Reliance 2016 Annual Report

(1) Gross profit, calculated as net sales less cost of sales, is a non-GAAP financial measure as it excludes depreciation and amortization expense associated with the corresponding sales. The majority of our orders are basic distribution with no processing services performed. For the remainder of our sales orders, we perform “first- stage” processing, which is generally not labor intensive as we are simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from our cost of sales. Therefore, our cost of sales is substantially comprised of the cost of the material we sell. We use gross profit as shown above as a measure of operating performance. Gross profit is an important operating and financial measure, as fluctuations in our gross profit can have a significant impact on our earnings. Gross profit, as presented, is not necessarily comparable with similarly titled measures for other companies.

SELECTED CONSOL IDATED FINANCIAL DATA

In millions, except share and per share data

Year Ended December 31,

2016

2015

2014

2013

2012

Income Statement Data:

Net sales

$8,613.4

$9,350.5

$10,451.6

$9,223.8

$8,442.3

Cost of sales (exclusive of depreciation and amortization expense)

6,023.1

6,803.6

7,830.6

6,826.2

6,235.4

Gross profit (1)

2,590.3

2,546.9

2,621.0

2,397.6

2,206.9

Warehouse, delivery, selling, general and administrative expense

1,803.3

1,728.5

1,789.8

1,638.4

1,396.2

Depreciation and amortization expense

222.0

218.5

213.8

192.4

149.0

Impairment of long-lived assets

52.4

53.3

–

14.9

2.5

Operating income

512.6

546.6

617.4

551.9

659.2

Other income (expense):

Interest expense

(84.6)

(84.3)

(81.9)

(77.5)

(58.4)

Other income (expense), net

1.2

(3.6)

10.8

3.9

8.6

Income before income taxes

429.2

458.7

546.3

478.3

609.4

Provision for income taxes

120.1

142.5

170.0

153.6

201.1

Net income

309.1

316.2

376.3

324.7

408.3

(2) Long-term debt includes the long-term portion of capital lease obligations.

Less: Net income attributable to noncontrolling interests

4.8

4.7

4.8

3.1

4.8

Net income attributable to Reliance

$304.3

$311.5

$371.5

$321.6

$403.5

Earnings Per Share:

Diluted

$4.16

$4.16

$4.73

$4.14

$5.33

Basic

$4.21

$4.20

$4.78

$4.19

$5.36

Weighted average shares outstanding – diluted

73,120,918 74,902,064 78,615,939

77,646,192 75,694,212

Weighted average shares outstanding – basic

72,362,513 74,096,349 77,682,943 76,844,912 75,216,955

Other Data:

Cash flow provided by operations

$626.5

$1,025.0

$356.0

$633.3

$601.9

Capital expenditures

154.9

172.2

190.4

168.0

214.0

Cash dividends per share

1.65

1.60

1.40

1.26

0.80

Balance Sheet Data (December 31) :

Working capital

$2,032.5

$1,564.5

$2,458.3

$2,165.5

$1,699.2

Total assets

7,411.3

7,121.6

7,822.4

7,323.6

5,846.7

Short-term debt

82.5

500.8

93.9

36.5

83.6

Long-term debt (2)

1,847.2

1,428.9

2,209.6

2,055.1

1,113.0

Reliance stockholders' equity

4,148.8

3,914.1

4,099.0

3,874.6

3,558.4

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