RELIANCE STEEL & ALUMINUM CO [RS] Filings

10-Q 1 rs-20230930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023

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

For the transition period from to

Commission file number: 001-13122


(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		95-1142616 (I.R.S. Employer Identification No.)

16100 N. 71st Street, Suite 400

Scottsdale, Arizona 85254

(Address of principal executive offices, including zip code)

(480) 564-5700

(Registrant’s telephone number, including area code)

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


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

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

As of October 27, 2023, there were 57,471,229 shares of the registrant’s common stock, $0.001 par value, outstanding.

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RELIANCE STEEL & ALUMINUM CO.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
	Item 1.	Financial Statements	1
		Unaudited Consolidated Balance Sheets	1
		Unaudited Consolidated Statements of Income	2
		Unaudited Consolidated Statements of Comprehensive Income	3
		Unaudited Consolidated Statements of Equity	4
		Unaudited Consolidated Statements of Cash Flows	5
		Notes to Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
	Item 4.	Controls and Procedures	22

PART II — OTHER INFORMATION
	Item 1.	Legal Proceedings	22
	Item 1A.	Risk Factors	23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 3.	Defaults Upon Senior Securities	23
	Item 4.	Mine Safety Disclosures	23
	Item 5.	Other Information	23
	Item 6.	Exhibits	24

SIGNATURE			25

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED BALANCE SHEETS

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


	September 30,		December 31,
	2023		2022*
ASSETS
Current assets:
Cash and cash equivalents	$	976.9	$	1,173.4
Accounts receivable, less allowance for credit losses of $27.1 at September 30, 2023 and $26.1 at December 31, 2022		1,666.3		1,565.7
Inventories		2,110.2		1,995.3
Prepaid expenses and other current assets		104.7		115.6
Income taxes receivable		1.0		36.6
Total current assets		4,859.1		4,886.6
Property, plant and equipment:
Land		281.6		262.7
Buildings		1,469.3		1,359.3
Machinery and equipment		2,645.9		2,446.9
Accumulated depreciation		(2,207.8)		(2,094.3)
Property, plant and equipment, net		2,189.0		1,974.6
Operating lease right-of-use assets		227.7		216.4
Goodwill		2,108.7		2,105.9
Intangible assets, net		990.1		1,019.6
Cash surrender value of life insurance policies, net		28.0		42.0
Other assets		90.3		84.8
Total assets	$	10,492.9	$	10,329.9

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable	$	445.4	$	412.4
Accrued expenses		130.3		118.8
Accrued compensation and retirement benefits		203.3		240.0
Accrued insurance costs		43.7		43.4
Current maturities of long-term debt and short-term borrowings		0.3		508.2
Current maturities of operating lease liabilities		55.7		52.5
Total current liabilities		878.7		1,375.3
Long-term debt		1,141.6		1,139.4
Operating lease liabilities		174.7		165.2
Long-term retirement benefits		30.4		26.1
Other long-term liabilities		56.8		51.4
Deferred income taxes		475.5		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—58,090 at September 30, 2023 and 58,787 at December 31, 2022		0.1		0.1
Retained earnings		7,823.6		7,173.6
Accumulated other comprehensive loss		(99.4)		(86.3)
Total Reliance stockholders’ equity		7,724.3		7,087.4
Noncontrolling interests		10.9		8.5
Total equity		7,735.2		7,095.9
Total liabilities and equity	$	10,492.9	$	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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net sales	$	3,623.0	$	4,247.2	$	11,468.6	$	13,414.2

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		2,546.0		3,008.2		7,942.9		9,292.7
Warehouse, delivery, selling, general and administrative (“SG&A”)		626.9		630.1		1,928.8		1,890.6
Depreciation and amortization		60.6		60.4		182.5		178.8
		3,233.5		3,698.7		10,054.2		11,362.1

Operating income		389.5		548.5		1,414.4		2,052.1

Other (income) expense:
Interest expense		9.7		15.6		30.3		46.8
Other (income) expense, net		(8.2)		8.9		(23.3)		21.5
Income before income taxes		388.0		524.0		1,407.4		1,983.8
Income tax provision		92.0		129.6		340.7		490.9
Net income		296.0		394.4		1,066.7		1,492.9
Less: net income attributable to noncontrolling interests		1.0		0.9		3.5		3.3
Net income attributable to Reliance	$	295.0	$	393.5	$	1,063.2	$	1,489.6

Earnings per share attributable to Reliance stockholders:
Basic	$	5.05	$	6.55	$	18.13	$	24.35
Diluted	$	4.99	$	6.45	$	17.92	$	23.98

Shares used in computing earnings per share:
Basic		58,427		60,055		58,648		61,175
Diluted		59,124		60,984		59,333		62,114

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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	296.0	$	394.4	$	1,066.7	$	1,492.9
Other comprehensive (loss) income:
Foreign currency translation loss		(11.9)		(32.0)		(10.7)		(51.3)
Postretirement benefit plan adjustments, net of tax		(0.9)		6.4		(2.4)		6.3
Total other comprehensive loss		(12.8)		(25.6)		(13.1)		(45.0)
Comprehensive income		283.2		368.8		1,053.6		1,447.9
Less: comprehensive income attributable to noncontrolling interests		1.0		0.9		3.5		3.3
Comprehensive income attributable to Reliance	$	282.2	$	367.9	$	1,050.1	$	1,444.6

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Total equity, beginning balances	$	7,625.5	$	6,863.1	$	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		16.8		18.6		48.4		48.4
Taxes paid related to net share settlement of restricted stock units		(4.0)		(4.5)		(41.3)		(21.6)
Repurchase of common shares		(11.6)		(14.1)		(5.3)		(26.8)
Excise tax on repurchase of common shares		(1.2)		—		(1.8)		—
Ending balances		0.1		0.1		0.1		0.1

Retained earnings:
Beginning balances		7,702.1		6,942.5		7,173.6		6,155.3
Net income attributable to Reliance		295.0		393.5		1,063.2		1,489.6
Cash dividends and dividend equivalents		(58.7)		(52.9)		(179.3)		(163.5)
Repurchase of common shares		(114.8)		(322.6)		(233.9)		(520.9)
Ending balances		7,823.6		6,960.5		7,823.6		6,960.5

Accumulated other comprehensive loss:
Beginning balances		(86.6)		(88.3)		(86.3)		(68.9)
Other comprehensive loss		(12.8)		(25.6)		(13.1)		(45.0)
Ending balances		(99.4)		(113.9)		(99.4)		(113.9)

Total Reliance stockholders' equity, ending balances		7,724.3		6,846.7		7,724.3		6,846.7

Noncontrolling interests:
Beginning balances		9.9		8.8		8.5		7.2
Comprehensive income		1.0		0.9		3.5		3.3
Capital contribution		—		—		—		0.3
Dividends paid		—		(0.9)		(1.1)		(2.0)
Ending balances		10.9		8.8		10.9		8.8

Total equity, ending balances	$	7,735.2	$	6,855.5	$	7,735.2	$	6,855.5

Cash dividends declared per common share	$	1.00	$	0.875	$	3.00	$	2.625

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended
	September 30,
	2023		2022
Operating activities:
Net income	$	1,066.7	$	1,492.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		182.5		178.8
Provision for credit losses		4.2		5.6
Stock-based compensation expense		48.4		48.4
Net loss on life insurance policies and deferred compensation plan assets		8.0		22.8
Other		(4.7)		2.9
Changes in operating assets and liabilities (excluding effect of businesses acquired):
Accounts receivable		(102.0)		(191.6)
Inventories		(113.5)		(126.6)
Prepaid expenses and other assets		91.1		20.0
Accounts payable and other liabilities		(35.0)		(143.3)
Net cash provided by operating activities		1,145.7		1,309.9

Investing activities:
Acquisition, net of cash acquired		(24.1)		—
Purchases of property, plant and equipment		(358.6)		(249.7)
Proceeds from sales of property, plant and equipment		9.9		9.8
Other		5.0		(4.5)
Net cash used in investing activities		(367.8)		(244.4)

Financing activities:
Net short-term debt repayments		(2.2)		(0.8)
Principal payments on long-term debt		(505.7)		—
Cash dividends and dividend equivalents		(179.3)		(163.5)
Share repurchases		(239.2)		(547.7)
Taxes paid related to net share settlement of restricted stock units		(41.3)		(21.6)
Other		(3.0)		22.5
Net cash used in financing activities		(970.7)		(711.1)
Effect of exchange rate changes on cash and cash equivalents		(3.7)		(11.2)
(Decrease) increase in cash and cash equivalents		(196.5)		343.2
Cash and cash equivalents at beginning of year		1,173.4		300.5
Cash and cash equivalents at end of the period	$	976.9	$	643.7

Supplemental cash flow information:
Interest paid during the period	$	32.5	$	39.1
Income taxes paid during the period, net	$	305.2	$	596.8

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. The IRA includes a new 15% minimum tax on book income of certain large corporations. Additionally, the IRA imposes a 1% excise tax, which is paid annually and recorded in paid-in-capital, on the excess of the fair market value of our share repurchases over the fair market value of share issuances, made after December 31, 2022. See our consolidated statements of equity for further information on our accrued 2023 excise tax.

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Note 2. Revenues

The following table presents our net sales disaggregated by product and service:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

	(in millions)
Carbon steel	$	1,996.9	$	2,371.9	$	6,266.6	$	7,545.2
Aluminum		592.6		660.3		1,902.5		2,069.9
Stainless steel		557.5		712.7		1,818.8		2,284.7
Alloy		174.4		188.2		552.6		568.5
Toll processing and logistics		154.3		139.5		464.2		414.8
Copper and brass		72.2		81.0		232.1		260.4
Other and eliminations		75.1		93.6		231.8		270.7
Total	$	3,623.0	$	4,247.2	$	11,468.6	$	13,414.2

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		2.6
Effect of foreign currency translation		0.2
Balance at September 30, 2023	$	2,108.7

We had no accumulated impairment losses related to goodwill at September 30, 2023 and December 31, 2022.

Note 4. Intangible Assets, net

Intangible assets, net consisted of the following:


		September 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	$	715.2	$	(510.7)	$	713.6	$	(479.3)
Backlog of orders	7.9		22.3		(5.2)		22.3		(3.1)
Other	9.4		10.3		(9.6)		9.9		(9.5)
			747.8		(525.5)		745.8		(491.9)
Intangible assets not subject to amortization:
Trade names			767.8		—		765.7		—
		$	1,515.6	$	(525.5)	$	1,511.5	$	(491.9)

Amortization expense for intangible assets was $33.6 million and $36.3 million for the nine months ended September 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 $4.0 million to the intangible assets acquired. Foreign currency translation gain related to Intangible assets, net was $0.1 million for the nine months ended September 30, 2023 compared to foreign currency translation loss of $5.0 million for the nine months ended September 30, 2022.

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The following is a summary of estimated future amortization expense:


	(in millions)
2023 (remaining three months)	$	10.2
2024		40.3
2025		36.1
2026		26.7
2027		26.0
Thereafter		83.0
	$	222.3

Note 5. Debt

Debt consisted of the following:


	September 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		(9.8)		(12.0)
Less: amounts due within one year and short-term borrowings		(0.3)		(508.2)
Total long-term debt	$	1,141.6	$	1,139.4

The weighted average interest rate on the Company’s outstanding borrowings as of September 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 amended to change the reference rate from LIBOR to SOFR (as amended, the “Credit Agreement”). As of September 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 September 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 September 30, 2023 and December 31, 2022, respectively.

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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 interest.

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 with no outstanding balance as of September 30, 2023 and $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 September 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 $41.4 million and $18.7 million were outstanding under this facility as of September 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 September 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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

	(in millions)
Operating lease cost	$	25.0	$	23.1	$	72.0	$	69.8

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Supplemental cash flow and balance sheet information is presented below:


	Nine Months Ended
	September 30,
	2023		2022

	(in millions)
Supplemental cash flow information:
Cash payments for operating leases	$	70.6	$	65.4
Right-of-use assets obtained in exchange for operating lease obligations	$	55.6	$	39.0

	September 30,		December 31,
	2023		2022
Other lease information:
Weighted average remaining lease term—operating leases		5.8 years		6.6 years
Weighted average discount rate—operating leases		4.1%		3.8%

Maturities of operating lease liabilities as of September 30, 2023 are as follows:


	(in millions)
2023 (remaining three months)	$	16.8
2024		61.2
2025		48.2
2026		35.3
2027		26.5
Thereafter		79.6
Total operating lease payments		267.6
Less: imputed interest		(37.2)
Total operating lease liabilities	$	230.4

Note 7. Income Taxes

Our effective income tax rates for the third quarter and nine months ended September 30, 2023 were 23.7% and 24.2%, respectively, 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 October 24, 2023, our Board of Directors declared the 2023 fourth quarter cash dividend of $1.00 per share of common stock, payable on December 1, 2023 to stockholders of record as of November 17, 2023.

During the third quarters of 2023 and 2022, we declared and paid quarterly dividends of $1.00 and $0.875 per share, or $58.5 million and $52.5 million in total, respectively. During the nine months ended September 30, 2023 and 2022, we declared and paid aggregate quarterly dividends of $3.00 and $2.625 per share, or $176.1 million and $160.6 million in total, respectively. In addition, we paid $3.2 million and $2.9 million in dividend equivalents with respect to vested restricted stock units during the nine months ended September 30, 2023 and 2022, respectively.

Stock-Based Compensation

We make annual grants of long-term equity 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

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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 nine months ended September 30, 2023 and 2022, we made payments of $41.3 million and $21.6 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 September 30, 2023, and changes during the nine 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	(4,075)		157.22
Cancelled or forfeited	(13,693)		177.18
Unvested at September 30, 2023	758,056	$	185.71
Shares reserved for future grants (all plans)	1,479,570

(1)	Comprised of 109,683 RSUs and 84,129 PSUs granted in February 2023. The RSUs cliff vest on December 1, 2025 and the PSUs are subject to a 3-year performance period ending December 31, 2025.

As of September 30, 2023, there was $82.5 million of total unrecognized compensation cost related to unvested RSUs and PSUs that is expected to be recognized, net of actual forfeitures and cancellations, over a weighted average period of 1.7 years.

Share Repurchases

Our share repurchase activity during the nine months ended September 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
Third quarter	467,213		270.49		126.4	1,883,093		178.79		336.7
	935,891	$	255.56	$	239.2	3,082,257	$	177.70	$	547.7

From October 2, 2023 through October 24, 2023, we repurchased 575,060 shares at an average cost per share of $255.15, for a total of $146.7 million, resulting in $294.8 million of our common stock remaining available for repurchase under our July 2022 authorization. Our Board of Directors subsequently amended our share repurchase program to increase the repurchase authorization to $1.5 billion effective October 30, 2023. 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.

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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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		Net of Tax		Loss
			(in millions)
Balance as of January 1, 2023	$	(84.0)	$	(2.3)	$	(86.3)
Current-period change		(10.7)		(2.4)		(13.1)
Balance as of September 30, 2023	$	(94.7)	$	(4.7)	$	(99.4)

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 September 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				Nine Months Ended
	September 30,				September 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	$	295.0	$	393.5	$	1,063.2	$	1,489.6

Denominator:
Weighted average shares outstanding		58,427		60,055		58,648		61,175
Dilutive effect of stock-based awards		697		929		685		939
Weighted average diluted shares outstanding		59,124		60,984		59,333		62,114

Earnings per share attributable to Reliance stockholders:
Basic	$	5.05	$	6.55	$	18.13	$	24.35
Diluted	$	4.99	$	6.45