Item 1. Financial Statements
Item 1. Financial Statements
RELIANCE STEEL & ALUMINUM CO .
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions, except number of shares which are reflected in thousands and par value)
June 30,
December 31,
2023
2022*
ASSETS
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
270.0
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
42.0
Other assets
97.3
84.8
Total assets
$
10,440.4
$
10,329.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
499.8
$
412.4
Accrued expenses
134.6
118.8
Accrued compensation and retirement benefits
181.8
240.0
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
170.0
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
* Amounts derived from audited financial statements.
See accompanying notes to unaudited consolidated financial statements.
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RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except number of shares which are reflected in thousands and per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net sales
$
3,880.3
$
4,681.2
$
7,845.6
$
9,167.0
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
3,369.0
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
$
6.56
$
9.29
$
13.07
$
17.75
Diluted
$
6.49
$
9.15
$
12.92
$
17.49
Shares used in computing earnings per share:
Basic
58,688
61,657
58,760
61,744
Diluted
59,346
62,594
59,440
62,688
See accompanying notes to unaudited consolidated financial statements.
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RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net income
$
386.3
$
573.9
$
770.7
$
1,098.5
Other comprehensive income (loss):
Foreign currency translation gain (loss)
0.7
( 20.0 )
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 )
( 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
$
385.0
$
552.8
$
767.9
$
1,076.7
See accompanying notes to unaudited consolidated financial statements.
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RELIANCE STEEL & ALUMI NUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Total equity, beginning balances
$
7,354.4
$
6,538.7
$
7,095.9
$
6,093.7
Common stock and additional paid-in capital:
Beginning balances
0.1
0.1
0.1
0.1
Stock-based compensation
18.1
18.0
31.6
29.8
Taxes paid related to net share settlement of restricted stock units
( 0.1 )
—
( 37.3 )
( 17.1 )
Repurchase of common shares
( 17.4 )
( 18.0 )
6.3
( 12.7 )
Excise tax on repurchase of common shares
( 0.6 )
—
( 0.6 )
—
Ending balances
0.1
0.1
0.1
0.1
Retained earnings:
Beginning balances
7,432.1
6,599.5
7,173.6
6,155.3
Net income attributable to Reliance
385.1
572.8
768.2
1,096.1
Cash dividends and dividend equivalents
( 58.6 )
( 53.9 )
( 120.6 )
( 110.6 )
Repurchase of common shares
( 56.5 )
( 175.9 )
( 119.1 )
( 198.3 )
Ending balances
7,702.1
6,942.5
7,702.1
6,942.5
Accumulated other comprehensive loss:
Beginning balances
( 86.5 )
( 68.3 )
( 86.3 )
( 68.9 )
Other comprehensive loss
( 0.1 )
( 20.0 )
( 0.3 )
( 19.4 )
Ending balances
( 86.6 )
( 88.3 )
( 86.6 )
( 88.3 )
Total Reliance stockholders' equity, ending balances
7,615.6
6,854.3
7,615.6
6,854.3
Noncontrolling interests:
Beginning balances
8.7
7.4
8.5
7.2
Comprehensive income
1.2
1.1
2.5
2.4
Capital contribution
—
0.3
—
0.3
Dividends paid
—
—
( 1.1 )
( 1.1 )
Ending balances
9.9
8.8
9.9
8.8
Total equity, ending balances
$
7,625.5
$
6,863.1
$
7,625.5
$
6,863.1
Cash dividends declared per common share
$
1.00
$
0.875
$
2.00
$
1.75
See accompanying notes to unaudited consolidated financial statements.
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RELIANCE STEEL & ALUMINUM CO.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Six Months Ended
June 30,
2023
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
4.0
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:
Acquisition, 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
( 255.0 )
( 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 )
( 211.0 )
Taxes paid related to net share settlement of restricted stock units
( 37.3 )
( 17.1 )
Other
( 1.8 )
23.0
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 )
204.0
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
$
191.0
$
427.2
See accompanying notes to unaudited consolidated financial statements.
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RELIANCE STEEL & ALUMINUM CO.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
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. Actual results could differ from those estimates.
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.
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
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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.
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
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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 t.
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.
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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.
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 %
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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
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.
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 in the forms of service-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) that each have approximately 3 -year vesting periods. The PSUs include the right to receive a maximum payout of two shares of our common stock based on performance goals tied to achieving a 3 -year return on assets result and include service criteria. We also grant the non-management members of our Board of Directors fully vested stock awards under our Directors Equity Plan . The fair values of the RSUs, PSUs and stock awards are determined based on the closing stock price of our common stock on the grant date.
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.
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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.
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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. Pension and postretirement benefit plan adjustments are net of taxes of $ 1.3 million as of June 30, 2023 and December 31, 2022. 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 .
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 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. 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.
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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.
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RELIANCE STEEL & ALUMINUM CO.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.