’ Equity

Common Stock

Accumulated

and Additional

Other

Non-

Paid-In Capital

Retained

Comprehensive

controlling

Shares

Amount

Earnings

(Loss) Income

Interests

Total
Balance at January 1, 2019
66,882

$
136.4

$
4,637.9

$
(102.7)

$
7.9

$
4,679.5
Net income
—

—

190.1

—

1.5

191.6
Other comprehensive income
—

—

—

6.8

—

6.8
Stock-based compensation, net
333

(1.3)

—

—

—

(1.3)
Stock options exercised
20

0.8

—

—

—

0.8
Cash dividends — $0.55 per share and dividend equivalents
—

—

(38.2)

—

—

(38.2)
Balance at March 31, 2019
67,235

$
135.9

$
4,789.8

$
(95.9)

$
9.4

$
4,839.2

Balance at January 1, 2020
66,854

$
122.2

$
5,189.5

$
(105.1)

$
7.5

$
5,214.1
Net income
—

—

61.7

—

1.2

62.9
Other comprehensive loss
—

—

—

(31.4)

—

(31.4)
Noncontrolling interest purchased
—

(6.9)

—

—

(1.1)

(8.0)
Dividend to noncontrolling interest holder
—

—

—

—

(0.5)

(0.5)
Stock-based compensation, net
111

3.8

—

—

—

3.8
Stock options exercised
6

0.3

—

—

—

0.3
Repurchase of common shares
(3,330)

(119.3)

(180.7)

—

—

(300.0)
Cash dividends — $0.625 per share and dividend equivalents
—

—

(41.9)

—

—

(41.9)
Balance at March 31, 2020
63,641

$
0.1

$
5,028.6

$
(136.5)

$
7.1

$
4,899.3


	Reliance Stockholders’ Equity
	Common Stock					Accumulated
	and Additional					Other		Non-
	Paid-In Capital			Retained		Comprehensive		controlling
	Shares	Amount		Earnings		Loss		Interests		Total
Balance at January 1, 2020	66,854	$	122.2	$	5,189.5	$	(105.1)	$	7.5	$	5,214.1
Net income	—		—		61.7		—		1.2		62.9
Other comprehensive loss	—		—		—		(31.4)		—		(31.4)
Noncontrolling interest purchased	—		(6.9)		��		—		(1.1)		(8.0)
Dividend to noncontrolling interest holder	—		—		—		—		(0.5)		(0.5)
Stock-based compensation, net	111		3.8		—		—		—		3.8
Stock options exercised	6		0.3		—		—		—		0.3
Repurchase of common shares	(3,330)		(119.3)		(180.7)		—		—		(300.0)
Cash dividends — $0.625 per share and dividend equivalents	—		—		(41.9)		—		—		(41.9)
Balance at March 31, 2020	63,641	$	0.1	$	5,028.6	$	(136.5)	$	7.1	$	4,899.3

Balance at January 1, 2021	63,600	$	0.1	$	5,193.2	$	(77.9)	$	7.3	$	5,122.7
Net income	—		—		266.9		—		1.3		268.2
Other comprehensive loss	—		—		—		(1.2)		—		(1.2)
Dividend to noncontrolling interest holder	—		—		—		—		(2.4)		(2.4)
Stock-based compensation, net	107		6.5		—		—		—		6.5
Cash dividends — $0.6875 per share and dividend equivalents	—		—		(44.8)		—		—		(44.8)
Balance at March 31, 2021	63,707	$	6.6	$	5,415.3	$	(79.1)	$	6.2	$	5,349.0

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Three Months Ended

March 31,

2020

2019
Operating activities:

Net income
$
62.9

$
191.6
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

57.0

54.0
Impairment of long-lived assets

97.7

—
Provision for uncollectible accounts

3.8

1.7
Deferred income tax benefit

(33.5)

(0.1)
Stock-based compensation expense

8.9

8.2
Other

9.7

1.7
Changes in operating assets and liabilities (excluding effect of businesses acquired):

Accounts receivable

(155.8)

(180.7)
Inventories

12.4

(119.0)
Prepaid expenses and other assets

68.3

41.2
Accounts payable and other liabilities

39.4

118.6
Net cash provided by operating activities

170.8

117.2

Investing activities:

Purchases of property, plant and equipment

(55.5)

(53.0)
Other

0.5

4.3
Net cash used in investing activities

(55.0)

(48.7)

Financing activities:

Proceeds from long-term debt borrowings

667.0

374.0
Principal payments on long-term debt

(419.0)

(391.0)
Dividends and dividend equivalents paid

(41.9)

(39.6)
Share repurchases

(300.0)

—
Noncontrolling interest purchased

(8.0)

—
Other

(5.5)

(8.8)
Net cash used in financing activities

(107.4)

(65.4)
Effect of exchange rate changes on cash and cash equivalents

(10.6)

2.3
(Decrease) increase in cash and cash equivalents

(2.2)

5.4
Cash and cash equivalents at beginning of year

174.3

128.2
Cash and cash equivalents at end of period
$
172.1

$
133.6

Supplemental cash flow information:

Interest paid during the period
$
6.0

$
13.6
Income taxes paid during the period, net
$
5.2

$
7.9


	Three Months Ended
	March 31,
	2021		2020
Operating activities:
Net income	$	268.2	$	62.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		56.9		57.0
Impairment of long-lived assets		—		97.7
Provision for credit losses		4.5		3.8
Deferred income tax benefit		(0.1)		(33.5)
Stock-based compensation expense		14.7		8.9
Other		0.4		9.7
Changes in operating assets and liabilities (excluding effect of businesses acquired):
Accounts receivable		(346.2)		(155.8)
Inventories		(50.4)		12.4
Prepaid expenses and other assets		(4.1)		68.3
Accounts payable and other liabilities		217.9		39.4
Net cash provided by operating activities		161.8		170.8

Investing activities:
Purchases of property, plant and equipment		(43.7)		(55.5)
Proceeds from sales of property, plant and equipment		20.6		0.8
Other		(4.6)		(0.3)
Net cash used in investing activities		(27.7)		(55.0)

Financing activities:
Net short-term debt repayments		(0.8)		—
Proceeds from long-term debt borrowings		—		667.0
Principal payments on long-term debt		—		(419.0)
Dividends and dividend equivalents paid		(44.8)		(41.9)
Share repurchases		—		(300.0)
Noncontrolling interest purchased		—		(8.0)
Other		(10.8)		(5.5)
Net cash used in financing activities		(56.4)		(107.4)
Effect of exchange rate changes on cash and cash equivalents		(0.9)		(10.6)
Increase (decrease) in cash and cash equivalents		76.8		(2.2)
Cash and cash equivalents at beginning of year		683.5		174.3
Cash and cash equivalents at end of period	$	760.3	$	172.1

Supplemental cash flow information:
Interest paid during the period	$	9.5	$	6.0
Income taxes paid during the period, net	$	6.9	$	5.2

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, ~~2020~~2021

Note 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 (“U.S. GAAP”) 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. GAAP for complete financial statements. In the opinion of management, our financial statements reflect all adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP. The results of operations for the ~~first quarter of 2020~~three months ended March 31, 2021 are not necessarily indicative of the results for the full year ending December 31, ~~2020.~~2021. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, ~~2019,~~2020, included in the Reliance Steel & Aluminum Co. (“Reliance,” the “Company,” “we,” “our” or “us”) Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. ~~During the first quarter of 2020, we purchased the remaining 49% noncontrolling interest of Feralloy Processing Company, which increased our ownership from 51% to 100%. See~~ ~~Note 9—“Equity”~~ ~~for further discussion of our noncontrolling interest transaction.~~ Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting.

Note 2. Impact of Recently Issued Accounting Guidance

Impact of Recently Issued Accounting Standards—Adopted

~~Financial Instruments – Credit Losses~~Income Taxes—In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued accounting ~~guidance~~changes that ~~changes how entities account~~simplify the accounting for credit losses for most financial assets, including the allowance for doubtful accounts for trade receivables, and certain other instruments that are not measured at fair value through net income. The new guidance replaces the current incurred loss model with an expected credit loss model that requires consideration of a broader range of information to estimate credit losses over the lifetimeincome taxes as part of the ~~asset.~~FASB’s overall initiative to reduce complexity in accounting standards. We adopted the new standard on January 1, ~~2020.~~2021. The adoption of this accounting change did not have a material impact on our consolidated financial statements.

Impact of Recently Issued Accounting Standards—Not Yet Adopted

~~Income Taxes~~—In December 2019, the FASB issued accounting changes that simplify the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020, or January 1, 2021 for the Company. Early adoption is permitted. The adoption of this standard will not have a material impact on our consolidated financial statements.

Reference Rate Reform—In March 2020, the FASB issued accounting changes that provide optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The accounting changes may be applied prospectively through December 31, 2022. The Company expects to adopt this guidance for any contracts that are modified as a result of reference rate reform. We ~~are continuing~~currently do not expect the transition from LIBOR to have a material impact on our consolidated financial statements.

Table of Contents

~~to evaluate which contracts may be impacted by reference rate reform, but believe our use of these accounting changes will not have a material impact on our consolidated financial statements.~~

Note 3. Revenues

The following table presents our net sales disaggregated by product and service. Certain sales taxes and value-added taxes collected from customers are excluded from our reported net sales.


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Carbon steel	$	1,316.2	$	1,593.6	$	1,659.2	$	1,316.2
Aluminum		512.2		565.8		462.8		512.2
Stainless steel		404.9		406.5		452.9		404.9
Alloy		151.4		184.3		117.3		151.4
Toll processing and logistics		112.5		111.7		115.6		112.5
Other and eliminations		75.7		94.7		30.6		75.7
Total	$	2,572.9	$	2,956.6	$	2,838.4	$	2,572.9

Note 4. Goodwill

The change in the carrying amount of goodwill is as follows:

(in millions)
Balance at January 1, 2020
$
2,003.8
Purchase price allocation adjustments

0.6
Foreign currency translation loss

(5.6)
Balance at March 31, 2020
$
1,998.8


	(in millions)
Balance at January 1, 2021	$	1,935.2
Foreign currency translation gain		0.5
Balance at March 31, 2021	$	1,935.7

We had 0 accumulated impairment losses related to goodwill at March 31, ~~2020.~~

The purchase price allocation for our 2019 acquisition of Fry Steel Company is pending the completion of purchase price adjustments, based on tangible and intangible asset valuations, and the completion of pre-acquisition period tax returns.2021.

Note 5. Intangible Assets, net

Intangible assets, net consisted of the following:


		March 31, 2020				December 31, 2019					March 31, 2021				December 31, 2020
	Weighted Average	Gross				Gross				Weighted Average	Gross				Gross
	Amortizable	Carrying		Accumulated		Carrying		Accumulated		Amortizable	Carrying		Accumulated		Carrying		Accumulated
	Life in Years	Amount		Amortization		Amount		Amortization		Life in Years	Amount		Amortization		Amount		Amortization

		(in millions)									(in millions)
Intangible assets subject to amortization:
Covenants not to compete	5.0	$	0.7	$	(0.4)	$	0.7	$	(0.4)	5.0	$	0.7	$	(0.5)	$	0.7	$	(0.5)
Customer lists/relationships	15.5		680.2		(445.4)		710.1		(438.1)	14.9		623.4		(406.0)		623.2		(396.7)
Software	10.0		8.1		(8.1)		8.1		(8.1)	10.0		8.1		(8.1)		8.1		(8.1)
Other	7.2		1.0		(0.9)		1.1		(0.9)	5.2		0.7		(0.6)		1.1		(0.9)
			690.0		(454.8)		720.0		(447.5)			632.9		(415.2)		633.1		(406.2)
Intangible assets not subject to amortization:
Trade names			692.8		—		758.6		—			720.3		—		720.2		—
		$	1,382.8	$	(454.8)	$	1,478.6	$	(447.5)		$	1,353.2	$	(415.2)	$	1,353.3	$	(406.2)

Amortization expense for intangible assets was $9.2 million and $10.8 million for the first quarters of 2021 and 2020, respectively. Foreign currency translation gains related to intangible assets, net, were $0.1 million for the first quarter of 2021 compared to foreign currency translation losses of 3.5 million in the first quarter of 2020.

In the first quarter of 2020, we recognized impairment losses of $64.1 million on our trade names and $24.7 million on our customer lists/relationships intangible assets, mainly related to certain of our energy-related businesses. See Note 12—“Impairment and Restructuring Charges” for further discussion of our impairment losses.

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Amortization expense for intangible assets was $10.8 million for the first quarters of 2020 and 2019. Foreign currency translation losses related to intangible assets, net, were $3.5 million in the first quarter of 2020 compared to foreign currency translation gains of $1.2 million in the first quarter of 2019.

In the first quarter of 2020, we recognized impairment losses of $64.1 million on our trade name and $24.7 million on our customer lists/relationships intangible assets related to certain of our energy-related businesses. See ~~Note 12—“Impairment and Restructuring Charge”~~ ~~for further discussion of our impairment losses.~~

The following is a summary of estimated future amortization expense for the remaining nine months of ~~2020~~2021 and each of the succeeding five years:


	(in millions)		(in millions)
2020 (remaining nine months)	$	26.4
2021		34.7
2021 (remaining nine months)			$	27.4
2022		34.0		35.9
2023		29.7		31.6
2024		26.2		28.1
2025				23.9
2026				14.4

Note 6. Debt

Debt consisted of the following:


	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Unsecured revolving credit facility due September 30, 2021	$	631.0	$	368.0
Unsecured term loan due from June 30, 2020 to September 30, 2021		450.0		465.0
Unsecured revolving credit facility maturing September 3, 2025					$	—	$	—
Senior unsecured notes due April 15, 2023		500.0		500.0		500.0		500.0
Senior unsecured notes due August 15, 2025						400.0		400.0
Senior unsecured notes due August 15, 2030						500.0		500.0
Senior unsecured notes due November 15, 2036		250.0		250.0		250.0		250.0
Other notes and revolving credit facilities		13.2		13.3		12.9		13.7
Total		1,844.2		1,596.3		1,662.9		1,663.7
Less: unamortized discount and debt issuance costs		(7.1)		(7.8)		(18.0)		(18.8)
Less: amounts due within one year and short-term borrowings		(64.8)		(64.9)		(5.2)		(6.0)
Total long-term debt	$	1,772.3	$	1,523.6	$	1,639.7	$	1,638.9

Unsecured Credit Facility

On September ~~30, 2016,~~3, 2020, we entered into a ~~$2.1~~$1.5 billion unsecured five-year ~~credit agreement~~Amended and Restated Credit Agreement (“Credit Agreement”) ~~comprised of a~~that amended and restated our existing $1.5 billion unsecured revolving credit facility and a $600.0 million unsecured term loan, with an option to increase the revolving credit facility up to an additional $500.0 million at our request, subject to approval of the lenders and certain other customary conditions. The term loan due September 30,facility. At March 31, 2021, ~~amortizes in quarterly installments, with an annual amortization of 10% until June 2021, with the balance to be paid at maturity. Interest on~~ borrowings under the Credit Agreement ~~at March 31, 2020 was~~were available at variable rates based on LIBOR plus ~~1.00%~~1.25% or the bank prime rate plus 0.25% and we pay a commitment fee at an annual rate of ~~0.125%~~0.20% on the unused portion of the revolving credit facility. The applicable margins over LIBOR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty. Our Credit Agreement includes provisions to change the reference rate to the then-prevailing market convention for similar agreements if a replacement rate for LIBOR is necessary during its term.

Weighted average interest rates on borrowings outstanding on the revolving credit facility were 2.14% and 3.69% as of March 31, 2020 and December 31, 2019, respectively. Weighted average interest rates on borrowings outstanding on the term loan were 1.99% and 2.80% as of March 31, 2020 and December 31, 2019, respectively. As of March 31, ~~2020,~~2021, we had ~~$631.0 million of~~0 outstanding borrowings ~~$37.5~~and $32.3 million of letters of credit issued ~~and $831.5 million available for borrowing~~ on the revolving credit facility.

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Senior Unsecured Notes

On November 20, 2006, we entered into an indenture (the “2006 Indenture”) for the issuance of $600.0 million of unsecured debt securities. The total ~~debt issued~~issuance was comprised of ~~2 tranches,~~ (a) $350.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, which matured and were repaid on November 15, 2016 and (b) $250.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036.

On April 12, 2013, we entered into an indenture (the “2013 Indenture” ~~and, together with the 2006 Indenture, the “Indentures”~~) for the issuance of $500.0 million aggregate principal amount of senior unsecured notes at the rate of 4.50% per annum, maturing on April 15, 2023.

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comprised of (a) $400.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 1.30% per annum, maturing on August 15, 2025 and (b) $500.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 2.15% per annum, maturing on August 15, 2030.

Under the Indentures, the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to make an offer to repurchase each series of the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest.

Other Notes and Revolving Credit Facilities

A revolving credit facility with a credit limit of ~~$7.7~~$8.3 million is in place for an operation in Asia with an outstanding balance of ~~$4.2~~$4.6 million and ~~$4.3~~$5.4 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Various industrial revenue bonds had combined outstanding balances of ~~$9.0~~$8.3 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, and have maturities through 2027.

Covenants

The Credit Agreement and the Indentures include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, 2 financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. We were in compliance with all financial maintenance covenants in our Credit Agreement at March 31, ~~2020.~~2021.

Note 7. Leases

Our metals service center leases are comprised of processing and distribution facilities, equipment, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers. We also lease various office buildings, including our corporate headquarters in Los Angeles, California. Our leases of facilities and other spaces expire at various times through ~~2031~~2045 and our ground leases expire at various times through 2068. Nearly all of our leases are operating leases. Information regarding our insignificant finance leases is not included as it is not meaningful to an understanding of our lease obligations.

The following is a summary of our lease cost:


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Operating lease cost	$	21.1	$	20.8	$	19.7	$	21.1

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Supplemental cash flow and balance sheet information is presented below:


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020

	(in millions)				(in millions)
Supplemental cash flow information
Supplemental cash flow information:
Cash payments for operating leases	$	21.2	$	20.2	$	19.6	$	21.2
Right-of-use assets obtained in exchange for operating lease obligations	$	14.5	$	11.7	$	11.5	$	14.5

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Other lease information
Other lease information:
Weighted average remaining lease term—operating leases		5.5 years		5.6 years		5.6 years		5.7 years
Weighted average discount rate—operating leases		4.2%		4.3%		3.6%		3.7%

Maturities of operating lease liabilities as of March 31, ~~2020~~2021 are as follows:


	(in millions)		(in millions)
2020 (remaining nine months)	$	45.1
2021		50.4
2021 (remaining 9 months)			$	44.0
2022		39.0		48.6
2023		30.0		39.0
2024		23.1		31.2
2025				21.4
Thereafter		41.9		46.1
Total operating lease payments		229.5		230.3
Less: imputed interest		(27.4)		(27.2)
Total operating lease liabilities	$	202.1	$	203.1

Note 8. Income Taxes

Our effective income tax rates for the first quarters of 2021 and 2020 were 25.3% and ~~2019 were~~ 24.3% ~~and 25.0%~~, respectively. The increase in our effective income tax rate was mainly due to our higher income levels. The differences between our effective income tax rates and the U.S. federal statutory rate of ~~21%~~21.0% were mainly due to state income taxes partially offset by the effects of company-owned life insurance policies.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer’s share of social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impacts the CARES Act may have on our business.

Note 9. Equity

Dividends

On April ~~21, 2020,~~20, 2021, our Board of Directors declared the ~~2020~~2021 second quarter cash dividend of ~~$0.625~~$0.6875 per share of common stock, payable on June ~~12, 2020~~11, 2021 to stockholders of record as of May ~~29, 2020.~~28, 2021.

During the first quarters of ~~2020~~2021 and ~~2019,~~2020, we declared and paid quarterly dividends of ~~$0.625~~$0.6875 and ~~$0.55~~$0.625 per share, or ~~$41.0~~$43.8 million and ~~$37.0~~$41.0 million in total, respectively. In addition, we paid ~~$0.9~~$1.0 million and ~~$2.6~~$0.9 million in dividend equivalents with respect to vested restricted stock units (“RSUs”) during the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively.

Stock-Based Compensation

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~~Stock-Based Compensation~~

We make annual grants of long-term incentive awards to officers and key employees in the forms of service-based and performance-based RSUs that have approximately 3-year vesting periods. The performance-based RSU awards are subject to both service and performance goal criteria. We also make annual grants of stock to the non-employee members of the Board of Directors that vest immediately upon grant. The fair value of the RSUs and stock grants is determined based on the closing stock price of our common stock on the grant date.

In the first quarters of ~~2020~~2021 and ~~2019,~~2020, we made payments of ~~$5.1~~$8.2 million and ~~$9.5~~$5.1 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlements. These payments are reflected in the Stock-based compensation, net caption of our consolidated statements of equity.

A summary of the status of our unvested service-based and performance-based RSUs as of March 31, ~~2020~~2021 and changes during the quarter then ended is as follows:


		Weighted			Weighted
		Average			Average
		Grant Date			Grant Date
		Fair Value			Fair Value
Unvested RSUs	Shares	Per RSU		Shares	Per RSU
Unvested at January 1, 2020	859,005	$	86.40
Unvested at January 1, 2021				995,720	$	85.27
Granted⁽¹⁾	540,547		82.81	318,495		141.41
Vested	(721)		84.54	(4,917)		86.53
Cancelled or forfeited	(3,964)		85.79	(8,855)		85.00
Unvested at March 31, 2020	1,394,867	$	85.01
Unvested at March 31, 2021				1,300,443	$	99.02
Shares reserved for future grants (all plans)	494,905			1,866,667

(1)

Comprised of ~~330,144~~191,139 service-based RSUs and ~~210,403~~127,356 performance-based RSUs granted in March ~~2020~~2021 with a fair value of ~~$82.81~~$141.41 per RSU. The service-based RSUs cliff vest on December 1, ~~2022~~2023 and the performance-based RSUs are subject to a three-year performance period ending December 31, ~~2022.~~2023.

Share Repurchase Plan

On October 23, 2018, our Board of Directors amended our share repurchase plan, increasing the total authorized number of shares available to be repurchased by 5.0 million and extending the duration of the plan through December 31, 2021. As of March 31, ~~2020,~~2021, we had remaining authorization under the plan to ~~repurchase~~purchase approximately ~~3.1~~2.8 million shares, or ~~about 5%~~approximately 4% of our current outstanding shares. ~~Repurchased and subsequently retired~~We repurchase shares ~~are restored~~through open market purchases under plans complying with Rule 10b5-1 or Rule 10b-18 under the Securities Act of 1934, as amended. There were 0 share repurchases in the first quarter of 2021 compared to ~~the status of authorized but unissued shares. During~~share repurchases in the first quarter of 2020 ~~we repurchased~~of approximately 3.3 million shares at an average cost of $90.09, for a total of $300.0 million. ~~There were 0 share repurchases in~~Repurchased and subsequently retired shares are restored to the ~~first quarter~~status of ~~2019.~~authorized but unissued shares.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss included the following:


			Pension and		Accumulated				Pension and		Accumulated
	Foreign Currency		Postretirement		Other		Foreign Currency		Postretirement		Other
	Translation		Benefit Adjustments,		Comprehensive		Translation		Benefit Adjustments,		Comprehensive
	Loss		Net of Tax		Loss		Loss		Net of Tax		Loss
	(in millions)								(in millions)
Balance as of January 1, 2020	$	(64.4)	$	(40.7)	$	(105.1)
Balance as of January 1, 2021							$	(52.7)	$	(25.2)	$	(77.9)
Current-period change		(31.4)		—		(31.4)		(1.2)		—		(1.2)
Balance as of March 31, 2020	$	(95.8)	$	(40.7)	$	(136.5)
Balance as of March 31, 2021							$	(53.9)	$	(25.2)	$	(79.1)

Foreign currency translation adjustments have not been adjusted for income taxes. Pension and postretirement benefit adjustments are net of taxes of ~~$7.9~~$5.8 million as of March 31, ~~2020~~2021 and December 31, ~~2019. Income~~2020. The income tax effects relating to our pension and postretirement benefit adjustments are reflected in our income tax provision in future periods as the pension and postretirement benefit adjustments are amortized over service periods and reflected in the amortization of net loss component of our net periodic benefit cost or are otherwise released and recognized as a settlement loss as a result of a plan termination.

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~~from accumulated other comprehensive loss as defined benefit plan and supplemental executive retirement plan obligations are settled.~~

~~Noncontrolling Interest Transaction~~

On March 31, 2020, through our wholly owned subsidiary, Feralloy Corporation, we purchased the remaining 49% noncontrolling interest of Feralloy Processing Company (“FPC”), a toll processor in Portage, Indiana. The increase in our ownership from 51% to 100% was accounted for as an equity transaction. The difference between the $8.0 million consideration paid for the noncontrolling interest with a carrying amount of $1.1 ~~million~~ ~~was recognized as a decrease in total Reliance stockholders’ equity.~~

Note 10. Commitments and Contingencies

Environmental Contingencies

We are currently involved with an environmental remediation project related to activities at former manufacturing operations of Earle M. Jorgensen Company (“EMJ”), our wholly owned subsidiary, that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ maintained insurance policies during the time it owned the manufacturing operations that have covered costs incurred to date and are expected to continue to cover the majority of the related costs. We do not expect that this obligation will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Legal Matters

From time to time, we are named as a defendant in legal actions. Generally, these actions arise in the ordinary course of business. We are not currently a party to any pending legal proceedings other than routine litigation incidental to the business. We expect that these matters will be resolved without having a material adverse impact on our consolidated financial position, results of operations or cash flows. We maintain general liability insurance against risks arising in the ordinary course of business.

COVID-19 Risks and Uncertainties

The global COVID-19 outbreak and associated countermeasures implemented by governments around the world, as well as increased business uncertainty and economic contraction, had an adverse impact on our financial results during 2020. We took a variety of actions during 2020 to help mitigate the financial impact, including rightsizing our inventory, reducing our workforce and furloughing employees. Activity in many of the end markets we serve sequentially improved as 2020 progressed, and this trend continued in the first quarter of 2021, although the long-term impact of COVID-19 on our business is uncertain at this time. Accordingly, our estimates and judgments may be subject to greater volatility than in the past.

Note 11. Earnings Per Share

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


	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2020		2019		2021		2020

	(in millions, except number of shares which are reflected in thousands and per share amounts)				(in millions, except number of shares which are reflected in thousands and per share amounts)
Numerator:
Net income attributable to Reliance	$	61.7	$	190.1	$	266.9	$	61.7
Denominator:
Weighted average shares outstanding		66,337		67,127		63,645		66,337
Dilutive effect of stock-based awards		911		799		1,066		911
Weighted average diluted shares outstanding		67,248		67,926		64,711		67,248

Earnings per share attributable to Reliance stockholders:
Diluted	$	0.92	$	2.80	$	4.12	$	0.92
Basic	$	0.93	$	2.83	$	4.19	$	0.93

The computations of earnings per share for the first quarters of ~~2020~~2021 and ~~2019~~2020 do not include ~~701,053~~452,124 and ~~682,660~~701,053 weighted average shares, respectively, in respect of RSUs, because their inclusion would have been anti-dilutive.

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Note 12. Impairment and Restructuring ~~Charge~~Charges

We recorded an impairment and restructuring charge of $137.5 million in the first quarter of ~~2020. The recent significant decline in crude oil prices that is expected~~2020 due to ~~result in~~our reduced ~~drilling activity and decreased demand for the products we sell informed our decision to close three of our energy-related businesses and reduce our~~ long-term outlook for our businesses ~~servicing~~serving the energy ~~market.~~market and charges at certain of our other businesses for which our outlook had turned negative based on the impacts of COVID-19.

The impairment and restructuring ~~charge~~charges consisted of the following:

Three Months Ended

March 31,

2020

2019

(in millions)
Intangible assets, net
$
88.8

$
—
Property, plant and equipment

8.7

—
Operating lease right-of-use assets

0.2

—
Total impairment charge

97.7

—
Restructuring––cost of sales

39.8

—
Total impairment and restructuring charge
$
137.5

$
—


	Three Months Ended
	March 31,
	2021		2020

	(in millions)
Intangible assets, net	$	—	$	88.8
Property, plant and equipment		—		8.7
Operating lease right-of-use assets		—		0.2
Total impairment charges		—		97.7
Restructuring––cost of sales		—		39.8
Restructuring––warehouse, delivery, selling, general and administrative expense		0.1		—
Total impairment and restructuring charges	$	0.1	$	137.5

The 2020 property, plant and equipment and restructuring – cost of sales charges ~~relate~~related to the ~~planned~~ closure of certain locations where we ~~anticipate~~anticipated losses on the disposition of certain real property, machinery and equipment and inventories. The measurement of the intangible assets at fair value in the first quarter of 2020 was determined using discounted cash flow techniques. The use of discounted cash flow models requires ~~significant judgement~~judgment and ~~requires~~ the use of inputs by management that are unobservable, including revenue forecasts, discount rates and long-term growth rates. Unobservable inputs are inputs that ~~reflect~~reflected the Company’s expectations of the assumptions market participants would use in pricing the eventual recovery of the oil and natural gas ~~industry~~and aerospace industries based on the best information available in the ~~circumstances.~~circumstances at that time.

Note 13. Subsequent Event

~~COVID-19 Risks~~On April 21, 2021, we entered into a Reimbursement Agreement and ~~Uncertainties~~Continuing Indemnity Relating to Standby Letters of Credit/Letters of Guarantee (the “Reimbursement Agreement’) with one of the lenders under our Credit Agreement (the “Issuing Bank”). Pursuant to the Reimbursement Agreement, the Issuing Bank has agreed to issue from time to time, at the Company’s request, standby letters of credit or letters of guarantee in an amount not to exceed $50.0 million in the aggregate.

In March 2020, the World Health Organization declared the outbreak of the novel strain of coronavirus ("COVID-19") a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this, and although operations have not been materially affected by the COVID-19 outbreak as of and for the three months ended March 31, 2020, we are unable to predict the impact that COVID-19 will have on our future financial position and operating results due to numerous uncertainties. The duration and severity of the outbreak and its long-term impact on our business are uncertain at this time.

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RELIANCE STEEL & ALUMINUM CO.

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

This report contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements may include, but are not limited to, discussions of our industry ~~our~~and end markets, our business strategies and our expectations concerning future demand and our results of operations, margins, profitability, impairment and restructuring charges, taxes, liquidity, litigation matters and capital resources. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “preliminary,” ~~“range”~~“range,” “intend” and “continue,” the negative of these terms, and similar expressions. All statements contained in this report, other than statements of historical fact, are forward-looking statements. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date of such statements.

Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance. Actual outcomes and results may differ materially from what is expressed or forecasted in ~~these~~our forward-looking statements as a result of various important factors, including, but not limited to, actions taken by us, including restructuring or cash-preservation initiatives, as well as developments beyond our control, including, but not limited to, the impact of the ~~novel strain of coronavirus ("COVID-19") outbreak~~COVID-19 pandemic and changes in worldwide and U.S. economic conditions that materially impact our customers and the demand for our products and services. The extent to which the COVID-19 pandemic will continue to negatively impact our operations will depend on future developments which are highly uncertain and cannot be predicted, including the duration of the outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, the actions taken to control the spread of COVID-19 or treat its impact, and changes in worldwide and U.S. economic conditions. Further deteriorations in economic conditions, as a result of COVID-19 or otherwise, could lead to a further or prolonged decline in demand for our products and services and negatively impact our business, and may also impact financial markets and corporate credit markets which could adversely impact our access to financing, or the terms of any financing. We cannot at this time predict the extent of the impact of the COVID-19 pandemic and resulting economic impact, but it could have a material adverse effect on our business, financial position, results of operations and cash flows. Other factors which could cause actual results to differ materially from our forward-looking statements include those disclosed in this report and in other reports we have filed with the United States Securities and Exchange Commission (the “SEC”). Important risks and uncertainties about our business can be found ~~elsewhere in this Quarterly Report on Form 10-Q, including in Item 1A “Risk Factors,” and in Item 1A “Risk Factors”~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the SECand in other documents Reliance files or furnishes with the SEC. ~~As a result, these~~

The statements contained in this quarterly report on Form 10-Q speak only as of the date that they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Except as required by law, we disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in assumptions, beliefs, or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based. You should review any additional disclosures we make in ~~our~~any subsequent press releases and Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC.

Overview

We ~~delivered solid~~generated record financial results ~~with healthy demand levels through most of~~in the first quarter of ~~2020 offset by downward pricing pressure mainly attributable to uncertainty regarding COVID-19.~~2021. Our resilient business model coupled with outstanding execution during a period of ongoing strength in metals prices resulted in record profitability.

Certain key ~~financial~~ results for the first quarter of ~~2020 included:~~2021 included the following:

●

Net sales of ~~$2.57 billion, down $383.7 million, or 13.0%, from $2.96~~$2.84 billion in the first quarter of ~~2019;~~2021, increased $265.5 million, or 10.3%, from $2.57 billion in the first quarter of 2020;

●

Record quarterly gross profit of $953.7 million increased $133.2 million, or 16.2%, and record quarterly gross profit margin of 33.6% increased 170 basis points compared to the first quarter of 2020, as adjusted for a $39.8 million inventory provision in the first quarter of 2020 related to the planned closure of certain operations;

●

Record quarterly pretax income of $359.0 million increased $138.4 million, or 62.7%, and record pretax income margin of 12.6% increased 400 basis points compared to the first quarter of 2020, as adjusted for a pretax impairment and restructuring charge of $137.5 million in the first quarter of 2020;

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●

~~Gross profit~~Net income of ~~$780.7~~$266.9 million ~~down $86.2~~increased $102.1 million, or ~~9.9%~~62.0%, ~~from gross profit~~and record earnings per diluted share of ~~$866.9 million~~$4.12 increased $1.67, or 68.2%, compared to the first quarter of 2020, as adjusted for the impairment and restructuring charge in the first quarter of ~~2019. Gross profit included a $39.8 million restructuring charge that decreased our gross profit margin by 160 basis points;~~ 2020;

●

~~Gross profit margin~~We generated strong cash provided by operations of ~~30.3% (or 31.9%, excluding the impact~~$161.8 million, despite a significant investment in working capital resulting from higher metals prices, which was slightly lower than $170.8 million of ~~a $39.8 million restructuring charge) compared to 29.3%~~operating cash flow we generated in the first quarter of ~~2019;~~2020; and

●

~~Pretax income~~We improved our inventory turn rate to 5.4 times (based on tons), surpassing our 2020 annual rate and company-wide turn goal of $83.1 million, down $172.4 million, or 67.5%, from $255.5 million in the first quarter of 2019. Pretax income included a $137.5 million impairment and restructuring charge that decreased pretax income margin by 540 basis points; and

●

Earnings per diluted share of $0.92 for the first quarter of 2020, down $1.88, or 67.1%, from $2.80 in the first quarter of 2019. The impairment and restructuring charge noted above decreased earnings per diluted share by $1.53.4.7 times.

Our ~~same-store tons sold decreased 2.3% and our average selling price per ton sold decreased 11.8%~~net sales were higher in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019. The decline~~2020 due to a 16.0% increase in our average selling price ~~per ton~~that was offset by a 2.5% decline in our daily tons sold was mainly due to carbon steel pricing that has trended lower over the past four quarters. Our investments in value-added processing equipment during the past several years and focus on specialty products supported our strong gross profit marginfrom pre-pandemic levels of ~~30.3% (or 31.9%, excluding the impact of a $39.8 million restructuring charge) in~~ the first quarter of 2020.

AsWe experienced healthy demand in most end markets we serve in the first quarter of ~~March 31,~~2021; however our tons sold were below pre-pandemic levels of the first quarter of 2020 mainly due to a decrease in tons sold to the commercial aerospace and energy end markets. However, we experienced positive signs of improving demand during the first quarter of 2021 in these end markets. In addition, we believe our ~~net debt-to-total capital ratio~~tons sold in the first quarter of 2021 were limited by market conditions for us and our customers that mainly related to metal supply constraints, supply chain disruptions, and labor and trucking shortages.

Our record pretax income in the first quarter of 2021 was ~~25.4%~~driven by our record gross profit margin and effective expense control. In the first quarter of 2021, we generated a record gross profit margin of 33.6% that increased 170 basis points from our first quarter of 2020 gross profit margin, as adjusted for a $39.8 million inventory provision, and our SG&A expense was relatively flat, declining $4.2 million, or 0.8%, ~~up from 21.4% as~~over the same period.

Our business model enables us to expand our average selling price per ton sold and gross profit margin during operating environments that include low levels of ~~December 31, 2019, but below~~metal inventories and availability. Consequently, we were able to generate a record gross profit margin in the first quarter of 2021 during which we observed ongoing strength in metals pricing with historically high levels for carbon steel products (56% of our ~~historical range~~gross sales dollars) due to solid demand, increased input costs and limited metal supply.

During the first quarter of ~~30% to 40%. As of March 31,~~ 2020, we ~~had ample~~recorded an impairment and restructuring charge of $137.5 million mainly related to planned closures of certain energy-related businesses and our revised negative outlook for our remaining energy-related businesses. See Note 12 — “Impairment and Restructuring Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment and restructuring charge.

As a result of our strong profitability, we generated strong cash flow from operations in the first quarter of 2021 of $161.8 million that was only 5.3% lower than our operating cash flow of $170.8 million in first quarter of 2020 despite a $182.8 million investment in operating assets and liabilities (primarily working capital, including accounts receivable and inventory less accounts payable) as a result of higher metals prices. We believe our strong liquidity ~~with $831.5 million available for~~position that includes significant cash on hand, strong cash flow generation, an extended long-term debt maturity profile and substantially all borrowing availability on our $1.5 billion revolving credit facility will support prudent use of capital as we maintain a flexible approach focused on growth, both through acquisitions and ~~$172.1 million in cash~~organically, and ~~cash equivalents.~~stockholder return activities.

~~Due to the spread~~While our results of ~~COVID-19, many government orders were issued to curb non-essential businesses beginning~~operations and customer demand in ~~the US in mid-March. As a result, certain of our customers closed. However,~~ most of our ~~locations continue to operate to support our customers albeit at reduced~~end markets has returned or exceeded pre-pandemic levels as essential businesses under the United States Department of Homeland Security Cybersecurity and Infrastructure Security Agency guidance. Our toll processing operations servicing the automotive market experienced significant declines in mid to late March as many auto manufacturers and steel and aluminum mills suddenly closed. We took decisive, immediate action, by reducing the workforce at our largest U.S. tolling operations by about 50%. Demand in the non-residential end market, our largest, remained solid through most of the first ~~quarter. However,~~quarter of 2020, we have begun to see some second quarter projects being deferred. Demand for the products we sell to the aerospace market remained relatively steady through the first quarter, with strength noted in our sales to the defense portion of this market. We expect activity for commercial aerospace to decline beginning in the second quarter as the direct result of COVID-19 and are uncertain as to the long-term impact.

We will continue to evaluate the nature and extent of future impacts of COVID-19 on our business. Given the dynamic nature of these unprecedented circumstances, including any potential resurgences of the virus or its variants or the failure to contain the spread of the pandemic by governments, we cannot reasonably estimate the full impact of the COVID-19 pandemic on our ongoing business, results of operations, and overall financial ~~performance cannot be reasonably estimated at this time.~~performance.

In addition, changes in drilling technology and increased global oil production led to significantly lower crude oil prices in the first quarter of 2020. As a result, we made a decision to close three of our energy-related businesses and reduced our long-term outlook for certain of our remaining energy-related businesses, resulting in an impairment and restructuring charge of $137.5 million.

We believe that our broad end market exposure, diverse product offerings, focus on small order sizes, when-needed delivery, ~~and~~ significant value-added processing capabilities along with our wide geographic footprint ~~will enable~~enabled us to persevere during ~~these difficult~~the lows of the pandemic in 2020 and ~~uncertain times.~~were the cornerstone of our record financial results in the first quarter of

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2021. We believe that these business model characteristics combined with pricing discipline and our ~~strategy~~strategies of concentrating on higher margin business ~~differentiate~~and cross selling inventory among our operating locations differentiates us from our industry peers and ~~will continue to~~ allow us to ~~achieve~~continue achieving industry-leading results.

In addition to ensuring the health, safety and well-being of our employees during this challenging time, with the significant uncertainty that currently exists, we have adjusted our capital allocation priorities to focus on cash preservation,

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including rightsizing our inventory and pausing non-essential capital expenditures. Due to the significant uncertainty that remains regarding the duration of the COVID-19 pandemic, we have reduced our 2020 capital expenditure budget from approximately $250 million to approximately $190 million. Nevertheless, we remain committed to concurrently making investments that support the long-term growth and sustainability of our company as well as continuing to provide returns to our stockholders. We believe our sources of liquidity and access to capital markets will continue to be adequate for the foreseeable future to maintain operations, finance strategic initiatives, pay dividends, and execute opportunistic purchases under our share repurchase program.

~~For more information, please see~~ ~~Item 1A “Risk Factors”~~ ~~in this Quarterly Report on Form 10-Q.~~

~~Acquisitions~~

~~2020 Acquisition~~

On March 31, 2020, through our wholly owned subsidiary, Feralloy Corporation, we purchased the remaining 49% noncontrolling interest of joint venture partnership Feralloy Processing Company (“FPC”), a toll processor in Portage, Indiana, that increased our ownership from 51% to 100%. We have consolidated the results of FPC since August 1, 2008, when we acquired PNA Group Holding Corporation and its subsidiaries. The difference between the $8.0 million consideration paid for the noncontrolling interest with a carrying amount of $1.1 million was recognized as a decrease in total Reliance stockholders’ equity.

~~We funded our 2020 acquisition of FPC with borrowings on our revolving credit facility and cash on hand.~~

~~2019 Acquisition~~

On December 31, 2019, we acquired Fry Steel Company (“Fry Steel”). Fry Steel is a general line and long bar distributor located in Santa Fe Springs, California. Fry Steel specializes in the cutting of various bar products including stainless, alloy, aluminum, carbon, brass and bronze. Sales of Fry Steel were $25.5 million in the first quarter of 2020.

~~We funded our 2019 acquisition of Fry Steel with borrowings on our revolving credit facility and cash on hand.~~

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Results of Operations

The following table sets forth certain income statement data for the first quarters of ~~2020~~2021 and ~~2019~~2020 (dollars are shown in millions and certain amounts may not calculate due to rounding):

Three Months Ended March 31,

2020

2019

% of

% of

$

Net Sales


$

Net Sales

Net sales
$
2,572.9

100.0
%

$
2,956.6

100.0
%
Cost of sales (exclusive of depreciation and amortization expenses shown below)⁽¹⁾

1,792.2

69.7

2,089.7

70.7

Gross profit⁽²⁾

780.7

30.3

866.9

29.3

Warehouse, delivery, selling, general and administrative expense ("S,G&A")

522.7

20.3

532.1

18.0

Depreciation expense

46.2

1.8

43.2

1.5

Amortization expense

10.8

0.4

10.8

0.4

Impairment of long-lived assets

97.7

3.8

—

—

Operating income
$
103.3

4.0
%

$
280.8

9.5
%


	Three Months Ended March 31,
	2021				2020
			% of				% of
	$		Net Sales		$		Net Sales
Net sales	$	2,838.4	100.0	%	$	2,572.9	100.0	%
Cost of sales (exclusive of depreciation and amortization expenses shown below)⁽¹⁾		1,884.7	66.4			1,792.2	69.7
Gross profit⁽²⁾		953.7	33.6			780.7	30.3
Warehouse, delivery, selling, general and administrative expense ("SG&A")		518.5	18.3			522.7	20.3
Depreciation expense		47.7	1.7			46.2	1.8
Amortization expense		9.2	0.3			10.8	0.4
Impairment of long-lived assets		—	—			97.7	3.8
Operating income	$	378.3	13.3	%	$	103.3	4.0	%

(1)	Cost of sales in the first quarter of 2020 included a $39.8 million inventory provision relating to the planned closure of certain ~~energy-related~~ operations.

(2)

Gross profit, calculated as net sales less cost of sales, and gross profit margin, calculated as gross profit divided by net sales, are non-GAAP financial measures as they exclude depreciation and amortization expenses associated with the corresponding sales. About half 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, is not significant and is excluded from our cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit and gross profit margin as shown above as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures, as their fluctuations can have a significant impact on our earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.

~~Three Months~~First Quarter Ended March 31, ~~2020~~2021 Compared to ~~Three Months~~First Quarter Ended March 31, ~~2019~~2020

Net Sales

Three Months Ended March 31,

Dollar

Percentage

2020

2019

Change

Change

(dollars in millions)

Net sales
$
2,572.9

$
2,956.6

$
(383.7)

(13.0)
%
Net sales, same-store
$
2,547.4

$
2,956.6

$
(409.2)

(13.8)
%

Three Months Ended March 31,

Tons

Percentage

2020

2019

    Change

Change

(tons in thousands)

Tons sold

1,468.8


1,502.0


(33.2)

(2.2)
%
Tons sold, same-store

1,466.8


1,502.0


(35.2)

(2.3)
%

Three Months Ended March 31,

Price

Percentage

2020

2019

Change

Change

Average selling price per ton sold
$
1,742

$
1,958

$
(216)

(11.0)
%
Average selling price per ton sold, same-store
$
1,727

$
1,958

$
(231)

(11.8)
%


	Three Months Ended
	March 31,						Percentage
	2021		2020		Change		Change

	(dollars in millions, tons in thousands)
Net sales	$	2,838.4	$	2,572.9	$	265.5	10.3	%
Tons sold		1,409.7		1,468.8		(59.1)	(4.0)	%
Average selling price per ton sold	$	2,020	$	1,742	$	278	16.0	%

~~Same-store amounts~~Our tons sold and average selling price per ton sold, which exclude the ~~results~~volumes processed by our tolling operations, include insignificant intercompany sales that are excluded from the net sales caption of our ~~acquisition completed in 2019.~~consolidated statements of income.

Our net sales were higher in the first quarter of 2021 compared to the first quarter of 2020 due to a significant increase in our average selling price per ton sold that was partially offset by lower tons sold. Demand was healthy in most of the end markets we served in the first quarter of 2021; however, our daily tons sold, which is adjusted for the effects of one

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~~Our net sales were lower~~less shipping day in the 2021 period, declined 2.5% compared to pre-pandemic levels in the first quarter of ~~2020 compared to~~2020. We believe our tons sold in the first quarter of ~~2019 due~~2021 were limited by market conditions for us and our customers that mainly related to ~~a lower average selling price per ton sold~~metal supply constraints, supply chain disruptions, and ~~lower tons sold.~~

Demand in non-residential construction (including infrastructure), our largest end market served, remained solid for most of the first quarter of 2020 before slowing in late March. Demand in the automotive end market (which we serve primarily through our toll processing operations in the U.S.labor and Mexico) was strong until mid-March when demand declined as many automotive OEM and steel and aluminum mills suspended operations. The aerospace end market remained steady during the first quarter of 2020, but is expected to be challenged in future quarters. Demand in heavy industry was steady in the first half of the first quarter of 2020, but both agricultural and construction equipment spending declined significantly in the last month of the quarter. Demand for the products we sell to the energy (oil and natural gas) end market continued to decline throughout the quarter from already low levels. We expect the aforementioned end market trends to continue until COVID-19 restrictions are lifted and economic conditions improve. Our tons sold have trended significantly lower, declining about 20% in the first two-and-a-half weeks in April of 2020 compared to the same period of March 2020; a trend that may continue, get worse or get better.trucking shortages.

Since we primarily purchase and sell our inventories in the “spot” market, the changes in our average selling prices generally fluctuate in accordance with the changes in the costs of the various metals we purchase. The mix of products sold can also have an impact on our average selling prices.

~~The first quarter of 2020 same-store~~Our average selling price per ton sold ~~decreased 11.8%,~~increased significantly in the first quarter of 2021 compared to the first quarter of 2020, mainly due to multiple mill price ~~decreases on many of the~~increases for carbon steel products ~~we sell. Our same-store average selling price per ton sold has declined sequentially for~~during the ~~past five quarters.~~first quarter of 2021. As carbon steel sales ~~represent~~represented approximately ~~50%~~56% of our gross sales ~~dollars,~~during the first quarter of 2021, changes in carbon steel prices have the most significant impact on changes in our overall average selling price per ton sold.

Our major commodity selling prices changed year-over-year as follows:

Same-store

Average Selling

Average Selling

Price per Ton Sold

Price per Ton Sold

(percentage change)

Carbon steel
(16.4)
%
(16.5)
%
Aluminum
(5.8)
%
(5.8)
%
Stainless steel
(1.0)
%
(3.3)
%
Alloy
(0.4)
%
(4.4)
%



	Average Selling
	Price per Ton Sold
	(percentage change)
Carbon steel	30.1	%
Aluminum	(1.0)	%
Stainless steel	9.6	%
Alloy	3.1	%

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Cost of Sales


	Three Months Ended
	March 31,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Cost of sales	$	1,884.7	66.4	%	$	1,792.2	69.7	%	$	92.5	5.2	%

The ~~decrease~~increase in cost of sales in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019~~2020 is mainly due to a ~~lower~~higher average cost per ton sold ~~and~~partially offset by lower tons sold. See “Net Sales” above for trends in both demand and costs of our products.

Cost of sales ~~in the first quarter of 2020~~ included a $39.8 million inventory provision ~~relating~~related to the planned closure of certain energy-related ~~operations.~~operations in the first quarter of 2020. See Note 12 — “Impairment and Restructuring ~~Charge”~~Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 restructuring charge.

In addition, our last-in, first-out (“LIFO”) method inventory valuation reserve adjustment, which is included in cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in a charge, or expense, of $100.0 million in the first quarter of 2021 compared to a credit, or income, of $20.0 million in the first quarter of ~~2020 compared to a credit, or income, of $12.5 million in the first quarter of 2019.~~2020. At March 31, ~~2020,~~2021, our LIFO method inventory valuation reserve on our balance sheet was ~~$117.6~~$215.6 million.

Gross Profit


	Three Months Ended
	March 31,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Gross profit	$	953.7	33.6	%	$	780.7	30.3	%	$	173.0	22.2	%

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Our gross profit and gross profit margins were records in the first quarter of 2021. We were able to expand our gross profit margin in the first quarter of 2021 due to elevated metals pricing, supported by solid demand and limited metal availability. Throughout the first quarter of 2021, we experienced ongoing strength in metals pricing, led by multiple mill price increases for carbon steel products, which represented about 56% of our gross sales dollars, and improving demand that allowed us to increase our selling prices before the higher metal costs were reflected in our average cost per ton sold.

~~Our strong gross~~Gross profit ~~margin continues to benefit from the increases in the percentage of our orders that include value-added processing in recent years that is supported~~was reduced by ~~our ongoing investments in processing equipment. The~~a $39.8 million inventory provision in the first quarter of 2020 that reduced our gross profit margin by 160 basis points. See “Net Sales” and “Cost of Sales” above for further discussion on product pricing trends and our LIFO inventory valuation reserve adjustments, respectively.

Expenses

Three Months Ended

March 31,

2020

2019


% of

% of

Dollar

Percentage

$

Net Sales


$

Net Sales


Change

Change

(dollars in millions)

S,G&A expense
$
522.7

20.3
%

$
532.1

18.0
%

$
(9.4)

(1.8)
%
S,G&A expense, same-store
$
516.8

20.3
%

$
532.1

18.0
%

$
(15.3)

(2.9)
%
Depreciation & amortization expense
$
57.0

2.2
%

$
54.0

1.8
%

$
3.0

5.6
%
Impairment of long-lived assets
$
97.7

3.8
%

$
—

—
%

$
97.7

*


	Three Months Ended
	March 31,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
SG&A expense	$	518.5	18.3	%	$	522.7	20.3	%	$	(4.2)	(0.8)	%
Depreciation & amortization expense	$	56.9	2.0	%	$	57.0	2.2	%	$	(0.1)	(0.2)	%
Impairment of long-lived assets	$	—	—	%	$	97.7	3.8	%	$	(97.7)	*

* ~~Not~~Percentage data not meaningful.

~~Same-store amounts exclude the results of our acquisition completed in 2019.~~

Our ~~same-store S,G~~SG&A expense was ~~lower~~relatively flat in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019~~2020 due to ~~decreases~~lower expenses associated with our permanent headcount reductions in 2020 offset by increases in incentive compensation ~~related~~as a result of our increased profitability in the first quarter of 2021 compared to ~~lower profitability levels and due to certain warehouse and delivery expenses that were lower due to our lower tons sold that offset~~ the ~~impact~~first quarter of ~~general inflation, including wage increases.~~

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2020. Our ~~S,G~~SG&A expense as a percentage of sales ~~increased~~decreased in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019, mainly~~2020 due to our ~~lower~~higher sales ~~levels.~~and effective expense control.

In the first quarter of 2020, we recorded a ~~$64.1~~$97.7 million impairment charge on our ~~intangibles with indefinite lives~~intangible and ~~a $33.6 million impairment charge on our~~ long-lived ~~assets. The impairment charge~~assets related to our decision to close ~~three of our~~certain energy-related operations and our reduced long-term outlook for ~~the energy market.~~our remaining energy-related operations. See Note 12 — “Impairment and Restructuring ~~Charge”~~Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment charge.

Operating Income


	Three Months Ended
	March 31,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Operating income	$	378.3	13.3	%	$	103.3	4.0	%	$	275.0	266.2	%

Our operating income was ~~lower~~significantly higher in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019 mainly~~2020 due to our record gross profit, resulting from higher sales levels and our third consecutive quarterly record gross profit margin, decreases in impairment and restructuring charges and a relatively flat SG&A expense. Our operating income in the first quarter of 2021 increased $137.5 million, or 57.1%, and our operating income margin increased from 9.4% to 13.3%, as adjusted for a $137.5 million impairment and restructuring ~~charge. Excluding the non-recurring impairment and restructuring~~ charge our operating income declined $40.0 million, or 14.2%, and was mainly due to our lower sales levels partially offset by a higher gross profit margin. In addition, excluding the non-recurring impairment and restructuring charge, which reduced our first quarter of 2020 operating margin by 540 basis points, our operating income margin forin the first quarter of ~~2020 was only 10 basis points lower than our first quarter of 2019 operating income margin.~~2020. See Note 12 — “Impairment and Restructuring ~~Charge”~~Charges” of our Unaudited Consolidated Financial Statements for further information on our 2020 impairment and restructuring charge. See “Net Sales” above for trends in both demand and costs of our products and “Expenses” for trends in our operating expenses.

~~Other Expense~~18

~~Interest expense was lower in the first quarter~~Table of ~~2020 due to lower interest rates on decreased borrowing levels on our revolving credit facility. See~~ ~~Note 6 — “Debt”~~ ~~of our Unaudited Consolidated Financial Statements for further information on the interest rates on our borrowings.~~Contents

Income Tax Rate

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Net Income


	Three Months Ended
	March 31,
	2021				2020
			% of				% of		Dollar		Percentage
	$		Net Sales		$		Net Sales		Change		Change

	(dollars in millions)
Net income attributable to Reliance	$	266.9	9.4	%	$	61.7	2.4	%	$	205.2	332.6	%

The ~~decrease~~increase in our net income and net income margin in the first quarter of 2021 compared to the first quarter of 2020 was mainly due to our increased operating income and operating income margin resulting from our record gross profit (dollars and margin), as discussed above, offset by a higher effective income tax rate. Excluding the $137.5 million impairment and restructuring charge in the first quarter of 2020, our net income in the first quarter of ~~2020 compared to the first quarter of 2019 was mainly due to a $137.5~~2021 increased $102.1 million, ~~impairment and restructuring charge and lower gross profit~~or 62.0%, from ~~our lower sales levels. Our net income margin in~~ the first quarter of 2020 ~~excluding the impact of the impairment~~ and ~~restructuring charge, was~~our net income margin increased from 6.4%~~, consistent with the first quarter of 2019.~~ to 9.4%.

Liquidity and Capital Resources

Operating Activities

Net cash provided by operations of $161.8 million in the first quarter of 2021 decreased slightly from $170.8 million in the first quarter of ~~2020 increased $53.6 million, or 45.7%, from $117.2 million~~2020. Our relatively flat operating cash flow was mainly the result of our higher net income and decreased non-cash impairment of long-lived asset charges in the first quarter of ~~2019. Our~~2021 offset by increased ~~operating cash flow was mainly due to decreased~~ working capital investment (primarily accounts receivable and inventory less accounts payable) in the first quarter of 2020. Our inventory tons on hand at the end of the first quarter of 2020 were relatively flat compared to December 31, 2019, due to effective inventory management. Conversely, in the first quarter of 2019 we increased our inventory tons on hand due to an expectation of a more favorable demand environment that did not materialize. Accordingly, we focused on reducing inventory levels through the remainder of 2019 to rightsize our inventory.2021. 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. At March 31, ~~2020~~2021 and ~~2019,~~2020, our days sales outstanding rate was ~~42.4~~41.1 days and ~~42.1~~42.4 days, respectively. Our inventory turn rate (based on tons) during the first quarter of ~~2020~~2021 was ~~4.8~~5.4 times (or ~~2.5~~2.2 months on hand), compared to ~~4.2~~4.8 times (or ~~2.9~~2.5 months on hand) in the first quarter of ~~2019.~~2020.

Investing Activities

Net cash used in investing activities was $27.7 million in the first quarter of 2021 compared to $55.0 million in the first quarter of 2020 ~~was fairly consistent with the $48.7 million used in the first quarter of 2019~~ and was substantially comprised of our capital ~~expenditures.~~expenditures partially offset by proceeds from sales of property, plant and equipment. Capital expenditures were ~~$55.5 million for the first quarter of 2020 compared to $53.0~~$43.7 million in the first quarter of ~~2019.~~2021 compared to $55.5 million in the first quarter of 2020. The majority of our ~~2020~~2021 and ~~2019~~2020 capital expenditures related to growth initiatives. Proceeds from sales of property, plant and equipment were $20.6 million in the first quarter of 2021 compared to $0.8 million in the first quarter of 2020 and included $20.0 million from the sale of non-core assets for which we recognized a $2.0 million gain.

Financing Activities

Net cash used in financing activities of ~~$107.4~~$56.4 million in the first quarter of ~~2020 increased~~2021 decreased from ~~$65.4~~$107.4 million net cash used in the first quarter of ~~2019 mainly due to~~2020. We had no share repurchases partially offset by increased net debt borrowings. In the first quarter of 2020, we repurchased a total of $300.0 million of our common stock compared to no repurchases in the first quarter of 2019. Netor debt borrowings in the first quarter of ~~2020 were $248.0 million~~2021 compared to ~~$17.0~~$300.0 million of share repurchases and $248.0 million of net debt ~~repayments~~borrowings in the first quarter of ~~2019.~~2020.

On April ~~21, 2020,~~20, 2021, our Board of Directors declared the ~~2020~~2021 second quarter cash dividend of ~~$0.625~~$0.6875 per share. We have increased our quarterly dividend 2728 times since our IPO in 1994, with the most recent increase of ~~13.6%~~10.0% from ~~$0.55~~ $0.625

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per share to ~~$0.625~~$0.6875 per share effective in the first quarter of ~~2020.~~ 2021. We have paid quarterly cash dividends on our common stock for 62 consecutive years and have never reduced or suspended our ~~dividend and have paid~~ regular quarterly ~~dividends to our stockholders for 61 consecutive years.~~dividend.

On October 23, 2018, our Board of Directors amended our share repurchase plan, increasing the total authorized number of shares available to be repurchased by 5.0 million and extending the duration of the plan through December 31, 2021. We had no share repurchases in the first quarter of 2021. In the first quarter of 2020, we repurchased ~~3,329,824~~approximately 3.3 million shares ~~of our common stock~~ at an average cost of $90.09, ~~per share,~~ for a total of $300.0 million. As of March 31, ~~2020,~~2021, we had authorization under the plan to repurchase approximately

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~~3.1~~ 2.8 million shares, or about 5%4% of our current outstanding shares. From the inception of the plan in 1994 through March 31, ~~2020,~~2021, we have repurchased approximately ~~32.5~~32.8 million shares at an average cost of ~~$47.57~~$48.21 per share. We expect to continue to be opportunistic in our approach to repurchasing shares of our common stock.

Liquidity

Our primary sources of liquidity are funds generated from operations, cash on hand and our $1.5 billion revolving credit facility. Our total outstanding debt at March 31, 2021 and December 31, 2020 was ~~$1.84 billion, compared to $1.60 billion at December 31, 2019.~~$1.66 billion. As of March 31, ~~2020,~~2021, we had ~~$631.0 million of~~no outstanding borrowings ~~$37.5~~and $32.3 million of letters of credit issued ~~and $831.5 million available for borrowing on our~~under the revolving credit facility. As of March 31, ~~2020,~~2021, we had ~~$172.1~~$760.3 million in cash and cash equivalents and our net debt-to-total capital ratio (net debt-to-total capital is calculated as total debt, net of cash, divided by total Reliance stockholders’ equity plus total debt, net of cash) was ~~25.4%~~14.2%, updown from ~~21.4%~~15.8% as of December 31, ~~2019.~~2020.

On September ~~30, 2016,~~3, 2020, we entered into a ~~$2.1~~$1.5 billion unsecured five-year ~~credit agreement~~Amended and Restated Credit Agreement (“Credit Agreement”) ~~comprised of a~~that amended and restated our existing $1.5 billion unsecured revolving credit ~~facility~~facility. At March 31, 2021, borrowings under the Credit Agreement were available at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and we pay a ~~$600.0 million unsecured term loan, with~~commitment fee at an ~~option to increase~~annual rate of 0.20% on the unused portion of the revolving credit ~~facility up to an additional $500.0 million at our request,~~facility. The applicable margins over LIBOR and base rate borrowings, along with commitment fees, are subject to ~~approval of~~adjustment every quarter based on our leverage ratio, as defined in the lenders and certain other customary conditions. We intend to use the revolving credit facility for working capital and general corporate purposes, including, but not limited to, capital expenditures, dividend payments, repayment of debt, share repurchases, internal growth initiatives and acquisitions. The $600.0 million term loan due September 30, 2021 amortizes in quarterly installments, with an annual amortization of 10% until June 2021, with the balance to be paid at maturity.Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty. Our Credit Agreement includes provisions to change the reference rate to the then-prevailing market convention for similar agreements if a replacement rate for LIBOR is necessary during its term.

Capital Resources

On November 20, 2006, we entered into an indenture (the “2006 Indenture”) for the issuance of $600.0 million of unsecured debt securities. The total ~~debt issued~~issuance was comprised of ~~two tranches,~~ (a) $350.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, which matured and were repaid on November 15, 2016 and (b) $250.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036.

On August 3, 2020, we entered into an indenture (the “2020 Indenture” and, together with the 2013 Indenture and 2006 Indenture, the “Indentures”) for the issuance of $900.0 million of unsecured debt securities. The total issuance was comprised of (a) $400.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 1.30% per annum, maturing on August 15, 2025 and (b) $500.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 2.15% per annum, maturing on August 15, 2030.

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Various industrial revenue bonds had combined outstanding balances of ~~$9.0~~$8.3 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, and have maturities through 2027.

As of March 31, ~~2020,~~2021, we had ~~$80.2~~$911.8 million of debt obligations coming due before our $1.5 billion revolving credit facility expires on September ~~30, 2021.~~2, 2025.

We believe that we will continue to have sufficient liquidity to fund our future operating needs and to repay our debt obligations as they become due. In addition to funds generated from operations and funds available under our revolving credit facility, we expect to continue to be able to access the capital markets to raise funds, if desired. We have taken steps to mitigate the impact of COVID-19 on our business, including, adjusting our capital allocation priorities to focus on cash preservation, including rightsizing our inventory and pausing non-essential capital expenditures. Due to the significant uncertainty that

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~~remains regarding the duration of the COVID-19 pandemic, we have reduced our 2020 capital expenditure budget from approximately $250 million to approximately $190 million.~~ We believe our sources of liquidity will continue to be adequate to maintain operations, make necessary capital expenditures, finance strategic growth through acquisitions and internal initiatives, pay dividends and ~~pay dividends.~~opportunistically repurchase shares. Additionally, based on current market conditions, we believe our investment grade credit ~~rating enhances~~ratings enhance our ability to effectively raise capital, if needed. We expect to continue our acquisition and ~~other~~internal growth and stockholder return activities and anticipate that we will be able to fund such activities as they arise.

~~The COVID-19 pandemic has had, and we expect will continue to have, an adverse effect on our~~ ~~net sales and pretax income.~~ Future decreases in cash flow from operations would decrease the cash available for the capital uses described above, including capital expenditures, dividend payments, repayment of debt, internal growth initiatives and acquisitions. However, since the ultimate severity and length of the COVID-19 pandemic is unknown, we cannot predict the impact it will have on our customers and suppliers and on the debt and equity capital markets, and we cannot estimate the ultimate impact it will have on our liquidity and capital resources.Covenants

~~Covenants~~

The Credit Agreement and the Indentures include customary representations, warranties, covenants ~~acceleration, indemnity~~ and events of default provisions. The covenants under the Credit Agreement include, among other things, two financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. Our interest coverage ratio for the twelve-month period ended March 31, ~~2020~~2021 was ~~13.1~~14.4 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as earnings before interest and taxes (“EBIT”), as defined in the Credit Agreement, divided by interest expense). Our leverage ratio as of March 31, ~~2020,~~2021, calculated in accordance with the terms of the Credit Agreement, was ~~27.7%~~21.8% compared to the debt covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of finance lease obligations and outstanding letters of credit, minus the lesser of cash held by our domestic subsidiaries and $200.0 million, divided by Reliance stockholders’ equity plus total debt).

We were in compliance with all financial maintenance covenants in our Credit Agreement at March 31, ~~2020.~~2021.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities, which are typically established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we were contingently liable under standby letters of credit in the aggregate amount of ~~$28.4 million.~~$23.8 million and $27.8 million, respectively. The letters of credit relate to insurance policies and construction projects.

Contractual Obligations and Other Commitments

We had no material changes in commitments for capital expenditures or purchase obligations as of March 31, ~~2020,~~2021, 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, ~~2019.~~2020.

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. However, our overall operations have not shown any material seasonal trends as a result of our geographic,

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product and customer diversity. Typically, revenues in the months of July, November and December have been lower than in other months because of a reduced number of working days for shipments of our products, resulting from holidays observed by the Company as well as vacation and extended holiday closures at some of our customers. ~~Reduced~~The number of shipping

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days in each quarter also ~~have~~has a significant impact on our quarterly sales and profitability. Particularly in light of COVID-19, we cannot predict whether period-to-period fluctuations will be consistent with historical patterns. Results of any one or more quarters are therefore not necessarily indicative of annual results.

Goodwill and Other Intangible Assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to ~~$2.00~~$1.94 billion at March 31, ~~2020,~~2021, or approximately ~~25%~~23% of total assets and ~~41%~~36% of total equity. Additionally, other intangible assets, net amounted to ~~$928.0~~$938.0 million at March 31, ~~2020,~~2021, or approximately 11% of total assets and ~~19%~~18% of total equity. Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests and further evaluation when certain events occur. Other intangible assets with finite useful lives are 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. In the first quarter of 2020, we recorded impairment losses of $64.1 million on our intangible assets with indefinite lives and $24.7 million on our intangible assets subject to amortization. See Note 12—“Impairment and Restructuring ~~Charge”~~Charges” of our Unaudited Consolidated Financial Statements for further information on our impairment ~~charge.~~charges.

Critical Accounting Policies and Estimates

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. GAAP. When we prepare these consolidated 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. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical accounting estimates include those related to goodwill and other indefinite-lived 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. The impacts of the COVID-19 pandemic ~~increases~~increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than in the past.

See “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 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. We do not believe that the new accounting guidance implemented in ~~2020~~2021 changed our critical accounting policies.

New Accounting Guidance

See Note 2—“Impact of Recently Issued Accounting Guidance” of our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for disclosure on new accounting guidance issued or implemented.

Website Disclosure

The Company may use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at investor.rsac.com. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section at investor.rsac.com. The website is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its website into this report.

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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 and metals pricing, demand and availability. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for further discussion on quantitative and qualitative disclosures about market risk. ~~Refer to Item~~ ~~1A “Risk Factors”~~ ~~within this Quarterly Report on Form 10-Q for additional discussion of current and potential risks of the COVID-19 pandemic on our business and financial performance.~~

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

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and operation of the Company’s disclosure controls and procedures pursuant to and as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act. 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 to ensure information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information contained under the heading “Legal Matters” in Note 10—“Commitments and ~~Contingencies”~~Contingencies” to our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item 1.

Item 1A. Risk Factors

~~We are supplementing~~There have been no material changes to the risk factors ~~described under~~ ~~Item 1A “Risk Factors”~~disclosed in ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019 with the additional risk factor set forth below, which supplements, and to the extent inconsistent, supersedes such risk factors.~~

~~The COVID-19 global pandemic may materially and adversely impact our business, financial condition and results of operations.~~

The global outbreak of COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government in March 2020 and has negatively affected the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. These factors have led to reduced demand of our products and services, particularly for our businesses that service the automotive, oil and gas, commercial aerospace and non-residential construction (infrastructure) sectors. Our tons sold have trended significantly lower, declining about 20% in the first two-and-a-half weeks in April of 2020 compared to the same period of March 2020; a trend that may continue, get worse or get better. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain and cannot be predicted.

The volatility in the market largely due to COVID-19 could result in a material impairment of goodwill or indefinite-lived intangible assets. Continued negative impacts to the markets we service due COVID-19 or additional stock market volatility could result in a decline in our market capitalization that may result in goodwill and/or indefinite-lived intangible asset impairment charges that could be material.

While most of our facilities continue to operate as essential businesses under the United States Department of Homeland Security Cybersecurity and Infrastructure Security Agency guidance, facility closures or work slowdowns or temporary stoppages could occur at all or some of our facilities due to new government regulations, decreased demand for our products and services or otherwise. In many cases, facilities are not operating under full staffing as a result of COVID-19, which could have a longer-term impact. Any prolonged slowdown or stoppage at our facilities may adversely affect our business, financial condition and results of operations and such impact may be material. We may face unpredictable

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increases in demand for certain of our products when restrictions on business and travel end. If demand for our products exceeds our capacity, it could adversely affect our financial results and customer relationships.

We continue to work with our stakeholders (including customers, employees, suppliers, business partners and local communities) to responsibly address this global pandemic. We will continue to monitor the situation and assess possible implications to our business and our stakeholders and will take appropriate actions in an effort to mitigate adverse consequences, including through adjusting our capital allocation priorities to focus on cash preservation. We cannot assure you that we will be successful in any such mitigation efforts. Although the duration and ultimate impact of these factors is unknown at this time, the decline in economic conditions due to COVID-19, or another disease causing similar impacts, may adversely affect our business, financial condition and results of operations and such impact may be material. Further deteriorations in economic and public health conditions, as a result of the COVID-19 pandemic or otherwise, could lead to disruptions in our supply chain and metals commodities pricing, a further or prolonged decline in demand for our products, potential closures of additional of our facilities, recognition of additional impairment charges, and otherwise negatively impact our business. We have a substantial amount of indebtedness outstanding, and if we experience continued significant declines in sales as a result of the pandemic, our business may not be able to generate cash flow from operations or access additional borrowings on our revolving credit facility in amounts sufficient to enable us to pay our debts and fund our other liquidity needs. The continued spread of COVID-19 has also led to disruption and volatility in the global capital markets and credit markets, which depending on future developments could impact our capital resources and liquidity in the future.

~~In addition, to the extent COVID-19 adversely affects the Company's business and financial results, it may also have the effect of heightening many of the other risks described under~~ ~~Part I, Item 1A “Risk Factors”~~ ~~of the Company’s annual report on Form 10-K for the year ended December 31, 2019.~~2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We repurchase shares of our common stock from time to time pursuant to our publicly announced share repurchase program. All of our share repurchases during the first quarter of 2020 were made in the open market. Our share repurchase activity for the first quarter of 2020 was as follows:None.

Period

Total Number of
Shares Purchased

Average Price Paid
Per Share

Total Number of Shares Purchased as Part of Publicly Announced Plan

Maximum Number of Shares That May Yet Be Purchased Under the Plan⁽¹⁾
January 1 - January 31, 2020

—

$
—

—

6,433,821
February 1 - February 29, 2020

492,500

$
106.57

492,500

5,941,321
March 1 - March 31, 2020

2,837,324

$
87.23

2,837,324

3,103,997
Total

3,329,824

$
90.09

3,329,824

~~(1)~~

Share repurchases were made pursuant to a share repurchase program authorized by our Board of Directors on October 20, 2015. On October 23, 2018, our Board of Directors amended our share repurchase plan increasing by 5,000,000 shares the total number of shares authorized to be repurchased and extending the duration of the program through December 31, 2021. Our share repurchase plan does not obligate us to acquire any specific number of shares. Under the share repurchase plan, shares may be repurchased in the open market or privately negotiated transactions.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit No.		Description

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*		The following unaudited financial information from Reliance Steel & Aluminum Co.’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2020~~2021 formatted in iXBRL (Inline eXtensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Comprehensive Income, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these consolidated financial statements.

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Label Linkbase Document.

101.PRE*		XBRL Taxonomy Presentation Linkbase Document.

104*		Cover Page Interactive Data File (formatting as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith.

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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.
	(Registrant)


Dated: ~~May 1, 2020~~	~~By:~~	~~/s/ Karla R. Lewis~~
		~~Karla R. Lewis~~
		~~Senior Executive Vice President and Chief Financial Officer~~
		~~(Principal Financial Officer)~~



April 29, 2021	By:	/s/ Arthur Ajemyan

		Arthur Ajemyan
		Vice President and ~~Corporate Controller~~Chief Financial Officer
		(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)

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			Same-store
	Average Selling		Average Selling
	Price per Ton Sold		Price per Ton Sold
	(percentage change)
Carbon steel	(16.4)	%	(16.5)	%
Aluminum	(5.8)	%	(5.8)	%
Stainless steel	(1.0)	%	(3.3)	%
Alloy	(0.4)	%	(4.4)	%


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Number of Shares That May Yet Be Purchased Under the Plan⁽¹⁾
January 1 - January 31, 2020	—	$	—	—	6,433,821
February 1 - February 29, 2020	492,500	$	106.57	492,500	5,941,321
March 1 - March 31, 2020	2,837,324	$	87.23	2,837,324	3,103,997
Total	3,329,824	$	90.09	3,329,824