Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 28, 2023 | |
Cover Abstract | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-13122 | |
Entity Registrant Name | RELIANCE STEEL & ALUMINUM CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-1142616 | |
Entity Address, Address Line One | 16100 N. 71st Street, Suite 400 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85254 | |
City Area Code | (480) | |
Local Phone Number | 564-5700 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | RS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 58,557,052 | |
Entity Central Index Key | 0000861884 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 816.3 | $ 1,173.4 |
Accounts receivable, less allowance for credit losses of $28.7 at June 30, 2023 and $26.1 at December 31, 2022 | 1,729.9 | 1,565.7 |
Inventories | 2,202.3 | 1,995.3 |
Prepaid expenses and other current assets | 109.8 | 115.6 |
Income taxes receivable | 36.6 | |
Total current assets | 4,858.3 | 4,886.6 |
Property, plant and equipment: | ||
Land | 270 | 262.7 |
Buildings | 1,434.9 | 1,359.3 |
Machinery and equipment | 2,578.9 | 2,446.9 |
Accumulated depreciation | (2,167.7) | (2,094.3) |
Property, plant and equipment, net | 2,116.1 | 1,974.6 |
Operating lease right-of-use assets | 222.9 | 216.4 |
Goodwill | 2,109.8 | 2,105.9 |
Intangible assets, net | 1,002.8 | 1,019.6 |
Cash surrender value of life insurance policies, net | 33.2 | 42 |
Other assets | 97.3 | 84.8 |
Total assets | 10,440.4 | 10,329.9 |
Current liabilities: | ||
Accounts payable | 499.8 | 412.4 |
Accrued expenses | 134.6 | 118.8 |
Accrued compensation and retirement benefits | 181.8 | 240 |
Accrued insurance costs | 45.5 | 43.4 |
Current maturities of long-term debt and short-term borrowings | 0.3 | 508.2 |
Current maturities of operating lease liabilities | 54.6 | 52.5 |
Income taxes payable | 21.2 | |
Total current liabilities | 937.8 | 1,375.3 |
Long-term debt | 1,140.9 | 1,139.4 |
Operating lease liabilities | 170 | 165.2 |
Long-term retirement benefits | 30.6 | 26.1 |
Other long-term liabilities | 59.3 | 51.4 |
Deferred income taxes | 476.3 | 476.6 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.001 par value: 5,000 shares authorized; none issued or outstanding | ||
Common stock and additional paid-in capital, $0.001 par value and 200,000 shares authorized Issued and outstanding shares-58,536 at June 30, 2023 and 58,787 at December 31, 2022 | 0.1 | 0.1 |
Retained earnings | 7,702.1 | 7,173.6 |
Accumulated other comprehensive loss | (86.6) | (86.3) |
Total Reliance stockholders' equity | 7,615.6 | 7,087.4 |
Noncontrolling interests | 9.9 | 8.5 |
Total equity | 7,625.5 | 7,095.9 |
Total liabilities and equity | $ 10,440.4 | $ 10,329.9 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for credit losses | $ 28.7 | $ 26.1 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Authorized shares | 5,000 | 5,000 |
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 | 200,000 |
Common stock, Issued shares | 58,536 | 58,787 |
Common stock, outstanding shares | 58,536 | 58,787 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 3,880.3 | $ 4,681.2 | $ 7,845.6 | $ 9,167 |
Costs and expenses: | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,657.6 | 3,185.8 | 5,396.9 | 6,284.5 |
Warehouse, delivery, selling, general and administrative ("SG&A") | 650.6 | 648.6 | 1,301.9 | 1,260.5 |
Depreciation and amortization | 60.8 | 59.3 | 121.9 | 118.4 |
Total costs and expenses | 3,369 | 3,893.7 | 6,820.7 | 7,663.4 |
Operating income | 511.3 | 787.5 | 1,024.9 | 1,503.6 |
Other (income) expense: | ||||
Interest expense | 9.7 | 15.6 | 20.6 | 31.2 |
Other (income) expense, net | (9.3) | 9.3 | (15.1) | 12.6 |
Income before income taxes | 510.9 | 762.6 | 1,019.4 | 1,459.8 |
Income tax provision | 124.6 | 188.7 | 248.7 | 361.3 |
Net income | 386.3 | 573.9 | 770.7 | 1,098.5 |
Less: net income attributable to noncontrolling interests | 1.2 | 1.1 | 2.5 | 2.4 |
Net income attributable to Reliance | $ 385.1 | $ 572.8 | $ 768.2 | $ 1,096.1 |
Earnings per share attributable to Reliance stockholders: | ||||
Basic (in dollars per share) | $ 6.56 | $ 9.29 | $ 13.07 | $ 17.75 |
Diluted (in dollars per share) | $ 6.49 | $ 9.15 | $ 12.92 | $ 17.49 |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 58,688 | 61,657 | 58,760 | 61,744 |
Diluted (in shares) | 59,346 | 62,594 | 59,440 | 62,688 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 386.3 | $ 573.9 | $ 770.7 | $ 1,098.5 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss) | 0.7 | (20) | 1.2 | (19.3) |
Postretirement benefit plan adjustments, net of tax | (0.8) | (1.5) | (0.1) | |
Total other comprehensive loss | (0.1) | (20) | (0.3) | (19.4) |
Comprehensive income | 386.2 | 553.9 | 770.4 | 1,079.1 |
Less: comprehensive income attributable to noncontrolling interests | 1.2 | 1.1 | 2.5 | 2.4 |
Comprehensive income attributable to Reliance | $ 385 | $ 552.8 | $ 767.9 | $ 1,076.7 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Reliance Stockholders' | Common Stock and Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total |
Balances at Dec. 31, 2021 | $ 0.1 | $ 6,155.3 | $ (68.9) | $ 7.2 | $ 6,093.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchase of common shares | (17.1) | |||||
Balances at Mar. 31, 2022 | 0.1 | 6,599.5 | (68.3) | 7.4 | 6,538.7 | |
Balances at Dec. 31, 2021 | 0.1 | 6,155.3 | (68.9) | 7.2 | 6,093.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Reliance | 1,096.1 | 1,096.1 | ||||
Cash dividends and dividend equivalents | (110.6) | |||||
Other comprehensive loss | (19.4) | (19.4) | ||||
Comprehensive income | 2.4 | (2.4) | ||||
Capital contributions | 0.3 | |||||
Dividends paid | (1.1) | |||||
Stock-based compensation | 29.8 | |||||
Taxes paid related to net share settlement of restricted stock units | (17.1) | |||||
Repurchase of common shares | (12.7) | (198.3) | (211) | |||
Balances at Jun. 30, 2022 | $ 6,854.3 | 0.1 | 6,942.5 | (88.3) | 8.8 | 6,863.1 |
Balances at Mar. 31, 2022 | 0.1 | 6,599.5 | (68.3) | 7.4 | 6,538.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Reliance | 572.8 | 572.8 | ||||
Cash dividends and dividend equivalents | (53.9) | |||||
Other comprehensive loss | (20) | (20) | ||||
Comprehensive income | 1.1 | (1.1) | ||||
Capital contributions | 0.3 | |||||
Stock-based compensation | 18 | |||||
Repurchase of common shares | (18) | (175.9) | (193.9) | |||
Balances at Jun. 30, 2022 | 6,854.3 | 0.1 | 6,942.5 | (88.3) | 8.8 | 6,863.1 |
Balances at Dec. 31, 2022 | 0.1 | 7,173.6 | (86.3) | 8.5 | 7,095.9 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Repurchase of common shares | (38.9) | |||||
Balances at Mar. 31, 2023 | 0.1 | 7,432.1 | (86.5) | 8.7 | 7,354.4 | |
Balances at Dec. 31, 2022 | 0.1 | 7,173.6 | (86.3) | 8.5 | 7,095.9 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Reliance | 768.2 | 768.2 | ||||
Cash dividends and dividend equivalents | (120.6) | |||||
Other comprehensive loss | (0.3) | (0.3) | ||||
Comprehensive income | 2.5 | (2.5) | ||||
Dividends paid | (1.1) | |||||
Stock-based compensation | 31.6 | |||||
Taxes paid related to net share settlement of restricted stock units | (37.3) | |||||
Repurchase of common shares | 6.3 | (119.1) | (112.8) | |||
Excise tax on repurchase of common shares | (0.6) | |||||
Balances at Jun. 30, 2023 | 7,615.6 | 0.1 | 7,702.1 | (86.6) | 9.9 | 7,625.5 |
Balances at Mar. 31, 2023 | 0.1 | 7,432.1 | (86.5) | 8.7 | 7,354.4 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Reliance | 385.1 | 385.1 | ||||
Cash dividends and dividend equivalents | (58.6) | |||||
Other comprehensive loss | (0.1) | (0.1) | ||||
Comprehensive income | 1.2 | (1.2) | ||||
Stock-based compensation | 18.1 | |||||
Taxes paid related to net share settlement of restricted stock units | (0.1) | |||||
Repurchase of common shares | (17.4) | (56.5) | (73.9) | |||
Excise tax on repurchase of common shares | (0.6) | |||||
Balances at Jun. 30, 2023 | $ 7,615.6 | $ 0.1 | $ 7,702.1 | $ (86.6) | $ 9.9 | $ 7,625.5 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||||
Cash dividends declared per common share (in dollars per share) | $ 1 | $ 0.875 | $ 2 | $ 1.75 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities: | ||
Net income | $ 770.7 | $ 1,098.5 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 121.9 | 118.4 |
Provision for credit losses | 3.8 | 6.6 |
Stock-based compensation expense | 31.6 | 29.8 |
Net loss on life insurance policies and deferred compensation plan assets | 4 | 15.4 |
Other | (5.6) | 2.4 |
Changes in operating assets and liabilities (excluding effect of businesses acquired): | ||
Accounts receivable | (163.3) | (380.6) |
Inventories | (202.1) | (291.2) |
Prepaid expenses and other assets | 71.1 | 29.2 |
Accounts payable and other liabilities | 47.6 | 45.7 |
Net cash provided by operating activities | 679.7 | 674.2 |
Investing activities: | ||
Acquisitions, net of cash acquired | (24.1) | |
Purchases of property, plant and equipment | (233.1) | (154.2) |
Proceeds from sales of property, plant and equipment | 9.4 | 9.2 |
Other | (7.2) | (4.4) |
Net cash used in investing activities | (255) | (149.4) |
Financing activities: | ||
Net short-term debt repayments | (2.2) | (0.8) |
Principal payments on long-term debt | (505.7) | |
Cash dividends and dividend equivalents | (120.6) | (110.6) |
Share repurchases | (112.8) | (211) |
Taxes paid related to net share settlement of restricted stock units | (37.3) | (17.1) |
Other | (1.8) | 23 |
Net cash used in financing activities | (780.4) | (316.5) |
Effect of exchange rate changes on cash and cash equivalents | (1.4) | (4.3) |
(Decrease) increase in cash and cash equivalents | (357.1) | 204 |
Cash and cash equivalents at beginning of year | 1,173.4 | 300.5 |
Cash and cash equivalents at end of the period | 816.3 | 504.5 |
Supplemental cash flow information: | ||
Interest paid during the period | 23.7 | 30.3 |
Income taxes paid during the period, net | $ 191 | $ 427.2 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of Reliance Steel & Aluminum Co. and its subsidiaries (collectively “Reliance”, the “Company”, “we”, “our” or “us”). These 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, the consolidated financial statements reflect all material adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP. Interim results are not necessarily indicative of the results for a full year. All significant intercompany accounts and transactions have been eliminated. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Investments in unconsolidated subsidiaries are recorded under the equity method of accounting. These consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and accompanying notes included in Reliance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 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. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. 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. We estimate the effect of LIFO on interim periods by allocating the projected year-end LIFO calculation to interim periods on a pro rata basis. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2023 | |
Revenues. | |
Revenues | Note 2. Revenues The following table presents our net sales disaggregated by product and service: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions) Carbon steel $ 2,141.2 $ 2,625.8 $ 4,269.7 $ 5,173.3 Aluminum 639.7 716.8 1,309.9 1,409.6 Stainless steel 604.0 807.1 1,261.3 1,572.0 Alloy 186.8 196.6 378.2 380.3 Toll processing and logistics 154.5 140.2 309.9 275.3 Copper and brass 77.9 92.8 159.9 179.4 Other and eliminations 76.2 101.9 156.7 177.1 Total $ 3,880.3 $ 4,681.2 $ 7,845.6 $ 9,167.0 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill. | |
Goodwill | Note 3. Goodwill The change in the carrying amount of goodwill is as follows: (in millions) Balance at January 1, 2023 $ 2,105.9 Acquisition 1.6 Effect of foreign currency translation 2.3 Balance at June 30, 2023 $ 2,109.8 We had no accumulated impairment losses related to goodwill at June 30, 2023 and December 31, 2022. |
Intangible Assets, net
Intangible Assets, net | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, net | |
Intangible Assets, net | Note 4. Intangible Assets, net Intangible assets, net consisted of the following: June 30, 2023 December 31, 2022 Weighted Average Gross Gross Amortizable Carrying Accumulated Carrying Accumulated Life in Years Amount Amortization Amount Amortization (in millions) Intangible assets subject to amortization: Customer lists/relationships 14.2 $ 716.4 $ (501.2) $ 713.6 $ (479.3) Backlog of orders 7.9 22.8 (4.6) 22.3 (3.1) Other 9.4 10.3 (9.5) 9.9 (9.5) 749.5 (515.3) 745.8 (491.9) Intangible assets not subject to amortization: Trade names 768.6 — 765.7 — $ 1,518.1 $ (515.3) $ 1,511.5 $ (491.9) Amortization expense for intangible assets was $23.0 million and $24.3 million for the six months ended June 30, 2023 and 2022, respectively. As part of the purchase price allocation of our acquisition of Southern Steel Supply, LLC on May 1, 2023, we allocated a total of $5.0 million to the intangible assets acquired. Foreign currency translation gains related to intangible assets, net were $1.2 million for the six months ended June 30, 2023 compared to foreign currency translation losses of $1.6 million for the six months ended June 30, 2022. The following is a summary of estimated future amortization expense: (in millions) 2023 (remaining six months) $ 20.8 2024 40.5 2025 36.3 2026 26.8 2027 26.2 Thereafter 83.6 $ 234.2 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt | |
Debt | Note 5. Debt Debt consisted of the following: June 30, December 31, 2023 2022 (in millions) Unsecured revolving credit facility maturing September 3, 2025 $ — $ — Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, redeemed on January 15, 2023 — 500.0 Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 400.0 400.0 Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 500.0 500.0 Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 1.7 9.6 Total 1,151.7 1,659.6 Less: unamortized discount and debt issuance costs (10.5) (12.0) Less: amounts due within one year and short-term borrowings (0.3) (508.2) Total long-term debt $ 1,140.9 $ 1,139.4 The weighted average interest rate on the Company’s outstanding borrowings as of June 30, 2023 and December 31, 2022 was 2.88% and 3.37%, respectively. Unsecured Credit Facility On September 3, 2020, we entered into a $1.5 billion unsecured five-year Amended and Restated Credit Agreement that amended and restated our then-existing $1.5 billion unsecured revolving credit facility. On January 12, 2023, the agreement was further amended to change the reference rate from LIBOR to SOFR (as amended, the “Credit Agreement”). As of June 30, 2023, borrowings under the Credit Agreement were available at variable rates based on SOFR plus 1.10% or the bank prime rate and we currently pay a commitment fee at an annual rate of 0.175% on the unused portion of the revolving credit facility. The applicable margins over SOFR and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined in the Credit Agreement. All borrowings under the Credit Agreement may be prepaid without penalty As of June 30, 2023 and December 31, 2022, we had no outstanding borrowings on the revolving credit facility. We had $1.7 million and $7.7 million of letters of credit outstanding under the revolving credit facility as of June 30, 2023 and December 31, 2022, respectively. Senior Unsecured Notes On January 15, 2023, we redeemed in full the $500.0 million aggregate outstanding principal amount of our 4.50% senior notes due April 15, 2023 using cash on hand. Under the indentures for each series of our senior notes (the “indentures”), the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. If we experience a change in control accompanied by a downgrade in our credit rating, we will be required to make an offer to repurchase each series of the notes at a price equal to 101% of their principal amount plus accrued and unpaid interes Other Notes, Revolving Credit and Letter of Credit/Letters of Guarantee Facilities A revolving credit facility with a credit limit of $7.5 million is in place for an operation in Asia. This facility had no outstanding borrowings as of June 30, 2023 and had $2.2 million outstanding as of December 31, 2022. Various industrial revenue bonds had combined outstanding balances of $1.7 million and $7.4 million as of June 30, 2023 and December 31, 2022, respectively, and have maturities through 2027. We have a $50.0 million standby letters of credit/letters of guarantee agreement with one of the lenders under our Credit Agreement. A total of $19.5 million and $18.7 million were outstanding under this facility as of June 30, 2023 and December 31, 2022, respectively. Covenants The Credit Agreement and the indentures include customary representations, warranties, covenants and events of default provisions. The covenants under the Credit Agreement include, among other things, two financial maintenance covenants that require us to comply with a minimum interest coverage ratio and a maximum leverage ratio. We were in compliance with all financial maintenance covenants in our Credit Agreement at June 30, 2023. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Leases | Note 6. Leases Our metals service center leases are comprised of processing and distribution facilities, equipment, trucks and trailers, ground leases and other leased spaces, such as depots, sales offices, storage and data centers. We also lease various office spaces. Our leases of facilities and other spaces expire at various times through 2045 and our ground leases expire at various times through 2068. Nearly all of our leases are operating leases; we have recognized finance right-of-use assets and obligations of less than $1.0 million. The following is a summary of our lease cost: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions) Operating lease cost $ 23.4 $ 23.6 $ 47.0 $ 46.6 Supplemental cash flow and balance sheet information is presented below: Six Months Ended June 30, 2023 2022 (in millions) Supplemental cash flow information: Cash payments for operating leases $ 46.7 $ 43.9 Right-of-use assets obtained in exchange for operating lease obligations $ 35.6 $ 27.7 June 30, December 31, 2023 2022 Other lease information: Weighted average remaining lease term—operating leases 6.1 years 6.6 years Weighted average discount rate—operating leases 4.0% 3.8% Maturities of operating lease liabilities as of June 30, 2023 are as follows: (in millions) 2023 (remaining six months) $ 32.3 2024 57.1 2025 44.2 2026 31.5 2027 23.1 Thereafter 72.2 Total operating lease payments 260.4 Less: imputed interest (35.8) Total operating lease liabilities $ 224.6 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | Note 7. Income Taxes Our effective income tax rate for each of the second quarter and six months ended June 30, 2023 was 24.4%, compared to 24.7% for the same 2022 periods. The differences between our effective income tax rates and the U.S. federal statutory rate of 21.0% were mainly due to state income taxes. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity | |
Equity | Note 8. Equity Dividends On July 25, 2023, our Board of Directors declared the 2023 third quarter cash dividend of $1.00 per share of common stock, payable on September 1, 2023 to stockholders of record as of August 18, 2023. During the second quarters of 2023 and 2022, we declared and paid quarterly dividends of $1.00 and $0.875 per share, or $58.6 million and $53.9 million in total, respectively. During the six months ended June 30, 2023 and 2022, we declared and paid aggregate quarterly dividends of $2.00 and $1.75 per share, or $117.6 million and $108.1 million in total, respectively. In addition, we paid $3.0 million and $2.5 million in dividend equivalents with respect to vested restricted stock units during the six months ended June 30, 2023 and 2022, respectively. Stock-Based Compensation We make annual grants of long-term incentive awards to officers and key employees under our Second Amended and Restated 2015 Incentive Award Plan We also grant the non-management members of our Board of Directors fully vested stock awards under our Directors Equity Plan In the six months ended June 30, 2023 and 2022, we made payments of $37.3 million and $17.1 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlement of vested restricted stock units. A summary of the status of our unvested RSUs and PSUs as of June 30, 2023, and changes during the six months then ended is as follows: Weighted Average RSU and PSU Grant Date Aggregate Units Fair Value Unvested at January 1, 2023 582,012 $ 164.60 Granted (1) 193,812 247.90 Vested (2,867) 156.80 Cancelled or forfeited (7,876) 176.98 Unvested at June 30, 2023 765,081 $ 185.60 Shares reserved for future grants (all plans) 1,458,557 (1) Comprised of 109,683 RSUs and 84,129 PSUs granted in February 2023. The service-based RSUs cliff vest on December 1, 2025 and the performance-based RSUs are subject to a 3 -year performance period ending December 31, 2025. As of June 30, 2023, there was $115.4 million of total unrecognized compensation cost related to unvested RSUs and PSUs that is expected to be recognized over a weighted average period of 1.8 years. Share Repurchases Our share repurchase activity during the six months ended June 30, 2023 and 2022 was as follows: 2023 2022 Average Cost Average Cost Shares Per Share Amount Shares Per Share Amount (in millions) (in millions) First quarter 160,224 $ 242.86 $ 38.9 113,529 $ 150.97 $ 17.1 Second quarter 308,454 239.55 73.9 1,085,635 178.61 193.9 468,678 $ 240.68 $ 112.8 1,199,164 $ 176.00 $ 211.0 On July 26, 2022, our Board of Directors amended our share repurchase program to increase the repurchase authorization to $1.0 billion. The share repurchase program does not obligate us to repurchase any specific number of shares, does not have a specific expiration date and may be suspended or discontinued at any time. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares. As of June 30, 2023, we had remaining authorization under the program to repurchase $567.9 million of our common stock We may repurchase shares through a variety of methods including, but not limited to, open market purchases, accelerated share repurchases, negotiated block purchases and transactions structured through investment banking institutions under plans relying on Rule 10b5-1 and/or Rule 10b-18 under the Exchange Act. The Inflation Reduction Act of 2022 imposed a nondeductible, 1% excise tax on the excess of the fair value of our share repurchases, net of our share issuances, made after December 31, 2022. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss included the following: Pension and Foreign Currency Postretirement Benefit Accumulated Other Translation Plan Adjustments, Comprehensive (Loss) Gain Net of Tax Loss (in millions) Balance as of January 1, 2023 $ (84.0) $ (2.3) $ (86.3) Current-period change 1.2 (1.5) (0.3) Balance as of June 30, 2023 $ (82.8) $ (3.8) $ (86.6) Foreign currency translation adjustments have not been adjusted for income taxes. Pension and postretirement benefit plan adjustments are amortized over service periods and reflected in the amortization of net loss component of our net periodic benefit cost or are otherwise recognized as a loss as a result of plan settlements. The income tax effects are released from accumulated other comprehensive loss and included in our income tax provision as obligations under our pension and postretirement plans are settled . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 9. 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 Legal Matters From time to time, we are named as a defendant in legal actions. These actions generally arise in the ordinary course of business. We are not currently a party to any pending legal proceedings other than routine litigation incidental to the business. We expect that these matters will be resolved without having a material adverse impact on our consolidated financial position, results of operations or cash flows. We maintain general liability insurance against risks arising in the ordinary course of business. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share | |
Earnings Per Share | Note 10. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions, except number of shares which are reflected in thousands and per share amounts) Numerator: Net income attributable to Reliance $ 385.1 $ 572.8 $ 768.2 $ 1,096.1 Denominator: Weighted average shares outstanding 58,688 61,657 58,760 61,744 Dilutive effect of stock-based awards 658 937 680 944 Weighted average diluted shares outstanding 59,346 62,594 59,440 62,688 Earnings per share attributable to Reliance stockholders: Basic $ 6.56 $ 9.29 $ 13.07 $ 17.75 Diluted $ 6.49 $ 9.15 $ 12.92 $ 17.49 The computations of earnings per share for the six months ended June 30, 2023 and 2022 do not include 100,326 and 162,116 weighted average shares, respectively, in respect of outstanding RSUs and PSUs, because their inclusion would have been anti-dilutive. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of Reliance Steel & Aluminum Co. and its subsidiaries (collectively “Reliance”, the “Company”, “we”, “our” or “us”). These 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, the consolidated financial statements reflect all material adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP. Interim results are not necessarily indicative of the results for a full year. All significant intercompany accounts and transactions have been eliminated. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Investments in unconsolidated subsidiaries are recorded under the equity method of accounting. These consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and accompanying notes included in Reliance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 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. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. |
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. We estimate the effect of LIFO on interim periods by allocating the projected year-end LIFO calculation to interim periods on a pro rata basis. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenues. | |
Schedule of disaggregation of revenue | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions) Carbon steel $ 2,141.2 $ 2,625.8 $ 4,269.7 $ 5,173.3 Aluminum 639.7 716.8 1,309.9 1,409.6 Stainless steel 604.0 807.1 1,261.3 1,572.0 Alloy 186.8 196.6 378.2 380.3 Toll processing and logistics 154.5 140.2 309.9 275.3 Copper and brass 77.9 92.8 159.9 179.4 Other and eliminations 76.2 101.9 156.7 177.1 Total $ 3,880.3 $ 4,681.2 $ 7,845.6 $ 9,167.0 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill. | |
Schedule of changes in the carrying amount of goodwill | (in millions) Balance at January 1, 2023 $ 2,105.9 Acquisition 1.6 Effect of foreign currency translation 2.3 Balance at June 30, 2023 $ 2,109.8 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, net | |
Summary of intangible assets, net | June 30, 2023 December 31, 2022 Weighted Average Gross Gross Amortizable Carrying Accumulated Carrying Accumulated Life in Years Amount Amortization Amount Amortization (in millions) Intangible assets subject to amortization: Customer lists/relationships 14.2 $ 716.4 $ (501.2) $ 713.6 $ (479.3) Backlog of orders 7.9 22.8 (4.6) 22.3 (3.1) Other 9.4 10.3 (9.5) 9.9 (9.5) 749.5 (515.3) 745.8 (491.9) Intangible assets not subject to amortization: Trade names 768.6 — 765.7 — $ 1,518.1 $ (515.3) $ 1,511.5 $ (491.9) |
Summary of estimated aggregate amortization expense | (in millions) 2023 (remaining six months) $ 20.8 2024 40.5 2025 36.3 2026 26.8 2027 26.2 Thereafter 83.6 $ 234.2 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt | |
Summary of debt | June 30, December 31, 2023 2022 (in millions) Unsecured revolving credit facility maturing September 3, 2025 $ — $ — Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, redeemed on January 15, 2023 — 500.0 Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 400.0 400.0 Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 500.0 500.0 Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 250.0 250.0 Other notes and revolving credit facilities 1.7 9.6 Total 1,151.7 1,659.6 Less: unamortized discount and debt issuance costs (10.5) (12.0) Less: amounts due within one year and short-term borrowings (0.3) (508.2) Total long-term debt $ 1,140.9 $ 1,139.4 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of lease cost | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions) Operating lease cost $ 23.4 $ 23.6 $ 47.0 $ 46.6 |
Schedule of supplemental cash flow and other lease information | Six Months Ended June 30, 2023 2022 (in millions) Supplemental cash flow information: Cash payments for operating leases $ 46.7 $ 43.9 Right-of-use assets obtained in exchange for operating lease obligations $ 35.6 $ 27.7 June 30, December 31, 2023 2022 Other lease information: Weighted average remaining lease term—operating leases 6.1 years 6.6 years Weighted average discount rate—operating leases 4.0% 3.8% |
Schedule of maturities of operating lease liabilities | (in millions) 2023 (remaining six months) $ 32.3 2024 57.1 2025 44.2 2026 31.5 2027 23.1 Thereafter 72.2 Total operating lease payments 260.4 Less: imputed interest (35.8) Total operating lease liabilities $ 224.6 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity | |
Summary of the status of the Company's restricted stock units and changes during the quarter | Weighted Average RSU and PSU Grant Date Aggregate Units Fair Value Unvested at January 1, 2023 582,012 $ 164.60 Granted (1) 193,812 247.90 Vested (2,867) 156.80 Cancelled or forfeited (7,876) 176.98 Unvested at June 30, 2023 765,081 $ 185.60 Shares reserved for future grants (all plans) 1,458,557 (1) Comprised of 109,683 RSUs and 84,129 PSUs granted in February 2023. The service-based RSUs cliff vest on December 1, 2025 and the performance-based RSUs are subject to a 3 -year performance period ending December 31, 2025. |
Schedule of share repurchase activity | 2023 2022 Average Cost Average Cost Shares Per Share Amount Shares Per Share Amount (in millions) (in millions) First quarter 160,224 $ 242.86 $ 38.9 113,529 $ 150.97 $ 17.1 Second quarter 308,454 239.55 73.9 1,085,635 178.61 193.9 468,678 $ 240.68 $ 112.8 1,199,164 $ 176.00 $ 211.0 |
Schedule of accumulated other comprehensive loss | Pension and Foreign Currency Postretirement Benefit Accumulated Other Translation Plan Adjustments, Comprehensive (Loss) Gain Net of Tax Loss (in millions) Balance as of January 1, 2023 $ (84.0) $ (2.3) $ (86.3) Current-period change 1.2 (1.5) (0.3) Balance as of June 30, 2023 $ (82.8) $ (3.8) $ (86.6) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in millions, except number of shares which are reflected in thousands and per share amounts) Numerator: Net income attributable to Reliance $ 385.1 $ 572.8 $ 768.2 $ 1,096.1 Denominator: Weighted average shares outstanding 58,688 61,657 58,760 61,744 Dilutive effect of stock-based awards 658 937 680 944 Weighted average diluted shares outstanding 59,346 62,594 59,440 62,688 Earnings per share attributable to Reliance stockholders: Basic $ 6.56 $ 9.29 $ 13.07 $ 17.75 Diluted $ 6.49 $ 9.15 $ 12.92 $ 17.49 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue Disaggregation | ||||
Revenue | $ 3,880.3 | $ 4,681.2 | $ 7,845.6 | $ 9,167 |
Carbon steel | ||||
Revenue Disaggregation | ||||
Revenue | 2,141.2 | 2,625.8 | 4,269.7 | 5,173.3 |
Aluminum | ||||
Revenue Disaggregation | ||||
Revenue | 639.7 | 716.8 | 1,309.9 | 1,409.6 |
Stainless steel | ||||
Revenue Disaggregation | ||||
Revenue | 604 | 807.1 | 1,261.3 | 1,572 |
Alloy | ||||
Revenue Disaggregation | ||||
Revenue | 186.8 | 196.6 | 378.2 | 380.3 |
Toll processing and logistics | ||||
Revenue Disaggregation | ||||
Revenue | 154.5 | 140.2 | 309.9 | 275.3 |
Copper and brass | ||||
Revenue Disaggregation | ||||
Revenue | 77.9 | 92.8 | 159.9 | 179.4 |
Other and eliminations | ||||
Revenue Disaggregation | ||||
Revenue | $ 76.2 | $ 101.9 | $ 156.7 | $ 177.1 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Change in the carrying amount of goodwill | ||
Balance at the beginning of the period | $ 2,105.9 | |
Acquisition | 1.6 | |
Effect of foreign currency translation | 2.3 | |
Balance at the end of the period | 2,109.8 | |
Accumulated impairment losses | $ 0 | $ 0 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | May 01, 2023 | Dec. 31, 2022 | |
Intangible assets subject to amortization: | ||||
Intangible assets subject to amortization, Gross Carrying Amount | $ 749.5 | $ 745.8 | ||
Intangible assets subject to amortization, Accumulated Amortization | (515.3) | (491.9) | ||
Intangible assets | ||||
Intangible assets, Gross Carrying Amount | 1,518.1 | 1,511.5 | ||
Amortization expense for intangible assets | 23 | $ 24.3 | ||
Changes in intangible assets due to foreign currency translation gains (losses) | 1.2 | $ (1.6) | ||
Summary of estimated aggregate amortization expense for each of the succeeding five years | ||||
2023 (remaining six months) | 20.8 | |||
2024 | 40.5 | |||
2025 | 36.3 | |||
2026 | 26.8 | |||
2027 | 26.2 | |||
Thereafter | 83.6 | |||
Total | 234.2 | |||
Southern Steel | ||||
Intangible assets | ||||
Intangible assets recorded in connection with acquisition | $ 5 | |||
Trade names | ||||
Intangible assets not subject to amortization: | ||||
Intangible assets not subject to amortization, Gross Carrying Amount | $ 768.6 | 765.7 | ||
Customer lists/relationships | ||||
Intangible assets subject to amortization: | ||||
Weighted average amortizable life in years | 14 years 2 months 12 days | |||
Intangible assets subject to amortization, Gross Carrying Amount | $ 716.4 | 713.6 | ||
Intangible assets subject to amortization, Accumulated Amortization | $ (501.2) | (479.3) | ||
Backlog of orders | ||||
Intangible assets subject to amortization: | ||||
Weighted average amortizable life in years | 7 years 10 months 24 days | |||
Intangible assets subject to amortization, Gross Carrying Amount | $ 22.8 | 22.3 | ||
Intangible assets subject to amortization, Accumulated Amortization | $ (4.6) | (3.1) | ||
Other | ||||
Intangible assets subject to amortization: | ||||
Weighted average amortizable life in years | 9 years 4 months 24 days | |||
Intangible assets subject to amortization, Gross Carrying Amount | $ 10.3 | 9.9 | ||
Intangible assets subject to amortization, Accumulated Amortization | $ (9.5) | $ (9.5) |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Jan. 15, 2023 | Dec. 31, 2022 |
Debt | |||
Total | $ 1,151.7 | $ 1,659.6 | |
Less: unamortized discount and debt issuance costs | (10.5) | (12) | |
Less: amounts due within one year and short-term borrowings | (0.3) | (508.2) | |
Total long-term debt | 1,140.9 | 1,139.4 | |
Unsecured revolving credit facility maturing September 3, 2025 | |||
Debt | |||
Total | 0 | 0 | |
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, due April 15, 2023, redeemed on January 15, 2023 | |||
Debt | |||
Total | $ 0 | $ 500 | |
Semi-annual rate (as a percent) | 4.50% | 4.50% | |
Effective rate (as a percent) | 4.63% | ||
Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 | |||
Debt | |||
Total | $ 400 | $ 400 | |
Semi-annual rate (as a percent) | 1.30% | 1.30% | |
Effective rate (as a percent) | 1.53% | 1.53% | |
Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 | |||
Debt | |||
Total | $ 500 | $ 500 | |
Semi-annual rate (as a percent) | 2.15% | 2.15% | |
Effective rate (as a percent) | 2.27% | 2.27% | |
Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 | |||
Debt | |||
Total | $ 250 | $ 250 | |
Semi-annual rate (as a percent) | 6.85% | 6.85% | |
Effective rate (as a percent) | 6.91% | 6.91% | |
Other notes and revolving credit facilities | |||
Debt | |||
Total | $ 1.7 | $ 9.6 |
Debt - Other (Details)
Debt - Other (Details) $ in Millions | 6 Months Ended | |||
Jan. 15, 2023 USD ($) | Sep. 03, 2020 USD ($) | Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) | |
Debt | ||||
Total | $ 1,151.7 | $ 1,659.6 | ||
Weighted average interest rate (as a percent) | 2.88% | 3.37% | ||
Principal payment on long-term debt | $ 505.7 | |||
Number of financial maintenance covenants | item | 2 | |||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 1,151.7 | $ 1,659.6 | ||
Unsecured revolving credit facility maturing September 3, 2025 | ||||
Debt | ||||
Maximum borrowing capacity | $ 1,500 | |||
Debt term | 5 years | |||
Total | $ 0 | 0 | ||
Commitment fee on unused portion of revolving credit facility (as a percent) | 0.175% | |||
Letters of credit outstanding | $ 1.7 | 7.7 | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 0 | 0 | ||
Unsecured revolving credit facility maturing September 3, 2025 | SOFR | ||||
Debt | ||||
Variable interest rate | SOFR | |||
Interest rate added to base (as a percent) | 1.10% | |||
Unsecured revolving credit facility maturing September 3, 2025 | Bank prime rate | ||||
Debt | ||||
Variable interest rate | bank prime rate | |||
Senior Unsecured Notes - Publicly Traded | ||||
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% | |||
Senior unsecured notes, interest payable semi-annually at 4.50%, effective rate of 4.63%, due April 15, 2023, redeemed on January 15, 2023 | ||||
Debt | ||||
Total | $ 0 | $ 500 | ||
Semi-annual rate (as a percent) | 4.50% | 4.50% | ||
Principal payment on long-term debt | $ 500 | |||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 0 | $ 500 | ||
Senior unsecured notes, interest payable semi-annually at 1.30%, effective rate of 1.53%, maturing August 15, 2025 | ||||
Debt | ||||
Total | $ 400 | $ 400 | ||
Semi-annual rate (as a percent) | 1.30% | 1.30% | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 400 | $ 400 | ||
Senior unsecured notes, interest payable semi-annually at 2.15%, effective rate of 2.27%, maturing August 15, 2030 | ||||
Debt | ||||
Total | $ 500 | $ 500 | ||
Semi-annual rate (as a percent) | 2.15% | 2.15% | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 500 | $ 500 | ||
Senior unsecured notes, interest payable semi-annually at 6.85%, effective rate of 6.91%, maturing November 15, 2036 | ||||
Debt | ||||
Total | $ 250 | $ 250 | ||
Semi-annual rate (as a percent) | 6.85% | 6.85% | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | $ 250 | $ 250 | ||
Other separate revolving credit facilities | ||||
Debt | ||||
Maximum borrowing capacity | 7.5 | |||
Total | 0 | 2.2 | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | 0 | 2.2 | ||
IRB | ||||
Debt | ||||
Total | 1.7 | 7.4 | ||
Aggregate maturities of long-term debt for each of the next five years and thereafter | ||||
Total | 1.7 | 7.4 | ||
Letter of Credit | Standby Facility | ||||
Debt | ||||
Maximum borrowing capacity | 50 | 50 | ||
Letters of credit outstanding | $ 19.5 | $ 18.7 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Operating lease cost | $ 23.4 | $ 23.6 | $ 47 | $ 46.6 | |
Cash payments for operating leases | 46.7 | 43.9 | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ 35.6 | $ 27.7 | |||
Weighted average remaining lease term - operating leases | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 7 months 6 days | ||
Weighted average discount rate - operating leases | 4% | 4% | 3.80% | ||
Maturities of operating lease liabilities | |||||
2023 (remaining six months) | $ 32.3 | $ 32.3 | |||
2024 | 57.1 | 57.1 | |||
2025 | 44.2 | 44.2 | |||
2026 | 31.5 | 31.5 | |||
2027 | 23.1 | 23.1 | |||
Thereafter | 72.2 | 72.2 | |||
Total operating lease payments | 260.4 | 260.4 | |||
Less: imputed interest | (35.8) | (35.8) | |||
Total operating lease liabilities | 224.6 | 224.6 | |||
Maximum | |||||
Finance right-of-use assets | 1 | 1 | |||
Finance right-of-use obligations | $ 1 | $ 1 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 24.40% | 24.70% | 24.40% | 24.70% |
Income tax at U.S. federal statutory tax rate (as a percent) | 21% | 21% | 21% | 21% |
Equity - Share Repurchases, Div
Equity - Share Repurchases, Dividends, Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jul. 25, 2023 | Feb. 28, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jul. 26, 2022 | |
Share Repurchase Plan | |||||||||
Value of shares authorized by the Board of Directors to be repurchased under share repurchase plan | $ 1,000 | ||||||||
Share repurchases (in shares) | 308,454 | 160,224 | 1,085,635 | 113,529 | 468,678 | 1,199,164 | |||
Average costs per share | $ 239.55 | $ 242.86 | $ 178.61 | $ 150.97 | $ 240.68 | $ 176 | |||
Value of shares repurchased | $ 73.9 | $ 38.9 | $ 193.9 | $ 17.1 | $ 112.8 | $ 211 | |||
Remaining value of shares authorized by the Board of Directors to be repurchased under share repurchase plan | $ 567.9 | $ 567.9 | |||||||
Percentage of excise tax on repurchase of shares (as a percent) | 1% | ||||||||
Common Stock and Additional Paid-In (in Shares) | |||||||||
Payments made to tax authorities on employees' behalf | $ 37.3 | $ 17.1 | |||||||
Dividends | |||||||||
Common stock quarterly dividend per share (in dollars per share) | $ 1 | $ 0.875 | $ 2 | $ 1.75 | |||||
Common stock dividend quarterly declared and paid per share (in dollars per share) | $ 1 | $ 1 | $ 0.875 | $ 2 | $ 1.75 | ||||
Dividends paid | $ 58.6 | $ 53.9 | $ 117.6 | $ 108.1 | |||||
Additional share-based compensation disclosures | |||||||||
Total unrecognized compensation cost | 115.4 | $ 115.4 | |||||||
Weighted average recognition period for unrecognized compensation cost (in years) | 1 year 9 months 18 days | ||||||||
Common Stock and Additional Paid in Capital | |||||||||
Share Repurchase Plan | |||||||||
Value of shares repurchased | $ 17.4 | $ 18 | $ (6.3) | 12.7 | |||||
Restricted stock units (RSUs) | |||||||||
Dividends | |||||||||
Dividend equivalents paid | $ 3 | $ 2.5 | |||||||
Additional share-based compensation disclosures | |||||||||
Vesting period (in years) | 3 years | ||||||||
Changes | |||||||||
Granted (in shares) | 109,683 | ||||||||
Restricted stock units (RSUs) and performance stock units (PSUs) | |||||||||
Changes | |||||||||
Unvested at the beginning of the year (in units) | 582,012 | 582,012 | |||||||
Granted (in shares) | 193,812 | ||||||||
Vested (in units) | (2,867) | ||||||||
Cancelled or forfeited (in units) | (7,876) | ||||||||
Unvested at the end of the period (in units) | 765,081 | 765,081 | |||||||
Shares reserved for future grants (all plans) | 1,458,557 | 1,458,557 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Unvested at the beginning of the year (in dollars per unit) | $ 164.60 | $ 164.60 | |||||||
Granted (in dollars per unit) | 247.90 | ||||||||
Vested (in dollars per unit) | 156.80 | ||||||||
Cancelled or forfeited (in dollars per unit) | 176.98 | ||||||||
Unvested at the end of the period (in dollars per unit) | $ 185.60 | $ 185.60 | |||||||
Performance stock units (PSUs) | |||||||||
Additional share-based compensation disclosures | |||||||||
Vesting period (in years) | 3 years | 3 years | |||||||
Return on assets result period | 3 years | 3 years | 3 years | ||||||
Changes | |||||||||
Granted (in shares) | 84,129 | ||||||||
Performance stock units (PSUs) | Maximum | |||||||||
Stock Based Compensation | |||||||||
Share of Common Stock | 2 | 2 | 2 | ||||||
All stock-based compensation plans | |||||||||
Common Stock and Additional Paid-In (in Shares) | |||||||||
Payments made to tax authorities on employees' behalf | $ 37.3 | $ 17.1 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ (86.3) | |
Current-period change | (0.3) | |
Balance at the end of the period | (86.6) | |
Deferred tax assets in accumulated other comprehensive loss, pension liabilities | 1.3 | $ 1.3 |
Foreign Currency Translation (Loss) Gain | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (84) | |
Current-period change | 1.2 | |
Balance at the end of the period | (82.8) | |
Pension and Postretirement Benefit Plan Adjustments, Net of Tax | ||
Schedule of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (2.3) | |
Current-period change | (1.5) | |
Balance at the end of the period | $ (3.8) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2023 |
Environmental Contingencies | |
Ownership interest in domestic subsidiaries (as a percent) | 100% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net income attributable to Reliance | $ 385.1 | $ 572.8 | $ 768.2 | $ 1,096.1 |
Denominator: | ||||
Weighted average shares outstanding (in shares) | 58,688,000 | 61,657,000 | 58,760,000 | 61,744,000 |
Dilutive effect of stock-based awards (in shares) | 658,000 | 937,000 | 680,000 | 944,000 |
Weighted average diluted shares outstanding (in shares) | 59,346,000 | 62,594,000 | 59,440,000 | 62,688,000 |
Earnings per share attributable to Reliance stockholders - basic (in dollars per share) | $ 6.56 | $ 9.29 | $ 13.07 | $ 17.75 |
Earnings per share attributable to Reliance stockholders - diluted (in dollars per share) | $ 6.49 | $ 9.15 | $ 12.92 | $ 17.49 |
Diluted shares | ||||
Weighted average shares, respectively, for RSUs and PSUs, not included in the diluted calculation due to their anti-dilutive effect | 100,326 | 162,116 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |