10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________________________________________

FORM 10-Q

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

        For the quarter ended June 30, 2020

☐ 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: 001-35475

_________________________________________________

REXNORD CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		20-5197013
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
511 W. Freshwater Way		53204
Milwaukee,	Wisconsin	(Zip Code)
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (414) 643-3739

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	RXN	The New York Stock Exchange

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 checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 

Class	Outstanding at July 24, 2020
Rexnord Corporation Common Stock, $0.01 par value per share	120,658,147 shares

TABLE OF CONTENTS

Part I FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43
Part II OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	44
Signatures		45

2

Private Securities Litigation Reform Act Safe Harbor Statement

        Our disclosure and analysis in this report concerning our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business and the realization of sales from our backlog, include forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” and similar expressions are forward-looking statements. Although these statements are based upon reasonable assumptions, including projections of orders, sales, operating margins, earnings, cash flows, research and development costs, working capital and capital expenditures, they are subject to risks and uncertainties that are described more fully herein and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, in Part I, Item 1A, “Risk Factors” and in Part I under the heading "Cautionary Notice Regarding Forward-Looking Statements." Accordingly, we can give no assurance that we will achieve the results anticipated or implied by our forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. In addition, the effects of the ongoing COVID-19 pandemic on our employees, customers and supply chain, including those related to governmental actions, all of which are uncertain at this time, may, among other impacts, heighten the effects on our business, results of operations and financial condition of the risk factors identified in our Form 10-K.

General

        Following the end of our fiscal year ended March 31, 2020, we transitioned to a December 31 fiscal year-end date. The nine-month period from April 1, 2020, to December 31, 2020, is serving as a transition period, and we will provide one-time, nine-month transitional financial statements for the transition period in a transition report on Form 10-K to be filed in 2021. Prior to the transition period, our fiscal year was the year ending on March 31 of the corresponding calendar year. For example, our fiscal year 2020, or fiscal 2020, was the period from April 1, 2019, to March 31, 2020. Our fiscal year 2021 will commence on January 1, 2021.

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PART I - FINANCIAL INFORMATION

ITEM  1. FINANCIAL STATEMENTS

Rexnord Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in Millions, except share amounts)

(Unaudited) 

	June 30, 2020		March 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	353.4	$	573.4
Receivables, net	272.1		334.7
Inventories	348.8		317.5
Other current assets	41.0		38.7
Total current assets	1,015.3		1,264.3
Property, plant and equipment, net	375.6		378.8
Intangible assets, net	505.7		514.2
Goodwill	1,323.5		1,321.9
Other assets	147.1		147.9
Total assets	$	3,367.2	$	3,627.1
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	76.4	$	76.4
Trade payables	160.1		185.6
Compensation and benefits	44.8		61.8
Current portion of pension and postretirement benefit obligations	3.2		3.2
Other current liabilities	118.5		128.5
Total current liabilities	403.0		455.5
Long-term debt	1,148.0		1,397.0
Pension and postretirement benefit obligations	189.8		189.6
Deferred income taxes	123.4		121.0
Other liabilities	149.3		150.3
Total liabilities	2,013.5		2,313.4
Stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 120,655,183 at June 30, 2020 and 119,718,631 at March 31, 2020	1.2		1.2
Additional paid-in capital	1,355.8		1,348.3
Retained earnings	111.9		85.9
Accumulated other comprehensive loss	(118.1)		(124.4)
Total Rexnord stockholders' equity	1,350.8		1,311.0
Non-controlling interest	2.9		2.7
Total stockholders' equity	1,353.7		1,313.7
Total liabilities and stockholders' equity	$	3,367.2	$	3,627.1

See notes to the condensed consolidated financial statements.

4

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(in Millions, except share and per share amounts)

(Unaudited)

	Three Months Ended
	June 30, 2020		June 30, 2019
Net sales	$	449.1	$	508.3
Cost of sales	272.2		306.7
Gross profit	176.9		201.6
Selling, general and administrative expenses	100.2		109.5
Restructuring and other similar charges	1.7		3.2
Amortization of intangible assets	9.0		8.7
Income from operations	66.0		80.2
Non-operating expense:
Interest expense, net	(13.4)		(15.5)
Other income (expense), net	0.4		(1.5)
Income before income taxes	53.0		63.2
Provision for income taxes	(17.2)		(14.8)
Equity method investment income	—		0.1
Net income from continuing operations	35.8		48.5
Loss from discontinued operations, net of tax	—		(1.8)
Net income	35.8		46.7
Non-controlling interest income	0.2		0.2
Net income attributable to Rexnord	35.6		46.5
Dividends on preferred stock	—		(5.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Basic net income (loss) per share attributable to Rexnord common stockholders:
Continuing operations	$	0.30	$	0.40
Discontinued operations	$	—	$	(0.02)
Net income	$	0.30	$	0.39
Diluted net income (loss) per share attributable to Rexnord common stockholders:
Continuing operations	$	0.29	$	0.39
Discontinued operations	$	—	$	(0.01)
Net income	$	0.29	$	0.38
Weighted-average number of shares outstanding (in thousands):
Basic	120,246		105,262
Effect of dilutive equity securities	1,802		18,402
Diluted	122,048		123,664

See notes to the condensed consolidated financial statements.

5

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in Millions)

(Unaudited)

	Three Months Ended
	June 30, 2020		June 30, 2019
Net income attributable to Rexnord	$	35.6	$	46.5
Other comprehensive income:
Foreign currency translation adjustments	6.4		(0.5)
Change in pension and postretirement defined benefit plans, net of tax	(0.1)		0.5
Other comprehensive income, net of tax	6.3		—
Non-controlling interest income	0.2		0.2
Total comprehensive income	$	42.1	$	46.7

See notes to the condensed consolidated financial statements.

6

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in Millions)

(Unaudited)

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating activities
Net income	$	35.8	$	46.7
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	12.7		12.3
Amortization of intangible assets	9.0		8.7
Deferred income taxes	2.4		3.6
Other non-cash charges	(0.6)		0.8
Stock-based compensation expense	13.3		6.9
Changes in operating assets and liabilities:
Receivables	52.9		12.5
Inventories	(29.5)		(33.5)
Other assets	(2.8)		(0.2)
Accounts payable	(26.4)		(12.1)
Accruals and other	(19.2)		(26.7)
Cash provided by operating activities	47.6		19.0
Investing activities
Expenditures for property, plant and equipment	(8.5)		(5.9)
Acquisitions, net of cash acquired	—		(24.8)
Proceeds from dispositions of long-lived assets	0.9		1.3
Cash used for investing activities	(7.6)		(29.4)
Financing activities
Repayments of debt	(250.3)		(3.9)
Proceeds from exercise of stock options	6.3		4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)		(5.7)
Payment of common stock dividends	(9.6)		—
Payment of preferred stock dividends	—		(5.8)
Cash used for financing activities	(263.0)		(10.6)
Effect of exchange rate changes on cash and cash equivalents	3.0		0.3
Decrease in cash and cash equivalents	(220.0)		(20.7)
Cash, cash equivalents and restricted cash at beginning of period	573.4		292.5
Cash, cash equivalents and restricted cash at end of period	$	353.4	$	271.8

See notes to the condensed consolidated financial statements.

7

Rexnord Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2020

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies

        The unaudited condensed consolidated financial statements included herein have been prepared by Rexnord Corporation (“Rexnord” or the “Company”) in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

        In the opinion of management, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results of operations for the interim periods. Following the end of the Company's fiscal year ended March 31, 2020, the Company transitioned to a December 31 fiscal year-end date. The nine-month period from April 1, 2020, to December 31, 2020, is serving as a transition period, and the Company will provide one-time, nine-month transitional financial statements for the transition period in a transition report on Form 10-K to be filed in 2021. Results for the interim periods are not necessarily indicative of results that may be expected for the nine-month transition period ending December 31, 2020. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's March 31, 2020 Annual Report on Form 10-K.

The Company

        Rexnord is a growth-oriented, multi-platform industrial company with what it believes to be leading market shares and highly-trusted brands that serve a diverse array of global end markets. The Company's heritage of innovation and specification have allowed it to provide highly-engineered, mission-critical solutions to customers for decades and affords it the privilege of having long-term, valued relationships with market leaders. The Company operates in a disciplined way and the Rexnord Business System (“RBS”) is its operating philosophy. Grounded in the spirit of continuous improvement, RBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of its business.

        The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where the Company's customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services.

        The Water Management platform designs, procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing and site works products for primarily nonresidential buildings.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate that is expected to be discontinued because of reference rate reform. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this ASU are effective for all entities as of March 12, 2020, through December 31, 2022. The Company did not modify any material contracts due to reference rate reform during the three months ended June 30, 2020. The Company will continue to evaluate the impact this guidance will have on its consolidated financial statements for all future transactions affected by reference rate reform during the time permitted.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The FASB issued this update as part of its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general

8

principles in Topic 740 and also improve consistent application of other areas by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities with fiscal years beginning after December 15, 2020, and early adoption is permitted. Certain amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.  

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The Company adopted ASU No. 2016-13, as amended, on April 1, 2020, using a modified-retrospective approach. There was no impact to the Company's consolidated financial statements.

        In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"), which updates the standard to remove disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. ASU 2018-14 is effective for public business entities with fiscal years beginning after December 15, 2020, on a retroactive basis. This guidance will have no impact on the Company's consolidated financial statements upon adoption other than with respect to the updated disclosure requirements.    

Reclassifications

        Certain prior year amounts have been reclassified to conform to the presentation used for the three months ended June 30, 2020.

9

2. Acquisitions

Fiscal Year 2020

        On January 28, 2020, the Company acquired substantially all of the assets of Just Manufacturing Company ("Just Manufacturing") for a cash purchase price of $59.4 million, excluding transaction costs and net of cash acquired. Just Manufacturing, based in Franklin Park, Illinois, manufactures stainless steel sinks and plumbing fixtures primarily used in institutional and commercial end markets and complements the Company's existing Water Management platform.

On May 10, 2019, the Company acquired substantially all of the assets of East Creek Corporation (d/b/a StainlessDrains.com), a manufacturer of stainless steel drains, grates and accessories for industrial and commercial end markets, for a cash purchase price of $24.8 million, excluding transaction costs and net of cash acquired. StainlessDrains.com, headquartered in Greenville, Texas, added complementary product lines to the Company's existing Water Management platform.

The fiscal 2020 acquisitions have been accounted for as business combinations and were recorded by allocating the purchase price to the fair value of the assets acquired and liabilities assumed at the acquisition date. The excess of the purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded as goodwill. The purchase price allocations associated with these acquisitions resulted in tax deductible goodwill of $27.2 million, other intangible assets of $40.9 million (including tradenames of $2.2 million and $38.7 million of customer relationships), $8.4 million of fixed assets, $9.1 million of trade working capital and other net liabilities of $1.4 million.

The preliminary purchase price allocations for Just Manufacturing were adjusted during the three months ended June 30, 2020, resulting in a $0.7 million increase in goodwill related to the refinement of the estimated fair value of the liabilities assumed as of the acquisition date. The Company is continuing to evaluate the preliminary purchase price allocations for Just Manufacturing related to the fair value assigned to intangible assets and net working capital acquired, which will be completed within the one year period following its acquisition date. The purchase price allocations for StainlessDrains.com were finalized during fiscal 2020. 

        During fiscal 2020, the Company acquired the remaining non-controlling interest in a Process and Motion Control joint venture for a cash purchase price of $0.3 million. The acquisition of the remaining minority interest was not material to the Company's condensed consolidated statements of operations or financial position.

The Company's results of operations include the acquired operations subsequent to the respective acquisition dates. Pro-forma results of operations and certain other U.S. GAAP disclosures related to the fiscal 2020 acquisitions have not been presented because they are not significant to the Company's condensed consolidated statements of operations or financial position.

3. Restructuring and Other Similar Charges

        During the three months ended June 30, 2020, the Company continued to execute various restructuring actions. These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio. These restructuring actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs. Management expects to continue executing initiatives and select product-line rationalizations to optimize its operating margin and manufacturing footprint. As the Company continues to evaluate the impact of COVID-19 and the resulting effects on the global economy, the Company may also execute additional restructuring actions. As such, the Company expects further expenses related to workforce reductions, lease termination costs, and other facility rationalization costs. As the Company’s evaluation of the impacts of COVID-19 and other potential restructuring actions are in process, related restructuring expenses, if any, are not yet estimable.

        The following table summarizes the Company's restructuring and other similar charges during the three months ended June 30, 2020 and June 30, 2019, by classification of operating segment (in millions):

	Restructuring and Other Similar Charges Three Months Ended June 30, 2020
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	0.2	$	0.9	$	0.1	$	1.2
Contract termination and other associated costs	0.5		—		—		0.5
Total restructuring and other similar costs	$	0.7	$	0.9	$	0.1	$	1.7

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	Restructuring and Other Similar Charges Three Months Ended June 30, 2019
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	2.6	$	0.3	$	—	$	2.9
Contract termination and other associated costs	0.3		—		—		0.3
Total restructuring and other similar costs	$	2.9	$	0.3	$	—	$	3.2

        The following table summarizes the activity in the Company's restructuring accrual for the three months ended June 30, 2020 (in millions):

	Employee termination benefits		Contract termination and other associated costs		Total
Restructuring accrual, March 31, 2020 (1)	$	8.3	$	1.5	$	9.8
Charges	1.2		0.5		1.7
Cash payments	(3.4)		(0.6)		(4.0)
Restructuring accrual, June 30, 2020 (1)	$	6.1	$	1.4	$	7.5

____________________

(1)The restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.

        In connection with the ongoing supply chain optimization and footprint repositioning initiatives, the Company has taken several actions to consolidate existing manufacturing facilities and rationalize its product offerings. These actions require the Company to assess whether the carrying amount of impacted long-lived assets will be recoverable as well as whether the remaining useful lives require adjustment. As a result, the Company recognized accelerated depreciation of $0.4 million and $0.6 million during the three months ended June 30, 2020 and June 30, 2019, respectively. Accelerated depreciation is recorded within Cost of sales in the condensed consolidated statements of operations.

4. Discontinued Operations

During fiscal 2019, the Company completed the sale of the VAG business, which was previously included within the Water Management platform. The operating results of the VAG business are reported as discontinued operations in the condensed consolidated statements of operations, as the sale of VAG represented a strategic shift that had a major impact on operations and financial results. The sale price was subject to customary working capital and cash balance adjustments, which were finalized in fiscal 2020. As a result of these adjustments and other related costs, the Company recognized an additional $1.8 million loss on the sale of discontinued operations during the three months ended June 30, 2019.

5. Revenue Recognition

        A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606, Revenue from Contracts with Customers ("ASC 606"). A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer.

        When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continues to be recognized as an expense when the products are sold. When the contract provides the customer the right to return eligible products or when the customer is part of a sales rebate program,

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the Company reduces revenue at the point of sale using current facts and historical experience by using an estimate for expected product returns and rebates associated with the transaction. The Company adjusts these estimates at the earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed. Accordingly, an increase or decrease to revenue is recognized at that time.

        Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a component of cost of sales in the condensed consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as Cost of sales in the condensed consolidated statements of operations.

Revenue by Category

The Company has two business segments, Process & Motion Control and Water Management. The following tables present our revenue disaggregated by customer type and geography (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Original equipment manufacturers/end users	$	158.4	$	186.2
Maintenance, repair, and operations	116.0		143.9
Total Process & Motion Control	$	274.4	$	330.1
Water safety, quality, flow control and conservation	$	163.2	$	165.0
Water infrastructure	11.5		13.2
Total Water Management	$	174.7	$	178.2

	Three Months Ended June 30, 2020
	Process & Motion Control		Water Management
United States and Canada	$	169.1	$	171.9
Europe	65.6		—
Rest of world	39.7		2.8
Total	$	274.4	$	174.7

	Three Months Ended June 30, 2019
	Process & Motion Control		Water Management
United States and Canada	$	214.4	$	174.8
Europe	72.4		—
Rest of world	43.3		3.4
Total	$	330.1	$	178.2

Contract Balances

For substantially all of the Company's Process & Motion Control and Water Management product sales, the customer is billed 100% of the contract value when the product ships and payment is generally due 30 days from shipment. Certain contracts include longer payment periods; however, the Company has elected to utilize the practical expedient in which the Company will only recognize a financing component to the sale if payment is due more than one year from the date of shipment.

        The Company receives payment from customers based on the contractual billing schedule and specific performance requirements established in the contract. Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. Contract assets arise when the Company performs by transferring goods or services to a customer before the customer pays consideration, or before the customer’s payment is due. A contract liability exists when the

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Company has received consideration or the amount is due from the customer in advance of revenue recognition. Contract liabilities and contract assets are recognized in Other current liabilities and Receivables, net, respectively, in the Company's condensed consolidated balance sheets.

The following table presents changes in the Company’s contract assets and liabilities during the three months ended June 30, 2020 (in millions):

	Balance Sheet Classification	March 31, 2020		Additions		Deductions		June 30, 2020
Contract assets	Receivables, net	$	0.5	$	0.1	$	—	$	0.6
Contract liabilities (1)	Other current liabilities	$	7.3	$	3.1	$	(4.4)	$	6.0

____________________

(1)Contract liabilities are reduced when revenue is recognized.

Backlog

        The Company has a backlog of $370.8 million as of June 30, 2020, which represents the most likely amount of consideration expected to be received in satisfying the remaining backlog under open contracts. The Company has elected to use the optional exemption provided by ASC 606-10-50-14A for variable consideration, and has not included estimated rebates in the amount of unsatisfied performance obligations. The Company expects to recognize approximately 78% of the unsatisfied performance obligations as revenue in the remaining six months in the transition period ending December 31, 2020, and the remaining approximately 22% in 2021 and beyond.

Timing of Performance Obligations Satisfied at a Point in Time

The Company determined that the customer is able to control the product when it is delivered to them; thus, depending on the shipping terms, control will transfer at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.

Variable Consideration

The Company provides volume-based rebates and the right to return product to certain customers, which are accrued for based on current facts and historical experience. Rebates are paid either on an annual or quarterly basis. There are no other significant variable consideration elements included in the Company's contracts with customers.

Contract Costs

The Company has elected to expense contract costs as incurred if the amortization period is expected to be one year or less. If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization. As of June 30, 2020, the contract assets capitalized, as well as amortization recognized in the three months ended June 30, 2020, are not significant and there have been no impairment losses recognized.

Allowance for Doubtful Accounts

The Company assesses the collectability of customer receivables based on the creditworthiness of a customer as determined by credit checks and analysis, as well as the customer’s payment history. In determining the allowance for doubtful accounts, the Company also considers various factors including the aging of customer accounts and historical write-offs. In addition, the Company monitors other risk factors including forward-looking information when establishing adequate allowances for doubtful accounts, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables.

6. Income Taxes

The provision for income taxes for all periods presented is based on an estimated effective income tax rate for the respective fiscal years. The estimated annual effective income tax rate is determined excluding the effect of significant discrete items or items that are reported net of their related tax effects. The tax effect of significant discrete items is reflected in the period in which they occur. The Company's income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are generally higher than the U.S. federal statutory rate, state tax rates in the jurisdictions where the Company does business and the Company's ability to utilize various tax credits, capital loss and net operating loss (“NOL”) carryforwards.

The Company regularly reviews its deferred tax assets for recoverability and valuation allowances are established based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary

13

differences, as deemed appropriate. In addition, all other available positive and negative evidence is taken into consideration for purposes of determining the proper balances of such valuation allowances. As a result of this review, the Company continues to maintain a full valuation allowance against U.S. federal and state capital loss carryforwards and a partial valuation allowance against certain foreign NOL carryforwards and other related foreign deferred tax assets, as well as certain U.S. state NOL carryforwards. Future changes to the balances of these valuation allowances, as a result of this continued review and analysis by the Company, could result in a material impact to the financial statements for such period of change.

The income tax provision was $17.2 million in the three months ended June 30, 2020, compared to $14.8 million in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was 32.5% versus 23.4% in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with global intangible low-taxed income (“GILTI”) and compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of withholding taxes associated with foreign dividends, and the accrual of various state income taxes, partially offset by the recognition of income tax benefits associated with share-based payments and foreign-derived intangible income (“FDII”). The effective income tax rate for the three months ended June 30, 2019 was above the U.S. federal statutory rate of 21% primarily due to the recognition of certain previously unrecognized tax benefits due to the lapse of applicable statutes of limitations, partially offset by the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with GILTI and the accrual of various state income taxes, partially offset by the recognition of income tax benefits associated with share-based payments and FDII.

On a quarterly basis, we review and analyze our valuation allowances associated with deferred tax assets relating to certain foreign and state net operating loss carryforwards as well as U.S. federal and state capital loss carryforwards. In conjunction with this analysis, we weigh both positive and negative evidence for purposes of determining the proper balances of such valuation allowances. Future changes to the balances of these valuation allowances, as a result of our continued review and analysis, could result in a material impact to the financial statements for such period of change.

The Company’s total liability for net unrecognized tax benefits as of June 30, 2020 and March 31, 2020, was $15.1 million and $14.8 million, respectively. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense. As of June 30, 2020 and March 31, 2020, the total amount of gross, unrecognized income tax benefits included $1.6 million and $1.5 million of accrued interest and penalties, respectively. The Company recognized $0.1 million of net interest and penalties as income tax benefit during both the three months ended June 30, 2020 and June 30, 2019.

The Company conducts business in multiple locations within and outside the U.S. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. Currently, the Company is undergoing routine, periodic income tax examinations in both domestic and foreign jurisdictions. The Company is currently undergoing an income tax examination by the Internal Revenue Service (the "IRS") of the Company’s U.S. consolidated federal income tax returns for the tax years ended March 31, 2016 and 2017. During the fourth quarter of fiscal 2020, the German tax authorities concluded an examination of the corporate income and trade tax returns for the Company’s CENTA German subsidiary for the tax years ended December 31, 2014 through December 31, 2017. The conclusion of the tax examination resulted in additional tax liabilities of approximately $1.7 million, all of which is subject to indemnification under the terms of the applicable purchase agreement or otherwise appropriately accrued in the Company's financial statements. During the three months ended March 31, 2020, the Italian tax authorities began conducting an income tax examination of the income tax returns of one of the Company’s Italian subsidiaries for the tax year ended March 31, 2018. In addition, certain of the Company’s German subsidiaries were notified by the German tax authorities of their intention to conduct an income tax examination of such subsidiaries’ German corporate income and trade tax returns for the tax years or period ended March 31, 2015 through March 31, 2018. The Company anticipates the related fieldwork on such matters will begin during the three months ending September 30, 2020. In addition, in accordance with the terms of the VAG sale agreement, the Company is required to indemnify the purchaser for any future income tax liabilities associated with all open tax years ending prior to, and including, the short period ended on the date of the Company's sale of VAG. VAG was notified by the German tax authorities of its intention to conduct an income tax examination of the VAG German entities’ corporate income and trade tax returns for the tax years ended March 31, 2014 through 2019. The Company anticipates the related fieldwork on this matter will begin during the three months ending December 31, 2020. During the three months ended September 30, 2018, the IRS completed an income tax examination of the Company’s amended U.S. consolidated federal income tax return for the tax year ended March 31, 2015, and the Company paid approximately $0.4 million upon conclusion of such examination. It appears reasonably possible that the amounts of unrecognized income tax benefits could change in the next twelve months upon conclusion of the Company’s current ongoing examinations; however, any potential payments of income tax, interest and penalties are not expected to be significant to the Company's consolidated financial statements. With certain exceptions, the Company is no longer subject to U.S. federal income tax examinations for tax years ending prior to March 31, 2016, state and local income tax examinations for years ending prior to fiscal 2016 or significant foreign income tax examinations for years ending prior to fiscal 2015.

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7. Earnings per Share

The following table presents the basis for income per share computations (in millions, except share amounts):

	Three Months Ended
	June 30, 2020		June 30, 2019
Basic net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		5.8
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	42.5
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Diluted net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		—
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	48.3
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Plus: Dividends on preferred stock	—		5.8
Net income attributable to Rexnord common stockholders	$	35.6	$	46.5
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Effect of dilutive equity securities	1,802		2,423
Preferred stock under the "if-converted" method (1)	—		15,979
Weighted-average common shares outstanding, diluted	122,048		123,664

____________________

(1)On November 15, 2019, the Company issued 15,980,050 shares of common stock upon the mandatory conversion of Series A Preferred Stock; see Note 8, Stockholders' Equity for additional information.

        The computation of diluted net income per share for the three months ended June 30, 2020 and June 30, 2019, excludes 1.2 million and 1.2 million shares, respectively, related to equity awards due to their anti-dilutive effects.

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8. Stockholders' Equity

Stockholders' equity consists of the following (in millions):

	Common stock		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2019	$	1.0	$	—	$	1,293.5	$	30.7	$	(96.6)	$	2.4	$	1,231.0
Total comprehensive income	—		—		—		46.5		—		0.2		46.7
Stock-based compensation expense	—		—		6.9		—		—		—		6.9
Proceeds from exercise of stock options	—		—		4.8		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	—		—		(5.7)		—		—		—		(5.7)
Preferred stock dividends ($14.375 per share)	—		—		—		(5.8)		—		—		(5.8)
Balance at June 30, 2019	$	1.0	$	—	$	1,299.5	$	71.4	$	(96.6)	$	2.6	$	1,277.9

	Common stock (1)		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2020	$	1.2	$	—	$	1,348.3	$	85.9	$	(124.4)	$	2.7	$	1,313.7
Total comprehensive income	—		—		—		35.6		6.3		0.2		42.1
Stock-based compensation expense	—		—		10.6		—		—		—		10.6
Proceeds from exercise of stock options	—		—		6.3		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	—		—		(9.4)		—		—		—		(9.4)
Common stock dividends ($0.08 per share)	—		—		—		(9.6)		—		—		(9.6)
Balance at June 30, 2020	$	1.2	$	—	$	1,355.8	$	111.9	$	(118.1)	$	2.9	$	1,353.7

____________________

(1)For the three months ended June 30, 2020, the Company issued 936,552 shares of common stock upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock awards.

(2)During the first quarter of fiscal 2020, represents a 30% non-controlling interest in two Process & Motion Control controlled subsidiaries. During the second quarter of fiscal 2020, the Company acquired the remaining 30% non-controlling interest associated with one of the aforementioned Process & Motion Control joint ventures for a cash purchase price of $0.3 million. Following this transaction, represents a 30% non-controlling interest in the remaining Process & Motion Control controlled subsidiary and a 5% non-controlling interest in another Process & Motion Control controlled subsidiary.

Preferred Stock

On November 15, 2019, 402,500 shares of 5.75% Series A Mandatory Convertible Preferred Stock (the "Series A Preferred Stock") automatically converted into 15,980,050 shares of the Company's common stock. The number of shares of common stock issued upon conversion was determined based on a defined average volume weighted average price per share of the Company’s common stock. Upon conversion, there were no shares of Series A Preferred Stock outstanding. The final dividend payment was made on November 15, 2019.

Share Repurchase Program

        During fiscal 2015, the Company's Board of Directors approved a common stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. On January 27, 2020, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $300.0 million. The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid. On April 8, 2020, the Company announced the temporary suspension of share repurchases as a result of the uncertainty caused by the COVID-19 pandemic. Therefore, during the three months ended June 30, 2020, the Company did not repurchase any shares of its common stock. A total of approximately $223.0 million of the existing authority remained under the Repurchase Program at June 30, 2020.

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9. Accumulated Other Comprehensive Loss

        The changes in accumulated other comprehensive loss, net of tax, for the three months ended June 30, 2020, are as follows (in millions):

	Foreign Currency Translation		Pension and Postretirement Plans		Total
Balance at March 31, 2020	$	(83.8)	$	(40.6)	$	(124.4)
Other comprehensive income before reclassifications	6.4		—		6.4
Amounts reclassified from accumulated other comprehensive loss	—		(0.1)		(0.1)
Net current period other comprehensive income (loss)	6.4		(0.1)		6.3
Balance at June 30, 2020	$	(77.4)	$	(40.7)	$	(118.1)

        The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three months ended June 30, 2020 and June 30, 2019 (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019		Income Statement Line
Pension and other postretirement plans
Amortization of prior service credit	$	(0.1)	$	(0.1)	Other income (expense), net
Settlement	—		0.8		Other income (expense), net
Benefit for income taxes	—		(0.2)
Total net of tax	$	(0.1)	$	0.5

10. Inventories

The major classes of inventories are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Finished goods	$	168.9	$	145.6
Work in progress	41.8		43.7
Purchased components	76.3		70.4
Raw materials	58.9		54.9
Inventories at First-in, First-Out ("FIFO") cost	345.9		314.6
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost	2.9		2.9
	$	348.8	$	317.5

11. Goodwill and Intangible Assets

        The changes in the net carrying value of goodwill for the three months ended June 30, 2020, by operating segment are presented below (in millions):

	Process & Motion Control		Water Management		Consolidated
Net carrying amount as of March 31, 2020	$	1,121.4	$	200.5	$	1,321.9
Currency translation adjustments	0.6		0.3		0.9
Purchase accounting adjustments (1)	—		0.7		0.7
Net carrying amount as of June 30, 2020	$	1,122.0	$	201.5	$	1,323.5

____________________

(1) Refer to Note 2, Acquisitions for additional information regarding acquisitions.

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        The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2020 and March 31, 2020 are as follows (in millions):  

		June 30, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.2	$	(41.5)	$	9.7
Customer relationships (including distribution network)	13 years	748.5		(560.6)		187.9
Tradenames	13 years	42.2		(15.0)		27.2
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.8	$	(617.1)	$	505.7
		March 31, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.1	$	(41.2)	$	9.9
Customer relationships (including distribution network)	13 years	748.0		(552.5)		195.5
Tradenames	13 years	42.1		(14.2)		27.9
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.1	$	(607.9)	$	514.2

        Intangible asset amortization expense totaled $9.0 million for the three months ended June 30, 2020. Intangible asset amortization expense totaled $8.7 million for the three months ended June 30, 2019. No intangible assets were acquired during the three months ended June 30, 2020.

        The Company expects to recognize amortization expense on the intangible assets subject to amortization of $26.9 million in the nine months ended December 31, 2020 (inclusive of $9.0 million of amortization expense recognized in the three months ended June 30, 2020), $34.4 million in 2021, $18.7 million in 2022, $16.2 million in 2023, $16.1 million in 2024 and $15.1 million in 2025.

12. Other Current Liabilities

Other current liabilities are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Contract liabilities	$	6.0	$	7.3
Sales rebates	25.2		35.5
Commissions	6.9		7.0
Restructuring and other similar charges (1)	7.5		9.8
Product warranty (2)	8.0		6.7
Risk management (3)	10.8		10.4
Legal and environmental	1.6		1.5
Taxes, other than income taxes	7.5		8.3
Income tax payable	17.1		9.9
Interest payable	1.7		8.3
Current portion of operating lease liability (4)	12.6		12.8
Other	13.6		11.0
	$	118.5	$	128.5

____________________

(1)See more information related to the restructuring obligations within Note 3, Restructuring and Other Similar Charges.

(2)See more information related to the product warranty obligations within Note 16, Commitments and Contingencies.

(3)Includes projected liabilities related to losses arising from automobile, general and product liability claims.

(4)See more information related to leases within Note 18, Leases.

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13. Long-Term Debt

Long-term debt is summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Term loan (1)	$	621.1	$	620.8
4.875% Senior Notes due 2025 (2)	495.9		495.7
Revolving credit facility (3)	—		249.2
Securitization facility borrowings (4)	74.9		74.9
Finance leases and other subsidiary debt (5)	32.5		32.8
Total	1,224.4		1,473.4
Less current maturities	76.4		76.4
Long-term debt	$	1,148.0	$	1,397.0

____________________

(1)Includes unamortized debt issuance costs of $3.9 million and $4.2 million at June 30, 2020 and March 31, 2020, respectively.

(2)Includes unamortized debt issuance costs of $4.1 million and $4.3 million at June 30, 2020 and March 31, 2020, respectively.

(3)Includes unamortized debt issuance costs of $0.0 million and $0.8 million at June 30, 2020 and March 31, 2020, respectively.

(4)Includes unamortized debt issuance costs of $0.1 million and $0.1 million at June 30, 2020 and March 31, 2020, respectively.

(5)See more information related to finance leases within Note 18, Leases.

Senior Secured Credit Facility

        At June 30, 2020, the Company’s Third Amended and Restated First Lien Credit Agreement, as amended (the “Credit Agreement”), is funded by a syndicate of banks and other financial institutions and provides for (i) a $725.0 million term loan facility, which was reduced to $625.0 million as a result of a December 2019 voluntary prepayment, and (ii) a $264.0 million revolving credit facility. The term loan facility has a maturity date of August 21, 2024, and there are no required principal payments due or scheduled under the term debt until the maturity date. At June 30, 2020, the borrowings under the Term Loan had a weighted-average effective interest rate of 1.91%. The weighted-average interest rate for borrowings under the Term Loan for the three months ended June 30, 2020, was 2.26%. At June 30, 2020, no amounts were borrowed under the revolving credit facility. As of March 31, 2020, $250.0 million was borrowed under the revolving credit facility. As of and during the three months ended June 30, 2020, borrowings under the revolving credit facility had weighted-average effective interest rates of 4.00%. As of June 30, 2020 and March 31, 2020, $2.7 million and $4.7 million of the revolving credit facility were considered utilized in connection with outstanding letters of credit, respectively.

As of June 30, 2020, the Company was in compliance with all applicable covenants under the Credit Agreement, including compliance with a maximum permitted total net leverage ratio (the Company's sole financial maintenance covenant under the revolving credit facility discussed below) of 6.75 to 1.0. The Company's total net leverage ratio was 2.1 to 1.0 as of June 30, 2020.

4.875% Senior Notes due 2025

On December 7, 2017, the Company issued $500.0 million aggregate principal amount of 4.875% senior notes due 2025 (the “Notes”). The Notes were issued by RBS Global, Inc. and Rexnord LLC (Company subsidiaries; collectively, the “Issuers”) pursuant to an Indenture, dated as of December 7, 2017 (the “Indenture”), by and among the Issuers, the domestic subsidiaries of the Company (with certain exceptions) as guarantors named therein (the “Subsidiary Guarantors”) and Wells Fargo Bank, National Association (the “Trustee”). The Notes are general senior unsecured obligations of the Issuers. Rexnord Corporation separately entered into a Parent Guarantee with the Trustee whereby it guaranteed certain obligations of the Issuers under the Indenture. The Notes pay interest semi-annually on June 15 and December 15.

Accounts Receivable Securitization Program

        The Company has an amended accounts receivable securitization facility (the "Securitization") with Wells Fargo & Company ("Wells Fargo"). Pursuant to the agreements evidencing the Securitization, Rexnord Funding LLC ("Rexnord Funding") (a wholly owned bankruptcy-remote special purpose subsidiary) has granted Wells Fargo a security interest in all of its current and future receivables and related assets in exchange for a credit facility permitting borrowings of up to a maximum aggregate amount of $100.0 million outstanding from time to time. Such borrowings are used by Rexnord Funding to finance purchases of accounts receivable. The amount of advances available will be determined based on advance rates relating to the eligibility of the receivables held by Rexnord Funding at that time. Advances bear interest based on LIBOR plus 1.20%. The

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last date on which advances may be made is December 30, 2020, unless the maturity of the Securitization is otherwise accelerated. In addition to other customary fees associated with financings of this type, Rexnord Funding pays an unused line fee to Wells Fargo based on any unused portion of the Securitization facility. If the average daily outstanding principal amount during a calendar month is less than 50% of the average daily aggregate commitment in effect during such month, the unused line fee is 0.50% per annum; otherwise, it is 0.375% per annum.

        The Securitization constitutes a "Permitted Receivables Financing" under the Credit Agreement and does not qualify for sale accounting under ASC 860, Transfers and Servicing. Any borrowings under the Securitization are accounted for as secured borrowings on the Company's condensed consolidated balance sheets. Financing costs associated with the Securitization are recorded within "Interest expense, net" in the condensed consolidated statements of operations if revolving loans or letters of credit are obtained under the facility.

        At June 30, 2020 and March 31, 2020, the Company's total borrowing capacity under the Securitization was $100.0 million, respectively, based on the current accounts receivables balance. As of both June 30, 2020 and March 31, 2020, $75.0 million was borrowed under the Securitization. In addition, $7.7 million and $5.7 million of available borrowing capacity under the Securitization was considered utilized in connection with outstanding letters of credit at June 30, 2020 and March 31, 2020, respectively. As of and during the three months ended June 30, 2020, borrowings under the Securitization had weighted-average effective interest rates of 1.58% and 1.36%, respectively. As of June 30, 2020, the Company was in compliance with all applicable covenants and performance ratios contained in the Securitization. On July 10, 2020, the Company repaid all remaining borrowings under the Securitization.

See Note 11, Long-Term Debt to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding long-term debt.

14. Derivative Financial Instruments

        The Company is exposed to certain financial risks relating to fluctuations in foreign currency exchange rates. The Company currently selectively uses foreign currency forward exchange contracts to manage its foreign currency risk. All hedging transactions are authorized and executed pursuant to defined policies and procedures that prohibit the use of financial instruments for speculative purposes.

Foreign Exchange Contracts

        The Company periodically enters into foreign currency forward contracts to mitigate the foreign currency volatility relative to certain intercompany and external cash flows expected to occur. These foreign currency forward contracts were not accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), and as such were marked to market through earnings. The amounts recorded on the condensed consolidated balance sheets and recognized within the condensed consolidated statements of operations related to the Company's foreign currency forward contracts for the three months ended June 30, 2020 and 2019, were not material.

15. Fair Value Measurements

        ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about the assumptions a market participant would use.

In accordance with ASC 820, fair value measurements are classified under the following hierarchy:

•Level 1 - Quoted prices for identical instruments in active markets.

•Level 2 - Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable.

•Level 3 - Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value measurement and unobservable.

        If applicable, the Company uses quoted market prices in active markets to determine fair value, and therefore classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters. These measurements are classified within Level 3 if they use significant unobservable inputs.

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Fair Value of Financial Instruments

        There were no transfers of assets between levels at June 30, 2020 and March 31, 2020, respectively.

        The Company has a nonqualified deferred compensation plan where assets are invested in mutual funds and corporate-owned life insurance contracts held in a rabbi trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for the mutual funds, which are measured using quoted prices of identical instruments in active markets categorized as Level 1. Corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and reflects the net asset value of the underlying publicly traded mutual funds categorized as Level 2. The deferred compensation assets are classified within other assets on the condensed consolidated balance sheets. Deferred compensation liabilities are measured at fair value based on quoted prices of identical instruments to the investment vehicles selected by the participants categorized as Level 1. Deferred compensation liabilities are classified within other liabilities on the condensed consolidated balance sheets.

        The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of June 30, 2020 and March 31, 2020 (in millions):

	Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	2.9	$	6.6	$	—	$	9.5
Deferred compensation liabilities	9.7		—		—		9.7

	Fair Value as of March 31, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	1.7	$	5.5	$	—	$	7.2
Deferred compensation liabilities	7.4		—		—		7.4

Fair Value of Non-Derivative Financial Instruments

        The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at June 30, 2020 and March 31, 2020 due to the short-term nature of those instruments. The fair value of long-term debt as of June 30, 2020 and March 31, 2020 was approximately $1,224.1 million and $1,398.1 million, respectively. The fair value is based on quoted market prices for the same instruments.

16. Commitments and Contingencies

Warranties:

        The Company offers warranties on the sales of certain products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management's estimate of the level of future claims. The following table presents changes in the Company's product warranty liability (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Balance at beginning of period	$	6.7	$	7.2
Charged to operations	1.8		0.7
Claims settled	(0.5)		(0.5)
Balance at end of period	$	8.0	$	7.4

Contingencies:

        The Company's subsidiaries are involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business involving, among other things, product liability, commercial, employment, workers' compensation, intellectual property claims and environmental matters. The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when liability is probable and those costs are capable of being reasonably estimated. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss or recovery, based upon current information, management believes the eventual outcome of these unresolved legal actions, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

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        In connection with its sale, Invensys plc ("Invensys") provided the Company with indemnification against certain contingent liabilities, including certain pre-closing environmental liabilities. The Company believes that, pursuant to such indemnity obligations, Invensys is obligated to defend and indemnify the Company with respect to the matters described below relating to the Ellsworth Industrial Park Site and to various asbestos claims. The indemnity obligations relating to the matters described below are subject, together with indemnity obligations relating to other matters, to an overall dollar cap equal to the purchase price, which is an amount in excess of $900 million. The following paragraphs summarize the most significant actions and proceedings:

•In 2002, Rexnord Industries, LLC ("Rexnord Industries") was named as a potentially responsible party ("PRP"), together with at least ten other companies, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the "Site"), by the United States Environmental Protection Agency ("USEPA"), and the Illinois Environmental Protection Agency ("IEPA"). Rexnord Industries' Downers Grove property is situated within the Ellsworth Industrial Complex. The USEPA and IEPA allege there have been one or more releases or threatened releases of chlorinated solvents and other hazardous substances, pollutants or contaminants, allegedly including but not limited to a release or threatened release on or from the Company's property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of USEPA's past costs. In early 2020, Rexnord Industries entered into an administrative order with the USEPA to do remediation work on its Downers Grove property. Rexnord Industries' allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending property damage and personal injury lawsuits against the Company related to the Site have been settled or dismissed. Pursuant to its indemnity obligation, Invensys continues to defend the Company in known matters related to the Site, including the costs of the remediation work pursuant to the 2020 administrative order, and has paid 100% of the costs to date.

•Multiple lawsuits (with approximately 300 claimants) are pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain brakes and clutches previously manufactured by the Company's Stearns division and/or its predecessor owners. Invensys and FMC, prior owners of the Stearns business, have paid 100% of the costs to date related to the Stearns lawsuits. Similarly, the Company's Prager subsidiary is the subject of claims by multiple claimants alleging personal injuries due to the alleged presence of asbestos in a product allegedly manufactured by Prager. However, all these claims are currently on the Texas Multi-district Litigation inactive docket, and the Company does not believe that they will become active in the future. To date, the Company's insurance providers have paid 100% of the costs related to the Prager asbestos matters. The Company believes that the combination of its insurance coverage and the Invensys indemnity obligations will cover any future costs of these matters.

        In connection with the Company's acquisition of The Falk Corporation ("Falk"), Hamilton Sundstrand provided the Company with indemnification against certain products-related asbestos exposure liabilities. The Company believes that, pursuant to such indemnity obligations, Hamilton Sundstrand is obligated to defend and indemnify the Company with respect to the asbestos claims described below, and that, with respect to these claims, such indemnity obligations are not subject to any time or dollar limitations.

        The following paragraph summarizes the most significant actions and proceedings for which Hamilton Sundstrand has accepted responsibility:

•Falk, through its successor entity, is a defendant in multiple lawsuits pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain clutches and drives previously manufactured by Falk. There are approximately 100 claimants in these suits. The ultimate outcome of these lawsuits cannot presently be determined. Hamilton Sundstrand is defending the Company in these lawsuits pursuant to its indemnity obligations and has paid 100% of the costs to date. 

        Certain Water Management subsidiaries are also subject to asbestos litigation. As of June 30, 2020, Zurn and numerous other unrelated companies were defendants in approximately 6,000 asbestos related lawsuits representing approximately 7,000 claims. Plaintiffs' claims allege personal injuries caused by exposure to asbestos used primarily in industrial boilers formerly manufactured by a segment of Zurn. Zurn did not manufacture asbestos or asbestos components. Instead, Zurn purchased them from suppliers. These claims are being handled pursuant to a defense strategy funded by insurers.

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        As of June 30, 2020, the Company estimates the potential liability for the asbestos-related claims described above as well as the claims expected to be filed in the next ten years to be approximately $50.0 million, of which Zurn expects its insurance carriers to pay approximately $38.0 million in the next ten years on such claims, with the balance of the estimated liability being paid in subsequent years. The $50.0 million was developed based on actuarial studies and represents the projected indemnity payout for current and future claims. There are inherent uncertainties involved in estimating the number of future asbestos claims, future settlement costs, and the effectiveness of defense strategies and settlement initiatives. As a result, actual liability could differ from the estimate described herein and could be substantial. The liability for the asbestos-related claims is recorded in Other liabilities within the condensed consolidated balance sheets.

        Management estimates that its available insurance to cover this potential asbestos liability as of June 30, 2020, is in excess of the 10 year estimated exposure, and accordingly, believes that all current claims are covered by insurance.

        As of June 30, 2020, the Company had a recorded receivable from its insurance carriers of $50.0 million, which corresponds to the amount of this potential asbestos liability that is covered by available insurance and is currently determined to be probable of recovery. However, there is no assurance the Company's current insurance coverage will ultimately be available or that this asbestos liability will not ultimately exceed the Company's coverage limits. Factors that could cause a decrease in the amount of available coverage or create gaps in coverage include: changes in law governing the policies, potential disputes and settlements with the carriers regarding the scope of coverage, and insolvencies of one or more of the Company's carriers. The receivable for probable asbestos-related recoveries is recorded in Other assets within the condensed consolidated balance sheets.

        Certain Company subsidiaries were named as defendants in a number of individual and class action lawsuits in various United States courts claiming damages due to the alleged failure or anticipated failure of Zurn brass fittings on the PEX plumbing systems in homes and other structures. In fiscal 2013, the Company reached a court-approved agreement to settle the liability underlying this litigation.  The settlement was designed to resolve, on a national basis, the Company's overall exposure for both known and unknown claims related to the alleged failure or anticipated failure of such fittings, subject to the right of eligible class members to opt-out of the settlement and pursue their claims independently.  The settlement utilized a seven year claims fund, which was capped at $20.0 million, and was funded in installments over the seven year period based on claim activity and minimum funding criteria.  The seven year filing period expired on April 1, 2020. Any claims after April 1, 2020 are time barred. The Company expects to make payment on any remaining timely filed claims and close out the settlement fund.

17. Retirement Benefits

The components of net periodic benefit cost are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Pension Benefits:
Service cost	$	0.1	$	0.1
Interest cost	4.6		5.6
Expected return on plan assets	(4.6)		(5.7)
Settlement	—		0.8
Net periodic benefit cost	$	0.1	$	0.8
Other Postretirement Benefits:
Interest cost	$	0.1	$	0.2
Amortization:
Prior service credit	(0.1)		(0.1)
Net periodic benefit cost	$	—	$	0.1

        The service cost component of net periodic benefits is presented within Cost of sales and Selling, general and administrative expenses in the condensed consolidated statements of operations, while the other components of net periodic benefit cost are presented within Other (expense) income, net.

        During the three months ended June 30, 2020 and June 30, 2019, the Company made contributions of $1.0 million and $0.1 million, respectively, to its U.S. qualified pension plan trusts.

        During fiscal 2019, the Company offered participants in a domestic defined benefit plan the opportunity to receive a lump sum settlement as part of the termination process for that plan. During the first quarter of fiscal 2020, the obligations associated with the individuals that did not accept the lump sum settlement offer were transferred to an insurance company through the purchase of an annuity. The Company's cash contribution to purchase the annuity contract was $3.9 million.

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Following the purchase of the annuity contract, the Company had no remaining obligations to participants of this plan. The termination of this plan resulted in the recognition of $0.8 million non-cash pre-tax losses during the three months ended June 30, 2019.

         See Note 16, Retirement Benefits, to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding retirement benefits.

18. Leases

The Company determines if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. The Company has operating and finance leases primarily associated with real estate, automobiles and manufacturing and office equipment.

The Company has lease agreements that include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of the underlying assets. The term of the Company’s leases generally reflects the non-cancellable period of the lease. Some of the Company’s lease agreements include options to extend or terminate the lease, which are excluded from the minimum lease terms unless the Company is reasonably certain the option will be exercised. Lease expense for operating leases and amortization expense for finance leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets and are instead recognized on a straight-line basis over the lease term

Right-of-use (“ROU”) assets and liabilities are recognized in the condensed consolidated balance sheets based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the lease commencement date, any initial direct costs incurred, and are reduced by lease incentives received. As most of the Company’s leases do not provide an implicit rate, the present value of lease payments is determined using the Company’s incremental borrowing rate at the commencement date of the lease. Lease payments included in the measurement of the lease liabilities are comprised of fixed payments, variable payments that depend on an index or rate, and amounts probable to be paid if an option is reasonably certain to be exercised. Variable lease payments, typically based on usage of the asset or changes in an index or rate, are excluded from the lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

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        ROU assets and lease liability balances recorded on the condensed consolidated balance sheets are summarized as follows (in millions):

Leases	Classification	June 30, 2020		March 31, 2020
Assets:
Operating ROU assets	Other assets	$	68.8	$	71.1
Finance ROU assets	Property, plant and equipment, net (1)	27.1		27.3
Total ROU assets		$	95.9	$	98.4
Liabilities:
Current
Operating	Other current liabilities	$	12.6	$	12.8
Finance	Current maturities of debt	0.5		0.5
Non-current
Operating	Other liabilities	60.8		63.1
Finance	Long-term debt	27.3		27.4
Total lease liabilities		$	101.2	$	103.8

____________________

(1)Finance lease assets are recorded net of accumulated amortization of $1.3 million and $1.0 million as of June 30, 2020 and March 31, 2020, respectively.

        The components of lease expense reported in the condensed consolidated statements of operations are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating lease expenses (1)	$	4.5	$	3.6
Finance lease expenses:
Depreciation of finance ROU assets (1)	0.3		0.2
Interest on lease liabilities (2)	0.4		0.3
Total finance lease expense	0.7		0.5
Variable and short-term lease expense (1)	1.1		1.2
Total lease expense	$	6.3	$	5.3

____________________

(1)Included in cost of sales and selling, general and administrative expenses.

(2)Included in interest expense, net.

Future minimum lease payments under operating and finance leases as of June 30, 2020 are as follows (in millions):

Years ending December 31,	Operating Leases (1)		Finance Leases (1)
2020 (through December 31, 2020)	$	7.4	$	1.1
2021	14.4		2.1
2022	14.8		2.0
2023	12.1		2.0
2024	10.0		2.0
Thereafter	30.3		45.1
Total future minimum lease payments	89.0		54.3
Less: Imputed interest	(15.6)		(26.5)
Total lease liabilities	$	73.4	$	27.8

____________________

(1)Excludes legally binding minimum lease payments for leases signed but not yet commenced.

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        The weighted-average remaining lease terms and discount rates for leases are as follows:

	Three Months Ended
Lease Term and Discount Rate	June 30, 2020		June 30, 2019
Weighted-average remaining lease terms (years):
Operating leases	6.6		5.2
Finance leases	27.6		29.2
Weighted-average discount rate:
Operating leases	4.8	%	3.9	%
Finance leases	5.7	%	5.7	%

        Cash paid for amounts included in the measurement of lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating cash flows from operating leases	$	3.8	$	3.6
Operating cash flows from finance leases	0.4		0.3
Financing cash flows from finance leases	0.1		0.2

        ROU assets obtained in exchange for lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating leases	$	—	$	1.2

19. Stock-Based Compensation

        The Rexnord Corporation Performance Incentive Plan (the "Plan") is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons to encourage them to maximize Rexnord's performance and create value for Rexnord's stockholders. For the three months ended June 30, 2020 and June 30, 2019, the Company recognized $13.3 million and $6.9 million, of stock-based compensation expense, respectively.

During the three months ended June 30, 2020, the Company granted the following stock options, restricted stock units, performance stock units and common stock to directors, executive officers, and certain other employees:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Stock options	196,902	$	7.68
Restricted stock units	426,921	$	25.52
Performance stock units	547,374	$	25.52
Common stock	66,557	$	27.68

        See Note 15, Stock-Based Compensation, to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding stock-based compensation.

20. Business Segment Information

The Company's results of operations are reported in two business segments, consisting of the Process & Motion Control platform and the Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services. Products and services are marketed and sold globally under widely recognized brand names, including Rexnord®, Rex®, Addax®, Euroflex®, Falk®, FlatTop®, Cambridge®, Link-Belt®, Omega®, PSI®, Shafer®, Stearns®, Highfield®, Thomas®, Centa®, and Tollok^TM. Process & Motion Control products and services are sold into a diverse group of attractive end markets, including food and beverage, aerospace, mining, petrochemical, energy and power generation, cement and aggregates, forest and wood products, agriculture, and general industrial and automation applications. The Water Management platform designs,

26

procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing, and site works products for primarily nonresidential buildings. Products are marketed and sold under widely recognized brand names, including Zurn®, Wilkins®, Green Turtle®, World Dryer®, StainlessDrains.com^TM and JUST®. The financial information of the Company's segments is regularly evaluated by the chief operating decision maker in determining resource allocation and assessing performance. Management evaluates the performance of each business segment based on its operating results. The same accounting policies are used throughout the organization. See Note 1, Basis of Presentation and Significant Accounting Policies for further information.  

        During fiscal 2019, the Company sold its VAG business included within the Water Management platform and in accordance with the authoritative guidance, the operating results of the VAG business are reported as discontinued operations. See Note 4, Discontinued Operations, for further information.

Business Segment Information:

(in Millions)

	Three Months Ended
	June 30, 2020		June 30, 2019
Net sales
Process & Motion Control	$	274.4	$	330.1
Water Management	174.7		178.2
Consolidated net sales	449.1		508.3
Income from operations
Process & Motion Control	39.6		55.1
Water Management	40.1		40.0
Corporate	(13.7)		(14.9)
Consolidated income from operations	66.0		80.2
Non-operating expense:
Interest expense, net	(13.4)		(15.5)
Other income (expense), net	0.4		(1.5)
Income before income taxes	53.0		63.2
Provision for income taxes	(17.2)		(14.8)
Equity method investment income	—		0.1
Net income from continuing operations	35.8		48.5
Loss from discontinued operations, net of tax	—		(1.8)
Net income	35.8		46.7
Non-controlling interest income	0.2		0.2
Net income attributable to Rexnord	35.6		46.5
Dividends on preferred stock	—		(5.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Depreciation and amortization
Process & Motion Control	$	14.3	$	14.6
Water Management	7.3		6.3
Corporate	0.1		0.1
Consolidated	$	21.7	$	21.0
Capital expenditures
Process & Motion Control	$	7.2	$	4.6
Water Management	1.3		1.3
Consolidated	$	8.5	$	5.9

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21. Guarantor Subsidiaries

The following schedules present condensed consolidating financial information as of June 30, 2020 and March 31, 2020, and for the three month periods ended June 30, 2020 and 2019 for (a) Rexnord Corporation, the parent company (the "Parent"); (b) RBS Global, Inc. and its wholly-owned subsidiary Rexnord LLC, which together are co-issuers (the “Issuers”) of the outstanding Notes; (c) on a combined basis, the domestic subsidiaries of the Company, all of which are wholly-owned by the Issuers (collectively, the “Guarantor Subsidiaries”) and guarantors of those Notes; and (d) on a combined basis, the foreign subsidiaries of the Company (collectively, the “Non-Guarantor Subsidiaries”). Separate financial statements of the Guarantor Subsidiaries are not presented because their guarantees of the senior notes and senior subordinated notes are full, unconditional and joint and several, and the Company believes separate financial statements and other disclosures regarding the Guarantor Subsidiaries are not material to investors.

Condensed Consolidating Balance Sheets

June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4
Receivables, net	—		—		174.8		97.3		—		272.1
Inventories	—		—		244.6		104.2		—		348.8
Other current assets	—		0.1		17.0		23.9		—		41.0
Total current assets	—		0.4		596.8		418.1		—		1,015.3
Property, plant and equipment, net	—		—		253.9		121.7		—		375.6
Intangible assets, net	—		—		417.5		88.2		—		505.7
Goodwill	—		—		1,044.2		279.3		—		1,323.5
Investment in:
Issuer subsidiaries	1,424.2		—		—		—		(1,424.2)		—
Guarantor subsidiaries	—		3,449.0		—		—		(3,449.0)		—
Non-guarantor subsidiaries	—		—		636.1		—		(636.1)		—
Other assets	—		0.8		87.4		58.9		—		147.1
Total assets	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.5	$	0.9	$	—	$	76.4
Trade payables	—		—		100.9		59.2		—		160.1
Compensation and benefits	—		—		28.3		16.5		—		44.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		1.4		75.1		42.0		—		118.5
Total current liabilities	—		1.4		281.6		120.0		—		403.0
Long-term debt	—		1,117.0		26.9		4.1		—		1,148.0
Note payable to (receivable from) affiliates, net	69.9		907.6		(1,054.8)		77.3		—		—
Pension and postretirement benefit obligations	—		—		142.4		47.4		—		189.8
Deferred income taxes	—		—		100.7		22.7		—		123.4
Other liabilities	0.6		—		90.1		58.6		—		149.3
Total liabilities	70.5		2,026.0		(413.1)		330.1		—		2,013.5
Total stockholders' equity	1,353.7		1,424.2		3,449.0		636.1		(5,509.3)		1,353.7
Total liabilities and stockholders' equity	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2

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Condensed Consolidating Balance Sheets

March 31, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	11.0	$	0.4	$	383.9	$	178.1	$	—	$	573.4
Receivables, net	—		—		223.5		111.2		—		334.7
Inventories	—		—		224.8		92.7		—		317.5
Other current assets	—		—		20.5		18.2		—		38.7
Total current assets	11.0		0.4		852.7		400.2		—		1,264.3
Property, plant and equipment, net	—		—		256.1		122.7		—		378.8
Intangible assets, net	—		—		424.8		89.4		—		514.2
Goodwill	—		—		1,043.6		278.3		—		1,321.9
Investment in:
Issuer subsidiaries	1,381.1		—		—		—		(1,381.1)		—
Guarantor subsidiaries	—		3,324.9		—		—		(3,324.9)		—
Non-guarantor subsidiaries	—		—		621.1		—		(621.1)		—
Other assets	—		—		88.7		59.2		—		147.9
Total assets	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.4	$	1.0	$	—	$	76.4
Trade payables	—		—		123.9		61.7		—		185.6
Compensation and benefits	—		—		42.4		19.4		—		61.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		7.9		79.9		40.7		—		128.5
Total current liabilities	—		7.9		323.4		124.2		—		455.5
Long-term debt	—		1,290.9		101.8		4.3		—		1,397.0
Note payable to (receivable from), net	77.9		645.4		(795.9)		72.6		—		—
Pension and postretirement benefit obligations	—		—		142.8		46.8		—		189.6
Deferred income taxes	—		—		98.6		22.4		—		121.0
Other liabilities	0.5		—		91.4		58.4		—		150.3
Total liabilities	78.4		1,944.2		(37.9)		328.7		—		2,313.4
Total stockholders' equity	1,313.7		1,381.1		3,324.9		621.1		(5,327.1)		1,313.7
Total liabilities and stockholders' equity	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1

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Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	341.6	$	141.9	$	(34.4)	$	449.1
Cost of sales	—		—		204.6		102.0		(34.4)		272.2
Gross profit	—		—		137.0		39.9		—		176.9
Selling, general and administrative expenses	—		—		77.9		22.3		—		100.2
Restructuring and other similar charges	—		—		2.3		(0.6)		—		1.7
Amortization of intangible assets	—		—		7.4		1.6		—		9.0
Income from operations	—		—		49.4		16.6		—		66.0
Non-operating income (expense):
Interest income (expense), net:
To third parties	—		(12.8)		(0.7)		0.1		—		(13.4)
To affiliates	9.6		5.8		(14.9)		(0.5)		—		—
Other expense, net	—		(0.1)		0.2		0.3		—		0.4
Income (loss) before income taxes	9.6		(7.1)		34.0		16.5		—		53.0
Provision for income taxes	—		—		(10.4)		(6.8)		—		(17.2)
Equity method investment income	—		—		—		—		—		—
Income (loss) before equity in earnings of subsidiaries	9.6		(7.1)		23.6		9.7		—		35.8
Equity in income of subsidiaries	26.2		33.3		9.7		—		(69.2)		—
Net income from continuing operations	35.8		26.2		33.3		9.7		(69.2)		35.8
Loss from discontinued operations, net of tax	—		—		—		—		—		—
Net income	35.8		26.2		33.3		9.7		(69.2)		35.8
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	35.8		26.2		33.3		9.5		(69.2)		35.6
Dividends on preferred stock	—		—		—		—		—		—
Net income attributable to Rexnord common stockholders	$	35.8	$	26.2	$	33.3	$	9.5	$	(69.2)	$	35.6
Comprehensive income	$	35.8	$	27.2	$	33.4	$	14.9	$	(69.2)	$	42.1

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Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	391.7	$	161.3	$	(44.7)	$	508.3
Cost of sales	—		—		238.0		113.4		(44.7)		306.7
Gross profit	—		—		153.7		47.9		—		201.6
Selling, general and administrative expenses	—		—		82.6		26.9		—		109.5
Restructuring and other similar charges	—		—		2.5		0.7		—		3.2
Amortization of intangible assets	—		—		6.9		1.8		—		8.7
Income from operations	—		—		61.7		18.5		—		80.2
Non-operating (expense) income:
Interest income (expense), net:
To third parties	—		(15.3)		(0.5)		0.3		—		(15.5)
To affiliates	0.3		8.7		(7.0)		(2.0)		—		—
Other expense, net	—		(0.1)		(0.7)		(0.7)		—		(1.5)
Income (loss) before income taxes	0.3		(6.7)		53.5		16.1		—		63.2
Provision for income taxes	—		—		(9.5)		(5.3)		—		(14.8)
Equity method investment income	—		—		—		0.1		—		0.1
Income (loss) before equity in earnings of subsidiaries	0.3		(6.7)		44.0		10.9		—		48.5
Equity in income of subsidiaries	46.5		53.2		9.2		—		(108.9)		—
Net income from continuing operations	46.8		46.5		53.2		10.9		(108.9)		48.5
Loss from discontinued operations, net of tax	—		—		—		(1.8)		—		(1.8)
Net income	46.8		46.5		53.2		9.1		(108.9)		46.7
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	46.8		46.5		53.2		8.9		(108.9)		46.5
Dividends on preferred stock	(5.8)		—		—		—		—		(5.8)
Net income attributable to Rexnord common stockholders	$	41.0	$	46.5	$	53.2	$	8.9	$	(108.9)	$	40.7
Comprehensive income	$	46.8	$	47.8	$	54.0	$	7.0	$	(108.9)	$	46.7

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Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	1.7	$	250.0	$	(217.5)	$	13.4	$	—	$	47.6
Investing activities
Expenditures for property, plant and equipment	—		—		(6.0)		(2.5)		—		(8.5)
Proceeds from dispositions of long-lived assets	—		—		—		0.9		—		0.9
Cash used for investing activities	—		—		(6.0)		(1.6)		—		(7.6)
Financing activities
Repayments of debt	—		(250.0)		(0.1)		(0.2)		—		(250.3)
Proceeds from exercise of stock options	6.3		—		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	(9.4)		—		—		—		—		(9.4)
Payment of common stock dividend	(9.6)		—		—		—		—		(9.6)
Cash used for financing activities	(12.7)		(250.0)		(0.1)		(0.2)		—		(263.0)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		3.0		—		3.0
(Decrease) increase in cash and cash equivalents	(11.0)		—		(223.6)		14.6		—		(220.0)
Cash, cash equivalents and restricted cash at beginning of period	11.0		0.3		384.0		178.1		—		573.4
Cash, cash equivalents and restricted cash at end of period	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4

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Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	5.9	$	0.6	$	(10.7)	$	23.2	$	—	$	19.0
Investing activities
Expenditures for property, plant and equipment	—		—		(4.8)		(1.1)		—		(5.9)
Acquisitions, net of cash acquired	—		—		(24.8)		—		—		(24.8)
Proceeds from dispositions of long-lived assets	—		—		—		1.3		—		1.3
Cash (used for) provided by investing activities	—		—		(29.6)		0.2		—		(29.4)
Financing activities
Repayments of debt	—		—		—		(3.9)		—		(3.9)
Proceeds from exercise of stock options	4.8		—		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	(5.7)		—		—		—		—		(5.7)
Payments of preferred stock dividends	(5.8)		—		—		—		—		(5.8)
Cash used for by financing activities	(6.7)		—		—		(3.9)		—		(10.6)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		0.3		—		0.3
(Decrease) increase in cash and cash equivalents	(0.8)		0.6		(40.3)		19.8		—		(20.7)
Cash, cash equivalents and restricted cash at beginning of period	1.4		0.2		107.7		183.2		—		292.5
Cash, cash equivalents and restricted cash at end of period	$	0.6	$	0.8	$	67.4	$	203.0	$	—	$	271.8

22. Subsequent Events

On July 23, 2020, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.08 per-share to be paid on September 8, 2020, to stockholders of record as of August 20, 2020.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

        Rexnord is a growth-oriented, multi-platform industrial company with what we believe are leading market shares and highly-trusted brands that serve a diverse array of global end markets. Our heritage of innovation and specification have allowed us to provide highly-engineered, mission-critical solutions to customers for decades and affords us the privilege of having long-term, valued relationships with market leaders. We operate our Company in a disciplined way and the Rexnord Business System (“RBS”) is our operating philosophy. Grounded in the spirit of continuous improvement, RBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of our business.

        The following information should be read in conjunction with the audited consolidated financial statements and notes thereto, along with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Fiscal Year

        Following the end of our fiscal 2020, we transitioned to a December 31 fiscal year-end date. The nine-month period from April 1, 2020, to December 31, 2020, is serving as a transition period, and we will provide one-time, nine-month transitional financial statements for the transition period in a transition report on Form 10-K to be filed in calendar year 2021. Prior to the transition period, our fiscal year was the year ending March 31 of the corresponding calendar year. Throughout this MD&A, we refer to the period from April 1, 2020 through June 30, 2020, as the "three months ended June 30, 2020" or the “quarter ended June 30, 2020.” We refer to the period from April 1, 2019 through June 30, 2019, as the “three months ended June 30, 2019” or the “quarter ended June 30, 2019.”

Critical Accounting Policies and Estimates

        The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Refer to Item 7, MD&A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, for information with respect to our critical accounting policies, which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management. Except for the items reported below, management believes that as of June 30, 2020, and during the period from April 1, 2020 through June 30, 2020, there has been no material change to this information.

Recent Accounting Pronouncements

        See Item 1, Note 1, Basis of Presentation and Significant Accounting Policies regarding recent accounting pronouncements.

COVID-19 Pandemic

The coronavirus ("COVID-19") pandemic and the actions taken by various governments and third parties to combat the spread of COVID-19 (including, in some cases, mandatory quarantines and other suspensions of non-essential business operations) have led to disruptions in our manufacturing and distribution operations and supply chains, including temporary reductions or suspensions of operations at some of our manufacturing and distribution locations around the world. In addition, our suppliers, business partners and customers are also experiencing similar negative impacts from the COVID-19 pandemic. As of June 30, 2020, essentially all of our global facilities are operating with only intermittent interruptions. We remain focused on the health and well-being of our associates and have undertaken numerous actions within our offices and manufacturing sites that are intended to to minimize the spread of COVID-19, including implementing work from home policies, establishing social distancing protocols for associates while at work and providing associates with access to numerous collaboration and productivity tools to facilitate communication in lieu of travel and face-to-face meetings.

During the three months ended June 30, 2020, we experienced a reduction in market demand in both Process & Motion Control and Water Management as customers reacted to the current COVID-19 pandemic. However, we did experience increased demand for our touchless and hygienic solutions products in our Water Management platform.

In order to reduce our cash outflows during this period of uncertainty and economic volatility, we have implemented and actioned furloughs of certain personnel, workforce reductions and reductions of non-essential spending. Our objective with respect to these actions is to attempt to control the downside risk to our financial results, while ensuring that we maintain the capacity and flexibility to fully participate in the expected eventual recovery. While it is not possible at this time to estimate the

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scope and severity of the impact that COVID-19 could have on our operations, the continued spread of COVID-19, the measures taken, and those that may be taken in the future, by the governments of countries affected, actions taken to protect employees, actions taken to shutdown or temporarily discontinue operations in certain locations, changes in customer buying patterns and the impact of the pandemic on various business activities in affected countries and the economy generally, it could continue to adversely affect our financial condition, results of operations and cash flows.

Acquisitions

On January 28, 2020, we acquired substantially all of the assets of Just Manufacturing Company ("Just Manufacturing") for a cash purchase price of $59.4 million, excluding transaction costs and net of cash acquired. Just Manufacturing, based in Franklin Park, Illinois, manufactures stainless steel sinks and plumbing fixtures primarily used in institutional and commercial end markets and complements our existing Water Management platform.

On May 10, 2019, we acquired substantially all of the assets of East Creek Corporation (d/b/a StainlessDrains.com), a manufacturer of stainless steel drains, grates and accessories for industrial and commercial end markets, for a cash purchase price of $24.8 million, excluding transaction costs and net of cash acquired. StainlessDrains.com, headquartered in Greenville, Texas, added complementary product lines to our existing Water Management platform.

Discontinued Operations

        During the fiscal year ending March 31, 2019, we completed the sale of our VAG business, which was previously included within our Water Management platform. As a result, the operating results of the VAG business are reported as discontinued operations in the consolidated statements of operations, as the sale of VAG represented a strategic shift that had a major impact on our operations and financial results. The sale price was subject to customary working capital and cash balance adjustments, which were finalized during the three months ended June 30, 2019. As a result of these adjustments and other related costs, we recognized an additional $1.8 million loss on the sale of discontinued operations during the three months ended June 30, 2019.

Restructuring

        During the three months ended June 30, 2020, we continued to execute various restructuring initiatives focused on driving efficiencies, reducing operating costs by modifying our footprint to reflect changes in the markets we serve and the impact of acquisitions on our overall manufacturing capacity and the refinement of our overall product portfolio. These restructuring actions primarily resulted in workforce reductions, impairment of related manufacturing facilities, equipment and intangible assets, lease termination costs, and other facility rationalization costs. We expect to continue executing similar initiatives to optimize our operating margin and manufacturing footprint. As we continue to evaluate the impact of COVID-19 and the resulting effects on the global economy, we may also execute additional restructuring actions. As such, we expect further expenses related to workforce reductions, lease termination costs, and other facility rationalization costs on our overall manufacturing capacity, and refining our overall product portfolio. For the three months ended June 30, 2020 and June 30, 2019, restructuring charges totaled $1.7 million and $3.2 million, respectively. Refer to Item 1, Note 3, Restructuring and Other Similar Charges for further information.

Results of Operations

Three Months Ended June 30, 2020 compared with the Three Months Ended June 30, 2019:

Net sales

(Dollars in Millions)

	Three Months Ended
	June 30, 2020		June 30, 2019		Change		% Change
Process & Motion Control	$	274.4	$	330.1	$	(55.7)	(16.9)	%
Water Management	174.7		178.2		(3.5)		(2.0)	%
Consolidated	$	449.1	$	508.3	$	(59.2)	(11.6)	%

Process & Motion Control

        Process & Motion Control net sales were $274.4 million and $330.1 million during the three months ended June 30, 2020 and 2019, respectively. Excluding a 2% unfavorable impact from foreign currency translation, core sales decreased 15% year over year as a result of a reduction in market demand across the majority of our end markets and geographies as customers reacted to and changed buying patterns given the current COVID-19 pandemic.

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Water Management

        Water Management net sales were $174.7 million during the three months ended June 30, 2020, a decrease of 2% year over year. Excluding a 3% year-over-year increase in net sales resulting from our prior year acquisitions of Stainlessdrains.com and Just Manufacturing, core sales decreased 5% during the three months ended June 30, 2020, as increased demand for our touchless and hygienic solutions was more than offset by reduced overall market demand resulting from the current COVID-19 pandemic.

Income from operations

(Dollars in Millions)

	Three Months Ended
	June 30, 2020			June 30, 2019			Change			% Change
Process & Motion Control	$	39.6		$	55.1		$	(15.5)		(28.1)	%
% of net sales	14.4		%	16.7		%	(2.3)		%
Water Management	40.1			40.0			0.1			0.3	%
% of net sales	23.0		%	22.4		%	0.6		%
Corporate	(13.7)			(14.9)			1.2			8.1	%
Consolidated	$	66.0		$	80.2		$	(14.2)		(17.7)	%
% of net sales	14.7		%	15.8		%	(1.1)		%

Process & Motion Control

        Process & Motion Control income from operations during the three months ended June 30, 2020 was $39.6 million, or 14.4% of net sales. Income from operations as a percentage of net sales decreased by 230 basis points year over year primarily as a result of the lower sales volume, partially offset by benefits obtained from cost reduction initiatives and footprint repositioning actions.

Water Management

        Water Management income from operations was $40.1 million during the three months ended June 30, 2020, or 23.0% of net sales. Income from operations as a percentage of net sales increased by 60 basis points year over year as the benefits obtained from our cost reduction and productivity initiatives more than offset the profit impact of lower sales year over year.

Corporate

        Corporate expenses were $13.7 million and $14.9 million during the three months ended June 30, 2020 and 2019, respectively. The decrease in corporate expenses during the three months ended June 30, 2020, is primarily the result of savings from cost reduction initiatives, including those related to COVID-19, as discussed above.

Interest expense, net

        Interest expense, net was $13.4 million during the three months ended June 30, 2020, compared to $15.5 million during the three months ended June 30, 2019. The decrease in interest expense as compared to the prior year's period is primarily a result of the impact of lower outstanding borrowings and lower average interest rates following the $100.0 million voluntary prepayment and refinancing of our term loan during the three months ended December 31, 2019. See Item 1, Note 13 Long-Term Debt for more information.

Other income (expense), net

        Other income (expense), net during the three months ended June 30, 2020 and 2019 was $0.4 million and ($1.5) million, respectively. Other income (expense), net consists primarily of foreign currency transaction gains and losses and the non-service cost components associated with our defined benefit plans. The year-over-year change is primarily driven by the recognition of actuarial losses in connection with the termination of a domestic defined benefit plan during the three months ended June 30, 2019.

Provision for income taxes

The income tax provision was $17.2 million during the three months ended June 30, 2020, compared to $14.8 million in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was 32.5% versus 23.4% in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with global intangible low-taxed income (“GILTI”) and compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of withholding taxes associated with foreign dividends, and the accrual of various state income taxes, partially offset by the

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recognition of income tax benefits associated with share-based payments and foreign-derived intangible income (“FDII”). The effective income tax rate for the three months ended June 30, 2019 was above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with GILTI and the accrual of various state income taxes, partially offset by the recognition of income tax benefits associated with share-based payments and FDII.

On a quarterly basis, we review and analyze our valuation allowances associated with deferred tax assets relating to certain foreign and state net operating loss carryforwards as well as U.S. federal and state capital loss carryforwards. In conjunction with this analysis, we weigh both positive and negative evidence for purposes of determining the proper balances of such valuation allowances. Future changes to the balances of these valuation allowances, as a result of our continued review and analysis, could result in a material impact to the financial statements for the period of such change.

Net income from continuing operations

        Net income from continuing operations during the three months ended June 30, 2020 and 2019, was $35.8 million and $48.5 million, respectively, as a result of the factors described above. Diluted net income per share from continuing operations was $0.29 during the three months ended June 30, 2020, as compared to diluted net income per share from continuing operations of $0.39 during the three months ended June 30, 2019.

Net income attributable to Rexnord common stockholders

        Net income attributable to Rexnord common stockholders during the three months ended June 30, 2020, was $35.6 million compared to $40.7 million during the three months ended June 30, 2019. Diluted net income per share attributable to Rexnord common stockholders for the three months ended June 30, 2020 and June 30, 2019, was $0.29 and $0.38, respectively, as a result of the factors described above. Net income attributable to Rexnord common stockholders for the three months ended June 30, 2019, reflects the effects of the payment of $5.8 million of dividends on shares of cumulative preferred stock (the preferred stock was converted into common stock on November 15, 2019, and is no longer outstanding).  

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Non-GAAP Financial Measures

        Non-GAAP financial measures are intended to supplement and not replace financial measures prepared in accordance with GAAP.

Core sales

        Core sales excludes the impact of acquisitions (such as the StainlessDrains.com and Just Manufacturing acquisitions), divestitures and foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparisons of our net sales performance with prior and future periods and to our peers. We exclude the effect of acquisitions and divestitures because the nature, size and number of acquisitions and divestitures can vary dramatically from period to period and between us and our peers, and can also obscure underlying business trends and make comparisons of long-term performance difficult. We exclude the effect of foreign currency translation from this measure because the volatility of currency translation is not under management's control.

EBITDA

        EBITDA represents earnings from continuing operations before interest and other debt related activities, taxes, depreciation and amortization. EBITDA is presented because it is an important supplemental measure of performance and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of operating performance or any other measures of performance derived in accordance with U.S. GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.

Adjusted EBITDA

        Adjusted EBITDA (as described below in “Covenant Compliance”) is an important measure because, under our credit agreement, our ability to incur certain types of acquisition debt and certain types of subordinated debt, make certain types of acquisitions or asset exchanges, operate our business and make dividends or other distributions, all of which will impact our financial performance, is impacted by our Adjusted EBITDA, as our lenders measure our performance with a net first lien leverage ratio by comparing our senior secured bank indebtedness to our Adjusted EBITDA (see “Covenant Compliance” for additional discussion of this ratio, including a reconciliation to our net income). We reported net income attributable to Rexnord common stockholders in the three months ended June 30, 2020, of $35.6 million and Adjusted EBITDA for the same period of $103.1 million. See “Covenant Compliance” for a reconciliation of Adjusted EBITDA to net income attributable to Rexnord common stockholders.

Covenant Compliance

        Our credit agreement, which governs our senior secured credit facilities, contains, among other provisions, restrictive covenants regarding indebtedness, payments and distributions, mergers and acquisitions, asset sales, affiliate transactions, capital expenditures and the maintenance of certain financial ratios. Payment of borrowings under the credit agreement may be accelerated if there is an event of default. Events of default include the failure to pay principal and interest when due, a material breach of a representation or warranty, certain non-payments or defaults under other indebtedness, covenant defaults, events of bankruptcy and a change of control. Certain covenants contained in the credit agreement restrict our ability to take certain actions, such as incurring additional debt or making acquisitions, if we are unable to meet a maximum total net leverage ratio of 6.75 to 1.0 as of the end of each fiscal quarter. At June 30, 2020, our net leverage ratio was 2.1 to 1.0. Failure to comply with these covenants could limit our long-term growth prospects by hindering our ability to borrow under the revolver, to obtain future debt and/or to make acquisitions.

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        “Adjusted EBITDA” is the term we use to describe EBITDA as defined and adjusted in our credit agreement, which is net income, adjusted for the items summarized in the table below. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring losses or gains. In view of our debt level, it is also provided to aid investors in understanding our compliance with our debt covenants. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA varies from others in our industry. This measure should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; or (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.

        In addition, certain of these expenses can represent the reduction of cash that could be used for other corporate purposes. Further, although not included in the calculation of Adjusted EBITDA below, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions or dispositions to restructuring, and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred.

        The calculation of Adjusted EBITDA under our credit agreement as of June 30, 2020, is presented in the table below. However, the results of such calculation could differ in the future based on the different types of adjustments that may be included in such respective calculations at the time.

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        Set forth below is a reconciliation of net income attributable to Rexnord common stockholders to Adjusted EBITDA for the periods indicated below.

(in millions)	Three months ended June 30, 2019		Fiscal year ended March 31, 2020		Three months ended June 30, 2020		Twelve months ended June 30, 2020
Net income attributable to Rexnord common stockholders	$	40.7	$	165.7	$	35.6	$	160.6
Dividends on preferred stock	5.8		14.4		—		8.6
Non-controlling interest income	0.2		0.3		0.2		0.3
Loss from discontinued operations, net of tax (1)	1.8		1.8		—		—
Equity method investment income	(0.1)		—		—		0.1
Income tax provision	14.8		54.1		17.2		56.5
Actuarial loss on pension and postretirement benefit obligations	0.8		36.6		—		35.8
Other expense (income), net (2)	0.7		3.8		(0.4)		2.7
Gain on the extinguishment of debt	—		(1.0)		—		(1.0)
Interest expense, net	15.5		58.6		13.4		56.5
Depreciation and amortization	21.0		86.6		21.7		87.3
EBITDA	$	101.2	$	420.9	$	87.7	$	407.4
Adjustments to EBITDA:
Restructuring and other similar charges (3)	3.2		15.5		1.7		14.0
Stock-based compensation expense	6.9		26.9		13.3		33.3
Last-in first-out inventory adjustments (4)	(0.3)		(4.1)		—		(3.8)
Acquisition-related fair value adjustment	0.5		1.7		0.9		2.1
Other, net (5)	(0.5)		(0.7)		(0.5)		(0.7)
Subtotal of adjustments to EBITDA	$	9.8	$	39.3	$	15.4	$	44.9
Adjusted EBITDA	$	111.0	$	460.2	$	103.1	$	452.3
Pro forma adjustment for acquisitions (6)							$	3.0
Pro forma Adjusted EBITDA							$	455.3
Consolidated indebtedness (7)							$	942.1
Total net leverage ratio (8)							2.1

__________________________________

(1)Loss from discontinued operations, net of tax is not included in Adjusted EBITDA in accordance with the terms of our credit agreement.

(2)Other expense (income), net for the periods indicated, consists primarily of gains and losses from foreign currency transactions and the non-service cost components of net periodic benefit costs associated with our defined benefit plans.

(3)Restructuring and other similar charges is comprised of costs associated with workforce reductions, lease termination costs and other facility rationalization costs.  See Item 1, Note 3, Restructuring and Other Similar Charges for more information.

(4)Last-in first-out (LIFO) inventory adjustments are excluded in calculating Adjusted EBITDA as defined in our credit agreement.

(5)Other, net for the periods indicated, consists primarily gains and losses on the disposition of long-lived assets.

(6)Represents a pro forma adjustment to include Adjusted EBITDA related to the acquisition of Just Manufacturing, which was permitted by our credit agreement. The pro forma adjustment includes the period from July 1, 2019, through the date of the Just Manufacturing acquisition. See Item 1, Note 2, Acquisitions for more information.

(7)Our credit agreement defines our consolidated indebtedness as the sum of all indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of indebtedness for borrowed money and capitalized lease obligations, less unrestricted cash, which was $282.3 million (as defined by the credit agreement) at June 30, 2020.

(8)Our credit agreement defines the total net leverage ratio as the ratio of consolidated indebtedness (as described above) to Adjusted EBITDA for the trailing four fiscal quarters.

40

Liquidity and Capital Resources 

        Our primary sources of liquidity are available cash and cash equivalents, cash flow from operations, borrowing availability of up to $264.0 million under our revolving credit facility and availability of up to $100.0 million under our accounts receivable securitization program.  

        As of June 30, 2020, we had $353.4 million of cash and cash equivalents and $278.6 million of additional borrowing capacity ($261.3 million of available borrowings under our revolving credit facility and $17.3 million available under our accounts receivable securitization program). As of June 30, 2020, the available borrowings under our credit facility and accounts receivable securitization were reduced by $10.4 million due to outstanding letters of credit. As of March 31, 2020, we had $573.4 million of cash and cash equivalents and approximately $28.6 million of additional borrowing capacity ($9.3 million of available borrowings under our revolving credit facility and $19.3 million available under our accounts receivable securitization program). On July 10, 2020, we repaid all remaining borrowings under the accounts receivable securitization program.

Both our revolving credit facility and accounts receivable securitization program are available to fund our working capital requirements, capital expenditures and for other general corporate purposes.

Cash Flows

        Cash provided by operating activities was $47.6 million and $19.0 million during the three months ended June 30, 2020 and 2019, respectively. Lower trade working capital and the timing of payments on accrued expenses were partially offset by lower net income generated during the three months ended June 30, 2020.

        Cash used for investing activities was $7.6 million during the three months ended June 30, 2020 compared to $29.4 million during the three months ended June 30, 2019. Investing activities during the three months ended June 30, 2020, primarily included $8.5 million of capital expenditures, partially offset by the receipt of $0.9 million in connection with the sale of certain long-lived assets. Investing activities during the three months ended June 30, 2019 included $5.9 million of capital expenditures and $24.8 million for the acquisition of substantially all the assets of StainlessDrains.com, partially offset by the receipt of $1.3 million in connection with the sale of certain long-lived assets.

        Cash used for financing activities was $263.0 million during the three months ended June 30, 2020 compared to $10.6 million during the three months ended June 30, 2019. During the three months ended June 30, 2020, we utilized a net $250.3 million of cash for payments on outstanding debt and $9.6 million for the payment of common stock dividends. The three months ended June 30, 2020, also includes $6.3 million of cash proceeds associated with stock option exercises, partially offset by $9.4 million of cash used for the payment of withholding taxes on employees' share-based awards. During the three months ended June 30, 2019, we utilized a net $3.9 million of cash for the payment of outstanding debt and $5.8 million for the payment of preferred stock dividends. The three months ended June 30, 2019 also includes $4.8 million of cash proceeds associated with stock option exercises, partially offset by $5.7 million of cash used for the payment of withholding taxes on employees' share-based awards.

Indebtedness

        As of June 30, 2020, we had $1,224.4 million of total indebtedness outstanding as follows (in millions):

	Total Debt at June 30, 2020		Current Maturities of Debt		Long-term Portion
Term loan (1)	$	621.1	$	—	$	621.1
4.875% Senior Notes due 2025 (2)	495.9		—		495.9
Securitization facility borrowings (3)	74.9		74.9		—
Finance leases and other subsidiary debt	32.5		1.5		31.0
Total	$	1,224.4	$	76.4	$	1,148.0

___________________________________________

(1)Includes unamortized debt issuance costs of $3.9 million at June 30, 2020.

(2)Includes unamortized debt issuance costs of $4.1 million at June 30, 2020.

(3)Includes unamortized debt issuance costs of $0.1 million at June 30, 2020.

41

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We are exposed to market risk during the normal course of business from changes in foreign currency exchange rates and interest rates. The exposure to these risks is managed through a combination of normal operating and financing activities and derivative financial instruments in the form of foreign currency forward contracts, interest rate swaps and interest rate caps to cover certain known foreign currency transactional risks, as well as identified risks due to interest rate fluctuations. There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K.

42

ITEM 4. CONTROLS AND PROCEDURES

        We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

        We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Based on that evaluation as of June 30, 2020, the Chief Executive Officer and Chief Financial Officer concluded that, as of such date, the Company's disclosure controls and procedures are adequate and effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, in a manner allowing timely decisions regarding required disclosure. As such, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the period covered by this report.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of the changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

43

PART II - OTHER INFORMATION

ITEM  1. LEGAL PROCEEDINGS

        See the information under the heading "Commitments and Contingencies" in Note 16 to the condensed consolidated financial statements contained in Part I, Item 1 of this report, which is incorporated in this Part II, Item 1 by reference.

ITEM  2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In fiscal 2015, the Company's Board of Directors approved a stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. On January 27, 2020, our Board of Directors increased the remaining share repurchase authority under the Repurchase Program to $300.0 million. The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid; however, the program will continue until the maximum amount of dollars authorized have been expended or until it is modified or terminated by the Board. On April 8, 2020, the Company announced the temporary suspension of share repurchases as a result of the uncertainty caused by the COVID-19 pandemic. Therefore, the Company did not repurchase any shares during the three months ended June 30, 2020. A total of approximately $223.0 million of the existing repurchase authority remained under the Repurchase Program at June 30, 2020.

ITEM  6. EXHIBITS

Exhibit No.	Description	Filed Herewith
10.1	Schedule of Compensation and Stock Ownership Guidelines for outside members of board, revised as of July 2020, effective as of July 23, 2020.	X
10.2	Form of Performance Stock Unit Agreement under the Performance Incentive Plan*	X
10.3	Form of Rexnord Management Incentive Compensation Plan for Executive Officers*	X
10.4	Amended and Restated Bylaws of Rexnord Corporation, as amended through May 5, 2020**
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.	X
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.	X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350	X
101.INS	Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.)	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Inline XBRL data (contained in Exhibit 101)	X

* Form of award agreement consistent with the terms of the Rexnord Corporation Performance Incentive Plan.

** Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, dated May 5, 2020.

44

SIGNATURE

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

		REXNORD CORPORATION
Date:	July 28, 2020	By:	/S/     MARK W. PETERSON
		Name:	Mark W. Peterson
		Title:	Senior Vice President and Chief Financial Officer

45

EX-10.1

Exhibit 10.1

Compensation Policy and Stock Ownership Guidelines

for Outside Members of the Board of Directors

Compensation Element	Description
Term	Directors serve staggered three-year terms.
Cash Compensation	•Directors will receive annual cash compensation of $90,000, inclusive of Board and committee meeting attendance fees. •Committee Chairs will receive an additional annual fee as follows: Audit Committee – $15,000; Compensation Committee – $12,500; Nominating and Corporate Governance Committee – $10,000; Environmental, Social and Governance Committee – $5,000. •Lead Director will receive an additional annual fee of $30,000. •Directors can elect to have cash compensation paid in Rexnord stock as permitted by rules adopted by the Company from time to time. •Cash compensation program is effective as of July 23, 2020.
Equity Grant	•Directors will receive an annual equity grant with a value of $130,000. •The vesting, form and methodology of the equity grant will be determined by the Compensation Committee from time to time. •Equity compensation program is effective as of April 1, 2019.
Stock Ownership Guidelines	Directors will be required to hold a minimum of 5 times the annual cash retainer in Rexnord stock within five years of appointment (including vested options and vested, but deferred RSUs).
Expenses	Rexnord will reimburse Directors for all reasonable out-of-pocket expenses related to their duties as a Director.
D&O Insurance	Rexnord will maintain D&O insurance of at least $50 million annually.
Indemnification	Rexnord will indemnify Directors to the fullest extent allowed by law.

The cash compensation and equity grant will be prorated for partial year service (e.g., directors who join in the middle of a year). Cash compensation is paid quarterly in arrears.

Revised as of July 2020

EX-10.2

Exhibit 10.2

PERFORMANCE STOCK UNIT AGREEMENT

OF

REXNORD CORPORATION

THIS AGREEMENT (this “Agreement”), dated as of ___________________ (the “Grant Date”) is made by and between Rexnord Corporation, a Delaware corporation (the “Corporation”), and _____________, an employee of the Corporation or one of its Subsidiaries (the “Grantee”).

WHEREAS, the Corporation wishes to afford the Grantee the opportunity to receive shares of its common stock (“Common Stock”);

WHEREAS, the Corporation wishes to carry out the purpose of the Rexnord Corporation Performance Incentive Plan (as may be amended, restated or revised from time to time, the “Plan”), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

WHEREAS, the Administrator, as defined in the Plan, (i) has determined that it would be to the advantage and in the best interests of the Corporation and its stockholders to grant performance stock units (the “Performance Stock Units”) provided for herein to the Grantee as an inducement for the Grantee to enter into or remain in the employ of the Corporation or one of its Subsidiaries and as an incentive for increased efforts by the Grantee during such employment, and (ii) has instructed the officers of the Corporation to issue said Performance Stock Units.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I

GRANT, EARNING AND VESTING OF PERFORMANCE STOCK UNITS

AND ISSUANCE OF SHARES

Section 1.1Grant of Performance Stock Units

(a) In consideration of the Grantee’s agreement to enter into or remain in the employ of the Corporation or one of its Subsidiaries and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, on the date hereof the Corporation irrevocably grants to the Grantee the number of Performance Stock Units (at target) as set forth in Section 1.1(b) hereof. The Performance Stock Units granted under this Agreement are units that will be reflected in a book account maintained by the Corporation until they become earned and vested or have been forfeited.

(b) The number of Performance Stock Units (at target) that will be earned and vested based on ____________________ is ________, as more fully described in Appendix A.

(c) The Performance Period for the Performance Stock Units will be the period beginning ___________, 20__ and ending ________, 20___ (the “Performance Period”).

Section 1.2Satisfaction of Performance-Based Conditions and Vesting

(a) Subject to Section 1.2(b) and the satisfaction of the performance conditions set forth in Appendix A to this Agreement during the Performance Period, the Performance

1

Exhibit 10.2

Stock Units will be earned and shall become vested on the last day of the Performance Period.

(b) All unearned Performance Stock Units will be forfeited upon the Grantee’s termination of employment during the Performance Period for any reason.

(c) The Grantee will not have any right to vote the Performance Stock Units and will not be deemed a stockholder of the Corporation with respect to any of the Performance Stock Units.

Section 1.3Issuance of Shares

Earned Performance Stock Units will be paid in shares of Common Stock as soon as administratively practicable following the close of the Performance Period and certification of the satisfaction of the performance conditions, but in no event later than the fifteenth (15th) day of the third month following the end of the Corporation’s fiscal year in which the Performance Units are earned and vest.

Section 1.4Performance Stock Units Subject to Plan

The Performance Stock Units granted hereunder are subject to the terms and provisions of the Plan, including without limitation, Sections 7.5 and 8.9 of the Plan. Capitalized terms used in this Agreement and not defined herein shall have the meaning given to such terms in the Plan.

Section 1.5Corporate Transactions – Acceleration of Performance Stock Units

The Performance Stock Units granted hereunder will be subject to accelerated vesting as set forth in Section 7.3 of the Plan and will be deemed earned at the “target” performance level set forth in Appendix A to this Agreement (i.e., 100% payout). In such case, the vested Performance Stock Units will be settled as soon as administratively practicable, but in no event later than the fifteenth (15th) day of the third month following the end of the Corporation’s fiscal year in which the Performance Units vest.

ARTICLE II

RESTRICTIVE COVENANTS

Section 2.1Reasonableness of Restrictions

The Grantee acknowledges that the Grantee has had and will continue to have access to Confidential Information (as defined below), that such Confidential Information is of economic value to the Corporation and its Subsidiaries, that such Confidential Information would be of value to a competitor of the Corporation and/or one of its Subsidiaries in competing against the Corporation and/or one of its Subsidiaries, and that it would be unfair for the Grantee to exploit such Confidential Information for the Grantee’s personal benefit or for the benefit of a competitor. The Grantee further acknowledges that the Grantee has had and/or will have an opportunity to learn about, and develop relationships with, customers of the Corporation and/or its Subsidiaries and that the Corporation and its Subsidiaries have a legitimate interest in protecting relationships with such customers, and that it would be unfair for the Grantee to exploit information the Grantee has learned about such customers and relationships which the Grantee has developed with such customers for the Grantee’s personal benefit or for the benefit of a competitor. The Grantee further acknowledges that the Corporation and its Subsidiaries currently market and sell products and services to customers throughout the United States and that the Grantee’s job duties have included and/or will include contact with products that are marketed throughout the entire United States and that

2

Exhibit 10.2

the Confidential Information to which the Grantee has had and/or and will have access to, and the Grantee’s customer knowledge and contacts and relationships, would be of value to a competitor in competing against the Corporation and/or one of its Subsidiaries anywhere in the United States. Accordingly, the Grantee acknowledges that the protections provided to the Corporation and its Subsidiaries in this Article II are reasonable and necessary to protect the legitimate interests of the Corporation and its Subsidiaries and that abiding by the Grantee’s obligations under this Article II will not impose an undue hardship on the Grantee.

Section 2.2Restricted Services Obligation

For a period of two years following the end, for whatever reason, of the Grantee’s employment with the Corporation or any of its Subsidiaries, the Grantee agrees not to directly or indirectly provide Restricted Services to any Competitor respecting its operations in the United States. For purposes of this Section, (i) “Restricted Services” means services of any kind or character comparable to those the Grantee provided to the Corporation or any of its Subsidiaries during the one year period preceding the end of the Grantee’s employment with the Corporation or any of its Subsidiaries, and (ii) “Competitor” means any business located in the United States which is engaged in the development and/or sale of any product line or service offering that is substantially similar to (and thus competitive with) a product line or service offering sold by the Corporation or any of its United States Subsidiaries for which the Grantee had direct managerial responsibility during the last year of the term of the Grantee’s employment with the Corporation or any of its United States Subsidiaries.

Section 2.3Customer Non-Solicitation

For a period of two years following the end, for whatever reason, of the Grantee’s employment with the Corporation or any of its Subsidiaries, the Grantee agrees not to directly or indirectly attempt to sell or otherwise provide to any Restricted Customer any goods, products or services of the type or substantially similar to the type sold or otherwise provided by the Corporation or any of its Subsidiaries (and thus competitive with such goods, products or services) for which the Grantee was employed during the twelve months prior to termination of the Grantee’s employment. For purposes of this Section 2.3, “Restricted Customer” means any individual or entity (i) for whom/which the Corporation or any of its Subsidiaries provided goods, products or services, and (ii) with whom/which the Grantee was the primary contact on behalf of the Corporation during the Grantee’s last twelve months of employment or about whom/which the Grantee acquired non-public information during the Grantee’s last twelve months of employment that would be of benefit to the Grantee in selling or attempting to sell such goods, products or services in competition with the Corporation or any of its Subsidiaries.

Section 2.4Non-Solicitation of Employees

During the term of the Grantee’s employment with the Corporation or any of its Subsidiaries and for a period of one year thereafter, the Grantee shall not directly or indirectly encourage any employee of the Corporation or any of its United States Subsidiaries with whom the Grantee has worked to terminate his or her employment with the Corporation or any such Subsidiary or solicit such an individual for employment outside the Corporation or any of its Subsidiaries in a manner which would end or diminish that employee’s services to the Corporation or any of its Subsidiaries.

Section 2.5Non-Disparagement

During the term of the Grantee’s employment with the Corporation or any of its Subsidiaries and thereafter in perpetuity, the Grantee shall not knowingly disparage, criticize, or otherwise make derogatory statements regarding the Corporation or any of its affiliates, Subsidiaries, successors,

3

Exhibit 10.2

directors, officers, customers or suppliers. The restrictions of this Section 2.5 shall not apply to any statements that are made truthfully in response to a subpoena or other compulsory legal process.

Section 2.6Non-Disclosure of Confidential Information

(a) The Grantee shall maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose, publish or otherwise misappropriate, or use for the Grantee’s benefit or the benefit of any Person, or deliver to any Person any Confidential Information (as defined herein) or trade secrets of the Corporation. “Confidential Information” means any document, record, notebook, computer program or similar repository of or containing, any confidential or proprietary information of or relating to the Corporation or any of its Subsidiaries, including, without limitation, information with respect to the Corporation’s or any of its Subsidiary’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment. Confidential Information shall be defined to exclude information which is or becomes public knowledge through no fault of the Grantee, or which was known to the Grantee before the start of the Grantee’s earliest relationship with the Corporation or any of its Subsidiaries, or which is otherwise not subject to protection under applicable law. The Grantee’s obligations under this Section 2.6 shall apply for so long as the Grantee continues in the employment of the Corporation or any of its Subsidiaries and for two years following the termination of such employment, for whatever reason, as to any Confidential Information that does not constitute a trade secret under applicable law. As to any Confidential Information that does constitute a trade secret under applicable law, the Grantee agrees that the Grantee’s obligations under this Section 2.6 shall apply for so long as the item qualifies as a trade secret.

(b) The Grantee is advised that he or she may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and provided that such disclosure is solely for the purpose of reporting or investigating a suspected violation of the law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, provided that such filing is made under seal. Additionally, in the event the Grantee files a lawsuit against the Corporation for retaliation by the Corporation against the Grantee for reporting a suspected violation of law, the Grantee has the right to provide trade secret information to the Grantee's attorney and use the trade secret information in the court proceeding, although the Grantee must file any document containing the trade secret under seal and may do not disclose the trade secret, except pursuant to court order.

Section 2.7Return of Corporation Property

All correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the Corporation’s or any of its Subsidiary’s customers, business plans, marketing strategies, products or processes, whether confidential or not, is the property of the Corporation (the “Corporation Property”). Accordingly, upon the Grantee’s termination of employment for any reason, the Grantee shall promptly deliver to the Corporation all such Corporation Property, including any and all copies of any such Corporation Property, and shall not make any notes of or relating to any information contained in any such Corporation Property. The Grantee may respond to a lawful and valid subpoena or other legal process but shall give the Corporation the earliest

4

Exhibit 10.2

possible notice thereof, shall, as much in advance of the return date as possible, make available to the Corporation and its counsel the documents and other information sought and shall assist such counsel in resisting or otherwise responding to such process.

Section 2.8Injunctive Relief; Attorneys’ Fees

The Grantee hereby acknowledges that a breach of the covenants contained in this Article II will cause irreparable damage to the Corporation and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Grantee hereby agrees that, in the event of an actual or threatened breach of any of the covenants contained in this Article II, in addition to any other remedy which may be available at law or in equity, the Corporation shall be entitled to specific performance and injunctive relief. In addition, should the Corporation prevail in obtaining legal relief against the Grantee as related to a breach of the covenants contained in this Article II, the Grantee shall indemnify the Corporation for reasonable costs and expenses, including, but not limited, to court costs and reasonable attorneys’ fees that the Corporation incurred pursuant to the enforcement of this Agreement.

ARTICLE III

OTHER PROVISIONS

Section 3.1Not a Contract of Employment

Nothing in this Agreement or in the Plan shall (i) confer upon the Grantee any right to continue in the employ of the Corporation or any of its Subsidiaries, or (ii) interfere with or restrict in any way the rights of the Corporation or its Subsidiaries, which are hereby expressly reserved, to discharge the Grantee at any time for any reason whatsoever, with or without Cause, except pursuant to an employment agreement, if any, executed by and between the Corporation or any of its Subsidiaries, on the one hand, and the Grantee, on the other hand, and approved by the Board.

Section 3.2Construction; Choice of Law; Other Obligations

This Agreement shall be administered, interpreted and enforced under the laws of the state of Delaware, without regard to conflicts of laws provisions that would give effect to the laws of another jurisdiction. The obligations and restrictions set forth in this Agreement are in addition to and not in lieu of any obligations or restrictions imposed upon the Grantee under any other agreement or any law or statute including, but not limited to, any obligations the Grantee may owe under any law governing trade secrets, any common law duty of loyalty, or any fiduciary duty. No time or geographic restriction provided above shall affect the availability or scope of protection afforded to the Corporation’s trade secrets.

Section 3.3Conformity to Securities Laws

The Grantee acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, including without limitation, Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Performance Stock Units are granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 3.4Entire Agreement

5

Exhibit 10.2

The parties hereto acknowledge that this Agreement and the Plan set forth the entire agreement and understanding of the parties and supersede all prior written or oral agreements or understandings with respect to the subject matter hereof, except that any provisions therein regarding confidentiality or non-competition remain in full force and effect in favor of the Corporation and its Subsidiaries as if the agreements containing such provisions were not so superseded. The obligations imposed by this Agreement are severable and should be construed independently of each other. The invalidity of one provision shall not affect the validity of any other provision. If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, or as applied to any circumstances, under the laws of any jurisdiction which may govern for such purpose, then such provision shall be deemed, to the extent allowed by the laws of such jurisdiction, to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, either generally or as applied to such circumstance, or shall be deemed exercised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be.

Section 3.5Amendment

The Administrator at any time, and from time to time, may amend the terms of this Agreement, provided, however, that the rights of the Grantee shall not be adversely impaired without the Grantee’s written consent. The Corporation shall provide the Grantee with notice and a copy of any amendment made to this Agreement

Section 3.6Disputes (Forum; Personal Jurisdiction; Waiver of Jury Trial)

Any dispute or controversy arising under, out of, or in connection with or in relation to this Agreement or the Plan shall be brought exclusively in the state, federal, or other courts of the state of Delaware, and the parties hereby consent and submit to the personal jurisdiction of those courts. In the event of dispute or litigation, each party shall pay its own attorney’s fees and expenses, except that, should the Grantee file suit in a forum other than the state, federal, or other courts of the state of Delaware, Corporation shall be entitled to recover from the Grantee its attorney fees and expenses associated with seeking the dismissal or transfer of the Grantee’s suit. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING UNDER, OUT OF, IN CONNECTION WITH, OR IN RELATION TO THE PLAN OR THIS AGREEMENT.

Section 3.7Notices

All notices, requests, consents and other communications hereunder to any party hereto shall be deemed to be sufficient if contained in a written instrument and shall be deemed to have been duly given when delivered in person, by telecopy, by nationally-recognized overnight courier, or by first class registered or certified mail, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by the addressee to the addressor:

(i) if to the Corporation, to:

Rexnord Corporation

________________________

________________________

Attention: General Counsel

6

Exhibit 10.2

(ii) if to the Grantee, to the Grantee’s home address on file with the Corporation.

Section 3.8Government and Other Regulations

The obligation to sell and deliver shares of stock under the Plan shall be subject to all applicable laws, rules and regulations and the obtaining of all such approvals by governmental agencies as may be deemed necessary or desirable by the Corporation, including (without limitation) the satisfaction of all applicable federal, state and local tax withholding requirements. The Corporation shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Corporation, an amount sufficient to satisfy federal, state, and local taxes (including the Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising or as a result of these Performance Stock Units.

Section 3.9Counterparts

This Agreement may be executed in several counterparts, including via facsimile transmission, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

[Signature Page to Follow]

7

Exhibit 10.2

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the day, month and year first set forth above.

THE CORPORATION:

Rexnord Corporation

By:

Print Name:

Title:

THE GRANTEE:

Signature:

Print Name:

Grantee’s Address:

Grantee’s Taxpayer Identification Number:

8

Exhibit 10.2

APPENDIX A

EARNING OF PERFORMANCE STOCK UNITS

[PERFORMANCE METRICS]

* * * * *

9

EX-10.3

Exhibit 10.3

REXNORD

MANAGEMENT INCENTIVE COMPENSATION PLAN

EFFECTIVE AS OF: April 2020

1

Exhibit 10.3

Plan Name:

Rexnord Management Incentive Compensation Plan – [CORPORATE / BUSINESS UNIT] (the “Plan” or “MICP”). This Plan is considered part of the Rexnord Corporation Performance Incentive Plan, as amended and restated effective as of July 25, 2019.

Plan Objectives:

To establish a meaningful variable compensation component of an attractive pay-for-performance total compensation program designed to support the achievement of outstanding, strategic, financial and operational performance.

Plan Term:

The Plan commences on the first day of Rexnord Corporation's current fiscal [period/year], _____, 20__, and ends on the last day of the current fiscal [period/year], _______, 20__.

Plan Eligibility:

As approved by the CEO, in consultation with the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee").

Target Bonus Levels:

Determined based on the position that a participant holds and that position’s relative value in the external market, value within Rexnord and its ability to impact overall company performance.

Plan Design

The Plan is based upon the Company’s achievement of financial factor targets tied to [INSERT FINANCIAL FACTOR(S)]. The financial factor targets (including the cliff) and the actual achievement against the financial factor targets are determined and approved by the Compensation Committee. The Non-Financial Goals and Objectives are established at the beginning of the Plan term and evaluated following the end of the Plan term.

Participants must also satisfy the employment condition described under “Plan Administration and Conditions” to receive any payout under the Plan.

Plan Design Definitions:

[INSERT DEFINITIONS OF FINANCIAL FACTOR(S), IF NEEDED]

Non-Financial Goals and Objectives (also known as Personal Performance Factor): quantifiable and process-oriented individual goals and objectives that are tied to personal performance. The Personal Performance Factor will range from zero to 1.5 as follows:

Below Target	On Target	Above Target
0.0	1.0	1.5

Payout Calculation Formula:

Base
Salary X Individual
Target
Bonus % X Financial
Factor X Personal
Performance
Factor = Bonus
Payout

2

Exhibit 10.3

If the period consists of less than 12 months, the following formula may be used to indicate that the payment is based on x/12 months:

Base
Salary X Individual
Target
Bonus % X [x/12] X Financial
Factor X Personal
Performance
Factor = Bonus
Payout

Financial Factors

[INSERT FINANCIAL FACTOR(S)] thresholds, which are measured as a percentage of the target, must be achieved to trigger a potential bonus payment under the Plan. The cliff will be set at such amount determined by the Compensation Committee for the performance period (see the cliff schedule for the financial performance range – Addendum A). Any maximum payout for the Plan will be as established by the Compensation Committee.

The CEO will have the right to recommend adjustments to performance targets to mitigate the unbudgeted impact of material, unusual or nonrecurring gains and losses, accounting changes or other extraordinary events not foreseen at the time the targets were set. The CEO may also make adjustments to calculations and payments when necessary to reflect sound business practices.

Incentive Calculation Example

[INSERT CALCULATION EXAMPLES, IF DESIRED]

Plan Administration and Conditions:

•The Plan will be administered in accordance with the following guidelines:

◦Plan Design & Continuation – to be determined by the Compensation Committee.

◦Plan Participation – to be determined by the CEO, in consultation with the Compensation Committee.

◦Payout Calculations and Timing – the Compensation Committee shall approve the targets and total annual payouts and individual payouts to the CEO's direct reports and Executive Officers. The CEO shall approve all other individual participant payouts.

◦Form of Payment – The Compensation Committee shall determine the form of payment (cash, shares of Company common stock or a combination thereof).

◦The CEO will administer all other aspects of the Plan and may delegate the daily administration of the Plan to other managers and associates, including payments of the amounts to be issued to participants under the Plan.

•Plan participants must be actively employed by the Company or on a paid leave of absence on the date of payment to qualify for payout (anticipated to be in _______ 20__).

•Exceptions due to retirement, disability, or death will be at the sole discretion of the CEO (except that any exception for the CEO, any Executive Officers and the CEO's direct reports shall be approved by the Compensation Committee).

•Promotions / Transfers

◦When a participant in this Plan transfers or is promoted to a position that is covered under a different incentive plan of the Company (or one of its subsidiaries) during the current

3

Exhibit 10.3

fiscal [period/year], the participant will receive a pro-rated award under each plan based on time, base salary, and incentive target percentage in the multiple assignments during the current fiscal [period/year]. For example, if a participant in this Plan transfers to a position that is covered under the [INSERT PLAN NAME] on October 1, that participant will receive an award for the current fiscal [period/year] under this Plan prorated from the state of the current fiscal [period/year] to September 30, and as being in the [INSERT PLAN NAME] from October 1 to December 31.

◦When a participant transfers or is promoted from a position that has one set of performance metrics under this Plan to a position that has another set of performance metrics under this Plan (e.g., from one business unit to another where the award for one position is based on one business unit's metrics and the award for the other position is based on another business unit's metrics), the participant 's award under the Plan will be prorated based on time, base salary and incentive target percentage in the multiple assignments.

◦When a participant transfers or is promoted from one position to another where both positions are covered under this Plan and the same performance metrics apply to each position, the participant will receive the greater of a prorated award based on time, base salary and incentive target percentage in the multiple assignments or an award based on base salary and target MICP percentage in effect at the end of the Plan term.

•If hired in the middle of the fiscal [period/year], a participant will be eligible for a payment of a pro-rated amount that is calculated at a rate of 1/12 of the annual amount for each complete calendar month of service, or 1/(the number of months in the period) for each complete calendar month of service if the period does not consist of 12 months.

•Each Plan participant will receive individual written notification of the financial factors and financial targets and the Non-Financial Goals and Objectives that will be used in calculating their MIC.

•Any amounts payable hereunder are subject the terms of Rexnord's recoupment, clawback or similar policies as may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of any award received under this Plan.

•The Company reserves the right to amend, modify or terminate the Plan at any time.

* * * * *

4

Exhibit 10.3

Addendum A

(Performance Ranges by Cliff %)

•For [ ]% Cliff

Performance of [INSERT FINANCIAL FACTOR(S)] Target Achievement	[ ]% of Target	[ ]% of Target	[ ]% of Target	[ ]% of Target	[ ]% of Target	[ ]% of Target	[ ]% of Target	[ ]% or > of Target
Financial Factor	[ ]%	[ ]%	[ ]%	[ ]%	[ ]%	[ ]%	[ ]%	[ ]% and >*

*For each additional [ ]% increase in the percent of Target Bonus Plan Achievement above [ ]%, the financial factor will increase [ ]%. Interpolation will be used for performance levels between each listed payout percent.

NOTES:

[TO BE INSERTED, IF NEEDED]

5

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Todd A. Adams, President and Chief Executive Officer of Rexnord Corporation,certifies that:

1. I have reviewed this quarterly report on Form 10-Q of Rexnord Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrants' other certifying officer(s) 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 registrants 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 registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 registrants' 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 registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and

5. The registrants' other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of registrants' 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 registrants' 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 registrants' internal control over financial reporting.

Date: July 28, 2020

By:	/s/ TODD A. ADAMS
Name:	Todd A. Adams
Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Mark W. Peterson, Senior Vice President and Chief Financial Officer of Rexnord Corporation, certifies that:

1. I have reviewed this quarterly report on Form 10-Q of Rexnord Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrants' other certifying officer(s) 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 registrants 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 registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 registrants' 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 registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and

5. The registrants' other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of registrants' 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 registrants' 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 registrants' internal control over financial reporting.

Date: July 28, 2020

By:	/s/ MARK W. PETERSON
Name:	Mark W. Peterson
Title:	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Pursuant to 18 United States Code § 1350

Each of the undersigned hereby certifies that the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of Rexnord Corporation filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 28, 2020

By:	/s/ TODD A. ADAMS
Name:	Todd A. Adams
Title:	President and Chief Executive Officer

Date: July 28, 2020

By:	/s/ MARK W. PETERSON
Name:	Mark W. Peterson
Title:	Senior Vice President and Chief Financial Officer

This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. 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

Cover Page - shares	3 Months Ended
	Jun. 30, 2020	Jul. 24, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-35475
Entity Registrant Name	REXNORD CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5197013
Entity Address, Address Line One	511 W. Freshwater Way
Entity Address, City or Town	Milwaukee,
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53204
City Area Code	414
Local Phone Number	643-3739
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	RXN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		120,658,147
Entity Central Index Key	0001439288
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 353.4	$ 573.4
Receivables, net	272.1	334.7
Inventories	348.8	317.5
Other current assets	41.0	38.7
Total current assets	1,015.3	1,264.3
Property, plant and equipment, net	375.6	378.8
Intangible assets, net	505.7	514.2
Goodwill	1,323.5	1,321.9
Other assets	147.1	147.9
Total assets	3,367.2	3,627.1
Current liabilities:
Current maturities of debt	76.4	76.4
Trade payables	160.1	185.6
Compensation and benefits	44.8	61.8
Current portion of pension and postretirement benefit obligations	3.2	3.2
Other current liabilities	118.5	128.5
Total current liabilities	403.0	455.5
Long-term debt	1,148.0	1,397.0
Pension and postretirement benefit obligations	189.8	189.6
Deferred income taxes	123.4	121.0
Other liabilities	149.3	150.3
Total liabilities	2,013.5	2,313.4
Stockholders' equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 120,655,183 at June 30, 2020 and 119,718,631 at March 31, 2020	1.2	1.2
Additional paid-in capital	1,355.8	1,348.3
Retained earnings	111.9	85.9
Accumulated other comprehensive loss	(118.1)	(124.4)
Total Rexnord stockholders' equity	1,350.8	1,311.0
Non-controlling interest	2.9	2.7
Total stockholders' equity	1,353.7	1,313.7
Total liabilities and stockholders' equity	$ 3,367.2	$ 3,627.1

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Mar. 31, 2020
Common Stock
Par value (in dollars per share)	$ 0.01	$ 0.01
Shares authorized (in shares)	200,000,000	200,000,000
Shares issued (in shares)	120,655,183	119,718,631
Shares outstanding (in shares)	120,655,183	119,718,631

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net sales	$ 449.1	$ 508.3
Cost of sales	272.2	306.7
Gross profit	176.9	201.6
Selling, general and administrative expenses	100.2	109.5
Restructuring and other similar charges	1.7	3.2
Amortization of intangible assets	9.0	8.7
Income from operations	66.0	80.2
Non-operating expense:
Interest expense, net	(13.4)	(15.5)
Other income (expense), net	0.4	(1.5)
Income before income taxes	53.0	63.2
Provision for income taxes	(17.2)	(14.8)
Equity method investment income	0.0	0.1
Net income from continuing operations	35.8	48.5
Loss from discontinued operations, net of tax	0.0	(1.8)
Net income	35.8	46.7
Non-controlling interest income	0.2	0.2
Net income attributable to Rexnord	35.6	46.5
Dividends on preferred stock	0.0	(5.8)
Net income attributable to Rexnord common stockholders	$ 35.6	$ 40.7
Basic net income (loss) per share attributable to Rexnord common stockholders:
Continuing operations (in dollars per share)	$ 0.30	$ 0.40
Discontinued operations (in dollars per share)	0	(0.02)
Net income (in dollars per share)	0.30	0.39
Diluted net income (loss) per share attributable to Rexnord common stockholders:
Continuing operations (in dollars per share)	0.29	0.39
Discontinued operations (in dollars per share)	0	(0.01)
Net income (in dollars per share)	$ 0.29	$ 0.38
Weighted-average number of shares outstanding (in thousands):
Basic (in shares)	120,246	105,262
Effect of dilutive equity securities (in shares)	1,802	18,402
Diluted (in shares)	122,048	123,664

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income attributable to Rexnord	$ 35.6	$ 46.5
Other comprehensive income:
Foreign currency translation adjustments	6.4	(0.5)
Change in pension and postretirement defined benefit plans, net of tax	(0.1)	0.5
Other comprehensive income, net of tax	6.3	0.0
Non-controlling interest income	0.2	0.2
Total comprehensive income	$ 42.1	$ 46.7

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net income	$ 35.8	$ 46.7
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	12.7	12.3
Amortization of intangible assets	9.0	8.7
Deferred income taxes	2.4	3.6
Other non-cash charges	(0.6)	0.8
Stock-based compensation expense	13.3	6.9
Changes in operating assets and liabilities:
Receivables	52.9	12.5
Inventories	(29.5)	(33.5)
Other assets	(2.8)	(0.2)
Accounts payable	(26.4)	(12.1)
Accruals and other	(19.2)	(26.7)
Cash provided by operating activities	47.6	19.0
Investing activities
Expenditures for property, plant and equipment	(8.5)	(5.9)
Acquisitions, net of cash acquired	0.0	(24.8)
Proceeds from dispositions of long-lived assets	0.9	1.3
Cash used for investing activities	(7.6)	(29.4)
Financing activities
Repayments of debt	(250.3)	(3.9)
Proceeds from exercise of stock options	6.3	4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)	(5.7)
Payment of common stock dividends	(9.6)	0.0
Payment of preferred stock dividends	0.0	(5.8)
Cash used for financing activities	(263.0)	(10.6)
Effect of exchange rate changes on cash and cash equivalents	3.0	0.3
Decrease in cash and cash equivalents	(220.0)	(20.7)
Cash, cash equivalents and restricted cash at beginning of period	573.4	292.5
Cash, cash equivalents and restricted cash at end of period	$ 353.4	$ 271.8

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Basis of Presentation and Significant Accounting Policies

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

        The unaudited condensed consolidated financial statements included herein have been prepared by Rexnord Corporation (“Rexnord” or the “Company”) in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

        In the opinion of management, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results of operations for the interim periods. Following the end of the Company's fiscal year ended March 31, 2020, the Company transitioned to a December 31 fiscal year-end date. The nine-month period from April 1, 2020, to December 31, 2020, is serving as a transition period, and the Company will provide one-time, nine-month transitional financial statements for the transition period in a transition report on Form 10-K to be filed in 2021. Results for the interim periods are not necessarily indicative of results that may be expected for the nine-month transition period ending December 31, 2020. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's March 31, 2020 Annual Report on Form 10-K.

The Company

        Rexnord is a growth-oriented, multi-platform industrial company with what it believes to be leading market shares and highly-trusted brands that serve a diverse array of global end markets. The Company's heritage of innovation and specification have allowed it to provide highly-engineered, mission-critical solutions to customers for decades and affords it the privilege of having long-term, valued relationships with market leaders. The Company operates in a disciplined way and the Rexnord Business System (“RBS”) is its operating philosophy. Grounded in the spirit of continuous improvement, RBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of its business.

        The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where the Company's customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services.

        The Water Management platform designs, procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing and site works products for primarily nonresidential buildings.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate that is expected to be discontinued because of reference rate reform. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this ASU are effective for all entities as of March 12, 2020, through December 31, 2022. The Company did not modify any material contracts due to reference rate reform during the three months ended June 30, 2020. The Company will continue to evaluate the impact this guidance will have on its consolidated financial statements for all future transactions affected by reference rate reform during the time permitted.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The FASB issued this update as part of its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general

principles in Topic 740 and also improve consistent application of other areas by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities with fiscal years beginning after December 15, 2020, and early adoption is permitted. Certain amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.  

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The Company adopted ASU No. 2016-13, as amended, on April 1, 2020, using a modified-retrospective approach. There was no impact to the Company's consolidated financial statements.

        In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"), which updates the standard to remove disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. ASU 2018-14 is effective for public business entities with fiscal years beginning after December 15, 2020, on a retroactive basis. This guidance will have no impact on the Company's consolidated financial statements upon adoption other than with respect to the updated disclosure requirements.    

Reclassifications

        Certain prior year amounts have been reclassified to conform to the presentation used for the three months ended June 30, 2020.

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Acquisitions

3 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

Fiscal Year 2020

        On January 28, 2020, the Company acquired substantially all of the assets of Just Manufacturing Company ("Just Manufacturing") for a cash purchase price of $59.4 million, excluding transaction costs and net of cash acquired. Just Manufacturing, based in Franklin Park, Illinois, manufactures stainless steel sinks and plumbing fixtures primarily used in institutional and commercial end markets and complements the Company's existing Water Management platform.

On May 10, 2019, the Company acquired substantially all of the assets of East Creek Corporation (d/b/a StainlessDrains.com), a manufacturer of stainless steel drains, grates and accessories for industrial and commercial end markets, for a cash purchase price of $24.8 million, excluding transaction costs and net of cash acquired. StainlessDrains.com, headquartered in Greenville, Texas, added complementary product lines to the Company's existing Water Management platform.

The fiscal 2020 acquisitions have been accounted for as business combinations and were recorded by allocating the purchase price to the fair value of the assets acquired and liabilities assumed at the acquisition date. The excess of the purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded as goodwill. The purchase price allocations associated with these acquisitions resulted in tax deductible goodwill of $27.2 million, other intangible assets of $40.9 million (including tradenames of $2.2 million and $38.7 million of customer relationships), $8.4 million of fixed assets, $9.1 million of trade working capital and other net liabilities of $1.4 million.

The preliminary purchase price allocations for Just Manufacturing were adjusted during the three months ended June 30, 2020, resulting in a $0.7 million increase in goodwill related to the refinement of the estimated fair value of the liabilities assumed as of the acquisition date. The Company is continuing to evaluate the preliminary purchase price allocations for Just Manufacturing related to the fair value assigned to intangible assets and net working capital acquired, which will be completed within the one year period following its acquisition date. The purchase price allocations for StainlessDrains.com were finalized during fiscal 2020. 

        During fiscal 2020, the Company acquired the remaining non-controlling interest in a Process and Motion Control joint venture for a cash purchase price of $0.3 million. The acquisition of the remaining minority interest was not material to the Company's condensed consolidated statements of operations or financial position.

The Company's results of operations include the acquired operations subsequent to the respective acquisition dates. Pro-forma results of operations and certain other U.S. GAAP disclosures related to the fiscal 2020 acquisitions have not been presented because they are not significant to the Company's condensed consolidated statements of operations or financial position.

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Restructuring and Other Similar Charges

3 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Other Similar Charges

Restructuring and Other Similar Charges

        During the three months ended June 30, 2020, the Company continued to execute various restructuring actions. These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio. These restructuring actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs. Management expects to continue executing initiatives and select product-line rationalizations to optimize its operating margin and manufacturing footprint. As the Company continues to evaluate the impact of COVID-19 and the resulting effects on the global economy, the Company may also execute additional restructuring actions. As such, the Company expects further expenses related to workforce reductions, lease termination costs, and other facility rationalization costs. As the Company’s evaluation of the impacts of COVID-19 and other potential restructuring actions are in process, related restructuring expenses, if any, are not yet estimable.

        The following table summarizes the Company's restructuring and other similar charges during the three months ended June 30, 2020 and June 30, 2019, by classification of operating segment (in millions):

	Restructuring and Other Similar Charges Three Months Ended June 30, 2020
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	0.2	$	0.9	$	0.1	$	1.2
Contract termination and other associated costs	0.5		—		—		0.5
Total restructuring and other similar costs	$	0.7	$	0.9	$	0.1	$	1.7

	Restructuring and Other Similar Charges Three Months Ended June 30, 2019
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	2.6	$	0.3	$	—	$	2.9
Contract termination and other associated costs	0.3		—		—		0.3
Total restructuring and other similar costs	$	2.9	$	0.3	$	—	$	3.2

        The following table summarizes the activity in the Company's restructuring accrual for the three months ended June 30, 2020 (in millions):

	Employee termination benefits		Contract termination and other associated costs		Total
Restructuring accrual, March 31, 2020 (1)	$	8.3	$	1.5	$	9.8
Charges	1.2		0.5		1.7
Cash payments	(3.4)		(0.6)		(4.0)
Restructuring accrual, June 30, 2020 (1)	$	6.1	$	1.4	$	7.5

____________________

(1)The restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.

        In connection with the ongoing supply chain optimization and footprint repositioning initiatives, the Company has taken several actions to consolidate existing manufacturing facilities and rationalize its product offerings. These actions require the Company to assess whether the carrying amount of impacted long-lived assets will be recoverable as well as whether the remaining useful lives require adjustment. As a result, the Company recognized accelerated depreciation of $0.4 million and $0.6 million during the three months ended June 30, 2020 and June 30, 2019, respectively. Accelerated depreciation is recorded within Cost of sales in the condensed consolidated statements of operations.

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Discontinued Operations	3 Months Ended
	Jun. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued OperationsDuring fiscal 2019, the Company completed the sale of the VAG business, which was previously included within the Water Management platform. The operating results of the VAG business are reported as discontinued operations in the condensed consolidated statements of operations, as the sale of VAG represented a strategic shift that had a major impact on operations and financial results. The sale price was subject to customary working capital and cash balance adjustments, which were finalized in fiscal 2020. As a result of these adjustments and other related costs, the Company recognized an additional $1.8 million loss on the sale of discontinued operations during the three months ended June 30, 2019.

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Revenue Recognition

3 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

        A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606, Revenue from Contracts with Customers ("ASC 606"). A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer.

        When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continues to be recognized as an expense when the products are sold. When the contract provides the customer the right to return eligible products or when the customer is part of a sales rebate program,

the Company reduces revenue at the point of sale using current facts and historical experience by using an estimate for expected product returns and rebates associated with the transaction. The Company adjusts these estimates at the earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed. Accordingly, an increase or decrease to revenue is recognized at that time.

        Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a component of cost of sales in the condensed consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as Cost of sales in the condensed consolidated statements of operations.

Revenue by Category

The Company has two business segments, Process & Motion Control and Water Management. The following tables present our revenue disaggregated by customer type and geography (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Original equipment manufacturers/end users	$	158.4	$	186.2
Maintenance, repair, and operations	116.0		143.9
Total Process & Motion Control	$	274.4	$	330.1
Water safety, quality, flow control and conservation	$	163.2	$	165.0
Water infrastructure	11.5		13.2
Total Water Management	$	174.7	$	178.2

	Three Months Ended June 30, 2020
	Process & Motion Control		Water Management
United States and Canada	$	169.1	$	171.9
Europe	65.6		—
Rest of world	39.7		2.8
Total	$	274.4	$	174.7

	Three Months Ended June 30, 2019
	Process & Motion Control		Water Management
United States and Canada	$	214.4	$	174.8
Europe	72.4		—
Rest of world	43.3		3.4
Total	$	330.1	$	178.2

Contract Balances

For substantially all of the Company's Process & Motion Control and Water Management product sales, the customer is billed 100% of the contract value when the product ships and payment is generally due 30 days from shipment. Certain contracts include longer payment periods; however, the Company has elected to utilize the practical expedient in which the Company will only recognize a financing component to the sale if payment is due more than one year from the date of shipment.

        The Company receives payment from customers based on the contractual billing schedule and specific performance requirements established in the contract. Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. Contract assets arise when the Company performs by transferring goods or services to a customer before the customer pays consideration, or before the customer’s payment is due. A contract liability exists when the

Company has received consideration or the amount is due from the customer in advance of revenue recognition. Contract liabilities and contract assets are recognized in Other current liabilities and Receivables, net, respectively, in the Company's condensed consolidated balance sheets.

The following table presents changes in the Company’s contract assets and liabilities during the three months ended June 30, 2020 (in millions):

	Balance Sheet Classification	March 31, 2020		Additions		Deductions		June 30, 2020
Contract assets	Receivables, net	$	0.5	$	0.1	$	—	$	0.6
Contract liabilities (1)	Other current liabilities	$	7.3	$	3.1	$	(4.4)	$	6.0

____________________

(1)Contract liabilities are reduced when revenue is recognized.

Backlog

        The Company has a backlog of $370.8 million as of June 30, 2020, which represents the most likely amount of consideration expected to be received in satisfying the remaining backlog under open contracts. The Company has elected to use the optional exemption provided by ASC 606-10-50-14A for variable consideration, and has not included estimated rebates in the amount of unsatisfied performance obligations. The Company expects to recognize approximately 78% of the unsatisfied performance obligations as revenue in the remaining six months in the transition period ending December 31, 2020, and the remaining approximately 22% in 2021 and beyond.

Timing of Performance Obligations Satisfied at a Point in Time

The Company determined that the customer is able to control the product when it is delivered to them; thus, depending on the shipping terms, control will transfer at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.

Variable Consideration

The Company provides volume-based rebates and the right to return product to certain customers, which are accrued for based on current facts and historical experience. Rebates are paid either on an annual or quarterly basis. There are no other significant variable consideration elements included in the Company's contracts with customers.

Contract Costs

The Company has elected to expense contract costs as incurred if the amortization period is expected to be one year or less. If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization. As of June 30, 2020, the contract assets capitalized, as well as amortization recognized in the three months ended June 30, 2020, are not significant and there have been no impairment losses recognized.

Allowance for Doubtful Accounts

The Company assesses the collectability of customer receivables based on the creditworthiness of a customer as determined by credit checks and analysis, as well as the customer’s payment history. In determining the allowance for doubtful accounts, the Company also considers various factors including the aging of customer accounts and historical write-offs. In addition, the Company monitors other risk factors including forward-looking information when establishing adequate allowances for doubtful accounts, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables.

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Income Taxes

3 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for all periods presented is based on an estimated effective income tax rate for the respective fiscal years. The estimated annual effective income tax rate is determined excluding the effect of significant discrete items or items that are reported net of their related tax effects. The tax effect of significant discrete items is reflected in the period in which they occur. The Company's income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are generally higher than the U.S. federal statutory rate, state tax rates in the jurisdictions where the Company does business and the Company's ability to utilize various tax credits, capital loss and net operating loss (“NOL”) carryforwards.

The Company regularly reviews its deferred tax assets for recoverability and valuation allowances are established based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary

differences, as deemed appropriate. In addition, all other available positive and negative evidence is taken into consideration for purposes of determining the proper balances of such valuation allowances. As a result of this review, the Company continues to maintain a full valuation allowance against U.S. federal and state capital loss carryforwards and a partial valuation allowance against certain foreign NOL carryforwards and other related foreign deferred tax assets, as well as certain U.S. state NOL carryforwards. Future changes to the balances of these valuation allowances, as a result of this continued review and analysis by the Company, could result in a material impact to the financial statements for such period of change.

The income tax provision was $17.2 million in the three months ended June 30, 2020, compared to $14.8 million in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was 32.5% versus 23.4% in the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with global intangible low-taxed income (“GILTI”) and compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of withholding taxes associated with foreign dividends, and the accrual of various state income taxes, partially offset by the recognition of income tax benefits associated with share-based payments and foreign-derived intangible income (“FDII”). The effective income tax rate for the three months ended June 30, 2019 was above the U.S. federal statutory rate of 21% primarily due to the recognition of certain previously unrecognized tax benefits due to the lapse of applicable statutes of limitations, partially offset by the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes which are generally above the U.S. federal statutory rate, the accrual of additional income taxes associated with GILTI and the accrual of various state income taxes, partially offset by the recognition of income tax benefits associated with share-based payments and FDII.

On a quarterly basis, we review and analyze our valuation allowances associated with deferred tax assets relating to certain foreign and state net operating loss carryforwards as well as U.S. federal and state capital loss carryforwards. In conjunction with this analysis, we weigh both positive and negative evidence for purposes of determining the proper balances of such valuation allowances. Future changes to the balances of these valuation allowances, as a result of our continued review and analysis, could result in a material impact to the financial statements for such period of change.

The Company’s total liability for net unrecognized tax benefits as of June 30, 2020 and March 31, 2020, was $15.1 million and $14.8 million, respectively. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense. As of June 30, 2020 and March 31, 2020, the total amount of gross, unrecognized income tax benefits included $1.6 million and $1.5 million of accrued interest and penalties, respectively. The Company recognized $0.1 million of net interest and penalties as income tax benefit during both the three months ended June 30, 2020 and June 30, 2019.

The Company conducts business in multiple locations within and outside the U.S. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. Currently, the Company is undergoing routine, periodic income tax examinations in both domestic and foreign jurisdictions. The Company is currently undergoing an income tax examination by the Internal Revenue Service (the "IRS") of the Company’s U.S. consolidated federal income tax returns for the tax years ended March 31, 2016 and 2017. During the fourth quarter of fiscal 2020, the German tax authorities concluded an examination of the corporate income and trade tax returns for the Company’s CENTA German subsidiary for the tax years ended December 31, 2014 through December 31, 2017. The conclusion of the tax examination resulted in additional tax liabilities of approximately $1.7 million, all of which is subject to indemnification under the terms of the applicable purchase agreement or otherwise appropriately accrued in the Company's financial statements. During the three months ended March 31, 2020, the Italian tax authorities began conducting an income tax examination of the income tax returns of one of the Company’s Italian subsidiaries for the tax year ended March 31, 2018. In addition, certain of the Company’s German subsidiaries were notified by the German tax authorities of their intention to conduct an income tax examination of such subsidiaries’ German corporate income and trade tax returns for the tax years or period ended March 31, 2015 through March 31, 2018. The Company anticipates the related fieldwork on such matters will begin during the three months ending September 30, 2020. In addition, in accordance with the terms of the VAG sale agreement, the Company is required to indemnify the purchaser for any future income tax liabilities associated with all open tax years ending prior to, and including, the short period ended on the date of the Company's sale of VAG. VAG was notified by the German tax authorities of its intention to conduct an income tax examination of the VAG German entities’ corporate income and trade tax returns for the tax years ended March 31, 2014 through 2019. The Company anticipates the related fieldwork on this matter will begin during the three months ending December 31, 2020. During the three months ended September 30, 2018, the IRS completed an income tax examination of the Company’s amended U.S. consolidated federal income tax return for the tax year ended March 31, 2015, and the Company paid approximately $0.4 million upon conclusion of such examination. It appears reasonably possible that the amounts of unrecognized income tax benefits could change in the next twelve months upon conclusion of the Company’s current ongoing examinations; however, any potential payments of income tax, interest and penalties are not expected to be significant to the Company's consolidated financial statements. With certain exceptions, the Company is no longer subject to U.S. federal income tax examinations for tax years ending prior to March 31, 2016, state and local income tax examinations for years ending prior to fiscal 2016 or significant foreign income tax examinations for years ending prior to fiscal 2015.

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Earnings per Share

3 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

The following table presents the basis for income per share computations (in millions, except share amounts):

	Three Months Ended
	June 30, 2020		June 30, 2019
Basic net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		5.8
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	42.5
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Diluted net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		—
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	48.3
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Plus: Dividends on preferred stock	—		5.8
Net income attributable to Rexnord common stockholders	$	35.6	$	46.5
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Effect of dilutive equity securities	1,802		2,423
Preferred stock under the "if-converted" method (1)	—		15,979
Weighted-average common shares outstanding, diluted	122,048		123,664

____________________

(1)On November 15, 2019, the Company issued 15,980,050 shares of common stock upon the mandatory conversion of Series A Preferred Stock; see Note 8, Stockholders' Equity for additional information.

        The computation of diluted net income per share for the three months ended June 30, 2020 and June 30, 2019, excludes 1.2 million and 1.2 million shares, respectively, related to equity awards due to their anti-dilutive effects.

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Stockholders' Equity

3 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders' Equity

Stockholders' equity consists of the following (in millions):

	Common stock		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2019	$	1.0	$	—	$	1,293.5	$	30.7	$	(96.6)	$	2.4	$	1,231.0
Total comprehensive income	—		—		—		46.5		—		0.2		46.7
Stock-based compensation expense	—		—		6.9		—		—		—		6.9
Proceeds from exercise of stock options	—		—		4.8		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	—		—		(5.7)		—		—		—		(5.7)
Preferred stock dividends ($14.375 per share)	—		—		—		(5.8)		—		—		(5.8)
Balance at June 30, 2019	$	1.0	$	—	$	1,299.5	$	71.4	$	(96.6)	$	2.6	$	1,277.9

	Common stock (1)		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2020	$	1.2	$	—	$	1,348.3	$	85.9	$	(124.4)	$	2.7	$	1,313.7
Total comprehensive income	—		—		—		35.6		6.3		0.2		42.1
Stock-based compensation expense	—		—		10.6		—		—		—		10.6
Proceeds from exercise of stock options	—		—		6.3		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	—		—		(9.4)		—		—		—		(9.4)
Common stock dividends ($0.08 per share)	—		—		—		(9.6)		—		—		(9.6)
Balance at June 30, 2020	$	1.2	$	—	$	1,355.8	$	111.9	$	(118.1)	$	2.9	$	1,353.7

____________________

(1)For the three months ended June 30, 2020, the Company issued 936,552 shares of common stock upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock awards.

(2)During the first quarter of fiscal 2020, represents a 30% non-controlling interest in two Process & Motion Control controlled subsidiaries. During the second quarter of fiscal 2020, the Company acquired the remaining 30% non-controlling interest associated with one of the aforementioned Process & Motion Control joint ventures for a cash purchase price of $0.3 million. Following this transaction, represents a 30% non-controlling interest in the remaining Process & Motion Control controlled subsidiary and a 5% non-controlling interest in another Process & Motion Control controlled subsidiary.

Preferred Stock

On November 15, 2019, 402,500 shares of 5.75% Series A Mandatory Convertible Preferred Stock (the "Series A Preferred Stock") automatically converted into 15,980,050 shares of the Company's common stock. The number of shares of common stock issued upon conversion was determined based on a defined average volume weighted average price per share of the Company’s common stock. Upon conversion, there were no shares of Series A Preferred Stock outstanding. The final dividend payment was made on November 15, 2019.

Share Repurchase Program

        During fiscal 2015, the Company's Board of Directors approved a common stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. On January 27, 2020, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $300.0 million. The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid. On April 8, 2020, the Company announced the temporary suspension of share repurchases as a result of the uncertainty caused by the COVID-19 pandemic. Therefore, during the three months ended June 30, 2020, the Company did not repurchase any shares of its common stock. A total of approximately $223.0 million of the existing authority remained under the Repurchase Program at June 30, 2020.

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Accumulated Other Comprehensive Loss

3 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

        The changes in accumulated other comprehensive loss, net of tax, for the three months ended June 30, 2020, are as follows (in millions):

	Foreign Currency Translation		Pension and Postretirement Plans		Total
Balance at March 31, 2020	$	(83.8)	$	(40.6)	$	(124.4)
Other comprehensive income before reclassifications	6.4		—		6.4
Amounts reclassified from accumulated other comprehensive loss	—		(0.1)		(0.1)
Net current period other comprehensive income (loss)	6.4		(0.1)		6.3
Balance at June 30, 2020	$	(77.4)	$	(40.7)	$	(118.1)

        The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three months ended June 30, 2020 and June 30, 2019 (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019		Income Statement Line
Pension and other postretirement plans
Amortization of prior service credit	$	(0.1)	$	(0.1)	Other income (expense), net
Settlement	—		0.8		Other income (expense), net
Benefit for income taxes	—		(0.2)
Total net of tax	$	(0.1)	$	0.5

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Inventories

3 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Inventories

Inventories

The major classes of inventories are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Finished goods	$	168.9	$	145.6
Work in progress	41.8		43.7
Purchased components	76.3		70.4
Raw materials	58.9		54.9
Inventories at First-in, First-Out ("FIFO") cost	345.9		314.6
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost	2.9		2.9
	$	348.8	$	317.5

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Goodwill and Intangible Assets

3 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

        The changes in the net carrying value of goodwill for the three months ended June 30, 2020, by operating segment are presented below (in millions):

	Process & Motion Control		Water Management		Consolidated
Net carrying amount as of March 31, 2020	$	1,121.4	$	200.5	$	1,321.9
Currency translation adjustments	0.6		0.3		0.9
Purchase accounting adjustments (1)	—		0.7		0.7
Net carrying amount as of June 30, 2020	$	1,122.0	$	201.5	$	1,323.5

____________________

(1) Refer to Note 2, Acquisitions for additional information regarding acquisitions.

        The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2020 and March 31, 2020 are as follows (in millions):  

		June 30, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.2	$	(41.5)	$	9.7
Customer relationships (including distribution network)	13 years	748.5		(560.6)		187.9
Tradenames	13 years	42.2		(15.0)		27.2
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.8	$	(617.1)	$	505.7
		March 31, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.1	$	(41.2)	$	9.9
Customer relationships (including distribution network)	13 years	748.0		(552.5)		195.5
Tradenames	13 years	42.1		(14.2)		27.9
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.1	$	(607.9)	$	514.2

        Intangible asset amortization expense totaled $9.0 million for the three months ended June 30, 2020. Intangible asset amortization expense totaled $8.7 million for the three months ended June 30, 2019. No intangible assets were acquired during the three months ended June 30, 2020.

        The Company expects to recognize amortization expense on the intangible assets subject to amortization of $26.9 million in the nine months ended December 31, 2020 (inclusive of $9.0 million of amortization expense recognized in the three months ended June 30, 2020), $34.4 million in 2021, $18.7 million in 2022, $16.2 million in 2023, $16.1 million in 2024 and $15.1 million in 2025.

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Other Current Liabilities

3 Months Ended

Jun. 30, 2020

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Other Current Liabilities

Other current liabilities are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Contract liabilities	$	6.0	$	7.3
Sales rebates	25.2		35.5
Commissions	6.9		7.0
Restructuring and other similar charges (1)	7.5		9.8
Product warranty (2)	8.0		6.7
Risk management (3)	10.8		10.4
Legal and environmental	1.6		1.5
Taxes, other than income taxes	7.5		8.3
Income tax payable	17.1		9.9
Interest payable	1.7		8.3
Current portion of operating lease liability (4)	12.6		12.8
Other	13.6		11.0
	$	118.5	$	128.5

____________________

(1)See more information related to the restructuring obligations within Note 3, Restructuring and Other Similar Charges.

(2)See more information related to the product warranty obligations within Note 16, Commitments and Contingencies.

(3)Includes projected liabilities related to losses arising from automobile, general and product liability claims.

(4)See more information related to leases within Note 18, Leases.

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Long-Term Debt

3 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt is summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Term loan (1)	$	621.1	$	620.8
4.875% Senior Notes due 2025 (2)	495.9		495.7
Revolving credit facility (3)	—		249.2
Securitization facility borrowings (4)	74.9		74.9
Finance leases and other subsidiary debt (5)	32.5		32.8
Total	1,224.4		1,473.4
Less current maturities	76.4		76.4
Long-term debt	$	1,148.0	$	1,397.0

____________________

(1)Includes unamortized debt issuance costs of $3.9 million and $4.2 million at June 30, 2020 and March 31, 2020, respectively.

(2)Includes unamortized debt issuance costs of $4.1 million and $4.3 million at June 30, 2020 and March 31, 2020, respectively.

(3)Includes unamortized debt issuance costs of $0.0 million and $0.8 million at June 30, 2020 and March 31, 2020, respectively.

(4)Includes unamortized debt issuance costs of $0.1 million and $0.1 million at June 30, 2020 and March 31, 2020, respectively.

(5)See more information related to finance leases within Note 18, Leases.

Senior Secured Credit Facility

        At June 30, 2020, the Company’s Third Amended and Restated First Lien Credit Agreement, as amended (the “Credit Agreement”), is funded by a syndicate of banks and other financial institutions and provides for (i) a $725.0 million term loan facility, which was reduced to $625.0 million as a result of a December 2019 voluntary prepayment, and (ii) a $264.0 million revolving credit facility. The term loan facility has a maturity date of August 21, 2024, and there are no required principal payments due or scheduled under the term debt until the maturity date. At June 30, 2020, the borrowings under the Term Loan had a weighted-average effective interest rate of 1.91%. The weighted-average interest rate for borrowings under the Term Loan for the three months ended June 30, 2020, was 2.26%. At June 30, 2020, no amounts were borrowed under the revolving credit facility. As of March 31, 2020, $250.0 million was borrowed under the revolving credit facility. As of and during the three months ended June 30, 2020, borrowings under the revolving credit facility had weighted-average effective interest rates of 4.00%. As of June 30, 2020 and March 31, 2020, $2.7 million and $4.7 million of the revolving credit facility were considered utilized in connection with outstanding letters of credit, respectively.

As of June 30, 2020, the Company was in compliance with all applicable covenants under the Credit Agreement, including compliance with a maximum permitted total net leverage ratio (the Company's sole financial maintenance covenant under the revolving credit facility discussed below) of 6.75 to 1.0. The Company's total net leverage ratio was 2.1 to 1.0 as of June 30, 2020.

4.875% Senior Notes due 2025

On December 7, 2017, the Company issued $500.0 million aggregate principal amount of 4.875% senior notes due 2025 (the “Notes”). The Notes were issued by RBS Global, Inc. and Rexnord LLC (Company subsidiaries; collectively, the “Issuers”) pursuant to an Indenture, dated as of December 7, 2017 (the “Indenture”), by and among the Issuers, the domestic subsidiaries of the Company (with certain exceptions) as guarantors named therein (the “Subsidiary Guarantors”) and Wells Fargo Bank, National Association (the “Trustee”). The Notes are general senior unsecured obligations of the Issuers. Rexnord Corporation separately entered into a Parent Guarantee with the Trustee whereby it guaranteed certain obligations of the Issuers under the Indenture. The Notes pay interest semi-annually on June 15 and December 15.

Accounts Receivable Securitization Program

        The Company has an amended accounts receivable securitization facility (the "Securitization") with Wells Fargo & Company ("Wells Fargo"). Pursuant to the agreements evidencing the Securitization, Rexnord Funding LLC ("Rexnord Funding") (a wholly owned bankruptcy-remote special purpose subsidiary) has granted Wells Fargo a security interest in all of its current and future receivables and related assets in exchange for a credit facility permitting borrowings of up to a maximum aggregate amount of $100.0 million outstanding from time to time. Such borrowings are used by Rexnord Funding to finance purchases of accounts receivable. The amount of advances available will be determined based on advance rates relating to the eligibility of the receivables held by Rexnord Funding at that time. Advances bear interest based on LIBOR plus 1.20%. The

last date on which advances may be made is December 30, 2020, unless the maturity of the Securitization is otherwise accelerated. In addition to other customary fees associated with financings of this type, Rexnord Funding pays an unused line fee to Wells Fargo based on any unused portion of the Securitization facility. If the average daily outstanding principal amount during a calendar month is less than 50% of the average daily aggregate commitment in effect during such month, the unused line fee is 0.50% per annum; otherwise, it is 0.375% per annum.

        The Securitization constitutes a "Permitted Receivables Financing" under the Credit Agreement and does not qualify for sale accounting under ASC 860, Transfers and Servicing. Any borrowings under the Securitization are accounted for as secured borrowings on the Company's condensed consolidated balance sheets. Financing costs associated with the Securitization are recorded within "Interest expense, net" in the condensed consolidated statements of operations if revolving loans or letters of credit are obtained under the facility.

        At June 30, 2020 and March 31, 2020, the Company's total borrowing capacity under the Securitization was $100.0 million, respectively, based on the current accounts receivables balance. As of both June 30, 2020 and March 31, 2020, $75.0 million was borrowed under the Securitization. In addition, $7.7 million and $5.7 million of available borrowing capacity under the Securitization was considered utilized in connection with outstanding letters of credit at June 30, 2020 and March 31, 2020, respectively. As of and during the three months ended June 30, 2020, borrowings under the Securitization had weighted-average effective interest rates of 1.58% and 1.36%, respectively. As of June 30, 2020, the Company was in compliance with all applicable covenants and performance ratios contained in the Securitization. On July 10, 2020, the Company repaid all remaining borrowings under the Securitization.

See Note 11, Long-Term Debt to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding long-term debt.

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Derivative Financial Instruments

3 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

        The Company is exposed to certain financial risks relating to fluctuations in foreign currency exchange rates. The Company currently selectively uses foreign currency forward exchange contracts to manage its foreign currency risk. All hedging transactions are authorized and executed pursuant to defined policies and procedures that prohibit the use of financial instruments for speculative purposes.

Foreign Exchange Contracts

        The Company periodically enters into foreign currency forward contracts to mitigate the foreign currency volatility relative to certain intercompany and external cash flows expected to occur. These foreign currency forward contracts were not accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), and as such were marked to market through earnings. The amounts recorded on the condensed consolidated balance sheets and recognized within the condensed consolidated statements of operations related to the Company's foreign currency forward contracts for the three months ended June 30, 2020 and 2019, were not material.

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Fair Value Measurements

3 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

        ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about the assumptions a market participant would use.

In accordance with ASC 820, fair value measurements are classified under the following hierarchy:

•Level 1 - Quoted prices for identical instruments in active markets.

•Level 2 - Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable.

•Level 3 - Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value measurement and unobservable.

        If applicable, the Company uses quoted market prices in active markets to determine fair value, and therefore classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters. These measurements are classified within Level 3 if they use significant unobservable inputs.

Fair Value of Financial Instruments

        There were no transfers of assets between levels at June 30, 2020 and March 31, 2020, respectively.

        The Company has a nonqualified deferred compensation plan where assets are invested in mutual funds and corporate-owned life insurance contracts held in a rabbi trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for the mutual funds, which are measured using quoted prices of identical instruments in active markets categorized as Level 1. Corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and reflects the net asset value of the underlying publicly traded mutual funds categorized as Level 2. The deferred compensation assets are classified within other assets on the condensed consolidated balance sheets. Deferred compensation liabilities are measured at fair value based on quoted prices of identical instruments to the investment vehicles selected by the participants categorized as Level 1. Deferred compensation liabilities are classified within other liabilities on the condensed consolidated balance sheets.

        The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of June 30, 2020 and March 31, 2020 (in millions):

	Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	2.9	$	6.6	$	—	$	9.5
Deferred compensation liabilities	9.7		—		—		9.7

	Fair Value as of March 31, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	1.7	$	5.5	$	—	$	7.2
Deferred compensation liabilities	7.4		—		—		7.4

Fair Value of Non-Derivative Financial Instruments

        The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at June 30, 2020 and March 31, 2020 due to the short-term nature of those instruments. The fair value of long-term debt as of June 30, 2020 and March 31, 2020 was approximately $1,224.1 million and $1,398.1 million, respectively. The fair value is based on quoted market prices for the same instruments.

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Commitments and Contingencies

3 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Warranties:

        The Company offers warranties on the sales of certain products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management's estimate of the level of future claims. The following table presents changes in the Company's product warranty liability (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Balance at beginning of period	$	6.7	$	7.2
Charged to operations	1.8		0.7
Claims settled	(0.5)		(0.5)
Balance at end of period	$	8.0	$	7.4

Contingencies:

        The Company's subsidiaries are involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business involving, among other things, product liability, commercial, employment, workers' compensation, intellectual property claims and environmental matters. The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when liability is probable and those costs are capable of being reasonably estimated. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss or recovery, based upon current information, management believes the eventual outcome of these unresolved legal actions, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

        In connection with its sale, Invensys plc ("Invensys") provided the Company with indemnification against certain contingent liabilities, including certain pre-closing environmental liabilities. The Company believes that, pursuant to such indemnity obligations, Invensys is obligated to defend and indemnify the Company with respect to the matters described below relating to the Ellsworth Industrial Park Site and to various asbestos claims. The indemnity obligations relating to the matters described below are subject, together with indemnity obligations relating to other matters, to an overall dollar cap equal to the purchase price, which is an amount in excess of $900 million. The following paragraphs summarize the most significant actions and proceedings:

•In 2002, Rexnord Industries, LLC ("Rexnord Industries") was named as a potentially responsible party ("PRP"), together with at least ten other companies, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the "Site"), by the United States Environmental Protection Agency ("USEPA"), and the Illinois Environmental Protection Agency ("IEPA"). Rexnord Industries' Downers Grove property is situated within the Ellsworth Industrial Complex. The USEPA and IEPA allege there have been one or more releases or threatened releases of chlorinated solvents and other hazardous substances, pollutants or contaminants, allegedly including but not limited to a release or threatened release on or from the Company's property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of USEPA's past costs. In early 2020, Rexnord Industries entered into an administrative order with the USEPA to do remediation work on its Downers Grove property. Rexnord Industries' allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending property damage and personal injury lawsuits against the Company related to the Site have been settled or dismissed. Pursuant to its indemnity obligation, Invensys continues to defend the Company in known matters related to the Site, including the costs of the remediation work pursuant to the 2020 administrative order, and has paid 100% of the costs to date.

•Multiple lawsuits (with approximately 300 claimants) are pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain brakes and clutches previously manufactured by the Company's Stearns division and/or its predecessor owners. Invensys and FMC, prior owners of the Stearns business, have paid 100% of the costs to date related to the Stearns lawsuits. Similarly, the Company's Prager subsidiary is the subject of claims by multiple claimants alleging personal injuries due to the alleged presence of asbestos in a product allegedly manufactured by Prager. However, all these claims are currently on the Texas Multi-district Litigation inactive docket, and the Company does not believe that they will become active in the future. To date, the Company's insurance providers have paid 100% of the costs related to the Prager asbestos matters. The Company believes that the combination of its insurance coverage and the Invensys indemnity obligations will cover any future costs of these matters.

        In connection with the Company's acquisition of The Falk Corporation ("Falk"), Hamilton Sundstrand provided the Company with indemnification against certain products-related asbestos exposure liabilities. The Company believes that, pursuant to such indemnity obligations, Hamilton Sundstrand is obligated to defend and indemnify the Company with respect to the asbestos claims described below, and that, with respect to these claims, such indemnity obligations are not subject to any time or dollar limitations.

        The following paragraph summarizes the most significant actions and proceedings for which Hamilton Sundstrand has accepted responsibility:

•Falk, through its successor entity, is a defendant in multiple lawsuits pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain clutches and drives previously manufactured by Falk. There are approximately 100 claimants in these suits. The ultimate outcome of these lawsuits cannot presently be determined. Hamilton Sundstrand is defending the Company in these lawsuits pursuant to its indemnity obligations and has paid 100% of the costs to date. 

        Certain Water Management subsidiaries are also subject to asbestos litigation. As of June 30, 2020, Zurn and numerous other unrelated companies were defendants in approximately 6,000 asbestos related lawsuits representing approximately 7,000 claims. Plaintiffs' claims allege personal injuries caused by exposure to asbestos used primarily in industrial boilers formerly manufactured by a segment of Zurn. Zurn did not manufacture asbestos or asbestos components. Instead, Zurn purchased them from suppliers. These claims are being handled pursuant to a defense strategy funded by insurers.

        As of June 30, 2020, the Company estimates the potential liability for the asbestos-related claims described above as well as the claims expected to be filed in the next ten years to be approximately $50.0 million, of which Zurn expects its insurance carriers to pay approximately $38.0 million in the next ten years on such claims, with the balance of the estimated liability being paid in subsequent years. The $50.0 million was developed based on actuarial studies and represents the projected indemnity payout for current and future claims. There are inherent uncertainties involved in estimating the number of future asbestos claims, future settlement costs, and the effectiveness of defense strategies and settlement initiatives. As a result, actual liability could differ from the estimate described herein and could be substantial. The liability for the asbestos-related claims is recorded in Other liabilities within the condensed consolidated balance sheets.

        Management estimates that its available insurance to cover this potential asbestos liability as of June 30, 2020, is in excess of the 10 year estimated exposure, and accordingly, believes that all current claims are covered by insurance.

        As of June 30, 2020, the Company had a recorded receivable from its insurance carriers of $50.0 million, which corresponds to the amount of this potential asbestos liability that is covered by available insurance and is currently determined to be probable of recovery. However, there is no assurance the Company's current insurance coverage will ultimately be available or that this asbestos liability will not ultimately exceed the Company's coverage limits. Factors that could cause a decrease in the amount of available coverage or create gaps in coverage include: changes in law governing the policies, potential disputes and settlements with the carriers regarding the scope of coverage, and insolvencies of one or more of the Company's carriers. The receivable for probable asbestos-related recoveries is recorded in Other assets within the condensed consolidated balance sheets.

        Certain Company subsidiaries were named as defendants in a number of individual and class action lawsuits in various United States courts claiming damages due to the alleged failure or anticipated failure of Zurn brass fittings on the PEX plumbing systems in homes and other structures. In fiscal 2013, the Company reached a court-approved agreement to settle the liability underlying this litigation.  The settlement was designed to resolve, on a national basis, the Company's overall exposure for both known and unknown claims related to the alleged failure or anticipated failure of such fittings, subject to the right of eligible class members to opt-out of the settlement and pursue their claims independently.  The settlement utilized a seven year claims fund, which was capped at $20.0 million, and was funded in installments over the seven year period based on claim activity and minimum funding criteria.  The seven year filing period expired on April 1, 2020. Any claims after April 1, 2020 are time barred. The Company expects to make payment on any remaining timely filed claims and close out the settlement fund.

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Retirement Benefits

3 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Retirement Benefits

Retirement Benefits

The components of net periodic benefit cost are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Pension Benefits:
Service cost	$	0.1	$	0.1
Interest cost	4.6		5.6
Expected return on plan assets	(4.6)		(5.7)
Settlement	—		0.8
Net periodic benefit cost	$	0.1	$	0.8
Other Postretirement Benefits:
Interest cost	$	0.1	$	0.2
Amortization:
Prior service credit	(0.1)		(0.1)
Net periodic benefit cost	$	—	$	0.1

        The service cost component of net periodic benefits is presented within Cost of sales and Selling, general and administrative expenses in the condensed consolidated statements of operations, while the other components of net periodic benefit cost are presented within Other (expense) income, net.

        During the three months ended June 30, 2020 and June 30, 2019, the Company made contributions of $1.0 million and $0.1 million, respectively, to its U.S. qualified pension plan trusts.

        During fiscal 2019, the Company offered participants in a domestic defined benefit plan the opportunity to receive a lump sum settlement as part of the termination process for that plan. During the first quarter of fiscal 2020, the obligations associated with the individuals that did not accept the lump sum settlement offer were transferred to an insurance company through the purchase of an annuity. The Company's cash contribution to purchase the annuity contract was $3.9 million.

Following the purchase of the annuity contract, the Company had no remaining obligations to participants of this plan. The termination of this plan resulted in the recognition of $0.8 million non-cash pre-tax losses during the three months ended June 30, 2019.

         See Note 16, Retirement Benefits, to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding retirement benefits.

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Leases

3 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Leases

The Company determines if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. The Company has operating and finance leases primarily associated with real estate, automobiles and manufacturing and office equipment.

The Company has lease agreements that include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of the underlying assets. The term of the Company’s leases generally reflects the non-cancellable period of the lease. Some of the Company’s lease agreements include options to extend or terminate the lease, which are excluded from the minimum lease terms unless the Company is reasonably certain the option will be exercised. Lease expense for operating leases and amortization expense for finance leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets and are instead recognized on a straight-line basis over the lease term

Right-of-use (“ROU”) assets and liabilities are recognized in the condensed consolidated balance sheets based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the lease commencement date, any initial direct costs incurred, and are reduced by lease incentives received. As most of the Company’s leases do not provide an implicit rate, the present value of lease payments is determined using the Company’s incremental borrowing rate at the commencement date of the lease. Lease payments included in the measurement of the lease liabilities are comprised of fixed payments, variable payments that depend on an index or rate, and amounts probable to be paid if an option is reasonably certain to be exercised. Variable lease payments, typically based on usage of the asset or changes in an index or rate, are excluded from the lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

        ROU assets and lease liability balances recorded on the condensed consolidated balance sheets are summarized as follows (in millions):

Leases	Classification	June 30, 2020		March 31, 2020
Assets:
Operating ROU assets	Other assets	$	68.8	$	71.1
Finance ROU assets	Property, plant and equipment, net (1)	27.1		27.3
Total ROU assets		$	95.9	$	98.4
Liabilities:
Current
Operating	Other current liabilities	$	12.6	$	12.8
Finance	Current maturities of debt	0.5		0.5
Non-current
Operating	Other liabilities	60.8		63.1
Finance	Long-term debt	27.3		27.4
Total lease liabilities		$	101.2	$	103.8

____________________

(1)Finance lease assets are recorded net of accumulated amortization of $1.3 million and $1.0 million as of June 30, 2020 and March 31, 2020, respectively.

        The components of lease expense reported in the condensed consolidated statements of operations are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating lease expenses (1)	$	4.5	$	3.6
Finance lease expenses:
Depreciation of finance ROU assets (1)	0.3		0.2
Interest on lease liabilities (2)	0.4		0.3
Total finance lease expense	0.7		0.5
Variable and short-term lease expense (1)	1.1		1.2
Total lease expense	$	6.3	$	5.3

____________________

(1)Included in cost of sales and selling, general and administrative expenses.

(2)Included in interest expense, net.

Future minimum lease payments under operating and finance leases as of June 30, 2020 are as follows (in millions):

Years ending December 31,	Operating Leases (1)		Finance Leases (1)
2020 (through December 31, 2020)	$	7.4	$	1.1
2021	14.4		2.1
2022	14.8		2.0
2023	12.1		2.0
2024	10.0		2.0
Thereafter	30.3		45.1
Total future minimum lease payments	89.0		54.3
Less: Imputed interest	(15.6)		(26.5)
Total lease liabilities	$	73.4	$	27.8

____________________

(1)Excludes legally binding minimum lease payments for leases signed but not yet commenced.

        The weighted-average remaining lease terms and discount rates for leases are as follows:

	Three Months Ended
Lease Term and Discount Rate	June 30, 2020		June 30, 2019
Weighted-average remaining lease terms (years):
Operating leases	6.6		5.2
Finance leases	27.6		29.2
Weighted-average discount rate:
Operating leases	4.8	%	3.9	%
Finance leases	5.7	%	5.7	%

        Cash paid for amounts included in the measurement of lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating cash flows from operating leases	$	3.8	$	3.6
Operating cash flows from finance leases	0.4		0.3
Financing cash flows from finance leases	0.1		0.2

        ROU assets obtained in exchange for lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating leases	$	—	$	1.2

Leases

Leases

The Company determines if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. The Company has operating and finance leases primarily associated with real estate, automobiles and manufacturing and office equipment.

The Company has lease agreements that include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of the underlying assets. The term of the Company’s leases generally reflects the non-cancellable period of the lease. Some of the Company’s lease agreements include options to extend or terminate the lease, which are excluded from the minimum lease terms unless the Company is reasonably certain the option will be exercised. Lease expense for operating leases and amortization expense for finance leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets and are instead recognized on a straight-line basis over the lease term

Right-of-use (“ROU”) assets and liabilities are recognized in the condensed consolidated balance sheets based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the lease commencement date, any initial direct costs incurred, and are reduced by lease incentives received. As most of the Company’s leases do not provide an implicit rate, the present value of lease payments is determined using the Company’s incremental borrowing rate at the commencement date of the lease. Lease payments included in the measurement of the lease liabilities are comprised of fixed payments, variable payments that depend on an index or rate, and amounts probable to be paid if an option is reasonably certain to be exercised. Variable lease payments, typically based on usage of the asset or changes in an index or rate, are excluded from the lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

        ROU assets and lease liability balances recorded on the condensed consolidated balance sheets are summarized as follows (in millions):

Leases	Classification	June 30, 2020		March 31, 2020
Assets:
Operating ROU assets	Other assets	$	68.8	$	71.1
Finance ROU assets	Property, plant and equipment, net (1)	27.1		27.3
Total ROU assets		$	95.9	$	98.4
Liabilities:
Current
Operating	Other current liabilities	$	12.6	$	12.8
Finance	Current maturities of debt	0.5		0.5
Non-current
Operating	Other liabilities	60.8		63.1
Finance	Long-term debt	27.3		27.4
Total lease liabilities		$	101.2	$	103.8

____________________

(1)Finance lease assets are recorded net of accumulated amortization of $1.3 million and $1.0 million as of June 30, 2020 and March 31, 2020, respectively.

        The components of lease expense reported in the condensed consolidated statements of operations are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating lease expenses (1)	$	4.5	$	3.6
Finance lease expenses:
Depreciation of finance ROU assets (1)	0.3		0.2
Interest on lease liabilities (2)	0.4		0.3
Total finance lease expense	0.7		0.5
Variable and short-term lease expense (1)	1.1		1.2
Total lease expense	$	6.3	$	5.3

____________________

(1)Included in cost of sales and selling, general and administrative expenses.

(2)Included in interest expense, net.

Future minimum lease payments under operating and finance leases as of June 30, 2020 are as follows (in millions):

Years ending December 31,	Operating Leases (1)		Finance Leases (1)
2020 (through December 31, 2020)	$	7.4	$	1.1
2021	14.4		2.1
2022	14.8		2.0
2023	12.1		2.0
2024	10.0		2.0
Thereafter	30.3		45.1
Total future minimum lease payments	89.0		54.3
Less: Imputed interest	(15.6)		(26.5)
Total lease liabilities	$	73.4	$	27.8

____________________

(1)Excludes legally binding minimum lease payments for leases signed but not yet commenced.

        The weighted-average remaining lease terms and discount rates for leases are as follows:

	Three Months Ended
Lease Term and Discount Rate	June 30, 2020		June 30, 2019
Weighted-average remaining lease terms (years):
Operating leases	6.6		5.2
Finance leases	27.6		29.2
Weighted-average discount rate:
Operating leases	4.8	%	3.9	%
Finance leases	5.7	%	5.7	%

        Cash paid for amounts included in the measurement of lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating cash flows from operating leases	$	3.8	$	3.6
Operating cash flows from finance leases	0.4		0.3
Financing cash flows from finance leases	0.1		0.2

        ROU assets obtained in exchange for lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating leases	$	—	$	1.2

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Stock-Based Compensation

3 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

        The Rexnord Corporation Performance Incentive Plan (the "Plan") is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons to encourage them to maximize Rexnord's performance and create value for Rexnord's stockholders. For the three months ended June 30, 2020 and June 30, 2019, the Company recognized $13.3 million and $6.9 million, of stock-based compensation expense, respectively.

During the three months ended June 30, 2020, the Company granted the following stock options, restricted stock units, performance stock units and common stock to directors, executive officers, and certain other employees:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Stock options	196,902	$	7.68
Restricted stock units	426,921	$	25.52
Performance stock units	547,374	$	25.52
Common stock	66,557	$	27.68

        See Note 15, Stock-Based Compensation, to the audited consolidated financial statements of the Company's March 31, 2020 Annual Report on Form 10-K for further information regarding stock-based compensation.

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Business Segment Information

3 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information The Company's results of operations are reported in two business segments, consisting of the Process & Motion Control platform and the Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services. Products and services are marketed and sold globally under widely recognized brand names, including Rexnord®, Rex®, Addax®, Euroflex®, Falk®, FlatTop®, Cambridge®, Link-Belt®, Omega®, PSI®, Shafer®, Stearns®, Highfield®, Thomas®, Centa®, and Tollok^TM. Process & Motion Control products and services are sold into a diverse group of attractive end markets, including food and beverage, aerospace, mining, petrochemical, energy and power generation, cement and aggregates, forest and wood products, agriculture, and general industrial and automation applications. The Water Management platform designs,

procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing, and site works products for primarily nonresidential buildings. Products are marketed and sold under widely recognized brand names, including Zurn®, Wilkins®, Green Turtle®, World Dryer®, StainlessDrains.com^TM and JUST®. The financial information of the Company's segments is regularly evaluated by the chief operating decision maker in determining resource allocation and assessing performance. Management evaluates the performance of each business segment based on its operating results. The same accounting policies are used throughout the organization. See Note 1, Basis of Presentation and Significant Accounting Policies for further information.  

        During fiscal 2019, the Company sold its VAG business included within the Water Management platform and in accordance with the authoritative guidance, the operating results of the VAG business are reported as discontinued operations. See Note 4, Discontinued Operations, for further information.

Business Segment Information:

(in Millions)

	Three Months Ended
	June 30, 2020		June 30, 2019
Net sales
Process & Motion Control	$	274.4	$	330.1
Water Management	174.7		178.2
Consolidated net sales	449.1		508.3
Income from operations
Process & Motion Control	39.6		55.1
Water Management	40.1		40.0
Corporate	(13.7)		(14.9)
Consolidated income from operations	66.0		80.2
Non-operating expense:
Interest expense, net	(13.4)		(15.5)
Other income (expense), net	0.4		(1.5)
Income before income taxes	53.0		63.2
Provision for income taxes	(17.2)		(14.8)
Equity method investment income	—		0.1
Net income from continuing operations	35.8		48.5
Loss from discontinued operations, net of tax	—		(1.8)
Net income	35.8		46.7
Non-controlling interest income	0.2		0.2
Net income attributable to Rexnord	35.6		46.5
Dividends on preferred stock	—		(5.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Depreciation and amortization
Process & Motion Control	$	14.3	$	14.6
Water Management	7.3		6.3
Corporate	0.1		0.1
Consolidated	$	21.7	$	21.0
Capital expenditures
Process & Motion Control	$	7.2	$	4.6
Water Management	1.3		1.3
Consolidated	$	8.5	$	5.9

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Guarantor Subsidiaries

3 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Guarantor Subsidiaries

Guarantor Subsidiaries

The following schedules present condensed consolidating financial information as of June 30, 2020 and March 31, 2020, and for the three month periods ended June 30, 2020 and 2019 for (a) Rexnord Corporation, the parent company (the "Parent"); (b) RBS Global, Inc. and its wholly-owned subsidiary Rexnord LLC, which together are co-issuers (the “Issuers”) of the outstanding Notes; (c) on a combined basis, the domestic subsidiaries of the Company, all of which are wholly-owned by the Issuers (collectively, the “Guarantor Subsidiaries”) and guarantors of those Notes; and (d) on a combined basis, the foreign subsidiaries of the Company (collectively, the “Non-Guarantor Subsidiaries”). Separate financial statements of the Guarantor Subsidiaries are not presented because their guarantees of the senior notes and senior subordinated notes are full, unconditional and joint and several, and the Company believes separate financial statements and other disclosures regarding the Guarantor Subsidiaries are not material to investors.

Condensed Consolidating Balance Sheets

June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4
Receivables, net	—		—		174.8		97.3		—		272.1
Inventories	—		—		244.6		104.2		—		348.8
Other current assets	—		0.1		17.0		23.9		—		41.0
Total current assets	—		0.4		596.8		418.1		—		1,015.3
Property, plant and equipment, net	—		—		253.9		121.7		—		375.6
Intangible assets, net	—		—		417.5		88.2		—		505.7
Goodwill	—		—		1,044.2		279.3		—		1,323.5
Investment in:
Issuer subsidiaries	1,424.2		—		—		—		(1,424.2)		—
Guarantor subsidiaries	—		3,449.0		—		—		(3,449.0)		—
Non-guarantor subsidiaries	—		—		636.1		—		(636.1)		—
Other assets	—		0.8		87.4		58.9		—		147.1
Total assets	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.5	$	0.9	$	—	$	76.4
Trade payables	—		—		100.9		59.2		—		160.1
Compensation and benefits	—		—		28.3		16.5		—		44.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		1.4		75.1		42.0		—		118.5
Total current liabilities	—		1.4		281.6		120.0		—		403.0
Long-term debt	—		1,117.0		26.9		4.1		—		1,148.0
Note payable to (receivable from) affiliates, net	69.9		907.6		(1,054.8)		77.3		—		—
Pension and postretirement benefit obligations	—		—		142.4		47.4		—		189.8
Deferred income taxes	—		—		100.7		22.7		—		123.4
Other liabilities	0.6		—		90.1		58.6		—		149.3
Total liabilities	70.5		2,026.0		(413.1)		330.1		—		2,013.5
Total stockholders' equity	1,353.7		1,424.2		3,449.0		636.1		(5,509.3)		1,353.7
Total liabilities and stockholders' equity	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2

Condensed Consolidating Balance Sheets

March 31, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	11.0	$	0.4	$	383.9	$	178.1	$	—	$	573.4
Receivables, net	—		—		223.5		111.2		—		334.7
Inventories	—		—		224.8		92.7		—		317.5
Other current assets	—		—		20.5		18.2		—		38.7
Total current assets	11.0		0.4		852.7		400.2		—		1,264.3
Property, plant and equipment, net	—		—		256.1		122.7		—		378.8
Intangible assets, net	—		—		424.8		89.4		—		514.2
Goodwill	—		—		1,043.6		278.3		—		1,321.9
Investment in:
Issuer subsidiaries	1,381.1		—		—		—		(1,381.1)		—
Guarantor subsidiaries	—		3,324.9		—		—		(3,324.9)		—
Non-guarantor subsidiaries	—		—		621.1		—		(621.1)		—
Other assets	—		—		88.7		59.2		—		147.9
Total assets	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.4	$	1.0	$	—	$	76.4
Trade payables	—		—		123.9		61.7		—		185.6
Compensation and benefits	—		—		42.4		19.4		—		61.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		7.9		79.9		40.7		—		128.5
Total current liabilities	—		7.9		323.4		124.2		—		455.5
Long-term debt	—		1,290.9		101.8		4.3		—		1,397.0
Note payable to (receivable from), net	77.9		645.4		(795.9)		72.6		—		—
Pension and postretirement benefit obligations	—		—		142.8		46.8		—		189.6
Deferred income taxes	—		—		98.6		22.4		—		121.0
Other liabilities	0.5		—		91.4		58.4		—		150.3
Total liabilities	78.4		1,944.2		(37.9)		328.7		—		2,313.4
Total stockholders' equity	1,313.7		1,381.1		3,324.9		621.1		(5,327.1)		1,313.7
Total liabilities and stockholders' equity	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	341.6	$	141.9	$	(34.4)	$	449.1
Cost of sales	—		—		204.6		102.0		(34.4)		272.2
Gross profit	—		—		137.0		39.9		—		176.9
Selling, general and administrative expenses	—		—		77.9		22.3		—		100.2
Restructuring and other similar charges	—		—		2.3		(0.6)		—		1.7
Amortization of intangible assets	—		—		7.4		1.6		—		9.0
Income from operations	—		—		49.4		16.6		—		66.0
Non-operating income (expense):
Interest income (expense), net:
To third parties	—		(12.8)		(0.7)		0.1		—		(13.4)
To affiliates	9.6		5.8		(14.9)		(0.5)		—		—
Other expense, net	—		(0.1)		0.2		0.3		—		0.4
Income (loss) before income taxes	9.6		(7.1)		34.0		16.5		—		53.0
Provision for income taxes	—		—		(10.4)		(6.8)		—		(17.2)
Equity method investment income	—		—		—		—		—		—
Income (loss) before equity in earnings of subsidiaries	9.6		(7.1)		23.6		9.7		—		35.8
Equity in income of subsidiaries	26.2		33.3		9.7		—		(69.2)		—
Net income from continuing operations	35.8		26.2		33.3		9.7		(69.2)		35.8
Loss from discontinued operations, net of tax	—		—		—		—		—		—
Net income	35.8		26.2		33.3		9.7		(69.2)		35.8
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	35.8		26.2		33.3		9.5		(69.2)		35.6
Dividends on preferred stock	—		—		—		—		—		—
Net income attributable to Rexnord common stockholders	$	35.8	$	26.2	$	33.3	$	9.5	$	(69.2)	$	35.6
Comprehensive income	$	35.8	$	27.2	$	33.4	$	14.9	$	(69.2)	$	42.1

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	391.7	$	161.3	$	(44.7)	$	508.3
Cost of sales	—		—		238.0		113.4		(44.7)		306.7
Gross profit	—		—		153.7		47.9		—		201.6
Selling, general and administrative expenses	—		—		82.6		26.9		—		109.5
Restructuring and other similar charges	—		—		2.5		0.7		—		3.2
Amortization of intangible assets	—		—		6.9		1.8		—		8.7
Income from operations	—		—		61.7		18.5		—		80.2
Non-operating (expense) income:
Interest income (expense), net:
To third parties	—		(15.3)		(0.5)		0.3		—		(15.5)
To affiliates	0.3		8.7		(7.0)		(2.0)		—		—
Other expense, net	—		(0.1)		(0.7)		(0.7)		—		(1.5)
Income (loss) before income taxes	0.3		(6.7)		53.5		16.1		—		63.2
Provision for income taxes	—		—		(9.5)		(5.3)		—		(14.8)
Equity method investment income	—		—		—		0.1		—		0.1
Income (loss) before equity in earnings of subsidiaries	0.3		(6.7)		44.0		10.9		—		48.5
Equity in income of subsidiaries	46.5		53.2		9.2		—		(108.9)		—
Net income from continuing operations	46.8		46.5		53.2		10.9		(108.9)		48.5
Loss from discontinued operations, net of tax	—		—		—		(1.8)		—		(1.8)
Net income	46.8		46.5		53.2		9.1		(108.9)		46.7
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	46.8		46.5		53.2		8.9		(108.9)		46.5
Dividends on preferred stock	(5.8)		—		—		—		—		(5.8)
Net income attributable to Rexnord common stockholders	$	41.0	$	46.5	$	53.2	$	8.9	$	(108.9)	$	40.7
Comprehensive income	$	46.8	$	47.8	$	54.0	$	7.0	$	(108.9)	$	46.7

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	1.7	$	250.0	$	(217.5)	$	13.4	$	—	$	47.6
Investing activities
Expenditures for property, plant and equipment	—		—		(6.0)		(2.5)		—		(8.5)
Proceeds from dispositions of long-lived assets	—		—		—		0.9		—		0.9
Cash used for investing activities	—		—		(6.0)		(1.6)		—		(7.6)
Financing activities
Repayments of debt	—		(250.0)		(0.1)		(0.2)		—		(250.3)
Proceeds from exercise of stock options	6.3		—		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	(9.4)		—		—		—		—		(9.4)
Payment of common stock dividend	(9.6)		—		—		—		—		(9.6)
Cash used for financing activities	(12.7)		(250.0)		(0.1)		(0.2)		—		(263.0)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		3.0		—		3.0
(Decrease) increase in cash and cash equivalents	(11.0)		—		(223.6)		14.6		—		(220.0)
Cash, cash equivalents and restricted cash at beginning of period	11.0		0.3		384.0		178.1		—		573.4
Cash, cash equivalents and restricted cash at end of period	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	5.9	$	0.6	$	(10.7)	$	23.2	$	—	$	19.0
Investing activities
Expenditures for property, plant and equipment	—		—		(4.8)		(1.1)		—		(5.9)
Acquisitions, net of cash acquired	—		—		(24.8)		—		—		(24.8)
Proceeds from dispositions of long-lived assets	—		—		—		1.3		—		1.3
Cash (used for) provided by investing activities	—		—		(29.6)		0.2		—		(29.4)
Financing activities
Repayments of debt	—		—		—		(3.9)		—		(3.9)
Proceeds from exercise of stock options	4.8		—		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	(5.7)		—		—		—		—		(5.7)
Payments of preferred stock dividends	(5.8)		—		—		—		—		(5.8)
Cash used for by financing activities	(6.7)		—		—		(3.9)		—		(10.6)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		0.3		—		0.3
(Decrease) increase in cash and cash equivalents	(0.8)		0.6		(40.3)		19.8		—		(20.7)
Cash, cash equivalents and restricted cash at beginning of period	1.4		0.2		107.7		183.2		—		292.5
Cash, cash equivalents and restricted cash at end of period	$	0.6	$	0.8	$	67.4	$	203.0	$	—	$	271.8

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Subsequent Events	3 Months Ended
	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn July 23, 2020, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.08 per-share to be paid on September 8, 2020, to stockholders of record as of August 20, 2020.

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Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate that is expected to be discontinued because of reference rate reform. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this ASU are effective for all entities as of March 12, 2020, through December 31, 2022. The Company did not modify any material contracts due to reference rate reform during the three months ended June 30, 2020. The Company will continue to evaluate the impact this guidance will have on its consolidated financial statements for all future transactions affected by reference rate reform during the time permitted.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The FASB issued this update as part of its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general

principles in Topic 740 and also improve consistent application of other areas by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities with fiscal years beginning after December 15, 2020, and early adoption is permitted. Certain amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.  

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The Company adopted ASU No. 2016-13, as amended, on April 1, 2020, using a modified-retrospective approach. There was no impact to the Company's consolidated financial statements.

        In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"), which updates the standard to remove disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. ASU 2018-14 is effective for public business entities with fiscal years beginning after December 15, 2020, on a retroactive basis. This guidance will have no impact on the Company's consolidated financial statements upon adoption other than with respect to the updated disclosure requirements.

Reclassifications

Reclassifications

        Certain prior year amounts have been reclassified to conform to the presentation used for the three months ended June 30, 2020.

Revenue Recognition

Revenue Recognition

        A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606, Revenue from Contracts with Customers ("ASC 606"). A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer.

        When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continues to be recognized as an expense when the products are sold. When the contract provides the customer the right to return eligible products or when the customer is part of a sales rebate program,

the Company reduces revenue at the point of sale using current facts and historical experience by using an estimate for expected product returns and rebates associated with the transaction. The Company adjusts these estimates at the earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed. Accordingly, an increase or decrease to revenue is recognized at that time.

Transaction Price Measurement, Tax Exclusion

Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a component of cost of sales in the condensed consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as Cost of sales in the condensed consolidated statements of operations.

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Restructuring and Other Similar Charges (Tables)

3 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following table summarizes the Company's restructuring and other similar charges during the three months ended June 30, 2020 and June 30, 2019, by classification of operating segment (in millions):

	Restructuring and Other Similar Charges Three Months Ended June 30, 2020
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	0.2	$	0.9	$	0.1	$	1.2
Contract termination and other associated costs	0.5		—		—		0.5
Total restructuring and other similar costs	$	0.7	$	0.9	$	0.1	$	1.7

	Restructuring and Other Similar Charges Three Months Ended June 30, 2019
	Process & Motion Control		Water Management		Corporate		Consolidated
Employee termination benefits	$	2.6	$	0.3	$	—	$	2.9
Contract termination and other associated costs	0.3		—		—		0.3
Total restructuring and other similar costs	$	2.9	$	0.3	$	—	$	3.2

Summary of Activity in Restructuring Accrual

The following table summarizes the activity in the Company's restructuring accrual for the three months ended June 30, 2020 (in millions):

	Employee termination benefits		Contract termination and other associated costs		Total
Restructuring accrual, March 31, 2020 (1)	$	8.3	$	1.5	$	9.8
Charges	1.2		0.5		1.7
Cash payments	(3.4)		(0.6)		(4.0)
Restructuring accrual, June 30, 2020 (1)	$	6.1	$	1.4	$	7.5

____________________

(1)The restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.

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Revenue Recognition (Tables)

3 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present our revenue disaggregated by customer type and geography (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Original equipment manufacturers/end users	$	158.4	$	186.2
Maintenance, repair, and operations	116.0		143.9
Total Process & Motion Control	$	274.4	$	330.1
Water safety, quality, flow control and conservation	$	163.2	$	165.0
Water infrastructure	11.5		13.2
Total Water Management	$	174.7	$	178.2

	Three Months Ended June 30, 2020
	Process & Motion Control		Water Management
United States and Canada	$	169.1	$	171.9
Europe	65.6		—
Rest of world	39.7		2.8
Total	$	274.4	$	174.7

	Three Months Ended June 30, 2019
	Process & Motion Control		Water Management
United States and Canada	$	214.4	$	174.8
Europe	72.4		—
Rest of world	43.3		3.4
Total	$	330.1	$	178.2

Changes in Contract Assets and Liabilities

The following table presents changes in the Company’s contract assets and liabilities during the three months ended June 30, 2020 (in millions):

	Balance Sheet Classification	March 31, 2020		Additions		Deductions		June 30, 2020
Contract assets	Receivables, net	$	0.5	$	0.1	$	—	$	0.6
Contract liabilities (1)	Other current liabilities	$	7.3	$	3.1	$	(4.4)	$	6.0

____________________

(1)Contract liabilities are reduced when revenue is recognized.

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Earnings per Share (Tables)

3 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the basis for income per share computations (in millions, except share amounts):

	Three Months Ended
	June 30, 2020		June 30, 2019
Basic net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		5.8
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	42.5
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Diluted net income per share attributable to Rexnord common stockholders
Numerator:
Net income from continuing operations	$	35.8	$	48.5
Less: Non-controlling interest income	0.2		0.2
Less: Dividends on preferred stock	—		—
Net income from continuing operations attributable to Rexnord common stockholders	$	35.6	$	48.3
Loss from discontinued operations, net of tax	$	—	$	(1.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Plus: Dividends on preferred stock	—		5.8
Net income attributable to Rexnord common stockholders	$	35.6	$	46.5
Denominator:
Weighted-average common shares outstanding, basic	120,246		105,262
Effect of dilutive equity securities	1,802		2,423
Preferred stock under the "if-converted" method (1)	—		15,979
Weighted-average common shares outstanding, diluted	122,048		123,664

____________________

(1)On November 15, 2019, the Company issued 15,980,050 shares of common stock upon the mandatory conversion of Series A Preferred Stock; see Note 8, Stockholders' Equity for additional information.

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Stockholders' Equity (Tables)

3 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Schedule of Stockholders' Equity

Stockholders' equity consists of the following (in millions):

	Common stock		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2019	$	1.0	$	—	$	1,293.5	$	30.7	$	(96.6)	$	2.4	$	1,231.0
Total comprehensive income	—		—		—		46.5		—		0.2		46.7
Stock-based compensation expense	—		—		6.9		—		—		—		6.9
Proceeds from exercise of stock options	—		—		4.8		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	—		—		(5.7)		—		—		—		(5.7)
Preferred stock dividends ($14.375 per share)	—		—		—		(5.8)		—		—		(5.8)
Balance at June 30, 2019	$	1.0	$	—	$	1,299.5	$	71.4	$	(96.6)	$	2.6	$	1,277.9

	Common stock (1)		Preferred stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interest (2)		Total stockholders’ equity
Balance at March 31, 2020	$	1.2	$	—	$	1,348.3	$	85.9	$	(124.4)	$	2.7	$	1,313.7
Total comprehensive income	—		—		—		35.6		6.3		0.2		42.1
Stock-based compensation expense	—		—		10.6		—		—		—		10.6
Proceeds from exercise of stock options	—		—		6.3		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	—		—		(9.4)		—		—		—		(9.4)
Common stock dividends ($0.08 per share)	—		—		—		(9.6)		—		—		(9.6)
Balance at June 30, 2020	$	1.2	$	—	$	1,355.8	$	111.9	$	(118.1)	$	2.9	$	1,353.7

____________________

(1)For the three months ended June 30, 2020, the Company issued 936,552 shares of common stock upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock awards.

(2)During the first quarter of fiscal 2020, represents a 30% non-controlling interest in two Process & Motion Control controlled subsidiaries. During the second quarter of fiscal 2020, the Company acquired the remaining 30% non-controlling interest associated with one of the aforementioned Process & Motion Control joint ventures for a cash purchase price of $0.3 million. Following this transaction, represents a 30% non-controlling interest in the remaining Process & Motion Control controlled subsidiary and a 5% non-controlling interest in another Process & Motion Control controlled subsidiary.

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the three months ended June 30, 2020, are as follows (in millions):

	Foreign Currency Translation		Pension and Postretirement Plans		Total
Balance at March 31, 2020	$	(83.8)	$	(40.6)	$	(124.4)
Other comprehensive income before reclassifications	6.4		—		6.4
Amounts reclassified from accumulated other comprehensive loss	—		(0.1)		(0.1)
Net current period other comprehensive income (loss)	6.4		(0.1)		6.3
Balance at June 30, 2020	$	(77.4)	$	(40.7)	$	(118.1)

Reclassification out of Accumulated Other Comprehensive Loss

The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three months ended June 30, 2020 and June 30, 2019 (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019		Income Statement Line
Pension and other postretirement plans
Amortization of prior service credit	$	(0.1)	$	(0.1)	Other income (expense), net
Settlement	—		0.8		Other income (expense), net
Benefit for income taxes	—		(0.2)
Total net of tax	$	(0.1)	$	0.5

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Inventories (Tables)

3 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Summary of Major Classes of Inventories

The major classes of inventories are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Finished goods	$	168.9	$	145.6
Work in progress	41.8		43.7
Purchased components	76.3		70.4
Raw materials	58.9		54.9
Inventories at First-in, First-Out ("FIFO") cost	345.9		314.6
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost	2.9		2.9
	$	348.8	$	317.5

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The changes in the net carrying value of goodwill for the three months ended June 30, 2020, by operating segment are presented below (in millions):

	Process & Motion Control		Water Management		Consolidated
Net carrying amount as of March 31, 2020	$	1,121.4	$	200.5	$	1,321.9
Currency translation adjustments	0.6		0.3		0.9
Purchase accounting adjustments (1)	—		0.7		0.7
Net carrying amount as of June 30, 2020	$	1,122.0	$	201.5	$	1,323.5

____________________

(1) Refer to Note 2, Acquisitions for additional information regarding acquisitions.

Schedule of Gross Carrying Amount and Accumulated Amortization for Finite-Lived Intangible Assets

The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2020 and March 31, 2020 are as follows (in millions):  

		June 30, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.2	$	(41.5)	$	9.7
Customer relationships (including distribution network)	13 years	748.5		(560.6)		187.9
Tradenames	13 years	42.2		(15.0)		27.2
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.8	$	(617.1)	$	505.7
		March 31, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.1	$	(41.2)	$	9.9
Customer relationships (including distribution network)	13 years	748.0		(552.5)		195.5
Tradenames	13 years	42.1		(14.2)		27.9
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.1	$	(607.9)	$	514.2

Schedule of Gross Carrying Amount and Accumulated Amortization for Infinite-Lived Intangible Assets

The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2020 and March 31, 2020 are as follows (in millions):  

		June 30, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.2	$	(41.5)	$	9.7
Customer relationships (including distribution network)	13 years	748.5		(560.6)		187.9
Tradenames	13 years	42.2		(15.0)		27.2
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.8	$	(617.1)	$	505.7
		March 31, 2020
	Weighted Average Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Patents	10 years	$	51.1	$	(41.2)	$	9.9
Customer relationships (including distribution network)	13 years	748.0		(552.5)		195.5
Tradenames	13 years	42.1		(14.2)		27.9
Intangible assets not subject to amortization - tradenames		280.9		—		280.9
Total intangible assets, net	13 years	$	1,122.1	$	(607.9)	$	514.2

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Other Current Liabilities (Tables)

3 Months Ended

Jun. 30, 2020

Other Liabilities Disclosure [Abstract]

Schedule of Other Current Liabilities

Other current liabilities are summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Contract liabilities	$	6.0	$	7.3
Sales rebates	25.2		35.5
Commissions	6.9		7.0
Restructuring and other similar charges (1)	7.5		9.8
Product warranty (2)	8.0		6.7
Risk management (3)	10.8		10.4
Legal and environmental	1.6		1.5
Taxes, other than income taxes	7.5		8.3
Income tax payable	17.1		9.9
Interest payable	1.7		8.3
Current portion of operating lease liability (4)	12.6		12.8
Other	13.6		11.0
	$	118.5	$	128.5

____________________

(1)See more information related to the restructuring obligations within Note 3, Restructuring and Other Similar Charges.

(2)See more information related to the product warranty obligations within Note 16, Commitments and Contingencies.

(3)Includes projected liabilities related to losses arising from automobile, general and product liability claims.

(4)See more information related to leases within Note 18, Leases.

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Long-Term Debt (Tables)

3 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Debt

Long-term debt is summarized as follows (in millions):

	June 30, 2020		March 31, 2020
Term loan (1)	$	621.1	$	620.8
4.875% Senior Notes due 2025 (2)	495.9		495.7
Revolving credit facility (3)	—		249.2
Securitization facility borrowings (4)	74.9		74.9
Finance leases and other subsidiary debt (5)	32.5		32.8
Total	1,224.4		1,473.4
Less current maturities	76.4		76.4
Long-term debt	$	1,148.0	$	1,397.0

____________________

(1)Includes unamortized debt issuance costs of $3.9 million and $4.2 million at June 30, 2020 and March 31, 2020, respectively.

(2)Includes unamortized debt issuance costs of $4.1 million and $4.3 million at June 30, 2020 and March 31, 2020, respectively.

(3)Includes unamortized debt issuance costs of $0.0 million and $0.8 million at June 30, 2020 and March 31, 2020, respectively.

(4)Includes unamortized debt issuance costs of $0.1 million and $0.1 million at June 30, 2020 and March 31, 2020, respectively.

(5)See more information related to finance leases within Note 18, Leases.

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Fair Value Measurements (Tables)

3 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Recognized at Fair Value on a Recurring Basis

The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of June 30, 2020 and March 31, 2020 (in millions):

	Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	2.9	$	6.6	$	—	$	9.5
Deferred compensation liabilities	9.7		—		—		9.7

	Fair Value as of March 31, 2020
	Level 1		Level 2		Level 3		Total
Deferred compensation assets	$	1.7	$	5.5	$	—	$	7.2
Deferred compensation liabilities	7.4		—		—		7.4

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Commitments and Contingencies (Tables)

3 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following table presents changes in the Company's product warranty liability (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Balance at beginning of period	$	6.7	$	7.2
Charged to operations	1.8		0.7
Claims settled	(0.5)		(0.5)
Balance at end of period	$	8.0	$	7.4

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Retirement Benefits (Tables)

3 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The components of net periodic benefit cost are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Pension Benefits:
Service cost	$	0.1	$	0.1
Interest cost	4.6		5.6
Expected return on plan assets	(4.6)		(5.7)
Settlement	—		0.8
Net periodic benefit cost	$	0.1	$	0.8
Other Postretirement Benefits:
Interest cost	$	0.1	$	0.2
Amortization:
Prior service credit	(0.1)		(0.1)
Net periodic benefit cost	$	—	$	0.1

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Leases (Tables)

3 Months Ended

Jun. 30, 2020

Leases [Abstract]

ROU Assets and Lease Liability Balances

ROU assets and lease liability balances recorded on the condensed consolidated balance sheets are summarized as follows (in millions):

Leases	Classification	June 30, 2020		March 31, 2020
Assets:
Operating ROU assets	Other assets	$	68.8	$	71.1
Finance ROU assets	Property, plant and equipment, net (1)	27.1		27.3
Total ROU assets		$	95.9	$	98.4
Liabilities:
Current
Operating	Other current liabilities	$	12.6	$	12.8
Finance	Current maturities of debt	0.5		0.5
Non-current
Operating	Other liabilities	60.8		63.1
Finance	Long-term debt	27.3		27.4
Total lease liabilities		$	101.2	$	103.8

____________________

(1)Finance lease assets are recorded net of accumulated amortization of $1.3 million and $1.0 million as of June 30, 2020 and March 31, 2020, respectively.

Components of Lease Expense

The components of lease expense reported in the condensed consolidated statements of operations are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating lease expenses (1)	$	4.5	$	3.6
Finance lease expenses:
Depreciation of finance ROU assets (1)	0.3		0.2
Interest on lease liabilities (2)	0.4		0.3
Total finance lease expense	0.7		0.5
Variable and short-term lease expense (1)	1.1		1.2
Total lease expense	$	6.3	$	5.3

____________________

(1)Included in cost of sales and selling, general and administrative expenses.

(2)Included in interest expense, net.

The weighted-average remaining lease terms and discount rates for leases are as follows:

	Three Months Ended
Lease Term and Discount Rate	June 30, 2020		June 30, 2019
Weighted-average remaining lease terms (years):
Operating leases	6.6		5.2
Finance leases	27.6		29.2
Weighted-average discount rate:
Operating leases	4.8	%	3.9	%
Finance leases	5.7	%	5.7	%

        Cash paid for amounts included in the measurement of lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating cash flows from operating leases	$	3.8	$	3.6
Operating cash flows from finance leases	0.4		0.3
Financing cash flows from finance leases	0.1		0.2

        ROU assets obtained in exchange for lease liabilities are as follows (in millions):

	Three Months Ended
	June 30, 2020		June 30, 2019
Operating leases	$	—	$	1.2

Future Minimum Lease Payments, Finance Leases

Future minimum lease payments under operating and finance leases as of June 30, 2020 are as follows (in millions):

Years ending December 31,	Operating Leases (1)		Finance Leases (1)
2020 (through December 31, 2020)	$	7.4	$	1.1
2021	14.4		2.1
2022	14.8		2.0
2023	12.1		2.0
2024	10.0		2.0
Thereafter	30.3		45.1
Total future minimum lease payments	89.0		54.3
Less: Imputed interest	(15.6)		(26.5)
Total lease liabilities	$	73.4	$	27.8

____________________

(1)Excludes legally binding minimum lease payments for leases signed but not yet commenced.

Future Minimum Lease Payments, Operating Leases

Future minimum lease payments under operating and finance leases as of June 30, 2020 are as follows (in millions):

Years ending December 31,	Operating Leases (1)		Finance Leases (1)
2020 (through December 31, 2020)	$	7.4	$	1.1
2021	14.4		2.1
2022	14.8		2.0
2023	12.1		2.0
2024	10.0		2.0
Thereafter	30.3		45.1
Total future minimum lease payments	89.0		54.3
Less: Imputed interest	(15.6)		(26.5)
Total lease liabilities	$	73.4	$	27.8

____________________

(1)Excludes legally binding minimum lease payments for leases signed but not yet commenced.

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Stock-Based Compensation (Tables)

3 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Share-Based Payments

During the three months ended June 30, 2020, the Company granted the following stock options, restricted stock units, performance stock units and common stock to directors, executive officers, and certain other employees:

Award Type	Number of Awards	Weighted Average Grant-Date Fair Value
Stock options	196,902	$	7.68
Restricted stock units	426,921	$	25.52
Performance stock units	547,374	$	25.52
Common stock	66,557	$	27.68

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Business Segment Information (Tables)

3 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Business Segment Information:

(in Millions)

	Three Months Ended
	June 30, 2020		June 30, 2019
Net sales
Process & Motion Control	$	274.4	$	330.1
Water Management	174.7		178.2
Consolidated net sales	449.1		508.3
Income from operations
Process & Motion Control	39.6		55.1
Water Management	40.1		40.0
Corporate	(13.7)		(14.9)
Consolidated income from operations	66.0		80.2
Non-operating expense:
Interest expense, net	(13.4)		(15.5)
Other income (expense), net	0.4		(1.5)
Income before income taxes	53.0		63.2
Provision for income taxes	(17.2)		(14.8)
Equity method investment income	—		0.1
Net income from continuing operations	35.8		48.5
Loss from discontinued operations, net of tax	—		(1.8)
Net income	35.8		46.7
Non-controlling interest income	0.2		0.2
Net income attributable to Rexnord	35.6		46.5
Dividends on preferred stock	—		(5.8)
Net income attributable to Rexnord common stockholders	$	35.6	$	40.7
Depreciation and amortization
Process & Motion Control	$	14.3	$	14.6
Water Management	7.3		6.3
Corporate	0.1		0.1
Consolidated	$	21.7	$	21.0
Capital expenditures
Process & Motion Control	$	7.2	$	4.6
Water Management	1.3		1.3
Consolidated	$	8.5	$	5.9

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Guarantor Subsidiaries (Tables)

3 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets

June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4
Receivables, net	—		—		174.8		97.3		—		272.1
Inventories	—		—		244.6		104.2		—		348.8
Other current assets	—		0.1		17.0		23.9		—		41.0
Total current assets	—		0.4		596.8		418.1		—		1,015.3
Property, plant and equipment, net	—		—		253.9		121.7		—		375.6
Intangible assets, net	—		—		417.5		88.2		—		505.7
Goodwill	—		—		1,044.2		279.3		—		1,323.5
Investment in:
Issuer subsidiaries	1,424.2		—		—		—		(1,424.2)		—
Guarantor subsidiaries	—		3,449.0		—		—		(3,449.0)		—
Non-guarantor subsidiaries	—		—		636.1		—		(636.1)		—
Other assets	—		0.8		87.4		58.9		—		147.1
Total assets	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.5	$	0.9	$	—	$	76.4
Trade payables	—		—		100.9		59.2		—		160.1
Compensation and benefits	—		—		28.3		16.5		—		44.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		1.4		75.1		42.0		—		118.5
Total current liabilities	—		1.4		281.6		120.0		—		403.0
Long-term debt	—		1,117.0		26.9		4.1		—		1,148.0
Note payable to (receivable from) affiliates, net	69.9		907.6		(1,054.8)		77.3		—		—
Pension and postretirement benefit obligations	—		—		142.4		47.4		—		189.8
Deferred income taxes	—		—		100.7		22.7		—		123.4
Other liabilities	0.6		—		90.1		58.6		—		149.3
Total liabilities	70.5		2,026.0		(413.1)		330.1		—		2,013.5
Total stockholders' equity	1,353.7		1,424.2		3,449.0		636.1		(5,509.3)		1,353.7
Total liabilities and stockholders' equity	$	1,424.2	$	3,450.2	$	3,035.9	$	966.2	$	(5,509.3)	$	3,367.2

Condensed Consolidating Balance Sheets

March 31, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	11.0	$	0.4	$	383.9	$	178.1	$	—	$	573.4
Receivables, net	—		—		223.5		111.2		—		334.7
Inventories	—		—		224.8		92.7		—		317.5
Other current assets	—		—		20.5		18.2		—		38.7
Total current assets	11.0		0.4		852.7		400.2		—		1,264.3
Property, plant and equipment, net	—		—		256.1		122.7		—		378.8
Intangible assets, net	—		—		424.8		89.4		—		514.2
Goodwill	—		—		1,043.6		278.3		—		1,321.9
Investment in:
Issuer subsidiaries	1,381.1		—		—		—		(1,381.1)		—
Guarantor subsidiaries	—		3,324.9		—		—		(3,324.9)		—
Non-guarantor subsidiaries	—		—		621.1		—		(621.1)		—
Other assets	—		—		88.7		59.2		—		147.9
Total assets	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1
Liabilities and stockholders' equity
Current liabilities:
Current maturities of debt	$	—	$	—	$	75.4	$	1.0	$	—	$	76.4
Trade payables	—		—		123.9		61.7		—		185.6
Compensation and benefits	—		—		42.4		19.4		—		61.8
Current portion of pension and postretirement benefit obligations	—		—		1.8		1.4		—		3.2
Other current liabilities	—		7.9		79.9		40.7		—		128.5
Total current liabilities	—		7.9		323.4		124.2		—		455.5
Long-term debt	—		1,290.9		101.8		4.3		—		1,397.0
Note payable to (receivable from), net	77.9		645.4		(795.9)		72.6		—		—
Pension and postretirement benefit obligations	—		—		142.8		46.8		—		189.6
Deferred income taxes	—		—		98.6		22.4		—		121.0
Other liabilities	0.5		—		91.4		58.4		—		150.3
Total liabilities	78.4		1,944.2		(37.9)		328.7		—		2,313.4
Total stockholders' equity	1,313.7		1,381.1		3,324.9		621.1		(5,327.1)		1,313.7
Total liabilities and stockholders' equity	$	1,392.1	$	3,325.3	$	3,287.0	$	949.8	$	(5,327.1)	$	3,627.1

Condensed Consolidating Statement of Operations

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	341.6	$	141.9	$	(34.4)	$	449.1
Cost of sales	—		—		204.6		102.0		(34.4)		272.2
Gross profit	—		—		137.0		39.9		—		176.9
Selling, general and administrative expenses	—		—		77.9		22.3		—		100.2
Restructuring and other similar charges	—		—		2.3		(0.6)		—		1.7
Amortization of intangible assets	—		—		7.4		1.6		—		9.0
Income from operations	—		—		49.4		16.6		—		66.0
Non-operating income (expense):
Interest income (expense), net:
To third parties	—		(12.8)		(0.7)		0.1		—		(13.4)
To affiliates	9.6		5.8		(14.9)		(0.5)		—		—
Other expense, net	—		(0.1)		0.2		0.3		—		0.4
Income (loss) before income taxes	9.6		(7.1)		34.0		16.5		—		53.0
Provision for income taxes	—		—		(10.4)		(6.8)		—		(17.2)
Equity method investment income	—		—		—		—		—		—
Income (loss) before equity in earnings of subsidiaries	9.6		(7.1)		23.6		9.7		—		35.8
Equity in income of subsidiaries	26.2		33.3		9.7		—		(69.2)		—
Net income from continuing operations	35.8		26.2		33.3		9.7		(69.2)		35.8
Loss from discontinued operations, net of tax	—		—		—		—		—		—
Net income	35.8		26.2		33.3		9.7		(69.2)		35.8
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	35.8		26.2		33.3		9.5		(69.2)		35.6
Dividends on preferred stock	—		—		—		—		—		—
Net income attributable to Rexnord common stockholders	$	35.8	$	26.2	$	33.3	$	9.5	$	(69.2)	$	35.6
Comprehensive income	$	35.8	$	27.2	$	33.4	$	14.9	$	(69.2)	$	42.1

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	391.7	$	161.3	$	(44.7)	$	508.3
Cost of sales	—		—		238.0		113.4		(44.7)		306.7
Gross profit	—		—		153.7		47.9		—		201.6
Selling, general and administrative expenses	—		—		82.6		26.9		—		109.5
Restructuring and other similar charges	—		—		2.5		0.7		—		3.2
Amortization of intangible assets	—		—		6.9		1.8		—		8.7
Income from operations	—		—		61.7		18.5		—		80.2
Non-operating (expense) income:
Interest income (expense), net:
To third parties	—		(15.3)		(0.5)		0.3		—		(15.5)
To affiliates	0.3		8.7		(7.0)		(2.0)		—		—
Other expense, net	—		(0.1)		(0.7)		(0.7)		—		(1.5)
Income (loss) before income taxes	0.3		(6.7)		53.5		16.1		—		63.2
Provision for income taxes	—		—		(9.5)		(5.3)		—		(14.8)
Equity method investment income	—		—		—		0.1		—		0.1
Income (loss) before equity in earnings of subsidiaries	0.3		(6.7)		44.0		10.9		—		48.5
Equity in income of subsidiaries	46.5		53.2		9.2		—		(108.9)		—
Net income from continuing operations	46.8		46.5		53.2		10.9		(108.9)		48.5
Loss from discontinued operations, net of tax	—		—		—		(1.8)		—		(1.8)
Net income	46.8		46.5		53.2		9.1		(108.9)		46.7
Non-controlling interest income	—		—		—		0.2		—		0.2
Net income attributable to Rexnord	46.8		46.5		53.2		8.9		(108.9)		46.5
Dividends on preferred stock	(5.8)		—		—		—		—		(5.8)
Net income attributable to Rexnord common stockholders	$	41.0	$	46.5	$	53.2	$	8.9	$	(108.9)	$	40.7
Comprehensive income	$	46.8	$	47.8	$	54.0	$	7.0	$	(108.9)	$	46.7

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2020

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	1.7	$	250.0	$	(217.5)	$	13.4	$	—	$	47.6
Investing activities
Expenditures for property, plant and equipment	—		—		(6.0)		(2.5)		—		(8.5)
Proceeds from dispositions of long-lived assets	—		—		—		0.9		—		0.9
Cash used for investing activities	—		—		(6.0)		(1.6)		—		(7.6)
Financing activities
Repayments of debt	—		(250.0)		(0.1)		(0.2)		—		(250.3)
Proceeds from exercise of stock options	6.3		—		—		—		—		6.3
Taxes withheld and paid on employees' share-based payment awards	(9.4)		—		—		—		—		(9.4)
Payment of common stock dividend	(9.6)		—		—		—		—		(9.6)
Cash used for financing activities	(12.7)		(250.0)		(0.1)		(0.2)		—		(263.0)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		3.0		—		3.0
(Decrease) increase in cash and cash equivalents	(11.0)		—		(223.6)		14.6		—		(220.0)
Cash, cash equivalents and restricted cash at beginning of period	11.0		0.3		384.0		178.1		—		573.4
Cash, cash equivalents and restricted cash at end of period	$	—	$	0.3	$	160.4	$	192.7	$	—	$	353.4

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended June 30, 2019

(in millions)

	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Operating activities
Cash provided by (used for) operating activities	$	5.9	$	0.6	$	(10.7)	$	23.2	$	—	$	19.0
Investing activities
Expenditures for property, plant and equipment	—		—		(4.8)		(1.1)		—		(5.9)
Acquisitions, net of cash acquired	—		—		(24.8)		—		—		(24.8)
Proceeds from dispositions of long-lived assets	—		—		—		1.3		—		1.3
Cash (used for) provided by investing activities	—		—		(29.6)		0.2		—		(29.4)
Financing activities
Repayments of debt	—		—		—		(3.9)		—		(3.9)
Proceeds from exercise of stock options	4.8		—		—		—		—		4.8
Taxes withheld and paid on employees' share-based payment awards	(5.7)		—		—		—		—		(5.7)
Payments of preferred stock dividends	(5.8)		—		—		—		—		(5.8)
Cash used for by financing activities	(6.7)		—		—		(3.9)		—		(10.6)
Effect of exchange rate changes on cash and cash equivalents	—		—		—		0.3		—		0.3
(Decrease) increase in cash and cash equivalents	(0.8)		0.6		(40.3)		19.8		—		(20.7)
Cash, cash equivalents and restricted cash at beginning of period	1.4		0.2		107.7		183.2		—		292.5
Cash, cash equivalents and restricted cash at end of period	$	0.6	$	0.8	$	67.4	$	203.0	$	—	$	271.8

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Acquisitions - Narrative (Details) - USD ($) $ in Millions			3 Months Ended		12 Months Ended
	Jan. 28, 2020	May 10, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Business Acquisition [Line Items]
Purchase price, excluding transaction costs and net of cash acquired			$ 0.0	$ 24.8
Goodwill			1,323.5		$ 1,321.9
Purchase accounting adjustments			0.7
Just Manufacturing
Business Acquisition [Line Items]
Payments to acquire business	$ 59.4
East Creek Corporation
Business Acquisition [Line Items]
Purchase price, excluding transaction costs and net of cash acquired		$ 24.8
Goodwill					27.2
Other intangible assets					40.9
Fixed assets					8.4
Trade working capital					9.1
Other liabilities					1.4
Purchase accounting adjustments			$ 0.7
East Creek Corporation | Tradenames
Business Acquisition [Line Items]
Other intangible assets					2.2
East Creek Corporation | Customer Relationships
Business Acquisition [Line Items]
Other intangible assets					38.7
Process & Motion Control Joint Venture
Business Acquisition [Line Items]
Purchase price, excluding transaction costs and net of cash acquired					$ 0.3

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Restructuring and Other Similar Charges - Costs to Date by Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	$ 1.7	$ 3.2
Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	1.2	2.9
Contract termination and other associated costs
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.5	0.3
Operating Segments | Process & Motion Control
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.7	2.9
Operating Segments | Process & Motion Control | Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.2	2.6
Operating Segments | Process & Motion Control | Contract termination and other associated costs
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.5	0.3
Operating Segments | Water Management
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.9	0.3
Operating Segments | Water Management | Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.9	0.3
Operating Segments | Water Management | Contract termination and other associated costs
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.0	0.0
Corporate
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.1	0.0
Corporate | Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	0.1	0.0
Corporate | Contract termination and other associated costs
Restructuring Cost and Reserve [Line Items]
Total restructuring and other similar costs	$ 0.0	$ 0.0

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Restructuring and Other Similar Charges - Reserve Roll Forward (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Restructuring Reserve [Roll Forward]
Restructuring accrual, beginning period	$ 9.8
Charges	1.7	$ 3.2
Cash payments	(4.0)
Restructuring accrual, ending period	7.5
Employee termination benefits
Restructuring Reserve [Roll Forward]
Restructuring accrual, beginning period	8.3
Charges	1.2	2.9
Cash payments	(3.4)
Restructuring accrual, ending period	6.1
Contract termination and other associated costs
Restructuring Reserve [Roll Forward]
Restructuring accrual, beginning period	1.5
Charges	0.5	$ 0.3
Cash payments	(0.6)
Restructuring accrual, ending period	$ 1.4

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Restructuring and Other Similar Charges - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Restructuring and Related Activities [Abstract]
Accelerated depreciation	$ 0.4	$ 0.6

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Discontinued Operations - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax	$ 0.0	$ (1.8)
Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax		$ (1.8)

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Revenue Recognition - Narrative (Details)	3 Months Ended
	Jun. 30, 2020 USD ($) segment
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Number of business segments | segment	2
Performance obligations expected to be satisfied	$ 370,800,000
Impairment loss recognized	$ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percentage of remaining performance obligation	78.00%
Percentage of remaining performance obligation, expected timing	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percentage of remaining performance obligation	22.00%
Percentage of remaining performance obligation, expected timing

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Revenue Recognition - Revenue Disaggregated by Customer Type and Geography (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Total	$ 449.1	$ 508.3
Process & Motion Control
Disaggregation of Revenue [Line Items]
Total	274.4	330.1
Process & Motion Control | United States and Canada
Disaggregation of Revenue [Line Items]
Total	169.1	214.4
Process & Motion Control | Europe
Disaggregation of Revenue [Line Items]
Total	65.6	72.4
Process & Motion Control | Rest of world
Disaggregation of Revenue [Line Items]
Total	39.7	43.3
Process & Motion Control | Original equipment manufacturers/end users
Disaggregation of Revenue [Line Items]
Total			$ 186.2	$ 158.4
Process & Motion Control | Maintenance, repair, and operations
Disaggregation of Revenue [Line Items]
Total			143.9	116.0
Water Management
Disaggregation of Revenue [Line Items]
Total	174.7	178.2
Water Management | United States and Canada
Disaggregation of Revenue [Line Items]
Total	171.9	174.8
Water Management | Europe
Disaggregation of Revenue [Line Items]
Total	0.0	0.0
Water Management | Rest of world
Disaggregation of Revenue [Line Items]
Total	$ 2.8	$ 3.4
Water Management | Water safety, quality, flow control and conservation
Disaggregation of Revenue [Line Items]
Total			165.0	163.2
Water Management | Water infrastructure
Disaggregation of Revenue [Line Items]
Total			$ 13.2	$ 11.5

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Revenue Recognition - Change in Contract with Customer, Asset and Liability (Details) $ in Millions	3 Months Ended
	Jun. 30, 2020 USD ($)
Contract assets
Contract assets, beginning balance	$ 0.5
Contract assets, additions	0.1
Contract assets, deductions	0.0
Contract assets, ending balance	0.6
Contract liabilities
Contract liabilities, beginning balance	7.3
Contract liabilities, additions	3.1
Contract liabilities, deductions	(4.4)
Contract liabilities, ending balance	$ 6.0

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Sep. 30, 2018	Mar. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Income tax provision	$ 17.2	$ 14.8
Effective income tax rate	32.50%	23.40%
Unrecognized Tax Benefits	$ 15.1			$ 14.8
Accrued interest and penalties	$ 1.6			$ 1.5
Net interest and penalties recognized as income tax expense		$ 0.1
Domestic Tax Authority | Internal Revenue Service (IRS)
Operating Loss Carryforwards [Line Items]
Net interest and penalties recognized as income tax expense			$ 0.4
Foreign Tax Authority | Federal Ministry of Finance, Germany
Operating Loss Carryforwards [Line Items]
Additional tax liabilities at conclusion of tax examination					$ 1.7

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Earnings per Share - Earnings per Share Computation (Details) - USD ($) $ in Millions		3 Months Ended
	Nov. 15, 2019	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net income from continuing operations		$ 35.8	$ 48.5
Less: Non-controlling interest income		0.2	0.2
Less: Dividends on preferred stock		0.0	5.8
Net income from continuing operations attributable to Rexnord common stockholders		35.6	42.5
Net income from continuing operations attributable to Rexnord common stockholders		35.6	48.3
Loss from discontinued operations, net of tax		0.0	(1.8)
Net income attributable to Rexnord common stockholders		35.6	40.7
Plus: Dividends on preferred stock		0.0	5.8
Net income attributable to Rexnord common stockholders		$ 35.6	$ 46.5
Denominator:
Weighted-average common shares outstanding, basic (in shares)		120,246,000	105,262,000
Effect of dilutive equity securities (in shares)		1,802,000	2,423,000
Preferred stock under the if-converted method (in shares)		0	15,979,000
Diluted (in shares)		122,048,000	123,664,000
Preferred stock under the if-converted method (in shares)		0	15,979,000
Redeemable Convertible Preferred Stock
Denominator:
Preferred stock under the if-converted method (in shares)	15,980,050
Preferred stock under the if-converted method (in shares)	15,980,050

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Earnings per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	1.2	1.2

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Stockholders' Equity - Roll Forward (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares	Jun. 30, 2019 USD ($) subsidiary $ / shares	Jun. 30, 2020 USD ($) shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 1,313.7	$ 1,231.0
Total comprehensive income	42.1	46.7
Stock-based compensation expense	10.6	6.9
Proceeds from exercise of stock options	6.3	4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)	(5.7)
Preferred stock dividends ($14.375 per share)		(5.8)
Common stock dividends ($0.08 per share)	(9.6)
Ending Balance	$ 1,353.7	$ 1,277.9	$ 1,353.7
Preferred stock dividends (in dollars per share) | $ / shares		$ 14.375
Common stock dividends (in dollars per share) | $ / shares	$ 0.08
Common stock issued (in shares) | shares			936,552
Number of subsidiaries | subsidiary		2
Centa China | Process & Motion Control
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Non-controlling interest	30.00%	30.00%	30.00%
Centa China | Centa China | Process & Motion Control
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Non-controlling interest	5.00%		5.00%
Common stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 1.2	$ 1.0
Ending Balance	1.2	1.0	$ 1.2
Preferred stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	0.0	0.0
Ending Balance	0.0	0.0	0.0
Additional paid-in capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	1,348.3	1,293.5
Stock-based compensation expense	10.6	6.9
Proceeds from exercise of stock options	6.3	4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)	(5.7)
Ending Balance	1,355.8	1,299.5	1,355.8
Acquisition of non-controlling interest		0.3
Retained earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	85.9	30.7
Total comprehensive income	35.6	46.5
Preferred stock dividends ($14.375 per share)		(5.8)
Common stock dividends ($0.08 per share)	(9.6)
Ending Balance	111.9	71.4	111.9
Accumulated other comprehensive loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	(124.4)	(96.6)
Total comprehensive income	6.3
Ending Balance	(118.1)	(96.6)	(118.1)
Non-controlling interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	2.7	2.4
Total comprehensive income	0.2	0.2
Ending Balance	$ 2.9	$ 2.6	$ 2.9

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Stockholders' Equity - Narrative (Details) - USD ($)		3 Months Ended
	Nov. 15, 2019	Jun. 30, 2020	Jun. 30, 2019	Jan. 27, 2020	Dec. 31, 2015
Class of Stock [Line Items]
Preferred stock under the if-converted method (in shares)		0	15,979,000
Redeemable Convertible Preferred Stock
Class of Stock [Line Items]
Shares converted (in shares)	402,500
Dividend rate, percentage	5.75%
Preferred stock under the if-converted method (in shares)	15,980,050
Shares issued (in shares)	0
Common stock
Class of Stock [Line Items]
Common stock repurchase program amount				$ 300,000,000.0	$ 200,000,000.0
Repurchased common stock (in shares)		0
Remaining amount of repurchase authority		$ 223,000,000.0

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Income (Loss) (Details) $ in Millions	3 Months Ended
	Jun. 30, 2020 USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 1,313.7
Ending Balance	1,353.7
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(124.4)
Other comprehensive income before reclassifications	6.4
Amounts reclassified from accumulated other comprehensive loss	(0.1)
Net current period other comprehensive income (loss)	6.3
Ending Balance	(118.1)
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(83.8)
Other comprehensive income before reclassifications	6.4
Amounts reclassified from accumulated other comprehensive loss	0.0
Net current period other comprehensive income (loss)	6.4
Ending Balance	(77.4)
Pension and Postretirement Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(40.6)
Other comprehensive income before reclassifications	0.0
Amounts reclassified from accumulated other comprehensive loss	(0.1)
Net current period other comprehensive income (loss)	(0.1)
Ending Balance	$ (40.7)

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Accumulated Other Comprehensive Loss - Reclassifications out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Pension and other postretirement plans
Other income (expense), net	$ 0.4	$ (1.5)
Benefit for income taxes	17.2	14.8
Net income	35.8	46.7
Reclassification out of Accumulated Other Comprehensive Income | Amortization of prior service credit
Pension and other postretirement plans
Other income (expense), net	(0.1)	(0.1)
Reclassification out of Accumulated Other Comprehensive Income | Settlement
Pension and other postretirement plans
Other income (expense), net		0.8
Reclassification out of Accumulated Other Comprehensive Income | Benefit for income taxes
Pension and other postretirement plans
Benefit for income taxes		(0.2)
Net income	$ (0.1)	$ 0.5

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Inventories - Inventory by Category (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Inventory, Net [Abstract]
Finished goods	$ 168.9	$ 145.6
Work in progress	41.8	43.7
Purchased components	76.3	70.4
Raw materials	58.9	54.9
Inventories at First-in, First-Out ("FIFO") cost	345.9	314.6
Adjustment to state inventories at Last-in, First-Out ("LIFO") cost	2.9	2.9
Inventories	$ 348.8	$ 317.5

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Goodwill and Intangible Assets - Changes in Net Carrying Value (Details) $ in Millions	3 Months Ended
	Jun. 30, 2020 USD ($)
Goodwill [Roll Forward]
Net carrying amount, beginning of period	$ 1,321.9
Currency translation adjustments	0.9
Purchase accounting adjustments	0.7
Net carrying amount, end of period	1,323.5
Process & Motion Control
Goodwill [Roll Forward]
Net carrying amount, beginning of period	1,121.4
Currency translation adjustments	0.6
Purchase accounting adjustments	0.0
Net carrying amount, end of period	1,122.0
Water Management
Goodwill [Roll Forward]
Net carrying amount, beginning of period	200.5
Currency translation adjustments	0.3
Purchase accounting adjustments	0.7
Net carrying amount, end of period	$ 201.5

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Goodwill and Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020
Intangible assets subject to amortization:
Weighted Average Useful Life	13 years	13 years
Accumulated Amortization	$ (617.1)	$ (607.9)
Intangible assets not subject to amortization - tradenames
Gross Carrying Amount	1,122.8	1,122.1
Net Carrying Amount	$ 505.7	$ 514.2
Patents
Intangible assets subject to amortization:
Weighted Average Useful Life	10 years	10 years
Gross Carrying Amount	$ 51.2	$ 51.1
Accumulated Amortization	(41.5)	(41.2)
Net Carrying Amount	$ 9.7	$ 9.9
Customer relationships (including distribution network)
Intangible assets subject to amortization:
Weighted Average Useful Life	13 years	13 years
Gross Carrying Amount	$ 748.5	$ 748.0
Accumulated Amortization	(560.6)	(552.5)
Net Carrying Amount	$ 187.9	$ 195.5
Tradenames
Intangible assets subject to amortization:
Weighted Average Useful Life	13 years	13 years
Gross Carrying Amount	$ 42.2	$ 42.1
Accumulated Amortization	(15.0)	(14.2)
Net Carrying Amount	27.2	27.9
Tradenames
Intangible assets not subject to amortization - tradenames
Carrying Amount	$ 280.9	$ 280.9

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Goodwill and Intangible Assets - Narrative (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization expense	$ 9,000,000.0	$ 8,700,000	$ 8,700,000
Finite-lived intangible assets acquired	0
Indefinite-lived intangible assets acquired	0
Amortization expense in fiscal year 2020	26,900,000
Amortization expense in fiscal year 2021	34,400,000
Amortization expense in fiscal year 2022	18,700,000
Amortization expense in fiscal year 2023	16,200,000
Amortization expense in fiscal year 2024	16,100,000
Amortization expense in fiscal year 2025	$ 15,100,000

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Other Current Liabilities - By Category (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Components of Other Current Liabilities [Line Items]
Other current liabilities	$ 118.5	$ 128.5
Contract liabilities
Components of Other Current Liabilities [Line Items]
Other current liabilities	6.0	7.3
Sales rebates
Components of Other Current Liabilities [Line Items]
Other current liabilities	25.2	35.5
Commissions
Components of Other Current Liabilities [Line Items]
Other current liabilities	6.9	7.0
Restructuring and other similar charges
Components of Other Current Liabilities [Line Items]
Other current liabilities	7.5	9.8
Product warranty
Components of Other Current Liabilities [Line Items]
Other current liabilities	8.0	6.7
Risk management
Components of Other Current Liabilities [Line Items]
Other current liabilities	10.8	10.4
Legal and environmental
Components of Other Current Liabilities [Line Items]
Other current liabilities	1.6	1.5
Taxes, other than income taxes
Components of Other Current Liabilities [Line Items]
Other current liabilities	7.5	8.3
Income tax payable
Components of Other Current Liabilities [Line Items]
Other current liabilities	17.1	9.9
Interest payable
Components of Other Current Liabilities [Line Items]
Other current liabilities	1.7	8.3
Current portion of operating lease liability
Components of Other Current Liabilities [Line Items]
Other current liabilities	12.6	12.8
Other
Components of Other Current Liabilities [Line Items]
Other current liabilities	$ 13.6	$ 11.0

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Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 07, 2017
Debt Instrument [Line Items]
Total	$ 1,224.4	$ 1,473.4
Less current maturities	76.4	76.4
Long-term debt	1,148.0	1,397.0
Term loan | Credit Facility
Debt Instrument [Line Items]
Total	621.1	620.8
Unamortized debt issuance costs	3.9	4.2
Term loan | Revolving Credit Facility
Debt Instrument [Line Items]
Total	0.0	249.2
Unamortized debt issuance costs	$ 0.0	0.8
4.875% Senior Notes Due 2025 | Senior Notes
Debt Instrument [Line Items]
Interest rate	4.875%		4.875%	4.875%
Total	$ 495.9	495.7
Unamortized debt issuance costs	4.1	4.3
Securitization facility borrowings | Other Debt
Debt Instrument [Line Items]
Total	74.9	74.9
Unamortized debt issuance costs	0.1	0.1
Finance leases and other subsidiary debt
Debt Instrument [Line Items]
Total	$ 32.5	$ 32.8

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Long-Term Debt - Narrative (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 07, 2017
Debt Instrument [Line Items]
Line of credit facility, unused capacity, daily aggregate commitment threshold of outstanding principal (less than)		50.00%
London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Applicable margin		1.20%
Maximum
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage		0.50%
Minimum
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage		0.375%
Senior Secured Credit Facility | Senior Secured Leverage Ratio (Numerator) | Maximum
Debt Instrument [Line Items]
Covenant terms, company's ratio	6.75	6.75
Revolving Credit Facility | Senior Secured Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 264,000,000.0	$ 264,000,000.0
Weighted-average effective interest rate	4.00%	4.00%
Amounts borrowed	$ 0	$ 0	$ 250,000,000.0
Letters of credit outstanding, amount	2,700,000	2,700,000	4,700,000
Credit Facility | Senior Secured Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 725,000,000.0	$ 725,000,000.0
Remaining borrowing capacity				$ 625,000,000.0
Weighted-average effective interest rate	1.91%	1.91%
Weighted-average interest rate, over time	2.26%
Covenant terms, company's ratio	2.1	2.1
Senior Notes | 4.875% Senior Notes Due 2025
Debt Instrument [Line Items]
Interest rate	4.875%	4.875%			4.875%	4.875%
Aggregate principal amount						$ 500,000,000.0
Notes Payable, Other Payables | Accounts Receivable Securitization Program
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 100,000,000.0	$ 100,000,000.0
Remaining borrowing capacity	$ 100,000,000.0	$ 100,000,000.0	100,000,000.0
Weighted-average effective interest rate	1.58%	1.58%
Weighted-average interest rate, over time		1.36%
Amounts borrowed	$ 75,000,000.0	$ 75,000,000.0	75,000,000.0
Letters of credit outstanding, amount	$ 7,700,000	$ 7,700,000	$ 5,700,000

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Fair Value Measurements - Schedule of Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation assets	$ 9.5	$ 7.2
Deferred compensation liabilities	9.7	7.4
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation assets	2.9	1.7
Deferred compensation liabilities	9.7	7.4
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation assets	6.6	5.5
Deferred compensation liabilities	0.0	0.0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation assets	0.0	0.0
Deferred compensation liabilities	$ 0.0	$ 0.0

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Fair value of long-term debt	$ 1,224.1	$ 1,398.1

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Commitments and Contingencies - Warranty Roll Forward (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Movement in Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 6.7	$ 7.2
Charged to operations	1.8	0.7
Claims settled	(0.5)	(0.5)
Balance at end of period	$ 8.0	$ 7.4

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Commitments and Contingencies - Narrative (Details) lawsuit in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) claimant lawsuit	Mar. 31, 2014 USD ($)	Dec. 31, 2002 release defendant
Loss Contingencies [Line Items]
Indemnification resulting from business acquisition, amount (in excess of)	$ 900,000,000
Environmental Issue | Ellsworth Industrial Park Site
Loss Contingencies [Line Items]
Number of releases, or threatened releases, chlorinated solvents (or more) | release			1
Indemnification resulting from business acquisition, percentage of costs paid to date by seller			100.00%
Environmental Issue | Ellsworth Industrial Park Site | Minimum
Loss Contingencies [Line Items]
Number of defendants | defendant			10
Damages from Product Defects | Stearns
Loss Contingencies [Line Items]
Indemnification resulting from business acquisition, percentage of costs paid to date by seller	100.00%
Number of claimants | claimant	300
Damages from Product Defects | Zurn
Loss Contingencies [Line Items]
Claim settlement funding period		7 years
Litigation settlement		$ 20,000,000.0
Asbestos Issue | Prager
Loss Contingencies [Line Items]
Insurance coverage, percentage of costs paid to date by insurance providers	100.00%
Asbestos Issue | Falk
Loss Contingencies [Line Items]
Indemnification resulting from business acquisition, percentage of costs paid to date by seller	100.00%
Number of claimants | claimant	100
Asbestos Issue | Zurn
Loss Contingencies [Line Items]
Number of claimants | claimant	7,000
Number of lawsuits | lawsuit	6
Time frame of claims expected to be filed	10 years
Insurance for asbestos claims	$ 50,000,000.0
Estimated claim payments made over specified period	$ 38,000,000.0
Time frame of estimated claims disbursements	10 years

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Retirement Benefits - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Pension Benefits:
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0.1	$ 0.1
Interest cost	4.6	5.6
Expected return on plan assets	(4.6)	(5.7)
Settlement	0.0	0.8
Amortization:
Net periodic benefit cost	0.1	0.8
Other Postretirement Benefits:
Defined Benefit Plan Disclosure [Line Items]
Interest cost	0.1	0.2
Amortization:
Prior service credit	(0.1)	(0.1)
Net periodic benefit cost	$ 0.0	$ 0.1

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Retirement Benefits - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Retirement Benefits [Abstract]
Contributions by employer	$ 1.0	$ 0.1
Cash contribution to purchase the annuity contract		3.9
Non-cash pre-tax losses from termination of plan		$ 0.8

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Leases - ROU Assets and Lease Liability Balances (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020
Assets
Operating ROU assets	$ 68.8	$ 71.1
Finance ROU assets	27.1	27.3
Total ROU assets	95.9	98.4
Current
Operating	12.6	12.8
Finance	0.5	0.5
Non-current
Operating	60.8	63.1
Finance	27.3	27.4
Total lease liabilities	101.2	103.8
Finance lease assets, net of accumulated amortization	$ 1.3	$ 1.0

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Leases - Components of Lease Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Operating lease expenses	$ 4.5	$ 3.6
Finance lease expenses:
Depreciation of finance ROU assets	0.3	0.2
Interest on lease liabilities	0.4	0.3
Total finance lease expense	0.7	0.5
Variable and short-term lease expense	1.1	1.2
Total lease expense	$ 6.3	$ 5.3

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Leases - Future Minimum Lease Payments (Details) $ in Millions	Jun. 30, 2020 USD ($)
Operating Leases
2020 (through December 31, 2020)	$ 7.4
2021	14.4
2022	14.8
2023	12.1
2024	10.0
Thereafter	30.3
Total future minimum lease payments	89.0
Less: Imputed interest	(15.6)
Total lease liabilities	73.4
Finance Leases
2020 (through December 31, 2020)	1.1
2021	2.1
2022	2.0
2023	2.0
2024	2.0
Thereafter	45.1
Total future minimum lease payments	54.3
Less: Imputed interest	(26.5)
Total lease liabilities	$ 27.8

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Leases - Weighted-Average Remaining Lease Terms (Details)	Jun. 30, 2020	Jun. 30, 2019
Weighted-average remaining lease terms (years):
Operating leases	6 years 7 months 6 days	5 years 2 months 12 days
Finance leases	27 years 7 months 6 days	29 years 2 months 12 days
Weighted-average discount rate:
Operating leases	4.80%	3.90%
Finance leases	5.70%	5.70%

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flow, Lessee [Abstract]
Operating cash flows from operating leases	$ 3.8	$ 3.6
Operating cash flows from finance leases	0.4	0.3
Financing cash flows from finance leases	0.1	0.2
Right-Of-Use Asset Obtained In Exchange For Lease Liability [Abstract]
Operating leases	$ 0.0	$ 1.2

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement, Noncash Expense [Abstract]
Stock-based compensation expense	$ 13.3	$ 6.9

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Stock-Based Compensation - Stock Options, Restricted Stock Units, and Performance Stock Units (Details)	3 Months Ended
	Jun. 30, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards (in shares) | shares	196,902
Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares	$ 7.68
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards (in shares) | shares	426,921
Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares	$ 25.52
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards (in shares) | shares	547,374
Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares	$ 25.52
Common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards (in shares) | shares	66,557
Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares	$ 27.68

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Business Segment Information - Narrative (Details)	3 Months Ended
	Jun. 30, 2020 segment
Segment Reporting [Abstract]
Number of business segments	2

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Business Segment Information - Schedule of Segment Reporting Information, By Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Net sales	$ 449.1	$ 508.3
Income from operations	66.0	80.2
Non-operating expense:
Interest expense, net	(13.4)	(15.5)
Other income (expense), net	0.4	(1.5)
Income before income taxes	53.0	63.2
Provision for income taxes	(17.2)	(14.8)
Equity method investment income	0.0	0.1
Net income from continuing operations	35.8	48.5
Loss from discontinued operations, net of tax	0.0	(1.8)
Net income	35.8	46.7
Non-controlling interest income	0.2	0.2
Net income attributable to Rexnord	35.6	46.5
Dividends on preferred stock	0.0	(5.8)
Net income attributable to Rexnord common stockholders	35.6	40.7
Additional Information
Depreciation and amortization	21.7	21.0
Capital expenditures	8.5	5.9
Process & Motion Control
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Net sales	274.4	330.1
Additional Information
Capital expenditures	7.2	4.6
Water Management
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Net sales	174.7	178.2
Additional Information
Capital expenditures	1.3	1.3
Operating Segments | Process & Motion Control
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Income from operations	39.6	55.1
Additional Information
Depreciation and amortization	14.3	14.6
Operating Segments | Water Management
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Income from operations	40.1	40.0
Additional Information
Depreciation and amortization	7.3	6.3
Corporate
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract]
Income from operations	(13.7)	(14.9)
Additional Information
Depreciation and amortization	$ 0.1	$ 0.1

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Guarantor Subsidiaries - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Current assets:
Cash and cash equivalents	$ 353.4	$ 573.4
Receivables, net	272.1	334.7
Inventories	348.8	317.5
Other current assets	41.0	38.7
Total current assets	1,015.3	1,264.3
Property, plant and equipment, net	375.6	378.8
Intangible assets, net	505.7	514.2
Goodwill	1,323.5	1,321.9
Investment in:
Other assets	147.1	147.9
Total assets	3,367.2	3,627.1
Current liabilities:
Current maturities of debt	76.4	76.4
Trade payables	160.1	185.6
Compensation and benefits	44.8	61.8
Current portion of pension and postretirement benefit obligations	3.2	3.2
Other current liabilities	118.5	128.5
Total current liabilities	403.0	455.5
Long-term debt	1,148.0	1,397.0
Pension and postretirement benefit obligations	189.8	189.6
Deferred income taxes	123.4	121.0
Other liabilities	149.3	150.3
Total liabilities	2,013.5	2,313.4
Note payable to affiliates, net	0.0	0.0
Total stockholders' equity	1,353.7	1,313.7	$ 1,277.9	$ 1,231.0
Total liabilities and stockholders' equity	3,367.2	3,627.1
Eliminations
Current assets:
Cash and cash equivalents	0.0	0.0
Receivables, net	0.0	0.0
Inventories	0.0	0.0
Other current assets	0.0	0.0
Total current assets	0.0	0.0
Property, plant and equipment, net	0.0	0.0
Intangible assets, net	0.0	0.0
Goodwill	0.0	0.0
Investment in:
Total assets	(5,509.3)	(5,327.1)
Current liabilities:
Current maturities of debt	0.0	0.0
Trade payables	0.0	0.0
Compensation and benefits	0.0	0.0
Current portion of pension and postretirement benefit obligations	0.0	0.0
Other current liabilities	0.0	0.0
Total current liabilities	0.0	0.0
Long-term debt	0.0	0.0
Pension and postretirement benefit obligations	0.0	0.0
Deferred income taxes	0.0	0.0
Other liabilities	0.0	0.0
Total liabilities	0.0	0.0
Note payable to affiliates, net	0.0	0.0
Total stockholders' equity	(5,509.3)	(5,327.1)
Total liabilities and stockholders' equity	(5,509.3)	(5,327.1)
Eliminations, Issuer Subsidiaries
Investment in:
Subsidiaries	(1,424.2)	(1,381.1)
Eliminations, Guarantor Subsidiaries
Investment in:
Subsidiaries	(3,449.0)	(3,324.9)
Eliminations, Non-Guarantor Subsidiaries
Investment in:
Subsidiaries	(636.1)	(621.1)
Parent | Reportable Legal Entities
Current assets:
Cash and cash equivalents	0.0	11.0
Receivables, net	0.0	0.0
Inventories	0.0	0.0
Other current assets	0.0	0.0
Total current assets	0.0	11.0
Property, plant and equipment, net	0.0	0.0
Intangible assets, net	0.0	0.0
Goodwill	0.0	0.0
Investment in:
Subsidiaries	1,424.2	1,381.1
Other assets	0.0	0.0
Total assets	1,424.2	1,392.1
Current liabilities:
Current maturities of debt	0.0	0.0
Trade payables	0.0	0.0
Compensation and benefits	0.0	0.0
Current portion of pension and postretirement benefit obligations	0.0	0.0
Other current liabilities	0.0	0.0
Total current liabilities	0.0	0.0
Long-term debt	0.0	0.0
Pension and postretirement benefit obligations	0.0	0.0
Deferred income taxes	0.0	0.0
Other liabilities	0.6	0.5
Total liabilities	70.5	78.4
Note payable to affiliates, net	69.9	77.9
Total stockholders' equity	1,353.7	1,313.7
Total liabilities and stockholders' equity	1,424.2	1,392.1
Issuers | Reportable Legal Entities
Current assets:
Cash and cash equivalents	0.3	0.4
Receivables, net	0.0	0.0
Inventories	0.0	0.0
Other current assets	0.1	0.0
Total current assets	0.4	0.4
Property, plant and equipment, net	0.0	0.0
Intangible assets, net	0.0	0.0
Goodwill	0.0	0.0
Investment in:
Subsidiaries	3,449.0	3,324.9
Other assets	0.8	0.0
Total assets	3,450.2	3,325.3
Current liabilities:
Current maturities of debt	0.0	0.0
Trade payables	0.0	0.0
Compensation and benefits	0.0	0.0
Current portion of pension and postretirement benefit obligations	0.0	0.0
Other current liabilities	1.4	7.9
Total current liabilities	1.4	7.9
Long-term debt	1,117.0	1,290.9
Pension and postretirement benefit obligations	0.0	0.0
Deferred income taxes	0.0	0.0
Other liabilities	0.0	0.0
Total liabilities	2,026.0	1,944.2
Note payable to affiliates, net	907.6	645.4
Total stockholders' equity	1,424.2	1,381.1
Total liabilities and stockholders' equity	3,450.2	3,325.3
Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Cash and cash equivalents	160.4	383.9
Receivables, net	174.8	223.5
Inventories	244.6	224.8
Other current assets	17.0	20.5
Total current assets	596.8	852.7
Property, plant and equipment, net	253.9	256.1
Intangible assets, net	417.5	424.8
Goodwill	1,044.2	1,043.6
Investment in:
Subsidiaries	636.1	621.1
Other assets	87.4	88.7
Total assets	3,035.9	3,287.0
Current liabilities:
Current maturities of debt	75.5	75.4
Trade payables	100.9	123.9
Compensation and benefits	28.3	42.4
Current portion of pension and postretirement benefit obligations	1.8	1.8
Other current liabilities	75.1	79.9
Total current liabilities	281.6	323.4
Long-term debt	26.9	101.8
Pension and postretirement benefit obligations	142.4	142.8
Deferred income taxes	100.7	98.6
Other liabilities	90.1	91.4
Total liabilities	(413.1)	(37.9)
Note receivable from affiliates, net	(1,054.8)	(795.9)
Total stockholders' equity	3,449.0	3,324.9
Total liabilities and stockholders' equity	3,035.9	3,287.0
Non-Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Cash and cash equivalents	192.7	178.1
Receivables, net	97.3	111.2
Inventories	104.2	92.7
Other current assets	23.9	18.2
Total current assets	418.1	400.2
Property, plant and equipment, net	121.7	122.7
Intangible assets, net	88.2	89.4
Goodwill	279.3	278.3
Investment in:
Other assets	58.9	59.2
Total assets	966.2	949.8
Current liabilities:
Current maturities of debt	0.9	1.0
Trade payables	59.2	61.7
Compensation and benefits	16.5	19.4
Current portion of pension and postretirement benefit obligations	1.4	1.4
Other current liabilities	42.0	40.7
Total current liabilities	120.0	124.2
Long-term debt	4.1	4.3
Pension and postretirement benefit obligations	47.4	46.8
Deferred income taxes	22.7	22.4
Other liabilities	58.6	58.4
Total liabilities	330.1	328.7
Note payable to affiliates, net	77.3	72.6
Total stockholders' equity	636.1	621.1
Total liabilities and stockholders' equity	$ 966.2	$ 949.8

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Guarantor Subsidiaries - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019
Condensed Income Statements, Captions [Line Items]
Net sales	$ 449.1	$ 508.3
Cost of sales	272.2	306.7
Gross profit	176.9	201.6
Selling, general and administrative expenses	100.2	109.5
Restructuring and other similar charges	1.7	3.2
Amortization of intangible assets	9.0	8.7	$ 8.7
Income from operations	66.0	80.2
Interest income (expense), net:
To third parties	(13.4)	(15.5)
To affiliates	0.0	0.0
Other expense, net	0.4	(1.5)
Income before income taxes	53.0	63.2
Provision for income taxes	(17.2)	(14.8)
Equity method investment income	0.0	0.1
Income (loss) before equity in earnings of subsidiaries	35.8	48.5
Equity in income of subsidiaries	0.0	0.0
Net income from continuing operations	35.8	48.5
Loss from discontinued operations, net of tax	0.0	(1.8)
Net income	35.8	46.7
Non-controlling interest income	0.2	0.2
Net income attributable to Rexnord	35.6	46.5
Dividends on preferred stock	0.0	(5.8)
Net income attributable to Rexnord common stockholders	35.6	40.7
Comprehensive income	42.1	46.7
Eliminations
Condensed Income Statements, Captions [Line Items]
Net sales	(34.4)	(44.7)
Cost of sales	(34.4)	(44.7)
Gross profit	0.0	0.0
Selling, general and administrative expenses	0.0	0.0
Restructuring and other similar charges	0.0	0.0
Amortization of intangible assets	0.0	0.0
Income from operations	0.0	0.0
Interest income (expense), net:
To third parties	0.0	0.0
To affiliates	0.0	0.0
Other expense, net	0.0	0.0
Income before income taxes	0.0	0.0
Provision for income taxes	0.0	0.0
Equity method investment income	0.0	0.0
Income (loss) before equity in earnings of subsidiaries	0.0	0.0
Equity in income of subsidiaries	(69.2)	(108.9)
Net income from continuing operations	(69.2)	(108.9)
Loss from discontinued operations, net of tax	0.0	0.0
Net income	(69.2)	(108.9)
Non-controlling interest income	0.0	0.0
Net income attributable to Rexnord	(69.2)	(108.9)
Dividends on preferred stock	0.0	0.0
Net income attributable to Rexnord common stockholders	(69.2)	(108.9)
Comprehensive income	(69.2)	(108.9)
Parent | Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Net sales	0.0	0.0
Cost of sales	0.0	0.0
Gross profit	0.0	0.0
Selling, general and administrative expenses	0.0	0.0
Restructuring and other similar charges	0.0	0.0
Amortization of intangible assets	0.0	0.0
Income from operations	0.0	0.0
Interest income (expense), net:
To third parties	0.0	0.0
To affiliates	9.6	0.3
Other expense, net	0.0	0.0
Income before income taxes	9.6	0.3
Provision for income taxes	0.0	0.0
Equity method investment income	0.0	0.0
Income (loss) before equity in earnings of subsidiaries	9.6	0.3
Equity in income of subsidiaries	26.2	46.5
Net income from continuing operations	35.8	46.8
Loss from discontinued operations, net of tax	0.0	0.0
Net income	35.8	46.8
Non-controlling interest income	0.0	0.0
Net income attributable to Rexnord	35.8	46.8
Dividends on preferred stock	0.0	(5.8)
Net income attributable to Rexnord common stockholders	35.8	41.0
Comprehensive income	35.8	46.8
Issuers | Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Net sales	0.0	0.0
Cost of sales	0.0	0.0
Gross profit	0.0	0.0
Selling, general and administrative expenses	0.0	0.0
Restructuring and other similar charges	0.0	0.0
Amortization of intangible assets	0.0	0.0
Income from operations	0.0	0.0
Interest income (expense), net:
To third parties	(12.8)	(15.3)
To affiliates	5.8	8.7
Other expense, net	(0.1)	(0.1)
Income before income taxes	(7.1)	(6.7)
Provision for income taxes	0.0	0.0
Equity method investment income	0.0	0.0
Income (loss) before equity in earnings of subsidiaries	(7.1)	(6.7)
Equity in income of subsidiaries	33.3	53.2
Net income from continuing operations	26.2	46.5
Loss from discontinued operations, net of tax	0.0	0.0
Net income	26.2	46.5
Non-controlling interest income	0.0	0.0
Net income attributable to Rexnord	26.2	46.5
Dividends on preferred stock	0.0	0.0
Net income attributable to Rexnord common stockholders	26.2	46.5
Comprehensive income	27.2	47.8
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Net sales	341.6	391.7
Cost of sales	204.6	238.0
Gross profit	137.0	153.7
Selling, general and administrative expenses	77.9	82.6
Restructuring and other similar charges	2.3	2.5
Amortization of intangible assets	7.4	6.9
Income from operations	49.4	61.7
Interest income (expense), net:
To third parties	(0.7)	(0.5)
To affiliates	(14.9)	(7.0)
Other expense, net	0.2	(0.7)
Income before income taxes	34.0	53.5
Provision for income taxes	(10.4)	(9.5)
Equity method investment income	0.0	0.0
Income (loss) before equity in earnings of subsidiaries	23.6	44.0
Equity in income of subsidiaries	9.7	9.2
Net income from continuing operations	33.3	53.2
Loss from discontinued operations, net of tax	0.0	0.0
Net income	33.3	53.2
Non-controlling interest income	0.0	0.0
Net income attributable to Rexnord	33.3	53.2
Dividends on preferred stock	0.0	0.0
Net income attributable to Rexnord common stockholders	33.3	53.2
Comprehensive income	33.4	54.0
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Net sales	141.9	161.3
Cost of sales	102.0	113.4
Gross profit	39.9	47.9
Selling, general and administrative expenses	22.3	26.9
Restructuring and other similar charges	(0.6)	0.7
Amortization of intangible assets	1.6	1.8
Income from operations	16.6	18.5
Interest income (expense), net:
To third parties	0.1	0.3
To affiliates	(0.5)	(2.0)
Other expense, net	0.3	(0.7)
Income before income taxes	16.5	16.1
Provision for income taxes	(6.8)	(5.3)
Equity method investment income	0.0	0.1
Income (loss) before equity in earnings of subsidiaries	9.7	10.9
Equity in income of subsidiaries	0.0	0.0
Net income from continuing operations	9.7	10.9
Loss from discontinued operations, net of tax	0.0	(1.8)
Net income	9.7	9.1
Non-controlling interest income	0.2	0.2
Net income attributable to Rexnord	9.5	8.9
Dividends on preferred stock	0.0	0.0
Net income attributable to Rexnord common stockholders	9.5	8.9
Comprehensive income	$ 14.9	$ 7.0

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Guarantor Subsidiaries - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Operating activities
Cash provided by (used for) operating activities	$ 47.6	$ 19.0
Investing activities
Expenditures for property, plant and equipment	(8.5)	(5.9)
Acquisitions, net of cash acquired	0.0	(24.8)
Proceeds from dispositions of long-lived assets	0.9	1.3
Cash used for investing activities	(7.6)	(29.4)
Financing activities
Repayments of debt	(250.3)	(3.9)
Proceeds from exercise of stock options	6.3	4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)	(5.7)
Payment of common stock dividends	(9.6)	0.0
Payment of common stock dividend	0.0	(5.8)
Cash used for financing activities	(263.0)	(10.6)
Effect of exchange rate changes on cash and cash equivalents	3.0	0.3
(Decrease) increase in cash and cash equivalents	(220.0)	(20.7)
Cash, cash equivalents and restricted cash at beginning of period	573.4	292.5	$ 292.5
Cash, cash equivalents and restricted cash at end of period	353.4	271.8	573.4
Eliminations
Operating activities
Cash provided by (used for) operating activities	0.0	0.0
Investing activities
Expenditures for property, plant and equipment	0.0	0.0
Acquisitions, net of cash acquired		0.0
Proceeds from dispositions of long-lived assets	0.0	0.0
Cash used for investing activities	0.0	0.0
Financing activities
Repayments of debt	0.0	0.0
Proceeds from exercise of stock options	0.0	0.0
Taxes withheld and paid on employees' share-based payment awards	0.0	0.0
Payment of common stock dividends	0.0
Payment of common stock dividend		0.0
Cash used for financing activities	0.0	0.0
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0
(Decrease) increase in cash and cash equivalents	0.0	0.0
Cash, cash equivalents and restricted cash at beginning of period	0.0	0.0	0.0
Cash, cash equivalents and restricted cash at end of period	0.0	0.0	0.0
Parent | Reportable Legal Entities
Operating activities
Cash provided by (used for) operating activities	1.7	5.9
Investing activities
Expenditures for property, plant and equipment	0.0	0.0
Acquisitions, net of cash acquired		0.0
Proceeds from dispositions of long-lived assets	0.0	0.0
Cash used for investing activities	0.0	0.0
Financing activities
Repayments of debt	0.0	0.0
Proceeds from exercise of stock options	6.3	4.8
Taxes withheld and paid on employees' share-based payment awards	(9.4)	(5.7)
Payment of common stock dividends	(9.6)
Payment of common stock dividend		(5.8)
Cash used for financing activities	(12.7)	(6.7)
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0
(Decrease) increase in cash and cash equivalents	(11.0)	(0.8)
Cash, cash equivalents and restricted cash at beginning of period	11.0	1.4	1.4
Cash, cash equivalents and restricted cash at end of period	0.0	0.6	11.0
Issuer | Reportable Legal Entities
Operating activities
Cash provided by (used for) operating activities	250.0	0.6
Investing activities
Expenditures for property, plant and equipment	0.0	0.0
Acquisitions, net of cash acquired		0.0
Proceeds from dispositions of long-lived assets	0.0	0.0
Cash used for investing activities	0.0	0.0
Financing activities
Repayments of debt	(250.0)	0.0
Proceeds from exercise of stock options	0.0	0.0
Taxes withheld and paid on employees' share-based payment awards	0.0	0.0
Payment of common stock dividends	0.0
Payment of common stock dividend		0.0
Cash used for financing activities	(250.0)	0.0
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0
(Decrease) increase in cash and cash equivalents	0.0	0.6
Cash, cash equivalents and restricted cash at beginning of period	0.3	0.2	0.2
Cash, cash equivalents and restricted cash at end of period	0.3	0.8	0.3
Guarantor Subsidiaries | Reportable Legal Entities
Operating activities
Cash provided by (used for) operating activities	(217.5)	(10.7)
Investing activities
Expenditures for property, plant and equipment	(6.0)	(4.8)
Acquisitions, net of cash acquired		(24.8)
Proceeds from dispositions of long-lived assets	0.0	0.0
Cash used for investing activities	(6.0)	(29.6)
Financing activities
Repayments of debt	(0.1)	0.0
Proceeds from exercise of stock options	0.0	0.0
Taxes withheld and paid on employees' share-based payment awards	0.0	0.0
Payment of common stock dividends	0.0
Payment of common stock dividend		0.0
Cash used for financing activities	(0.1)	0.0
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0
(Decrease) increase in cash and cash equivalents	(223.6)	(40.3)
Cash, cash equivalents and restricted cash at beginning of period	384.0	107.7	107.7
Cash, cash equivalents and restricted cash at end of period	160.4	67.4	384.0
Non-Guarantor Subsidiaries | Reportable Legal Entities
Operating activities
Cash provided by (used for) operating activities	13.4	23.2
Investing activities
Expenditures for property, plant and equipment	(2.5)	(1.1)
Acquisitions, net of cash acquired		0.0
Proceeds from dispositions of long-lived assets	0.9	1.3
Cash used for investing activities	(1.6)	0.2
Financing activities
Repayments of debt	(0.2)	(3.9)
Proceeds from exercise of stock options	0.0	0.0
Taxes withheld and paid on employees' share-based payment awards	0.0	0.0
Payment of common stock dividends	0.0
Payment of common stock dividend		0.0
Cash used for financing activities	(0.2)	(3.9)
Effect of exchange rate changes on cash and cash equivalents	3.0	0.3
(Decrease) increase in cash and cash equivalents	14.6	19.8
Cash, cash equivalents and restricted cash at beginning of period	178.1	183.2	183.2
Cash, cash equivalents and restricted cash at end of period	$ 192.7	$ 203.0	$ 178.1

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Subsequent Events (Details)	Jul. 23, 2020 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Quarterly dividend declared (in dollars per share)	$ 0.08