In addition to developing new policies and procedures to prevent the spread of the virus, we improved our safety performance in 2020 with an approximately 23% reduction in our incident rate compared to 2019.
While this is a significant milestone, as I've stated in the past, we will not be satisfied until this rate reaches 0.
Karla has demonstrated excellent judgment and leadership in each role she has held since joining Reliance in 1992, and her unique abilities and talents have earned the respect of our employees and shareholders.
Arthur has held various positions in Reliance's finance and accounting department for over 15 years and has done a phenomenal job.
Our results demonstrate the strength and resiliency of our people and unique business model as well as our ability to execute through both good times and bad given the diversity of our products, end markets and geographies.
These factors, combined with pricing discipline and continuous improvements to our value-added processing capabilities, enabled us to achieve our second consecutive year of record annual gross profit margins at 31.5%, up 120 basis points from 2019 and exceeding our estimated sustainable range of 28% to 30%.
For the full year, we generated non-GAAP earnings per share of $7.71 as a result of the combination of strong margin discipline and effective expense control, which helped mitigate our decline in profitability.
On the heels of a record year in 2019, we maintained strong cash flow from operations of $1.17 billion in 2020 driven by our profitability and focus on working capital management.
Fueled by our ongoing focus on rightsizing our inventory to reflect current demand levels and our differentiating advantage of cross-selling inventory among our family of companies, we achieved our companywide inventory turn goal of 4.7 times based on tons for 2020.
We invested $172 million in our business through capital expenditures in 2020, including many growth opportunities such as our recent toll processing expansion in Texas and Kentucky.
Today, we are introducing our 2021 capital expenditure budget of $245 million that includes new buildings and other projects to expand, upgrade and maintain many of our operating facilities.
In 2020, we repurchased $337.3 million worth of our common stock at an average cost of $91.80 per share and paid $164.1 million in dividends to our shareholders.
We've maintained our payment of regularly quarterly dividends for 61 consecutive years without ever suspending payment or reducing our dividend rate.
In addition, we've increased our dividend 28 times since our 1994 IPO, including the most recent increase of 10% for the first quarter of 2021.
As was evident throughout the past year, our customers rely on Reliance to continue to support them through trying times, often in greater capacity and on a more frequent basis.
As an essential business, we were able to continue operating throughout the pandemic, with our 2020 tons sold decreasing only 10.8% compared to 2019.
Our average selling price was down 9.6% in 2020 compared to 2019 due to declining mill prices for most of the products we sell during the first nine months of the year.
In the fourth quarter of 2020, healthy demand conditions in the majority of our end markets resulted in our tons sold declining only 1.3% compared to the prior quarter.
This was the lowest Q4 seasonal decline we've experienced in the last 10 years and exceeded our guidance by a significant margin.
Supported by solid demand and rising input costs, metal pricing improved as mill price increases for many of the products we sell accelerated throughout the fourth quarter with prices for certain carbon steel products almost doubling, which led to our average selling price increasing 4.6% compared to the third quarter of 2020, again, exceeding our expectations.
The favorable demand and pricing conditions in the fourth quarter contributed to our record gross profit margin of 33%, a 60 basis point improvement from the third quarter of 2020.
And on a non-GAAP FIFO basis, which we believe is the best measure of our day-to-day operating performance, our gross profit margin of 33.6% increased 180 basis points from 31.8% in the third quarter of 2020.
While we are very pleased with our record Q4 and full year gross profit margin, we continue to believe our estimated sustainable gross profit margin range of 28% to 30% is appropriate as we navigate the ongoing COVID-19 pandemic and operate through this uncertain environment.
While the percentage of orders with value-added processing declined to approximately 49% from 51% in 2019 due to changes in product mix caused by the pandemic, process orders continue to serve as a stabilizer to our margins in challenging markets with declining demand and pricing trends.
Demand in nonresidential construction, the largest market we serve, remained relatively steady during the fourth quarter due to ongoing healthy bidding activity for new projects and the restart of projects that had been put on hold earlier in the year.
Fourth quarter 2020 sales were down 12.8% from the prior year period as our markets continued to recover following the reopening of the economy.
For the full year of 2020, sales were down 19.7% from 2019.
As Jim and Karla highlighted, we generated a record quarterly gross profit margin of 33% in the fourth quarter of 2020, up 60 basis points from both Q3 2020 and Q4 2019 and a record gross profit margin of 31.5% for the full year of 2020, up 120 basis points from our previous annual record of 30.3% in 2019.
Our non-GAAP FIFO gross profit margin in the fourth quarter of 2020 was up 450 basis points from Q4 2019, and for the full year of 2020 was up to 280 basis points from 2019.
We incurred LIFO expense of $15.5 million in the fourth quarter of 2020 due to rapidly increasing mill costs for most of our products.
However, for the full year of 2020, we still recognized LIFO income of $22 million as our cost of inventory on hand at the end of the year was still below the levels at the beginning of the year.
This compares to LIFO income in the fourth quarter and full year of 2019 of $81 million and $156 million, respectively.
We ended 2020 with a LIFO reserve of $115.6 million on our balance sheet.
Based on current market conditions, we expect to incur an annual LIFO expense of $340 million in 2021.
As such, our current projected Q1 2021 LIFO expense is $85 million.
Our fourth quarter non-GAAP SG&A expenses decreased $51 million or 9.9% compared to the fourth quarter of 2019 on a 7.9% reduction in shipments.
For the full year, same-store SG&A expenses declined $241 million or 11.5% on a 10.8% reduction in shipments.
As you've heard us say before, approximately 60% to 65% of our SG&A expenses are people related.
When looking at the 11.5% year-over-year decline in same-store SG&A expenses, approximately half of the decrease was people-related as our headcount declined 14% compared to the prior year.
Although we are entering the first quarter of 2021 with a more efficient expense structure because of strong volume and pricing trends, we expect our expenses will increase in the first quarter of 2021 from the fourth quarter of 2020, consistent with seasonal trends.
For the full year of 2020, our effective income tax rate declined to 22.1% from 24% in 2019 mainly due to our lower pre-tax income level in 2020.
We currently anticipate our full year 2021 effective income tax rate will be 24%.
Our strong gross profit margin and effective expense management resulted in $2.01 of earnings per diluted share in the fourth quarter of 2020, well above our outlook of $1.30 to $1.40 per diluted share but down 17.6% from $2.44 in the fourth quarter of 2019 mainly due to reduced demand levels related to the pandemic, with commercial aerospace and energy end market sales being significant contributors to the decline in our sales.
In comparison to the third quarter of 2020, fourth quarter non-GAAP earnings per diluted share of $2.01 was up 7.5% from $1.87 due to improved pricing, strong gross profit margin and recovering demand in most end markets.
We generated strong cash flow from operations of $230.2 million during the fourth quarter due to our profitable operations and effective working capital management, including our focus on rightsizing our inventory levels.
At the end of the year, our total debt outstanding was $1.66 billion, resulting in net debt-to-EBITDA multiple of 1.1 times.
Also at the end of the year, no borrowings were outstanding on our $1.5 billion revolving credit facility.
As mentioned last quarter, we significantly strengthened our liquidity position through the successful completion of both our $900 million senior notes offering and amended/restated $1.5 billion five-year unsecured revolving credit facility.
As a result of these favorable conditions and the normal seasonal improvement, we estimate our tons sold will be up 10% to 12% in the first quarter of 2021 compared to the fourth quarter of 2020.
We also expect our average selling price in the first quarter of 2021 will be up 12% to 14% compared to the fourth quarter of 2020.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $3.40 to $3.50 for the first quarter of 2021.

Summary:
Our results demonstrate the strength and resiliency of our people and unique business model as well as our ability to execute through both good times and bad given the diversity of our products, end markets and geographies.
As was evident throughout the past year, our customers rely on Reliance to continue to support them through trying times, often in greater capacity and on a more frequent basis.
Supported by solid demand and rising input costs, metal pricing improved as mill price increases for many of the products we sell accelerated throughout the fourth quarter with prices for certain carbon steel products almost doubling, which led to our average selling price increasing 4.6% compared to the third quarter of 2020, again, exceeding our expectations.
Demand in nonresidential construction, the largest market we serve, remained relatively steady during the fourth quarter due to ongoing healthy bidding activity for new projects and the restart of projects that had been put on hold earlier in the year.
Although we are entering the first quarter of 2021 with a more efficient expense structure because of strong volume and pricing trends, we expect our expenses will increase in the first quarter of 2021 from the fourth quarter of 2020, consistent with seasonal trends.
Our strong gross profit margin and effective expense management resulted in $2.01 of earnings per diluted share in the fourth quarter of 2020, well above our outlook of $1.30 to $1.40 per diluted share but down 17.6% from $2.44 in the fourth quarter of 2019 mainly due to reduced demand levels related to the pandemic, with commercial aerospace and energy end market sales being significant contributors to the decline in our sales.
In comparison to the third quarter of 2020, fourth quarter non-GAAP earnings per diluted share of $2.01 was up 7.5% from $1.87 due to improved pricing, strong gross profit margin and recovering demand in most end markets.
As a result of these favorable conditions and the normal seasonal improvement, we estimate our tons sold will be up 10% to 12% in the first quarter of 2021 compared to the fourth quarter of 2020.
We also expect our average selling price in the first quarter of 2021 will be up 12% to 14% compared to the fourth quarter of 2020.
Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $3.40 to $3.50 for the first quarter of 2021.