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RELIANCE STEEL & ALUMINUM CO - Quarter Report: 2016 March (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2016

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)

 

 

 

 

 

 

 

Delaware

(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   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   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

 

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 Exchange Act).

Yes   No 

As of April 27, 2016, 72,332,193 shares of the registrant’s common stock, $0.001 par value, were outstanding.

 

 


 

Table of Contents

RELIANCE STEEL & ALUMINUM CO.

TABLE OF CONTENTS

 

 

 

 

 

PART I -- FINANCIAL INFORMATION 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

 

 

Unaudited Consolidated Balance Sheets at March 31, 2016 and December 31, 2015

1

 

 

 

 

 

 

Unaudited Consolidated Statements of Income for the First Quarter of 2016 and 2015

2

 

 

 

 

 

 

Unaudited Consolidated Statements of Comprehensive Income for the First Quarter of 2016 and 2015

3

 

 

 

 

 

 

Unaudited Consolidated Statements of Cash Flows for the First Quarter of 2016 and 2015

4

 

 

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

5

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

 

 

 

 

 

Item 4.

Controls and Procedures

26

 

 

PART II -- OTHER INFORMATION 

27 

 

 

 

Item 1A.

Risk Factors

27

 

 

 

 

 

Item 6.

Exhibits

27

 

 

SIGNATURES 

28 

 

 

EXHIBIT INDEX 

29 

 

 

 

 


 

Table of Contents

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

 

RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

2016

    

2015*

ASSETS

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

120.5

 

$

104.3

Accounts receivable, less allowance for doubtful accounts of $17.2 at March 31, 2016 and $16.3 at December 31, 2015

 

1,009.0

 

 

916.6

Inventories

 

1,525.7

 

 

1,436.0

Prepaid expenses and other current assets

 

55.4

 

 

60.8

Income taxes receivable

 

29.3

 

 

36.5

Total current assets

 

2,739.9

 

 

2,554.2

Property, plant and equipment:

 

 

 

 

 

Land

 

202.7

 

 

196.2

Buildings

 

1,029.9

 

 

1,006.3

Machinery and equipment

 

1,617.1

 

 

1,569.8

Accumulated depreciation

 

(1,177.8)

 

 

(1,136.8)

 

 

1,671.9

 

 

1,635.5

 

 

 

 

 

 

Goodwill

 

1,824.6

 

 

1,724.8

Intangible assets, net

 

1,205.0

 

 

1,125.4

Cash surrender value of life insurance policies, net

 

42.2

 

 

45.8

Other assets

 

35.9

 

 

35.9

Total assets  

$

7,519.5

 

$

7,121.6

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

350.4

 

$

247.0

Accrued expenses

 

94.7

 

 

83.0

Accrued compensation and retirement costs

 

91.0

 

 

118.7

Accrued insurance costs

 

41.5

 

 

40.2

Current maturities of long-term debt and short-term borrowings

 

493.8

 

 

500.8

Total current liabilities

 

1,071.4

 

 

989.7

Long-term debt

 

1,640.3

 

 

1,427.9

Long-term retirement costs

 

107.2

 

 

103.8

Other long-term liabilities

 

30.2

 

 

30.4

Deferred income taxes

 

630.0

 

 

627.1

Commitments and contingencies

 

 

 

 

 

Equity:

 

 

 

 

 

Preferred stock, $0.001 par value:

 

 

 

 

 

Authorized shares — 5,000,000

 

 

 

 

 

None issued or outstanding

 

 —

 

 

 —

Common stock and additional paid-in capital, $0.001 par value:

 

 

 

 

 

Authorized shares — 200,000,000

 

 

 

 

 

Issued and outstanding shares – 72,222,793 at March 31, 2016 and 71,739,072 at December 31, 2015

 

553.4

 

 

533.8

Retained earnings

 

3,542.6

 

 

3,480.0

Accumulated other comprehensive loss

 

(84.0)

 

 

(99.7)

Total Reliance stockholders’ equity

 

4,012.0

 

 

3,914.1

   Noncontrolling interests 

 

28.4

 

 

28.6

Total equity 

 

4,040.4

 

 

3,942.7

Total liabilities and equity

$

7,519.5

 

$

7,121.6

 


* 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 Ended

 

March 31,

 

2016

    

2015

  

  

  

  

  

  

Net sales

$

2,162.7

 

$

2,614.4

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of sales (exclusive of depreciation and amortization shown below)

 

1,526.0

 

 

1,943.7

Warehouse, delivery, selling, general and administrative

 

450.8

 

 

446.1

Depreciation and amortization

 

56.1

 

 

55.3

 

 

2,032.9

 

 

2,445.1

 

 

 

 

 

 

Operating income

 

129.8

 

 

169.3

 

 

 

 

 

 

Other expense:

 

 

 

 

 

Interest

 

(21.7)

 

 

(20.6)

Other income, net

 

1.1

 

 

1.9

Income before income taxes

 

109.2

 

 

150.6

Income tax provision

 

15.7

 

 

47.7

Net income

 

93.5

 

 

102.9

Less:  Net income attributable to noncontrolling interests

 

1.3

 

 

1.6

Net income attributable to Reliance

$

92.2

 

$

101.3

 

 

 

 

 

 

Earnings per share attributable to Reliance stockholders:

 

 

 

 

 

Diluted

$

1.27

 

$

1.30

Basic

$

1.28

 

$

1.31

 

 

 

 

 

 

Cash dividends per share

$

0.40

 

$

0.40

 

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

 

March 31,

 

2016

    

2015

  

  

  

  

  

  

Net income 

$

93.5

 

$

102.9

Other comprehensive income:        

 

 

 

 

 

Foreign currency translation gain (loss)    

 

15.7

 

 

(24.9)

Unrealized gain on investments, net of tax   

 

 —

 

 

0.1

Total other comprehensive income (loss)

 

15.7

 

 

(24.8)

Comprehensive income

 

109.2

 

 

78.1

Less: comprehensive income attributable to noncontrolling interests

 

1.3

 

 

1.6

Comprehensive income attributable to Reliance

$

107.9

 

$

76.5

 

See accompanying notes to unaudited consolidated financial statements.

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RELIANCE STEEL & ALUMINUM CO.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

2016

    

2015

Operating activities:

 

 

 

 

 

Net income 

$

93.5

 

$

102.9

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization expense

 

56.1

 

 

55.3

Deferred income tax provision (benefit)

 

2.3

 

 

(0.2)

Gain on sales of property, plant and equipment 

 

(0.5)

 

 

(0.1)

Stock-based compensation expense

 

3.3

 

 

3.7

Other

 

1.0

 

 

1.0

Changes in operating assets and liabilities (excluding effect of business acquired):

 

 

 

 

 

Accounts receivable

 

(80.3)

 

 

(73.6)

Inventories 

 

(29.3)

 

 

(57.6)

Prepaid expenses and other assets 

 

17.0

 

 

23.1

Accounts payable and other liabilities 

 

92.3

 

 

116.9

Net cash provided by operating activities 

 

155.4

 

 

171.4

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Purchases of property, plant and equipment 

 

(34.4)

 

 

(31.3)

Acquisition, net of cash acquired

 

(290.9)

 

 

 —

Other

 

(6.2)

 

 

4.1

Net cash used in investing activities 

 

(331.5)

 

 

(27.2)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Net short-term debt (repayments) borrowings

 

(6.2)

 

 

1.1

Proceeds from long-term debt borrowings 

 

399.0

 

 

363.0

Principal payments on long-term debt

 

(188.0)

 

 

(311.0)

Dividends and dividend equivalents paid 

 

(29.0)

 

 

(31.7)

Exercise of stock options 

 

16.5

 

 

6.1

Share repurchases

 

 —

 

 

(171.2)

Other

 

(2.6)

 

 

(2.3)

Net cash provided by (used in) financing activities 

 

189.7

 

 

(146.0)

Effect of exchange rate changes on cash 

 

2.6

 

 

(2.8)

Increase (decrease) in cash and cash equivalents 

 

16.2

 

 

(4.6)

Cash and cash equivalents at beginning of year 

 

104.3

 

 

106.2

Cash and cash equivalents at end of period

$

120.5

 

$

101.6

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

Interest paid during the period

$

5.1

 

$

5.3

Income taxes paid during the period, net

$

5.7

 

$

23.2

 

See accompanying notes to unaudited consolidated financial statements.

 

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RELIANCE STEEL & ALUMINUM CO.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2016

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 (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, 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 first quarter of 2016 are not necessarily indicative of the results for the full year ending December 31, 2016. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, 2015, included in Reliance Steel & Aluminum Co.’s (“Reliance”, the “Company”, “we”, “our” or “us”) Annual Report on Form 10-K.

 

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

 

Our consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. 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.

 

2.  Impact of Recently Issued Accounting Guidance

 

Impact of Recently Issued Accounting Standards—Adopted

 

Improvements to Employee Share-Based Payment Accounting—In March 2016, the Financial Accounting Standards Board (“FASB”) issued accounting changes intended to improve various aspects of the accounting for share-based payment transactions as part of its simplification initiative. We adopted these changes as of January 1, 2016. The adoption of these changes did not have a material impact on our consolidated financial statements. For further discussion of our adoption of these accounting changes, see Note 8 — “Equity”.

 

Impact of Recently Issued Accounting Standards—Not Yet Adopted

 

Leases—In February 2016, the FASB issued accounting changes which will require lessees to recognize most long-term leases on-balance sheet through the recognition of a right-of-use asset and a lease liability. The guidance will be effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are evaluating the new standard and have not determined what impact the adoption of these accounting changes will have on our consolidated financial statements.

 

Revenue from Contracts with Customers—In May 2014, the FASB issued accounting changes which replace most of the detailed guidance on revenue recognition that currently exists under U.S. GAAP. Under the new guidance an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB issued additional clarifying guidance in March 2016 and April 2016.  The guidance will be effective for fiscal years beginning after December 15, 2017. Early adoption is not permitted. We are evaluating the new standard, but do not expect this standard to have a material impact on our consolidated financial statements.

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3.  Acquisition

 

2016 Acquisition

 

On January 1, 2016, we acquired Tubular Steel, Inc. (“Tubular Steel”), a distributor and processor of carbon, alloy and stainless steel pipe, tubing and bar products. Tubular Steel, headquartered in St. Louis, Missouri, has seven locations and a fabrication business that supports its diverse customer base. This acquisition was funded with borrowings on our revolving credit facility. For the first quarter of 2016, Tubular Steel’s net sales were approximately $29.8 million.

 

The preliminary allocation of the total purchase price of Tubular Steel to the fair values of the assets acquired and liabilities assumed was as follows:

 

 

 

 

 

(in millions)

  

  

  

Cash 

$

0.2

Accounts receivable 

 

10.6

Inventories 

 

57.6

Property, plant and equipment 

 

43.4

Goodwill 

 

96.0

Intangible assets subject to amortization 

 

61.7

Intangible assets not subject to amortization 

 

27.3

Other current and long-term assets 

 

0.1

Total assets acquired 

 

296.9

Other current and long-term liabilities 

 

5.8

Net assets acquired

$

291.1

 

The acquisition discussed in this note has been accounted for under the acquisition method of accounting and, accordingly, the respective purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of the acquisition. The accompanying consolidated statement of income includes the revenues and expenses of the acquisition since its acquisition date.  The consolidated balance sheet reflects the allocation of the acquisition’s purchase price as of March 31, 2016. The purchase price allocation for the acquisition is preliminary and is pending the completion of certain purchase price adjustments based on tangible and intangible asset valuations and various pre-acquisition period income tax returns. The measurement period for the purchase price allocation does not exceed 12 months from the acquisition date.

 

4.  Goodwill

 

The change in the carrying amount of goodwill is as follows:

 

 

 

 

(in millions)

    

  

 

Balance at January 1, 2016

$

1,724.8

Acquisition

 

96.0

Effect of foreign currency translation

 

3.8

Balance at March 31, 2016

$

1,824.6

 

We had no accumulated impairment losses related to goodwill at March 31, 2016.

 

All of the goodwill recorded from our acquisition of Tubular Steel is tax deductible.

 

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5.  Intangible Assets, net

 

Intangible assets, net consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2016

 

December 31, 2015

 

Weighted Average

 

Gross

 

 

 

 

Gross

 

 

 

 

Amortizable

 

Carrying

 

Accumulated

 

Carrying

 

Accumulated

 

Life in Years

    

Amount

  

Amortization

  

Amount

  

Amortization

 

 

 

(in millions)

Intangible assets subject to amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Covenants not to compete

4.4

 

$

1.4

 

$

(1.1)

 

$

1.3

 

$

(1.0)

Customer lists/relationships

14.9

 

 

724.3

 

 

(300.1)

 

 

659.0

 

 

(285.7)

Software – internal use

10.0

 

 

8.1

 

 

(8.1)

 

 

8.1

 

 

(7.9)

Other

5.3

 

 

6.4

 

 

(5.4)

 

 

6.3

 

 

(5.0)

 

 

 

 

740.2

 

 

(314.7)

 

 

674.7

 

 

(299.6)

Intangible assets not subject to amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names

 

 

 

779.5

 

 

 

 

750.3

 

 

 

 

 

$

1,519.7

 

$

(314.7)

 

$

1,425.0

 

$

(299.6)

 

Intangible assets recorded in connection with our acquisition of Tubular Steel were $89.0 million as of March 31, 2016 (see Note 3). A total of $27.3 million was allocated to the acquisition of Tubular Steel’s trade name, which is not subject to amortization. 

 

We recognized amortization expense for intangible assets of $13.6 million and $14.3 million for the first quarter of  2016 and 2015, respectively. Foreign currency translation gains related to intangible assets, net, were approximately $4.2 million during the first quarter of 2016.

 

The following is a summary of estimated aggregate amortization expense for the remaining nine months of 2016 and each of the succeeding five years:

 

 

 

 

 

 

 

 

 

(in millions)

  

  

  

2016

$

39.6

2017

 

49.0

2018

 

44.7

2019

 

44.6

2020

 

44.6

2021

 

40.6

 

 

6.  Debt

 

Debt consisted of the following:

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

2016

    

2015

 

(in millions)

Unsecured revolving credit facility due April 4, 2018

$

556.0

 

$

332.0

Unsecured term loan due from June 30, 2016 to April 4, 2018

 

386.3

 

 

398.8

Senior unsecured notes due November 15, 2016

 

350.0

 

 

350.0

Senior unsecured notes due April 15, 2023

 

500.0

 

 

500.0

Senior unsecured notes due November 15, 2036

 

250.0

 

 

250.0

Other notes and revolving credit facilities

 

104.3

 

 

111.3

Total

 

2,146.6

 

 

1,942.1

Less: unamortized discount and debt issuance costs

 

(12.5)

 

 

(13.4)

Less: amounts due within one year and short-term borrowings

 

(493.8)

 

 

(500.8)

Total long-term debt

$

1,640.3

 

$

1,427.9

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Unsecured Credit Facility

 

On April 4, 2013, we entered into an unsecured five-year credit agreement with a syndicated bank group (“Credit Agreement”). The Credit Agreement amended and restated our existing $1.5 billion unsecured revolving credit facility and provided for a $500.0 million term loan and an option to increase the revolving credit facility for up to $500.0 million at our request, subject to approval of the lenders and certain other conditions. The term loan due April 4, 2018 amortizes in quarterly installments, with an annual amortization of 10% until March 2018, with the balance to be paid at maturity. Interest on borrowings from the revolving credit facility and term loan during the first quarter of 2016 was at variable rates based on LIBOR plus 1.25% or the bank prime rate plus 0.25% and included a commitment fee at an annual rate of 0.20% on the unused portion of the revolving credit facility. The applicable margins over LIBOR rate and base rate borrowings, along with commitment fees, are subject to adjustment every quarter based on our leverage ratio, as defined in the Credit Agreement.

 

Weighted average interest rates on borrowings outstanding on the revolving credit facility were 1.73% and 1.81% as of March 31, 2016 and December 31, 2015, respectively. Weighted average interest rates on borrowings outstanding on the term loan were 1.68% and 1.67% as of March 31, 2016 and December 31, 2015, respectively. As of March 31, 2016, we had $556.0 million of outstanding borrowings, $56.9 million of letters of credit issued and $887.1 million available on the revolving credit facility.

 

Senior Unsecured Notes

 

On November 20, 2006, we entered into an indenture (the “2006 Indenture”), for the issuance of $600.0 million of unsecured debt securities. The total debt issued was comprised of two tranches, (a) $350.0 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) $250.0 million aggregate principal amount of senior unsecured notes bearing interest at the rate of 6.85% per annum, maturing on November 15, 2036.

 

On April 12, 2013, we entered into an indenture (the “2013 Indenture” and, together with the 2006 Indenture, the “Indentures”), for the issuance of $500.0 million aggregate principal amount of senior unsecured notes at the rate of 4.50% per annum, maturing on April 15, 2023.  The net proceeds from the issuance of these notes were used to partially fund the acquisition of Metals USA Holdings Corp. (“Metals USA”).

 

Under the Indentures, the notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. The notes are guaranteed by certain of our 100%-owned domestic subsidiaries that guarantee our revolving credit facility. The senior unsecured notes include provisions that require us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest in the event of both a change in control and a downgrade of our credit rating.

Other Notes and Revolving Credit Facilities

 

Other revolving credit facilities with a combined credit limit of approximately $74.3 million are in place for operations in Asia and Europe with combined outstanding balances of $53.2 million and $59.9 million as of March 31, 2016 and December 31, 2015, respectively.

 

In connection with our acquisition of Metals USA, we assumed industrial revenue bonds with combined outstanding balances of $11.0 million as of March 31, 2016 and December 31, 2015, and maturities through 2027. Additionally, we assumed mortgage obligations pursuant to our acquisition of a portfolio of real estate properties that we were leasing, which have outstanding balances of $40.1 million and $40.4 million as of March 31, 2016 and December 31, 2015, respectively. The mortgages, which are secured by the underlying properties, have a fixed interest rate of 6.40% and scheduled amortization payments with a lump sum payment of $39.2 million due October 2016.

 

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Covenants

 

The Credit Agreement requires us to maintain an interest coverage ratio and a maximum leverage ratio, among other things.

 

Our obligations under the Credit Agreement and Indentures are required to be guaranteed by certain of our 100%-owned domestic subsidiaries. The subsidiary guarantors, together with Reliance, are required to collectively account for at least 80% of our consolidated EBITDA and 80% of consolidated tangible assets.

 

We were in compliance with all material covenants in our debt agreements at March 31, 2016.

 

7.  Income Taxes

 

Our effective income tax rates for the first quarter of 2016 and 2015 were 14.4% and 31.7%, respectively. During the first quarter of 2016, favorable developments occurred toward the resolution of a tax position that was previously uncertain. The re-measurement of that tax position lowered our effective tax rate by 16.1% in the first quarter of 2016, which is not expected to occur in subsequent periods. Permanent items that lowered our effective income tax rates from the federal statutory rate were not materially different during both years and relate mainly to company-owned life insurance policies, domestic production activities deductions and foreign income levels that are taxed at rates lower than the U.S. statutory rate of 35%.

 

8.  Equity

 

Common Stock

 

As of March 31, 2016, we had authorization to purchase a total of approximately 8.4 million shares under our existing share repurchase plan, or about 12% of outstanding shares. There were no share repurchases in the first quarter of 2016. Repurchased and subsequently retired shares are restored to the status of authorized but unissued shares.

 

Common stock and additional paid-in capital activity included the following:

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

March 31, 2016

 

 

 

Weighted Average

 

Shares

 

 

Amount

 

Exercise Price

 

(in millions, except share and per share amounts)

Stock-based compensation

 

$

2.1

 

 

Stock options exercised

345,170

 

 

16.5

 

$

64.87

Cumulative effect of change in accounting for stock-based compensation

 

 

1.0

 

 

Total

345,170

 

$

19.6

 

 

 

 

Dividends

 

On April 19, 2016, our Board of Directors declared the 2016 second quarter cash dividend of $0.40 per share. The dividend is payable on June 17, 2016 to stockholders of record as of May 27, 2016.

 

During the first quarter of 2016 and 2015, we declared and paid a quarterly dividend of $0.40 per share, or $28.9 million and $30.7 million in total, respectively. During the first quarter of 2016 and 2015, we paid $0.9 million and $1.0 million in dividend equivalents with respect to vested RSUs, respectively.

 

Stock-Based Compensation

 

Effective January 1, 2016, we adopted accounting changes issued by the FASB for stock-based compensation that allow us to account for forfeitures of restricted stock unit (“RSUs”) as they occur rather than estimating the number of

9


 

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forfeitures. As a result of the adoption, we recorded a cumulative-effect adjustment that reduced beginning retained earnings by $0.6 million, net of tax.

 

We make annual grants of long-term incentive awards to officers and key employees in the forms of service-based and performance-based RSUs that generally have 3-year vesting periods. The performance-based RSU awards are subject to both service and performance goal criteria. We also grant restricted stock to the non-employee members of the Board of Directors. The fair value of the RSUs and restricted stock awards is determined based on the closing stock price of our common stock on the grant date.

 

A summary of the status of our unvested restricted stock grants and service-based and performance-based RSUs as of March 31, 2016 and changes during the quarter then ended is as follows:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

Average Grant

Unvested Shares

   

Shares

 

Date Fair Value

  

  

  

  

  

  

Unvested at January 1, 2016

 

900,410

 

$

63.26

Granted(1)

 

512,895

 

 

69.16

Vested

 

(256)

 

 

59.27

Canceled

 

(5,684)

 

 

65.96

Unvested at March 31, 2016

 

1,407,365

 

$

65.40

Shares reserved for future grants (all plans)

 

1,859,259

 

 

 


(1) 512,895 RSUs, including 190,175 performance-based RSUs.

 

Accumulated Other Comprehensive Loss

 

Accumulated other comprehensive loss included the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension and

 

Accumulated

 

Foreign Currency

 

Postretirement

 

Other

 

Translation

 

Benefit Adjustments,

 

Comprehensive

 

(Loss) Gain       

    

Net of Tax

    

(Loss) Income       

 

(in millions)

Balance as of January 1, 2016

$

(74.2)

 

$

(25.5)

 

$

(99.7)

Current-period change

 

15.7

 

 

 —

 

 

15.7

Balance as of March 31, 2016

$

(58.5)

 

$

(25.5)

 

$

(84.0)

 

Foreign currency translation adjustments are not generally adjusted for income taxes as they relate to indefinite investments in foreign subsidiaries. Pension and postretirement benefit adjustments are net of taxes of $15.6 million as of March 31, 2016 and December 31, 2015.

 

9.  Commitments and Contingencies

 

Environmental Contingencies

 

We are currently involved with an environmental remediation project related to activities at former manufacturing operations of Earle M. Jorgensen Company (“EMJ”), our 100%-owned subsidiary, which were sold many years prior to Reliance’s 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 have covered costs incurred to date, and are expected to continue to cover the majority of the remaining costs. We do not expect that these obligations will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

 

10


 

Table of Contents

Legal Matters

 

From time to time, we are named as a defendant in legal actions. Generally, these actions arise out of our normal course of business. We are not a party to any pending legal proceedings other than routine litigation incidental to the business. We expect that these matters will be resolved without a material adverse effect on our results of operations, financial condition or cash flows. We maintain general liability insurance against risks arising out of our ordinary course of business.

 

10.  Earnings Per Share

 

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

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

2016

  

2015

 

(in millions, except share and per share amounts)

Numerator:

 

 

 

 

 

Net income attributable to Reliance 

$

92.2

 

$

101.3

Denominator:

 

 

 

 

 

Weighted average shares outstanding

 

71,929,821

 

 

77,119,266

Dilutive effect of stock-based awards

 

778,528

 

 

713,054

Weighted average diluted shares outstanding

 

72,708,349

 

 

77,832,320

 

 

 

 

 

 

Earnings per share attributable to Reliance stockholders:

 

 

 

 

 

Diluted

$

1.27

 

$

1.30

Basic

$

1.28

 

$

1.31

 

Potentially dilutive securities whose effect would have been antidilutive were not significant for the first quarter of 2016 and 2015.

 

11.  Subsequent Event

 

On April 1, 2016, we acquired Best Manufacturing, Inc. (“Best Manufacturing”), a custom sheet metal fabricator of steel and aluminum products on both a direct and toll basis. Best Manufacturing, headquartered in Jonesboro, Arkansas, provides various precision fabrication services including laser cutting, shearing, computer numerated control (“CNC”) punching, CNC forming and rolling, as well as welding, assembly, painting, inventory management and engineering expertise. For the year ended December 31, 2015, Best Manufacturing’s net sales were approximately $20.0 million.

 

12.  Condensed Consolidating Financial Statements

 

In November 2006 and April 2013, we issued senior unsecured notes in the aggregate principal amount of $1.1 billion, at fixed interest rates that are guaranteed by certain of our 100%-owned domestic subsidiaries that also guarantee borrowings under the Credit Agreement. The accompanying consolidating financial information has been prepared and presented pursuant to Rule 3-10 of 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 subsidiary guarantors. There are no significant restrictions on our ability to obtain funds from any of the subsidiary guarantors by dividends or loans. The supplemental consolidating financial information has been presented in lieu of separate financial statements of the subsidiary guarantors as such separate financial statements are not considered meaningful.

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Table of Contents

Condensed Unaudited Consolidating Balance Sheet

As of March 31, 2016

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

    

Subsidiaries

    

Subsidiaries

    

Adjustments

    

Consolidated

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

17.1

 

$

(4.8)

 

$

108.2

 

$

 —

 

$

120.5

Accounts receivable, net

 

75.2

 

 

775.8

 

 

162.2

 

 

(4.2)

 

 

1,009.0

Inventories

 

61.7

 

 

1,242.0

 

 

222.0

 

 

 —

 

 

1,525.7

Income taxes receivable

 

47.7

 

 

 —

 

 

 —

 

 

(18.4)

 

 

29.3

Other current assets

 

30.1

 

 

13.1

 

 

13.5

 

 

(1.3)

 

 

55.4

Total current assets

 

231.8

 

 

2,026.1

 

 

505.9

 

 

(23.9)

 

 

2,739.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in subsidiaries

 

5,172.2

 

 

340.0

 

 

 —

 

 

(5,512.2)

 

 

 —

Property, plant and equipment, net

 

115.8

 

 

1,345.5

 

 

210.6

 

 

 —

 

 

1,671.9

Goodwill

 

23.8

 

 

1,667.1

 

 

133.7

 

 

 —

 

 

1,824.6

Intangible assets, net

 

13.5

 

 

1,055.1

 

 

136.4

 

 

 —

 

 

1,205.0

Intercompany receivables

 

787.3

 

 

47.5

 

 

32.0

 

 

(866.8)

 

 

 —

Other assets 

 

24.5

 

 

47.6

 

 

6.0

 

 

 —

 

 

78.1

Total assets 

$

6,368.9

 

$

6,528.9

 

$

1,024.6

 

$

(6,402.9)

 

$

7,519.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities & Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

33.7

 

$

252.0

 

$

68.9

 

$

(4.2)

 

$

350.4

Accrued compensation and retirement costs 

 

15.4

 

 

69.6

 

 

6.0

 

 

 —

 

 

91.0

Other current liabilities

 

67.2

 

 

34.2

 

 

54.5

 

 

(19.7)

 

 

136.2

Current maturities of long-term debt and short-term borrowings

 

400.0

 

 

 —

 

 

93.8

 

 

 —

 

 

493.8

Total current liabilities 

 

516.3

 

 

355.8

 

 

223.2

 

 

(23.9)

 

 

1,071.4

Long-term debt

 

1,629.7

 

 

5.7

 

 

4.9

 

 

 —

 

 

1,640.3

Intercompany borrowings

 

 —

 

 

712.6

 

 

154.2

 

 

(866.8)

 

 

 —

Other long-term liabilities

 

210.9

 

 

505.2

 

 

51.3

 

 

 —

 

 

767.4

Total Reliance stockholders’ equity  

 

4,012.0

 

 

4,942.3

 

 

569.9

 

 

(5,512.2)

 

 

4,012.0

Noncontrolling interests

 

 —

 

 

7.3

 

 

21.1

 

 

 —

 

 

28.4

Total equity 

 

4,012.0

 

 

4,949.6

 

 

591.0

 

 

(5,512.2)

 

 

4,040.4

Total liabilities and equity

$

6,368.9

 

$

6,528.9

 

$

1,024.6

 

$

(6,402.9)

 

$

7,519.5

 

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Table of Contents

Condensed Unaudited Consolidating Balance Sheet

As of December 31, 2015

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

    

Subsidiaries

    

Subsidiaries

    

Adjustments

    

Consolidated

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

10.7

 

$

(1.0)

 

$

94.6

 

$

 —

 

$

104.3

Accounts receivable, net

 

66.5

 

 

701.8

 

 

152.3

 

 

(4.0)

 

 

916.6

Inventories

 

56.0

 

 

1,145.1

 

 

234.9

 

 

 —

 

 

1,436.0

Income taxes receivable

 

38.2

 

 

 —

 

 

(1.7)

 

 

 —

 

 

36.5

Other current assets

 

36.4

 

 

15.1

 

 

12.6

 

 

(3.3)

 

 

60.8

Total current assets

 

207.8

 

 

1,861.0

 

 

492.7

 

 

(7.3)

 

 

2,554.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in subsidiaries

 

5,046.2

 

 

328.0

 

 

 —

 

 

(5,374.2)

 

 

 —

Property, plant and equipment, net

 

115.5

 

 

1,311.3

 

 

208.7

 

 

 —

 

 

1,635.5

Goodwill

 

23.8

 

 

1,571.1

 

 

129.9

 

 

 —

 

 

1,724.8

Intangible assets, net

 

14.0

 

 

977.5

 

 

133.9

 

 

 —

 

 

1,125.4

Intercompany receivables

 

614.2

 

 

45.4

 

 

30.5

 

 

(690.1)

 

 

 —

Other assets 

 

24.6

 

 

50.9

 

 

6.2

 

 

 —

 

 

81.7

Total assets 

$

6,046.1

 

$

6,145.2

 

$

1,001.9

 

$

(6,071.6)

 

$

7,121.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities & Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

25.3

 

$

160.0

 

$

65.7

 

$

(4.0)

 

$

247.0

Accrued compensation and retirement costs 

 

29.5

 

 

79.1

 

 

10.1

 

 

 —

 

 

118.7

Other current liabilities

 

54.0

 

 

15.3

 

 

57.2

 

 

(3.3)

 

 

123.2

Current maturities of long-term debt and short-term borrowings

 

400.0

 

 

 —

 

 

100.8

 

 

 —

 

 

500.8

Total current liabilities 

 

508.8

 

 

254.4

 

 

233.8

 

 

(7.3)

 

 

989.7

Long-term debt

 

1,417.3

 

 

5.7

 

 

4.9

 

 

 —

 

 

1,427.9

Intercompany borrowings

 

 —

 

 

547.6

 

 

142.5

 

 

(690.1)

 

 

 —

Other long-term liabilities

 

205.9

 

 

505.0

 

 

50.4

 

 

 —

 

 

761.3

Total Reliance stockholders’ equity 

 

3,914.1

 

 

4,824.5

 

 

549.7

 

 

(5,374.2)

 

 

3,914.1

Noncontrolling interests

 

 —

 

 

8.0

 

 

20.6

 

 

 —

 

 

28.6

Total equity 

 

3,914.1

 

 

4,832.5

 

 

570.3

 

 

(5,374.2)

 

 

3,942.7

Total liabilities and equity

$

6,046.1

 

$

6,145.2

 

$

1,001.9

 

$

(6,071.6)

 

$

7,121.6

 

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Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Three Months Ended March 31, 2016

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

  

Subsidiaries

  

Subsidiaries

  

Adjustments

  

Consolidated

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net sales 

$

169.8

 

$

1,816.5

 

$

220.8

 

$

(44.4)

 

$

2,162.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of depreciation and amortization shown below)

 

129.3

 

 

1,270.5

 

 

170.6

 

 

(44.4)

 

 

1,526.0

Warehouse, delivery, selling, general and administrative

 

47.6

 

 

373.6

 

 

34.7

 

 

(5.1)

 

 

450.8

Depreciation and amortization 

 

4.1

 

 

46.4

 

 

5.6

 

 

 —

 

 

56.1

 

 

181.0

 

 

1,690.5

 

 

210.9

 

 

(49.5)

 

 

2,032.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(11.2)

 

 

126.0

 

 

9.9

 

 

5.1

 

 

129.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest 

 

(20.7)

 

 

(2.9)

 

 

(1.5)

 

 

3.4

 

 

(21.7)

Other income, net  

 

3.4

 

 

1.2

 

 

5.0

 

 

(8.5)

 

 

1.1

(Loss) income before equity in earnings of subsidiaries and income taxes

 

(28.5)

 

 

124.3

 

 

13.4

 

 

 —

 

 

109.2

Equity in earnings of subsidiaries

 

114.6

 

 

4.2

 

 

 —

 

 

(118.8)

 

 

 —

Income before income taxes 

 

86.1

 

 

128.5

 

 

13.4

 

 

(118.8)

 

 

109.2

Income tax (benefit) provision

 

(6.1)

 

 

18.5

 

 

3.3

 

 

 —

 

 

15.7

Net income

 

92.2

 

 

110.0

 

 

10.1

 

 

(118.8)

 

 

93.5

Less:  Net income attributable to noncontrolling interests

 

 —

 

 

1.3

 

 

 —

 

 

 —

 

 

1.3

Net income attributable to Reliance 

$

92.2

 

$

108.7

 

$

10.1

 

$

(118.8)

 

$

92.2

Comprehensive income attributable to Reliance 

$

107.9

 

$

121.8

 

$

28.7

 

$

(150.5)

 

$

107.9

 

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Table of Contents

Condensed Unaudited Consolidating Statement of Comprehensive Income

For the Three Months Ended March 31, 2015

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

  

Subsidiaries

  

Subsidiaries

  

Adjustments

  

Consolidated

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net sales 

$

192.1

 

$

2,237.1

 

$

237.9

 

$

(52.7)

 

$

2,614.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of depreciation and amortization shown below)

 

155.1

 

 

1,660.9

 

 

180.4

 

 

(52.7)

 

 

1,943.7

Warehouse, delivery, selling, general and administrative 

 

39.9

 

 

385.4

 

 

37.4

 

 

(16.6)

 

 

446.1

Depreciation and amortization 

 

5.1

 

 

44.5

 

 

5.7

 

 

 —

 

 

55.3

 

 

200.1

 

 

2,090.8

 

 

223.5

 

 

(69.3)

 

 

2,445.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(8.0)

 

 

146.3

 

 

14.4

 

 

16.6

 

 

169.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest 

 

(19.6)

 

 

(5.9)

 

 

(1.5)

 

 

6.4

 

 

(20.6)

Other income, net  

 

18.9

 

 

0.3

 

 

5.7

 

 

(23.0)

 

 

1.9

(Loss) income before equity in earnings of subsidiaries and income taxes

 

(8.7)

 

 

140.7

 

 

18.6

 

 

 —

 

 

150.6

Equity in earnings of subsidiaries

 

98.8

 

 

3.5

 

 

 —

 

 

(102.3)

 

 

 —

Income before income taxes 

 

90.1

 

 

144.2

 

 

18.6

 

 

(102.3)

 

 

150.6

Income tax (benefit) provision

 

(11.2)

 

 

55.0

 

 

3.9

 

 

 —

 

 

47.7

Net income

 

101.3

 

 

89.2

 

 

14.7

 

 

(102.3)

 

 

102.9

Less:  Net income attributable to noncontrolling interests 

 

 —

 

 

1.4

 

 

0.2

 

 

 —

 

 

1.6

Net income attributable to Reliance 

$

101.3

 

$

87.8

 

$

14.5

 

$

(102.3)

 

$

101.3

Comprehensive income (loss) attributable to Reliance

$

76.5

 

$

70.1

 

$

(5.8)

 

$

(64.3)

 

$

76.5

 

15


 

Table of Contents

Condensed Unaudited Consolidating Cash Flow Statement

For the Three Months ended March 31, 2016

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

  

Subsidiaries

  

Subsidiaries

  

Adjustments

  

Consolidated

  

  

  

  

  

  

    

  

  

  

  

  

  

  

  

Net cash (used in) provided by operating activities

$

(16.6)

 

$

157.2

 

$

14.8

 

$

 —

 

$

155.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment 

 

(4.0)

 

 

(26.2)

 

 

(4.2)

 

 

 —

 

 

(34.4)

Acquisition, net of cash acquired

 

(291.1)

 

 

0.2

 

 

 —

 

 

 —

 

 

(290.9)

Net repayments from subsidiaries

 

125.1

 

 

 —

 

 

 —

 

 

(125.1)

 

 

 —

Other investing activities, net

 

(4.9)

 

 

(1.4)

 

 

0.1

 

 

 —

 

 

(6.2)

Net cash used in investing activities

 

(174.9)

 

 

(27.4)

 

 

(4.1)

 

 

(125.1)

 

 

(331.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net short-term debt repayments

 

 —

 

 

 —

 

 

(6.2)

 

 

 —

 

 

(6.2)

Proceeds from long-term debt borrowings

 

399.0

 

 

 —

 

 

 —

 

 

 —

 

 

399.0

Principal payments on long-term debt

 

(187.5)

 

 

(0.5)

 

 

 —

 

 

 —

 

 

(188.0)

Dividends and dividend equivalents paid 

 

(29.0)

 

 

 —

 

 

 —

 

 

 —

 

 

(29.0)

Net intercompany (repayments) borrowings

 

 —

 

 

(133.1)

 

 

8.0

 

 

125.1

 

 

 —

Other financing activities, net

 

15.4

 

 

 —

 

 

(1.5)

 

 

 —

 

 

13.9

Net cash provided by (used in) financing activities

 

197.9

 

 

(133.6)

 

 

0.3

 

 

125.1

 

 

189.7

Effect of exchange rate changes on cash and cash equivalents

 

 —

 

 

 —

 

 

2.6

 

 

 —

 

 

2.6

Increase (decrease) in cash and cash equivalents

 

6.4

 

 

(3.8)

 

 

13.6

 

 

 —

 

 

16.2

Cash and cash equivalents at beginning of year

 

10.7

 

 

(1.0)

 

 

94.6

 

 

 —

 

 

104.3

Cash and cash equivalents at end of period

$

17.1

 

$

(4.8)

 

$

108.2

 

$

 —

 

$

120.5

 

16


 

Table of Contents

Condensed Unaudited Consolidating Cash Flow Statement

For the Three Months Ended March 31, 2015

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

Guarantor

 

Guarantor

 

Consolidating

 

 

 

 

Parent

  

Subsidiaries

  

Subsidiaries

  

Adjustments

  

Consolidated

  

  

  

  

  

  

    

  

  

  

  

  

  

  

  

Net cash (used in) provided by operating activities

$

(41.0)

 

$

189.0

 

$

23.4

 

$

 —

 

$

171.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment 

 

(3.1)

 

 

(25.1)

 

 

(3.1)

 

 

 —

 

 

(31.3)

Net repayments from subsidiaries

 

174.6

 

 

 —

 

 

 —

 

 

(174.6)

 

 

 —

Other investing activities, net

 

 —

 

 

4.1

 

 

 —

 

 

 —

 

 

4.1

Net cash provided by (used) in investing activities

 

171.5

 

 

(21.0)

 

 

(3.1)

 

 

(174.6)

 

 

(27.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net short-term debt borrowings

 

 —

 

 

 —

 

 

1.1

 

 

 —

 

 

1.1

Proceeds from long-term debt borrowings

 

363.0

 

 

 —

 

 

 —

 

 

 —

 

 

363.0

Principal payments on long-term debt

 

(310.3)

 

 

(0.7)

 

 

 —

 

 

 —

 

 

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