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Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

The following table presents the Company’s revenues disaggregated by geographical region for the fiscal years ended December 31, 2022, January 1, 2022 and January 2, 2021, respectively:


December 31, 2022	Commercial Systems		Industrial Systems		Climate Solutions		Motion Control Solutions		Total
North America	$	813.3	$	361.6	$	953.6	$	1,728.1	$	3,856.6
Asia	156.8		159.1		31.3		157.6		504.8
Europe	134.1		50.7		48.1		394.2		627.1
Rest-of-World	41.2		44.6		48.8		94.8		229.4
Total	$	1,145.4	$	616.0	$	1,081.8	$	2,374.7	$	5,217.9


January 1, 2022	Commercial Systems		Industrial Systems		Climate Solutions		Motion Control Solutions		Total
North America	$	696.0	$	296.2	$	905.9	$	877.0	$	2,775.1
Asia	182.3		186.7		33.7		60.3		463.0
Europe	102.7		46.4		43.6		168.8		361.5
Rest-of-World	51.1		47.0		47.4		65.2		210.7
Total	$	1,032.1	$	576.3	$	1,030.6	$	1,171.3	$	3,810.3


January 2, 2021	Commercial Systems		Industrial Systems		Climate Solutions		Motion Control Solutions		Total
North America	$	566.9	$	291.4	$	752.7	$	572.4	$	2,183.4
Asia	124.9		150.9		27.7		27.5		331.0
Europe	86.1		44.8		30.3		86.4		247.6
Rest-of-World	42.3		41.7		36.1		24.9		145.0
Total	$	820.2	$	528.8	$	846.8	$	711.2	$	2,907.0

Research and Development Costs are Expense

The costs are recorded in Operating Expenses in the fiscal year as follows as noted in the table below:


	December 31, 2022		January 1, 2022		January 2, 2021
Research, Development and Engineering Costs	$	106.6	$	74.5	$	67.0

Schedule of Accounting Standards Update and Change in Accounting Principle

In addition, certain financial statement line items in our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income for the years ended January 1, 2022 and January 2, 2021, Consolidated Statements of Cash Flows for the years ended January 1, 2022 and January 2, 2021 and our Consolidated Balance Sheet as of January 1, 2022, were adjusted as follows:


	As Originally Reported		Effect of Change		As Adjusted
Consolidated Statement of Operations for the year ended January 1, 2022
Cost of Sales	$	2,724.6	$	(25.9)	$	2,698.7
Provision for Income Taxes	$	68.5	$	6.2	$	74.7
Net income attributable to Regal Rexnord Corporation	$	209.9	$	19.7	$	229.6

Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	4.44	$	0.41	$	4.85
Assuming Dilution	$	4.40	$	0.41	$	4.81

Consolidated Statement of Operations for the year ended January 2, 2021
Cost of Sales	$	2,098.3	$	2.1	$	2,100.4
Provision for Income Taxes	$	56.8	$	(0.5)	$	56.3
Net income attributable to Regal Rexnord Corporation	$	189.3	$	(1.6)	$	187.7

Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	4.66	$	(0.04)	$	4.62
Assuming Dilution	$	4.64	$	(0.04)	$	4.60

Consolidated Balance Sheet as of January 1, 2022
Inventories	$	1,106.6	$	85.8	$	1,192.4
Deferred Income Taxes	$	652.0	$	27.7	$	679.7
Retained Earnings	$	1,854.5	$	58.1	$	1,912.6

Consolidated Statement of Cash Flows for the year ended January 1, 2022
Net Income	$	216.1	$	19.7	$	235.8
Change in Inventories	$	(148.5)	$	(25.9)	$	(174.4)
Benefit from Deferred Income Taxes	$	(14.9)	$	6.2	$	(8.7)

Consolidated Statement of Cash Flows for the year ended January 2, 2021
Net Income	$	193.8	$	(1.6)	$	192.2
Change in Inventories	$	(3.7)	$	2.1	$	(1.6)
Benefit from Deferred Income Taxes	$	(16.5)	$	(0.5)	$	(17.0)

Consolidated Statement of Comprehensive Income for the year ended January 1, 2022
Comprehensive income attributable to Regal Rexnord Corporation	$	178.1	$	19.7	$	197.8

Consolidated Statement of Comprehensive Income for the year ended January 2, 2021
Comprehensive income attributable to Regal Rexnord Corporation	$	263.8	$	(1.6)	$	262.2

The following table compares amounts that would have been reported under the LIFO method with amounts reported under the FIFO method in our Consolidated Statement of Operations, Consolidated Statement of Comprehensive Income and Consolidated Statement of Cash Flows for the year ended December 31, 2022 and our Consolidated Balance Sheet as of December 31, 2022:


	As Computed under LIFO		Effect of Change		As Reported under FIFO
Consolidated Statement of Operations for the year ended December 31, 2022
Cost of Sales	$	3,616.4	$	(68.2)	$	3,548.2
Provision for Income Taxes	$	102.6	$	16.3	$	118.9
Net income attributable to Regal Rexnord Corporation	$	437.0	$	51.9	$	488.9

Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	6.55	$	0.78	$	7.33
Assuming Dilution	$	6.51	$	0.78	$	7.29










Consolidated Balance Sheet as of December 31, 2022
Inventories	$	1,182.9	$	154.0	$	1,336.9
Deferred Income Taxes	$	547.9	$	44.0	$	591.9
Retained Earnings	$	2,020.0	$	110.0	$	2,130.0

Consolidated Statement of Cash Flows for the year ended December 31, 2022
Net Income	$	443.0	$	51.9	$	494.9
Change in Inventories	$	(106.2)	$	(68.2)	$	(174.4)
Benefit from Deferred Income Taxes	$	(96.4)	$	16.3	$	(80.1)






Consolidated Statement of Comprehensive Income for the year ended December 31, 2022
Comprehensive income attributable to Regal Rexnord Corporation	$	280.0	$	51.9	$	331.9

Percentage Distribution Between Major Classes of Inventory

The major classes of inventory at year end are as follows:


	December 31, 2022	January 1, 2022
Raw Material and Work in Process	57.0%	43.4%
Finished Goods and Purchased Parts	43.0%	56.6%

Property, Plant and Equipment

Property, plant and equipment by major classification was as follows:


	Useful Life (In Years)	December 31, 2022		January 1, 2022

Land and Improvements		$	103.4	$	109.1
Buildings and Improvements	3-50	401.7		449.6
Machinery and Equipment	3-15	1,111.3		1,164.8
Property, Plant and Equipment		1,616.4		1,723.5
Less: Accumulated Depreciation		(809.4)		(815.0)
Net Property, Plant and Equipment		$	807.0	$	908.5

Earnings Per Share Reconciliation

The following table reconciles the basic and diluted shares used in earnings per share calculations for the fiscal years ended:


	2022	2021	2020
Denominator for Basic Earnings Per Share	66.7	47.3	40.6
Effect of Dilutive Securities	0.4	0.4	0.2
Denominator for Diluted Earnings Per Share	67.1	47.7	40.8

Accumulated Other Comprehensive Loss

The components of the ending balances of AOCI are as follows:


	2022		2021
Foreign Currency Translation Adjustments	$	(356.1)	$	(201.8)
Hedging Activities, Net of Tax of $5.1 in 2022 and $6.6 in 2021	17.3		21.0
Pension and Post-Retirement Benefits, Net of Tax of $(4.1) in 2022 and $(4.2) in 2021	(13.3)		(14.3)
Total	$	(352.1)	$	(195.1)