10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

 X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

    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

RELIANCE STEEL & ALUMINUM CO.

(Exact name of registrant as specified in its charter)

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

350 South Grand Avenue, Suite 5100

Los Angeles, California 90071

(213) 687-7700

(Address of principal executive offices and telephone number)

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  þ  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  þ  No  ¨

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

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

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

As of July 31, 2012, 75,284,426 shares of the registrant’s common stock, no par value, were outstanding.

RELIANCE STEEL & ALUMINUM CO.

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PART I -- FINANCIAL INFORMATION		1
Item 1.	Unaudited Consolidated Balance Sheets at June 30, 2012 and December 31, 2011	1
	Unaudited Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2012 and 2011	2
	Unaudited Consolidated Statements of Comprehensive Income for the Three Months and Six Months Ended June 30, 2012 and 2011	3
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27
PART II -- OTHER INFORMATION		28
Item 1A.	Risk Factors	28
Item 6.	Exhibits	28
SIGNATURES		29
EXHIBIT INDEX		30

PART I -- FINANCIAL INFORMATION

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

ASSETS
	June 30,2012			December 31,2011*
Current assets:
Cash and cash equivalents	$	93.6		$	84.6
Accounts receivable, less allowance for doubtful accounts of $22.7 at June 30, 2012 and $22.2 at December 31, 2011	1,013.5			896.2
Inventories	1,424.0			1,212.8
Prepaid expenses and other current assets	39.7			47.8
Income taxes receivable	2.1			¾
Deferred income taxes	35.3			33.3
Total current assets	2,608.2			2,274.7
Property, plant and equipment:
Land	149.5			145.8
Buildings	672.7			656.8
Machinery and equipment	1,056.3			982.9
Accumulated depreciation	(726.7		)	(680.0		)
	1,151.8			1,105.5
Goodwill	1,277.6			1,244.3
Intangible assets, net	915.6			895.9
Cash surrender value of life insurance policies, net	37.6			41.9
Investments in unconsolidated entities	16.7			16.2
Other assets	27.8			27.4
Total assets	$	6,035.3		$	5,605.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	375.2		$	335.2
Accrued expenses	56.7			54.0
Accrued compensation and retirement costs	90.3			111.0
Accrued insurance costs	41.0			42.1
Current maturities of long-term debt and short-term borrowings	12.2			12.2
Income taxes payable	¾			21.9
Total current liabilities	575.4			576.4
Long-term debt	1,519.0			1,319.0
Long-term retirement costs	88.9			88.6
Other long-term liabilities	27.4			30.1
Deferred income taxes	449.4			439.8
Commitments and contingencies
Equity:
Preferred stock, no par value: Authorized shares — 5,000,000 None issued or outstanding	¾			¾
Common stock, no par value: Authorized shares — 200,000,000 Issued and outstanding shares – 75,278,455 at June 30, 2012 and 75,007,694 at December 31, 2011, stated capital	678.3			657.1
Retained earnings	2,697.5			2,495.6
Accumulated other comprehensive loss	(10.4		)	(8.8		)
Total Reliance shareholders’ equity	3,365.4			3,143.9
Noncontrolling interests	9.8			8.1
Total equity	3,375.2			3,152.0
Total liabilities and equity	$	6,035.3		$	5,605.9

* Amounts were 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 per share amounts)

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2012			2011			2012			2011
Net sales	$	2,209.7		$	2,049.5		$	4,498.0		$	3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	1,640.3			1,538.7			3,350.8			2,945.1
Warehouse, delivery, selling, general and administrative	346.7			313.7			704.4			632.2
Depreciation and amortization	36.5			31.5			72.0			64.5
	2,023.5			1,883.9			4,127.2			3,641.8
Operating income	186.2			165.6			370.8			320.4
Other income (expense):
Interest	(15.0		)	(15.5		)	(29.5		)	(30.1		)
Other (expense) income, net	(3.5		)	4.1			3.0			4.3
Income before income taxes	167.7			154.2			344.3			294.6
Income tax provision	57.5			54.0			116.2			100.8
Net income	110.2			100.2			228.1			193.8
Less: Net income attributable to noncontrolling interests	1.4			1.5			3.1			2.8
Net income attributable to Reliance	$	108.8		$	98.7		$	225.0		$	191.0
Earnings per share:
Diluted earnings per common share attributable to Reliance shareholders	$	1.44		$	1.31		$	2.98		$	2.54
Basic earnings per common share attributable to Reliance shareholders	$	1.45		$	1.32		$	3.00		$	2.56
Cash dividends per share	$	0.15		$	0.12		$	0.30		$	0.24

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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net income	$	110.2		$	100.2		$	228.1		$	193.8
Other comprehensive (loss) income:
Foreign currency translation (loss) gain	(9.2		)	(0.2		)	(1.6		)	6.4
Unrealized (loss) gain on investments, net of tax	(0.2		)	—			—			0.1
Total other comprehensive (loss) income	(9.4		)	(0.2		)	(1.6		)	6.5
Comprehensive income	100.8			100.0			226.5			200.3
Less: Comprehensive income attributable to noncontrolling interests	(1.4		)	(1.5		)	(3.1		)	(2.8		)
Comprehensive income attributable to Reliance	$	99.4		$	98.5		$	223.4		$	197.5

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNUAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net income	$	228.1		$	193.8
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense	72.0			64.5
Deferred income tax benefit	(2.5		)	(2.5		)
Gain on sales of property, plant and equipment	(0.2		)	(2.1		)
Equity in earnings of unconsolidated entities	(1.1		)	(1.1		)
Dividends received from unconsolidated entities	0.6			0.6
Share-based compensation expense	11.5			10.8
Tax (benefit) deficit from share-based compensation	(0.2		)	0.3
Net loss from life insurance policies and other investments	1.0			1.7
Changes in operating assets and liabilities (excluding effects of businesses acquired):
Accounts receivable	(98.6		)	(259.9		)
Inventories	(183.4		)	(299.0		)
Prepaid expenses and other assets	8.8			27.2
Accounts payable and other liabilities	(14.8		)	180.2
Net cash provided by (used in) operating activities	21.2			(85.5		)
Investing activities:
Purchases of property, plant and equipment	(86.8		)	(66.3		)
Acquisitions of metals service centers, net of cash acquired	(82.3		)	¾
Proceeds from sales of property, plant and equipment	2.8			7.3
Investment in marketable securities	(1.7		)	¾
Net proceeds from redemption of life insurance policies	0.7			2.3
Net cash used in investing activities	(167.3		)	(56.7		)
Financing activities:
Net short-term debt (repayments) borrowings	(29.4		)	0.8
Proceeds from long-term debt borrowings	458.0			286.0
Principal payments on long-term debt	(259.5		)	(117.1		)
Payments to noncontrolling interest holders	(1.4		)	(1.0		)
Dividends paid	(22.5		)	(17.9		)
Tax benefit (deficit) from share-based compensation	0.2			(0.3		)
Exercise of stock options	9.7			9.4
Net cash provided by financing activities	155.1			159.9
Effect of exchange rate changes on cash	¾			1.4
Increase in cash and cash equivalents	9.0			19.1
Cash and cash equivalents at beginning of year	84.6			72.9
Cash and cash equivalents at end of period	$	93.6		$	92.0
Supplemental cash flow information:
Interest paid during the period	$	29.0		$	26.4
Income taxes paid during the period	$	142.4		$	60.9
Non-cash investing and financing activities:
Debt assumed in connection with an acquisition of a metals service center	$	29.5		$	¾

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

1.  Basis of Presentation

Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles 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. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements, have been included. The results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results for the full year ending December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2011, included in Reliance Steel & Aluminum Co.’s (“We”, “Reliance” or the “Company”) Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated.

2.  Impact of Recently Issued Accounting Guidance

Accounting Guidance Recently Adopted

On January 1, 2012, we adopted changes issued by the Financial Accounting Standards Board (“FASB”), which requires companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. We elected to adopt the two-statement option. The new guidance eliminated the option to present the components of other comprehensive income as part of the statement of equity. Other than the change in presentation, the adoption of these changes had no material impact on our consolidated financial statements. The new guidance also required entities to present reclassification adjustments from accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. However, in December 2011, the FASB issued guidance, which indefinitely defers the guidance related to the presentation of reclassification adjustments.

On January 1, 2012, we adopted changes issued by the FASB to provide a consistent definition of fair value and to ensure that the fair value measurement and disclosure requirements are similar between U.S. generally accepted accounting principles and International Financial Reporting Standards. The new guidance changed certain fair value measurement principles and enhanced the disclosure requirements particularly for Level 3 fair value measurements. The adoption of these changes did not have a material impact on our consolidated financial statements.

Impact of Recently Issued Accounting Standard – Not Yet Adopted

In July 2012, the FASB issued updated guidance on the periodic testing of indefinite-lived intangible assets for impairment. This guidance will allow companies to assess qualitative factors to determine if it is more-likely-than-not that indefinite-lived intangible asset might be impaired and whether it is necessary to perform a quantitative impairment test. This new guidance is effective for us beginning January 1, 2013, with early adoption permitted. We are currently evaluating this guidance, but do not expect the adoption will have a material effect on our consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

3.  Acquisitions

2012 Acquisitions

Effective April, 27, 2012, through our wholly-owned subsidiary Precision Strip, Inc., we acquired the assets of the Worthington Steel Vonore, Tennessee plant, a processing facility owned by Worthington Industries, Inc.  The Vonore plant operates as a Precision Strip, Inc. location which processes and delivers carbon steel, aluminum and stainless steel products on a “toll” basis, processing the metal for a fee without taking ownership of the metal.  The addition of the Vonore location to our existing footprint of facilities allows us to better service our customer base in an important geographic area of the country.

Effective April 3, 2012, we acquired all the outstanding limited liability company interests of National Specialty Alloys, LLC (“NSA”), a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas.  In addition to enhancing our existing product offerings with the addition of specialty stainless steel and nickel products, NSA also expands and complements our exposure to the fast-growing energy market.  NSA was founded in 1985 and has additional locations in Anaheim, California; Buford, Georgia and Tulsa, Oklahoma. Net sales of NSA during the period from April 3, 2012 through June 30, 2012 were approximately $24.4 million.

Effective February 1, 2012, through our wholly-owned subsidiary Diamond Manufacturing Company, we acquired McKey Perforating Co., Inc. (“McKey”), headquartered in New Berlin, Wisconsin and its subsidiary, McKey Perforated Products Co., Inc., located in Manchester, Tennessee. McKey was founded in 1867 and provides a full range of metal perforating and fabrication services to customers located primarily in the U.S.  McKey will be working closely with Diamond Manufacturing Company to leverage their combined expertise in the perforated metal market and further expand our presence within that market.  McKey had net sales of $9.0 million for the five months ended June 30, 2012.

The combined transaction value of our 2012 acquisitions was $111.9 million, which included the assumption and repayment of $29.5 million of debt.  We funded these acquisitions with borrowings on our revolving credit facility.

2011 Acquisition

Effective August 1, 2011, we acquired all the outstanding capital securities of Continental Alloys & Services, Inc. (“Continental”), headquartered in Houston, Texas, and certain affiliated companies for a combined transaction value of approximately $440.8 million, which included the assumption and repayment of $104.7 million of debt. We funded this acquisition with borrowings on our revolving credit facility. Continental is a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies and has 12 locations in seven countries including Canada, Malaysia, Mexico, Singapore, the U.A.E., the United Kingdom, and the United States.  This acquisition aligns well with our diversification strategy by increasing our exposure to the fast growing energy market, including the addition of Oil Country Tubular Goods (“OCTG”) products, new processing capabilities, and entry into new international markets.  Continental and its affiliates had combined net sales of approximately $225.8 million for the six months ended June 30, 2012.

Purchase Price Allocations

The purchase price allocations for the 2012 acquisitions are preliminary and are pending the completion of tangible and intangible asset valuations and various pre- and post-acquisition period income tax returns. The purchase price allocation for the acquisition of Continental is pending the completion of certain post-acquisition period income tax returns.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

4.  Goodwill

The change in the carrying amount of goodwill for the six months ended June 30, 2012 is as follows:

	(in millions)
Balance as of December 31, 2011	$	1,244.3
Acquisitions	33.5
Effect of foreign currency translation	(0.2		)
Balance as of June 30, 2012	$	1,277.6

We had no accumulated impairment losses related to goodwill as of June 30, 2012.

5.  Intangible Assets, net

The following table summarizes our intangible assets, net:

	June 30, 2012							December 31, 2011
	Gross Carrying Amount			Accumulated Amortization				Gross Carrying Amount			Accumulated Amortization
	(in millions)
Intangible assets subject to amortization:
Covenants not to compete		$	7.6		$	(7.0	)		$	7.3		$	(6.9	)
Loan fees		31.2			(18.9		)		31.2			(17.6		)
Customer lists/relationships		501.8			(133.0		)		477.7			(114.2		)
Software – internal use		8.1			(5.1		)		8.1			(4.7		)
Other		6.6			(2.4		)		6.6			(2.2		)
		555.3			(166.4		)		530.9			(145.6		)
Intangible assets not subject to amortization:
Trade names		526.7			—				510.6			—
		$	1,082.0		$	(166.4	)		$	1,041.5		$	(145.6	)

Intangible assets recorded in connection with 2012 acquisitions were $41.0 million (see Note 3). We recognized amortization expense for intangible assets of $20.9 million and $15.8 million for the six months ended June 30, 2012 and 2011, respectively. Other changes in intangible assets, net during the six months ended June 30, 2012 are due to foreign currency translation losses of $0.4 million.

The following is a summary of estimated aggregated amortization expense for the remaining six months of 2012 and each of the succeeding five years:

	(in millions)
2012	$	21.5
2013	42.9
2014	40.9
2015	39.3
2016	37.6
2017	32.2

6.  Income Taxes

Our effective income tax rates for the three-month periods ended June 30, 2012 and 2011 were 34.3% and 35.0%, respectively. Our effective income tax rates for the six-month periods ended June 30, 2012 and 2011 were 33.7% and 34.2%, respectively. Permanent items that lowered our effective income tax rates from the federal statutory rate were not materially different in amounts during these periods and relate mainly to company-owned life insurance policies, domestic production activities deductions and foreign income levels that are taxed at lower rates.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

7.  Debt

Debt consists of the following:

	June 30,			December 31,
	2012			2011
	(in millions)
Unsecured revolving credit facility due July 26, 2016	$	845.0		$	645.0
Senior unsecured notes due July 2, 2013		75.0			75.0
Senior unsecured notes due November 15, 2016		350.0			350.0
Senior unsecured notes due November 15, 2036		250.0			250.0
Other notes and revolving credit facilities		12.8			12.8
Total		1,532.8			1,332.8
Less: unamortized discount		(1.6	)		(1.6	)
Less: amounts due within one year and short-term borrowings		(12.2	)		(12.2	)
Total long-term debt	$	1,519.0		$	1,319.0

Unsecured Revolving Credit Facility

On July 26, 2011, we amended and restated the existing syndicated credit agreement to increase the borrowing limit from $1.1 billion to $1.5 billion, and to extend the maturity date of the credit facility for a five-year term to July 26, 2016.  The amended and restated revolving credit facility has 26 banks as lenders. Interest on borrowings from the amended and restated revolving credit facility is at variable rates based on LIBOR plus 1.50% or the bank prime rate plus 0.50% as of June 30, 2012.  The amended and restated revolving credit facility includes a commitment fee on the unused portion, at an annual rate of 0.25% as of June 30, 2012. The applicable margin over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined.

Weighted average rates on borrowings outstanding on the revolving credit facility were 1.74% and 1.78% as of June 30, 2012 and December 31, 2011, respectively. As of June 30, 2012, we had $33.0 million of letters of credit outstanding under the revolving credit facility with availability to issue an additional $217.0 million of letters of credit.

Revolving Credit Facilities – Foreign Operations

Various other separate revolving credit facilities with a combined credit limit of approximately $20.7 million are in place for operations in Asia and Europe with combined outstanding balances of $11.9 million and $11.8 million as of June 30, 2012 and December 31, 2011, respectively.

Senior Unsecured Notes – Private Placements

We have $75.0 million of outstanding senior unsecured notes issued in private placements of debt as of June 30, 2012. At June 30, 2012, the outstanding senior notes bear interest at a fixed rate of 5.35% and mature in July 2013.

Senior Unsecured Notes – Publicly Traded

On November 20, 2006, we entered into an Indenture (the “Indenture”), for the issuance of $600 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, maturing on November 15, 2016 and (b) $250 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036. The notes are senior unsecured obligations of Reliance and rank equally with all other existing and future unsecured and unsubordinated debt obligations of Reliance. The senior unsecured notes include provisions that, in the event of a change in control and a downgrade of our credit rating, require us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued interest.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Covenants

The amended and restated revolving credit facility and the senior unsecured note agreements collectively require us to maintain a minimum net worth and interest coverage ratio and a maximum leverage ratio and include a change of control provision, among other things. Our interest coverage ratio for the twelve-month period ended June 30, 2012 was approximately 10.4 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as net income attributable to Reliance plus interest expense and provision for income taxes and plus or minus any non-operating non-recurring loss or gain, respectively, divided by interest expense). Our leverage ratio as of June 30, 2012 calculated in accordance with the terms of the revolving credit facility was 31.7% compared to the financial covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of capital lease obligations and outstanding letters of credit, divided by Reliance shareholders’ equity plus total debt). The minimum net worth requirement as of June 30, 2012 was $1.09 billion compared to Reliance shareholders’ equity balance of $3.37 billion as of June 30, 2012.

Additionally, all of our wholly-owned domestic subsidiaries, which constitute the substantial majority of our subsidiaries, guarantee the borrowings under the revolving credit facility, the Indenture and the private placement notes. The subsidiary guarantors, together with Reliance, are required collectively to account for at least 80% of our consolidated EBITDA and 80% of consolidated tangible assets. Reliance and the subsidiary guarantors accounted for approximately 87% of our total consolidated EBITDA for the last twelve months and approximately 90% of total consolidated tangible assets as of June 30, 2012.

We were in compliance with all debt covenants as of June 30, 2012.

8.  Equity

Common Stock

During the six months ended June 30, 2012, we issued 253,919 shares of common stock in connection with the exercise of stock options for total proceeds of approximately $9.7 million.

On May 16, 2012, our shareholders approved an amendment to our Restated Articles of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 200,000,000.

Share Based Compensation

On May 16, 2012, pursuant to the May 2011 Directors Equity Plan, which has been approved by the shareholders, 16,842 shares of restricted stock were automatically granted to the non-employee members of the Board of Directors. The awards include dividend rights and vest immediately upon grant.  The recipients are restricted from trading the restricted stock for one year from date of grant.  The fair value of the restricted stock granted was $49.87 per share, determined based on the closing price of the Company’s common stock on the grant date.

On March 16, 2012, we granted 391,050 restricted stock units (“RSUs”) to key employees pursuant to the Amended and Restated Stock Option and Restricted Stock Plan. Each RSU has a service condition and cliff vests at December 31, 2014 and consists of the right to receive one share of our common stock and dividend equivalent rights, subject to forfeiture, equal to the accrued cash or stock dividends where the record date for such dividends is after the grant date but before the shares vest.  In addition to the service criteria, 138,700 of the 391,050 RSUs also have performance goals and vest only upon the satisfaction of the service and performance criteria.  The fair value of the restricted stock units granted was $57.42 per share, determined based on the closing price of our common stock on the grant date.

Share Repurchase Program

As of June 30, 2012, 7,883,033 shares of common stock remain authorized for repurchase under our stock repurchase program. No shares were repurchased in 2012 or 2011. Repurchased shares are redeemed and treated as authorized but unissued shares.

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss included the following:

	June 30,			December 31,
	2012			2011
	(in millions)
Foreign currency translation gain	$	8.8		$	10.4
Unrealized loss on investments, net of tax		(0.4	)		(0.4	)
Minimum pension liability, net of tax		(18.8	)		(18.8	)
Total accumulated other comprehensive loss	$	(10.4	)	$	(8.8	)

Foreign currency translation adjustments are not generally adjusted for income taxes as they relate to indefinite investments in foreign subsidiaries. Unrealized loss on investments and minimum pension liability are net of taxes of $0.1 million and $11.5 million, respectively, as of June 30, 2012 and December 31, 2011.

9.  Commitments and Contingencies

We are currently involved with certain environmental remediation projects related to activities at former manufacturing operations of our wholly-owned subsidiary Earle M. Jorgensen Company (“EMJ”) that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ had insurance policies in place at the time they owned the manufacturing operations that are expected to cover the majority of the related costs. We do not expect that these obligations will have a material adverse impact on our financial position, results of operations or cash flows.

10.  Earnings Per Share

Basic earnings per share exclude any dilutive effects of options, restricted stock, warrants and convertible securities. Diluted earnings per share are calculated including the dilutive effects of options, restricted stock, warrants and convertible securities, if any.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except share and per share amounts)
Numerator:
Net income attributable to Reliance	$	108.8	$	98.7	$	225.0	$	191.0
Denominator:
Denominator for basic earnings per share:
Weighted average shares	75,087,057		74,773,715		75,004,840		74,697,185
Effect of dilutive securities:
Stock options and restricted stock	424,192		377,083		464,129		390,572
Denominator for diluted earnings per share:
Adjusted weighted average shares and assumed conversions	75,511,249		75,150,798		75,468,969		75,087,757
Net income per share attributable to Reliance shareholders – diluted	$	1.44	$	1.31	$	2.98	$	2.54
Net income per share attributable to Reliance shareholders – basic	$	1.45	$	1.32	$	3.00	$	2.56

10

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

The computations of earnings per share for the three months ended June 30, 2012 and 2011 do not include 2,462,550 and 3,084,925 shares reserved for issuance upon exercise of stock options or vesting of restricted shares, respectively, because their inclusion would have been anti-dilutive.

The computations of earnings per share for the six months ended June 30, 2012 and 2011 do not include 2,468,973 and 3,091,513 shares reserved for issuance upon exercise of stock options or vesting of restricted shares, respectively, because their inclusion would have been anti-dilutive.

11. Subsequent Event

On July 6, 2012, through our newly-formed subsidiary Bralco Metals (Australia) Pty Ltd, we completed the acquisition of substantially all of the assets of Airport Metals (Australia) Pty Ltd (“Airport Metals”), a subsidiary of Samuel Son & Co., Limited. Airport Metals, based in Melbourne, operates as a stocking distributor of aircraft materials and supplies. Terms were not disclosed due to immateriality.

12. Condensed Consolidating Financial Statements

In November 2006, we issued senior unsecured notes in the aggregate principal amount of $600 million at fixed interest rates that are guaranteed by our wholly-owned domestic subsidiaries. The accompanying consolidating financial information has been prepared and presented pursuant to Rule 3-10 of SEC Regulation S-X “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries. There are no significant restrictions on our ability to obtain funds from any of the guarantor subsidiaries by dividends or loans. The supplemental consolidating financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful.

11

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Balance Sheet
As of June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	30.7		$	13.8		$	49.1		$	—			$	93.6
Accounts receivable, less allowance for doubtful accounts		78.5			845.9			89.1			—				1,013.5
Inventories		61.7			1,198.7			163.6			—				1,424.0
Intercompany receivables		0.4			13.3			2.9			(16.6		)		—
Other current assets		167.2			28.0			5.9			(124.0		)		77.1
Total current assets		338.5			2,099.7			310.6			(140.6		)		2,608.2
Investments in subsidiaries		3,323.9			293.4			—			(3,617.3		)		—
Property, plant and equipment, net		101.7			972.2			77.9			—				1,151.8
Goodwill		23.8			1,149.4			104.4			—				1,277.6
Intangible assets, net		12.3			772.6			130.7			—				915.6
Intercompany receivables		1,439.3			33.6			—			(1,472.9		)		—
Other assets		15.7			64.6			1.8			—				82.1
Total assets		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8)			$	6,035.3
Liabilities & Equity
Accounts payable		$	35.7		$	314.5		$	41.6		$	(16.6	)		$	375.2
Accrued compensation and retirement costs		13.9			70.4			6.0			—				90.3
Other current liabilities		50.2			89.1			7.4			(49.0		)		97.7
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.3			—			11.9			—				12.2
Total current liabilities		100.1			549.0			66.9			(140.6		)		575.4
Long-term debt		1,519.0			—			—			—				1,519.0
Intercompany borrowings		—			1,316.5			156.4			(1,472.9		)		—
Other long-term liabilities		270.7			271.0			24.0			—				565.7
Total Reliance shareholders’ equity		3,365.4			3,243.1			374.2			(3,617.3		)		3,365.4
Noncontrolling interests		—			5.9			3.9			—				9.8
Total equity		3,365.4			3,249.0			378.1			(3,617.3		)		3,375.2
Total liabilities and equity		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8	)		$	6,035.3

12

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Balance Sheet
As of December 31, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	15.1		$	10.8		$	58.7		$	—			$	84.6
Accounts receivable, less allowance for doubtful accounts		69.6			739.1			87.5			—				896.2
Inventories		43.7			1,017.4			151.7			—				1,212.8
Intercompany receivables		0.3			11.6			0.9			(12.8		)		—
Other current assets		108.7			28.0			7.5			(63.1		)		81.1
Total current assets		237.4			1,806.9			306.3			(75.9		)		2,274.7
Investments in subsidiaries		3,217.0			273.9			—			(3,490.9		)		—
Property, plant and equipment, net		100.0			931.5			74.0			—				1,105.5
Goodwill		23.8			1,115.7			104.8			—				1,244.3
Intangible assets, net		13.6			748.0			134.3			—				895.9
Intercompany receivables		1,229.9			35.9			—			(1,265.8		)		—
Other assets		13.7			70.0			1.8			—				85.5
Total assets		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9
Liabilities & Equity
Accounts payable		$	31.2		$	270.6		$	46.2		$	(12.8	)		$	335.2
Accrued compensation and retirement costs		22.0			81.4			7.6			—				111.0
Other current liabilities		49.3			41.4			15.4			11.9				118.0
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.2			0.2			11.8			—				12.2
Total current liabilities		102.7			468.6			81.0			(75.9		)		576.4
Long-term debt		1,319.0			—			—			—				1,319.0
Intercompany borrowings		—			1,097.2			168.6			(1,265.8		)		—
Other long-term liabilities		269.8			264.9			23.8			—				558.5
Total Reliance shareholders’ equity		3,143.9			3,146.8			344.1			(3,490.9		)		3,143.9
Noncontrolling interests		—			4.4			3.7			—				8.1
Total equity		3,143.9			3,151.2			347.8			(3,490.9		)		3,152.0
Total liabilities and equity		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9

13

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2012
(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	189.7			$	1,924.1			$	154.3			$	(58.4	)		$	2,209.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		132.9				1,457.1				108.7				(58.4		)		1,640.3
Warehouse, delivery, selling, general and administrative		16.2				326.2				24.4				(20.1		)		346.7
Depreciation and amortization		3.4				29.8				3.3				—				36.5
		152.5				1,813.1				136.4				(78.5		)		2,023.5
Operating income		37.2				111.0				17.9				20.1				186.2
Other income (expense):
Interest		(14.8		)		(4.7		)		(0.5		)		5.0				(15.0		)
Other income (expense), net		22.8				(0.7		)		(0.5		)		(25.1		)		(3.5		)
Income before equity in earnings of subsidiaries and income taxes		45.2				105.6				16.9				—				167.7
Equity in earnings of subsidiaries		60.1				7.9				—				(68.0		)		—
Income before income taxes		105.3				113.5				16.9				(68.0		)		167.7
Income tax (benefit) provision		(3.5		)		57.4				3.6				—				57.5
Net income		108.8				56.1				13.3				(68.0		)		110.2
Less: Net income attributable to noncontrolling interests		—				1.4				—				—				1.4
Net income attributable to Reliance		$	108.8			$	54.7			$	13.3			$	(68.0	)		$	108.8

14

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2011

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Net sales		$	182.8			$	1,804.0			$	116.4		$	(53.7	)		$	2,049.5
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		129.2				1,386.4				76.8			(53.7		)		1,538.7
Warehouse, delivery, selling, general and administrative		19.8				293.7				20.7			(20.5		)		313.7
Depreciation and amortization		3.5				26.2				1.8			—				31.5
		152.5				1,706.3				99.3			(74.2		)		1,883.9
Operating income		30.3				97.7				17.1			20.5				165.6
Other income (expense):
Interest		(15.3		)		(12.0		)		—			11.8				(15.5)
Other income, net		30.3				6.1				—			(32.3		)		4.1
Income before equity in earnings of subsidiaries and income taxes		45.3				91.8				17.1			—				154.2
Equity in earnings of subsidiaries		51.6				7.9				—			(59.5		)		—
Income before income taxes		96.9				99.7				17.1			(59.5		)		154.2
Income tax (benefit) provision		(1.8		)		51.9				3.9			—				54.0
Net income		98.7				47.8				13.2			(59.5		)		100.2
Less: Net income attributable to noncontrolling interests		—				1.3				0.2			—				1.5
Net income attributable to Reliance		$	98.7			$	46.5			$	13.0		$	(59.5	)		$	98.7

15

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2012

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	382.4			$	3,896.3			$	345.9			$	(126.6	)		$	4,498.0
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		286.6				2,944.9				245.9				(126.6		)		3,350.8
Warehouse, delivery, selling, general and administrative		31.2				670.7				49.2				(46.7		)		704.4
Depreciation and amortization		6.9				59.0				6.1				—				72.0
		324.7				3,674.6				301.2				(173.3		)		4,127.2
Operating income		57.7				221.7				44.7				46.7				370.8
Other income (expense):
Interest		(29.2		)		(8.6		)		(1.2		)		9.5				(29.5)
Other income, net		56.7				2.0				0.5				(56.2		)		3.0
Income before equity in earnings of subsidiaries and income taxes		85.2				215.1				44.0				—				344.3
Equity in earnings of subsidiaries		128.1				17.8				—				(145.9		)		—
Income before income taxes		213.3				232.9				44.0				(145.9		)		344.3
Income tax (benefit) provision		(11.7		)		119.6				8.3				—				116.2
Net income		225.0				113.3				35.7				(145.9		)		228.1
Less: Net income attributable to noncontrolling interests		—				2.9				0.2				—				3.1
Net income attributable to Reliance		$	225.0			$	110.4			$	35.5			$	(145.9	)		$	225.0

16

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	358.5		$	3,487.9		$	225.7		$	(109.9	)	$	3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	268.3			2,639.6			147.1			(109.9		)	2,945.1
Warehouse, delivery, selling, general and administrative	39.4			597.3			40.9			(45.4		)	632.2
Depreciation and amortization	6.9			54.1			3.5			—			64.5
	314.6			3,291.0			191.5			(155.3		)	3,641.8
Operating income	43.9			196.9			34.2			45.4			320.4
Other income (expense):
Interest	(29.8		)	(18.6		)	(0.4		)	18.7			(30.1		)
Other income, net	62.3			6.1			—			(64.1		)	4.3
Income before equity in earnings of subsidiaries and income taxes	76.4			184.4			33.8			—			294.6
Equity in earnings of subsidiaries	104.7			15.7			—			(120.4		)	—
Income before income taxes	181.1			200.1			33.8			(120.4		)	294.6
Income tax (benefit) provision	(9.9		)	102.9			7.8			—			100.8
Net income	191.0			97.2			26.0			(120.4		)	193.8
Less: Net income attributable to noncontrolling interests	—			2.3			0.5			—			2.8
Net income attributable to Reliance	$	191.0		$	94.9		$	25.5		$	(120.4	)	$	191.0

17

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	225.0		$	113.3		$	35.7		$	(145.9	)	$	228.1
Equity in earnings of subsidiaries	(128.1		)	(18.9		)	—			145.9			(1.1		)
Other operating activities, net	14.1			(193.9		)	(26.0		)	—			(205.8		)
Cash provided by (used in) operating activities	111.0			(99.5		)	9.7			—			21.2
Investing activities:
Purchases of property, plant and equipment	(7.6		)	(72.0		)	(7.2		)	—			(86.8		)
Acquisitions of metal service centers, net of cash acquired	(65.9		)	(16.4		)	—			—			(82.3		)
Net advances to subsidiaries	(209.4		)	—			—			209.4			—
Other investing activities, net	0.1			1.7			—			—			1.8
Cash used in investing activities	(282.8		)	(86.7		)	(7.2		)	209.4			(167.3		)
Financing activities:
Net short-term debt (repayments) borrowings	—			(29.5		)	0.1			—			(29.4		)
Proceeds from long-term debt borrowings	458.0			—			—			—			458.0
Principal payments on long-term debt	(258.0		)	(1.5		)	—			—			(259.5		)
Dividends paid	(22.5		)	—			—			—			(22.5		)
Net intercompany borrowings (repayments)	—			221.6			(12.2		)	(209.4		)	—
Other financing activities, net	9.9			(1.4		)	—			—			8.5
Cash provided by (used in) financing activities	187.4			189.2			(12.1		)	(209.4		)	155.1
Effect of exchange rate changes on cash and cash equivalents	—			—			—			—			—
Increase (decrease) in cash and cash equivalents	15.6			3.0			(9.6		)	—			9.0
Cash and cash equivalents at beginning of year	15.1			10.8			58.7			—			84.6
Cash and cash equivalents at end of period	$	30.7		$	13.8		$	49.1		$	—		$	93.6

18

RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	191.0		$	97.2		$	26.0		$	(120.4	)	$	193.8
Equity in earnings of subsidiaries	(104.7		)	(16.8		)	—			120.4			(1.1		)
Other operating activities, net	0.4			(252.3		)	(26.3		)	—			(278.2		)
Cash provided by (used in) operating activities	86.7			(171.9		)	(0.3		)	—			(85.5		)
Investing activities:
Purchases of property, plant and equipment	(5.9		)	(58.6		)	(1.8		)	—			(66.3		)
Net advances to subsidiaries	(243.8		)	—			—			243.8			—
Other investing activities, net	2.6			6.9			0.1			—			9.6
Cash used in investing activities	(247.1		)	(51.7		)	(1.7		)	243.8			(56.7		)
Financing activities:
Net short-term debt repayments	—			—			0.8			—			0.8
Proceeds from long-term debt borrowings	286.0			—			—			—			286.0
Principal payments on long-term debt	(116.0		)	(1.1		)	—			—			(117.1		)
Dividends paid	(17.9		)	—			—			—			(17.9		)
Net intercompany borrowings	—			238.9			4.9			(243.8		)	—
Other financing activities, net	9.1			(1.0		)	—			—			8.1
Cash provided by financing activities	161.2			236.8			5.7			(243.8		)	159.9
Effect of exchange rate changes on cash and cash equivalents	—			—			1.4			—			1.4
Increase in cash and cash equivalents	0.8			13.2			5.1			—			19.1
Cash and cash equivalents at beginning of year	14.4			8.0			50.5			—			72.9
Cash and cash equivalents at end of period	$	15.2		$	21.2		$	55.6		$	—		$	92.0

19

RELIANCE STEEL & ALUMINUM CO.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q may contain forward-looking statements relating to future financial results. Actual results may differ materially as a result of factors over which Reliance Steel & Aluminum Co. has no control. These risk factors and additional information are included in our Annual Report on Form 10-K for the year ended December 31, 2011.

2012 Acquisitions

On July 6, 2012, through our newly-formed subsidiary Bralco Metals (Australia) Pty Ltd, we completed the acquisition of substantially all of the assets of Airport Metals (Australia) Pty Ltd (“Airport Metals”), a subsidiary of Samuel Son & Co., Limited. Airport Metals, based in Melbourne, operates as a stocking distributor of aircraft materials and supplies.

Effective April, 27, 2012, through our wholly-owned subsidiary Precision Strip, Inc., we acquired the assets of the Worthington Steel Vonore, Tennessee plant, a processing facility owned by Worthington Industries, Inc.  The Vonore plant operates as a Precision Strip, Inc. location which processes and delivers carbon steel, aluminum and stainless steel products on a “toll” basis, processing the metal for a fee without taking ownership of the metal.  The addition of the Vonore location to our existing footprint of facilities allows us to better service our customer base in an important geographic area of the country.

Effective April 3, 2012, we acquired all the outstanding limited liability company interests of National Specialty Alloys, LLC (“NSA”), a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas.  In addition to enhancing our existing product offerings with the addition of specialty stainless steel and nickel products, NSA also expands and complements our exposure to the fast-growing energy market.  NSA was founded in 1985 and has additional locations in Anaheim, California; Buford, Georgia and Tulsa, Oklahoma. Net sales of NSA during the period from April 3, 2012 through June 30, 2012 were approximately $24.4 million.

Effective February 1, 2012, through our wholly-owned subsidiary Diamond Manufacturing Company, we acquired McKey Perforating Co., Inc. (“McKey”), headquartered in New Berlin, Wisconsin and its subsidiary, McKey Perforated Products Co., Inc., located in Manchester, Tennessee. McKey was founded in 1867 and provides a full range of metal perforating and fabrication services to customers located primarily in the U.S.  McKey will be working closely with Diamond Manufacturing Company to leverage their combined expertise in the perforated metal market and further expand our presence within that market.  McKey had net sales of $9.0 million for the five months ended June 30, 2012.

2011 Acquisition

Effective August 1, 2011, we acquired all the outstanding capital securities of Continental Alloys & Services, Inc. (“Continental”), headquartered in Houston, Texas, and certain affiliated companies for a combined transaction value of approximately $440.8 million, which included the assumption and repayment of $104.7 million of debt. We funded this acquisition with borrowings on our revolving credit facility. Continental is a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies and has 12 locations in seven countries including Canada, Malaysia, Mexico, Singapore, the U.A.E., the United Kingdom, and the United States.  This acquisition aligns well with our diversification strategy by increasing our exposure to the fast growing energy market, including the addition of Oil Country Tubular Goods (“OCTG”) products, new processing capabilities, and entry into new international markets.  Continental and its affiliates had combined net sales of approximately $225.8 million for the six months ended June 30, 2012.

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Three Months and Six Months Ended June 30, 2012 Compared to Three Months and Six Months Ended June 30, 2011

The following table sets forth certain income statement data for the three-month and six-month periods ended June 30, 2012 and 2011 (dollars are shown in millions and certain amounts may not calculate due to rounding):

	Three Months Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
	$		% of Net Sales		$		% of Net Sales		$		% of Net Sales		$		% of Net Sales
Net sales	$	2,209.7	100.0	%	$	2,049.5	100.0	%	$	4,498.0	100.0	%	$	3,962.2	100.0	%
Cost of sales (exclusive of depreciation and amortization expense shown below)	1,640.3		74.2		1,538.7		75.1		3,350.8		74.5		2,945.1		74.3
Gross profit(1)	569.4		25.8		510.8		24.9		1,147.2		25.5		1,017.1		25.7
Warehouse, delivery, selling, general and administrative expense (“S,G&A”)	346.7		15.7		313.7		15.3		704.4		15.7		632.2		16.0
Depreciation expense	25.8		1.2		23.6		1.2		51.1		1.1		48.7		1.2
Amortization expense	10.7		0.5		7.9		0.4		20.9		0.5		15.8		0.4
Operating income	$	186.2	8.4	%	$	165.6	8.1	%	$	370.8	8.2	%	$	320.4	8.1	%

(1) Gross profit, calculated as net sales less cost of sales, and gross profit margin, calculated as gross profit divided by net sales, are non-GAAP financial measures as they exclude 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, are not significant and are excluded from our cost of sales. Therefore, our cost of sales is primarily comprised of the cost of the material we sell. We use gross profit and gross profit margin as shown above as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures, as fluctuations in our gross profit and gross profit margin can have a significant impact on our earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.

Net Sales

	June 30,				Dollar			Percentage
	2012		2011		Change			Change
	(in millions)
Net sales (three months ended)	$	2,209.7	$	2,049.5	$		160.2	7.8%
Net sales (six months ended)	$	4,498.0	$	3,962.2	$		535.8	13.5%
Net sales, same-store (three months ended)	$	2,078.6	$	2,049.5	$		29.1	1.4%
Net sales, same-store (six months ended)	$	4,238.3	$	3,962.2	$		276.1	7.0%
	June 30,				Tons			Percentage
	2012		2011		Change			Change
	(in thousands)
Tons sold (three months ended)	1,146.2		1,042.4		103.8			10.0%
Tons sold (six months ended)	2,319.9		2,074.2		245.7			11.8%
Tons sold, same-store (three months ended)	1,116.6		1,042.4		74.2			7.1%
Tons sold, same-store (six months ended)	2,253.4		2,074.2		179.2			8.6%
	June 30,				Price/Ton			Percentage
	2012		2011		Change			Change
Average selling price per ton sold (three months ended)	$	1,921	$	1,965	$	(44)		(2.2%)
Average selling price per ton sold (six months ended)	$	1,937	$	1,909	$	28		1.5%
Average selling price per ton sold, same-store (three months ended)	$	1,855	$	1,965	$	(110)		(5.6%)
Average selling price per ton sold, same-store (six months ended)	$	1,879	$	1,909	$	(30)		(1.6%)

Tons sold and average selling price per ton sold amounts exclude our toll processing sales. Same-store amounts exclude the results of our 2012 and 2011 acquisitions.

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We have continued to see steady improvement in our tons sold in 2012. In general, business activity in most all of our markets served is better in 2012 than in the same period in 2011. In 2012, our strongest markets continue to be energy (oil and gas), aerospace, farm and heavy equipment, and auto (through our toll processing businesses). We have seen some improvements in our non-residential construction related business mainly through industrial construction projects, but it still lags the growth we have seen in other areas.

Since we primarily purchase and sell our inventories in the “spot” market, the changes in our average selling prices generally fluctuate in accordance with the changes in the costs of the various metals we purchase. The mix of products sold can also have an impact on our average selling prices.  Our 2011 and 2012 acquisitions, particularly Continental and NSA who specialize in various alloy steel products, favorably impacted our 2012 three- and six-month period average selling prices as their specialty products have higher selling prices than our company average.

Our 2012 same-store three- and six-month period average selling prices declined from the same periods in 2011 due to lower mill pricing for most of our products as a result of decreases in raw material and scrap costs at the mills as well as high import levels that needed to be absorbed in the marketplace. Lower London Metal Exchange aluminum prices and reduced nickel surcharges were primarily responsible for the drop in common alloy aluminum and stainless steel prices, respectively.

Our major commodity same-store selling prices changed during the three-month period ended June 30, 2012 from the same period in 2011 as follows: carbon steel down 4.7%; aluminum down 2.4%; stainless steel down 12.9%; and alloy up 2.7%. For the 2012 six-month period, our same-store average selling prices changed from the same period in 2011 as follows: carbon steel down 0.3%; aluminum down 0.3%; stainless steel down 9.2%; and alloy up 5.2%.  As carbon steel sales represent slightly more than 50% of our sales, changes in carbon steel prices have a significant impact on changes in our overall average price per ton sold.

Cost of Sales

	June 30,
	2012			2011
	$		% of Net Sales	$		% of Net Sales	Dollar Change		Percentage Change
	(in millions)
Cost of sales (three months ended)	$	1,640.3	74.2%	$	1,538.7	75.1%	$	101.6	6.6%
Cost of sales (six months ended)	$	3,350.8	74.5%	$	2,945.1	74.3%	$	405.7	13.8%

The increase in cost of sales in the three- and six-month periods ended June 30, 2012 is primarily due to the increase in tons sold in both periods.  See “Net Sales” above for trends in both demand and costs of our products.

Our LIFO reserve adjustment, which is included in our cost of sales and, in effect, reflects cost of sales at current replacement costs, resulted in a credit, or income, of $7.5 million in the three-month period ended June 30, 2012 compared to a charge, or expense, of $25.0 million in the same period in 2011. Our LIFO reserve at June 30, 2012 remained unchanged from December 31, 2011, resulting in no charge or credit in the 2012 six-month period.  Our LIFO reserve adjustment resulted in a charge, or expense, of $45.0 million in the 2011 six-month period.

We currently estimate our year-end LIFO reserve to remain unchanged from prior year-end, as we expect our average cost of inventory at December 31, 2012 to remain consistent with prior year-end.

Gross Profit

	June 30,
	2012			2011
	$		% of Net Sales	$		% of Net Sales	Dollar Change		Percentage Change
	(in millions)
Gross profit (three months ended)	$	569.4	25.8%	$	510.8	24.9%	$	58.6	11.5%
Gross profit (six months ended)	$	1,147.2	25.5%	$	1,017.1	25.7%	$	130.1	12.8%

The increase in our gross profit levels in the three and six-month periods ended June 30, 2012 is primarily due to higher sales levels. The gross profit margin fluctuations are due to changing commodity prices that impact the cost of the materials we purchase as well as LIFO adjustments, which in effect reflect cost of sales at current replacement costs. See “Net Sales” and “Cost of Sales” above for discussion on product pricing trends and our LIFO reserve adjustments, respectively.

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Expenses

	June 30,
	2012			2011
	$		% of Net Sales	$		% of Net Sales	Dollar Change		Percentage Change
	(in millions)
S,G&A expense (three months ended)	$	346.7	15.7%	$	313.7	15.3%	$	33.0	10.5%
S,G&A expense (six months ended)	$	704.4	15.7%	$	632.2	16.0%	$	72.2	11.4%
S,G&A expense, same-store (three months ended)	$	328.4	15.8%	$	313.7	15.3%	$	14.7	4.7%
S,G&A expense, same-store (six months ended)	$	673.1	15.9%	$	632.2	16.0%	$	40.9	6.5%
Depreciation & amortization expenses (three months ended)	$	36.5	1.7%	$	31.5	1.5%	$	5.0	15.9%
Depreciation & amortization expenses (six months ended)	$	72.0	1.6%	$	64.5	1.6%	$	7.5	11.6%

The additional expenses of our 2012 and 2011 acquisitions and increases in certain warehouse and delivery expenses from additional staffing levels required due to improved demand accounted for most of the increase in S,G&A expense during the three- and six-month periods ended June 30, 2012 compared to the same periods in 2011. Our three-month period ended June 30, 2012 S,G&A expense as a percent of net sales increased as compared to the same period in 2011 primarily due to lower average selling prices in the 2012 three-month period compared to the same period in 2011.

The increase in depreciation and amortization expense was mainly due to our 2012 and 2011 acquisitions and depreciation expense from our recent capital expenditures.

Operating Income

	June 30,
	2012			2011
	$		% of Net Sales	$		% of Net Sales	Dollar Change		Percentage Change
	(in millions)
Operating income (three months ended)	$	186.2	8.4%	$	165.6	8.1%	$	20.6	12.4%
Operating income (six months ended)	$	370.8	8.2%	$	320.4	8.1%	$	50.4	15.7%

The higher gross profit dollars generated on higher sales, offset by only moderate increases in S,G&A expense, and the contributions of our 2011 and 2012 acquisitions significantly improved our operating income level in the three-and six-month periods ended June 30, 2012. Our operating income returns improved slightly in the 2012 periods mainly because our 2012 and 2011 acquisitions produce higher operating returns due to the specialty nature of their products and processing services.

Other Income (Expense)

	June 30,
	2012				2011
	$			% of Net Sales	$		% of Net Sales	Dollar Change			Percentage Change
	(in millions)
Other (expense) income, net (three months ended)	$	(3.5	)	(0.2%)	$	4.1	0.2%	$	(7.6	)	(185.4%)
Other income, net (six months ended)	$	3.0		0.1%	$	4.3	0.1%	$	(1.3	)	(30.2%)

The change in other income (expense) in the three month period ended June 30, 2012 compared to the same period in 2011 was primarily due to lower gains from sales of property plant, and equipment, lower gains from redemption of life insurance policies and higher foreign currency losses due to the strengthening of the U.S. dollar in the three month-period ended June 30, 2012.

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Income Tax Rate

Our effective income tax rates for the three-month periods ended June 30, 2012 and 2011 were 34.3% and 35.0%, respectively. Our effective income tax rates for the six-month periods ended June 30, 2012 and 2011 were 33.7% and 34.2%, respectively. Permanent items that lowered our effective income tax rates from the federal statutory rate were not materially different in amounts during these periods and relate mainly to company-owned life insurance policies, domestic production activities deductions and foreign income levels that are taxed at lower rates.

Net Income Attributable to Reliance

	June 30,
	2012			2011
	$		% of Net Sales	$		% of Net Sales	Dollar Change		Percentage Change
	(in millions)
Net income attributable to Reliance (three months ended)	$	108.8	4.9%	$	98.7	4.8%	$	10.1	10.2%
Net income attributable to Reliance (six months ended)	$	225.0	5.0%	$	191.0	4.8%	$	34.0	17.8%

The increase in net income attributable to Reliance in the three- and six- month periods ended June 30, 2012 was primarily the result of more favorable demand for our products, which has allowed us to generate increased gross profit dollars with relatively lower increases in our operating expenses, and contributions from our 2011 and 2012 acquisitions.

Liquidity and Capital Resources

Operating Activities

Net cash provided by operating activities was $21.2 million in the six-month period ended June 30, 2012 as compared to net cash used in operating activities of $85.5 million in the same period in 2011. As a result of increased demand levels from December 31, 2011, our working capital, primarily accounts receivable and inventories, has increased from year-end levels.  However, we were able to fund these increases partially with our profitable business activities and borrowings on our $1.5 billion revolving credit facility. Our receivables and FIFO inventories increased by $98.6 million and $183.4 million, respectively, from December 31, 2011 levels, and our accounts payable and accrued expenses decreased approximately $14.8 million.

To manage our working capital, we focus on our days sales outstanding and on our inventory turnover rate, as receivables and inventory are the two most significant elements of our working capital. At June 30, 2012 our days sales outstanding rate was approximately 41.5 days compared to 41.6 days at December 31, 2011.  Our inventory turn rate (based on dollars) during the six-month period ended June 30, 2012 was about 4.1 times (or 2.9 months on hand), compared to our 2011 annual rate of 4.4 times (or 2.7 months on hand). Our turns were primarily impacted by the Continental acquisition in August 2011 and NSA in April 2012. Excluding the 2011 and 2012 acquisitions, our 2012 inventory turn rate (based on dollars) was 4.3 times (or 2.8 months on hand).

Investing Activities

Capital expenditures were $86.8 million for the six-month period ended June 30, 2012 compared to $66.3 million during the same period in 2011. The majority of our 2012 capital expenditures relate to growth initiatives to expand or relocate existing facilities, purchase properties that were previously leased and to add or upgrade equipment in addition to meeting ongoing maintenance requirements. Our 2012 capital expenditures are budgeted at approximately $250 million. At this point, we expect our full year 2012 capital expenditures to be below our budgeted amount. However, we have not curtailed our growth activities.

We also spent $82.3 million on acquisitions in the 2012 six-month period, net of cash acquired and debt assumed.

Financing Activities

The increase in our working capital, our 2012 capital expenditures and the 2012 acquisitions were largely funded by our cash from operations and net borrowings of $200.0 million on our credit facility. We paid dividends to our shareholders of $22.5 million during the six-month period ended June 30, 2012. On July 24, 2012, our Board of Directors declared the 2012 third quarter cash dividend of $.25 per share, up 67% from $.15 per share. We have

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increased our dividend 18 times since our IPO in 1994 and have paid regular quarterly dividends to our shareholders for 53 consecutive years.

Liquidity

Our primary sources of liquidity are our internally generated funds from operations and our $1.5 billion revolving credit facility. Our total outstanding debt at June 30, 2012 was $1.53 billion, up from $1.33 billion at December 31, 2011. At June 30, 2012, we had $845.0 million in outstanding borrowings on our $1.5 billion revolving credit facility.

On July 26, 2011, we amended and restated the existing syndicated credit agreement to increase the borrowing limit from $1.1 billion to $1.5 billion, and to extend the maturity date of the credit facility for a five-year term to July 26, 2016.  The amended and restated revolving credit facility has 26 banks as lenders. Interest on borrowings from the amended and restated revolving credit facility is at variable rates based on LIBOR plus 1.50% or the bank prime rate plus 0.50% as of June 30, 2012.  The amended and restated revolving credit facility includes a commitment fee on the unused portion, at an annual rate of 0.25% as of June 30, 2012. The applicable margin over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined.

We also have various other separate revolving credit facilities in place for our operations in Asia and Europe with a combined credit limit of approximately $20.7 million and with combined outstanding balances of $11.9 million and $11.8 million as of June 30, 2012 and December 31, 2011, respectively.

Capital Resources

On November 20, 2006 we entered into an Indenture (the “Indenture”), for the issuance of $600 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, maturing on November 15, 2016 and (b) $250 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036. The notes are senior unsecured obligations and rank equally with all of our other existing and future unsecured and unsubordinated debt obligations.  The senior unsecured notes include provisions that, in the event of a change in control and a downgrade of our credit rating, require us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued interest.

At June 30, 2012, we also had $75.0 million of outstanding senior unsecured notes issued in private placements of debt. The outstanding senior notes bear interest at a fixed rate of 5.35% and mature in July 2013.

Our net debt-to-total capital ratio was 29.9% at June 30, 2012; up from our 2011 year-end rate of 28.4% (net debt-to-total capital is calculated as total debt, net of cash, divided by Reliance shareholders’ equity plus total debt, net of cash).

As of June 30, 2012, we had $87.8 million of debt obligations coming due before our new $1.5 billion revolving credit facility expires on July 26, 2016. We are comfortable that we will have adequate cash flow and capacity on our revolving credit facility to fund our debt obligations as well as our working capital, capital expenditure, growth and other needs, and to maintain and potentially increase our dividends. We expect to continue our acquisition and other growth activities in the future and anticipate that we will be able to fund such activities with cash from operations and borrowings under our revolving credit facility in the near term.

Covenants

Our amended and restated revolving credit facility and senior notes collectively require that we maintain a minimum net worth and interest coverage ratio, and a maximum leverage ratio and include change of control provisions, among other things. The interest coverage ratio for the twelve month period ended June 30, 2012 was approximately 10.4 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as net income attributable to Reliance plus interest expense and provision for income taxes and plus or minus any non-operating non-recurring loss or gain, respectively, divided by interest expense). The leverage ratio at June 30, 2012, calculated in accordance with the terms of the credit agreement, was 31.7% compared to the debt covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of capital lease obligations and outstanding letters of credit, divided by Reliance shareholders’ equity plus total debt). The minimum net worth requirement at June 30, 2012 was $1.09 billion compared to the Reliance shareholders’ equity balance of $3.37 billion at June 30, 2012.

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Additionally, all of our wholly-owned domestic subsidiaries, which constitute the substantial majority of our subsidiaries, guarantee the borrowings under the revolving credit facility, the Indenture and the private placement notes. The subsidiary guarantors, together with Reliance, are required collectively to account for at least 80% of our consolidated EBITDA and 80% of consolidated tangible assets. Reliance and the subsidiary guarantors accounted for approximately 87% of our total consolidated EBITDA for the last twelve months and approximately 90% of total consolidated tangible assets as of June 30, 2012.

We were in compliance with all debt covenants at June 30, 2012.

Off-Balance-Sheet Arrangements

We had no material changes in commitments for capital expenditures, operating lease obligations or purchase obligations as of June 30, 2012, as compared to those disclosed in our table of contractual obligations included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Inflation

Our operations have not been, and we do not expect them to be, materially affected by general inflation. Historically, we have been successful in adjusting prices to our customers to reflect changes in metal prices.

Seasonality

Some of our customers are in seasonal businesses, especially customers in the construction industry and related businesses. As a result of our geographic, product and customer diversity, however, our operations have not shown any material seasonal trends. Revenues in the months of July, November and December traditionally have been lower than in other months because of a reduced number of working days for shipments of our products resulting from vacation and holiday closures at some of our customers. We cannot assure you that period-to-period fluctuations will not occur in the future. Results of any one or more quarters are therefore not necessarily indicative of annual results.

Goodwill and Other Intangible Assets

Effective January 1, 2012, we revised our internal reporting package for our Chief Operation Decision Maker (our Chief Executive Officer) and our Board of Directors in order to better align internal reporting with the way performance is measured and key resource allocation decisions are made, which are primarily based on enterprise level data. As part of the segment reassessment process triggered by this change, we concluded that we have one operating segment and also one reporting unit for goodwill impairment purposes. There was no change in our reportable segments; we have one reportable segment, metals service centers.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $1.28 billion at June 30, 2012, or approximately 21.2% of total assets, or 38.0% of Reliance shareholders’ equity. Additionally, other intangible assets, net amounted to $915.6 million at June 30, 2012, or approximately 15.2% of total assets, or 27.2% of Reliance shareholders’ equity. We review the recoverability of goodwill and other intangible assets deemed to have indefinite lives annually or whenever significant events or changes occur, which might impair the recovery of recorded amounts. Our most recently completed annual impairment tests of goodwill were performed as of November 1, 2011 and updated for any significant developments or changes through December, 31, 2011. We determined that the recorded amounts for goodwill were recoverable and that no impairment existed. Our 2012 annual impairment tests of goodwill will be performed as of November 1, 2012. Other intangible assets with finite useful lives continue to be amortized over their useful lives. We review the recoverability of our long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and the current changing market conditions may impact our assumptions as to commodity prices, demand and future growth rates or other factors that may result in changes in our estimates of future cash flows. Although we believe the assumptions used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a significantly different result. Furthermore, significant declines in the market conditions for our products as well as significant decreases in the price of our common stock could also impact our impairment analysis. However, as of June 30, 2012, we have noted no indications of impairment.

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Critical Accounting Policies

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our unaudited Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. When we prepare these financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to accounts receivable, inventories, deferred tax assets, goodwill and intangible assets and long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

For further information regarding the accounting policies that we believe to be critical accounting policies and that affect our more significant judgments and estimates used in preparing our consolidated financial statements see our Annual Report on Form 10-K for the year ended December 31, 2011. We do not believe that any of the new accounting guidance implemented during 2012 changed our critical accounting policies.

New Accounting Guidance

See Notes to Unaudited Consolidated Financial Statements for disclosure on new accounting guidance issued or implemented.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

In the ordinary course of business, we are exposed to various market risk factors, including fluctuations in interest rates, changes in general economic conditions, domestic and foreign competition, foreign currency exchange rates, metals pricing, demand and availability. There have been no significant changes in our market risk exposures since December 31, 2011. Please refer to Item 7A - Quantitative and Qualitative Disclosures About Market Risk, contained in our Annual Report on Form 10-K for the year ended December 31, 2011 for further discussion on quantitative and qualitative disclosures about market risk.

Item 4. Controls And Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to and as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered in this report, the Company’s disclosure controls and procedures are effective.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II -- OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 6.  Exhibits

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document. (1)
101.SCH	XBRL Taxonomy Extension Schema Document. (1)
101.CAL	XBRL Taxonomy Calculation Linkbase Document. (1)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (1)
101.LAB	XBRL Taxonomy Label Linkbase Document. (1)
101.PRE	XBRL Taxonomy Presentation Linkbase Document. (1)

(1)  Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RELIANCE STEEL & ALUMINUM CO.
Dated:   August 6, 2012	By:	/s/	David H. Hannah
			David H. Hannah
			Chairman and
			Chief Executive Officer
	By:	/s/	Karla R. Lewis
			Karla R. Lewis
			Executive Vice President and
			Chief Financial Officer

29

Exhibit Index

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document. (1)
101.SCH	XBRL Taxonomy Extension Schema Document. (1)
101.CAL	XBRL Taxonomy Calculation Linkbase Document. (1)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (1)
101.LAB	XBRL Taxonomy Label Linkbase Document. (1)
101.PRE	XBRL Taxonomy Presentation Linkbase Document. (1)

(1)  Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

30

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer
Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934

I, David H. Hannah, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Reliance Steel & Aluminum Co.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2012

/s/ David H. Hannah

David H. Hannah

Chairman and

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934

I, Karla R. Lewis, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Reliance Steel & Aluminum Co.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2012

/s/ Karla R. Lewis

Karla R. Lewis

Executive Vice President and

Chief Financial Officer

EX-32

Exhibit 32

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) (the “Act”), each of the undersigned officers of Reliance Steel & Aluminum Co., a California corporation (the “Company”), does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (the “Periodic Report”) of the Company fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)) and information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David H. Hannah

David H. Hannah

Chairman and

Chief Executive Officer

/s/ Karla R. Lewis

Karla R. Lewis

Executive Vice President and

Chief Financial Officer

Dated: August 6, 2012

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Condensed Consolidating Financial Statements (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Nov. 30, 2006	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Consolidating financial statements, captions
Aggregate principal amount	$ 600
ASSETS
Cash and cash equivalents		93.6	84.6	92.0	72.9
Accounts receivable, less allowance for doubtful accounts		1,013.5	896.2
Inventories		1,424.0	1,212.8
Other current assets		77.1	81.1
Total current assets		2,608.2	2,274.7
Property, plant and equipment, net		1,151.8	1,105.5
Goodwill		1,277.6	1,244.3
Intangible assets, net		915.6	895.9
Other assets		82.1	85.5
Total assets		6,035.3	5,605.9
Liabilities & Equity
Accounts payable		375.2	335.2
Accrued compensation and retirement costs		90.3	111.0
Other current liabilities		97.7	118.0
Current maturities of long-term debt and short-term borrowings		12.2	12.2
Total current liabilities		575.4	576.4
Long-term debt		1,519.0	1,319.0
Other long-term liabilities		565.7	558.5
Total Reliance shareholders' equity		3,365.4	3,143.9
Noncontrolling interests		9.8	8.1
Total equity		3,375.2	3,152.0
Total liabilities and equity		6,035.3	5,605.9
Parent
ASSETS
Cash and cash equivalents		30.7	15.1	15.2	14.4
Accounts receivable, less allowance for doubtful accounts		78.5	69.6
Inventories		61.7	43.7
Intercompany receivables		0.4	0.3
Other current assets		167.2	108.7
Total current assets		338.5	237.4
Investments in subsidiaries		3,323.9	3,217.0
Property, plant and equipment, net		101.7	100.0
Goodwill		23.8	23.8
Intangible assets, net		12.3	13.6
Intercompany receivables		1,439.3	1,229.9
Other assets		15.7	13.7
Total assets		5,255.2	4,835.4
Liabilities & Equity
Accounts payable		35.7	31.2
Accrued compensation and retirement costs		13.9	22.0
Other current liabilities		50.2	49.3
Current maturities of long-term debt and short-term borrowings		0.3	0.2
Total current liabilities		100.1	102.7
Long-term debt		1,519.0	1,319.0
Other long-term liabilities		270.7	269.8
Total Reliance shareholders' equity		3,365.4	3,143.9
Total equity		3,365.4	3,143.9
Total liabilities and equity		5,255.2	4,835.4
Guarantor Subsidiaries
ASSETS
Cash and cash equivalents		13.8	10.8	21.2	8.0
Accounts receivable, less allowance for doubtful accounts		845.9	739.1
Inventories		1,198.7	1,017.4
Intercompany receivables		13.3	11.6
Other current assets		28.0	28.0
Total current assets		2,099.7	1,806.9
Investments in subsidiaries		293.4	273.9
Property, plant and equipment, net		972.2	931.5
Goodwill		1,149.4	1,115.7
Intangible assets, net		772.6	748.0
Intercompany receivables		33.6	35.9
Other assets		64.6	70.0
Total assets		5,385.5	4,981.9
Liabilities & Equity
Accounts payable		314.5	270.6
Accrued compensation and retirement costs		70.4	81.4
Other current liabilities		89.1	41.4
Deferred income taxes		75.0	75.0
Current maturities of long-term debt and short-term borrowings			0.2
Total current liabilities		549.0	468.6
Intercompany borrowings		1,316.5	1,097.2
Other long-term liabilities		271.0	264.9
Total Reliance shareholders' equity		3,243.1	3,146.8
Noncontrolling interests		5.9	4.4
Total equity		3,249.0	3,151.2
Total liabilities and equity		5,385.5	4,981.9
Non-Guarantor Subsidiaries
ASSETS
Cash and cash equivalents		49.1	58.7	55.6	50.5
Accounts receivable, less allowance for doubtful accounts		89.1	87.5
Inventories		163.6	151.7
Intercompany receivables		2.9	0.9
Other current assets		5.9	7.5
Total current assets		310.6	306.3
Property, plant and equipment, net		77.9	74.0
Goodwill		104.4	104.8
Intangible assets, net		130.7	134.3
Other assets		1.8	1.8
Total assets		625.4	621.2
Liabilities & Equity
Accounts payable		41.6	46.2
Accrued compensation and retirement costs		6.0	7.6
Other current liabilities		7.4	15.4
Current maturities of long-term debt and short-term borrowings		11.9	11.8
Total current liabilities		66.9	81.0
Intercompany borrowings		156.4	168.6
Other long-term liabilities		24.0	23.8
Total Reliance shareholders' equity		374.2	344.1
Noncontrolling interests		3.9	3.7
Total equity		378.1	347.8
Total liabilities and equity		625.4	621.2
Consolidating Adjustments
ASSETS
Intercompany receivables		(16.6)	(12.8)
Other current assets		(124.0)	(63.1)
Total current assets		(140.6)	(75.9)
Investments in subsidiaries		(3,617.3)	(3,490.9)
Intercompany receivables		(1,472.9)	(1,265.8)
Total assets		(5,230.8)	(4,832.6)
Liabilities & Equity
Accounts payable		(16.6)	(12.8)
Other current liabilities		(49.0)	11.9
Deferred income taxes		(75.0)	(75.0)
Total current liabilities		(140.6)	(75.9)
Intercompany borrowings		(1,472.9)	(1,265.8)
Total Reliance shareholders' equity		(3,617.3)	(3,490.9)
Total equity		(3,617.3)	(3,490.9)
Total liabilities and equity		$ (5,230.8)	$ (4,832.6)

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended	5 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 National Specialty Alloys, LLC	Jun. 30, 2012 McKey Perforated Products Co., Inc.,	Jun. 30, 2012 Continental Alloys & Services, Inc.	Aug. 01, 2011 Continental Alloys & Services, Inc. Country Location	Jun. 30, 2012 2012 acquisitions
Acquisitions
Number of locations of the acquiree entity								12
Number of countries of the acquiree entity								7
Net sales	$ 2,209.7	$ 2,049.5	$ 4,498.0	$ 3,962.2	$ 24.4	$ 9.0	$ 225.8
Total transaction value								440.8	111.9
Assumed debt								$ 104.7	$ 29.5

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Acquisitions

6 Months Ended

Jun. 30, 2012

Acquisitions

Acquisitions

3.  Acquisitions

2012 Acquisitions

Effective April, 27, 2012, through our wholly-owned subsidiary Precision Strip, Inc., we acquired the assets of the Worthington Steel Vonore, Tennessee plant, a processing facility owned by Worthington Industries, Inc.  The Vonore plant operates as a Precision Strip, Inc. location which processes and delivers carbon steel, aluminum and stainless steel products on a “toll” basis, processing the metal for a fee without taking ownership of the metal.  The addition of the Vonore location to our existing footprint of facilities allows us to better service our customer base in an important geographic area of the country.

Effective April 3, 2012, we acquired all the outstanding limited liability company interests of National Specialty Alloys, LLC (“NSA”), a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas.  In addition to enhancing our existing product offerings with the addition of specialty stainless steel and nickel products, NSA also expands and complements our exposure to the fast-growing energy market.  NSA was founded in 1985 and has additional locations in Anaheim, California; Buford, Georgia and Tulsa, Oklahoma. Net sales of NSA during the period from April 3, 2012 through June 30, 2012 were approximately $24.4 million.

Effective February 1, 2012, through our wholly-owned subsidiary Diamond Manufacturing Company, we acquired McKey Perforating Co., Inc. (“McKey”), headquartered in New Berlin, Wisconsin and its subsidiary, McKey Perforated Products Co., Inc., located in Manchester, Tennessee. McKey was founded in 1867 and provides a full range of metal perforating and fabrication services to customers located primarily in the U.S.  McKey will be working closely with Diamond Manufacturing Company to leverage their combined expertise in the perforated metal market and further expand our presence within that market.  McKey had net sales of $9.0 million for the five months ended June 30, 2012.

The combined transaction value of our 2012 acquisitions was $111.9 million, which included the assumption and repayment of $29.5 million of debt.  We funded these acquisitions with borrowings on our revolving credit facility.

2011 Acquisition

Effective August 1, 2011, we acquired all the outstanding capital securities of Continental Alloys & Services, Inc. (“Continental”), headquartered in Houston, Texas, and certain affiliated companies for a combined transaction value of approximately $440.8 million, which included the assumption and repayment of $104.7 million of debt. We funded this acquisition with borrowings on our revolving credit facility. Continental is a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies and has 12 locations in seven countries including Canada, Malaysia, Mexico, Singapore, the U.A.E., the United Kingdom, and the United States.  This acquisition aligns well with our diversification strategy by increasing our exposure to the fast growing energy market, including the addition of Oil Country Tubular Goods (“OCTG”) products, new processing capabilities, and entry into new international markets.  Continental and its affiliates had combined net sales of approximately $225.8 million for the six months ended June 30, 2012.

Purchase Price Allocations

The purchase price allocations for the 2012 acquisitions are preliminary and are pending the completion of tangible and intangible asset valuations and various pre- and post-acquisition period income tax returns. The purchase price allocation for the acquisition of Continental is pending the completion of certain post-acquisition period income tax returns.

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Debt (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Debt
Total	$ 1,532.8	$ 1,332.8
Less: unamortized discount	(1.6)	(1.6)
Less: amounts due within one year and short-term borrowings	(12.2)	(12.2)
Total long-term debt	1,519.0	1,319.0
Unsecured revolving credit facility due July 26, 2016
Debt
Total	845.0	645.0
Senior unsecured notes due July 2, 2013
Debt
Total	75.0	75.0
Senior unsecured notes due November 15, 2016
Debt
Total	350.0	350.0
Senior unsecured notes due November 15, 2036
Debt
Total	250.0	250.0
Other notes and revolving credit facilities
Debt
Total	$ 12.8	$ 12.8

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Taxes
Effective tax rate (as a percent)	34.30%	35.00%	33.70%	34.20%

XML

Debt (Details 2) (USD $)	1 Months Ended			1 Months Ended	6 Months Ended						1 Months Ended	6 Months Ended	1 Months Ended		1 Months Ended
	Nov. 30, 2006	Jun. 30, 2012	Dec. 31, 2011	Jul. 31, 2011 Unsecured revolving credit facility Y entity	Jun. 30, 2012 Unsecured revolving credit facility	Dec. 31, 2011 Unsecured revolving credit facility	Jul. 26, 2011 Unsecured revolving credit facility	Jun. 30, 2012 Unsecured revolving credit facility LIBOR	Jun. 30, 2012 Unsecured revolving credit facility Bank prime rate	Jun. 30, 2012 Senior unsecured notes due July 2, 2013	Nov. 30, 2006 Senior Unsecured Notes - Publicly Traded Tranche	Jun. 30, 2012 Senior Unsecured Notes - Publicly Traded	Nov. 30, 2006 Senior unsecured notes due November 15, 2016	Jun. 30, 2012 Senior unsecured notes due November 15, 2016	Nov. 30, 2006 Senior unsecured notes due November 15, 2036	Jun. 30, 2012 Senior unsecured notes due November 15, 2036	Jun. 30, 2012 Revolving Credit Facilities - Foreign Operations	Dec. 31, 2011 Revolving Credit Facilities - Foreign Operations	Jun. 30, 2012 Unsecured Revolving Credit Facility and Senior Unsecured Notes count	Jun. 30, 2012 Unsecured Revolving Credit Facility and Senior Unsecured Notes Minimum count	Jun. 30, 2012 Unsecured Revolving Credit Facility and Senior Unsecured Notes Maximum
Debt
Borrowing capacity under revolving credit facility					$ 1,500,000,000		$ 1,100,000,000										$ 20,700,000
Period of extended term of existing syndicated credit agreement (in years)				5
Number of banks as lenders				26
Interest rate added to base (as a percent)								1.50%	0.50%
Commitment fee on unused portion of revolving credit facility (as a percent)					0.25%
Weighted average fixed rate (as a percent)					1.74%	1.78%				5.35%
Letters of credit outstanding					33,000,000
Additional amount of letters of credit available to be issued					217,000,000
Combined outstanding balances of revolving credit facilities																	11,900,000	11,800,000
Issuance of debt	600,000,000										600,000,000		350,000,000		250,000,000
Number of tranches comprising the debt issuance											2
Interest rate (as a percent)														6.20%		6.85%
Percentage of principal amount at which the notes may be required to be repurchased in event of a change of control and a downgrade of the entity's credit rating												101.00%
Interest coverage ratio, actual																			10.4
Minimum interest coverage ratio required, debt covenant																				3.0
Leverage ratio, actual (as a percent)																			37.10%
Maximum leverage ratio required under financial covenant (as a percent)																					60.00%
Minimum net worth requirement																				1,090,000,000
Reliance shareholders' equity		$ 3,365,400,000	$ 3,143,900,000																$ 3,370,000,000
Minimum percentage of consolidated EBITDA required for the entity and subsidiary guarantors																				80.00%
Minimum percentage of consolidated tangible assets required for the entity and subsidiary guarantors																				80.00%
Actual percentage of total consolidated EBITDA for the parent and subsidiary guarantors																			87.00%
Actual percentage of consolidated tangible assets owned by the entity and subsidiary guarantors																			90.00%

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Equity (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended				1 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	May 16, 2012	Dec. 31, 2011	Mar. 31, 2012 Restricted stock units (RSUs)	May 31, 2012 Non-employee director restricted stock award Y	Mar. 31, 2012 Performance-based restricted stock unit awards
Equity
Issuance of common stock in connection with the exercise of stock options (in shares)	253,919
Total proceeds from the exercise of stock options	$ 9.7	$ 9.4
Number of common stock share authorized before amendment to Restated Articles of Incorporation			100,000,000
Number of common stock shares authorized	200,000,000		200,000,000	100,000,000
Share Based Compensation
Restricted stock granted (in shares)					391,050	16,842	138,700
Number of years from grant date that recipient is restricted from trading restricted stock (in years)						1
Right to receive number common stock (in shares)					1
Fair value of restricted stock granted (in dollars per share)					$ 57.42	$ 49.87
Share Repurchase Program
Remaining number of common stock authorized for repurchase under stock repurchase program (in shares)	7,883,033
Accumulated Other Comprehensive (Loss) Income
Foreign currency translation gain	8.8			10.4
Unrealized loss on investments, net of tax	(0.4)			(0.4)
Minimum pension liability, net of tax	(18.8)			(18.8)
Total accumulated other comprehensive loss	(10.4)			(8.8)
Deferred tax assets in accumulated other comprehensive income, unrealized loss on investments	0.1			0.1
Deferred tax assets in accumulated other comprehensive income, pension liabilities	$ 11.5			$ 11.5

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Impact of Recently Issued Accounting Guidance

6 Months Ended

Jun. 30, 2012

Impact of Recently Issued Accounting Guidance

Impact of Recently Issued Accounting Guidance

2.  Impact of Recently Issued Accounting Guidance

Accounting Guidance Recently Adopted

On January 1, 2012, we adopted changes issued by the Financial Accounting Standards Board (“FASB”), which requires companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. We elected to adopt the two-statement option. The new guidance eliminated the option to present the components of other comprehensive income as part of the statement of equity. Other than the change in presentation, the adoption of these changes had no material impact on our consolidated financial statements. The new guidance also required entities to present reclassification adjustments from accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. However, in December 2011, the FASB issued guidance, which indefinitely defers the guidance related to the presentation of reclassification adjustments.

On January 1, 2012, we adopted changes issued by the FASB to provide a consistent definition of fair value and to ensure that the fair value measurement and disclosure requirements are similar between U.S. generally accepted accounting principles and International Financial Reporting Standards. The new guidance changed certain fair value measurement principles and enhanced the disclosure requirements particularly for Level 3 fair value measurements. The adoption of these changes did not have a material impact on our consolidated financial statements.

Impact of Recently Issued Accounting Standard – Not Yet Adopted

In July 2012, the FASB issued updated guidance on the periodic testing of indefinite-lived intangible assets for impairment. This guidance will allow companies to assess qualitative factors to determine if it is more-likely-than-not that indefinite-lived intangible asset might be impaired and whether it is necessary to perform a quantitative impairment test. This new guidance is effective for us beginning January 1, 2013, with early adoption permitted. We are currently evaluating this guidance, but do not expect the adoption will have a material effect on our consolidated financial statements.

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Earnings Per Share (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Numerator:
Net income attributable to Reliance (in dollars)	$ 108.8	$ 98.7	$ 225.0	$ 191.0
Denominator for basic earnings per share:
Weighted average shares	75,087,057	74,773,715	75,004,840	74,697,185
Effect of dilutive securities:
Stock options and restricted stock (in shares)	424,192	377,083	464,129	390,572
Denominator for dilutive earnings per share:
Adjusted weighted average shares and assumed conversions	75,511,249	75,150,798	75,468,969	75,087,757
Net income per share attributable to Reliance shareholders - diluted (in dollars per share)	$ 1.44	$ 1.31	$ 2.98	$ 2.54
Net income per share attributable to Reliance shareholders - basic (in dollars per share)	$ 1.45	$ 1.32	$ 3.00	$ 2.56
Diluted shares
Shares reserved for issuance upon exercise of stock options or vesting of restricted shares respectively, not included in the diluted calculation due to their anti-dilutive effect	2,462,550	3,084,925	2,468,973	3,091,513

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 93.6	$ 84.6
Accounts receivable, less allowance for doubtful accounts of $22.7 at June 30, 2012 and $22.2 at December 31, 2011	1,013.5	896.2
Inventories	1,424.0	1,212.8
Prepaid expenses and other current assets	39.7	47.8
Income taxes receivable	2.1
Deferred income taxes	35.3	33.3
Total current assets	2,608.2	2,274.7
Property, plant and equipment:
Land	149.5	145.8
Buildings	672.7	656.8
Machinery and equipment	1,056.3	982.9
Accumulated depreciation	(726.7)	(680.0)
Total property, plant and equipment	1,151.8	1,105.5
Goodwill	1,277.6	1,244.3
Intangible assets, net	915.6	895.9
Cash surrender value of life insurance policies, net	37.6	41.9
Investments in unconsolidated entities	16.7	16.2
Other assets	27.8	27.4
Total assets	6,035.3	5,605.9
Current liabilities:
Accounts payable	375.2	335.2
Accrued expenses	56.7	54.0
Accrued compensation and retirement costs	90.3	111.0
Accrued insurance costs	41.0	42.1
Current maturities of long-term debt and short-term borrowings	12.2	12.2
Income taxes payable		21.9
Total current liabilities	575.4	576.4
Long-term debt	1,519.0	1,319.0
Long-term retirement costs	88.9	88.6
Other long-term liabilities	27.4	30.1
Deferred income taxes	449.4	439.8
Commitments and contingencies
Equity:
Preferred stock, no par value: Authorized shares - 5,000,000 None issued or outstanding
Common stock, no par value: Authorized shares - 200,000,000 Issued and outstanding shares - 75,278,455 at June 30, 2012 and 75,007,694 at December 31, 2011, stated capital	678.3	657.1
Retained earnings	2,697.5	2,495.6
Accumulated other comprehensive loss	(10.4)	(8.8)
Total Reliance shareholders' equity	3,365.4	3,143.9
Noncontrolling interests	9.8	8.1
Total equity	3,375.2	3,152.0
Total liabilities and equity	$ 6,035.3	$ 5,605.9

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income	$ 228.1	$ 193.8
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense	72.0	64.5
Deferred income tax benefit	(2.5)	(2.5)
Gain on sales of property, plant and equipment	(0.2)	(2.1)
Equity in earnings of unconsolidated entities	(1.1)	(1.1)
Dividends received from unconsolidated entities	0.6	0.6
Share-based compensation expense	11.5	10.8
Tax (benefit) deficit from share-based compensation	(0.2)	0.3
Net loss from life insurance policies and other investments	1.0	1.7
Changes in operating assets and liabilities (excluding effects of businesses acquired):
Accounts receivable	(98.6)	(259.9)
Inventories	(183.4)	(299.0)
Prepaid expenses and other assets	8.8	27.2
Accounts payable and other liabilities	(14.8)	180.2
Net cash provided by (used in) operating activities	21.2	(85.5)
Investing activities:
Purchases of property, plant and equipment	(86.8)	(66.3)
Acquisitions of metals service centers, net of cash acquired	(82.3)
Proceeds from sales of property, plant and equipment	2.8	7.3
Investment in marketable securities	(1.7)
Net proceeds from redemption of life insurance policies	0.7	2.3
Net cash used in investing activities	(167.3)	(56.7)
Financing activities:
Net short-term debt (repayments) borrowings	(29.4)	0.8
Proceeds from long-term debt borrowings	458.0	286.0
Principal payments on long-term debt	(259.5)	(117.1)
Payments to noncontrolling interest holders	(1.4)	(1.0)
Dividends paid	(22.5)	(17.9)
Tax benefit (deficit) from share-based compensation	0.2	(0.3)
Exercise of stock options	9.7	9.4
Net cash provided by financing activities	155.1	159.9
Effect of exchange rate changes on cash		1.4
Increase (decrease) in cash and cash equivalents	9.0	19.1
Cash and cash equivalents at beginning of year	84.6	72.9
Cash and cash equivalents at end of period	93.6	92.0
Supplemental cash flow information:
Interest paid during the period	29.0	26.4
Income taxes paid during the period	142.4	60.9
Non-cash investing and financing activities:
Debt assumed in connection with an acquisition of a metals service center	$ 29.5

XML

Condensed Consolidating Financial Statements (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income	$ 110.2	$ 100.2	$ 228.1	$ 193.8
Equity in earnings of subsidiaries			(1.1)	(1.1)
Other operating activities, net			(205.8)	(278.2)
Net cash provided by (used in) operating activities			21.2	(85.5)
Investing activities:
Purchases of property, plant and equipment			(86.8)	(66.3)
Acquisitions of metals service centers, net of cash acquired			(82.3)
Other investing activities, net			1.8	9.6
Net cash used in investing activities			(167.3)	(56.7)
Financing activities:
Net short-term debt (repayments) borrowings			(29.4)	0.8
Proceeds from long-term debt borrowings			458.0	286.0
Principal payments on long-term debt			(259.5)	(117.1)
Dividends paid			(22.5)	(17.9)
Other financing activities, net			8.5	8.1
Net cash provided by financing activities			155.1	159.9
Effect of exchange rate changes on cash and cash equivalents				1.4
Increase (decrease) in cash and cash equivalents			9.0	19.1
Cash and cash equivalents at beginning of year			84.6	72.9
Cash and cash equivalents at end of period	93.6	92.0	93.6	92.0
Parent
Operating activities:
Net income	108.8	98.7	225.0	191.0
Equity in earnings of subsidiaries			(128.1)	(104.7)
Other operating activities, net			14.1	0.4
Net cash provided by (used in) operating activities			111.0	86.7
Investing activities:
Purchases of property, plant and equipment			(7.6)	(5.9)
Acquisitions of metals service centers, net of cash acquired			(65.9)
Net advances to subsidiaries			(209.4)	(243.8)
Other investing activities, net			0.1	2.6
Net cash used in investing activities			(282.8)	(247.1)
Financing activities:
Proceeds from long-term debt borrowings			458.0	286.0
Principal payments on long-term debt			(258.0)	(116.0)
Dividends paid			(22.5)	(17.9)
Other financing activities, net			9.9	9.1
Net cash provided by financing activities			187.4	161.2
Increase (decrease) in cash and cash equivalents			15.6	0.8
Cash and cash equivalents at beginning of year			15.1	14.4
Cash and cash equivalents at end of period	30.7	15.2	30.7	15.2
Guarantor Subsidiaries
Operating activities:
Net income	56.1	47.8	113.3	97.2
Equity in earnings of subsidiaries			(18.9)	(16.8)
Other operating activities, net			(193.9)	(252.3)
Net cash provided by (used in) operating activities			(99.5)	(171.9)
Investing activities:
Purchases of property, plant and equipment			(72.0)	(58.6)
Acquisitions of metals service centers, net of cash acquired			(16.4)
Other investing activities, net			1.7	6.9
Net cash used in investing activities			(86.7)	(51.7)
Financing activities:
Net short-term debt (repayments) borrowings			(29.5)
Principal payments on long-term debt			(1.5)	(1.1)
Net intercompany borrowings (repayments)			221.6	238.9
Other financing activities, net			(1.4)	(1.0)
Net cash provided by financing activities			189.2	236.8
Increase (decrease) in cash and cash equivalents			3.0	13.2
Cash and cash equivalents at beginning of year			10.8	8.0
Cash and cash equivalents at end of period	13.8	21.2	13.8	21.2
Non-Guarantor Subsidiaries
Operating activities:
Net income	13.3	13.2	35.7	26.0
Other operating activities, net			(26.0)	(26.3)
Net cash provided by (used in) operating activities			9.7	(0.3)
Investing activities:
Purchases of property, plant and equipment			(7.2)	(1.8)
Other investing activities, net				0.1
Net cash used in investing activities			(7.2)	(1.7)
Financing activities:
Net short-term debt (repayments) borrowings			0.1	0.8
Net intercompany borrowings (repayments)			(12.2)	4.9
Net cash provided by financing activities			(12.1)	5.7
Effect of exchange rate changes on cash and cash equivalents				1.4
Increase (decrease) in cash and cash equivalents			(9.6)	5.1
Cash and cash equivalents at beginning of year			58.7	50.5
Cash and cash equivalents at end of period	49.1	55.6	49.1	55.6
Consolidating Adjustments
Operating activities:
Net income	(68.0)	(59.5)	(145.9)	(120.4)
Equity in earnings of subsidiaries			145.9	120.4
Investing activities:
Net advances to subsidiaries			209.4	243.8
Net cash used in investing activities			209.4	243.8
Financing activities:
Net intercompany borrowings (repayments)			(209.4)	(243.8)
Net cash provided by financing activities			$ (209.4)	$ (243.8)

XML

Equity (Tables)

6 Months Ended

Jun. 30, 2012

Equity

Schedule of accumulated other comprehensive (loss) income

	June 30,			December 31,
	2012			2011
	(in millions)
Foreign currency translation gain	$	8.8		$	10.4
Unrealized loss on investments, net of tax		(0.4	)		(0.4	)
Minimum pension liability, net of tax		(18.8	)		(18.8	)
Total accumulated other comprehensive loss	$	(10.4	)	$	(8.8	)

XML

Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Statements

Schedule of Condensed Consolidating Balance Sheet

Condensed Unaudited Consolidating Balance Sheet
As of June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	30.7		$	13.8		$	49.1		$	—			$	93.6
Accounts receivable, less allowance for doubtful accounts		78.5			845.9			89.1			—				1,013.5
Inventories		61.7			1,198.7			163.6			—				1,424.0
Intercompany receivables		0.4			13.3			2.9			(16.6		)		—
Other current assets		167.2			28.0			5.9			(124.0		)		77.1
Total current assets		338.5			2,099.7			310.6			(140.6		)		2,608.2
Investments in subsidiaries		3,323.9			293.4			—			(3,617.3		)		—
Property, plant and equipment, net		101.7			972.2			77.9			—				1,151.8
Goodwill		23.8			1,149.4			104.4			—				1,277.6
Intangible assets, net		12.3			772.6			130.7			—				915.6
Intercompany receivables		1,439.3			33.6			—			(1,472.9		)		—
Other assets		15.7			64.6			1.8			—				82.1
Total assets		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8)			$	6,035.3
Liabilities & Equity
Accounts payable		$	35.7		$	314.5		$	41.6		$	(16.6	)		$	375.2
Accrued compensation and retirement costs		13.9			70.4			6.0			—				90.3
Other current liabilities		50.2			89.1			7.4			(49.0		)		97.7
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.3			—			11.9			—				12.2
Total current liabilities		100.1			549.0			66.9			(140.6		)		575.4
Long-term debt		1,519.0			—			—			—				1,519.0
Intercompany borrowings		—			1,316.5			156.4			(1,472.9		)		—
Other long-term liabilities		270.7			271.0			24.0			—				565.7
Total Reliance shareholders’ equity		3,365.4			3,243.1			374.2			(3,617.3		)		3,365.4
Noncontrolling interests		—			5.9			3.9			—				9.8
Total equity		3,365.4			3,249.0			378.1			(3,617.3		)		3,375.2
Total liabilities and equity		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8	)		$	6,035.3

Condensed Unaudited Consolidating Balance Sheet
As of December 31, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	15.1		$	10.8		$	58.7		$	—			$	84.6
Accounts receivable, less allowance for doubtful accounts		69.6			739.1			87.5			—				896.2
Inventories		43.7			1,017.4			151.7			—				1,212.8
Intercompany receivables		0.3			11.6			0.9			(12.8		)		—
Other current assets		108.7			28.0			7.5			(63.1		)		81.1
Total current assets		237.4			1,806.9			306.3			(75.9		)		2,274.7
Investments in subsidiaries		3,217.0			273.9			—			(3,490.9		)		—
Property, plant and equipment, net		100.0			931.5			74.0			—				1,105.5
Goodwill		23.8			1,115.7			104.8			—				1,244.3
Intangible assets, net		13.6			748.0			134.3			—				895.9
Intercompany receivables		1,229.9			35.9			—			(1,265.8		)		—
Other assets		13.7			70.0			1.8			—				85.5
Total assets		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9
Liabilities & Equity
Accounts payable		$	31.2		$	270.6		$	46.2		$	(12.8	)		$	335.2
Accrued compensation and retirement costs		22.0			81.4			7.6			—				111.0
Other current liabilities		49.3			41.4			15.4			11.9				118.0
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.2			0.2			11.8			—				12.2
Total current liabilities		102.7			468.6			81.0			(75.9		)		576.4
Long-term debt		1,319.0			—			—			—				1,319.0
Intercompany borrowings		—			1,097.2			168.6			(1,265.8		)		—
Other long-term liabilities		269.8			264.9			23.8			—				558.5
Total Reliance shareholders’ equity		3,143.9			3,146.8			344.1			(3,490.9		)		3,143.9
Noncontrolling interests		—			4.4			3.7			—				8.1
Total equity		3,143.9			3,151.2			347.8			(3,490.9		)		3,152.0
Total liabilities and equity		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9

Schedule of Condensed Consolidating Statement of Income

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2012
(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	189.7			$	1,924.1			$	154.3			$	(58.4	)		$	2,209.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		132.9				1,457.1				108.7				(58.4		)		1,640.3
Warehouse, delivery, selling, general and administrative		16.2				326.2				24.4				(20.1		)		346.7
Depreciation and amortization		3.4				29.8				3.3				—				36.5
		152.5				1,813.1				136.4				(78.5		)		2,023.5
Operating income		37.2				111.0				17.9				20.1				186.2
Other income (expense):
Interest		(14.8		)		(4.7		)		(0.5		)		5.0				(15.0		)
Other income (expense), net		22.8				(0.7		)		(0.5		)		(25.1		)		(3.5		)
Income before equity in earnings of subsidiaries and income taxes		45.2				105.6				16.9				—				167.7
Equity in earnings of subsidiaries		60.1				7.9				—				(68.0		)		—
Income before income taxes		105.3				113.5				16.9				(68.0		)		167.7
Income tax (benefit) provision		(3.5		)		57.4				3.6				—				57.5
Net income		108.8				56.1				13.3				(68.0		)		110.2
Less: Net income attributable to noncontrolling interests		—				1.4				—				—				1.4
Net income attributable to Reliance		$	108.8			$	54.7			$	13.3			$	(68.0	)		$	108.8

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2011

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Net sales		$	182.8			$	1,804.0			$	116.4		$	(53.7	)		$	2,049.5
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		129.2				1,386.4				76.8			(53.7		)		1,538.7
Warehouse, delivery, selling, general and administrative		19.8				293.7				20.7			(20.5		)		313.7
Depreciation and amortization		3.5				26.2				1.8			—				31.5
		152.5				1,706.3				99.3			(74.2		)		1,883.9
Operating income		30.3				97.7				17.1			20.5				165.6
Other income (expense):
Interest		(15.3		)		(12.0		)		—			11.8				(15.5)
Other income, net		30.3				6.1				—			(32.3		)		4.1
Income before equity in earnings of subsidiaries and income taxes		45.3				91.8				17.1			—				154.2
Equity in earnings of subsidiaries		51.6				7.9				—			(59.5		)		—
Income before income taxes		96.9				99.7				17.1			(59.5		)		154.2
Income tax (benefit) provision		(1.8		)		51.9				3.9			—				54.0
Net income		98.7				47.8				13.2			(59.5		)		100.2
Less: Net income attributable to noncontrolling interests		—				1.3				0.2			—				1.5
Net income attributable to Reliance		$	98.7			$	46.5			$	13.0		$	(59.5	)		$	98.7

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2012

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	382.4			$	3,896.3			$	345.9			$	(126.6	)		$	4,498.0
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		286.6				2,944.9				245.9				(126.6		)		3,350.8
Warehouse, delivery, selling, general and administrative		31.2				670.7				49.2				(46.7		)		704.4
Depreciation and amortization		6.9				59.0				6.1				—				72.0
		324.7				3,674.6				301.2				(173.3		)		4,127.2
Operating income		57.7				221.7				44.7				46.7				370.8
Other income (expense):
Interest		(29.2		)		(8.6		)		(1.2		)		9.5				(29.5)
Other income, net		56.7				2.0				0.5				(56.2		)		3.0
Income before equity in earnings of subsidiaries and income taxes		85.2				215.1				44.0				—				344.3
Equity in earnings of subsidiaries		128.1				17.8				—				(145.9		)		—
Income before income taxes		213.3				232.9				44.0				(145.9		)		344.3
Income tax (benefit) provision		(11.7		)		119.6				8.3				—				116.2
Net income		225.0				113.3				35.7				(145.9		)		228.1
Less: Net income attributable to noncontrolling interests		—				2.9				0.2				—				3.1
Net income attributable to Reliance		$	225.0			$	110.4			$	35.5			$	(145.9	)		$	225.0

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	358.5		$	3,487.9		$	225.7		$	(109.9	)	$	3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	268.3			2,639.6			147.1			(109.9		)	2,945.1
Warehouse, delivery, selling, general and administrative	39.4			597.3			40.9			(45.4		)	632.2
Depreciation and amortization	6.9			54.1			3.5			—			64.5
	314.6			3,291.0			191.5			(155.3		)	3,641.8
Operating income	43.9			196.9			34.2			45.4			320.4
Other income (expense):
Interest	(29.8		)	(18.6		)	(0.4		)	18.7			(30.1		)
Other income, net	62.3			6.1			—			(64.1		)	4.3
Income before equity in earnings of subsidiaries and income taxes	76.4			184.4			33.8			—			294.6
Equity in earnings of subsidiaries	104.7			15.7			—			(120.4		)	—
Income before income taxes	181.1			200.1			33.8			(120.4		)	294.6
Income tax (benefit) provision	(9.9		)	102.9			7.8			—			100.8
Net income	191.0			97.2			26.0			(120.4		)	193.8
Less: Net income attributable to noncontrolling interests	—			2.3			0.5			—			2.8
Net income attributable to Reliance	$	191.0		$	94.9		$	25.5		$	(120.4	)	$	191.0

Schedule of Condensed Consolidating Cash Flow Statement

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	225.0		$	113.3		$	35.7		$	(145.9	)	$	228.1
Equity in earnings of subsidiaries	(128.1		)	(18.9		)	—			145.9			(1.1		)
Other operating activities, net	14.1			(193.9		)	(26.0		)	—			(205.8		)
Cash provided by (used in) operating activities	111.0			(99.5		)	9.7			—			21.2
Investing activities:
Purchases of property, plant and equipment	(7.6		)	(72.0		)	(7.2		)	—			(86.8		)
Acquisitions of metal service centers, net of cash acquired	(65.9		)	(16.4		)	—			—			(82.3		)
Net advances to subsidiaries	(209.4		)	—			—			209.4			—
Other investing activities, net	0.1			1.7			—			—			1.8
Cash used in investing activities	(282.8		)	(86.7		)	(7.2		)	209.4			(167.3		)
Financing activities:
Net short-term debt (repayments) borrowings	—			(29.5		)	0.1			—			(29.4		)
Proceeds from long-term debt borrowings	458.0			—			—			—			458.0
Principal payments on long-term debt	(258.0		)	(1.5		)	—			—			(259.5		)
Dividends paid	(22.5		)	—			—			—			(22.5		)
Net intercompany borrowings (repayments)	—			221.6			(12.2		)	(209.4		)	—
Other financing activities, net	9.9			(1.4		)	—			—			8.5
Cash provided by (used in) financing activities	187.4			189.2			(12.1		)	(209.4		)	155.1
Effect of exchange rate changes on cash and cash equivalents	—			—			—			—			—
Increase (decrease) in cash and cash equivalents	15.6			3.0			(9.6		)	—			9.0
Cash and cash equivalents at beginning of year	15.1			10.8			58.7			—			84.6
Cash and cash equivalents at end of period	$	30.7		$	13.8		$	49.1		$	—		$	93.6

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	191.0		$	97.2		$	26.0		$	(120.4	)	$	193.8
Equity in earnings of subsidiaries	(104.7		)	(16.8		)	—			120.4			(1.1		)
Other operating activities, net	0.4			(252.3		)	(26.3		)	—			(278.2		)
Cash provided by (used in) operating activities	86.7			(171.9		)	(0.3		)	—			(85.5		)
Investing activities:
Purchases of property, plant and equipment	(5.9		)	(58.6		)	(1.8		)	—			(66.3		)
Net advances to subsidiaries	(243.8		)	—			—			243.8			—
Other investing activities, net	2.6			6.9			0.1			—			9.6
Cash used in investing activities	(247.1		)	(51.7		)	(1.7		)	243.8			(56.7		)
Financing activities:
Net short-term debt repayments	—			—			0.8			—			0.8
Proceeds from long-term debt borrowings	286.0			—			—			—			286.0
Principal payments on long-term debt	(116.0		)	(1.1		)	—			—			(117.1		)
Dividends paid	(17.9		)	—			—			—			(17.9		)
Net intercompany borrowings	—			238.9			4.9			(243.8		)	—
Other financing activities, net	9.1			(1.0		)	—			—			8.1
Cash provided by financing activities	161.2			236.8			5.7			(243.8		)	159.9
Effect of exchange rate changes on cash and cash equivalents	—			—			1.4			—			1.4
Increase in cash and cash equivalents	0.8			13.2			5.1			—			19.1
Cash and cash equivalents at beginning of year	14.4			8.0			50.5			—			72.9
Cash and cash equivalents at end of period	$	15.2		$	21.2		$	55.6		$	—		$	92.0

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2012

Basis of Presentation

Basis of Presentation

1.  Basis of Presentation

Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles 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. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements, have been included. The results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results for the full year ending December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2011, included in Reliance Steel & Aluminum Co.’s (“We”, “Reliance” or the “Company”) Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. The ownership of the other interest holders of consolidated subsidiaries is reflected as noncontrolling interests. Our investments in unconsolidated subsidiaries are recorded under the equity method of accounting. All significant intercompany accounts and transactions have been eliminated.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 22.7	$ 22.2
Preferred stock, Authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, Authorized shares	200,000,000	100,000,000
Common stock, Issued shares	75,278,455	75,007,694
Common stock, outstanding shares	75,278,455	75,007,694

XML

Subsequent Event

6 Months Ended

Jun. 30, 2012

Subsequent Event

Subsequent Event

11. Subsequent Event

On July 6, 2012, through our newly-formed subsidiary Bralco Metals (Australia) Pty Ltd, we completed the acquisition of substantially all of the assets of Airport Metals (Australia) Pty Ltd (“Airport Metals”), a subsidiary of Samuel Son & Co., Limited. Airport Metals, based in Melbourne, operates as a stocking distributor of aircraft materials and supplies. Terms were not disclosed due to immateriality.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Document and Entity Information
Entity Registrant Name	RELIANCE STEEL & ALUMINUM CO
Entity Central Index Key	0000861884
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		75,284,426
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

XML

Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

12. Condensed Consolidating Financial Statements

In November 2006, we issued senior unsecured notes in the aggregate principal amount of $600 million at fixed interest rates that are guaranteed by our wholly-owned domestic subsidiaries. The accompanying consolidating financial information has been prepared and presented pursuant to Rule 3-10 of SEC Regulation S-X “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries. There are no significant restrictions on our ability to obtain funds from any of the guarantor subsidiaries by dividends or loans. The supplemental consolidating financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful.

Condensed Unaudited Consolidating Balance Sheet
As of June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	30.7		$	13.8		$	49.1		$	—			$	93.6
Accounts receivable, less allowance for doubtful accounts		78.5			845.9			89.1			—				1,013.5
Inventories		61.7			1,198.7			163.6			—				1,424.0
Intercompany receivables		0.4			13.3			2.9			(16.6		)		—
Other current assets		167.2			28.0			5.9			(124.0		)		77.1
Total current assets		338.5			2,099.7			310.6			(140.6		)		2,608.2
Investments in subsidiaries		3,323.9			293.4			—			(3,617.3		)		—
Property, plant and equipment, net		101.7			972.2			77.9			—				1,151.8
Goodwill		23.8			1,149.4			104.4			—				1,277.6
Intangible assets, net		12.3			772.6			130.7			—				915.6
Intercompany receivables		1,439.3			33.6			—			(1,472.9		)		—
Other assets		15.7			64.6			1.8			—				82.1
Total assets		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8)			$	6,035.3
Liabilities & Equity
Accounts payable		$	35.7		$	314.5		$	41.6		$	(16.6	)		$	375.2
Accrued compensation and retirement costs		13.9			70.4			6.0			—				90.3
Other current liabilities		50.2			89.1			7.4			(49.0		)		97.7
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.3			—			11.9			—				12.2
Total current liabilities		100.1			549.0			66.9			(140.6		)		575.4
Long-term debt		1,519.0			—			—			—				1,519.0
Intercompany borrowings		—			1,316.5			156.4			(1,472.9		)		—
Other long-term liabilities		270.7			271.0			24.0			—				565.7
Total Reliance shareholders’ equity		3,365.4			3,243.1			374.2			(3,617.3		)		3,365.4
Noncontrolling interests		—			5.9			3.9			—				9.8
Total equity		3,365.4			3,249.0			378.1			(3,617.3		)		3,375.2
Total liabilities and equity		$	5,255.2		$	5,385.5		$	625.4		$	(5,230.8	)		$	6,035.3

Condensed Unaudited Consolidating Balance Sheet
As of December 31, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Assets
Cash and cash equivalents		$	15.1		$	10.8		$	58.7		$	—			$	84.6
Accounts receivable, less allowance for doubtful accounts		69.6			739.1			87.5			—				896.2
Inventories		43.7			1,017.4			151.7			—				1,212.8
Intercompany receivables		0.3			11.6			0.9			(12.8		)		—
Other current assets		108.7			28.0			7.5			(63.1		)		81.1
Total current assets		237.4			1,806.9			306.3			(75.9		)		2,274.7
Investments in subsidiaries		3,217.0			273.9			—			(3,490.9		)		—
Property, plant and equipment, net		100.0			931.5			74.0			—				1,105.5
Goodwill		23.8			1,115.7			104.8			—				1,244.3
Intangible assets, net		13.6			748.0			134.3			—				895.9
Intercompany receivables		1,229.9			35.9			—			(1,265.8		)		—
Other assets		13.7			70.0			1.8			—				85.5
Total assets		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9
Liabilities & Equity
Accounts payable		$	31.2		$	270.6		$	46.2		$	(12.8	)		$	335.2
Accrued compensation and retirement costs		22.0			81.4			7.6			—				111.0
Other current liabilities		49.3			41.4			15.4			11.9				118.0
Deferred income taxes		—			75.0			—			(75.0		)		—
Current maturities of long-term debt and short-term borrowings		0.2			0.2			11.8			—				12.2
Total current liabilities		102.7			468.6			81.0			(75.9		)		576.4
Long-term debt		1,319.0			—			—			—				1,319.0
Intercompany borrowings		—			1,097.2			168.6			(1,265.8		)		—
Other long-term liabilities		269.8			264.9			23.8			—				558.5
Total Reliance shareholders’ equity		3,143.9			3,146.8			344.1			(3,490.9		)		3,143.9
Noncontrolling interests		—			4.4			3.7			—				8.1
Total equity		3,143.9			3,151.2			347.8			(3,490.9		)		3,152.0
Total liabilities and equity		$	4,835.4		$	4,981.9		$	621.2		$	(4,832.6	)		$	5,605.9

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2012
(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	189.7			$	1,924.1			$	154.3			$	(58.4	)		$	2,209.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		132.9				1,457.1				108.7				(58.4		)		1,640.3
Warehouse, delivery, selling, general and administrative		16.2				326.2				24.4				(20.1		)		346.7
Depreciation and amortization		3.4				29.8				3.3				—				36.5
		152.5				1,813.1				136.4				(78.5		)		2,023.5
Operating income		37.2				111.0				17.9				20.1				186.2
Other income (expense):
Interest		(14.8		)		(4.7		)		(0.5		)		5.0				(15.0		)
Other income (expense), net		22.8				(0.7		)		(0.5		)		(25.1		)		(3.5		)
Income before equity in earnings of subsidiaries and income taxes		45.2				105.6				16.9				—				167.7
Equity in earnings of subsidiaries		60.1				7.9				—				(68.0		)		—
Income before income taxes		105.3				113.5				16.9				(68.0		)		167.7
Income tax (benefit) provision		(3.5		)		57.4				3.6				—				57.5
Net income		108.8				56.1				13.3				(68.0		)		110.2
Less: Net income attributable to noncontrolling interests		—				1.4				—				—				1.4
Net income attributable to Reliance		$	108.8			$	54.7			$	13.3			$	(68.0	)		$	108.8

Condensed Unaudited Consolidating Statement of Income
For the three months ended June 30, 2011

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated
Net sales		$	182.8			$	1,804.0			$	116.4		$	(53.7	)		$	2,049.5
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		129.2				1,386.4				76.8			(53.7		)		1,538.7
Warehouse, delivery, selling, general and administrative		19.8				293.7				20.7			(20.5		)		313.7
Depreciation and amortization		3.5				26.2				1.8			—				31.5
		152.5				1,706.3				99.3			(74.2		)		1,883.9
Operating income		30.3				97.7				17.1			20.5				165.6
Other income (expense):
Interest		(15.3		)		(12.0		)		—			11.8				(15.5)
Other income, net		30.3				6.1				—			(32.3		)		4.1
Income before equity in earnings of subsidiaries and income taxes		45.3				91.8				17.1			—				154.2
Equity in earnings of subsidiaries		51.6				7.9				—			(59.5		)		—
Income before income taxes		96.9				99.7				17.1			(59.5		)		154.2
Income tax (benefit) provision		(1.8		)		51.9				3.9			—				54.0
Net income		98.7				47.8				13.2			(59.5		)		100.2
Less: Net income attributable to noncontrolling interests		—				1.3				0.2			—				1.5
Net income attributable to Reliance		$	98.7			$	46.5			$	13.0		$	(59.5	)		$	98.7

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2012

(in millions)

	Parent				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Consolidating Adjustments				Consolidated
Net sales		$	382.4			$	3,896.3			$	345.9			$	(126.6	)		$	4,498.0
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		286.6				2,944.9				245.9				(126.6		)		3,350.8
Warehouse, delivery, selling, general and administrative		31.2				670.7				49.2				(46.7		)		704.4
Depreciation and amortization		6.9				59.0				6.1				—				72.0
		324.7				3,674.6				301.2				(173.3		)		4,127.2
Operating income		57.7				221.7				44.7				46.7				370.8
Other income (expense):
Interest		(29.2		)		(8.6		)		(1.2		)		9.5				(29.5)
Other income, net		56.7				2.0				0.5				(56.2		)		3.0
Income before equity in earnings of subsidiaries and income taxes		85.2				215.1				44.0				—				344.3
Equity in earnings of subsidiaries		128.1				17.8				—				(145.9		)		—
Income before income taxes		213.3				232.9				44.0				(145.9		)		344.3
Income tax (benefit) provision		(11.7		)		119.6				8.3				—				116.2
Net income		225.0				113.3				35.7				(145.9		)		228.1
Less: Net income attributable to noncontrolling interests		—				2.9				0.2				—				3.1
Net income attributable to Reliance		$	225.0			$	110.4			$	35.5			$	(145.9	)		$	225.0

Condensed Unaudited Consolidating Statement of Income
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net sales	$	358.5		$	3,487.9		$	225.7		$	(109.9	)	$	3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	268.3			2,639.6			147.1			(109.9		)	2,945.1
Warehouse, delivery, selling, general and administrative	39.4			597.3			40.9			(45.4		)	632.2
Depreciation and amortization	6.9			54.1			3.5			—			64.5
	314.6			3,291.0			191.5			(155.3		)	3,641.8
Operating income	43.9			196.9			34.2			45.4			320.4
Other income (expense):
Interest	(29.8		)	(18.6		)	(0.4		)	18.7			(30.1		)
Other income, net	62.3			6.1			—			(64.1		)	4.3
Income before equity in earnings of subsidiaries and income taxes	76.4			184.4			33.8			—			294.6
Equity in earnings of subsidiaries	104.7			15.7			—			(120.4		)	—
Income before income taxes	181.1			200.1			33.8			(120.4		)	294.6
Income tax (benefit) provision	(9.9		)	102.9			7.8			—			100.8
Net income	191.0			97.2			26.0			(120.4		)	193.8
Less: Net income attributable to noncontrolling interests	—			2.3			0.5			—			2.8
Net income attributable to Reliance	$	191.0		$	94.9		$	25.5		$	(120.4	)	$	191.0

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2012

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	225.0		$	113.3		$	35.7		$	(145.9	)	$	228.1
Equity in earnings of subsidiaries	(128.1		)	(18.9		)	—			145.9			(1.1		)
Other operating activities, net	14.1			(193.9		)	(26.0		)	—			(205.8		)
Cash provided by (used in) operating activities	111.0			(99.5		)	9.7			—			21.2
Investing activities:
Purchases of property, plant and equipment	(7.6		)	(72.0		)	(7.2		)	—			(86.8		)
Acquisitions of metal service centers, net of cash acquired	(65.9		)	(16.4		)	—			—			(82.3		)
Net advances to subsidiaries	(209.4		)	—			—			209.4			—
Other investing activities, net	0.1			1.7			—			—			1.8
Cash used in investing activities	(282.8		)	(86.7		)	(7.2		)	209.4			(167.3		)
Financing activities:
Net short-term debt (repayments) borrowings	—			(29.5		)	0.1			—			(29.4		)
Proceeds from long-term debt borrowings	458.0			—			—			—			458.0
Principal payments on long-term debt	(258.0		)	(1.5		)	—			—			(259.5		)
Dividends paid	(22.5		)	—			—			—			(22.5		)
Net intercompany borrowings (repayments)	—			221.6			(12.2		)	(209.4		)	—
Other financing activities, net	9.9			(1.4		)	—			—			8.5
Cash provided by (used in) financing activities	187.4			189.2			(12.1		)	(209.4		)	155.1
Effect of exchange rate changes on cash and cash equivalents	—			—			—			—			—
Increase (decrease) in cash and cash equivalents	15.6			3.0			(9.6		)	—			9.0
Cash and cash equivalents at beginning of year	15.1			10.8			58.7			—			84.6
Cash and cash equivalents at end of period	$	30.7		$	13.8		$	49.1		$	—		$	93.6

Condensed Unaudited Consolidating Cash Flow Statement
For the six months ended June 30, 2011

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income	$	191.0		$	97.2		$	26.0		$	(120.4	)	$	193.8
Equity in earnings of subsidiaries	(104.7		)	(16.8		)	—			120.4			(1.1		)
Other operating activities, net	0.4			(252.3		)	(26.3		)	—			(278.2		)
Cash provided by (used in) operating activities	86.7			(171.9		)	(0.3		)	—			(85.5		)
Investing activities:
Purchases of property, plant and equipment	(5.9		)	(58.6		)	(1.8		)	—			(66.3		)
Net advances to subsidiaries	(243.8		)	—			—			243.8			—
Other investing activities, net	2.6			6.9			0.1			—			9.6
Cash used in investing activities	(247.1		)	(51.7		)	(1.7		)	243.8			(56.7		)
Financing activities:
Net short-term debt repayments	—			—			0.8			—			0.8
Proceeds from long-term debt borrowings	286.0			—			—			—			286.0
Principal payments on long-term debt	(116.0		)	(1.1		)	—			—			(117.1		)
Dividends paid	(17.9		)	—			—			—			(17.9		)
Net intercompany borrowings	—			238.9			4.9			(243.8		)	—
Other financing activities, net	9.1			(1.0		)	—			—			8.1
Cash provided by financing activities	161.2			236.8			5.7			(243.8		)	159.9
Effect of exchange rate changes on cash and cash equivalents	—			—			1.4			—			1.4
Increase in cash and cash equivalents	0.8			13.2			5.1			—			19.1
Cash and cash equivalents at beginning of year	14.4			8.0			50.5			—			72.9
Cash and cash equivalents at end of period	$	15.2		$	21.2		$	55.6		$	—		$	92.0

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net sales	$ 2,209.7	$ 2,049.5	$ 4,498.0	$ 3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	1,640.3	1,538.7	3,350.8	2,945.1
Warehouse, delivery, selling, general and administrative	346.7	313.7	704.4	632.2
Depreciation and amortization	36.5	31.5	72.0	64.5
Total costs and expenses	2,023.5	1,883.9	4,127.2	3,641.8
Operating income	186.2	165.6	370.8	320.4
Other income (expense):
Interest	(15.0)	(15.5)	(29.5)	(30.1)
Other (expense) income, net	(3.5)	4.1	3.0	4.3
Income before income taxes	167.7	154.2	344.3	294.6
Income tax provision	57.5	54.0	116.2	100.8
Net income	110.2	100.2	228.1	193.8
Less: Net income attributable to noncontrolling interests	1.4	1.5	3.1	2.8
Net income attributable to Reliance	$ 108.8	$ 98.7	$ 225.0	$ 191.0
Earnings per share:
Diluted earnings per common share attributable to Reliance shareholders (in dollars per share)	$ 1.44	$ 1.31	$ 2.98	$ 2.54
Basic earnings per common share attributable to Reliance shareholders (in dollars per share)	$ 1.45	$ 1.32	$ 3.00	$ 2.56
Cash dividends per share (in dollars per share)	$ 0.15	$ 0.12	$ 0.30	$ 0.24

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes

Income Taxes

6.  Income Taxes

Our effective income tax rates for the three-month periods ended June 30, 2012 and 2011 were 34.3% and 35.0%, respectively. Our effective income tax rates for the six-month periods ended June 30, 2012 and 2011 were 33.7% and 34.2%, respectively. Permanent items that lowered our effective income tax rates from the federal statutory rate were not materially different in amounts during these periods and relate mainly to company-owned life insurance policies, domestic production activities deductions and foreign income levels that are taxed at lower rates.

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Intangible Assets, net

6 Months Ended

Jun. 30, 2012

Intangible Assets, net

Intangible Assets, net

5.  Intangible Assets, net

The following table summarizes our intangible assets, net:

	June 30, 2012							December 31, 2011
	Gross Carrying Amount			Accumulated Amortization				Gross Carrying Amount			Accumulated Amortization
	(in millions)
Intangible assets subject to amortization:
Covenants not to compete		$	7.6		$	(7.0	)		$	7.3		$	(6.9	)
Loan fees		31.2			(18.9		)		31.2			(17.6		)
Customer lists/relationships		501.8			(133.0		)		477.7			(114.2		)
Software – internal use		8.1			(5.1		)		8.1			(4.7		)
Other		6.6			(2.4		)		6.6			(2.2		)
		555.3			(166.4		)		530.9			(145.6		)
Intangible assets not subject to amortization:
Trade names		526.7			—				510.6			—
		$	1,082.0		$	(166.4	)		$	1,041.5		$	(145.6	)

Intangible assets recorded in connection with 2012 acquisitions were $41.0 million (see Note 3). We recognized amortization expense for intangible assets of $20.9 million and $15.8 million for the six months ended June 30, 2012 and 2011, respectively. Other changes in intangible assets, net during the six months ended June 30, 2012 are due to foreign currency translation losses of $0.4 million.

The following is a summary of estimated aggregated amortization expense for the remaining six months of 2012 and each of the succeeding five years:

	(in millions)
2012	$	21.5
2013	42.9
2014	40.9
2015	39.3
2016	37.6
2017	32.2

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share

Computation of basic and diluted earnings per share

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except share and per share amounts)
Numerator:
Net income attributable to Reliance	$	108.8	$	98.7	$	225.0	$	191.0
Denominator:
Denominator for basic earnings per share:
Weighted average shares	75,087,057		74,773,715		75,004,840		74,697,185
Effect of dilutive securities:
Stock options and restricted stock	424,192		377,083		464,129		390,572
Denominator for diluted earnings per share:
Adjusted weighted average shares and assumed conversions	75,511,249		75,150,798		75,468,969		75,087,757
Net income per share attributable to Reliance shareholders – diluted	$	1.44	$	1.31	$	2.98	$	2.54
Net income per share attributable to Reliance shareholders – basic	$	1.45	$	1.32	$	3.00	$	2.56

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill

Schedule of changes in the carrying amount of goodwill

	(in millions)
Balance as of December 31, 2011	$	1,244.3
Acquisitions	33.5
Effect of foreign currency translation	(0.2		)
Balance as of June 30, 2012	$	1,277.6

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies

Commitments and Contingencies

9.  Commitments and Contingencies

We are currently involved with certain environmental remediation projects related to activities at former manufacturing operations of our wholly-owned subsidiary Earle M. Jorgensen Company (“EMJ”) that were sold many years prior to our acquisition of EMJ in 2006. Although the potential cleanup costs could be significant, EMJ had insurance policies in place at the time they owned the manufacturing operations that are expected to cover the majority of the related costs. We do not expect that these obligations will have a material adverse impact on our financial position, results of operations or cash flows.

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Debt

6 Months Ended

Jun. 30, 2012

Debt

Debt

7.  Debt

Debt consists of the following:

	June 30,			December 31,
	2012			2011
	(in millions)
Unsecured revolving credit facility due July 26, 2016	$	845.0		$	645.0
Senior unsecured notes due July 2, 2013		75.0			75.0
Senior unsecured notes due November 15, 2016		350.0			350.0
Senior unsecured notes due November 15, 2036		250.0			250.0
Other notes and revolving credit facilities		12.8			12.8
Total		1,532.8			1,332.8
Less: unamortized discount		(1.6	)		(1.6	)
Less: amounts due within one year and short-term borrowings		(12.2	)		(12.2	)
Total long-term debt	$	1,519.0		$	1,319.0

Unsecured Revolving Credit Facility

On July 26, 2011, we amended and restated the existing syndicated credit agreement to increase the borrowing limit from $1.1 billion to $1.5 billion, and to extend the maturity date of the credit facility for a five-year term to July 26, 2016.  The amended and restated revolving credit facility has 26 banks as lenders. Interest on borrowings from the amended and restated revolving credit facility is at variable rates based on LIBOR plus 1.50% or the bank prime rate plus 0.50% as of June 30, 2012.  The amended and restated revolving credit facility includes a commitment fee on the unused portion, at an annual rate of 0.25% as of June 30, 2012. The applicable margin over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined.

Weighted average rates on borrowings outstanding on the revolving credit facility were 1.74% and 1.78% as of June 30, 2012 and December 31, 2011, respectively. As of June 30, 2012, we had $33.0 million of letters of credit outstanding under the revolving credit facility with availability to issue an additional $217.0 million of letters of credit.

Revolving Credit Facilities – Foreign Operations

Various other separate revolving credit facilities with a combined credit limit of approximately $20.7 million are in place for operations in Asia and Europe with combined outstanding balances of $11.9 million and $11.8 million as of June 30, 2012 and December 31, 2011, respectively.

Senior Unsecured Notes – Private Placements

We have $75.0 million of outstanding senior unsecured notes issued in private placements of debt as of June 30, 2012. At June 30, 2012, the outstanding senior notes bear interest at a fixed rate of 5.35% and mature in July 2013.

Senior Unsecured Notes – Publicly Traded

On November 20, 2006, we entered into an Indenture (the “Indenture”), for the issuance of $600 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.20% per annum, maturing on November 15, 2016 and (b) $250 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036. The notes are senior unsecured obligations of Reliance and rank equally with all other existing and future unsecured and unsubordinated debt obligations of Reliance. The senior unsecured notes include provisions that, in the event of a change in control and a downgrade of our credit rating, require us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued interest.

Covenants

The amended and restated revolving credit facility and the senior unsecured note agreements collectively require us to maintain a minimum net worth and interest coverage ratio and a maximum leverage ratio and include a change of control provision, among other things. Our interest coverage ratio for the twelve-month period ended June 30, 2012 was approximately 10.4 times compared to the debt covenant minimum requirement of 3.0 times (interest coverage ratio is calculated as net income attributable to Reliance plus interest expense and provision for income taxes and plus or minus any non-operating non-recurring loss or gain, respectively, divided by interest expense). Our leverage ratio as of June 30, 2012 calculated in accordance with the terms of the revolving credit facility was 31.7% compared to the financial covenant maximum amount of 60% (leverage ratio is calculated as total debt, inclusive of capital lease obligations and outstanding letters of credit, divided by Reliance shareholders’ equity plus total debt). The minimum net worth requirement as of June 30, 2012 was $1.09 billion compared to Reliance shareholders’ equity balance of $3.37 billion as of June 30, 2012.

Additionally, all of our wholly-owned domestic subsidiaries, which constitute the substantial majority of our subsidiaries, guarantee the borrowings under the revolving credit facility, the Indenture and the private placement notes. The subsidiary guarantors, together with Reliance, are required collectively to account for at least 80% of our consolidated EBITDA and 80% of consolidated tangible assets. Reliance and the subsidiary guarantors accounted for approximately 87% of our total consolidated EBITDA for the last twelve months and approximately 90% of total consolidated tangible assets as of June 30, 2012.

We were in compliance with all debt covenants as of June 30, 2012.

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Equity

6 Months Ended

Jun. 30, 2012

Equity

Equity

8.  Equity

Common Stock

During the six months ended June 30, 2012, we issued 253,919 shares of common stock in connection with the exercise of stock options for total proceeds of approximately $9.7 million.

On May 16, 2012, our shareholders approved an amendment to our Restated Articles of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 200,000,000.

Share Based Compensation

On May 16, 2012, pursuant to the May 2011 Directors Equity Plan, which has been approved by the shareholders, 16,842 shares of restricted stock were automatically granted to the non-employee members of the Board of Directors. The awards include dividend rights and vest immediately upon grant.  The recipients are restricted from trading the restricted stock for one year from date of grant.  The fair value of the restricted stock granted was $49.87 per share, determined based on the closing price of the Company’s common stock on the grant date.

On March 16, 2012, we granted 391,050 restricted stock units (“RSUs”) to key employees pursuant to the Amended and Restated Stock Option and Restricted Stock Plan. Each RSU has a service condition and cliff vests at December 31, 2014 and consists of the right to receive one share of our common stock and dividend equivalent rights, subject to forfeiture, equal to the accrued cash or stock dividends where the record date for such dividends is after the grant date but before the shares vest.  In addition to the service criteria, 138,700 of the 391,050 RSUs also have performance goals and vest only upon the satisfaction of the service and performance criteria.  The fair value of the restricted stock units granted was $57.42 per share, determined based on the closing price of our common stock on the grant date.

Share Repurchase Program

As of June 30, 2012, 7,883,033 shares of common stock remain authorized for repurchase under our stock repurchase program. No shares were repurchased in 2012 or 2011. Repurchased shares are redeemed and treated as authorized but unissued shares.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss included the following:

	June 30,			December 31,
	2012			2011
	(in millions)
Foreign currency translation gain	$	8.8		$	10.4
Unrealized loss on investments, net of tax		(0.4	)		(0.4	)
Minimum pension liability, net of tax		(18.8	)		(18.8	)
Total accumulated other comprehensive loss	$	(10.4	)	$	(8.8	)

Foreign currency translation adjustments are not generally adjusted for income taxes as they relate to indefinite investments in foreign subsidiaries. Unrealized loss on investments and minimum pension liability are net of taxes of $0.1 million and $11.5 million, respectively, as of June 30, 2012 and December 31, 2011.

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share

Earnings Per Share

10.  Earnings Per Share

Basic earnings per share exclude any dilutive effects of options, restricted stock, warrants and convertible securities. Diluted earnings per share are calculated including the dilutive effects of options, restricted stock, warrants and convertible securities, if any.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except share and per share amounts)
Numerator:
Net income attributable to Reliance	$	108.8	$	98.7	$	225.0	$	191.0
Denominator:
Denominator for basic earnings per share:
Weighted average shares	75,087,057		74,773,715		75,004,840		74,697,185
Effect of dilutive securities:
Stock options and restricted stock	424,192		377,083		464,129		390,572
Denominator for diluted earnings per share:
Adjusted weighted average shares and assumed conversions	75,511,249		75,150,798		75,468,969		75,087,757
Net income per share attributable to Reliance shareholders – diluted	$	1.44	$	1.31	$	2.98	$	2.54
Net income per share attributable to Reliance shareholders – basic	$	1.45	$	1.32	$	3.00	$	2.56

The computations of earnings per share for the three months ended June 30, 2012 and 2011 do not include 2,462,550 and 3,084,925 shares reserved for issuance upon exercise of stock options or vesting of restricted shares, respectively, because their inclusion would have been anti-dilutive.

The computations of earnings per share for the six months ended June 30, 2012 and 2011 do not include 2,468,973 and 3,091,513 shares reserved for issuance upon exercise of stock options or vesting of restricted shares, respectively, because their inclusion would have been anti-dilutive.

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Condensed Consolidating Financial Statements (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidating financial statements, captions
Net sales	$ 2,209.7	$ 2,049.5	$ 4,498.0	$ 3,962.2
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	1,640.3	1,538.7	3,350.8	2,945.1
Warehouse, delivery, selling, general and administrative	346.7	313.7	704.4	632.2
Depreciation and amortization	36.5	31.5	72.0	64.5
Total costs and expenses	2,023.5	1,883.9	4,127.2	3,641.8
Operating income	186.2	165.6	370.8	320.4
Other income (expense):
Interest	(15.0)	(15.5)	(29.5)	(30.1)
Other income (expense), net	(3.5)	4.1	3.0	4.3
Income before equity in earnings of subsidiaries and income taxes	167.7	154.2	344.3	294.6
Income before income taxes	167.7	154.2	344.3	294.6
Income tax (benefit) provision	57.5	54.0	116.2	100.8
Net income	110.2	100.2	228.1	193.8
Less: Net income attributable to noncontrolling interests	1.4	1.5	3.1	2.8
Net income attributable to Reliance	108.8	98.7	225.0	191.0
Parent
Consolidating financial statements, captions
Net sales	189.7	182.8	382.4	358.5
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	132.9	129.2	286.6	268.3
Warehouse, delivery, selling, general and administrative	16.2	19.8	31.2	39.4
Depreciation and amortization	3.4	3.5	6.9	6.9
Total costs and expenses	152.5	152.5	324.7	314.6
Operating income	37.2	30.3	57.7	43.9
Other income (expense):
Interest	(14.8)	(15.3)	(29.2)	(29.8)
Other income (expense), net	22.8	30.3	56.7	62.3
Income before equity in earnings of subsidiaries and income taxes	45.2	45.3	85.2	76.4
Equity in earnings of subsidiaries	60.1	51.6	128.1	104.7
Income before income taxes	105.3	96.9	213.3	181.1
Income tax (benefit) provision	(3.5)	(1.8)	(11.7)	(9.9)
Net income	108.8	98.7	225.0	191.0
Net income attributable to Reliance	108.8	98.7	225.0	191.0
Guarantor Subsidiaries
Consolidating financial statements, captions
Net sales	1,924.1	1,804.0	3,896.3	3,487.9
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	1,457.1	1,386.4	2,944.9	2,639.6
Warehouse, delivery, selling, general and administrative	326.2	293.7	670.7	597.3
Depreciation and amortization	29.8	26.2	59.0	54.1
Total costs and expenses	1,813.1	1,706.3	3,674.6	3,291.0
Operating income	111.0	97.7	221.7	196.9
Other income (expense):
Interest	(4.7)	(12.0)	(8.6)	(18.6)
Other income (expense), net	(0.7)	6.1	2.0	6.1
Income before equity in earnings of subsidiaries and income taxes	105.6	91.8	215.1	184.4
Equity in earnings of subsidiaries	7.9	7.9	17.8	15.7
Income before income taxes	113.5	99.7	232.9	200.1
Income tax (benefit) provision	57.4	51.9	119.6	102.9
Net income	56.1	47.8	113.3	97.2
Less: Net income attributable to noncontrolling interests	1.4	1.3	2.9	2.3
Net income attributable to Reliance	54.7	46.5	110.4	94.9
Non-Guarantor Subsidiaries
Consolidating financial statements, captions
Net sales	154.3	116.4	345.9	225.7
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	108.7	76.8	245.9	147.1
Warehouse, delivery, selling, general and administrative	24.4	20.7	49.2	40.9
Depreciation and amortization	3.3	1.8	6.1	3.5
Total costs and expenses	136.4	99.3	301.2	191.5
Operating income	17.9	17.1	44.7	34.2
Other income (expense):
Interest	(0.5)		(1.2)	(0.4)
Other income (expense), net	(0.5)		0.5
Income before equity in earnings of subsidiaries and income taxes	16.9	17.1	44.0	33.8
Income before income taxes	16.9	17.1	44.0	33.8
Income tax (benefit) provision	3.6	3.9	8.3	7.8
Net income	13.3	13.2	35.7	26.0
Less: Net income attributable to noncontrolling interests		0.2	0.2	0.5
Net income attributable to Reliance	13.3	13.0	35.5	25.5
Consolidating Adjustments
Consolidating financial statements, captions
Net sales	(58.4)	(53.7)	(126.6)	(109.9)
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown below)	(58.4)	(53.7)	(126.6)	(109.9)
Warehouse, delivery, selling, general and administrative	(20.1)	(20.5)	(46.7)	(45.4)
Total costs and expenses	(78.5)	(74.2)	(173.3)	(155.3)
Operating income	20.1	20.5	46.7	45.4
Other income (expense):
Interest	5.0	11.8	9.5	18.7
Other income (expense), net	(25.1)	(32.3)	(56.2)	(64.1)
Equity in earnings of subsidiaries	(68.0)	(59.5)	(145.9)	(120.4)
Income before income taxes	(68.0)	(59.5)	(145.9)	(120.4)
Net income	(68.0)	(59.5)	(145.9)	(120.4)
Net income attributable to Reliance	$ (68.0)	$ (59.5)	$ (145.9)	$ (120.4)

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Debt (Tables)

6 Months Ended

Jun. 30, 2012

Debt

Summary of debt

	June 30,			December 31,
	2012			2011
	(in millions)
Unsecured revolving credit facility due July 26, 2016	$	845.0		$	645.0
Senior unsecured notes due July 2, 2013		75.0			75.0
Senior unsecured notes due November 15, 2016		350.0			350.0
Senior unsecured notes due November 15, 2036		250.0			250.0
Other notes and revolving credit facilities		12.8			12.8
Total		1,532.8			1,332.8
Less: unamortized discount		(1.6	)		(1.6	)
Less: amounts due within one year and short-term borrowings		(12.2	)		(12.2	)
Total long-term debt	$	1,519.0		$	1,319.0

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Goodwill (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Change in the carrying amount of goodwill
Balance at the beginning of the period	$ 1,244.3
Acquisitions	33.5
Effect of foreign currency translation	(0.2)
Balance at the end of the period	$ 1,277.6

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income	$ 110.2	$ 100.2	$ 228.1	$ 193.8
Other comprehensive (loss) income:
Foreign currency translation (loss) gain	(9.2)	(0.2)	(1.6)	6.4
Unrealized (loss) gain on investments, net of tax	(0.2)			0.1
Total other comprehensive (loss) income	(9.4)	(0.2)	(1.6)	6.5
Comprehensive income	100.8	100.0	226.5	200.3
Less: Comprehensive income attributable to noncontrolling interests	(1.4)	(1.5)	(3.1)	(2.8)
Comprehensive income attributable to Reliance	$ 99.4	$ 98.5	$ 223.4	$ 197.5

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill

Goodwill

4.  Goodwill

The change in the carrying amount of goodwill for the six months ended June 30, 2012 is as follows:

	(in millions)
Balance as of December 31, 2011	$	1,244.3
Acquisitions	33.5
Effect of foreign currency translation	(0.2		)
Balance as of June 30, 2012	$	1,277.6

We had no accumulated impairment losses related to goodwill as of June 30, 2012.

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Intangible Assets, net (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	$ 555.3		$ 530.9
Intangible assets subject to amortization, Accumulated Amortization	(166.4)		(145.6)
Intangible assets
Intangible assets, Gross Carrying Amount	1,082.0		1,041.5
Changes in intangible assets due to foreign currency translation losses	0.4
Amortization expense for intangible assets	20.9	15.8
Summary of estimated aggregate amortization expense for each of the next five years
2012	21.5
2013	42.9
2014	40.9
2015	39.3
2016	37.6
2017	32.2
2012 acquisitions
Intangible assets
Intangible assets acquired, excluding goodwill	41.0
Covenants not to compete
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	7.6		7.3
Intangible assets subject to amortization, Accumulated Amortization	(7.0)		(6.9)
Loan fees
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	31.2		31.2
Intangible assets subject to amortization, Accumulated Amortization	(18.9)		(17.6)
Customer lists/relationships
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	501.8		477.7
Intangible assets subject to amortization, Accumulated Amortization	(133.0)		(114.2)
Software - internal use
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	8.1		8.1
Intangible assets subject to amortization, Accumulated Amortization	(5.1)		(4.7)
Other
Intangible assets subject to amortization:
Intangible assets subject to amortization, Gross Carrying Amount	6.6		6.6
Intangible assets subject to amortization, Accumulated Amortization	(2.4)		(2.2)
Trade names
Intangible assets not subject to amortization:
Intangible assets not subject to amortization, Gross Carrying Amount	$ 526.7		$ 510.6

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Intangible Assets, net (Tables)

6 Months Ended

Jun. 30, 2012

Intangible Assets, net

Summarizes our intangible assets, net

	June 30, 2012							December 31, 2011
	Gross Carrying Amount			Accumulated Amortization				Gross Carrying Amount			Accumulated Amortization
	(in millions)
Intangible assets subject to amortization:
Covenants not to compete		$	7.6		$	(7.0	)		$	7.3		$	(6.9	)
Loan fees		31.2			(18.9		)		31.2			(17.6		)
Customer lists/relationships		501.8			(133.0		)		477.7			(114.2		)
Software – internal use		8.1			(5.1		)		8.1			(4.7		)
Other		6.6			(2.4		)		6.6			(2.2		)
		555.3			(166.4		)		530.9			(145.6		)
Intangible assets not subject to amortization:
Trade names		526.7			—				510.6			—
		$	1,082.0		$	(166.4	)		$	1,041.5		$	(145.6	)

Summary of estimated aggregate amortization expense

	(in millions)
2012	$	21.5
2013	42.9
2014	40.9
2015	39.3
2016	37.6
2017	32.2