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The weak pricing environment was driven by high levels

of imports as a result of the strong U.S. dollar and a weak

global economy, including economic slowdown in China

in the second half of 2015. Our same-store average selling

price per ton sold declined sequentially each month from

September 2014 through December 2015. However, our

same-store average selling price per ton sold declined only

10.3% in 2015 compared to 2014, with mill pricing for

most carbon and stainless steel products falling 30% to

40%. We believe our disciplined and localized operating

strategy of maintaining the right level of inventory to

support current sales activity in each of our operations

encouraged our local management teams to turn away

low margin business and focus on higher margin orders.

We continue to invest in the strongest areas of our company,

including significant investments in our businesses servicing

the automotive and aerospace markets. We service the

automotive industry primarily through our toll processing

operations, which have been highly profitable for Reliance

since we eliminate metal price risk by not taking ownership

of the metal and provide high-quality value-added

processing capabilities. As a result, we have made and

continue to make investments in internally engineered,

state-of-the-art processing equipment to increase our

overall toll processing capacity, including incremental

processing resulting from the increased usage of aluminum

in the automotive industry. In aerospace, we have invested

in expansion both through our August 2014 acquisition

of Aluminium Services UK Limited and the opening of

additional new facilities around the globe in anticipation of

continued strong build rates and high backlog.

Effective January 1, 2016, we completed the acquisition

of Tubular Steel, Inc., a distributor and processor of

carbon, alloy and stainless steel pipe, tubing and bar

products, headquartered in St. Louis, Missouri. Tubular

Steel is a strong company with a well-respected position

in the market, and brings additional high-margin,

specialty products to our mix. This acquisition not only

fits our growth strategy of investing in higher-returning

businesses but also expands our product breadth and

end-market diversification. Going forward, accretive

acquisitions will remain an integral element of our growth

strategy. Our pipeline of potential acquisition targets is

robust and we continue to evaluate various opportunities

to acquire profitable, well-managed metals service centers

and processors with product and end-market exposures

that help support our growth strategies.

We were especially pleased with our ability to generate

record cash flow and improve our balance sheet in 2015,

while at the same time growing our business and enhancing

stockholder value. The Reliance model enables us to

generate cash during cyclical downturns through effective

working capital management along with strong operational

profits. Our cash flow generation in 2015 allowed us

to invest in both organic growth, with $172 million in

capital expenditures, as well as M&A opportunities

including the acquisition of Tubular Steel in early 2016.

We also deleveraged our balance sheet throughout the

year, reducing total debt by nearly $377 million. During

2015, we repurchased approximately 6.2 million shares of

our common stock for approximately $356 million. Given

our strong liquidity, we believe share repurchases are an