Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 26, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | RELIANCE STEEL & ALUMINUM CO | |
Entity Central Index Key | 861,884 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,432,046 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 112.1 | $ 154.4 |
Accounts receivable, less allowance for doubtful accounts of $21.5 at September 30, 2018 and $15.5 at December 31, 2017 | 1,425.8 | 1,087.3 |
Inventories | 2,083.7 | 1,726 |
Prepaid expenses and other current assets | 71 | 80.7 |
Income taxes receivable | 2.9 | |
Total current assets | 3,692.6 | 3,051.3 |
Property, plant and equipment: | ||
Land | 231.1 | 229.7 |
Buildings | 1,136.3 | 1,095.3 |
Machinery and equipment | 1,830.7 | 1,738.6 |
Accumulated depreciation | (1,516.7) | (1,407.3) |
Property, plant and equipment, net | 1,681.4 | 1,656.3 |
Goodwill | 1,853.3 | 1,842.6 |
Intangible assets, net | 1,064.5 | 1,112.1 |
Cash surrender value of life insurance policies, net | 34.6 | 47.8 |
Other assets | 46.2 | 40.9 |
Total assets | 8,372.6 | 7,751 |
Current liabilities: | ||
Accounts payable | 461.2 | 346.7 |
Accrued expenses | 89 | 83.6 |
Accrued compensation and retirement costs | 156.7 | 139.3 |
Accrued insurance costs | 41.4 | 42.1 |
Current maturities of long-term debt and short-term borrowings | 89.1 | 92 |
Income taxes payable | 2.6 | |
Total current liabilities | 840 | 703.7 |
Long-term debt | 1,981.1 | 1,809.4 |
Long-term retirement costs | 76.5 | 85.4 |
Other long-term liabilities | 14.3 | 11.8 |
Deferred income taxes | 430.4 | 440.8 |
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 – 71,443,121 at September 30, 2018 and 72,609,540 at December 31, 2017 | 495.6 | 594.6 |
Retained earnings | 4,583 | 4,144.1 |
Accumulated other comprehensive loss | (83.1) | (71.6) |
Total Reliance stockholders' equity | 4,995.5 | 4,667.1 |
Noncontrolling interests | 34.8 | 32.8 |
Total equity | 5,030.3 | 4,699.9 |
Total liabilities and equity | $ 8,372.6 | $ 7,751 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 21.5 | $ 15.5 |
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 | 71,443,121 | 72,609,540 |
Common stock, outstanding shares | 71,443,121 | 72,609,540 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 2,974.5 | $ 2,450.1 | $ 8,720.5 | $ 7,344.6 |
Costs and expenses: | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,140.2 | 1,764.6 | 6,148.8 | 5,235.4 |
Warehouse, delivery, selling, general and administrative | 531 | 470 | 1,586.3 | 1,422.1 |
Depreciation and amortization | 53.4 | 54 | 161.8 | 164.2 |
Impairment of long-lived assets | 35.5 | 2.8 | 35.5 | 2.8 |
Total costs and expenses | 2,760.1 | 2,291.4 | 7,932.4 | 6,824.5 |
Operating income | 214.4 | 158.7 | 788.1 | 520.1 |
Other (income) expense: | ||||
Interest expense | 22 | 19.1 | 62.6 | 54.9 |
Other (income) expense, net | (2.5) | (2.6) | (1.2) | 2.1 |
Income before income taxes | 194.9 | 142.2 | 726.7 | 463.1 |
Income tax provision | 44.6 | 43.2 | 172.2 | 145.9 |
Net income | 150.3 | 99 | 554.5 | 317.2 |
Less: Net income attributable to noncontrolling interests | 2 | 1.7 | 6.4 | 5.2 |
Net income attributable to Reliance | $ 148.3 | $ 97.3 | $ 548.1 | $ 312 |
Earnings per share attributable to Reliance stockholders: | ||||
Diluted earnings per common share (in dollars per share) | $ 2.03 | $ 1.32 | $ 7.49 | $ 4.24 |
Basic earnings per common share (in dollars per share) | 2.06 | 1.33 | 7.57 | 4.28 |
Cash dividends per share (in dollars per share) | $ 0.50 | $ 0.45 | $ 1.50 | $ 1.35 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 150.3 | $ 99 | $ 554.5 | $ 317.2 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss) | 2.6 | 10.5 | (11.5) | 24.5 |
Pension and postretirement benefit adjustments, net of tax | 2.3 | |||
Total other comprehensive income (loss) | 2.6 | 10.5 | (11.5) | 26.8 |
Comprehensive income | 152.9 | 109.5 | 543 | 344 |
Less: Comprehensive income attributable to noncontrolling interests | 2 | 1.7 | 6.4 | 5.2 |
Comprehensive income attributable to Reliance | $ 150.9 | $ 107.8 | $ 536.6 | $ 338.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income | $ 554.5 | $ 317.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 161.8 | 164.2 |
Impairment of long-lived assets | 35.5 | 2.8 |
Provision for uncollectible accounts | 8.4 | 6.3 |
Deferred income tax benefit | (9.9) | (4.7) |
Gain on sales of property, plant and equipment | (1.2) | (8.4) |
Stock-based compensation expense | 33.8 | 23.3 |
Other | 6.8 | 4.9 |
Changes in operating assets and liabilities (excluding effect of businesses acquired): | ||
Accounts receivable | (339.6) | (208.9) |
Inventories | (352.2) | (235.5) |
Prepaid expenses and other assets | 9.9 | 12.6 |
Accounts payable and other liabilities | 125.5 | 124.5 |
Net cash provided by operating activities | 233.3 | 198.3 |
Investing activities: | ||
Purchases of property, plant and equipment | (152.6) | (118.1) |
Acquisitions, net of cash acquired | (55.6) | (1.3) |
Proceeds from sales of property, plant and equipment | 8.8 | 14 |
Other | 10.4 | 5.6 |
Net cash used in investing activities | (189) | (99.8) |
Financing activities: | ||
Net short-term debt (repayments) borrowings | (24.6) | 3.6 |
Proceeds from long-term debt borrowings | 941 | 674 |
Principal payments on long-term debt | (752.5) | (634.5) |
Dividends and dividend equivalents paid | (110.5) | (99.3) |
Exercise of stock options | 2.8 | 3.4 |
Share repurchases | (130.1) | |
Other | (9.9) | (5.3) |
Net cash used in financing activities | (83.8) | (58.1) |
Effect of exchange rate changes on cash and cash equivalents | (2.8) | 7 |
(Decrease) increase in cash and cash equivalents | (42.3) | 47.4 |
Cash and cash equivalents at beginning of year | 154.4 | 122.8 |
Cash and cash equivalents at end of period | 112.1 | 170.2 |
Supplemental cash flow information: | ||
Interest paid during the period | 50.6 | 44.2 |
Income taxes paid during the period, net | 171.4 | $ 135.2 |
Non-cash investing and financing activities: | ||
Debt assumed in connection with acquisitions | $ 3.3 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements, have been included. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results for the full year ending December 31, 2018. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, 2017, included in the Reliance Steel & Aluminum Co. (“Reliance”, the “Company”, “we”, “our” or “us”) Annual Report on Form 10-K. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. |
Impact of Recently Issued Accou
Impact of Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2018 | |
Impact of Recently Issued Accounting Guidance | |
Impact of Recently Issued Accounting Guidance | 2. Impact of Recently Issued Accounting Guidance Impact of Recently Issued Accounting Standards—Adopted Revenue from Contracts with Customers —In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting changes that replaced most of the detailed guidance on revenue recognition that previously existed 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 adopted these changes as of January 1, 2018 using the modified retrospective method. See Note 4—“Revenues” for further details. Classification of Certain Cash Receipts and Cash Payments —In August 2016, the FASB issued accounting changes that clarify 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. We adopted these changes as of January 1, 2018. The adoption of this standard did not have a material impact on our consolidated financial statements. Impact of Recently Issued Accounting Standards—Not Yet Adopted Leases — In February 2016, the FASB issued accounting changes that require lessees to recognize most long-term leases on the balance sheet through the recognition of a right-of-use asset and a lease liability using a modified retrospective transition method. In July 2018, the FASB issued an update to these accounting changes providing an additional, optional transition method that allows lessees the option to initially apply the new accounting changes at the adoption date and recognize a cumulative-effect adjustment to beginning retained earnings while continuing to present all prior periods under previous lease accounting guidance . 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 updating our accounting policies and internal controls that would be impacted by the new guidance. We anticipate adopting this new standard on January 1, 2019 using the optional transition method and the available practical expedients. 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, stockholders’ equity, or cash flows. We are unable to quantify the ultimate impact of adopting this new standard at this time as the actual impact will depend on the total amount of our lease commitments as of the adoption date. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income — In February 2018, the FASB issued accounting changes that allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) . The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period. The adoption of this standard will not have a material impact on our consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions | |
Acquisitions | 3. Acquisitions On August 1, 2018, we acquired KMS Fab, LLC and KMS South, Inc. (collectively, “KMS” or the “KMS Companies”). The KMS Companies are headquartered in Luzerne, Pennsylvania. The KMS Companies specialize in precision sheet metal fabrication ranging from prototypes to large production runs which utilize a wide variety of metals and fabrication methods including laser cutting, stamping, turret punching, machining, powder coating and welding. KMS’ net sales during the period from August 1, 2018 to September 30, 2018 were $4.6 million. On March 1, 2018, we acquired DuBose National Energy Services, Inc. (“DuBose Energy”) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (“DuBose Fasteners” and, together with DuBose Energy, “DuBose”). DuBose is headquartered in Clinton, North Carolina. DuBose specializes in fabrication, supply and distribution of metal and metal products to the nuclear industry, including utilities, component manufacturers and contractors. DuBose’s net sales during the period from March 1, 2018 to September 30, 2018 were $16.4 million. 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 for diverse end markets including industrial machinery, automotive, aerospace, sugar products and consumer electronics manufacturers. Ferguson’s net sales were $29.5 million for the nine months ended September 30, 2018. We funded our 2018 and 2017 acquisitions with borrowings on our revolving credit facility and cash on hand. The acquisitions discussed in this note have been accounted for under the acquisition method of accounting and, accordingly, the respective purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of each acquisition. The accompanying consolidated statements of income include the revenues and expenses of each acquisition since its respective acquisition date. The consolidated balance sheets reflect the allocation of each acquisition’s purchase price as of September 30, 2018 and December 31, 2017, as applicable. The purchase price allocations for our acquisitions of KMS and DuBose are preliminary and are pending the completion of various pre-acquisition period income tax returns. The measurement periods for purchase price allocations do not exceed 12 months from the acquisition date. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Revenues | 4. Revenues Revenue from Contracts with Customers On January 1, 2018, we adopted new accounting guidance relating to the recognition of revenue from contracts with our customers using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. We did not record a cumulative-effect adjustment to retained earnings upon adoption and comparable period financial statement amounts have not been adjusted. Our reported results for the nine months ended September 30, 2018 would not have been different if reported under the previous accounting standard. Revenue Recognition We recognize revenue when control of metal products or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. There are no significant judgments or estimates made to determine the amount or timing of our reported revenues. The amount of transaction price associated with unperformed performance obligations and the amount of our contract balances is not significant. The following table presents our sales disaggregated by product and service. Certain sales taxes or value-added taxes collected from customers are excluded from our reported sales. Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in millions) Carbon Steel $ 1,637.6 $ 1,319.5 $ 4,741.0 $ 3,936.8 Aluminum 559.9 475.3 1,680.1 1,446.2 Stainless Steel 418.7 343.3 1,250.6 1,038.6 Alloy 171.2 149.3 512.7 440.4 Toll processing and logistics 106.5 85.8 311.9 258.8 Other and eliminations 80.6 76.9 224.2 223.8 Total $ 2,974.5 $ 2,450.1 $ 8,720.5 $ 7,344.6 Metal Sales Metal product sales represented approximately 94% of our revenues for the nine months ended September 30, 2018. We have minimal long-term contract sales with our customers as we primarily transact in the “spot market” under fixed price sales orders. The majority of our metal product sales orders generally have only one performance obligation: sale of processed or unprocessed metal product. Control of the metal products we sell transfers to our customers upon delivery for orders with FOB destination terms or upon shipment for orders with FOB shipping point terms. Shipping and handling charges to our customers are included in net sales. We account for all shipping and handling of our products as fulfillment activities and not as a promised good or service. Costs incurred in connection with the shipping and handling of our products are typically included in operating expenses whether we use a third-party carrier or our own trucks. Shipment and delivery of our orders generally occur on the same day due to the close proximity of our customers and our metals service center locations. Toll Processing and Logistics Toll processing services relate to the processing of customer-owned metal. Logistics services primarily include transportation services for metal we toll-process. Revenue for these services is recognized over time as the toll processing or logistics services are performed. These services are generally short-term in nature with the service being performed in less than one day. Seasonality Some of our customers are in seasonal businesses, especially customers in the construction industry and related businesses. However, our overall operations have not shown any material seasonal trends as a result of our geographic, product and customer diversity. Typically, revenues in the months of July, November and December have been lower than in other months because of a reduced number of working days for shipments of our products, resulting from holidays observed by the Company as well as vacation and extended holiday closures at some of our customers. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill. | |
Goodwill | 5. Goodwill The change in the carrying amount of goodwill is as follows: (in millions) Balance at January 1, 2018 $ 1,842.6 Acquisitions 12.8 Effect of foreign currency translation (2.1) Balance at September 30, 2018 $ 1,853.3 We had no accumulated impairment losses related to goodwill at September 30, 2018. The goodwill recorded from our acquisitions of KMS and DuBose is tax deductible. |
Intangible Assets, net
Intangible Assets, net | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets, net | |
Intangible Assets, net | 6. Intangible Assets, net Intangible assets, net consisted of the following: September 30, 2018 December 31, 2017 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 $ 0.9 $ (0.5) $ 0.8 $ (0.4) Customer lists/relationships 15.1 698.2 (384.6) 745.0 (391.3) Software 10.0 8.1 (8.1) 8.1 (8.1) Other 7.6 1.0 (0.9) 6.3 (5.9) 708.2 (394.1) 760.2 (405.7) Intangible assets not subject to amortization: Trade names 750.4 — 757.6 — $ 1,458.6 $ (394.1) $ 1,517.8 $ (405.7) Intangible assets recorded in connection with our acquisitions of KMS and DuBose were $22.9 million as of September 30, 2018 (see Note 3—“Acquisitions” ). A total of $10.0 million was allocated to the trade names acquired, which is not subject to amortization. We recognized amortization expense for intangible assets of $35.1 million and $38.9 million for the nine months ended September 30, 2018 and 2017, respectively. Foreign currency translation losses related to intangible assets, net, were $1.5 million during the nine months ended September 30, 2018. During the three-month and nine-month periods ended September 30, 2018 we recognized impairment losses of $16.5 million and $16.7 million on our trade name and customer relationship intangible assets, respectively, related to one of our energy businesses. See Note 12—“Impairment and Restructuring Charges” for further discussion of our impairment losses. The following is a summary of estimated aggregate amortization expense for the remaining three months of 2018 and each of the succeeding five years: (in millions) 2018 (remaining three months) $ 10.5 2019 41.9 2020 41.9 2021 40.2 2022 35.5 2023 29.5 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt | |
Debt | 7. Debt Debt consisted of the following: September 30, December 31, 2018 2017 (in millions) Unsecured revolving credit facility due September 30, 2021 $ 753.0 $ 538.0 Unsecured term loan due from December 31, 2018 to September 30, 2021 540.0 562.5 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 38.3 64.0 Total 2,081.3 1,914.5 Less: unamortized discount and debt issuance costs (11.1) (13.1) Less: amounts due within one year and short-term borrowings (89.1) (92.0) Total long-term debt $ 1,981.1 $ 1,809.4 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 credit facility up to an additional $500.0 million at our request, subject to approval of the lenders and certain other customary conditions. Weighted average interest rates on borrowings outstanding on the revolving credit facility were 3.54% and 2.96% as of September 30, 2018 and December 31, 2017, respectively. Weighted average interest rates on borrowings outstanding on the term loan were 3.49% and 2.82% as of September 30, 2018 and December 31, 2017, respectively. 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. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to repurchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest. Other Notes and Revolving Credit Facilities Revolving credit facilities with a combined credit limit of approximately $62.1 million are in place for operations in Asia and Europe with combined outstanding balances of $28.5 million and $53.9 million as of September 30, 2018 and December 31, 2017, respectively. Various industrial revenue bonds had combined outstanding balances of $9.8 million as of September 30, 2018 and $10.1 million as of December 31, 2017, and have 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 maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | 8. Income Taxes Our effective income tax rates for the three-month periods ended September 30, 2018 and 2017 were 22.9% and 30.4%, respectively. Our effective income tax rates for the nine-month periods ended September 30, 2018 and 2017 were 23.7% and 31.5%, respectively. Our 2018 three-month and nine-month period effective income tax rates were favorably impacted by the Tax Cuts and Jobs Act of 2017 (“Tax Reform”), which included significant changes to the taxation of U.S. corporations, including a reduction of the U.S. federal statutory rate from 35% to 21%, effective January 1, 2018. Based on our preliminary assessment of the impact of Tax Reform, we recognized a one-time, provisional net tax benefit of $207.3 million in the fourth quarter of 2017, primarily related to the remeasurement of deferred tax assets and liabilities at the lowered federal statutory tax rate, which was partially offset by repatriation and related liabilities . Given the substantial changes to the Internal Revenue Code as a result of Tax Reform, our estimates of the financial impacts attributable to Tax Reform are subject to continuing analysis, interpretation and clarification of the new law, which could result in changes to our estimates in the fourth quarter of 2018. The adjustments to our provisional estimates during the nine months ended September 30, 2018 were not significant. State income taxes offset by the effects of company-owned life insurance policies mainly accounted for the difference between our effective income tax rate and the federal statutory rate for the nine months ended September 30, 2018 . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity | |
Equity | 9. Equity Common Stock and 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. On October 23, 2018, our Board of Directors amended our share repurchase plan, increasing the total authorized number of shares available to be repurchased by 5.0 million and extending the duration of the plan through December 31, 2021. As of October 23, 2018, we had authorization under the plan to repurchase approximately 10.7 million shares, or about 15% of our current outstanding shares. We repurchase shares through open market purchases under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). During the nine months ended September 30, 2018, we repurchased 1,510,916 shares of our common stock at an average cost of $86.48 per share for a total of $130.7 million. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares . Common stock and additional paid-in capital activity included the following: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Weighted Average Weighted Average Shares Amount Exercise Price Per Share Shares Amount Exercise Price Per Share (in millions, except share and per share amounts) Stock-based compensation (1) 3,984 $ 14.4 288,991 $ 28.3 Stock options exercised — — 48,275 2.8 $ Share repurchases (2) (918,352) (80.7) (1,510,916) (130.7) Total (914,368) $ (66.3) (1,173,650) $ (99.6) (1) The nine months ended September 30, 2018 amount is comprised of stock-based compensation expense of $33.8 million reduced by $5.5 million of payments we made to tax authorities on our employees’ behalf for shares withheld related to net share settlements. (2) Includes 7,231 shares for $0.6 million pending settlement at September 30, 2018. Dividends On October 23, 2018, our Board of Directors declared the 2018 fourth quarter cash dividend of $0.50 per share. The dividend is payable on December 7, 2018 to stockholders of record as of November 16, 2018. During the third quarters of 2018 and 2017, we declared and paid quarterly dividends of $0.50 and $0.45 per share, or $35.9 million and $32.8 million in total, respectively. During the nine months ended September 30, 2018 and 2017, we declared and paid quarterly dividends of $1.50 and $1.35 per share, or $108.5 million and $98.4 million in total, respectively. During the nine months ended September 30, 2018 and 2017, we paid $2.0 million and $0.9 million in dividend equivalents with respect to vested restricted stock units (“RSUs”), respectively. Stock-Based Compensation We make annual grants of long-term incentive awards to officers and key employees in the forms of service-based and performance-based RSUs that generally have approximately 3-year vesting periods. The performance-based RSU awards are subject to both service and performance goal criteria. We also make annual grants of stock to the non-employee members of the Board of Directors that include dividend rights and vest immediately upon grant. The fair value of the RSUs and stock grants is determined based on the closing stock price of our common stock on the grant date. A summary of the status of our unvested service-based and performance-based RSUs as of September 30, 2018 and changes during the nine-month period then ended is as follows: Weighted Average Grant Unvested Shares Shares Date Fair Value Unvested at January 1, 2018 924,575 $ Granted (1) 474,715 Vested (7,790) Cancelled or forfeited (20,160) Unvested at September 30, 2018 $ Shares reserved for future grants (all plans) (1) 474,715 RSUs, including 178,970 performance-based RSUs, were granted in March 2018. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss included the following: Pension and Accumulated Foreign Currency Postretirement Other Translation Benefit Adjustments, Comprehensive Loss Net of Tax Loss (in millions) Balance as of January 1, 2018 $ (51.1) $ (20.5) $ (71.6) Current-period change (11.5) — (11.5) Balance as of September 30, 2018 $ (62.6) $ (20.5) $ (83.1) Foreign currency translation adjustments have not been adjusted for income taxes. Pension and postretirement benefit adjustments are net of taxes of $13.6 million as of September 30, 2018 and December 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 10. Commitments and Contingencies Environmental Contingencies We are currently involved with an environmental remediation project related to activities at former manufacturing operations of Earle M. Jorgensen Company (“EMJ”), our wholly owned subsidiary, that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ maintained insurance policies during the time it owned the manufacturing operations that have covered costs incurred to date, and are expected to continue to cover the majority of the related costs. We do not expect that this obligation will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Legal Matters From time to time, we are named as a defendant in legal actions. Generally, these actions arise in the ordinary course of business. We are not currently a party to any pending legal proceedings other than routine litigation incidental to the business. We expect that these matters will be resolved without having a material adverse effect on our results of operations, financial condition or cash flows. We maintain general liability insurance against risks arising out of our normal course of business. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | 11. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (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 the three-month and nine-month periods ended September 30, 2018 and 2017. |
Impairment and Restructuring Ch
Impairment and Restructuring Charges | 9 Months Ended |
Sep. 30, 2018 | |
Impairment and Restructuring Charges | |
Impairment and Restructuring Charges | 12. Impairment and Restructuring Charges We recorded impairment and restructuring charges of $36.8 million in the three-month and nine-month periods ended September 30, 2018, compared to $2.1 million and $2.4 million in the three-month and nine-month periods ended September 30, 2017, respectively. The 2018 charges mainly related to our decision to downsize one of our energy businesses due to changes in competitive factors for certain of the products they sell. The measurement of these assets at fair value was determined using a combination of discounted cash flow techniques for intangible assets and the market approach for property, plant, and equipment. The impairment and restructuring charges (credits) consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in millions) Property, plant and equipment $ 2.3 $ 2.8 $ 2.3 $ 2.8 Intangible assets, net 33.2 — 33.2 — Total impairment charges 35.5 2.8 35.5 2.8 Restructuring –– cost of sales — — — (0.2) Restructuring –– warehouse, delivery, selling, general and administrative expense 1.3 (0.7) 1.3 (0.2) Total impairment and restructuring charges $ 36.8 $ 2.1 $ 36.8 $ 2.4 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Event On October 23, 2018, we purchased the remaining 40% noncontrolling interest of Acero Prime, S. de R.L. de C.V., a toll processor in Mexico, which increased our ownership from 60% to 100%. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Schedule of disaggregation of revenue | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in millions) Carbon Steel $ 1,637.6 $ 1,319.5 $ 4,741.0 $ 3,936.8 Aluminum 559.9 475.3 1,680.1 1,446.2 Stainless Steel 418.7 343.3 1,250.6 1,038.6 Alloy 171.2 149.3 512.7 440.4 Toll processing and logistics 106.5 85.8 311.9 258.8 Other and eliminations 80.6 76.9 224.2 223.8 Total $ 2,974.5 $ 2,450.1 $ 8,720.5 $ 7,344.6 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill. | |
Schedule of changes in the carrying amount of goodwill | (in millions) Balance at January 1, 2018 $ 1,842.6 Acquisitions 12.8 Effect of foreign currency translation (2.1) Balance at September 30, 2018 $ 1,853.3 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets, net | |
Summary of intangible assets, net | September 30, 2018 December 31, 2017 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 $ 0.9 $ (0.5) $ 0.8 $ (0.4) Customer lists/relationships 15.1 698.2 (384.6) 745.0 (391.3) Software 10.0 8.1 (8.1) 8.1 (8.1) Other 7.6 1.0 (0.9) 6.3 (5.9) 708.2 (394.1) 760.2 (405.7) Intangible assets not subject to amortization: Trade names 750.4 — 757.6 — $ 1,458.6 $ (394.1) $ 1,517.8 $ (405.7) |
Summary of estimated aggregate amortization expense | (in millions) 2018 (remaining three months) $ 10.5 2019 41.9 2020 41.9 2021 40.2 2022 35.5 2023 29.5 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt | |
Summary of debt | September 30, December 31, 2018 2017 (in millions) Unsecured revolving credit facility due September 30, 2021 $ 753.0 $ 538.0 Unsecured term loan due from December 31, 2018 to September 30, 2021 540.0 562.5 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 38.3 64.0 Total 2,081.3 1,914.5 Less: unamortized discount and debt issuance costs (11.1) (13.1) Less: amounts due within one year and short-term borrowings (89.1) (92.0) Total long-term debt $ 1,981.1 $ 1,809.4 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity | |
Schedule of common stock and additional paid-in capital activity | Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Weighted Average Weighted Average Shares Amount Exercise Price Per Share Shares Amount Exercise Price Per Share (in millions, except share and per share amounts) Stock-based compensation (1) 3,984 $ 14.4 288,991 $ 28.3 Stock options exercised — — 48,275 2.8 $ Share repurchases (2) (918,352) (80.7) (1,510,916) (130.7) Total (914,368) $ (66.3) (1,173,650) $ (99.6) (1) The nine months ended September 30, 2018 amount is comprised of stock-based compensation expense of $33.8 million reduced by $5.5 million of payments we made to tax authorities on our employees’ behalf for shares withheld related to net share settlements. (2) Includes 7,231 shares for $0.6 million pending settlement at September 30, 2018. |
Summary of the status of the Company's unvested restricted stock units and changes during the year | Weighted Average Grant Unvested Shares Shares Date Fair Value Unvested at January 1, 2018 924,575 $ Granted (1) 474,715 Vested (7,790) Cancelled or forfeited (20,160) Unvested at September 30, 2018 $ Shares reserved for future grants (all plans) (1) 474,715 RSUs, including 178,970 performance-based RSUs, were granted in March 2018. |
Schedule of accumulated other comprehensive loss | Pension and Accumulated Foreign Currency Postretirement Other Translation Benefit Adjustments, Comprehensive Loss Net of Tax Loss (in millions) Balance as of January 1, 2018 $ (51.1) $ (20.5) $ (71.6) Current-period change (11.5) — (11.5) Balance as of September 30, 2018 $ (62.6) $ (20.5) $ (83.1) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (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 $ $ $ $ |
Impairment and Restructuring _2
Impairment and Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Impairment and Restructuring Charges | |
Schedule of impairment and restructuring charges | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in millions) Property, plant and equipment $ 2.3 $ 2.8 $ 2.3 $ 2.8 Intangible assets, net 33.2 — 33.2 — Total impairment charges 35.5 2.8 35.5 2.8 Restructuring –– cost of sales — — — (0.2) Restructuring –– warehouse, delivery, selling, general and administrative expense 1.3 (0.7) 1.3 (0.2) Total impairment and restructuring charges $ 36.8 $ 2.1 $ 36.8 $ 2.4 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Acquisitions | ||||||
Net sales | $ 2,974.5 | $ 2,450.1 | $ 8,720.5 | $ 7,344.6 | ||
DuBose | ||||||
Acquisitions | ||||||
Net sales | $ 16.4 | |||||
Ferguson | ||||||
Acquisitions | ||||||
Net sales | $ 29.5 | |||||
KMS | ||||||
Acquisitions | ||||||
Net sales | $ 4.6 |
Revenues (Details)
Revenues (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | |
Revenue Disaggregation | ||||
Revenue | $ 2,974.5 | $ 8,720.5 | ||
Revenue from sales of metal products (as a percent) | 94.00% | |||
Number of performance obligations from sales of metal products | item | 1 | |||
Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | $ 2,450.1 | $ 7,344.6 | ||
Carbon steel | ||||
Revenue Disaggregation | ||||
Revenue | 1,637.6 | $ 4,741 | ||
Carbon steel | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | 1,319.5 | 3,936.8 | ||
Aluminum | ||||
Revenue Disaggregation | ||||
Revenue | 559.9 | 1,680.1 | ||
Aluminum | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | 475.3 | 1,446.2 | ||
Stainless steel | ||||
Revenue Disaggregation | ||||
Revenue | 418.7 | 1,250.6 | ||
Stainless steel | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | 343.3 | 1,038.6 | ||
Alloy | ||||
Revenue Disaggregation | ||||
Revenue | 171.2 | 512.7 | ||
Alloy | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | 149.3 | 440.4 | ||
Toll processing and logistics | ||||
Revenue Disaggregation | ||||
Revenue | 106.5 | $ 311.9 | ||
Number of days to perform services | 1 day | |||
Toll processing and logistics | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | 85.8 | 258.8 | ||
Other and eliminations | ||||
Revenue Disaggregation | ||||
Revenue | $ 80.6 | $ 224.2 | ||
Other and eliminations | Before adoption of ASU 2014-09 | ||||
Revenue Disaggregation | ||||
Revenue | $ 76.9 | $ 223.8 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 1,842.6 |
Acquisitions | 12.8 |
Effect of foreign currency translation | (2.1) |
Balance at the end of the period | 1,853.3 |
Accumulated impairment losses | 0 |
Goodwill, tax deductible amount | $ 12.8 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Intangible assets subject to amortization: | ||||
Intangible assets subject to amortization, Gross Carrying Amount | $ 708.2 | $ 708.2 | $ 760.2 | |
Intangible assets subject to amortization, Accumulated Amortization | (394.1) | (394.1) | (405.7) | |
Intangible assets | ||||
Intangible assets, Gross Carrying Amount | 1,458.6 | 1,458.6 | 1,517.8 | |
Amortization expense for intangible assets | 35.1 | $ 38.9 | ||
Changes in intangible assets due to foreign currency translation losses | 1.5 | |||
Summary of estimated aggregate amortization expense for each of the succeeding five years | ||||
2018 (remaining three months) | 10.5 | 10.5 | ||
2,019 | 41.9 | 41.9 | ||
2,020 | 41.9 | 41.9 | ||
2,021 | 40.2 | 40.2 | ||
2,022 | 35.5 | 35.5 | ||
2,023 | 29.5 | 29.5 | ||
KMS and DuBose | ||||
Intangible assets | ||||
Intangible assets, Gross Carrying Amount | 22.9 | 22.9 | ||
Trade names | ||||
Intangible assets not subject to amortization: | ||||
Intangible assets not subject to amortization, Gross Carrying Amount | 750.4 | 750.4 | 757.6 | |
Intangible assets | ||||
Impairment losses of intangible assets, indefinite-lived | 16.5 | 16.5 | ||
Trade names | KMS and DuBose | ||||
Intangible assets not subject to amortization: | ||||
Intangible assets not subject to amortization, Gross Carrying Amount | 10 | $ 10 | ||
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 | 0.9 | $ 0.9 | 0.8 | |
Intangible assets subject to amortization, Accumulated Amortization | (0.5) | $ (0.5) | (0.4) | |
Customer lists/relationships | ||||
Intangible assets subject to amortization: | ||||
Weighted average amortizable life in years | 15 years 1 month 6 days | |||
Intangible assets subject to amortization, Gross Carrying Amount | 698.2 | $ 698.2 | 745 | |
Intangible assets subject to amortization, Accumulated Amortization | (384.6) | (384.6) | (391.3) | |
Intangible assets | ||||
Impairment losses of intangible assets, finite-lived | 16.7 | $ 16.7 | ||
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 | 8.1 | |
Intangible assets subject to amortization, Accumulated Amortization | (8.1) | $ (8.1) | (8.1) | |
Other | ||||
Intangible assets subject to amortization: | ||||
Weighted average amortizable life in years | 7 years 7 months 6 days | |||
Intangible assets subject to amortization, Gross Carrying Amount | 1 | $ 1 | 6.3 | |
Intangible assets subject to amortization, Accumulated Amortization | $ (0.9) | $ (0.9) | $ (5.9) |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt | ||
Total | $ 2,081.3 | $ 1,914.5 |
Less: unamortized discount and debt issuance costs | (11.1) | (13.1) |
Less: amounts due within one year and short-term borrowings | (89.1) | (92) |
Total long-term debt | 1,981.1 | 1,809.4 |
Unsecured revolving credit facility due September 30, 2021 | ||
Debt | ||
Total | 753 | 538 |
Unsecured term loan due from December 31, 2018 to September 30, 2021 | ||
Debt | ||
Total | 540 | 562.5 |
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 | $ 38.3 | $ 64 |
Debt - Other (Details)
Debt - Other (Details) $ in Millions | Apr. 12, 2013USD ($) | Nov. 20, 2006USD ($)tranche | Sep. 30, 2016USD ($) | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($) | Nov. 15, 2016USD ($) |
Debt | ||||||
Total | $ 2,081.3 | $ 1,914.5 | ||||
Number of financial covenants | item | 2 | |||||
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 | $ 753 | $ 538 | ||||
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) | 3.54% | 2.96% | ||||
Letters of credit outstanding | $ 40.8 | |||||
Available on the revolving credit facility | $ 706.2 | |||||
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 | |||||
Interest rate added to base (as a percent) | 0.25% | |||||
Unsecured term loan due from December 31, 2018 to September 30, 2021 | ||||||
Debt | ||||||
Total | $ 540 | $ 562.5 | ||||
Debt amount | $ 600 | |||||
Annual amortization of term loan thereafter until June 2021 (as a percent) | 10.00% | |||||
Weighted average fixed interest rate (as a percent) | 3.49% | 2.82% | ||||
Unsecured term loan due from December 31, 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 December 31, 2018 to September 30, 2021 | Bank prime rate | ||||||
Debt | ||||||
Variable interest rate | bank prime | |||||
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 | 62.1 | |||||
Total | 28.5 | 53.9 | ||||
IRB | ||||||
Debt | ||||||
Total | $ 9.8 | $ 10.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2010 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | ||||||
Effective tax rate (as a percent) | 22.90% | 30.40% | 23.70% | 31.50% | ||
Income tax at U.S. federal statutory tax rate (as a percent) | 21.00% | 35.00% | ||||
Tax Reform, provisional net tax benefit | $ 207.3 |
Equity - Share Repurchases, Div
Equity - Share Repurchases, Dividends, Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 23, 2018 | Oct. 20, 2015 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Share Repurchase Plan | |||||||
Increase in authorized number of shares to be repurchased | 5,000,000 | 7,500,000 | |||||
Number of shares authorized by the Board of Directors to be repurchased under share repurchase plan | 10,700,000 | ||||||
Number of shares authorized by the Board of Directors to be repurchased under share repurchase plan, expressed as a percentage of outstanding shares (as a percent) | 15.00% | ||||||
Dividends | |||||||
Common stock quarterly dividend per share (in dollars per share) | $ 0.50 | ||||||
Common stock dividend quarterly declared and paid per share (in dollars per share) | $ 0.50 | $ 0.45 | $ 1.50 | $ 1.35 | |||
Dividends paid | $ 35.9 | $ 32.8 | $ 108.5 | $ 98.4 | |||
Common Stock and Additional Paid in Capital | |||||||
Share Repurchase Plan | |||||||
Share repurchases (in shares) | (918,352) | (1,510,916) | |||||
Average costs per share | $ 86.48 | ||||||
Value of shares repurchased | $ 80.7 | $ 130.7 | |||||
Common Stock and Additional Paid-In (in Shares) | |||||||
Stock-based compensation (in shares) | 3,984 | 288,991 | |||||
Stock options exercised (in shares) | 48,275 | ||||||
Share repurchases (in shares) | (918,352) | (1,510,916) | |||||
Total (in shares) | (914,368) | (1,173,650) | |||||
Stock-based compensation expense | $ 33.8 | ||||||
Payments made to tax authorities on employees' behalf | $ 5.5 | ||||||
Repurchase of common shares pending settlement (in shares) | 7,231 | 7,231 | |||||
Repurchase value of common shares pending settlement | $ 0.6 | $ 0.6 | |||||
Common Stock and Additional Paid-In (in Amount) | |||||||
Stock-based compensation | 14.4 | 28.3 | |||||
Stock options exercised | 2.8 | ||||||
Repurchase of common shares | (80.7) | (130.7) | |||||
Total | $ (66.3) | $ (99.6) | |||||
Weighted Average Exercise Price Per Share | |||||||
Stock options exercised (in dollars per share) | $ 57.91 | ||||||
RSU's | |||||||
Dividends | |||||||
Dividend equivalents paid | $ 2 | $ 0.9 | |||||
Stock-Based Compensation | |||||||
Vesting period (in years) | 3 years | ||||||
RSU changes | |||||||
Granted (in shares) | 474,715 | ||||||
RSU's | Performance-based | |||||||
RSU changes | |||||||
Granted (in shares) | 178,970 | ||||||
Unvested RSUs and Restricted Stock | |||||||
RSU changes | |||||||
Unvested at the beginning of the period (in shares) | 924,575 | ||||||
Granted (in shares) | 474,715 | ||||||
Vested (in shares) | (7,790) | ||||||
Cancelled or forfeited (in shares) | (20,160) | ||||||
Unvested at the end of the period (in shares) | 1,371,340 | 1,371,340 | |||||
Shares reserved for future grants (all plans) | 1,376,110 | 1,376,110 | |||||
Weighted Average Grant Date Fair Value | |||||||
Unvested at the beginning of the period (in dollars per share) | $ 74.09 | ||||||
Granted (in dollars per shares) | 84.26 | ||||||
Vested (in dollars per shares) | 72.43 | ||||||
Cancelled or forfeited (in dollars per shares) | 75.36 | ||||||
Unvested at the end of the period (in dollars per shares) | $ 77.60 | $ 77.60 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ (71.6) | |
Current-period change | (11.5) | |
Balance at the end of the period | (83.1) | |
Deferred tax assets in accumulated other comprehensive loss, pension liabilities | 13.6 | $ 13.6 |
Foreign Currency Translation (Loss) Gain | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (51.1) | |
Current-period change | (11.5) | |
Balance at the end of the period | (62.6) | |
Pension and Postretirement Benefit Adjustments, Net of Tax | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (20.5) | |
Balance at the end of the period | $ (20.5) |
Commitments and Contingencies -
Commitments and Contingencies - (Details) | Sep. 30, 2018 |
Environmental Contingencies | |
Ownership interest in domestic subsidiaries (as a percent) | 100.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income attributable to Reliance | $ 148.3 | $ 97.3 | $ 548.1 | $ 312 |
Denominator: | ||||
Weighted average shares outstanding (in shares) | 71,940,253 | 72,908,979 | 72,364,121 | 72,881,000 |
Dilutive effect of stock-based awards (in shares) | 1,040,977 | 708,500 | 772,461 | 630,427 |
Weighted average diluted shares outstanding (in shares) | 72,981,230 | 73,617,479 | 73,136,582 | 73,511,427 |
Earnings per share attributable to Reliance stockholders - diluted (in dollars per share) | $ 2.03 | $ 1.32 | $ 7.49 | $ 4.24 |
Earnings per share attributable to Reliance stockholders - basic (in dollars per share) | $ 2.06 | $ 1.33 | $ 7.57 | $ 4.28 |
Impairment and Restructuring _3
Impairment and Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Impairment and Restructuring Charges | ||||
Property, plant and equipment | $ 2.3 | $ 2.8 | $ 2.3 | $ 2.8 |
Intangible assets, net | 33.2 | 33.2 | ||
Total impairment charges | 35.5 | 2.8 | 35.5 | 2.8 |
Total impairment and restructuring charges | 36.8 | 2.1 | 36.8 | 2.4 |
Cost of sales | ||||
Impairment and Restructuring Charges | ||||
Restructuring | (0.2) | |||
Warehouse, delivery, selling, general and administrative expense | ||||
Impairment and Restructuring Charges | ||||
Restructuring | $ 1.3 | $ (0.7) | $ 1.3 | $ (0.2) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - Acero Prime S. de R.L. de C.V. | Oct. 23, 2018 | Oct. 22, 2018 |
Subsequent Events | ||
Ownership interest acquired (percentage) | 40.00% | |
Ownership interest prior to acquisition | 60.00% | |
Total ownership percentage | 100.00% |