Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | RELIANCE STEEL & ALUMINUM CO | ||
Entity Central Index Key | 861,884 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 5,140,000,000 | ||
Entity Common Stock, Shares Outstanding | 72,830,040 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 154.4 | $ 122.8 |
Accounts receivable, less allowance for doubtful accounts of $15.5 at December 31, 2017 and $15.3 at December 31, 2016 | 1,087.3 | 960.2 |
Inventories | 1,726 | 1,532.6 |
Prepaid expenses and other current assets | 80.7 | 72.9 |
Income taxes receivable | 2.9 | |
Total current assets | 3,051.3 | 2,688.5 |
Property, plant and equipment: | ||
Land | 229.7 | 228.2 |
Buildings | 1,095.3 | 1,059.2 |
Machinery and equipment | 1,738.6 | 1,647.3 |
Accumulated depreciation | (1,407.3) | (1,272.5) |
Property, plant and equipment, net | 1,656.3 | 1,662.2 |
Goodwill | 1,842.6 | 1,827.4 |
Intangible assets, net | 1,112.1 | 1,151.3 |
Cash surrender value of life insurance policies, net | 47.8 | 46.9 |
Other assets | 40.9 | 35 |
Total assets | 7,751 | 7,411.3 |
Current liabilities: | ||
Accounts payable | 346.7 | 302.2 |
Accrued expenses | 83.6 | 83.7 |
Accrued compensation and retirement costs | 139.3 | 140.8 |
Accrued insurance costs | 42.1 | 40.6 |
Current maturities of long-term debt and short-term borrowings | 92 | 82.5 |
Income taxes payable | 6.2 | |
Total current liabilities | 703.7 | 656 |
Long-term debt | 1,809.4 | 1,846.7 |
Long-term retirement costs | 85.4 | 89.6 |
Other long-term liabilities | 11.8 | 13 |
Deferred income taxes | 440.8 | 626.9 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.001 par value: Authorized shares — 5,000,000 None issued or outstanding | ||
Common stock and additional paid-in capital, $0.001 par value: Authorized shares — 200,000,000 Issued and outstanding shares – 72,609,540 at December 31, 2017 and 72,682,793 at December 31, 2016 | 594.6 | 590.3 |
Retained earnings | 4,144.1 | 3,663.2 |
Accumulated other comprehensive loss | (71.6) | (104.7) |
Total Reliance stockholders' equity | 4,667.1 | 4,148.8 |
Noncontrolling interests | 32.8 | 30.3 |
Total equity | 4,699.9 | 4,179.1 |
Total liabilities and equity | $ 7,751 | $ 7,411.3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 15.5 | $ 15.3 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, Authorized shares | 200,000,000 | 200,000,000 |
Common stock, Issued shares | 72,609,540 | 72,682,793 |
Common stock, outstanding shares | 72,609,540 | 72,682,793 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Net sales | $ 9,721 | $ 8,613.4 | $ 9,350.5 |
Costs and expenses: | |||
Cost of sales (exclusive of depreciation and amortization shown below) | 6,933.2 | 6,023.1 | 6,803.6 |
Warehouse, delivery, selling, general and administrative | 1,902.8 | 1,798.1 | 1,725.3 |
Depreciation and amortization | 218.4 | 222 | 218.5 |
Impairment of long-lived assets | 4.2 | 52.4 | 53.3 |
Total costs and expenses | 9,058.6 | 8,095.6 | 8,800.7 |
Operating income | 662.4 | 517.8 | 549.8 |
Other expense: | |||
Interest | 73.9 | 84.6 | 84.3 |
Other expense, net | 4.7 | 4 | 6.8 |
Income before income taxes | 583.8 | 429.2 | 458.7 |
Income tax (benefit) provision | (37.2) | 120.1 | 142.5 |
Net income | 621 | 309.1 | 316.2 |
Less: Net income attributable to noncontrolling interests | 7.6 | 4.8 | 4.7 |
Net income attributable to Reliance | $ 613.4 | $ 304.3 | $ 311.5 |
Earnings per share attributable to Reliance stockholders: | |||
Diluted earnings per common share (in dollars per share) | $ 8.34 | $ 4.16 | $ 4.16 |
Basic earnings per common share (in dollars per share) | 8.42 | 4.21 | 4.20 |
Cash dividends per share (in dollars per share) | $ 1.80 | $ 1.65 | $ 1.60 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 621 | $ 309.1 | $ 316.2 |
Other comprehensive income (loss): | |||
Foreign currency translation gain (loss) | 28.8 | (5.7) | (51) |
Unrealized loss on investments, net of tax | (0.4) | ||
Pension and postretirement benefit adjustments, net of tax | 4.3 | 0.7 | 0.6 |
Total other comprehensive income (loss) | 33.1 | (5) | (50.8) |
Comprehensive income | 654.1 | 304.1 | 265.4 |
Less: Comprehensive income attributable to noncontrolling interests | 7.6 | 4.8 | 4.7 |
Comprehensive income attributable to Reliance | $ 646.5 | $ 299.3 | $ 260.7 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Common Stock and Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests | Total |
Balance at Dec. 31, 2014 | $ 819.4 | $ 3,328.5 | $ (48.9) | $ 28.9 | $ 4,127.9 |
Balance (in shares) at Dec. 31, 2014 | 77,337,251 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 311.5 | 4.7 | 316.2 | ||
Other comprehensive income (loss) | (50.8) | (50.8) | |||
Noncontrolling interest purchased | $ (0.6) | (2) | (2.6) | ||
Payments to noncontrolling interest holders | (3) | (3) | |||
Stock-based compensation | $ 16.8 | 16.8 | |||
Stock-based compensation (in shares) | 271,438 | ||||
Stock options exercised | $ 15.1 | 15.1 | |||
Stock options exercised (in shares) | 325,024 | ||||
Repurchase of common shares | $ (355.5) | $ (355.5) | |||
Repurchase of common shares (in shares) | (6,194,641) | (6,200,000) | |||
Stock-based compensation tax deficit | (1.3) | $ (1.3) | |||
Delaware reincorporation | $ 38.6 | (38.6) | |||
Cash dividends and dividend equivalents - $1.80 and $1.65 and $1.60 per share for the year ended on December 31, 2017 and December 31, 2016 and December 31, 2015, respectively | (120.1) | (120.1) | |||
Balance at Dec. 31, 2015 | $ 533.8 | 3,480 | (99.7) | 28.6 | 3,942.7 |
Balance (in shares) at Dec. 31, 2015 | 71,739,072 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 304.3 | 4.8 | 309.1 | ||
Other comprehensive income (loss) | (5) | (5) | |||
Payments to noncontrolling interest holders | (3.1) | (3.1) | |||
Stock-based compensation | $ 18 | 18 | |||
Stock-based compensation (in shares) | 188,576 | ||||
Stock options exercised | $ 37.5 | 37.5 | |||
Stock options exercised (in shares) | 755,145 | ||||
Cumulative effect of change in accounting for stock-based compensation | $ 1 | (0.6) | $ 0.4 | ||
Repurchase of common shares (in shares) | 0 | ||||
Cash dividends and dividend equivalents - $1.80 and $1.65 and $1.60 per share for the year ended on December 31, 2017 and December 31, 2016 and December 31, 2015, respectively | (120.5) | $ (120.5) | |||
Balance at Dec. 31, 2016 | $ 590.3 | 3,663.2 | (104.7) | 30.3 | $ 4,179.1 |
Balance (in shares) at Dec. 31, 2016 | 72,682,793 | 72,682,793 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 613.4 | 7.6 | $ 621 | ||
Other comprehensive income (loss) | 33.1 | 33.1 | |||
Payments to noncontrolling interest holders | (5.1) | (5.1) | |||
Stock-based compensation | $ 24.1 | 24.1 | |||
Stock-based compensation (in shares) | 164,958 | ||||
Stock options exercised | $ 5.2 | 5.2 | |||
Stock options exercised (in shares) | 98,405 | ||||
Repurchase of common shares | $ (25) | $ (25) | |||
Repurchase of common shares (in shares) | (336,616) | (300,000) | |||
Cash dividends and dividend equivalents - $1.80 and $1.65 and $1.60 per share for the year ended on December 31, 2017 and December 31, 2016 and December 31, 2015, respectively | (132.5) | $ (132.5) | |||
Balance at Dec. 31, 2017 | $ 594.6 | $ 4,144.1 | $ (71.6) | $ 32.8 | $ 4,699.9 |
Balance (in shares) at Dec. 31, 2017 | 72,609,540 | 72,609,540 |
CONSOLIDATED STATEMENTS OF EQU7
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2018 | Feb. 28, 2017 | Jul. 31, 2016 | Feb. 28, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF EQUITY | |||||||
Cash dividends per share (in dollars per share) | $ 0.50 | $ 0.45 | $ 0.425 | $ 0.40 | $ 1.80 | $ 1.65 | $ 1.60 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net income | $ 621 | $ 309.1 | $ 316.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 218.4 | 222 | 218.5 |
Impairment of long-lived assets | 4.2 | 52.4 | 53.3 |
Deferred income tax benefit | (192.6) | (0.5) | (17.1) |
Gain on sales of property, plant and equipment | (9.5) | (1.2) | (2.2) |
Stock-based compensation expense | 33.4 | 24.4 | 21.3 |
Other | 7.7 | 7.7 | 9.8 |
Changes in operating assets and liabilities (excluding effect of businesses acquired): | |||
Accounts receivable | (119.7) | (31.2) | 222.5 |
Inventories | (186.6) | (30.4) | 306.8 |
Prepaid expenses and other assets | (11.5) | 26.7 | (25.2) |
Accounts payable and other liabilities | 34.2 | 47.5 | (78.9) |
Net cash provided by operating activities | 399 | 626.5 | 1,025 |
Investing activities: | |||
Purchases of property, plant and equipment | (161.6) | (154.9) | (172.2) |
Acquisitions, net of cash acquired | (37.8) | (348.7) | (0.4) |
Proceeds from sales of property, plant and equipment | 27.6 | 8.9 | 7.4 |
Other | (7.6) | (10.4) | (4.7) |
Net cash used in investing activities | (179.4) | (505.1) | (169.9) |
Financing activities: | |||
Net short-term debt borrowings (repayments) | 8.4 | (12.6) | 12.7 |
Proceeds from long-term debt borrowings | 875 | 2,073 | 573 |
Principal payments on long-term debt | (915.3) | (2,061.4) | (962.3) |
Debt issuance costs | (6.8) | ||
Dividends and dividend equivalents paid | (132) | (120.4) | (120.1) |
Exercise of stock options | 5.2 | 37.5 | 15.1 |
Share repurchases | (25) | (355.5) | |
Other | (14.4) | (9.5) | (11.4) |
Net cash used in financing activities | (198.1) | (100.2) | (848.5) |
Effect of exchange rate changes on cash and cash equivalents | 10.1 | (2.7) | (8.5) |
Increase (decrease) in cash and cash equivalents | 31.6 | 18.5 | (1.9) |
Cash and cash equivalents at beginning of year | 122.8 | 104.3 | 106.2 |
Cash and cash equivalents at end of year | 154.4 | 122.8 | 104.3 |
Supplemental cash flow information: | |||
Interest paid during the year | 72.5 | 81.4 | 82 |
Income taxes paid during the year, net | $ 171.1 | 95.1 | $ 204.9 |
Non-cash investing and financing activities: | |||
Debt assumed in connection with acquisitions | $ 6.1 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policie Principles of Consolidation The accompanying consolidated financial statements include the accounts of Reliance Steel & Aluminum Co. and its subsidiaries (collectively referred to as “Reliance”, “the Company”, “we”, “our” or “us”). Our consolidated financial statements include the assets, liabilities and operating results of majority‑owned subsidiaries. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated. Business We operate a metals service center network of more than 300 locations in 40 states in the U.S. and in 13 other countries (Australia, Belgium, Canada, China, France, India, Malaysia, Mexico, Singapore, South Korea, Turkey, the United Arab Emirates and the United Kingdom) that provides value‑added metals processing services and distributes a full line of more than 100,000 metal products. Since our inception in 1939, we have not diversified outside our core business as a metals service center operator. Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, such as accounts receivable collectability, valuation of inventories, goodwill, long‑lived assets, income tax and other contingencies, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Accounts Receivable and Concentrations of Credit Risk Concentrations of credit risk with respect to trade receivables are limited due to the geographically diverse customer base, with limited exposure to any single customer account, and various industries into which our products are sold. Trade receivables are typically non‑interest bearing and are initially recorded at cost. Sales to our recurring customers are generally made on open account terms while sales to occasional customers may be made on a C.O.D. basis when collectability is not assured. Past due status of customer accounts is determined based on how recently payments have been received in relation to payment terms granted. Credit is generally extended based upon an evaluation of each customer’s financial condition, with terms consistent in the industry and no collateral is required. Losses from credit sales are provided for in the financial statements and consistently have been within the allowance provided. The allowance is an estimate of the uncollectability of accounts receivable based on an evaluation of specific customer risks along with additional reserves based on historical and probable bad debt experience. Amounts are written-off against the allowance in the period we determine that the receivable is uncollectible. As a result of the above factors, we do not consider ourselves to have any significant concentrations of credit risk. Inventories The majority of our inventory is valued using the last‑in, first‑out (“LIFO”) method, which is not in excess of market. Under this method, older costs are included in inventory, which may be higher or lower than current costs. This method of valuation is subject to year‑to‑year fluctuations in cost of material sold, which is influenced by the inflation or deflation existing within the metals industry as well as fluctuations in our product mix and on‑hand inventory levels. Fair Values of Financial Instruments Fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities, and the current portion of long‑term debt approximate carrying values due to the short period of time to maturity. Fair values of long‑term debt, which have been determined based on borrowing rates currently available to us or to other companies with comparable credit ratings, for loans with similar terms or maturity, approximate the carrying amounts in the consolidated financial statements, with the exception of our publicly traded senior unsecured notes of $750.0 million as of December 31, 2017 and 2016. The fair values of these senior unsecured notes based on quoted market prices as of December 31, 2017 and 2016, were $831.7 million and $773.2 million, respectively, compared to their carrying values of $744.0 million and $743.2 million as of the end of each respective fiscal year. These estimated fair values are based on Level 2 inputs. Fair values are generally based on quoted market prices for identical or similar instruments. Cash Equivalents We consider all highly liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash and cash equivalents with high‑credit, quality financial institutions. The Company, by policy, limits the amount of credit exposure to any one financial institution. Goodwill Goodwill is the excess of cost over the fair value of net assets of businesses acquired. Goodwill is not amortized but is tested for impairment at least annually. We have one operating segment and one reporting unit for goodwill impairment purposes. We test for impairment of goodwill by assessing qualitative factors to determine if the fair value of the reporting unit is more likely than not below the carrying value of the reporting unit. We also calculate the fair value of the reporting unit using our market capitalization or the discounted cash flow method, as necessary, and compare the fair value to the carrying value of the reporting unit to determine if impairment exists. We perform the required annual goodwill impairment evaluation on November 1 of each year. No impairment of goodwill was determined to exist in any of the years presented. Long‑Lived Assets Property, plant and equipment is recorded at cost (or at fair value for assets acquired in connection with business combinations) and the provision for depreciation of these assets is generally computed on the straight‑line method at rates designed to distribute the cost of assets over the useful lives, estimated as follows: buildings, including leasehold improvements, over five to 50 years and machinery and equipment over three to 20 years. Other intangible assets with finite useful lives are amortized over their useful lives. Other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. We review the recoverability of our long‑lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We recognized impairment losses of $14.4 million on our other intangible assets with finite lives in 2015 and $36.4 million and $21.2 million related to our other intangible assets with indefinite lives in 2016 and 2015, respectively. We recognized impairment losses of $4.2 million, $16.0 million and $17.7 million for property, plant, and equipment in 2017, 2016 and 2015, respectively. See Note 17 — “Impairment and Restructuring Charges” for further discussion of our impairment losses. Revenue Recognition We recognize revenue from product or processing sales upon concluding that all of the fundamental criteria for product revenue recognition have been met, such as a fixed or determinable sales price; reasonable assurance of collectability; and passage of title and risks of ownership to the buyer. Such criteria are usually met upon delivery to the customer for orders with FOB destination terms or upon shipment for orders with FOB shipping point terms, or after toll processing services are performed. Considering the close proximity of our customers to our metals service center locations, shipment and delivery of our orders generally occur on the same day. Billings for orders where the revenue recognition criteria are not met, which primarily include certain bill and hold transactions (in which our customers request to be billed for the material but request delivery at a later date), are recorded as deferred revenue. Shipping and handling charges to our customers are included in Net sales. Costs incurred in connection with shipping and handling our products that are performed by third-party carriers and costs incurred by our personnel are typically included in operating expenses. In 2017, 2016 and 2015, shipping and handling costs included in Warehouse, delivery, selling, general and administrative expenses were $372.3 million, $346.2 million, and $319.1 million, respectively. Stock‑Based Compensation All of our stock‑based compensation plans are considered equity plans. We calculate the fair value of stock options on the grant date based on the closing market price of our common stock, using a Black‑Scholes option‑pricing model. The fair value of restricted stock awards and restricted stock units is determined based on the fair value of our common stock on the grant date. The fair value of stock options, restricted stock awards, and restricted stock units is expensed on a straight‑line basis over their respective vesting periods, net of forfeitures when they occur. The stock-based compensation expense recorded was $33.4 million, $24.4 million, and $21.3 million in 2017, 2016 and 2015, respectively, and is included in the Warehouse, delivery, selling, general and administrative expense caption of our consolidated statements of income. Environmental Remediation Costs We accrue for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remediation feasibility study. Such accruals are adjusted as further information develops or circumstances change. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. We are not aware of any environmental remediation obligations that would materially affect our operations, financial position or cash flows. See Note 14 — “Commitments and Contingencies” for further discussion on our environmental remediation matters. Income Taxes We file a consolidated U.S. federal income tax return with our wholly owned domestic subsidiaries. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax reporting bases of assets and liabilities using the enacted tax rates expected to be in effect when such differences are realized or settled. The effect on deferred taxes from a change in tax rates is recognized in income in the period that includes the enactment date of the change. The provision for income taxes reflects the taxes to be paid for the period and the change during the period in the deferred tax assets and liabilities. We evaluate on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is estimated that it is more likely than not that the tax benefit of the deferred tax asset will not be realized. We make a comprehensive review of our uncertain tax positions on a quarterly basis. Tax benefits are recognized when it is more‑likely‑than‑not that a tax position will be sustained upon examination by the authorities. The benefit from a position that has surpassed the more‑likely‑than‑not threshold is the largest amount of benefit that is more than 50% likely to be realized upon settlement. We recognize interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was enacted, which included significant changes to the taxation of U.S. corporations. These changes include, among other things, a reduction of the U.S. federal statutory rate from 35% to 21% effective in 2018, the implementation of a territorial tax system, a one-time tax in 2017 on accumulated foreign profits that have not been previously subject to U.S. tax law (deemed repatriation), the repeal of the corporate alternative minimum tax and changes to business deductions, including the repeal of the deduction for domestic production activities. For further discussion of the impact of the tax legislation, see Note 9 — “Income Taxes” . Foreign Currencies The currency effects of translating the financial statements of our foreign subsidiaries, which operate in local currency environments, are included in other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the results of operations in the Other expense, net caption and amounted to net losses of $4.9 million in 2017 and net gains of $1.8 million in 2016. Gains and losses resulting from foreign currency transactions were insignificant in 2015. Impact of Recently Issued Accounting Standards — Adopted Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost —In March 2017, the Financial Accounting Standards Board (“FASB”) issued accounting changes to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost in the income statement, and to narrow the amounts eligible for capitalization in assets. The amendments require the service cost component of net periodic benefit cost be reported in the same line as other compensation costs and the other components of net periodic benefit cost be presented in the income statement outside of operating income. We adopted these changes in 2017 on a retrospective basis. As a result of the adoption, we retrospectively adjusted the presentation of our income statement, decreasing Warehouse, delivery, selling, general and administrative expense by $5.2 million and $3.2 million and increasing Other expense, net by $5.2 million and $3.2 million in 2016 and 2015, respectively. The adjustments to the income statement presentation for 2016 and 2015 were estimated using the components of net periodic benefit cost other than service cost included in Note 11 — “Employee Benefits” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. We include the components of net periodic benefit cost other than service cost in Other expense, net in all periods presented. The amendment requiring only the service cost component of net periodic benefit cost to be eligible for capitalization in assets did not impact our asset capitalization policies. The adoption of these changes did not have a material impact on our consolidated financial statements. Clarifying the Definition of a Business— In January 2017, the FASB issued accounting changes to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The accounting changes provide a framework to determine when a set of assets and activities is not a business. Our adoption of these accounting changes in 2017 did not have a material impact on our consolidated financial statements. Improvements to Employee Share-Based Payment Accounting— In March 2016, the FASB issued accounting changes intended to improve various aspects of the accounting for share-based payment transactions as part of its simplification initiative. We adopted these changes as of January 1, 2016. The adoption of these changes did not have a material impact on our consolidated financial statements. For further discussion of our adoption of these accounting changes, see Note 12 — “Equity” . Impact of Recently Issued Accounting Standards—Not Yet Adopted Classification of Certain Cash Receipts and Cash Payments —In August 2016, the FASB issued accounting changes that clarifies the presentation and classification of certain cash receipts and payments in the statement of cash flows with the objective of reducing the existing diversity in practice with respect to eight types of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, or January 1, 2018 for the Company. Early adoption is permitted. The adoption of this standard will not have a material impact on our consolidated financial statements. Leases — In February 2016, the FASB issued accounting changes which will require lessees to recognize most long-term leases on-balance sheet through the recognition of a right-of-use asset and a lease liability. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2018, or January 1, 2019 for the Company. Early adoption is permitted. We have implemented a lease management system and are developing processes necessary to implement these accounting changes. We expect the adoption of these accounting changes will materially increase our assets and liabilities, but will not have a material impact on our net income or equity. We anticipate adopting this new standard on January 1, 2019 with modified retrospective application, using the available practical expedients. Full retrospective application is prohibited. Revenue from Contracts with Customers— In May 2014, the FASB issued accounting changes, which replace most of the detailed guidance on revenue recognition that currently exists under U.S. GAAP. Under the new standard, an entity should recognize revenue when goods or services are transferred to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. We completed our evaluation of the new standard and its potential impacts on our consolidated financial statements and will adopt the new standard on January 1, 2018 using the modified retrospective approach. We will not record a cumulative-effect adjustment to retained earnings upon adoption. The adoption of the new standard will have an insignificant impact on our revenue recognition practices. This is mainly due to our businesses having minimal contract sales, as we primarily sell our inventories in the “spot market” under fixed price sales orders, the toll processing and logistics services we provide being short-term in nature and our contracts with customers generally having only one performance obligation. However, our future revenue recognition disclosures in the notes to our consolidated financial statements will be significantly expanded due to the disaggregation of revenue disclosure requirements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions | |
Acquisitions | Note 2. Acquisitions 2017 Acquisition On October 2, 2017, through our wholly owned subsidiary Diamond Manufacturing Company, we acquired Ferguson Perforating Company (“Ferguson”). Ferguson, headquartered in Providence, Rhode Island, specializes in manufacturing highly engineered and complex perforated metal parts that have application in diverse end markets including industrial machinery, automotive, aerospace, sugar products and consumer electronics manufacturers. Ferguson’s net sales during the period from October 2, 2017 to December 31, 2017 were $7.8 million. We funded our acquisition of Ferguson with borrowings on our revolving credit facility and cash on hand. 2016 Acquisitions On August 1, 2016, through our wholly owned subsidiary American Metals Corporation, we acquired Alaska Steel Company (“Alaska Steel”), a full-line metal distributor headquartered in Anchorage, Alaska. Our acquisition of Alaska Steel was our first entry into the Alaska market. Alaska Steel provides steel, aluminum, stainless and specialty metals and related processing services to a variety of customers in diverse industries including infrastructure and energy throughout Alaska. Alaska Steel’s net sales in 2017 were $22.0 million. On April 1, 2016, we acquired Best Manufacturing, Inc. (“Best Manufacturing”), a custom sheet metal fabricator of steel and aluminum products on both a direct and toll basis. Best Manufacturing, headquartered in Jonesboro, Arkansas, provides various precision fabrication services including laser cutting, shearing, computer numerated control (“CNC”) punching, CNC forming and rolling, as well as welding, assembly, painting, inventory management and engineering expertise. Best Manufacturing’s net sales in 2017 were $21.6 million. On January 1, 2016, we acquired Tubular Steel, Inc. (“Tubular Steel”), a distributor and processor of carbon, alloy and stainless steel pipe, tubing and bar products. Tubular Steel, headquartered in St. Louis, Missouri, has six locations and a fabrication business that supports its diverse customer base. Tubular Steel’s net sales in 2017 were $135.5 million. We funded our 2016 acquisitions with borrowings on our revolving credit facility and cash on hand. The allocation of the total purchase price of our 2016 acquisitions to the fair values of the assets acquired and liabilities assumed was as follows: (in millions) Cash $ 1.5 Accounts receivable 14.1 Inventories 66.6 Property, plant and equipment 62.2 Goodwill 104.7 Intangible assets subject to amortization 77.1 Intangible assets not subject to amortization 38.2 Other current and long-term assets 0.5 Total assets acquired 364.9 Current and long-term debt 6.1 Other current and long-term liabilities 7.3 Total liabilities assumed 13.4 Net assets acquired $ 351.5 Summary purchase price allocation information for all acquisitions All of the acquisitions discussed in this note have been accounted for under the acquisition method of accounting and, accordingly, each purchase price has been allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of each acquisition. The accompanying consolidated statements of income include the revenues and expenses of each acquisition since its respective acquisition date. The consolidated balance sheets reflect the allocations of each acquisition’s purchase price as of December 31, 2017 or 2016, as applicable. The purchase price allocation for Ferguson is preliminary and is pending the completion of pre-acquisition income tax returns. The measurement periods for purchase price allocations do not exceed 12 months from the acquisition date. As part of the purchase price allocations of the acquisitions completed in 2017 and 2016, $3.7 million and $38.2 million, respectively, were allocated to the trade names acquired. We determined that all of the trade names acquired in connection with these acquisitions had indefinite lives since their economic lives are expected to approximate the life of each company acquired. Additionally, we recorded other identifiable intangible assets related to customer relationships for the 2017 and 2016 acquisitions of $3.7 million and $76.8 million, respectively, with weighted average lives of 10.0 and 15.5 years, respectively. The goodwill arising from our 2017 and 2016 acquisitions consists largely of expected strategic benefits, including enhanced financial and operational scale, as well as expansion of acquired product and processing know-how across our enterprise. Tax deductible goodwill from our 2016 acquisitions amounted to $104.7 million. Total tax deductible goodwill amounted to $664.0 million as of December 31, 2017. |
Joint Ventures and Noncontrolli
Joint Ventures and Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2017 | |
Joint Ventures and Noncontrolling Interests | |
Joint Ventures and Noncontrolling Interests | Note 3. Joint Ventures and Noncontrolling Interests The equity method of accounting is used where our investment in voting stock gives us the ability to exercise significant influence over the investee, generally 20% to 50%. The financial results of investees are generally consolidated when the ownership interest is greater than 50%. We have two joint venture arrangements with noncontrolling interests: Oregon Feralloy Partners LLC (40%-owned) and Eagle Steel Products, Inc. (45%-owned). These investments are accounted for using the equity method. The corresponding investments in these entities are reflected in the Other assets caption of the consolidated balance sheets. Equity in earnings of these entities and related distribution of earnings have not been material to our results of operations or cash flows. Operations that are majority owned by us are as follows: Acero Prime S. de R.L. de C.V. (60%-owned), Feralloy Processing Company (51%-owned), Indiana Pickling and Processing Company (56%-owned), and Valex Corp.’s operations in South Korea, in which Valex Corp. has 95% ownership. The results of these majority‑owned operations are consolidated in our financial results. The portion of the earnings related to the noncontrolling shareholder interests has been reflected in the Net income attributable to noncontrolling interests caption in the accompanying consolidated statements of income. On December 15, 2015, we purchased the noncontrolling interest of Valex Corp., which increased our ownership from 97% to 100%, and on September 11, 2015 Valex Corp. purchased the noncontrolling interest in its operation in the People’s Republic of China, which increased its ownership interest from 92% to 100%. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Inventories | Note 4. Inventories Our inventories are primarily stated on the LIFO method, which is not in excess of market. We use the LIFO method of inventory valuation because it results in a better matching of costs and revenues. The cost of inventories stated on the first-in, first-out (“FIFO”) method is not in excess of net realizable value. Inventories consisted of the following: December 31, December 31, 2017 2016 (in millions) LIFO inventories - cost on the FIFO method $ 1,390.0 $ 1,219.0 LIFO inventory valuation reserve adjustment (21.8) 51.5 Lower of cost or market adjustment — (42.6) Cost on FIFO method (higher) lower than LIFO value (21.8) 8.9 Inventories - stated on LIFO method 1,368.2 1,227.9 Inventories - stated on FIFO method 357.8 304.7 $ 1,726.0 $ 1,532.6 The lower of cost or market charge in 2016 was due to a significant decline in metals pricing that resulted in our LIFO inventory valuation exceeding current replacement cost. In 2016, we also recorded a lower of cost or market charge of $7.6 million relating to certain inventories of a foreign subsidiary that are remeasured into the U.S. dollar. The changes in the LIFO valuation reserve and impact of LIFO liquidations were as follows: Year Ended December 31, 2017 2016 2015 (in millions) LIFO inventory valuation reserve adjustment charge (income) $ 73.3 $ (8.5) $ (186.1) Liquidation of LIFO inventory quantities that increased cost of sales ** ** $ 38.7 ** Insignificant liquidations of LIFO inventory quantities. Cost increases for the majority of our products were the primary cause of the 2017 increase in the LIFO valuation reserve. Cost decreases for the majority of our products were the primary cause of the 2016 and 2015 reductions in the LIFO valuation reserve. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill. | |
Goodwill | Note 5. Goodwill The changes in the carrying amount of goodwill are as follows: (in millions) Balance at January 1, 2015 $ 1,736.4 Acquisitions 0.4 Purchase price allocation adjustments (0.4) Effect of foreign currency translation (11.6) Balance at December 31, 2015 1,724.8 Acquisitions 103.4 Disposal of businesses (1.0) Effect of foreign currency translation 0.2 Balance at December 31, 2016 1,827.4 Acquisitions 10.3 Effect of foreign currency translation 4.9 Balance at December 31, 2017 $ 1,842.6 All of the goodwill recorded from our 2016 acquisitions is tax deductible. We had no accumulated impairment losses related to goodwill at December 31, 2017. |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, net | |
Intangible Assets, net | Note 6. Intangible Assets, net Intangible assets, net, consisted of the following: December 31, 2017 December 31, 2016 Weighted Average Gross Gross Amortizable Carrying Accumulated Carrying Accumulated Life in Years Amount Amortization Amount Amortization (in millions) Intangible assets subject to amortization: Covenants not to compete 4.7 $ 0.8 $ (0.4) $ 1.1 $ (0.6) Customer lists/relationships 14.6 745.0 (391.3) 736.7 (338.9) Software 10.0 8.1 (8.1) 8.1 (8.1) Other 5.4 6.3 (5.9) 6.3 (5.5) 760.2 (405.7) 752.2 (353.1) Intangible assets not subject to amortization: Trade names 757.6 — 752.2 — $ 1,517.8 $ (405.7) $ 1,504.4 $ (353.1) Intangible assets recorded in connection with our 2017 acquisition was $7.4 million (see Note 2 — “Acquisitions” ). A total of $3.7 million was allocated to the trade name acquired, which is not subject to amortization. Impairment losses of $36.4 million related to eight of our trade name intangible assets were recognized in 2016. Impairment losses of $21.2 million related to five of our trade name intangible assets and $14.4 million related to two of our customer relationship intangible assets were recognized in 2015. See Note 17 — “Impairment and Restructuring Charges” for further discussion of our impairment losses. Amortization expense for intangible assets amounted to $50.6 million, $54.1 million and $53.7 million in 2017, 2016 and 2015, respectively. Foreign currency translation gains related to intangible assets, net in 2017 were $4.0 million. The following is a summary of estimated aggregate amortization expense for each of the next five years: (in millions) 2018 $ 46.7 2019 46.6 2020 46.6 2021 42.6 2022 34.3 |
Cash Surrender Value of Life In
Cash Surrender Value of Life Insurance Policies, net | 12 Months Ended |
Dec. 31, 2017 | |
Cash Surrender Value of Life Insurance Policies, net | |
Cash Surrender Value of Life Insurance Policies, net | Note 7. Cash Surrender Value of Life Insurance Policies, net The cash surrender value of all life insurance policies held by us, net of loans and related accrued interest, was $47.8 million and $46.9 million as of December 31, 2017 and 2016, respectively. Our wholly owned subsidiary, Earle M. Jorgensen Company (“EMJ”), is the owner and beneficiary of life insurance policies on all former nonunion employees of a predecessor company, including certain current employees of EMJ. These policies, by providing payments to EMJ upon the death of covered individuals, were designed to provide cash to EMJ in order to repurchase shares held by employees in EMJ’s former employee stock ownership plan and shares held individually by employees upon the termination of their employment. We are also the owner and beneficiary of key man life insurance policies on certain current and former executives of the Company, its subsidiaries and predecessor companies. Cash surrender value of the life insurance policies increases by a portion of the amount of premiums paid and by investment income earned under the policies and decreases by the amount of cost of insurance charges, investment losses and interest on policy loans, as applicable. Income earned on all of our life insurance policies is recorded in the Other expense, net caption in the accompanying consolidated statements of income (see Note 13 — “Other Expense, net” ). Annually, we borrow against the cash surrender value of policies to pay a portion of the premiums and accrued interest on loans against those policies. We borrowed $49.9 million, $51.3 million and $47.9 million against the cash surrender value of certain policies, which was used to partially pay premiums and accrued interest owed of $64.0 million, $64.7 million and $60.4 million in 2017, 2016 and 2015, respectively. Interest rates on borrowings under some of the EMJ life insurance policies are fixed at 11.76% and the portion of the policy cash surrender value that the borrowings relate to earns interest and dividend income at 11.26%. The unborrowed portion of the policy cash surrender value earns income at rates commensurate with certain risk‑free U.S. Treasury bond yields but not less than 4.0%. All other life insurance policies earn investment income or incur losses based on the performance of the underlying investments held by the policies. As of December 31, 2017 and 2016, loans and accrued interest outstanding on EMJ’s life insurance policies were $612.0 million and $577.6 million, respectively. There were no borrowings available as of December 31, 2017 and December 31, 2016. Interest expense on borrowings against cash surrender values is included in the Other expense, net caption in the accompanying consolidated statements of income (see Note 13 — “Other Expense, net” ). |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt | |
Debt | Note 8. Debt Debt consisted of the following: December 31, December 31, 2017 2016 (in millions) Unsecured revolving credit facility due September 30, 2021 $ 538.0 $ 540.0 Unsecured term loan due from March 30, 2018 to September 30, 2021 562.5 600.0 Senior unsecured notes due April 15, 2023 500.0 500.0 Senior unsecured notes due November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 64.0 55.0 Total 1,914.5 1,945.0 Less: unamortized discount and debt issuance costs (13.1) (15.8) Less: amounts due within one year and short-term borrowings (92.0) (82.5) Total long-term debt $ 1,809.4 $ 1,846.7 Unsecured Credit Facility On September 30, 2016, we entered into a $2.1 billion unsecured five-year credit agreement (“Credit Agreement”) comprised of a $1.5 billion unsecured revolving credit facility and a $600.0 million unsecured term loan, with an option to increase the revolving facility for up to $500.0 million at our request, subject to approval of the lenders and certain other customary conditions. The term loan due September 30, 2021 amortizes in quarterly installments, with an annual amortization of 5% through September 2018 and 10% thereafter until June 2021, with the balance to be paid at maturity. Interest on borrowings from the revolving credit facility and term loan at December 31, 2017 was at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and included a commitment fee at an annual rate of 0.15% on the unused portion of the revolving credit facility. The applicable margins over LIBOR rate 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 repaid without penalty. Weighted average interest rates on borrowings outstanding on the revolving credit facility were 2.96% and 2.16% as of December 31, 2017 and December 31, 2016, respectively. Weighted average interest rates on borrowings outstanding on the term loan were 2.82% and 2.02% as of December 31, 2017 and December 31, 2016, respectively. As of December 31, 2017, we had $538.0 million of outstanding borrowings, $53.3 million of letters of credit issued and $908.7 million available for borrowing on the revolving credit facility. 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 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 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. 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. The senior unsecured notes include provisions that require us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest in the event of both a change in control and a downgrade of our credit rating. Other Notes and Revolving Credit Facilities Revolving credit facilities with a combined credit limit of approximately $70.3 million are in place for operations in Asia and Europe with combined outstanding balances of $53.9 million and $44.4 million as of December 31, 2017 and December 31, 2016, respectively. Various industrial revenue bonds had combined outstanding balances of $10.1 million and $10.6 million as of December 31, 2017 and December 31, 2016, respectively, and maturities through 2027. 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 covenants that require us to comply with an interest coverage ratio and a leverage ratio. Debt Maturities The following is a summary of aggregate maturities of long‑term debt for each of the next five years and thereafter: 2018 $ 92.0 2019 60.6 2020 60.6 2021 943.6 2022 0.3 Thereafter 757.4 $ 1,914.5 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | Note 9. Income Taxes Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2014 and state and local tax examinations before 2013. Significant components of the provision for income taxes attributable to continuing operations were as follows: Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2014 and state and local tax examinations before 2013. Significant components of the provision for income taxes attributable to continuing operations were as follows:Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2014 and state and local tax examinations before 2013. Significant components of the provision for income taxes attributable to continuing operations were as follows: Year Ended December 31, 2017 2016 2015 (in millions) Current: Federal $ 117.8 $ 91.1 $ 129.5 State 21.5 18.9 21.3 Foreign 16.1 10.6 8.8 155.4 120.6 159.6 Deferred: Federal 3.0 (11.7) State 11.1 1.0 (4.5) Foreign (0.9) (4.5) (0.9) (0.5) (17.1) $ (37.2) $ 120.1 $ 142.5 Components of U.S. and international income before income taxes were as follows: Year Ended December 31, 2017 2016 2015 (in millions) U.S. $ 524.6 $ 411.0 $ 427.3 International 59.2 18.2 31.4 Income before income taxes $ 583.8 $ 429.2 $ 458.7 The reconciliation of income tax at the U.S. federal statutory tax rate to income tax expense is as follows: Year Ended December 31, 2017 2016 2015 Income tax at U.S. federal statutory tax rate 35.0 % 35.0 % 35.0 % Tax reform (35.5) — — State income tax, net of federal tax effect 3.8 3.1 2.0 Foreign earnings taxed at lower rates (0.7) (0.8) (0.8) Net effect of life insurance policies (3.6) (4.2) (3.6) Net effect of changes in unrecognized tax benefits (0.2) (4.3) 0.7 Domestic production activity deduction (1.6) (1.7) (2.0) Loss on sale of assets (0.8) — — Other, net (2.8) 0.9 (0.2) Effective tax rate (6.4) % 28.0 % 31.1 % Significant components of our deferred tax assets and liabilities are as follows: December 31, 2017 2016 (in millions) Deferred tax assets: Accrued expenses not currently deductible for tax $ 34.8 $ 77.6 Inventory costs capitalized for tax purposes 23.1 29.2 Stock-based compensation 10.5 12.0 Allowance for doubtful accounts 3.4 5.3 Tax credits carryforwards 1.3 1.3 Net operating loss carryforwards 5.6 4.7 Total deferred tax assets 78.7 130.1 Deferred tax liabilities: Property, plant and equipment, net (159.7) (238.6) Goodwill and other intangible assets (307.3) (451.2) LIFO inventories (39.5) (54.1) Deferred income (0.8) (7.1) Other (12.2) (6.0) Total deferred tax liabilities (519.5) (757.0) Net deferred tax liabilities $ (440.8) $ (626.9) As of December 31, 2017, we had available state net operating loss carryforwards (“NOL”) of $6.3 million to offset future income taxes expiring in years 2018 through 2037. We believe that it is more likely than not that we will be able to realize these NOLs within their respective carryforward periods. The Company believes it is more likely than not that it will generate sufficient future taxable income to realize its deferred tax assets. Tax Cuts and Jobs Act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was enacted, which included significant changes to the taxation of U.S. corporations. These changes include, among other things, a reduction of the U.S. federal statutory rate from 35% to 21% effective in 2018, the implementation of a territorial tax system, a one-time tax in 2017 on accumulated foreign profits that have not been previously subject to U.S. tax (deemed repatriation), the repeal of the corporate alternative minimum tax and changes to business deductions, including the repeal of the deduction for domestic production activities. We recognized a provisional net tax benefit in 2017 relating to Tax Reform of $207.3 million. The components of our preliminary assessment of the impact of Tax Reform on our 2017 provision for income taxes were as follows: (in millions) Effect of tax rate changes on deferred tax assets and liabilities $ 216.7 Repatriation and related liabilities (9.4) Tax benefit, net $ 207.3 Our accounting of the repatriation and related liabilities included in our preliminary assessment of the impact of Tax Reform is incomplete; however we were able to record a provisional amount based on our estimates. Furthermore, Tax Reform created a minimum tax on global intangible low-taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder. Due to the complexity of the new GILTI tax rules, we are not yet able to reasonably estimate its effects and therefore have not included any amount relating to GILTI in our preliminary assessment of the impact of Tax Reform. We are continuing to gather additional information to enable us to more precisely compute our repatriation and related liabilities and determine the impact, if any, of GILTI and will update our provisional amounts during 2018. Given the substantial changes to the Internal Revenue Code as a result of Tax Reform, our estimated financial impacts from Tax Reform are subject to further analysis, interpretation and clarification of the new tax law, which could result in changes to our estimates in 2018. Unrecognized Tax Benefits We are under audit by various state jurisdictions but do not anticipate any material adjustments from these examinations. Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: Year Ended December 31, 2017 2016 2015 (in millions) Unrecognized tax benefits at January 1 $ 5.2 $ 22.9 $ 20.2 Increases in tax positions for prior years — 0.4 0.3 Decreases in tax positions for prior years (0.1) (0.6) (1.7) Increases in tax positions for current year — 0.1 4.2 Settlements (0.2) (17.6) (0.1) Lapses in statutes-of-limitation periods (0.8) — — Unrecognized tax benefits at December 31 $ 4.1 $ 5.2 $ 22.9 As of December 31, 2017, $4.1 million of unrecognized tax benefits would impact the effective tax rate if recognized. Accrued interest and penalties, net of applicable tax effect, related to uncertain tax positions were $0.5 million and $0.7 million as of December 31, 2017 and 2016, respectively. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | Note 10. Stock‑Based Compensation Plans We grant stock‑based compensation to our employees and directors. At December 31, 2017, an aggregate of 1,745,716 shares were authorized for future grant under our various stock‑based compensation plans, including stock options, restricted stock units, and restricted stock awards. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. As stock options are exercised, restricted stock units and restricted stock awards vest, we issue new shares of Reliance common stock. Stock Options Stock option activity under all the plans is as follows: Weighted Average Remaining Aggregate Option Weighted Average Contractual Term Intrinsic Value Stock Options Shares Exercise Price (in years) (in millions) Outstanding at January 1, 2015 1,327,412 $ 49.66 Exercised (390,606) 48.19 Expired or forfeited (2,481) 51.96 Outstanding at December 31, 2015 934,325 50.26 Exercised (753,645) 49.70 Outstanding at December 31, 2016 180,680 52.61 Exercised (98,405) 52.41 Expired or forfeited (7,000) 58.68 Outstanding at December 31, 2017 75,275 $ 52.30 0.9 $ 2.5 Exercisable at December 31, 2017 75,275 $ 52.30 0.9 $ 2.5 All stock options outstanding at December 31, 2017 had four-year vesting periods and seven-year terms, with the exception of 40,000 options granted to our non‑employee directors that had one-year vesting periods and ten-year terms. There were no unvested stock options at December 31, 2017 and 2016. Proceeds from stock options exercised under all stock option plans in 2017, 2016 and 2015 were $5.2 million, $37.5 million and $15.1 million, respectively. The total intrinsic values of all options exercised in 2017, 2016 and 2015 were $2.8 million, $16.3 million and $4.8 million, respectively. The tax benefit realized from option exercises in 2017, 2016 and 2015 were $8.4 million, $14.3 million and $7.6 million, respectively. The following tabulation summarizes certain information concerning outstanding and exercisable options as of December 31, 2017: Options Outstanding and Exercisable Weighted Average Remaining Weighted Range of Outstanding at Contractual Life Average Exercise Price December 31, 2017 in Years Exercise Price $38 12,000 1.4 $ 38.00 $44 - $45 16,000 2.4 44.99 $55 - $56 35,275 0.1 55.73 $66 - $67 12,000 0.4 66.28 $38 - $67 75,275 0.9 $ 52.30 Restricted Stock In 2017, 2016 and 2015, we granted 446,525, 512,895 and 507,760, respectively, restricted stock units (“RSUs”) to key employees pursuant to the Amended and Restated Stock Option and Restricted Stock Plan. Each RSU consists of the right to receive one share of our common stock and dividend equivalent rights, subject to forfeiture, equal to the accrued cash or stock dividends where the record date for such dividends is after the grant date but before the shares vest. Additionally, each 2017, 2016 and 2015 RSU granted has a service-based condition and cliff vests at December 1, 2019, December 31, 2018 and December 31, 2017, respectively, if the recipient is an employee on those dates. In addition to the service-based condition, 169,009, 190,175, and 185,450 of the RSUs granted in 2017, 2016 and 2015, respectively, also have performance goals and vest only upon the satisfaction of the service-based condition and certain three-year performance targets. In addition to the 2015 RSUs described above, we also granted 10,000 service-based and 40,000 performance-based RSUs to our former CEO as a result of his planned retirement in July 2016 that had a service-based condition and eighteen-month performance targets ended June 30, 2016. The fair value of the 2017, 2016 and 2015 RSUs granted was $79.60 per share, $69.16 per share and $59.27 per share, respectively, determined based on the closing price of our common stock on the grant date. In 2017, 2016 and 2015, 18,120, 11,851, and 12,719 shares of restricted stock, respectively, were granted to the non‑employee members of the Board of Directors pursuant to the Directors Equity Plan. The fair value of the restricted stock granted in 2017, 2016, and 2015, was $71.73 per share, $70.88 per share, and $66.03 per share, respectively, determined based on the closing price of our common stock on the grant date. The awards include dividend rights and vest immediately upon grant. In 2017, 2016 and 2015, we made payments of $9.3 million, $6.4 million and $4.5 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 caption of the statement of equity. A summary of the status of our unvested service-based and performance-based RSUs as of December 31, 2017 and changes during the year then ended is as follows: Weighted Average Grant Unvested Shares Shares Date Fair Value Unvested at January 1, 2017 985,540 $ 64.34 Granted 446,525 79.60 Vested (467,968) 59.33 Canceled or forfeited (39,522) 67.99 Unvested at December 31, 2017 924,575 $ 74.09 Unrecognized Compensation Cost As of December 31, 2017, there was $39.5 million of total unrecognized compensation cost related to unvested stock‑based compensation awards granted under all stock‑based compensation plans. That cost is expected to be recognized over a weighted average period of 1.33 years. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits | |
Employee Benefits | Note 11. Employee Benefits Employee Stock Ownership Plan We have a tax-qualified employee stock ownership plan (the “ESOP”) that is a noncontributory plan that covers certain salaried and hourly employees of the Company. The amount of the annual contribution is at the discretion of the Board, except that the minimum amount must be sufficient to enable the ESOP trust to meet its current obligations. The Company will cease making annual contributions to the ESOP after the 2018 plan year. Defined Contribution Plans Effective in 1998, the Reliance Steel & Aluminum Co. Master 401(k) Plan (the “Master Plan”) was established, which combined several of the various 401(k) and profit‑sharing plans of the Company and its subsidiaries into one plan. Salaried and certain hourly employees of the Company and its participating subsidiaries are covered under the Master Plan. Eligibility occurs after three months of service, and the Company contribution vests at 25% per year. Other 401(k) and profit‑sharing plans exist as certain subsidiaries have not combined their plans into the Master Plan as of December 31, 2017. Supplemental Executive Retirement Plans Effective January 1996, we adopted a Supplemental Executive Retirement Plan (“SERP”), which is a nonqualified pension plan that provides postretirement pension benefits to certain key officers of the Company. The SERP is administered by the Compensation Committee of the Board. Benefits are based upon the employees’ earnings. Life insurance policies were purchased for most individuals covered by the SERP. Separate Supplemental Executive Retirement Plans (“SERPs”) exist for certain wholly owned subsidiaries of the Company, each of which provides postretirement pension benefits to certain current and former key employees. All SERPs have been frozen to new participants. Deferred Compensation Plan In December 2008, the Reliance Deferred Compensation Plan was established for certain officers and key employees of the Company. Account balances from various compensation plans of subsidiaries were transferred and consolidated into this new deferred compensation plan. The balance in the Reliance Deferred Compensation Plan as of December 31, 2017 and 2016 was $21.2 million and $16.6 million, respectively. The balance of the assets set aside for funding future payouts under the deferred compensation plan amounted to $20.2 million as of December 31, 2017. Multiemployer Plans Certain of our union employees participate in plans collectively bargained and maintained by multiple employers and a labor union. We do not recognize on our balance sheet any amounts relating to these plans. For the years ended December 31, 2017, 2016, and 2015 our contributions to these plans were $5.4 million, $5.3 million and $5.2 million, respectively. Some of the plans we participate in are in endangered, critical, or declining status and have adopted rehabilitation plans. If we were to withdraw our participation from these plans, we would be required to recognize a liability on our balance sheet and the amount could be significant. Defined Benefit Plans We, through certain subsidiaries, maintain qualified defined benefit pension plans for certain of our union employees. These plans generally provide benefits of stated amounts for each year of service or provide benefits based on the participant's hourly wage rate and years of service. The plans permit the sponsor, at any time, to amend or terminate the plans subject to union approval, if applicable. Certain of these plans are frozen as of December 31, 2017. We use a December 31 measurement date for our plans. The following is a summary of the status of the funding of the various SERPs and Defined Benefit Plans: SERPs Defined Benefit Plans 2017 2016 2017 2016 (in millions) (in millions) Change in benefit obligation Benefit obligation at beginning of year $ 48.5 $ 49.4 $ 95.9 $ 96.3 Service cost 0.8 1.1 1.5 1.6 Interest cost 1.1 1.6 3.7 3.9 Actuarial loss 1.0 1.1 6.2 0.6 Benefits paid (1.2) (1.3) (3.8) (6.1) Plan amendments — — 0.2 — Plan settlements (13.6) (3.4) (0.2) (0.4) Benefit obligation at end of year $ 36.6 $ 48.5 $ 103.5 $ 95.9 Change in plan assets Fair value of plan assets at beginning of year N/A N/A $ 73.3 $ 70.2 Actual return on plan assets N/A N/A 9.9 3.9 Employer contributions N/A N/A 9.8 5.5 Benefits paid N/A N/A (4.0) (6.3) Fair value of plan assets at end of year N/A N/A $ 89.0 $ 73.3 Funded status Funded status of the plans $ (36.6) $ (48.5) $ (14.5) $ (22.6) Items not yet recognized as component of net periodic pension expense Unrecognized net actuarial losses $ 10.3 $ 14.1 $ 24.5 $ 25.4 Unamortized prior service cost — — 2.1 2.3 $ 10.3 $ 14.1 $ 26.6 $ 27.7 As of December 31, 2017 and 2016, the following amounts were recognized on the balance sheet: SERPs Defined Benefit Plans 2017 2016 2017 2016 (in millions) (in millions) Amounts recognized in the statement of financial position Current liabilities $ (1.2) $ (14.8) $ — $ — Noncurrent liabilities (35.4) (33.7) (14.5) (22.6) Accumulated other comprehensive loss 10.3 14.1 26.6 27.7 Net amount recognized $ (26.3) $ (34.4) $ 12.1 $ 5.1 The accumulated benefit obligation for all SERPs was $32.6 million and $44.2 million as of December 31, 2017 and 2016, respectively. The accumulated benefit obligation for all defined benefit pension plans was $103.5 million and $95.9 million as of December 31, 2017 and 2016, respectively. Year Ended December 31, 2017 2016 (in millions) Information for defined benefit plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets Accumulated benefit obligation $ 75.5 $ 95.9 Projected benefit obligation 75.5 95.9 Fair value of plan assets 60.3 73.3 Following are the details of net periodic benefit cost related to the SERPs and Defined Benefit Plans: SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 (in millions) (in millions) Service cost $ 0.8 $ 1.1 $ 1.0 $ 1.5 $ 1.6 $ 1.7 Interest cost 1.1 1.6 1.3 3.7 3.9 3.7 Expected return on plan assets — — — (4.4) (4.6) (5.0) Settlement loss 3.7 1.0 — 0.1 0.1 — Prior service (credit) cost — — (0.3) 0.3 0.3 0.2 Amortization of net loss 0.9 1.4 1.5 1.5 1.5 1.8 $ 6.5 $ 5.1 $ 3.5 $ 2.7 $ 2.8 $ 2.4 Net periodic benefit cost related to the SERPs and Defined Benefit Plans is presented in our statements of income as summarized below: SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 (in millions) (in millions) Amounts recognized in the statement of income Warehouse, delivery, selling, general and administrative expense $ 0.8 $ 1.1 $ 1.0 $ 1.5 $ 1.6 $ 1.7 Other expense, net 5.7 4.0 2.5 1.2 1.2 0.7 $ 6.5 $ 5.1 $ 3.5 $ 2.7 $ 2.8 $ 2.4 Assumptions used to determine net periodic benefit cost are detailed below: SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 Weighted average assumptions to determine net cost Discount rate 3.36 % 3.45 % 3.02 % 3.93 % 4.13 % 3.87 % Expected long-term rate of return on plan assets N/A N/A N/A 6.17 % 6.57 % 6.59 % Rate of compensation increase 6.00 % 6.00 % 6.00 % N/A N/A N/A Assumptions used to determine the benefit obligation are detailed below: SERPs Defined Benefit Plans December 31, December 31, 2017 2016 2017 2016 Weighted average assumptions to determine benefit obligations Discount rate 3.04 % 3.34 % 3.47 % 3.93 % Expected long-term rate of return on plan assets N/A N/A 6.17 % 6.57 % Rate of compensation increase 6.00 % 6.00 % N/A N/A Employer contributions to the SERPs and Defined Benefit Plans during 2018 are expected to be $1.2 million and $1.6 million, respectively. Plan Assets and Investment Policy The weighted‑average asset allocations of our Defined Benefit Plans by asset category are as follows: December 31, 2017 2016 Plan Assets Equity securities 55 % 58 % Debt securities 38 % 38 % Other 7 % 4 % Total 100 % 100 % Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. The investment goal is a return on assets that is at least equal to the assumed actuarial rate of return over the long-term within reasonable and prudent levels of risk. Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate risk including quality and diversification standards. Asset allocation targets are reviewed periodically with investment advisors to determine the appropriate investment strategies for acceptable risk levels. Our target allocation ranges are as follows: equity securities 35% to 65%, debt securities 15% to 45% and other assets of 0% to 15%. We establish our estimated long‑term return on plan assets considering various factors including the targeted asset allocation percentages, historic returns and expected future returns. The fair value measurements of our Defined Benefit Plan assets fall within the following levels of the fair value hierarchy as of December 31, 2017 and 2016: Level 1 Level 2 Level 3 Total (in millions) December 31, 2017: Common stock (1) $ 26.7 $ — $ — $ 26.7 U.S. government, state, and agency — 4.7 — 4.7 Corporate debt securities (2) — 17.4 — 17.4 Mutual funds (3) 30.8 3.5 — 34.3 Interest and non-interest bearing cash 5.9 — — 5.9 $ 63.4 $ 25.6 $ — $ 89.0 December 31, 2016: Common stock (1) $ 23.5 $ — $ — $ 23.5 U.S. government, state, and agency — 7.3 — 7.3 Corporate debt securities (2) — 10.3 — 10.3 Mutual funds (3) 26.3 3.0 — 29.3 Interest and non-interest bearing cash 2.9 — — 2.9 $ 52.7 $ 20.6 $ — $ 73.3 (1) Comprised primarily of securities of large domestic and foreign companies. Valued at the closing price reported on the active market on which the individual securities are traded. (2) Valued using a combination of inputs including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two‑sided markets, benchmark securities, bids, offers, and reference data. (3) Level 1 assets are comprised of exchange traded funds, money market funds, and stock and bond funds. These assets are valued at closing price for exchange traded funds and Net Asset Value (NAV) for open‑end and closed‑end mutual funds. Level 2 assets are comprised of fixed income funds and pooled separate accounts and are valued at the net asset value per unit based on either the observable net asset value of the underlying investment or the net asset value of the underlying pool of securities. Summary Disclosures for All Defined Benefit Plans The following is a summary of benefit payments under our various defined benefit plans, which reflect expected future employee service, as appropriate, expected to be paid in the periods indicated: Defined SERPs Benefit Plans (in millions) 2018 $ 1.2 $ 4.2 2019 1.1 4.4 2020 13.5 4.5 2021 1.1 4.7 2022 8.3 4.9 2023 – 2027 4.6 27.4 The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during 2018 are as follows: Defined SERPs Benefit Plans (in millions) Actuarial loss $ 1.0 $ 1.4 Prior service cost — 0.3 Total $ 1.0 $ 1.7 Supplemental Bonus Plan In connection with the acquisition of EMJ in April 2006, Reliance assumed the obligation resulting from EMJ’s settlement with the U.S. Department of Labor to contribute 258,006 shares of Reliance common stock to EMJ’s Supplemental Bonus Plan, a phantom stock bonus plan supplementing the EMJ Retirement Savings Plan. As of December 31, 2017, the remaining obligation to the EMJ Supplemental Bonus Plan consisted of the cash equivalent of 75,379 shares of Reliance common stock totaling $6.5 million. The adjustments to reflect this obligation at fair value based on the closing price of our common stock at the end of each reporting period are included in Warehouse, delivery, selling, general and administrative expense. The expense (income) from mark to market adjustments to this obligation in each of the years ended December 31, 2017, 2016 and 2015 amounted to $0.6 million, $2.1 million and ($0.2) million, respectively. This obligation will be satisfied by future cash payments to participants upon their termination of employment. Contributions to Reliance Sponsored Retirement Plans Our expense for Reliance‑sponsored retirement plans was as follows: Year Ended December 31, 2017 2016 2015 (in millions) Master Plan $ 25.0 $ 22.3 $ 21.4 Other Defined Contribution Plans 9.0 8.5 7.9 Employee Stock Ownership Plan 1.8 1.8 1.5 Deferred Compensation Plan 0.9 0.7 0.6 Supplemental Executive Retirement Plans 6.5 5.1 3.5 Defined Benefit Plans 2.7 2.8 2.4 $ 45.9 $ 41.2 $ 37.3 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Equity | Note 12. Equity Reincorporation During the second quarter of 2015, the Company’s shareholders approved the reincorporation of the Company from California to Delaware by means of a merger with and into a wholly owned Delaware subsidiary. The reincorporation did not result in any change in the Company’s business, physical location, management, assets, liabilities, net worth or number of authorized shares. In the reincorporation, the Company’s Restated Certificate of Incorporation established par value of the Company’s common stock and unissued preferred stock of $0.001 per share. Common Stock We have paid regular quarterly cash dividends on our common stock for 58 consecutive years. Our Board of Directors increased the quarterly dividend to $0.425 per share from $0.40 per share in July 2016, increased it to $0.45 per share in February 2017 and increased it again in February 2018 to $0.50 per share. The holders of Reliance common stock are entitled to one vote per share on each matter submitted to a vote of stockholders. Share Repurchase Plan On October 20, 2015, our Board of Directors increased the number of shares authorized to be repurchased under our share repurchase plan by 7.5 million shares and extended the duration of the plan through December 31, 2018. We repurchase shares through open market purchases under plans complying with Rule 10b5-1 under the Securities Act of 1934, as amended (the “Exchange Act”). During 2017, we repurchased approximately 0.3 million shares of our common stock at an average cost of $74.27 per share, for a total of $25.0 million. We did not repurchase any shares in 2016. During 2015, we repurchased approximately 6.2 million shares of our common stock at an average cost of $57.39 per share, for a total of $355.5 million. Since initiating the share repurchase plan in 1994, we have repurchased approximately 22.5 million shares at an average cost of $31.58 per share. As of December 31, 2017, we had authorization under the plan to purchase approximately 8.1 million shares, or about 11% of our current outstanding shares. Preferred Stock We are authorized to issue 5,000,000 shares of preferred stock, $0.001 per share. No shares of our preferred stock are issued and outstanding. Our restated articles of incorporation provide that shares of preferred stock may be issued from time to time in one or more series by the Board. The Board can fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of each series of preferred stock. The rights of preferred stockholders may supersede the rights of common stockholders. Stock-Based Compensation Effective January 1, 2016, we adopted accounting changes issued by the FASB for stock-based compensation that allow us to account for forfeitures of RSUs as they occur rather than estimating the number of forfeitures. As a result of the adoption, we recorded a cumulative-effect adjustment that reduced beginning retained earnings by $0.6 million, net of tax. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss included the following: Pension and Accumulated Foreign Currency Postretirement Other Translation Benefit Adjustments, Comprehensive (Loss) Gain Net of Tax (Loss) Income (in millions) Balance as of January 1, 2017 $ (79.9) $ (24.8) $ (104.7) Current-year change 28.8 4.3 33.1 Balance as of December 31, 2017 $ (51.1) $ (20.5) $ (71.6) Foreign currency translation adjustments have not been adjusted for income taxes. Pension and postretirement benefit adjustments are net of taxes of $13.6 million and $14.9 million as of December 31, 2017 and December 31, 2016, respectively. See Note 11 — “Employee Benefits” for information regarding reclassification of amounts from accumulated comprehensive loss to net income. |
Other Expense, net
Other Expense, net | 12 Months Ended |
Dec. 31, 2017 | |
Other Expense, net | |
Other Expense, net | Note 13. Other Expense, net Significant components of Other expense, net are as follows: Year Ended December 31, 2017 2016 2015 (in millions) Investment income from life insurance policies $ (66.4) $ (60.8) $ (55.3) Interest expense on life insurance policy loans 66.5 62.1 57.4 Life insurance policy cost of insurance 11.5 10.9 10.1 Income from life insurance policy redemptions (8.5) (4.4) (4.2) Foreign currency transaction losses (gains) 4.9 (1.8) — Net periodic benefit cost — components other than service cost 6.9 5.2 3.2 All other, net (10.2) (7.2) (4.4) $ 4.7 $ 4.0 $ 6.8 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Lease Commitments We lease land, buildings and equipment under non‑cancelable operating leases expiring in various years through 2041. Rent expense for leases that contain scheduled rent increases are recorded on a straight‑line basis. Several of the leases have renewal options providing for additional lease periods. Future minimum payments, by year and in the aggregate, under the non‑cancelable leases with initial or remaining terms of one year or more, consisted of the following as of December 31, 2017: Operating Leases (in millions) 2018 $ 62.7 2019 50.1 2020 35.1 2021 21.9 2022 13.6 Thereafter 17.7 $ 201.1 Total rental expense amounted to $77.9 million, $78.9 million and $80.0 million in 2017, 2016 and 2015, respectively. Included in the amounts for operating leases are lease payments to various related parties, who are not executive officers of the Company, in the amounts of $3.4 million, $3.6 million and $5.2 million in 2017, 2016 and 2015, respectively. These related party leases are for buildings leased to certain of the companies we have acquired and expire in various years through 2022. Purchase Commitments As of December 31, 2017, we had commitments to purchase minimum quantities of certain metal products, which we entered into to secure material for corresponding long‑term sales commitments we have entered into with our customers. The total amount of the minimum commitments based on current pricing is estimated at approximately $126.2 million, with amounts in 2018, 2019 and thereafter being $38.9 million, $28.1 million, and $59.2 million, respectively. Collective Bargaining Agreements As of December 31, 2017, approximately 12%, or 1,770, of our total employees are covered by 41 collective bargaining agreements at 53 of our different locations, which expire at various times over the next eight years. Approximately 600 of our employees are covered by 23 different collective bargaining agreements that will expire during 2018. Environmental Contingencies We are subject to extensive and changing federal, state, local and foreign laws and regulations designed to protect the environment, including those relating to the use, handling, storage, discharge and disposal of hazardous substances and the remediation of environmental contamination. Our operations use minimal amounts of such substances. We believe we are in material compliance with environmental laws and regulations; however, we are from time to time involved in administrative and judicial proceedings and inquiries relating to environmental matters. Some of our owned or leased properties are located in industrial areas with histories of heavy industrial use. We may incur some environmental liabilities because of the location of these properties. In addition, we are currently involved with a certain environmental remediation project related to activities at former manufacturing operations of EMJ, our wholly owned subsidiary, that were sold many years prior to Reliance’s acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ had 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 these obligations 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 out of our normal 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 effect on our results of operations or financial condition. We maintain liability insurance against risks arising out of our normal course of business. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Earnings Per Share | Note 15. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Year Ended December 31, 2017 2016 2015 (in millions, except share and per share amounts) Numerator: Net income attributable to Reliance $ $ $ Denominator: Weighted average shares outstanding Dilutive effect of stock-based awards Weighted average diluted shares outstanding Earnings per share attributable to Reliance stockholders: Diluted $ $ $ Basic $ $ $ Potentially dilutive securities whose effect would have been antidilutive were not significant for 2017, 2016, and 2015. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | Note 16. Segment Information We have one reportable segment, metals service centers. All of our recent acquisitions were metals service centers and did not result in new reportable segments. Although a variety of products or services are sold at our various locations, in total, sales were comprised of the following in each of the three years ended December 31: 2017 2016 2015 Carbon steel 52 % 52 % 52 % Aluminum 19 % 20 % 19 % Stainless steel 14 % 14 % 14 % Alloy 6 % 5 % 7 % Toll processing and logistics 4 % 4 % 3 % Other 5 % 5 % 5 % Total 100 % 100 % 100 % The following table summarizes consolidated financial information of our operations by geographic location based on where sales originated from: United States Foreign Countries Total (in millions) Year Ended December 31, 2017 Net sales $ 8,847.3 $ 873.7 $ 9,721.0 Long-lived assets 4,353.7 346.0 4,699.7 Year Ended December 31, 2016 Net sales 7,867.3 746.1 8,613.4 Long-lived assets 4,385.2 337.6 4,722.8 Year Ended December 31, 2015 Net sales 8,617.7 732.8 9,350.5 Long-lived assets 4,211.5 355.9 4,567.4 |
Impairment and Restructuring Ch
Impairment and Restructuring Charges | 12 Months Ended |
Dec. 31, 2017 | |
Impairment and Restructuring Charges | |
Impairment and Restructuring Charges | Note 17. Impairment and Restructuring Charges We recorded impairment and restructuring charges of $4.1 million, $69.1 million and $56.3 million in 2017, 2016 and 2015, respectively. The 2016 and 2015 charges mainly related to certain of our energy-related businesses as a result of the impact to our businesses from continued low crude oil prices that reduced drilling activity and the resulting decline in demand for the products we sell to the energy market (oil and gas). The impairment and restructuring charges consisted of the following: Year Ended December 31, 2017 2016 2015 (in millions) Property, plant and equipment $ 4.2 $ 16.0 $ 17.7 Intangible assets, net — 36.4 35.6 Total impairment charges 4.2 52.4 53.3 Restructuring –– cost of sales (0.2) 12.8 1.6 Restructuring –– warehouse, delivery, selling, general and administrative expense 0.1 2.9 1.0 Restructuring –– depreciation expense — — 0.4 Restructuring –– non-operating expense — 1.0 — Total impairment and restructuring charges $ 4.1 $ 69.1 $ 56.3 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | Note 18. Quarterly Financial Information (Unaudited) The following is a summary of the unaudited quarterly results of operations for 2017 and 2016: March 31, June 30, September 30, December 31, (in millions, except per share amounts) 2017: Net sales $ 2,419.3 $ 2,475.2 $ 2,450.1 $ 2,376.4 Cost of sales 1,697.7 1,773.1 1,764.6 1,697.8 Gross profit (1) 721.6 702.1 685.5 678.6 Net income 113.4 104.8 99.0 303.8 Net income attributable to Reliance 111.7 103.0 97.3 301.4 Earnings per share attributable to Reliance stockholders: Diluted 1.52 1.40 1.32 4.09 Basic 1.53 1.41 1.33 4.14 2016: Net sales $ 2,162.7 $ 2,203.9 $ 2,185.2 $ 2,061.6 Cost of sales 1,526.0 1,518.8 1,530.6 1,447.7 Gross profit (1) 636.7 685.1 654.6 613.9 Net income 93.5 102.1 50.6 62.9 Net income attributable to Reliance 92.2 100.9 49.5 61.7 Earnings per share attributable to Reliance stockholders: Diluted 1.27 1.38 0.68 0.84 Basic 1.28 1.39 0.68 0.85 (1) Gross profit, calculated as net sales less cost of sales, is a non‑GAAP financial measure as it excludes depreciation and amortization expense associated with the corresponding sales. The majority of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first‑stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, 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 as shown above as a measure of operating performance. Gross profit is an important operating and financial measure, as fluctuations in gross profit can have a significant impact on our earnings. Gross profit, as presented, is not necessarily comparable with similarly titled measures for other companies. Quarterly and year‑to‑date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with per share amounts for the years shown elsewhere in this Annual Report on Form 10‑K. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | RELIANCE STEEL & ALUMINUM CO. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNT (in millions) Additions Amounts Balance at Charged to Charged to Balance at Beginning Costs and Other End of Description of Period Expenses Deductions Accounts Period Year Ended December 31, 2015 Allowance for doubtful accounts $ 18.3 $ 4.7 $ 6.7 (1) $ — $ 16.3 Year Ended December 31, 2016 Allowance for doubtful accounts $ 16.3 $ 5.2 $ 6.5 (1) $ 0.3 $ 15.3 Year Ended December 31, 2017 Allowance for doubtful accounts $ 15.3 $ 6.7 $ 6.5 (1) $ — $ 15.5 (1) Uncollectible accounts written off. See accompanying report of independent registered public accounting firm. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Reliance Steel & Aluminum Co. and its subsidiaries (collectively referred to as “Reliance”, “the Company”, “we”, “our” or “us”). Our consolidated financial statements include the assets, liabilities and operating results of majority‑owned subsidiaries. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated. |
Business | Business We operate a metals service center network of more than 300 locations in 40 states in the U.S. and in 13 other countries (Australia, Belgium, Canada, China, France, India, Malaysia, Mexico, Singapore, South Korea, Turkey, the United Arab Emirates and the United Kingdom) that provides value‑added metals processing services and distributes a full line of more than 100,000 metal products. Since our inception in 1939, we have not diversified outside our core business as a metals service center operator. |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, such as accounts receivable collectability, valuation of inventories, goodwill, long‑lived assets, income tax and other contingencies, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Accounts Receivable and Concentrations of Credit Risk | Accounts Receivable and Concentrations of Credit Risk Concentrations of credit risk with respect to trade receivables are limited due to the geographically diverse customer base, with limited exposure to any single customer account, and various industries into which our products are sold. Trade receivables are typically non‑interest bearing and are initially recorded at cost. Sales to our recurring customers are generally made on open account terms while sales to occasional customers may be made on a C.O.D. basis when collectability is not assured. Past due status of customer accounts is determined based on how recently payments have been received in relation to payment terms granted. Credit is generally extended based upon an evaluation of each customer’s financial condition, with terms consistent in the industry and no collateral is required. Losses from credit sales are provided for in the financial statements and consistently have been within the allowance provided. The allowance is an estimate of the uncollectability of accounts receivable based on an evaluation of specific customer risks along with additional reserves based on historical and probable bad debt experience. Amounts are written-off against the allowance in the period we determine that the receivable is uncollectible. As a result of the above factors, we do not consider ourselves to have any significant concentrations of credit risk. |
Inventories | Inventories The majority of our inventory is valued using the last‑in, first‑out (“LIFO”) method, which is not in excess of market. Under this method, older costs are included in inventory, which may be higher or lower than current costs. This method of valuation is subject to year‑to‑year fluctuations in cost of material sold, which is influenced by the inflation or deflation existing within the metals industry as well as fluctuations in our product mix and on‑hand inventory levels. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments Fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities, and the current portion of long‑term debt approximate carrying values due to the short period of time to maturity. Fair values of long‑term debt, which have been determined based on borrowing rates currently available to us or to other companies with comparable credit ratings, for loans with similar terms or maturity, approximate the carrying amounts in the consolidated financial statements, with the exception of our publicly traded senior unsecured notes of $750.0 million as of December 31, 2017 and 2016. The fair values of these senior unsecured notes based on quoted market prices as of December 31, 2017 and 2016, were $831.7 million and $773.2 million, respectively, compared to their carrying values of $744.0 million and $743.2 million as of the end of each respective fiscal year. These estimated fair values are based on Level 2 inputs. Fair values are generally based on quoted market prices for identical or similar instruments. |
Cash Equivalents | Cash Equivalents We consider all highly liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash and cash equivalents with high‑credit, quality financial institutions. The Company, by policy, limits the amount of credit exposure to any one financial institution. |
Goodwill | Goodwill Goodwill is the excess of cost over the fair value of net assets of businesses acquired. Goodwill is not amortized but is tested for impairment at least annually. We have one operating segment and one reporting unit for goodwill impairment purposes. We test for impairment of goodwill by assessing qualitative factors to determine if the fair value of the reporting unit is more likely than not below the carrying value of the reporting unit. We also calculate the fair value of the reporting unit using our market capitalization or the discounted cash flow method, as necessary, and compare the fair value to the carrying value of the reporting unit to determine if impairment exists. We perform the required annual goodwill impairment evaluation on November 1 of each year. No impairment of goodwill was determined to exist in any of the years presented. |
Long-Lived Assets | Long‑Lived Assets Property, plant and equipment is recorded at cost (or at fair value for assets acquired in connection with business combinations) and the provision for depreciation of these assets is generally computed on the straight‑line method at rates designed to distribute the cost of assets over the useful lives, estimated as follows: buildings, including leasehold improvements, over five to 50 years and machinery and equipment over three to 20 years. Other intangible assets with finite useful lives are amortized over their useful lives. Other intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. We review the recoverability of our long‑lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We recognized impairment losses of $14.4 million on our other intangible assets with finite lives in 2015 and $36.4 million and $21.2 million related to our other intangible assets with indefinite lives in 2016 and 2015, respectively. We recognized impairment losses of $4.2 million, $16.0 million and $17.7 million for property, plant, and equipment in 2017, 2016 and 2015, respectively. See Note 17 — “Impairment and Restructuring Charges” for further discussion of our impairment losses. |
Revenue Recognition | Revenue Recognition We recognize revenue from product or processing sales upon concluding that all of the fundamental criteria for product revenue recognition have been met, such as a fixed or determinable sales price; reasonable assurance of collectability; and passage of title and risks of ownership to the buyer. Such criteria are usually met upon delivery to the customer for orders with FOB destination terms or upon shipment for orders with FOB shipping point terms, or after toll processing services are performed. Considering the close proximity of our customers to our metals service center locations, shipment and delivery of our orders generally occur on the same day. Billings for orders where the revenue recognition criteria are not met, which primarily include certain bill and hold transactions (in which our customers request to be billed for the material but request delivery at a later date), are recorded as deferred revenue. Shipping and handling charges to our customers are included in Net sales. Costs incurred in connection with shipping and handling our products that are performed by third-party carriers and costs incurred by our personnel are typically included in operating expenses. In 2017, 2016 and 2015, shipping and handling costs included in Warehouse, delivery, selling, general and administrative expenses were $372.3 million, $346.2 million, and $319.1 million, respectively. |
Stock-Based Compensation | Stock‑Based Compensation All of our stock‑based compensation plans are considered equity plans. We calculate the fair value of stock options on the grant date based on the closing market price of our common stock, using a Black‑Scholes option‑pricing model. The fair value of restricted stock awards and restricted stock units is determined based on the fair value of our common stock on the grant date. The fair value of stock options, restricted stock awards, and restricted stock units is expensed on a straight‑line basis over their respective vesting periods, net of forfeitures when they occur. The stock-based compensation expense recorded was $33.4 million, $24.4 million, and $21.3 million in 2017, 2016 and 2015, respectively, and is included in the Warehouse, delivery, selling, general and administrative expense caption of our consolidated statements of income. |
Environmental Remediation Costs | Environmental Remediation Costs We accrue for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remediation feasibility study. Such accruals are adjusted as further information develops or circumstances change. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. We are not aware of any environmental remediation obligations that would materially affect our operations, financial position or cash flows. See Note 14 — “Commitments and Contingencies” for further discussion on our environmental remediation matters. |
Income Taxes | Income Taxes We file a consolidated U.S. federal income tax return with our wholly owned domestic subsidiaries. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax reporting bases of assets and liabilities using the enacted tax rates expected to be in effect when such differences are realized or settled. The effect on deferred taxes from a change in tax rates is recognized in income in the period that includes the enactment date of the change. The provision for income taxes reflects the taxes to be paid for the period and the change during the period in the deferred tax assets and liabilities. We evaluate on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is estimated that it is more likely than not that the tax benefit of the deferred tax asset will not be realized. We make a comprehensive review of our uncertain tax positions on a quarterly basis. Tax benefits are recognized when it is more‑likely‑than‑not that a tax position will be sustained upon examination by the authorities. The benefit from a position that has surpassed the more‑likely‑than‑not threshold is the largest amount of benefit that is more than 50% likely to be realized upon settlement. We recognize interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was enacted, which included significant changes to the taxation of U.S. corporations. These changes include, among other things, a reduction of the U.S. federal statutory rate from 35% to 21% effective in 2018, the implementation of a territorial tax system, a one-time tax in 2017 on accumulated foreign profits that have not been previously subject to U.S. tax law (deemed repatriation), the repeal of the corporate alternative minimum tax and changes to business deductions, including the repeal of the deduction for domestic production activities. For further discussion of the impact of the tax legislation, see Note 9 — “Income Taxes” . |
Foreign Currencies | Foreign Currencies The currency effects of translating the financial statements of our foreign subsidiaries, which operate in local currency environments, are included in other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the results of operations in the Other expense, net caption and amounted to net losses of $4.9 million in 2017 and net gains of $1.8 million in 2016. Gains and losses resulting from foreign currency transactions were insignificant in 2015. |
Impact of Recently Issued Accounting Standards - Adopted | Impact of Recently Issued Accounting Standards — Adopted Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost —In March 2017, the Financial Accounting Standards Board (“FASB”) issued accounting changes to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost in the income statement, and to narrow the amounts eligible for capitalization in assets. The amendments require the service cost component of net periodic benefit cost be reported in the same line as other compensation costs and the other components of net periodic benefit cost be presented in the income statement outside of operating income. We adopted these changes in 2017 on a retrospective basis. As a result of the adoption, we retrospectively adjusted the presentation of our income statement, decreasing Warehouse, delivery, selling, general and administrative expense by $5.2 million and $3.2 million and increasing Other expense, net by $5.2 million and $3.2 million in 2016 and 2015, respectively. The adjustments to the income statement presentation for 2016 and 2015 were estimated using the components of net periodic benefit cost other than service cost included in Note 11 — “Employee Benefits” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. We include the components of net periodic benefit cost other than service cost in Other expense, net in all periods presented. The amendment requiring only the service cost component of net periodic benefit cost to be eligible for capitalization in assets did not impact our asset capitalization policies. The adoption of these changes did not have a material impact on our consolidated financial statements. Clarifying the Definition of a Business— In January 2017, the FASB issued accounting changes to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The accounting changes provide a framework to determine when a set of assets and activities is not a business. Our adoption of these accounting changes in 2017 did not have a material impact on our consolidated financial statements. Improvements to Employee Share-Based Payment Accounting— In March 2016, the FASB issued accounting changes intended to improve various aspects of the accounting for share-based payment transactions as part of its simplification initiative. We adopted these changes as of January 1, 2016. The adoption of these changes did not have a material impact on our consolidated financial statements. For further discussion of our adoption of these accounting changes, see Note 12 — “Equity” . |
Impact of Recently Issued Accounting Standards - Not Yet Adopted | Impact of Recently Issued Accounting Standards—Not Yet Adopted Classification of Certain Cash Receipts and Cash Payments —In August 2016, the FASB issued accounting changes that clarifies the presentation and classification of certain cash receipts and payments in the statement of cash flows with the objective of reducing the existing diversity in practice with respect to eight types of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, or January 1, 2018 for the Company. Early adoption is permitted. The adoption of this standard will not have a material impact on our consolidated financial statements. Leases — In February 2016, the FASB issued accounting changes which will require lessees to recognize most long-term leases on-balance sheet through the recognition of a right-of-use asset and a lease liability. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2018, or January 1, 2019 for the Company. Early adoption is permitted. We have implemented a lease management system and are developing processes necessary to implement these accounting changes. We expect the adoption of these accounting changes will materially increase our assets and liabilities, but will not have a material impact on our net income or equity. We anticipate adopting this new standard on January 1, 2019 with modified retrospective application, using the available practical expedients. Full retrospective application is prohibited. Revenue from Contracts with Customers— In May 2014, the FASB issued accounting changes, which replace most of the detailed guidance on revenue recognition that currently exists under U.S. GAAP. Under the new standard, an entity should recognize revenue when goods or services are transferred to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. We completed our evaluation of the new standard and its potential impacts on our consolidated financial statements and will adopt the new standard on January 1, 2018 using the modified retrospective approach. We will not record a cumulative-effect adjustment to retained earnings upon adoption. The adoption of the new standard will have an insignificant impact on our revenue recognition practices. This is mainly due to our businesses having minimal contract sales, as we primarily sell our inventories in the “spot market” under fixed price sales orders, the toll processing and logistics services we provide being short-term in nature and our contracts with customers generally having only one performance obligation. However, our future revenue recognition disclosures in the notes to our consolidated financial statements will be significantly expanded due to the disaggregation of revenue disclosure requirements. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
2016 Acquisitions | |
Acquisitions | |
Schedule of allocation of the purchase price of acquisition to the fair value of the assets acquired and liabilities assumed | (in millions) Cash $ 1.5 Accounts receivable 14.1 Inventories 66.6 Property, plant and equipment 62.2 Goodwill 104.7 Intangible assets subject to amortization 77.1 Intangible assets not subject to amortization 38.2 Other current and long-term assets 0.5 Total assets acquired 364.9 Current and long-term debt 6.1 Other current and long-term liabilities 7.3 Total liabilities assumed 13.4 Net assets acquired $ 351.5 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Schedule of inventories | December 31, December 31, 2017 2016 (in millions) LIFO inventories - cost on the FIFO method $ 1,390.0 $ 1,219.0 LIFO inventory valuation reserve adjustment (21.8) 51.5 Lower of cost or market adjustment — (42.6) Cost on FIFO method (higher) lower than LIFO value (21.8) 8.9 Inventories - stated on LIFO method 1,368.2 1,227.9 Inventories - stated on FIFO method 357.8 304.7 $ 1,726.0 $ 1,532.6 |
Schedule of changes in the LIFO valuation reserve and impact of LIFO liquidations | Year Ended December 31, 2017 2016 2015 (in millions) LIFO inventory valuation reserve adjustment charge (income) $ 73.3 $ (8.5) $ (186.1) Liquidation of LIFO inventory quantities that increased cost of sales ** ** $ 38.7 ** Insignificant liquidations of LIFO inventory quantities. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill. | |
Schedule of changes in the carrying amount of goodwill | (in millions) Balance at January 1, 2015 $ 1,736.4 Acquisitions 0.4 Purchase price allocation adjustments (0.4) Effect of foreign currency translation (11.6) Balance at December 31, 2015 1,724.8 Acquisitions 103.4 Disposal of businesses (1.0) Effect of foreign currency translation 0.2 Balance at December 31, 2016 1,827.4 Acquisitions 10.3 Effect of foreign currency translation 4.9 Balance at December 31, 2017 $ 1,842.6 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, net | |
Summary of intangible assets, net | December 31, 2017 December 31, 2016 Weighted Average Gross Gross Amortizable Carrying Accumulated Carrying Accumulated Life in Years Amount Amortization Amount Amortization (in millions) Intangible assets subject to amortization: Covenants not to compete 4.7 $ 0.8 $ (0.4) $ 1.1 $ (0.6) Customer lists/relationships 14.6 745.0 (391.3) 736.7 (338.9) Software 10.0 8.1 (8.1) 8.1 (8.1) Other 5.4 6.3 (5.9) 6.3 (5.5) 760.2 (405.7) 752.2 (353.1) Intangible assets not subject to amortization: Trade names 757.6 — 752.2 — $ 1,517.8 $ (405.7) $ 1,504.4 $ (353.1) |
Summary of estimated aggregate amortization expense | (in millions) 2018 $ 46.7 2019 46.6 2020 46.6 2021 42.6 2022 34.3 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt | |
Summary of debt | December 31, December 31, 2017 2016 (in millions) Unsecured revolving credit facility due September 30, 2021 $ 538.0 $ 540.0 Unsecured term loan due from March 30, 2018 to September 30, 2021 562.5 600.0 Senior unsecured notes due April 15, 2023 500.0 500.0 Senior unsecured notes due November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 64.0 55.0 Total 1,914.5 1,945.0 Less: unamortized discount and debt issuance costs (13.1) (15.8) Less: amounts due within one year and short-term borrowings (92.0) (82.5) Total long-term debt $ 1,809.4 $ 1,846.7 |
Summary of aggregate maturities of long-term debt for each of the next five years and thereafter | 2018 $ 92.0 2019 60.6 2020 60.6 2021 943.6 2022 0.3 Thereafter 757.4 $ 1,914.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of components of the provision for income taxes attributable to continuing operations | Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2014 and state and local tax examinations before 2013. Significant components of the provision for income taxes attributable to continuing operations were as follows:Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2014 and state and local tax examinations before 2013. Significant components of the provision for income taxes attributable to continuing operations were as follows: Year Ended December 31, 2017 2016 2015 (in millions) Current: Federal $ 117.8 $ 91.1 $ 129.5 State 21.5 18.9 21.3 Foreign 16.1 10.6 8.8 155.4 120.6 159.6 Deferred: Federal 3.0 (11.7) State 11.1 1.0 (4.5) Foreign (0.9) (4.5) (0.9) (0.5) (17.1) $ (37.2) $ 120.1 $ 142.5 |
Components of U.S. and international income before income taxes | Year Ended December 31, 2017 2016 2015 (in millions) U.S. $ 524.6 $ 411.0 $ 427.3 International 59.2 18.2 31.4 Income before income taxes $ 583.8 $ 429.2 $ 458.7 |
Schedule of reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense | Year Ended December 31, 2017 2016 2015 Income tax at U.S. federal statutory tax rate 35.0 % 35.0 % 35.0 % Tax reform (35.5) — — State income tax, net of federal tax effect 3.8 3.1 2.0 Foreign earnings taxed at lower rates (0.7) (0.8) (0.8) Net effect of life insurance policies (3.6) (4.2) (3.6) Net effect of changes in unrecognized tax benefits (0.2) (4.3) 0.7 Domestic production activity deduction (1.6) (1.7) (2.0) Loss on sale of assets (0.8) — — Other, net (2.8) 0.9 (0.2) Effective tax rate (6.4) % 28.0 % 31.1 % |
Schedule of components of the Company's deferred tax assets and liabilities | December 31, 2017 2016 (in millions) Deferred tax assets: Accrued expenses not currently deductible for tax $ 34.8 $ 77.6 Inventory costs capitalized for tax purposes 23.1 29.2 Stock-based compensation 10.5 12.0 Allowance for doubtful accounts 3.4 5.3 Tax credits carryforwards 1.3 1.3 Net operating loss carryforwards 5.6 4.7 Total deferred tax assets 78.7 130.1 Deferred tax liabilities: Property, plant and equipment, net (159.7) (238.6) Goodwill and other intangible assets (307.3) (451.2) LIFO inventories (39.5) (54.1) Deferred income (0.8) (7.1) Other (12.2) (6.0) Total deferred tax liabilities (519.5) (757.0) Net deferred tax liabilities $ (440.8) $ (626.9) |
Summary of income tax reform impact | The components of our preliminary assessment of the impact of Tax Reform on our 2017 provision for income taxes were as follows: (in millions) Effect of tax rate changes on deferred tax assets and liabilities $ 216.7 Repatriation and related liabilities (9.4) Tax benefit, net $ 207.3 |
Schedule of reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits | Year Ended December 31, 2017 2016 2015 (in millions) Unrecognized tax benefits at January 1 $ 5.2 $ 22.9 $ 20.2 Increases in tax positions for prior years — 0.4 0.3 Decreases in tax positions for prior years (0.1) (0.6) (1.7) Increases in tax positions for current year — 0.1 4.2 Settlements (0.2) (17.6) (0.1) Lapses in statutes-of-limitation periods (0.8) — — Unrecognized tax benefits at December 31 $ 4.1 $ 5.2 $ 22.9 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation Plans | |
Schedule of stock option activity | Weighted Average Remaining Aggregate Option Weighted Average Contractual Term Intrinsic Value Stock Options Shares Exercise Price (in years) (in millions) Outstanding at January 1, 2015 1,327,412 $ 49.66 Exercised (390,606) 48.19 Expired or forfeited (2,481) 51.96 Outstanding at December 31, 2015 934,325 50.26 Exercised (753,645) 49.70 Outstanding at December 31, 2016 180,680 52.61 Exercised (98,405) 52.41 Expired or forfeited (7,000) 58.68 Outstanding at December 31, 2017 75,275 $ 52.30 0.9 $ 2.5 Exercisable at December 31, 2017 75,275 $ 52.30 0.9 $ 2.5 |
Summary of certain information concerning outstanding and exercisable options | Options Outstanding and Exercisable Weighted Average Remaining Weighted Range of Outstanding at Contractual Life Average Exercise Price December 31, 2017 in Years Exercise Price $38 12,000 1.4 $ 38.00 $44 - $45 16,000 2.4 44.99 $55 - $56 35,275 0.1 55.73 $66 - $67 12,000 0.4 66.28 $38 - $67 75,275 0.9 $ 52.30 |
Summary of the status of the Company's restricted stock units and changes during the year | Weighted Average Grant Unvested Shares Shares Date Fair Value Unvested at January 1, 2017 985,540 $ 64.34 Granted 446,525 79.60 Vested (467,968) 59.33 Canceled or forfeited (39,522) 67.99 Unvested at December 31, 2017 924,575 $ 74.09 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits | |
Summary of benefit payments under various defined benefit plans, which reflect expected future employee service, as appropriate, expected to be paid in the future periods | Defined SERPs Benefit Plans (in millions) 2018 $ 1.2 $ 4.2 2019 1.1 4.4 2020 13.5 4.5 2021 1.1 4.7 2022 8.3 4.9 2023 – 2027 4.6 27.4 |
Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during 2018 | Defined SERPs Benefit Plans (in millions) Actuarial loss $ 1.0 $ 1.4 Prior service cost — 0.3 Total $ 1.0 $ 1.7 |
Schedule of Company's expense for Reliance-sponsored retirement plans | Year Ended December 31, 2017 2016 2015 (in millions) Master Plan $ 25.0 $ 22.3 $ 21.4 Other Defined Contribution Plans 9.0 8.5 7.9 Employee Stock Ownership Plan 1.8 1.8 1.5 Deferred Compensation Plan 0.9 0.7 0.6 Supplemental Executive Retirement Plans 6.5 5.1 3.5 Defined Benefit Plans 2.7 2.8 2.4 $ 45.9 $ 41.2 $ 37.3 |
SERPs and Defined Benefit Plans | |
Employee Benefits | |
Summary of the status of the funding of the plans, change in plan assets and items not yet recognized as a component of net periodic pension expense | SERPs Defined Benefit Plans 2017 2016 2017 2016 (in millions) (in millions) Change in benefit obligation Benefit obligation at beginning of year $ 48.5 $ 49.4 $ 95.9 $ 96.3 Service cost 0.8 1.1 1.5 1.6 Interest cost 1.1 1.6 3.7 3.9 Actuarial loss 1.0 1.1 6.2 0.6 Benefits paid (1.2) (1.3) (3.8) (6.1) Plan amendments — — 0.2 — Plan settlements (13.6) (3.4) (0.2) (0.4) Benefit obligation at end of year $ 36.6 $ 48.5 $ 103.5 $ 95.9 Change in plan assets Fair value of plan assets at beginning of year N/A N/A $ 73.3 $ 70.2 Actual return on plan assets N/A N/A 9.9 3.9 Employer contributions N/A N/A 9.8 5.5 Benefits paid N/A N/A (4.0) (6.3) Fair value of plan assets at end of year N/A N/A $ 89.0 $ 73.3 Funded status Funded status of the plans $ (36.6) $ (48.5) $ (14.5) $ (22.6) Items not yet recognized as component of net periodic pension expense Unrecognized net actuarial losses $ 10.3 $ 14.1 $ 24.5 $ 25.4 Unamortized prior service cost — — 2.1 2.3 $ 10.3 $ 14.1 $ 26.6 $ 27.7 |
Schedule of amounts recognized in the statement of financial position | SERPs Defined Benefit Plans 2017 2016 2017 2016 (in millions) (in millions) Amounts recognized in the statement of financial position Current liabilities $ (1.2) $ (14.8) $ — $ — Noncurrent liabilities (35.4) (33.7) (14.5) (22.6) Accumulated other comprehensive loss 10.3 14.1 26.6 27.7 Net amount recognized $ (26.3) $ (34.4) $ 12.1 $ 5.1 |
Schedule of details of net periodic pension expense | Following are the details of net periodic benefit cost related to the SERPs and Defined Benefit Plans: SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 (in millions) (in millions) Service cost $ 0.8 $ 1.1 $ 1.0 $ 1.5 $ 1.6 $ 1.7 Interest cost 1.1 1.6 1.3 3.7 3.9 3.7 Expected return on plan assets — — — (4.4) (4.6) (5.0) Settlement loss 3.7 1.0 — 0.1 0.1 — Prior service (credit) cost — — (0.3) 0.3 0.3 0.2 Amortization of net loss 0.9 1.4 1.5 1.5 1.5 1.8 $ 6.5 $ 5.1 $ 3.5 $ 2.7 $ 2.8 $ 2.4 Net periodic benefit cost related to the SERPs and Defined Benefit Plans is presented in our statements of income as summarized below: SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 (in millions) (in millions) Amounts recognized in the statement of income Warehouse, delivery, selling, general and administrative expense $ 0.8 $ 1.1 $ 1.0 $ 1.5 $ 1.6 $ 1.7 Other expense, net 5.7 4.0 2.5 1.2 1.2 0.7 $ 6.5 $ 5.1 $ 3.5 $ 2.7 $ 2.8 $ 2.4 |
Schedule of assumptions used to determine net periodic benefit cost | SERPs Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2017 2016 2015 2017 2016 2015 Weighted average assumptions to determine net cost Discount rate 3.36 % 3.45 % 3.02 % 3.93 % 4.13 % 3.87 % Expected long-term rate of return on plan assets N/A N/A N/A 6.17 % 6.57 % 6.59 % Rate of compensation increase 6.00 % 6.00 % 6.00 % N/A N/A N/A |
Schedule of assumptions used to determine the benefit obligation | SERPs Defined Benefit Plans December 31, December 31, 2017 2016 2017 2016 Weighted average assumptions to determine benefit obligations Discount rate 3.04 % 3.34 % 3.47 % 3.93 % Expected long-term rate of return on plan assets N/A N/A 6.17 % 6.57 % Rate of compensation increase 6.00 % 6.00 % N/A N/A |
Defined Benefit Plans | |
Employee Benefits | |
Schedule of information for defined benefit plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets | Year Ended December 31, 2017 2016 (in millions) Information for defined benefit plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets Accumulated benefit obligation $ 75.5 $ 95.9 Projected benefit obligation 75.5 95.9 Fair value of plan assets 60.3 73.3 |
Schedule of weighted-average asset allocations of the Company's Defined Benefit Plans by asset category | December 31, 2017 2016 Plan Assets Equity securities 55 % 58 % Debt securities 38 % 38 % Other 7 % 4 % Total 100 % 100 % |
Schedule of fair value measurements of Defined Benefit Plans assets | Level 1 Level 2 Level 3 Total (in millions) December 31, 2017: Common stock (1) $ 26.7 $ — $ — $ 26.7 U.S. government, state, and agency — 4.7 — 4.7 Corporate debt securities (2) — 17.4 — 17.4 Mutual funds (3) 30.8 3.5 — 34.3 Interest and non-interest bearing cash 5.9 — — 5.9 $ 63.4 $ 25.6 $ — $ 89.0 December 31, 2016: Common stock (1) $ 23.5 $ — $ — $ 23.5 U.S. government, state, and agency — 7.3 — 7.3 Corporate debt securities (2) — 10.3 — 10.3 Mutual funds (3) 26.3 3.0 — 29.3 Interest and non-interest bearing cash 2.9 — — 2.9 $ 52.7 $ 20.6 $ — $ 73.3 (1) Comprised primarily of securities of large domestic and foreign companies. Valued at the closing price reported on the active market on which the individual securities are traded. (2) Valued using a combination of inputs including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two‑sided markets, benchmark securities, bids, offers, and reference data. (3) Level 1 assets are comprised of exchange traded funds, money market funds, and stock and bond funds. These assets are valued at closing price for exchange traded funds and Net Asset Value (NAV) for open‑end and closed‑end mutual funds. Level 2 assets are comprised of fixed income funds and pooled separate accounts and are valued at the net asset value per unit based on either the observable net asset value of the underlying investment or the net asset value of the underlying pool of securities. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Schedule of accumulated other comprehensive loss | Pension and Accumulated Foreign Currency Postretirement Other Translation Benefit Adjustments, Comprehensive (Loss) Gain Net of Tax (Loss) Income (in millions) Balance as of January 1, 2017 $ (79.9) $ (24.8) $ (104.7) Current-year change 28.8 4.3 33.1 Balance as of December 31, 2017 $ (51.1) $ (20.5) $ (71.6) |
Other Expense, net (Tables)
Other Expense, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Expense, net | |
Schedule of significant components of other expense, net | Year Ended December 31, 2017 2016 2015 (in millions) Investment income from life insurance policies $ (66.4) $ (60.8) $ (55.3) Interest expense on life insurance policy loans 66.5 62.1 57.4 Life insurance policy cost of insurance 11.5 10.9 10.1 Income from life insurance policy redemptions (8.5) (4.4) (4.2) Foreign currency transaction losses (gains) 4.9 (1.8) — Net periodic benefit cost — components other than service cost 6.9 5.2 3.2 All other, net (10.2) (7.2) (4.4) $ 4.7 $ 4.0 $ 6.8 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies. | |
Schedule of future minimum payments under the non-cancelable leases | Future minimum payments, by year and in the aggregate, under the non‑cancelable leases with initial or remaining terms of one year or more, consisted of the following as of December 31, 2017: Operating Leases (in millions) 2018 $ 62.7 2019 50.1 2020 35.1 2021 21.9 2022 13.6 Thereafter 17.7 $ 201.1 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | Year Ended December 31, 2017 2016 2015 (in millions, except share and per share amounts) Numerator: Net income attributable to Reliance $ $ $ Denominator: Weighted average shares outstanding Dilutive effect of stock-based awards Weighted average diluted shares outstanding Earnings per share attributable to Reliance stockholders: Diluted $ $ $ Basic $ $ $ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Schedule of sales, by products or services | 2017 2016 2015 Carbon steel 52 % 52 % 52 % Aluminum 19 % 20 % 19 % Stainless steel 14 % 14 % 14 % Alloy 6 % 5 % 7 % Toll processing and logistics 4 % 4 % 3 % Other 5 % 5 % 5 % Total 100 % 100 % 100 % |
Summary of the Company's operations by geographic location based on where sales originated from | United States Foreign Countries Total (in millions) Year Ended December 31, 2017 Net sales $ 8,847.3 $ 873.7 $ 9,721.0 Long-lived assets 4,353.7 346.0 4,699.7 Year Ended December 31, 2016 Net sales 7,867.3 746.1 8,613.4 Long-lived assets 4,385.2 337.6 4,722.8 Year Ended December 31, 2015 Net sales 8,617.7 732.8 9,350.5 Long-lived assets 4,211.5 355.9 4,567.4 |
Impairment and Restructuring 42
Impairment and Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Impairment and Restructuring Charges | |
Schedule of impairment and restructuring charges | Year Ended December 31, 2017 2016 2015 (in millions) Property, plant and equipment $ 4.2 $ 16.0 $ 17.7 Intangible assets, net — 36.4 35.6 Total impairment charges 4.2 52.4 53.3 Restructuring –– cost of sales (0.2) 12.8 1.6 Restructuring –– warehouse, delivery, selling, general and administrative expense 0.1 2.9 1.0 Restructuring –– depreciation expense — — 0.4 Restructuring –– non-operating expense — 1.0 — Total impairment and restructuring charges $ 4.1 $ 69.1 $ 56.3 |
Quarterly Financial Informati43
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | |
Summary of the unaudited quarterly results of operations | March 31, June 30, September 30, December 31, (in millions, except per share amounts) 2017: Net sales $ 2,419.3 $ 2,475.2 $ 2,450.1 $ 2,376.4 Cost of sales 1,697.7 1,773.1 1,764.6 1,697.8 Gross profit (1) 721.6 702.1 685.5 678.6 Net income 113.4 104.8 99.0 303.8 Net income attributable to Reliance 111.7 103.0 97.3 301.4 Earnings per share attributable to Reliance stockholders: Diluted 1.52 1.40 1.32 4.09 Basic 1.53 1.41 1.33 4.14 2016: Net sales $ 2,162.7 $ 2,203.9 $ 2,185.2 $ 2,061.6 Cost of sales 1,526.0 1,518.8 1,530.6 1,447.7 Gross profit (1) 636.7 685.1 654.6 613.9 Net income 93.5 102.1 50.6 62.9 Net income attributable to Reliance 92.2 100.9 49.5 61.7 Earnings per share attributable to Reliance stockholders: Diluted 1.27 1.38 0.68 0.84 Basic 1.28 1.39 0.68 0.85 Gross profit, calculated as net sales less cost of sales, is a non‑GAAP financial measure as it excludes depreciation and amortization expense associated with the corresponding sales. The majority of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first‑stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, 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 as shown above as a measure of operating performance. Gross profit is an important operating and financial measure, as fluctuations in gross profit can have a significant impact on our earnings. Gross profit, as presented, is not necessarily comparable with similarly titled measures for other companies. |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Business (Details) | 12 Months Ended |
Dec. 31, 2017item | |
Summary of Significant Accounting Policies | |
Minimum number of locations in which company operates metal service center network | 300 |
Number of states in which the company operates metal service center network | 40 |
Number of countries in which entity operates outside the U.S. | 13 |
Minimum number of products the company distributes | 100,000 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Values of Financial Instruments | ||
Total carrying value of debt | $ 1,914.5 | $ 1,945 |
Senior Unsecured Notes | ||
Fair Values of Financial Instruments | ||
Carrying value, before deducting unamortized discount or premiums | 750 | 750 |
Carrying value | 744 | 743.2 |
Senior Unsecured Notes | Level 2 | ||
Fair Values of Financial Instruments | ||
Fair value | $ 831.7 | $ 773.2 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Goodwill (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | |
Goodwill Policy | |||
Number of operating segments | 1 | 1 | 1 |
Number of reportable segments | 1 | 1 | 1 |
Impairment of goodwill | $ | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment | |||
Impairment loss of property, plant and equipment | $ 4.2 | $ 16 | $ 17.7 |
Buildings | Minimum | |||
Property, Plant and Equipment | |||
Useful lives | 5 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment | |||
Useful lives | 50 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment | |||
Useful lives | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment | |||
Useful lives | 20 years |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Revenue Recognition and Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangibles | |||
Impairment losses of intangible assets, finite-lived | $ 14.4 | ||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 36.4 | 21.2 | |
Revenue Recognition | |||
Shipping and handling costs included in operating expenses | $ 372.3 | 346.2 | 319.1 |
Share-Based Compensation | |||
Stock-based compensation expense | 33.4 | 24.4 | $ 21.3 |
Foreign Currencies | |||
Net (loss) gain resulting from foreign currency transactions | $ (4.9) | $ 1.8 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Income Taxes (Details) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies | ||||
U.S. federal statutory tax rate (as a percent) | 21.00% | 35.00% | 35.00% | 35.00% |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Impact of Recently Issued Accounting Guidance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impact of Recently Issued Accounting Standards—Adopted | |||
Warehouse, delivery, selling, general and administrative | $ 1,902.8 | $ 1,798.1 | $ 1,725.3 |
Other expense, net | $ 4.7 | 4 | 6.8 |
Impact of Recently Issued Accounting Standards—Adopted | Improvements to Net Periodic Pension Costs and Net Periodic Postretirement Benefits Cost | |||
Impact of Recently Issued Accounting Standards—Adopted | |||
Warehouse, delivery, selling, general and administrative | (5.2) | (3.2) | |
Other expense, net | $ 5.2 | $ 3.2 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 01, 2016location | Dec. 31, 2014USD ($) | |
Acquisitions | ||||||||||||||
Net sales | $ 2,376.4 | $ 2,450.1 | $ 2,475.2 | $ 2,419.3 | $ 2,061.6 | $ 2,185.2 | $ 2,203.9 | $ 2,162.7 | $ 9,721 | $ 8,613.4 | $ 9,350.5 | |||
Allocation of the total purchase price of the acquisitions to the fair value of the assets acquired and liabilities assumed | ||||||||||||||
Goodwill | $ 1,842.6 | 1,842.6 | 1,827.4 | 1,842.6 | 1,827.4 | $ 1,724.8 | $ 1,736.4 | |||||||
Summary purchase price allocation information for all acquisitions | ||||||||||||||
Tax deductible goodwill amount | 664 | 664 | 664 | |||||||||||
Trade names | ||||||||||||||
Allocation of the total purchase price of the acquisitions to the fair value of the assets acquired and liabilities assumed | ||||||||||||||
Intangible assets not subject to amortization | 3.7 | 3.7 | 38.2 | 3.7 | 38.2 | |||||||||
Summary purchase price allocation information for all acquisitions | ||||||||||||||
Intangible assets not subject to amortization | 3.7 | $ 3.7 | 38.2 | 3.7 | 38.2 | |||||||||
Customer relationships | ||||||||||||||
Summary purchase price allocation information for all acquisitions | ||||||||||||||
Intangible assets acquired subject to amortization | $ 3.7 | $ 76.8 | ||||||||||||
Weighted average lives of identifiable intangible assets | 10 years | 15 years 6 months | ||||||||||||
Ferguson | ||||||||||||||
Acquisitions | ||||||||||||||
Sales since acquisition date | $ 7.8 | |||||||||||||
Alaska Steel | ||||||||||||||
Acquisitions | ||||||||||||||
Net sales | $ 22 | |||||||||||||
Best Manufacturing | ||||||||||||||
Acquisitions | ||||||||||||||
Net sales | 21.6 | |||||||||||||
Tubular Steel | ||||||||||||||
Acquisitions | ||||||||||||||
Net sales | $ 135.5 | |||||||||||||
Number of locations of the acquiree entity | location | 6 | |||||||||||||
2016 Acquisitions | ||||||||||||||
Allocation of the total purchase price of the acquisitions to the fair value of the assets acquired and liabilities assumed | ||||||||||||||
Cash | 1.5 | $ 1.5 | ||||||||||||
Accounts receivable | 14.1 | 14.1 | ||||||||||||
Inventories | 66.6 | 66.6 | ||||||||||||
Property, plant and equipment | 62.2 | 62.2 | ||||||||||||
Goodwill | 104.7 | 104.7 | ||||||||||||
Intangible assets subject to amortization | 77.1 | 77.1 | ||||||||||||
Intangible assets not subject to amortization | 38.2 | 38.2 | ||||||||||||
Other current and long-term assets | 0.5 | 0.5 | ||||||||||||
Total assets acquired | 364.9 | 364.9 | ||||||||||||
Current and long-term debt | 6.1 | 6.1 | ||||||||||||
Other current and long-term liabilities | 7.3 | 7.3 | ||||||||||||
Total liabilities assumed | 13.4 | 13.4 | ||||||||||||
Net assets acquired | 351.5 | 351.5 | ||||||||||||
Summary purchase price allocation information for all acquisitions | ||||||||||||||
Intangible assets not subject to amortization | 38.2 | 38.2 | ||||||||||||
Tax deductible goodwill amount | $ 104.7 | $ 104.7 |
Joint Ventures and Noncontrol52
Joint Ventures and Noncontrolling Interests (Details) - item | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 15, 2015 | Sep. 11, 2015 | |
Joint Ventures and Noncontrolling Interests | ||||
Number of joint ventures in which the entity has a noncontrolling interest | 2 | |||
Valex Corp. | South Korea | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated investments other than equity method investment | 95.00% | |||
Indiana Pickling & Processing Company | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated investments other than equity method investment | 56.00% | |||
Feralloy Processing Company | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated investments other than equity method investment | 51.00% | |||
Eagle Steel Products, Inc. | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in equity method investment | 45.00% | |||
Acero Prime S. de R.L. de C.V. | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated investments other than equity method investment | 60.00% | |||
Oregon Feralloy Partners LLC | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in equity method investment | 40.00% | |||
Minimum | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in equity method investment | 20.00% | |||
Percentage of ownership for consolidation of financial statements | 50.00% | |||
Minimum | Valex Corp. | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated subsidiary | 97.00% | |||
Minimum | Valex Corp. | People's Republic of China | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated subsidiary | 92.00% | |||
Maximum | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in equity method investment | 50.00% | |||
Maximum | Valex Corp. | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated subsidiary | 100.00% | |||
Maximum | Valex Corp. | People's Republic of China | ||||
Joint Ventures and Noncontrolling Interests | ||||
Ownership percentage in consolidated subsidiary | 100.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventories | |||
LIFO inventories - cost on the FIFO method | $ 1,390 | $ 1,219 | |
LIFO inventory valuation reserve adjustment | (21.8) | 51.5 | |
Lower of cost or market adjustment | (42.6) | ||
Cost on FIFO method (higher) lower than LIFO value | (21.8) | 8.9 | |
Inventories - stated on LIFO method | 1,368.2 | 1,227.9 | |
Inventories - stated on FIFO method | 357.8 | 304.7 | |
Inventories | 1,726 | 1,532.6 | |
Lower of cost or market charge related to certain inventories of a foreign subsidiary | 7.6 | ||
LIFO inventory valuation reserve adjustment charge (income) | $ 73.3 | $ (8.5) | $ (186.1) |
Liquidation of LIFO inventory quantities that increased cost of sales | $ 38.7 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in the carrying amount of goodwill | |||
Balance at the beginning of the period | $ 1,827.4 | $ 1,724.8 | $ 1,736.4 |
Acquisitions | 10.3 | 103.4 | 0.4 |
Purchase price allocation adjustments | (0.4) | ||
Disposal of businesses | (1) | ||
Effect of foreign currency translation | 4.9 | 0.2 | (11.6) |
Balance at the end of the period | 1,842.6 | $ 1,827.4 | $ 1,724.8 |
Accumulated impairment losses | 0 | ||
Goodwill, tax deductible amount | $ 664 |
Intangible Assets, net (Details
Intangible Assets, net (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | |
Intangible assets subject to amortization: | |||
Intangible assets subject to amortization, Gross Carrying Amount | $ 760.2 | $ 752.2 | |
Intangible assets subject to amortization, Accumulated Amortization | (405.7) | (353.1) | |
Intangible assets | |||
Intangible assets, Gross Carrying Amount | 1,517.8 | 1,504.4 | |
Amortization expense for intangible assets | 50.6 | 54.1 | $ 53.7 |
Changes in intangible assets due to foreign currency translation gains | 4 | ||
Impairment losses of intangible assets, indefinite-lived | 36.4 | 21.2 | |
Impairment losses of intangible assets, finite-lived | $ 14.4 | ||
Summary of estimated aggregate amortization expense for each of the succeeding five years | |||
2,018 | 46.7 | ||
2,019 | 46.6 | ||
2,020 | 46.6 | ||
2,021 | 42.6 | ||
2,022 | 34.3 | ||
2017 Acquisitions | |||
Intangible assets | |||
Intangible assets recorded in connection with our 2017 acquisitions | 7.4 | ||
Trade names | |||
Intangible assets not subject to amortization: | |||
Intangible assets not subject to amortization, Gross Carrying Amount | 757.6 | $ 752.2 | |
Intangible assets | |||
Number of intangible assets subject to impairment | item | 8 | 5 | |
Impairment losses of intangible assets, indefinite-lived | $ 36.4 | $ 21.2 | |
Trade names | 2017 Acquisitions | |||
Intangible assets not subject to amortization: | |||
Intangible assets not subject to amortization, Gross Carrying Amount | $ 3.7 | ||
Covenants not to compete | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 4 years 8 months 12 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 0.8 | 1.1 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (0.4) | (0.6) | |
Customer lists/relationships | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 14 years 7 months 6 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 745 | 736.7 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (391.3) | (338.9) | |
Intangible assets | |||
Number of intangible assets subject to impairment | item | 2 | ||
Impairment losses of intangible assets, finite-lived | $ 14.4 | ||
Software | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 10 years | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 8.1 | 8.1 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (8.1) | (8.1) | |
Other | |||
Intangible assets subject to amortization: | |||
Weighted average amortizable life in years | 5 years 4 months 24 days | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 6.3 | 6.3 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (5.9) | $ (5.5) |
Cash Surrender Value of Life 56
Cash Surrender Value of Life Insurance Policies, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Information about cash surrender value of life insurance policies | |||
Cash surrender value of all life insurance policies, net of loans and related accrued interest | $ 47.8 | $ 46.9 | |
Borrowings available | 0 | 0 | |
Borrowed portion | |||
Information about cash surrender value of life insurance policies | |||
Amount of borrowed funds against cash surrender value of certain life insurance policies used to pay premiums and accrued interest owed | 49.9 | 51.3 | $ 47.9 |
Paid premiums and accrued interest on loans against policies | $ 64 | 64.7 | $ 60.4 |
Earle M. Jorgensen Company ("EMJ") | Borrowed portion | |||
Information about cash surrender value of life insurance policies | |||
Interest on borrowings against cash surrender value of certain life insurance policies (as a percent) | 11.76% | ||
Rate at which the portion of the policy cash surrender value earns interest and dividend income (as a percent) | 11.26% | ||
Loans and accrued interest outstanding on EMJ's life insurance policies | $ 612 | $ 577.6 | |
Earle M. Jorgensen Company ("EMJ") | Unborrowed portion | Minimum | |||
Information about cash surrender value of life insurance policies | |||
Rate at which the portion of the policy cash surrender value earns interest and dividend income (as a percent) | 4.00% |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt | ||
Total | $ 1,914.5 | $ 1,945 |
Less: unamortized discount and debt issuance costs | (13.1) | (15.8) |
Less: amounts due within one year and short-term borrowings | (92) | (82.5) |
Total long-term debt | 1,809.4 | 1,846.7 |
Unsecured revolving credit facility due September 30, 2021 | ||
Debt | ||
Total | 538 | 540 |
Unsecured term loan due from March 30, 2018 to September 30, 2021 | ||
Debt | ||
Total | 562.5 | 600 |
Senior unsecured notes due April 15, 2023 | ||
Debt | ||
Total | 500 | 500 |
Senior unsecured notes due November 15, 2036 | ||
Debt | ||
Total | 250 | 250 |
Other notes and revolving credit facilities | ||
Debt | ||
Total | $ 64 | $ 55 |
Debt - Other (Details)
Debt - Other (Details) $ in Millions | Apr. 12, 2013USD ($) | Sep. 30, 2016USD ($) | Nov. 30, 2006USD ($)tranche | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Nov. 15, 2016USD ($) |
Debt | ||||||
Total | $ 1,914.5 | $ 1,945 | ||||
Number of financial covenants | item | 2 | |||||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||||
2,018 | $ 92 | |||||
2,019 | 60.6 | |||||
2,020 | 60.6 | |||||
2,021 | 943.6 | |||||
2,022 | 0.3 | |||||
Thereafter | 757.4 | |||||
Credit Agreement | ||||||
Debt | ||||||
Maximum borrowing capacity | $ 2,100 | |||||
Debt term | 5 years | |||||
Unsecured revolving credit facility due September 30, 2021 | ||||||
Debt | ||||||
Maximum borrowing capacity | $ 1,500 | |||||
Total | $ 538 | $ 540 | ||||
Additional maximum borrowing capacity under the credit agreement subject to approval of the lenders and certain other conditions | 500 | |||||
Commitment fee on unused portion of revolving credit facility (as a percent) | 0.15% | |||||
Weighted average fixed interest rate (as a percent) | 2.96% | 2.16% | ||||
Letters of credit outstanding | $ 53.3 | |||||
Available on the revolving credit facility | $ 908.7 | |||||
Unsecured revolving credit facility due September 30, 2021 | LIBOR | ||||||
Debt | ||||||
Variable interest rate | LIBOR | |||||
Interest rate added to base (as a percent) | 1.25% | |||||
Unsecured revolving credit facility due September 30, 2021 | Bank prime rate | ||||||
Debt | ||||||
Variable interest rate | bank prime rate | |||||
Interest rate added to base (as a percent) | 0.25% | |||||
Unsecured term loan due from March 30, 2018 to September 30, 2021 | ||||||
Debt | ||||||
Maximum borrowing capacity | $ 600 | |||||
Total | $ 562.5 | $ 600 | ||||
Annual amortization of term loan through September 2018 (as a percent) | 5.00% | |||||
Annual amortization of term loan thereafter until June 2021 (as a percent) | 10.00% | |||||
Weighted average fixed interest rate (as a percent) | 2.82% | 2.02% | ||||
Unsecured term loan due from March 30, 2018 to September 30, 2021 | LIBOR | ||||||
Debt | ||||||
Variable interest rate | LIBOR | |||||
Interest rate added to base (as a percent) | 1.25% | |||||
Unsecured term loan due from March 30, 2018 to September 30, 2021 | Bank prime rate | ||||||
Debt | ||||||
Variable interest rate | bank prime rate | |||||
Interest rate added to base (as a percent) | 0.25% | |||||
Senior Unsecured Notes | ||||||
Debt | ||||||
Percentage of principal amount at which the notes may be required to be repurchased in event of a change of control and a downgrade of the entity's credit rating | 101.00% | |||||
Senior unsecured notes issued November 20, 2006 | ||||||
Debt | ||||||
Issuance of debt | $ 600 | |||||
Number of tranches comprising the debt issuance | tranche | 2 | |||||
Senior unsecured notes due November 15, 2016 | ||||||
Debt | ||||||
Total | $ 0 | |||||
Interest rate (as a percent) | 6.20% | |||||
Lump sum payment on maturity | $ 350 | |||||
Issuance of debt | $ 350 | |||||
Senior unsecured notes due April 15, 2023 | ||||||
Debt | ||||||
Total | $ 500 | $ 500 | ||||
Interest rate (as a percent) | 4.50% | |||||
Issuance of debt | $ 500 | |||||
Senior unsecured notes due November 15, 2036 | ||||||
Debt | ||||||
Total | 250 | 250 | ||||
Interest rate (as a percent) | 6.85% | |||||
Issuance of debt | $ 250 | |||||
Other notes and revolving credit facilities | ||||||
Debt | ||||||
Maximum borrowing capacity | 70.3 | |||||
Lines of credit | 53.9 | 44.4 | ||||
IRB | ||||||
Debt | ||||||
Total | $ 10.1 | $ 10.6 |
Income Taxes - Summary, Reconci
Income Taxes - Summary, Reconciliation and Other (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | ||||
Federal | $ 117.8 | $ 91.1 | $ 129.5 | |
State | 21.5 | 18.9 | 21.3 | |
Foreign | 16.1 | 10.6 | 8.8 | |
Total | 155.4 | 120.6 | 159.6 | |
Deferred: | ||||
Federal | (202.8) | 3 | (11.7) | |
State | 11.1 | 1 | (4.5) | |
Foreign | (0.9) | (4.5) | (0.9) | |
Total | (192.6) | (0.5) | (17.1) | |
Income tax provision | (37.2) | 120.1 | 142.5 | |
Components of U.S. and international income before income taxes | ||||
US | 524.6 | 411 | 427.3 | |
International | 59.2 | 18.2 | 31.4 | |
Income before income taxes | $ 583.8 | $ 429.2 | $ 458.7 | |
Reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense | ||||
Income tax at U.S. federal statutory tax rate (as a percent) | 21.00% | 35.00% | 35.00% | 35.00% |
Tax reform (as a percent) | (35.50%) | |||
State income tax, net of federal tax effect (as a percent) | 3.80% | 3.10% | 2.00% | |
Foreign earnings taxed at lower rates | (0.70%) | (0.80%) | (0.80%) | |
Net effect of life insurance policies (as a percent) | (3.60%) | (4.20%) | (3.60%) | |
Net effect of changes in unrecognized tax benefits (as a percent) | (0.20%) | (4.30%) | 0.70% | |
Domestic production activity deduction (as a percent) | (1.60%) | (1.70%) | (2.00%) | |
Loss on sale of assets (as a percent) | (0.80%) | |||
Other, net (as a percent) | (2.80%) | 0.90% | (0.20%) | |
Effective tax rate (as a percent) | (6.40%) | 28.00% | 31.10% | |
Deferred tax assets: | ||||
Accrued expenses not currently deductible for tax | $ 34.8 | $ 77.6 | ||
Inventory costs capitalized for tax purposes | 23.1 | 29.2 | ||
Share-based compensation | 10.5 | 12 | ||
Allowance for doubtful accounts | 3.4 | 5.3 | ||
Tax credits carryforwards | 1.3 | 1.3 | ||
Net operating loss carryforwards | 5.6 | 4.7 | ||
Total deferred tax assets | 78.7 | 130.1 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment, net | (159.7) | (238.6) | ||
Goodwill and other intangible assets | (307.3) | (451.2) | ||
LIFO inventories | (39.5) | (54.1) | ||
Deferred income | (0.8) | (7.1) | ||
Other | (12.2) | (6) | ||
Total deferred tax liabilities | (519.5) | (757) | ||
Net deferred tax liabilities | (440.8) | $ (626.9) | ||
Tax Cuts and Jobs Act of 2017 | ||||
Effect of tax rate changes on deferred tax assets and liabilities | 216.7 | |||
Repatriation and related liabilities | (9.4) | |||
Tax benefit, net | $ 207.3 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits | |||
Balance at the beginning of the year | $ 5.2 | $ 22.9 | $ 20.2 |
Increases in tax positions for prior years | 0.4 | 0.3 | |
Decreases in tax positions for prior years | (0.1) | (0.6) | (1.7) |
Increases in tax positions for current year | 0.1 | 4.2 | |
Settlements | (0.2) | (17.6) | (0.1) |
Lapses in statutes-of-limitation periods | (0.8) | ||
Balance at the end of the year | 4.1 | 5.2 | $ 22.9 |
Unrecognized tax benefits, if recognized, would affect the effective tax rate | 4.1 | ||
Accrued interest and penalties on uncertain tax positions | 0.5 | $ 0.7 | |
State | |||
Income Taxes | |||
Operating Loss Carryforwards | $ 6.3 |
Stock-Based Compensation Plan61
Stock-Based Compensation Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation plans | |||
Shares authorized for future grant | 1,745,716 | ||
Additional share-based compensation disclosures | |||
Proceed from option exercises | $ 5.2 | $ 37.5 | $ 15.1 |
Stock options | |||
Number of shares | |||
Outstanding at the beginning of the year (in shares) | 180,680 | 934,325 | 1,327,412 |
Exercised (in shares) | (98,405) | (753,645) | (390,606) |
Expired or forfeited (in shares) | (7,000) | (2,481) | |
Outstanding at the end of the year (in shares) | 75,275 | 180,680 | 934,325 |
Exercisable at the end of the year (in shares) | 75,275 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the year, Weighted Average Exercise Price (in dollars per share) | $ 52.61 | $ 50.26 | $ 49.66 |
Exercised, Weighted Average Exercise Price (in dollars per share) | 52.41 | 49.70 | 48.19 |
Expired or forfeited, Weighted Average Exercise Price (in dollars per share) | 58.68 | 51.96 | |
Outstanding at the end of the year, Weighted Average Exercise Price (in dollars per share) | 52.30 | $ 52.61 | $ 50.26 |
Exercisable at the end of the year, Weighted Average Exercise Price (in dollars per share) | $ 52.30 | ||
Weighted Average Remaining Contractual Term | |||
Weighted Average Remaining Contractual Term, stock options outstanding (in years) | 10 months 24 days | ||
Weighted Average Remaining Contractual Term, stock options exercisable (in years) | 10 months 24 days | ||
Aggregate Intrinsic Value (In millions) | |||
Aggregate Intrinsic Value, options outstanding | $ 2.5 | ||
Aggregate Intrinsic Value, options exercisable | $ 2.5 | ||
Vesting period (in years) | 4 years | ||
Award expiration term (in years) | 7 years | ||
Changes in non-vested stock options | |||
Non-vested | 0 | 0 | |
Additional share-based compensation disclosures | |||
Proceed from option exercises | $ 5.2 | $ 37.5 | $ 15.1 |
Total intrinsic value of all options exercised | 2.8 | 16.3 | 4.8 |
Tax benefit realized from option exercises | $ 8.4 | $ 14.3 | $ 7.6 |
Stock options | Non-employee director | |||
Number of shares | |||
Outstanding at the end of the year (in shares) | 40,000 | ||
Aggregate Intrinsic Value (In millions) | |||
Vesting period (in years) | 1 year | ||
Options with ten-year term | Non-employee director | |||
Aggregate Intrinsic Value (In millions) | |||
Award expiration term (in years) | 10 years |
Stock-Based Compensation Plan62
Stock-Based Compensation Plans - Outstanding and Exercisable Options (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Stock Option Plans | |
Range of exercise price, lower limit (in dollars per share) | $ 38 |
Range of exercise price, upper limit (in dollars per share) | $ 67 |
Options Outstanding and Exercisable (in shares) | shares | 75,275 |
Options Outstanding and Exercisable, Weighted Average Remaining Contractual Life (In Years) | 10 months 24 days |
Options Outstanding and Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 52.30 |
Exercise Price $38 | |
Stock Option Plans | |
Weighted Average Exercise Price of Options Exercisable (in dollars per share) | $ 38 |
Options Outstanding and Exercisable (in shares) | shares | 12,000 |
Options Outstanding and Exercisable, Weighted Average Remaining Contractual Life (In Years) | 1 year 4 months 24 days |
Options Outstanding and Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 38 |
Range of Exercise Price $44 - $45 | |
Stock Option Plans | |
Range of exercise price, lower limit (in dollars per share) | 44 |
Range of exercise price, upper limit (in dollars per share) | $ 45 |
Options Outstanding and Exercisable (in shares) | shares | 16,000 |
Options Outstanding and Exercisable, Weighted Average Remaining Contractual Life (In Years) | 2 years 4 months 24 days |
Options Outstanding and Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 44.99 |
Range of Exercise Price $55 - $56 | |
Stock Option Plans | |
Range of exercise price, lower limit (in dollars per share) | 55 |
Range of exercise price, upper limit (in dollars per share) | $ 56 |
Options Outstanding and Exercisable (in shares) | shares | 35,275 |
Options Outstanding and Exercisable, Weighted Average Remaining Contractual Life (In Years) | 1 month 6 days |
Options Outstanding and Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 55.73 |
Range of Exercise Price $66 - $67 | |
Stock Option Plans | |
Range of exercise price, lower limit (in dollars per share) | 66 |
Range of exercise price, upper limit (in dollars per share) | $ 67 |
Options Outstanding and Exercisable (in shares) | shares | 12,000 |
Options Outstanding and Exercisable, Weighted Average Remaining Contractual Life (In Years) | 4 months 24 days |
Options Outstanding and Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 66.28 |
Stock-Based Compensation Plan63
Stock-Based Compensation Plans - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Additional share-based compensation disclosures | ||||
Total unrecognized compensation cost | $ 39.5 | |||
Weighted average recognition period for unrecognized compensation cost (in years) | 1 year 3 months 29 days | |||
Restricted stock, 2017 grant | ||||
Restricted Shares | ||||
Awards granted (in shares) | 446,525 | |||
The number of grants made during the period on the basis of service and performance criteria other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan). | 169,009 | |||
Fair value of restricted stock granted (in dollars per share) | $ 79.60 | |||
Share of common stock | 1 | |||
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 446,525 | |||
Weighted Average Grant Date Fair Value | ||||
Granted (in dollars per shares) | $ 79.60 | |||
Restricted stock, 2016 grant | ||||
Restricted Shares | ||||
Awards granted (in shares) | 512,895 | |||
The number of grants made during the period on the basis of service and performance criteria other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan). | 190,175 | |||
Fair value of restricted stock granted (in dollars per share) | $ 69.16 | |||
Share of common stock | 1 | |||
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 512,895 | |||
Weighted Average Grant Date Fair Value | ||||
Granted (in dollars per shares) | $ 69.16 | |||
Restricted stock, 2015 grant | ||||
Restricted Shares | ||||
Awards granted (in shares) | 507,760 | |||
The number of grants made during the period on the basis of service and performance criteria other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan). | 185,450 | |||
Fair value of restricted stock granted (in dollars per share) | $ 59.27 | |||
Share of common stock | 1 | |||
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 507,760 | |||
Weighted Average Grant Date Fair Value | ||||
Granted (in dollars per shares) | $ 59.27 | |||
Restricted stock and RSUs | ||||
Restricted Shares | ||||
Awards granted (in shares) | 446,525 | |||
Fair value of restricted stock granted (in dollars per share) | $ 79.60 | |||
Number of shares unvested and outstanding | 985,540 | 985,540 | 924,575 | |
Changes restricted stock grants and RSUs | ||||
Unvested at the beginning of the period (in shares) | 985,540 | |||
Granted (in shares) | 446,525 | |||
Vested (in shares) | (467,968) | |||
Cancelled or forfeited (in shares) | (39,522) | |||
Unvested at the end of the period (in shares) | 924,575 | 985,540 | ||
Weighted Average Grant Date Fair Value | ||||
Unvested at the beginning of the period (in dollars per share) | $ 64.34 | |||
Granted (in dollars per shares) | 79.60 | |||
Vested (in dollars per shares) | 59.33 | |||
Cancelled or forfeited (in dollars per shares) | 67.99 | |||
Unvested at the end of the period (in dollars per shares) | $ 74.09 | $ 64.34 | ||
Restricted stock | ||||
Restricted Shares | ||||
Payments to tax authorities on employees' behalf for shares withheld related to share settlements | $ 9.3 | $ 6.4 | $ 4.5 | |
Time-based | RSU's | Former CEO | ||||
Restricted Shares | ||||
Awards granted (in shares) | 10,000 | |||
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 10,000 | |||
Performance-based | RSU's | ||||
Restricted Shares | ||||
Performance target period (in years) | 3 years | |||
Performance-based | RSU's | Former CEO | ||||
Restricted Shares | ||||
Awards granted (in shares) | 40,000 | |||
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 40,000 | |||
Directors Equity Plan | Restricted stock | ||||
Restricted Shares | ||||
Awards granted (in shares) | 18,120 | 11,851 | 12,719 | |
Fair value of restricted stock granted (in dollars per share) | $ 71.73 | $ 70.88 | $ 66.03 | |
Changes restricted stock grants and RSUs | ||||
Granted (in shares) | 18,120 | 11,851 | 12,719 | |
Weighted Average Grant Date Fair Value | ||||
Granted (in dollars per shares) | $ 71.73 | $ 70.88 | $ 66.03 |
Employee Benefits - Defined Con
Employee Benefits - Defined Contribution Plan Information (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plans | |
Eligibility period of service | 3 months |
Vesting percentage per year | 25.00% |
Employee Benefits - Summary of
Employee Benefits - Summary of SERPs and Defined Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefits | |||
Balances in Deferred Compensation Plan | $ 21.2 | $ 16.6 | |
Value of assets for funding future payouts under the deferred compensation plan | 20.2 | ||
Contributions to Multiemployer Plans | 5.4 | 5.3 | $ 5.2 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 73.3 | ||
Fair value of plan assets at end of year | 89 | 73.3 | |
Amounts recognized in the statement of financial position | |||
Noncurrent liabilities | (85.4) | (89.6) | |
Supplemental Executive Retirement Plans | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 48.5 | 49.4 | |
Service cost | 0.8 | 1.1 | 1 |
Interest cost | 1.1 | 1.6 | |
Actuarial loss | 1 | 1.1 | |
Benefits paid | (1.2) | (1.3) | |
Plan settlements | (13.6) | (3.4) | |
Benefit obligation at end of year | 36.6 | 48.5 | 49.4 |
Funded status | |||
Funded status of the plans | (36.6) | (48.5) | |
Items not yet recognized as component of net periodic pension expense | |||
Unrecognized net actuarial losses | 10.3 | 14.1 | |
Accumulated other comprehensive loss | 10.3 | 14.1 | |
Amounts recognized in the statement of financial position | |||
Current liabilities | (1.2) | (14.8) | |
Noncurrent liabilities | (35.4) | (33.7) | |
Accumulated other comprehensive loss | 10.3 | 14.1 | |
Net amount recognized | (26.3) | (34.4) | |
Accumulated benefit obligation | 32.6 | 44.2 | |
Components of net periodic benefit cost | |||
Service cost | 0.8 | 1.1 | 1 |
Interest cost | 1.1 | 1.6 | 1.3 |
Settlement loss | 3.7 | 1 | |
Prior service (credit) cost | (0.3) | ||
Amortization of net loss | 0.9 | 1.4 | 1.5 |
Net periodic benefit cost | $ 6.5 | $ 5.1 | $ 3.5 |
Weighted average assumptions to determine net cost | |||
Discount rate (as a percent) | 3.36% | 3.45% | 3.02% |
Rate of compensation increase (as a percent) | 6.00% | 6.00% | 6.00% |
Weighted average assumptions to determine benefit obligations | |||
Discount rate (as a percent) | 3.04% | 3.34% | |
Rate of compensation increase (as a percent) | 6.00% | 6.00% | |
Expected employer contributions during 2018 | $ 1.2 | ||
Defined Benefit Plans | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 95.9 | $ 96.3 | |
Service cost | 1.5 | 1.6 | $ 1.7 |
Interest cost | 3.7 | 3.9 | |
Actuarial loss | 6.2 | 0.6 | |
Benefits paid | (3.8) | (6.1) | |
Plan amendments | 0.2 | ||
Plan settlements | (0.2) | (0.4) | |
Benefit obligation at end of year | 103.5 | 95.9 | 96.3 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 73.3 | 70.2 | |
Actual return on plan assets | 9.9 | 3.9 | |
Employer contributions | 9.8 | 5.5 | |
Benefits paid | (4) | (6.3) | |
Fair value of plan assets at end of year | 89 | 73.3 | 70.2 |
Funded status | |||
Funded status of the plans | (14.5) | (22.6) | |
Items not yet recognized as component of net periodic pension expense | |||
Unrecognized net actuarial losses | 24.5 | 25.4 | |
Unamortized prior service cost | 2.1 | 2.3 | |
Accumulated other comprehensive loss | 26.6 | 27.7 | |
Amounts recognized in the statement of financial position | |||
Noncurrent liabilities | (14.5) | (22.6) | |
Accumulated other comprehensive loss | 26.6 | 27.7 | |
Net amount recognized | 12.1 | 5.1 | |
Accumulated benefit obligation | 103.5 | 95.9 | |
Information for defined benefit plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets | |||
Accumulated benefit obligation | 75.5 | 95.9 | |
Projected benefit obligation | 75.5 | 95.9 | |
Fair value of plan assets | 60.3 | 73.3 | |
Components of net periodic benefit cost | |||
Service cost | 1.5 | 1.6 | 1.7 |
Interest cost | 3.7 | 3.9 | 3.7 |
Expected return on plan assets | (4.4) | (4.6) | (5) |
Settlement loss | 0.1 | 0.1 | |
Prior service (credit) cost | 0.3 | 0.3 | 0.2 |
Amortization of net loss | 1.5 | 1.5 | 1.8 |
Net periodic benefit cost | $ 2.7 | $ 2.8 | $ 2.4 |
Weighted average assumptions to determine net cost | |||
Discount rate (as a percent) | 3.93% | 4.13% | 3.87% |
Expected long-term rate of return on plan assets (as a percent) | 6.17% | 6.57% | 6.59% |
Weighted average assumptions to determine benefit obligations | |||
Discount rate (as a percent) | 3.47% | 3.93% | |
Expected long-term rate of return on plan assets (as a percent) | 6.17% | 6.57% | |
Expected employer contributions during 2018 | $ 1.6 | ||
Warehouse, delivery, selling, general and administrative expense | Supplemental Executive Retirement Plans | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | 0.8 | $ 1.1 | $ 1 |
Warehouse, delivery, selling, general and administrative expense | Defined Benefit Plans | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | 1.5 | 1.6 | 1.7 |
Other expenses, net | Supplemental Executive Retirement Plans | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | 5.7 | 4 | 2.5 |
Other expenses, net | Defined Benefit Plans | |||
Components of net periodic benefit cost | |||
Net periodic benefit cost | $ 1.2 | $ 1.2 | $ 0.7 |
Employee Benefits - Plan Assets
Employee Benefits - Plan Assets and Investment Policy (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Benefits | ||
Weighted-average asset allocations (as a percent) | 100.00% | 100.00% |
Fair value of plan assets | $ 89 | $ 73.3 |
Level 1 | ||
Employee Benefits | ||
Fair value of plan assets | 63.4 | 52.7 |
Level 2 | ||
Employee Benefits | ||
Fair value of plan assets | 25.6 | 20.6 |
Equity securities | ||
Employee Benefits | ||
Fair value of plan assets | 26.7 | 23.5 |
Equity securities | Level 1 | ||
Employee Benefits | ||
Fair value of plan assets | 26.7 | 23.5 |
U.S. government, state, and agency | ||
Employee Benefits | ||
Fair value of plan assets | 4.7 | 7.3 |
U.S. government, state, and agency | Level 2 | ||
Employee Benefits | ||
Fair value of plan assets | 4.7 | 7.3 |
Corporate debt securities | ||
Employee Benefits | ||
Fair value of plan assets | 17.4 | 10.3 |
Corporate debt securities | Level 2 | ||
Employee Benefits | ||
Fair value of plan assets | 17.4 | 10.3 |
Mutual funds | ||
Employee Benefits | ||
Fair value of plan assets | 34.3 | 29.3 |
Mutual funds | Level 1 | ||
Employee Benefits | ||
Fair value of plan assets | 30.8 | 26.3 |
Mutual funds | Level 2 | ||
Employee Benefits | ||
Fair value of plan assets | 3.5 | 3 |
Interest and non-interest bearing cash | ||
Employee Benefits | ||
Fair value of plan assets | 5.9 | 2.9 |
Interest and non-interest bearing cash | Level 1 | ||
Employee Benefits | ||
Fair value of plan assets | $ 5.9 | $ 2.9 |
Equity securities | ||
Employee Benefits | ||
Weighted-average asset allocations (as a percent) | 55.00% | 58.00% |
Target allocation | ||
Target allocation, minimum (as a percent) | 35.00% | |
Target allocation, maximum (as a percent) | 65.00% | |
Debt securities | ||
Employee Benefits | ||
Weighted-average asset allocations (as a percent) | 38.00% | 38.00% |
Target allocation | ||
Target allocation, minimum (as a percent) | 15.00% | |
Target allocation, maximum (as a percent) | 45.00% | |
Other | ||
Employee Benefits | ||
Weighted-average asset allocations (as a percent) | 7.00% | 4.00% |
Target allocation | ||
Target allocation, minimum (as a percent) | 0.00% | |
Target allocation, maximum (as a percent) | 15.00% |
Employee Benefits - Postretirem
Employee Benefits - Postretirement Plan and Summary Information for All Defined Benefit Plans (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2006 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Executive Retirement Plans | ||||
Summary of benefit payments under the Company's various defined benefit plans, which reflect expected future employee service, as appropriate, expected to be paid in the future periods | ||||
2,018 | $ 1.2 | |||
2,019 | 1.1 | |||
2,020 | 13.5 | |||
2,021 | 1.1 | |||
2,022 | 8.3 | |||
2023-2027 | 4.6 | |||
Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during 2018 | ||||
Actuarial loss | 1 | |||
Total | 1 | |||
Defined Benefit Plans | ||||
Summary of benefit payments under the Company's various defined benefit plans, which reflect expected future employee service, as appropriate, expected to be paid in the future periods | ||||
2,018 | 4.2 | |||
2,019 | 4.4 | |||
2,020 | 4.5 | |||
2,021 | 4.7 | |||
2,022 | 4.9 | |||
2023-2027 | 27.4 | |||
Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during 2018 | ||||
Actuarial loss | 1.4 | |||
Prior service cost | 0.3 | |||
Total | $ 1.7 | |||
Supplemental Bonus Plan | ||||
Stock-Based Compensation | ||||
Number of shares of the entity to be contributed to the plan as a result of acquisition | 258,006 | |||
Share liability to the plan to be settled in cash | 75,379 | |||
Cash equivalent of share liability to the plan | $ 6.5 | |||
Expense (income) from mark to market adjustment | $ 0.6 | $ 2.1 | $ (0.2) |
Employee Benefits - Supplementa
Employee Benefits - Supplemental Bonus Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | $ 45.9 | $ 41.2 | $ 37.3 |
Master Plan | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | 25 | 22.3 | 21.4 |
Other Defined Contribution Plans | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | 9 | 8.5 | 7.9 |
Employee Stock Ownership Plan | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | 1.8 | 1.8 | 1.5 |
Deferred Compensation Plan | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | 0.9 | 0.7 | 0.6 |
Supplemental Executive Retirement Plans | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | 6.5 | 5.1 | 3.5 |
Defined Benefit Plans | |||
Contributions to Company Sponsored Retirement Plans | |||
Company's expense for Reliance-sponsored retirement plans | $ 2.7 | $ 2.8 | $ 2.4 |
Equity - Reincorporation, Commo
Equity - Reincorporation, Common Stock (Details) | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2018$ / shares | Feb. 28, 2017$ / shares | Jul. 31, 2016$ / shares | Feb. 28, 2015$ / shares | Dec. 31, 2017item$ / shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | |
Common Stock | |||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | 0.001 | |||||
The number of consecutive years the company has paid regular common stock quarterly dividends. | item | 58 | ||||||
Votes per share of common stock | item | 1 | ||||||
Common stock quarterly dividend per share (in dollars per share) | $ 0.50 | $ 0.45 | $ 0.425 | $ 0.40 | $ 1.80 | $ 1.65 | $ 1.60 |
Equity - Share Repurchase Plan,
Equity - Share Repurchase Plan, Preferred Stock (Details) $ / shares in Units, $ in Millions | Oct. 20, 2015shares | Dec. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Share Repurchase Plan | |||||
Increase in authorized number of shares to be repurchased | 7,500,000 | ||||
Repurchase of common shares (in shares) | 300,000 | 0 | 6,200,000 | 22,500,000 | |
Average costs per share | $ / shares | $ 74.27 | $ 57.39 | $ 31.58 | ||
Value of shares repurchased | $ | $ 25 | $ 355.5 | |||
Remaining number of common stock authorized for repurchase under stock repurchase program (in shares) | 8,100,000 | 8,100,000 | |||
Percent of outstanding stock authorized for repurchase | 11.00% | 11.00% | |||
Preferred Stock | |||||
Preferred stock, authorized shares | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, issued shares | 0 | 0 | 0 | ||
Preferred stock, outstanding shares | 0 | 0 | 0 | ||
Minimum number of series in which preferred shares may be issued | item | 1 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation (Details) $ in Millions | Jan. 01, 2016USD ($) |
Early Adoption | Improvements to Employee Share-Based Payment Accounting | |
Impact of Recently Issued Accounting Standards—Adopted | |
Cumulative-effect adjustment | $ 0.6 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the year | $ (104.7) | |
Current-year change | 33.1 | |
Balance as of December 31, 2017 | (71.6) | |
Deferred tax assets in accumulated other comprehensive loss, pension liabilities | 13.6 | $ 14.9 |
Foreign Currency Translation (Loss) Gain | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the year | (79.9) | |
Current-year change | 28.8 | |
Balance as of December 31, 2017 | (51.1) | |
Pension and Postretirement Benefit Adjustments, Net of Tax | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the year | (24.8) | |
Current-year change | 4.3 | |
Balance as of December 31, 2017 | $ (20.5) |
Other Expense, net (Details)
Other Expense, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Significant components of Other Expense, net | |||
Other Expense, net | $ 4.7 | $ 4 | $ 6.8 |
Investment income from life insurance policies | |||
Significant components of Other Expense, net | |||
Other Expense, net | (66.4) | (60.8) | (55.3) |
Interest expense on life insurance policy loans | |||
Significant components of Other Expense, net | |||
Other Expense, net | 66.5 | 62.1 | 57.4 |
Life insurance policy cost of insurance | |||
Significant components of Other Expense, net | |||
Other Expense, net | 11.5 | 10.9 | 10.1 |
Income from life insurance policy redemptions | |||
Significant components of Other Expense, net | |||
Other Expense, net | (8.5) | (4.4) | (4.2) |
Foreign currency transaction losses (gains) | |||
Significant components of Other Expense, net | |||
Other Expense, net | 4.9 | (1.8) | |
Net periodic benefit cost - components other than service cost | |||
Significant components of Other Expense, net | |||
Other Expense, net | 6.9 | 5.2 | 3.2 |
All other, net | |||
Significant components of Other Expense, net | |||
Other Expense, net | $ (10.2) | $ (7.2) | $ (4.4) |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Lease Commitments | |||
Minimum term of non-cancelable lease commitments for further disclosure | 1 year | ||
Rental expense | $ 77.9 | $ 78.9 | $ 80 |
Operating lease payments due to various related parties | 3.4 | $ 3.6 | $ 5.2 |
Operating Leases | |||
2,018 | 62.7 | ||
2,019 | 50.1 | ||
2,020 | 35.1 | ||
2,021 | 21.9 | ||
2,022 | 13.6 | ||
Thereafter | 17.7 | ||
Total | $ 201.1 |
Commitments and Contingencies75
Commitments and Contingencies - Purchase Commitments (Details) - Steel Products $ in Millions | Dec. 31, 2017USD ($) |
Purchase Commitments | |
Total amount of purchase commitments | $ 126.2 |
2,018 | 38.9 |
2,019 | 28.1 |
Thereafter | $ 59.2 |
Commitments and Contingencies76
Commitments and Contingencies - Collective Bargaining Agreements and Environmental Contingencies (Details) | 12 Months Ended |
Dec. 31, 2017employeeitemlocation | |
Employees covered by collective bargaining agreements | |
Collective Bargaining Agreements | |
Number of Location Entity Operates | location | 53 |
Expiration period of collective bargaining agreements | 8 years |
Total employees | Employees covered by collective bargaining agreements | |
Collective Bargaining Agreements | |
Percentage of employees covered by collective bargaining agreements | 12.00% |
Number of employees | employee | 1,770 |
Number of collective bargaining agreements that expire over the next five years | item | 41 |
Employees covered by collective bargaining agreements that expire during 2018 | |
Collective Bargaining Agreements | |
Number of employees | employee | 600 |
Employees covered by collective bargaining agreements that expire during 2018 | Employees covered by collective bargaining agreements | |
Collective Bargaining Agreements | |
Number of collective bargaining agreements that expire within one year | item | 23 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income attributable to Reliance | $ 301.4 | $ 97.3 | $ 103 | $ 111.7 | $ 61.7 | $ 49.5 | $ 100.9 | $ 92.2 | $ 613.4 | $ 304.3 | $ 311.5 |
Denominator: | |||||||||||
Weighted average shares outstanding (in shares) | 72,851,021 | 72,362,513 | 74,096,349 | ||||||||
Dilutive effect of stock-based awards (in shares) | 688,403 | 758,405 | 805,715 | ||||||||
Weighted average diluted shares outstanding (in shares) | 73,539,424 | 73,120,918 | 74,902,064 | ||||||||
Earnings per share attributable to Reliance stockholders - diluted (in dollars per share) | $ 4.09 | $ 1.32 | $ 1.40 | $ 1.52 | $ 0.84 | $ 0.68 | $ 1.38 | $ 1.27 | $ 8.34 | $ 4.16 | $ 4.16 |
Earnings per share attributable to Reliance stockholders - basic (in dollars per share) | $ 4.14 | $ 1.33 | $ 1.41 | $ 1.53 | $ 0.85 | $ 0.68 | $ 1.39 | $ 1.28 | $ 8.42 | $ 4.21 | $ 4.20 |
Segment Information - Summary o
Segment Information - Summary of sale by product and service (Details) - item | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Information | |||
Number of reportable segments | 1 | 1 | 1 |
Sales (as a percent) | 100.00% | 100.00% | 100.00% |
Carbon steel | |||
Segment Information | |||
Sales (as a percent) | 52.00% | 52.00% | 52.00% |
Aluminum | |||
Segment Information | |||
Sales (as a percent) | 19.00% | 20.00% | 19.00% |
Stainless steel | |||
Segment Information | |||
Sales (as a percent) | 14.00% | 14.00% | 14.00% |
Alloy | |||
Segment Information | |||
Sales (as a percent) | 6.00% | 5.00% | 7.00% |
Toll processing and logistics | |||
Segment Information | |||
Sales (as a percent) | 4.00% | 4.00% | 3.00% |
Other | |||
Segment Information | |||
Sales (as a percent) | 5.00% | 5.00% | 5.00% |
Segment Information - Geographi
Segment Information - Geographic Location (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated financial information of the Company's operations by geographic location | |||||||||||
Net sales | $ 2,376.4 | $ 2,450.1 | $ 2,475.2 | $ 2,419.3 | $ 2,061.6 | $ 2,185.2 | $ 2,203.9 | $ 2,162.7 | $ 9,721 | $ 8,613.4 | $ 9,350.5 |
Long-lived assets | 4,699.7 | 4,722.8 | 4,699.7 | 4,722.8 | 4,567.4 | ||||||
United States | |||||||||||
Consolidated financial information of the Company's operations by geographic location | |||||||||||
Net sales | 8,847.3 | 7,867.3 | 8,617.7 | ||||||||
Long-lived assets | 4,353.7 | 4,385.2 | 4,353.7 | 4,385.2 | 4,211.5 | ||||||
Foreign Countries | |||||||||||
Consolidated financial information of the Company's operations by geographic location | |||||||||||
Net sales | 873.7 | 746.1 | 732.8 | ||||||||
Long-lived assets | $ 346 | $ 337.6 | $ 346 | $ 337.6 | $ 355.9 |
Impairment and Restructuring 80
Impairment and Restructuring Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment and Restructuring Charges | |||
Property, plant and equipment | $ 4.2 | $ 16 | $ 17.7 |
Intangible assets, net | 36.4 | 35.6 | |
Total impairment charges | 4.2 | 52.4 | 53.3 |
Total impairment and restructuring charges | 4.1 | 69.1 | 56.3 |
Cost of sales | |||
Impairment and Restructuring Charges | |||
Restructuring | (0.2) | 12.8 | 1.6 |
Warehouse, delivery, selling, general and administrative expense | |||
Impairment and Restructuring Charges | |||
Restructuring | $ 0.1 | 2.9 | 1 |
Depreciation expense | |||
Impairment and Restructuring Charges | |||
Restructuring | $ 0.4 | ||
Non-operating expense | |||
Impairment and Restructuring Charges | |||
Restructuring | $ 1 |
Quarterly Financial Informati81
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of the quarterly results of operations | |||||||||||
Net sales | $ 2,376.4 | $ 2,450.1 | $ 2,475.2 | $ 2,419.3 | $ 2,061.6 | $ 2,185.2 | $ 2,203.9 | $ 2,162.7 | $ 9,721 | $ 8,613.4 | $ 9,350.5 |
Cost of sales | 1,697.8 | 1,764.6 | 1,773.1 | 1,697.7 | 1,447.7 | 1,530.6 | 1,518.8 | 1,526 | 6,933.2 | 6,023.1 | 6,803.6 |
Gross profit | 678.6 | 685.5 | 702.1 | 721.6 | 613.9 | 654.6 | 685.1 | 636.7 | |||
Net income | 303.8 | 99 | 104.8 | 113.4 | 62.9 | 50.6 | 102.1 | 93.5 | 621 | 309.1 | 316.2 |
Net income attributable to Reliance | $ 301.4 | $ 97.3 | $ 103 | $ 111.7 | $ 61.7 | $ 49.5 | $ 100.9 | $ 92.2 | $ 613.4 | $ 304.3 | $ 311.5 |
Diluted earnings per common share (in dollars per share) | $ 4.09 | $ 1.32 | $ 1.40 | $ 1.52 | $ 0.84 | $ 0.68 | $ 1.38 | $ 1.27 | $ 8.34 | $ 4.16 | $ 4.16 |
Basic earnings per common share (in dollars per share) | $ 4.14 | $ 1.33 | $ 1.41 | $ 1.53 | $ 0.85 | $ 0.68 | $ 1.39 | $ 1.28 | $ 8.42 | $ 4.21 | $ 4.20 |
SCHEDULE II - VALUATION AND Q82
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for doubtful accounts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 15.3 | $ 16.3 | $ 18.3 |
Additions Charged to Costs and Expenses | 6.7 | 5.2 | 4.7 |
Deductions | 6.5 | 6.5 | 6.7 |
Amounts Charged to Other Accounts | 0.3 | ||
Balance at End of Period | $ 15.5 | $ 15.3 | $ 16.3 |